XXXXXX INDUSTRIES, INC.
$37,500,000
12% Senior Secured Notes due , 2001
NOTE PURCHASE AGREEMENT
Dated [ ] __, 1998
TABLE OF CONTENTS
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Page
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1. AUTHORIZATION OF NOTES. . . . . . . . . . . . . . . . . . .1
2. EXCHANGE AND ISSUANCE OF NOTES. . . . . . . . . . . . . . .1
3. CLOSING.. . . . . . . . . . . . . . . . . . . . . . . . . .2
4. INTEREST ON NOTES.. . . . . . . . . . . . . . . . . . . . .2
5. CONDITIONS TO CLOSING.. . . . . . . . . . . . . . . . . . .2
5.1. Representations and Warranties . . . . . . . . . . . .3
5.2. Performance; No Default. . . . . . . . . . . . . . . .3
5.3. Compliance Certificates. . . . . . . . . . . . . . . .3
5.4. Opinions of Counsel. . . . . . . . . . . . . . . . . .3
5.5. Exchange Permitted By Applicable Law, etc. . . . . . .4
5.6. Payment of Special Counsel Fees. . . . . . . . . . . .4
5.7. Private Placement Number . . . . . . . . . . . . . . .5
5.8. Changes in Corporate Structure . . . . . . . . . . . .5
5.9. Security Documents . . . . . . . . . . . . . . . . . .5
0.00.Xxxxxxxx(s) and Title Insurance. . . . . . . . . . . .5
5.11.Fayette Facilities . . . . . . . . . . . . . . . . . .6
5.12.Intercreditor Agreement. . . . . . . . . . . . . . . .6
5.13.Financing Statements . . . . . . . . . . . . . . . . .7
5.14.Appraisals . . . . . . . . . . . . . . . . . . . . . .7
5.15.Surveys and Other Reports. . . . . . . . . . . . . . .7
0.00.Xxxxxxxxx. . . . . . . . . . . . . . . . . . . . . . .7
0.00.Xxx Revolving Credit Agreement . . . . . . . . . . . .8
5.18.Foothill Subordinated Note . . . . . . . . . . . . . .8
0.00.Xxxx Payment . . . . . . . . . . . . . . . . . . . . .8
5.20.Issuance of New Common . . . . . . . . . . . . . . . .8
5.21.Confirmation Order . . . . . . . . . . . . . . . . . .8
5.22.Release of Certain Existing Liens. . . . . . . . . . .8
0.00.Xxxxxxxx of Notes. . . . . . . . . . . . . . . . . . .9
5.24.Proceedings and Documents. . . . . . . . . . . . . . .9
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . .9
6.1. Organization; Power and Authority. . . . . . . . . . .9
6.2. Authorization, etc . . . . . . . . . . . . . . . . . .9
6.3. Disclosure . . . . . . . . . . . . . . . . . . . . . .10
6.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates . . . . . . . . . . . . . . . . . . . . . .10
6.5. Title to Property; Leases. . . . . . . . . . . . . . .11
6.6. Ownership of Certain Subsidiaries. . . . . . . . . . .11
6.7. Intentionally Left Blank . . . . . . . . . . . . . . .11
6.8. Equipment. . . . . . . . . . . . . . . . . . . . . . .11
6.9. Location of Inventory and Equipment. . . . . . . . . .11
6.10.Inventory Records. . . . . . . . . . . . . . . . . . .12
6.11.Location of Chief Executive Office; FEIN . . . . . . .12
6.12.Solvency . . . . . . . . . . . . . . . . . . . . . . .12
0.00.Xx Material Adverse Change . . . . . . . . . . . . . .12
6.14.Intentionally Left Blank . . . . . . . . . . . . . . .12
6.15.Compliance with Laws, Other Instruments, etc . . . . .12
6.16.Litigation; Observance of Agreements, Statutes and
Orders . . . . . . . . . . . . . . . . . . . . . . . .13
6.17.Taxes. . . . . . . . . . . . . . . . . . . . . . . . .13
6.18.Licenses, Permits, etc . . . . . . . . . . . . . . . .13
6.19.Compliance with ERISA. . . . . . . . . . . . . . . . .14
6.20.Private Offering by the Company. . . . . . . . . . . .15
6.21.Existing Indebtedness; Material Agreements; Future
Liens . . . . . . . . . . . . . . . . . . . . . . . .15
6.22.Foreign Assets Control Regulations, etc. . . . . . . .15
6.23.Status under Certain Statutes. . . . . . . . . . . . .15
6.24.Environmental Matters. . . . . . . . . . . . . . . . .16
7. REPRESENTATION OF THE PURCHASERS. . . . . . . . . . . . . .16
8. INFORMATION AS TO COMPANY.. . . . . . . . . . . . . . . . .17
8.1. Financial Information. . . . . . . . . . . . . . . . .17
8.2. Business Information . . . . . . . . . . . . . . . . .18
8.3. Officer's Certificate. . . . . . . . . . . . . . . . .20
8.4. Inspection . . . . . . . . . . . . . . . . . . . . . .20
9. PREPAYMENT OF THE NOTES.. . . . . . . . . . . . . . . . . .21
9.1. Special Prepayments from Average Available Cash and
After Sale of Assets or Change of Control. . . . . . .21
9.2. Optional Prepayments . . . . . . . . . . . . . . . . .24
9.3. Allocation of Partial Prepayments. . . . . . . . . . .24
9.4. Maturity; Surrender, etc . . . . . . . . . . . . . . .24
9.5. Purchase of Notes. . . . . . . . . . . . . . . . . . .24
10. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . .25
10.1.Compliance with Law . . . . . . . . . . . . . . . . .25
10.2.Accounting Systems . . . . . . . . . . . . . . . . . .25
10.3.Collateral Reporting . . . . . . . . . . . . . . . . .25
10.4.Title to Equipment . . . . . . . . . . . . . . . . . .25
10.5.Maintain the Equipment and Improvements . . . . . . .26
00.0.Xxxxxxxxx . . . . . . . . . . . . . . . . . . . . . .26
00.0.Xx Setoffs or Counterclaims . . . . . . . . . . . . .27
10.8.Location of Equipment . . . . . . . . . . . . . . . .28
10.9.Intentionally Left Blank . . . . . . . . . . . . . . .28
10.10.Leases. . . . . . . . . . . . . . . . . . . . . . . .28
10.11.Payment of Taxes and Claims . . . . . . . . . . . . .28
10.12.Corporate Existence, etc. . . . . . . . . . . . . . .28
10.13.Certain Obligations Respecting Domestic Subsidiaries.29
10.14.Chief Executive Officer . . . . . . . . . . . . . . .30
00.00.Xxx Returns . . . . . . . . . . . . . . . . . . . . .30
10.16.Fayette Facilities. . . . . . . . . . . . . . . . . .30
11. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . .30
11.1. Indebtedness . . . . . . . . . . . . . . . . . . . .30
11.2. Liens. . . . . . . . . . . . . . . . . . . . . . . .30
11.3. Fundamental Changes. . . . . . . . . . . . . . . . .31
11.4. Intentionally Left Blank . . . . . . . . . . . . . .32
11.5. Lines of Business. . . . . . . . . . . . . . . . . .32
11.6. Investments. . . . . . . . . . . . . . . . . . . . .32
11.7. Restricted Payments. . . . . . . . . . . . . . . . .33
11.8. Transactions with Affiliates . . . . . . . . . . . .33
11.9. Restrictive Agreements . . . . . . . . . . . . . . .33
11.10.Change Name. . . . . . . . . . . . . . . . . . . . .34
11.11.Prepayments and Amendments . . . . . . . . . . . . .34
00.00.Xxxx or Discount of Accounts . . . . . . . . . . . .34
11.13.Intentionally Left Blank. . . . . . . . . . . . . . .34
11.14.Accounting Methods. . . . . . . . . . . . . . . . . .35
11.15.Suspension. . . . . . . . . . . . . . . . . . . . . .35
11.16.Change in Location of Chief Executive Office;
Inventory and Equipment with Bailees. . . . . . . . .35
00.00.Xx Prohibited Transactions Under ERISA. . . . . . . .35
11.18.Minimum Net Worth . . . . . . . . . . . . . . . . . .36
00.00.Xxxxxxx Expenditures. . . . . . . . . . . . . . . . .36
12. EVENTS OF DEFAULT.. . . . . . . . . . . . . . . . . . . . .36
13. REMEDIES ON DEFAULT, ETC. . . . . . . . . . . . . . . . . .40
13.1.Acceleration . . . . . . . . . . . . . . . . . . . . .40
13.2.Other Remedies . . . . . . . . . . . . . . . . . . . .40
13.3.Rescission . . . . . . . . . . . . . . . . . . . . . .40
00.0.Xx Waivers or Election of Remedies, Expenses, etc. . .41
14. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.. . . . . . .41
14.1. Registration of Notes . . . . . . . . . . . . . . .41
14.2. Assignment and Exchange of Notes . . . . . . . . . .41
14.3. Replacement of Notes . . . . . . . . . . . . . . . .42
15. PAYMENTS ON NOTES.. . . . . . . . . . . . . . . . . . . . .42
00.0.Xxxxx of Payment . . . . . . . . . . . . . . . . . . .42
15.2.Home Office Payment. . . . . . . . . . . . . . . . . .42
15.3.Notification to Collateral Agent of Payment in Full. .43
16. EXPENSES, ETC . . . . . . . . . . . . . . . . . . . . . . .43
16.1.Survival . . . . . . . . . . . . . . . . . . . . . . .44
17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.. . . . . . . . . . . . . . . . . . . . . . . . .44
18. AMENDMENT AND WAIVER. . . . . . . . . . . . . . . . . . . .44
18.1.Requirements . . . . . . . . . . . . . . . . . . . . .44
18.2.Solicitation of Holders of Notes . . . . . . . . . . .44
18.3.Binding Effect, etc. . . . . . . . . . . . . . . . . .45
18.4.Notes held by Company, etc . . . . . . . . . . . . . .45
19. NOTICES.. . . . . . . . . . . . . . . . . . . . . . . . . .45
20. REPRODUCTION OF DOCUMENTS.. . . . . . . . . . . . . . . . .46
21. CONFIDENTIAL INFORMATION. . . . . . . . . . . . . . . . . .46
22. WAIVERS; INDEMNIFICATION. . . . . . . . . . . . . . . . . .47
22.1.Demand; Protest; etc . . . . . . . . . . . . . . . . .47
22.2.Liability of Collateral Agent and Purchasers . . . . .47
22.3.Indemnification . . . . . . . . . . . . . . . . . . .48
23. SUBSTITUTION OF PURCHASER . . . . . . . . . . . . . . . . .48
24. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . .49
24.1.Successors and Assigns . . . . . . . . . . . . . . . .49
24.2.Payments Due on Non-Business Days. . . . . . . . . . .49
24.3.Severability . . . . . . . . . . . . . . . . . . . . .49
24.4.Collateral Agent . . . . . . . . . . . . . . . . . . .49
00.0.Xxxxxxxxxxxx . . . . . . . . . . . . . . . . . . . . .49
24.6.Counterparts . . . . . . . . . . . . . . . . . . . . .49
24.7.Governing Law; Jurisdiction; Consent to Service of
Process. . . . . . . . . . . . . . . . . . . . . . . .50
24.8.Waiver of Jury Trial . . . . . . . . . . . . . . . . .50
SCHEDULES
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SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE C -- Existing Indebtedness
SCHEDULE D -- Changes in Corporate Structure
SCHEDULE E -- Real Property
SCHEDULE F -- Subsidiaries of the Company and
Ownership of Subsidiary Stock
SCHEDULE G -- Existing Liens
SCHEDULE H -- Location of Inventory and Equipment
SCHEDULE I -- Financial Statements
SCHEDULE J -- Certain Litigation
SCHEDULE K -- Intentionally Left Blank
SCHEDULE L -- Licenses, Permits, Etc.
SCHEDULE M -- Environmental Reports
SCHEDULE N -- Investments
SCHEDULE O -- Transactions with Affiliates
SCHEDULE P -- Restrictive Agreements
SCHEDULE Q -- Prohibited Transferees
SCHEDULE R -- Excluded Assets
EXHIBITS
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EXHIBIT 1 -- Form of 12% Senior Secured Note due [____], 2001
EXHIBIT 2 -- Form of Opinion of South Carolina Counsel for the Company
EXHIBIT 3 -- Form of Opinion of Special Counsel to the Company and each of its
Subsidiaries
EXHIBIT 4 -- Form of Opinion of Special Alabama Counsel for the Company
EXHIBIT 5 -- Form of Opinion of Special Counsel for the Purchasers
EXHIBIT 6 -- Form of Agency Agreement
EXHIBIT 7 -- Form of Foothill Subordinated Note
EXHIBIT 8 -- Form of Guaranty and Security Agreement
EXHIBIT 9 -- Form of Guaranty Assumption Agreement
EXHIBIT 10 -- Form of Intercreditor Agreement
EXHIBIT 11 -- Form of New Revolving Credit Agreement
EXHIBIT 12 -- Form of Security and Pledge Agreement
EXHIBIT 13 -- Form of Trademark Security Agreement
EXHIBIT 14 -- Form of Deposit Account Security Agreement
EXHIBIT 15 -- Form of Mortgage
XXXXXX INDUSTRIES, INC.
0000 Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
12% Senior Secured Notes due [ ], 2001
[_______ __, 1998]
TO IBJ XXXXXXXX BANK & TRUST COMPANY,
AS NOTE AGENT, AND EACH OF THE
PURCHASERS LISTED IN THE ATTACHED
SCHEDULE A
Ladies and Gentlemen:
Xxxxxx Industries, Inc., a Delaware corporation (the "Company"),
agrees with you as follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue of $37,500,000 aggregate
principal amount of its 12% Senior Secured Notes due [_________], 2001 (the
"Notes", such term to include any such notes issued in substitution therefor
pursuant to Section 14 of this Agreement). The Notes shall be substantially in
the form set out in Exhibit 1, with such changes therefrom, if any, as may be
approved by you and the Company. Certain capitalized terms used in this
Agreement are defined in Schedule B; references to a "Schedule" or an "Exhibit"
are, unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.
2. EXCHANGE AND ISSUANCE OF NOTES.
Subject to the terms and conditions set forth herein, the Company
hereby agrees that in exchange for the delivery by each Purchaser of the
Existing Notes held by such Purchaser, it will deliver Notes to each Purchaser
in the amounts set forth opposite such Purchaser's name on Schedule A hereto
(the "Exchange"). Upon receipt by the Purchasers of all the Notes as set forth
on Schedule A hereto, the Company shall cancel all of the Existing Notes and the
Existing Notes, and the obligations of the Obligors under the Existing Revolving
Credit Documents and the Existing Prudential Documents shall be of no further
force or effect. The Notes are to be entitled ratably to the benefits and
security of the Security Documents as herein and therein provided. To induce the
Purchasers to enter into this Agreement and to make the respective exchanges for
Notes to be made by them hereunder, the Company makes the representations and
warranties set forth in Section 6 and in the Security Documents, and the
covenants and agreements hereinafter stated.
3. CLOSING.
The date and time for the Exchange as provided herein is _______ at
10:00 A.M., New York City time, or on such other Business Day thereafter on or
prior to [_______], 19[__] as may be agreed upon by the Purchasers of a majority
in principal amount of the Notes and the Company (the "Closing"). The Exchange
will be made at the offices of Milbank, Tweed, Xxxxxx & XxXxxx, One Xxxxx
Manhattan Plaza, New York, New York, or at such other place as shall be agreed
upon among the parties hereto.
Subject to satisfaction of the closing conditions listed in Section 5
hereunder, each Purchaser will, at the Closing, deliver to the Company its
Existing Notes, against delivery by the Company to such Purchaser of one or more
duly executed Notes in the respective aggregate principal amounts for Notes set
forth opposite such Purchaser's name in Schedule A, each such Note to be dated
the date of the Closing and in the form of a Note registered in the name of such
Purchaser or such Purchaser's nominee, in any denominations, all as may be
specified by timely notice to the Company (or, in the absence of such notice, a
single Note in the entire aggregate principal amount for Notes to be purchased
by such Purchaser, in denominations as set forth on Schedule A and registered in
such Purchaser's name).
4. INTEREST ON NOTES.
The Company hereby promises to pay interest on the unpaid principal
amount of each Note in arrears on the last Business Day of each calendar month
for the period commencing on the date of such Note to but excluding the date
such Note shall be paid in full, at a rate per annum equal to 12%; provided,
however, that the Company shall be permitted to pay interest on the unpaid
principal of each Note during the period up to and including [date two years
from Closing] by issuing Additional Notes in a principal amount equal to such
interest; provided, further, however, that in no event shall the Company be
permitted to issue Additional Notes in satisfaction of its obligation to pay
interest in cash on the unpaid principal amount of the Notes if the Company has
satisfied the EBITDA Requirement with respect to the date as of which such
interest is payable.
Notwithstanding the foregoing, upon the occurrence and during the
continuation of an Event of Default, the Company hereby promises to pay interest
at a rate per annum equal to 13 1/2% on any principal payable under a Note, and
on any other amount payable by the Company hereunder or under any Security
Document with respect to or under a Note, until the same is paid in full
(whether before or after judgment).
5. CONDITIONS TO CLOSING.
Your obligation to accept the Notes hereunder is subject to the
fulfillment to your satisfaction, prior to or at the Closing, of the following
conditions; provided, however, that in the event that (i) the Majority Holders
determine that modifications, if any, to the Intercreditor Agreement, the New
Revolving Credit Agreement, the Foothill Subordinated Note or this Agreement are
Immaterial Changes, (ii) all of the conditions set forth in this Section 5 other
than conditions set forth in Sections 5.12, 5.18 and 5.19 (which conditions
shall be governed by clause (i) above) are satisfied or waived by the Purchasers
in accordance with the terms of this Agreement and (iii) the Reorganization Plan
is confirmed in the form filed by the Company with no modifications other than
Immaterial Changes, then all of the Class 2 Claimants shall be bound by the
terms of this Agreement and shall be deemed to be signatories thereof: 5.1.
Representations and Warranties.
The representations and warranties of the Obligors in this Agreement
and the other Basic Documents shall be correct when made and at the time of the
Closing.
5.2. Performance; No Default.
The Obligors shall have performed and complied with all agreements and
conditions contained in this Agreement and the other Basic Documents required to
be performed or complied with by it prior to or at the Closing and after giving
effect to the exchange and issue of the Notes no Default shall have occurred and
be continuing. Neither the Company nor any Subsidiary shall have entered into
any transaction since the Petition Date that would have been prohibited by
Sections 11.7, 11.8, 11.12 or 11.19 hereof had such Sections applied since such
date.
5.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to you an
Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 5.1 and 5.2 have been fulfilled.
(b) Secretary's Certificate. Each of the Obligors shall have delivered to
you a certificate of the secretary or an assistant secretary of such Person
certifying the resolutions attached thereto and other corporate proceedings
relating to the authorization, execution and delivery of the Notes, this
Agreement and the other Basic Documents.
(c) Intentionally Left Blank. This paragraph has intentionally been left
blank.
(d) Other Certificates. The Purchasers shall have received (i) a
certificate of status with respect to each Obligor, dated within 15 days of the
Closing Date, such certificate to be issued by the appropriate officer of the
jurisdiction of organization of such Obligor, which certificate shall indicate
that such Obligor is in good standing in such jurisdiction and (ii) a
certificate of status with respect to each Obligor, dated within 15 days of the
Closing Date, such certificates to be issued by the appropriate officer of the
jurisdictions in which its failure to be duly qualified or licensed would have a
Material Adverse Effect, which certificates shall indicate that such Obligor is
in good standing in such jurisdictions.
5.4. Opinions of Counsel.
You shall have received opinions in form and substance satisfactory to
you, dated the date of Closing,
(a) from special South Carolina counsel for the Company, substantially
in the form set out in Exhibit 2 and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably request,
(b) from special New York counsel for the Company, substantially in
the form set out in Exhibit 3 and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably request,
(c) from special Alabama counsel for the Company, substantially in the
form set out in Exhibit 4 and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably request,
and
(d) from Milbank, Tweed, Xxxxxx & XxXxxx, your special counsel in
connection with the transactions contemplated hereby.
The Company hereby instructs its counsel named in (a), (b) and (c)
above to deliver such opinions to you and the Collateral Agent.
5.5. Exchange Permitted By Applicable Law, etc.
On the date of the Closing your acceptance of the Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.
5.6. Payment f Special Counsel Fees.
Without limiting the provisions of Section 16.1, the Company shall
have paid on or before the Closing in accordance with the Reorganization Plan
(a) the reasonable fees, charges and disbursements of your special counsel,
Milbank, Tweed, Xxxxxx & XxXxxx and local counsel for you in Delaware, Klehr,
Harrison, Xxxxxx, Branzburg & Xxxxxx, to the extent reflected in a statement of
such counsel rendered to the Company at least one Business Day prior to the
Closing, (b) the reasonable fees, charges and disbursements of the Collateral
Agent to the extent reflected in a statement of the Collateral Agent rendered to
the Company at least one Business Day prior to the date of Closing (which fees,
charges and disbursements shall be consistent with the agreement between the
Company and the Collateral Agent and acceptable to the Purchasers in their
reasonable determination), and (c) the reasonable fees, charges and
disbursements of the special counsel of the Collateral Agent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the date of Closing.
5.7. Private Placement Number.
A private placement number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for the Notes.
5.8. Changes in Corporate Structure.
Except as specified in Schedule D, the Company shall not have changed
its jurisdiction of incorporation or been a party to any merger or consolidation
and shall not have succeeded to all or any substantial part of the liabilities
of any other entity, at any time following the date of the most recent financial
statements referred to in Schedule I.
5.9. Security Documents.
The Agency Agreement, the Guaranty and Security Agreement, the
Security and Pledge Agreement, the Trademark Security Agreement, the Deposit
Account Security Agreement and the Mortgages shall each have been duly executed
and delivered by the Company and each other Person contemplated to be a party
thereto all as contemplated by the Reorganization Plan and each shall be in full
force and effect and the Purchasers shall have received evidence satisfactory to
them of the perfection and priority under the laws of any applicable
jurisdiction of the Liens intended to be created by such Security Documents,
subject to the terms of the Intercreditor Agreement.
5.10. Mortgage(s) and Title Insurance.
The following documents shall each have been duly executed (and, where
appropriate, acknowledged) by Persons satisfactory to the Majority Holders:
(a) one or more Mortgages as contemplated by the Reorganization Plan
covering the Real Property Collateral identified in Schedule E with an asterisk,
in each case duly executed and delivered by the relevant Obligor in recordable
form (in such number of copies as the Majority Holders and the Collateral Agent
shall have requested);
(b) one or more mortgagee policies of title insurance on forms of and
issued by one or more title companies satisfactory to the Majority Holders and
the Collateral Agent as contemplated by the Reorganization Plan (the "Title
Companies"), insuring a valid first mortgage lien on the Mortgaged Property (as
defined in the Mortgage(s)); for and in amounts satisfactory to the Majority
Holders in their reasonable determination, subject only to such exceptions as
are reasonably satisfactory to the Majority Holders and the Collateral Agent
and, to the extent necessary under applicable law, for filing in the appropriate
county land office(s), Uniform Commercial Code financing statements covering
fixtures, in each case appropriately completed and duly executed; such title
policies shall contain such endorsements in form and substance reasonably
satisfactory to the Majority Holders;
(c) as-built surveys of recent date of each of the facilities to be
covered by the Mortgages showing such matters as may be reasonably required by
Majority Holders, which surveys shall be in form and content acceptable to the
ajority Holders in their reasonable determination, and certified to the
Collateral Agent and the Title Companies, and shall have been prepared by a
registered surveyor acceptable to the Majority Holders;
(d) certified copies of permanent and unconditional certificates of
occupancy (or, if it is not the practice to issue certificates of occupancy in
the jurisdiction in which the facilities to be covered by the Mortgage(s) are
located, then such other evidence satisfactory to the Majority Holders in its
reasonable determination) permitting the fully functioning operation and
occupancy of each such facility and of such other permits necessary for the use
and operation of each such facility issued by the respective governmental
authorities having jurisdiction over each such facility; and
(e) such Collateral Access Agreements from lessors, warehousemen,
bailees, and other third persons (i) in the case of Inventory stored with a
bailee, warehouseman or similar party, as the Majority Holders and the
Collateral Agent reasonably may require, to the extent provided to the New
Revolving Credit Lender by the Company under the New Revolving Credit Agreement
and (ii) in the case of Equipment stored with a bailee, warehouseman or similar
party as the Majority Holders and the Collateral Agent may reasonably require.
In addition, the Company shall have paid to the Title Companies all
expenses and premiums of the Title Companies in connection with the issuance of
such policies and in addition shall have paid to the Title Companies an amount
equal to the recording and stamp taxes payable in connection with recording the
Mortgage(s) in the appropriate county land office(s).
Notwithstanding the foregoing, to the extent that any of the items set
forth above in this Section 5.10(e) are not obtainable by the Closing Date, it
shall not be a condition to the Closing hereunder that such items be delivered
to the Collateral Agent and the Purchasers, but such items shall be delivered to
the Collateral Agent as promptly after the Closing Date as practicable, but in
any event within 30 days thereafter, provided that it shall not be a Default
hereunder if the Obligors are unable to deliver any of such items by reason of
their inability to obtain a necessary landlord or other third-party consent
(unless such consent is to come from an Affiliate) so long as the Obligors use
commercially reasonable efforts to obtain such non-Affiliated landlord or
third-party consents.
5.11. Fayette Facilities.
The Company shall have granted the Collateral Agent a Mortgage on the
Company's interests in the real Property and Equipment located at the Fayette
Facilities, subject only to Permitted Encumbrances.
5.12. Intercreditor Agreement.
The Intercreditor Agreement shall have been duly executed and
delivered by the Purchasers, the Collateral Agent and the New Revolving Lender
in the form of Exhibit 10 and shall be in full force and effect, and no term or
condition thereof shall have been amended, modified, supplemented or waived
(except for Immaterial Changes) without the prior written consent of each of the
Purchasers.
5.13. Financing Statements.
Each financing statement required to be filed, registered or recorded
in connection with the transactions contemplated by this Agreement and the
Security Documents shall have been properly filed, registered or recorded in
each office in each jurisdiction required in order to create in favor of the
Collateral Agent, for the ratable benefit of the Purchasers, a valid and/or
perfected first priority Lien (subject only to the provisions of the
Intercreditor Agreement and the Permitted Encumbrances) on the respective
collateral described therein; the Collateral Agent and you shall have received,
to the extent available, acknowledgement copies of all of such filings,
registrations and recordations stamped by the appropriate filing, registration
or recording officer (or, in lieu thereof, other evidence satisfactory to the
Collateral Agent that all such filings, registrations and recordations have been
made); and all necessary filing, recording and other similar fees, and all taxes
and other charges related to such filings, registrations and recordations
(including such other taxes and charges requested by you), shall have been paid
in full.
Uniform Commercial Code financing statement, judgment lien and Federal
income tax lien searches (collectively, the "UCC Searches") (a) in the office of
the Clerk for Gwinnet County, Georgia, (b) in the office of the Clerk for New
York County, New York and in the office of the Secretary of State of New York,
(c) in the office of the Clerk for Lenoir County, North Carolina and in the
office of the Secretary of State of North Carolina, (d) in the office of the
Secretary of State of Alabama, (e) in the office of the Secretary of State of
South Carolina and (f) in the office of the Secretary of State of Florida, each
of a recent date, shall have been delivered to you or your special counsel.
5.14. Appraisals.
Copies of updated appraisals of the Inventory and Real Property Collateral
to the extent made available to the Company by the New Revolving Credit Lender
shall have been delivered to you or your special counsel.
5.15. Surveys and Other Reports.
Copies of recent Phase I environmental surveys and assessments
together with all other environmental reports prepared within the last five
years by Persons (familiar with the identification of toxic and hazardous
substances) satisfactory to the Majority Holders and set forth on Schedule M
shall have been delivered to you or your special counsel, such environmental
surveys and assessments to be based upon physical on-site inspections by such
firm of each of the existing sites and facilities owned, operated or leased by
the Company and its Subsidiaries, as well as a historical review of the uses of
such sites and facilities and of the business and operations of the Company and
its Subsidiaries (including any former Subsidiaries or divisions of the Company
or any of its Subsidiaries that have been disposed of prior to the date of such
survey and assessment and with respect to which the Company or any of its
Subsidiaries may have retained liability for Environmental Liabilities).
5.16. Insurance.
Certificates of insurance evidencing the existence of all insurance
required to be maintained by the Company pursuant to Section 10.6 and, subject
to the terms and conditions of the Intercreditor Agreement, the designation of
the Collateral Agent as the loss payee or additional named insured, as the case
may be, thereunder to the extent required by Section 10.6, such certificates to
be in such form and contain such information as is specified in Section 10.6. In
addition, the Company shall have delivered a certificate of a Senior Financial
Officer of the Company setting forth the insurance obtained by it in accordance
with the requirements of Section 10.6 and stating that such insurance is in full
force and effect and that all premiums then due and payable thereon have been
paid.
5.17. New Revolving Credit Agreement.
The New Revolving Credit Agreement shall have been duly executed and
delivered by the parties thereto in the form of Exhibit 11 and shall be in full
force and effect, and no term or condition thereof shall have been amended,
modified, supplemented or waived (except for Immaterial Changes) without the
prior written consent of each of the Purchasers.
5.18. Foothill Subordinated Note.
The Foothill Subordinated Note shall have been duly executed and
delivered by the Company to Foothill in the form of Exhibit 7 and shall be in
full force and effect, and no term or condition therefore shall have been
amended modified, supplemented or waived (except for Immaterial Changes) without
the prior written consent of each of the Purchasers.
5.19. Cash Payment.
The Company shall have paid to each of the Purchasers its pro rata
share of $15,000,000 in cash in accordance with the terms of the Reorganization
Plan.
5.20. Issuance of New Common.
The Company shall have issued to each of the Purchasers its pro rata
portion of shares of New Common in accordance with the terms of the
Reorganization Plan.
5.21. Confirmation Order.
The Confirmation Order shall have been entered.
5.22. Release of Certain Existing Liens.
Except as contemplated by the Intercreditor Agreement, Foothill shall
have delivered, or shall have caused to be delivered, to the Collateral Agent
all necessary termination statements, satisfaction pieces and other release
documentation in respect of any and all Liens it may have in and to the
Equipment and the Real Property Collateral, which shall be in form and substance
satisfactory to effect such release and for recordation in the appropriate
recording offices.
5.23. Exchange of Notes.
The Company shall have executed and delivered to each Purchaser,
against surrender in exchange therefor by such Purchaser of any Existing Notes,
Notes in the respective principal amounts set forth on Schedule A, in each case
dated the date of the Closing.
5.24. Proceedings and Documents.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
6.1. Organization; Power and Authority.
Each of the Company and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and is duly qualified as a foreign corporation
and is in good standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each of the Company
and its Subsidiaries has the corporate power and authority to own or hold under
lease the Properties it purports to own or hold under lease, to transact the
business it transacts and proposes to transact, to execute and deliver this
Agreement, the Notes and the other Basic Documents and to perform the provisions
hereof and thereof.
6.2. Authorization, etc.
(a) This Agreement, the Notes and the other Basic Documents have been
duly authorized by all necessary corporate action on the part of each Obligor,
and this Agreement constitutes, and upon execution and delivery thereof each
Note and each of the other Basic Documents will constitute, a legal, valid and
binding obligation of each Obligor enforceable against such Obligor in
accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(b) Other than the filing of appropriate financing statements, fixture
filings, and mortgages, the execution, delivery, and performance by each of the
Obligors of this Agreement and the Basic Documents to which such Obligor is a
party do not and will not require any registration with, consent, or approval
of, or notice to, or other action with or by, any Federal, State, foreign, or
other Governmental Authority or other Person, except for any necessary filings
or reports required to be made to or with the Securities and Exchange Commission
or in accordance with the Bankruptcy Code.
(c) Except with respect to the perfection and priority of Liens on
Inventory or Equipment located outside the United States of America, as to which
this paragraph is not applicable, subject to the filing of appropriate financing
statements, fixture filings, and mortgages, the Liens granted by each of the
Obligors to the Collateral Agent for the ratable benefit of the Purchasers in
and to their Properties pursuant to this Agreement and the other Basic Documents
are validly created, perfected, and first priority Liens to the extent
contemplated by the Intercreditor Agreement, subject only to Permitted
Encumbrances and Liens permitted by Section 11.2(b), (c) and (g).
6.3. Disclosure.
The Company has disclosed to the Purchasers all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. None of the reports, financial statements, certificates or other
information (including, without limitation, the Disclosure Statement) furnished
by or on behalf of the Obligors to the Purchasers in connection with the
negotiation of this Agreement and the other Basic Documents or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided that, with
respect to projected financial information, the Company represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
6.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) Schedule F contains (except as noted therein) complete and correct
lists of the (i) Company's Subsidiaries, showing, as to each Subsidiary, the
correct name thereof, the jurisdiction of its organization, and the percentage
of shares of each class of its capital stock or similar equity interests
outstanding owned by the Company and each other Subsidiary, (ii) Persons known
by the Company to be its Affiliates, other than Subsidiaries, and (iii)
Company's directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule F as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except in favor of the Collateral Agent or as otherwise disclosed in Schedule
G).
(c) Each Subsidiary identified in Schedule F is a corporation or other
legal entity duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements
identified with an asterisk on Schedule C and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Subsidiary.
6.5. Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient title to
their respective Properties, including all such Properties reflected in the most
recent audited balance sheet referred to in Schedule I or purported to have been
acquired by the Company or any Subsidiary after the date of such balance sheet
(except as sold or otherwise disposed of (i) in the ordinary course of business
or (ii) as otherwise permitted by this Agreement), in each case free and clear
of Liens prohibited by this Agreement or deed restrictions related to
environmental contamination or deed restrictions related to environmental
contamination. All leases are valid and subsisting and are in full force and
effect in all Material respects.
6.6. Ownership of Certain Subsidiaries.
Xxxxxx Freeport Holdings Corp., organized under the laws of the
British Virgin Islands, is a holding company for a foreign Subsidiary of the
Company, and has no Material Property of its own. Xxxxxx International Corp.,
organized under the laws of the British Virgin Islands, is a holding company for
a foreign Subsidiary of the Company, and has no Material Property of its own.
Xxxxxx Export Corp., a South Carolina corporation, has no Material Property.
6.7. Intentionally Left Blank.
This section has intentionally been left blank.
6.8. Equipment.
All of the Equipment issued or held for use in the Company's business
or the businesses of its Subsidiaries is fit for such purposes.
6.9. Location of Inventory and Equipment.
The Equipment is not stored with a bailee, warehouseman, or similar
party (without the Collateral Agent's prior written consent). The Equipment and
Inventory are located only at the locations identified on Schedule H or
otherwise permitted by Section 10.8.
6.10. Inventory Records.
The Company and its Subsidiaries keep correct and accurate records
itemizing and describing the kind, type, quality, and quantity of the Inventory,
and the Company's and each of its Subsidiaries' costs therefor.
6.11. Location of Chief Executive Office; FEIN.
The chief executive office of the Company is located at the address
indicated in the preamble to this Agreement. The Company's FEIN is 00-0000000.
Kinston's FEIN is 00-0000000.
6.12. Solvency.
Each of the Obligors is Solvent. No transfer of Property is being made
by the Company and no obligation is being incurred by the Company in connection
with the transactions contemplated by this Agreement or the other Basic
Documents with the intent to hinder, delay, or defraud either present or future
creditors of the Company.
6.13. No Material Adverse Change.
All consolidated financial statements relating to the Company and its
Subsidiaries listed on Schedule I have been delivered by the Company to the
Purchasers, have been prepared in accordance with GAAP (except, in the case of
unaudited financial statements, for the lack of footnotes and being subject to
year-end and quarter-end (in the case of monthly or quarterly financial
statements) audit adjustments) and present fairly, in all material respects, the
consolidated financial position of the Company and its Subsidiaries as of the
date thereof and the consolidated results of operations and cash flows of the
Company and its Subsidiaries for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal quarterly and year-end
adjustments). There has not been a Material Adverse Change with respect to the
Company and its Subsidiaries since the date of the latest financial statements
submitted to the Purchasers on or before the Closing Date.
6.14. Intentionally Left Blank.
This section has intentionally been left blank.
6.15. Compliance with Laws, Other Instruments, etc.
Except as otherwise permitted pursuant to a Final Order of the
Bankruptcy Court, the execution, delivery and performance by each of the
Obligors of this Agreement, the Notes, and the other Basic Documents will not
(i) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any Property of the Company or
any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which the
Company or any Subsidiary or any of their respective Properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary. No Default
has occurred or is continuing.
6.16. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule J there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any Property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority. None of the actions, suits or proceedings disclosed on
Schedule J, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(b) On the Effective Date, neither the Company nor any Subsidiary is
in default under any term of any agreement or instrument to which it is a party
or by which it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation Environmental Laws)
of any Governmental Authority, which default or violation, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
6.17. Taxes.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment. The charges, accruals and
reserves on the books of the Company and its Subsidiaries in respect of Federal,
state or other taxes for all fiscal periods are adequate. The Federal income tax
liabilities of the Company and its Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended [September __, ____].
6.18. Licenses, Permits, etc.
Except as disclosed in Schedule K,
(a) the Company and its Subsidiaries own or possess all of their
respective licenses, permits, franchises, authorizations, patents, copyrights,
service marks, trademarks and trade names, or rights thereto, necessary to
conduct their businesses, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the Company
infringes in any material respect upon any license, permit, franchise,
authorization, patent, copyright, service xxxx, trademark, trade name or other
right owned by any other Person; and
(c) to the best knowledge of the Company, there is no violation by any
Person of any right of the Company or any of its Subsidiaries with respect to
any patent, copyright, service xxxx, trademark, trade name or other right owned
or used by the Company or any of its Subsidiaries.
6.19. Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws, except for such
instances of noncompliance as have not resulted in and would not reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in section 3 of ERISA), and no event, transaction or condition
has occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate, or in
the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plans most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plans most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities [by more than $_________ in the case of
any single Plan and by more than $_________ in the aggregate for all Plans]. The
term "benefit liabilities" has the meaning specified in section 4001 of ERISA
and the terms "current value" and "present value" have the meaning specified in
section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans.
(d) The aggregate expected postretirement benefit obligation
(determined as of the last day of the Company's most recently ended fiscal year
in accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Company and its Subsidiaries does not exceed
$_______.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.
6.20. Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any person other than you and the other Purchasers. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
6.21. Existing Indebtedness; Material Agreements; Future Liens.
(a) Except as described therein, Schedule C sets forth a complete and
correct list of all outstanding Indebtedness of the Company and its Subsidiaries
as of the Effective Date, since which date there has been no Material change in
the amounts, interest rates, sinking funds, installment payments or maturities
of the Indebtedness of the Company or its Subsidiaries. After giving effect to
the transactions contemplated hereby, neither the Company nor any Subsidiary
will be in default and no waiver of default will be currently in effect, in the
payment of any principal or interest on any Indebtedness of the Company or such
Subsidiary and no event or condition will exist with respect to any Indebtedness
of the Company or any Subsidiary that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Schedule G is a complete and correct list of each Lien (other than
Permitted Encumbrances) securing Indebtedness of any Person outstanding on the
date hereof, the aggregate principal or face amount of which equals or exceeds
(or may equal or exceed) $250,000, and covering any Property of the Company or
any of its Subsidiaries, and the aggregate Indebtedness secured (or that may be
secured) by each such Lien and the Property covered by each such Lien is
correctly described in Schedule G.
(c) Except as disclosed in Schedule G, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its Property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 11.2.
6.22. Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
6.23. Status under Certain Statutes.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act, as amended.
6.24. Environmental Matters.
(a) The Company has heretofore delivered to the Purchasers copies of
all environmental investigations, studies, audits, tests, reviews or other
analyses conducted by or that are in the possession of the Company or any of its
Subsidiaries in relation to facts, circumstances or conditions at or affecting
any site or facility now or previously owned, operated or leased by the Company
or any of its Subsidiaries. These environmental investigations, studies, audits,
tests, reviews or other analyses are listed on Schedule L;
(b) Neither the Company nor any Subsidiary has knowledge of any claim
or has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(c) Neither the Company nor any Subsidiary has knowledge of any facts
which would give rise to any claim, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned, leased or operated
by any of them or to other assets or their use, except, in each case, such as
could not reasonably be expected to result in a Material Adverse Effect;
(d) Neither the Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or operated
by any of them and has not disposed of any Hazardous Materials in a manner
contrary to any Environmental Laws or in a manner that may give rise to
liability under any Environmental Laws in each case in any manner that could
reasonably be expected to result in a Material Adverse Effect; and
(e) all operations and buildings on all real properties now owned,
leased or operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
7. REPRESENTATION OF THE PURCHASERS.
You represent that you are accepting the Notes in exchange for the
Existing Notes for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, provided that the disposition of
your or their Property shall at all times be within your or their control. You
understand that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
8. INFORMATION AS TO COMPANY.
8.1. Financial Information.
The Company shall deliver to the Note Agent and, upon the written
request (which shall be required to be made only a single time) of any
Purchaser, to such Purchaser:
(a) Quarterly Statements -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the last
quarterly fiscal period of each such fiscal year), duplicate copies of,
(i) a consolidated balance sheet of the Company and its Subsidiaries
as at the end of such quarter, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries, for such quarter
and (in the case of the second and third quarters) for the portion of the
fiscal year ending with such quarter, setting forth in each case in
comparative form the figures for the corresponding periods in (or, in the
case of the balance sheet, as of the end of) the previous fiscal year, all
in reasonable detail, prepared in accordance with GAAP applicable to
quarterly financial statements generally subject to year-end adjustments
and without footnotes, and certified by a Senior Financial Officer as
presenting fairly, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments, provided that
delivery within the time period specified above of copies of the Company's
quarterly report on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this Section 8.1(a);
(b) Annual Statements -- within 105 days after the end of each fiscal
year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries, for such
year, setting forth in each case in comparative form the figures for
the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP, and accompanied
(A) by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall
state that such financial statements present fairly, in all
material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and
have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, and
(B) by a certificate of such accountants (which certificate
may be limited to the extent required by accounting rules or
guidelines) stating that they have reviewed this Agreement and
stating further whether, in making their audit, they have become
aware of any condition or event that then constitutes a Default
or an Event of Default, and, if they are aware that any such
condition or event then exists, specifying the nature and period
of the existence thereof (it being understood that such
accountants shall not be liable, directly or indirectly, for any
failure to obtain knowledge of any Default or Event of Default
unless such accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted auditing
standards or did not make such an audit),
provided that the delivery within the time period specified above of the
Company's annual report on Form 10-K for such fiscal year (together with
the Company's annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate described in clause
(B) above, shall be deemed to satisfy the requirements of this Section
8.1(b);
(c) Monthly Statements -- within 45 days after the end of each
calendar month, duplicate copies of the consolidated monthly financial
statements of the Company and its Subsidiaries in the same form as those
distributed internally to the members of senior management of the Company, which
statements shall be prepared in accordance with GAAP as applicable to interim
statements, provided that such statements need not contain footnotes and may be
subject to quarterly and annual adjustments;
(d) SEC and Other Reports -- promptly upon their becoming available,
one copy of (i) each financial statement, report, notice or proxy statement sent
by the Company or any Subsidiary to public securities holders generally, and
(ii) each regular or periodic report (other than Forms S-8 and 11-K), each
registration statement (without exhibits except as expressly requested by such
holder), and each prospectus and all amendments thereto filed by the Company or
any Subsidiary with the Securities and Exchange Commission and of all press
releases and other statements made available generally by the Company or any
Subsidiary to the public concerning developments that are Material;
(e) Information Required by Rule 144A -- promptly upon it becoming
available, duplicate copies of such financial and other information as such
holder may reasonably determine to be necessary in order to permit compliance
with the information requirements of Rule 144A under the Securities Act in
connection with the resale of Notes, except at such times as the Company is
subject to the reporting requirements of section 13 or 15(d) of the Exchange
Act.
8.2. Business Information.
(a) The Company shall deliver to each Purchaser:
(i) Notice of Default -- promptly, and in any event within five
days after a Responsible Officer becomes aware of the existence of any
Default or that any Person has given any notice or taken any action with
respect to a claimed Default or that any Person has given any notice or
taken any action with respect to a claimed Default of the type referred to
in Section 12(f), a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to take
with respect thereto;
(ii) Notices from Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Federal or state Governmental Authority
relating to any order, ruling, statute or other law or regulation that
could reasonably be expected to have a Material Adverse Effect; and
(iii) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations, affairs,
financial condition, or Properties of the Company or any of its
Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such Purchaser.
(b) Employee Benefits. Upon the written request of any Purchaser
(which shall be required to be made only a single time), the Company shall:
(i) Cause to be delivered to such Purchaser, each of the
following: (A) promptly, and in any event within 10 Business Days after the
Company or any of its Subsidiaries knows or has reason to know that an
ERISA Event has occurred that reasonably could be expected to result in a
Material Adverse Change, a written statement of a Senior Financial Officer
of the Company describing such ERISA Event and any action that is being
taken with respect thereto by the Company, any such Subsidiary or ERISA
Affiliate, and any action taken or threatened by the IRS, Department of
Labor, or PBGC. The Company or such Subsidiary, as applicable, shall be
deemed to know all facts known by the administrator of any Benefit Plan of
which it is the plan sponsor, (B) promptly, and in any event within 3
Business Days after the filing thereof with the IRS, a copy of each funding
waiver request filed with respect to any Benefit Plan and all
communications received by the Company, any of its Subsidiaries or, to the
knowledge of the Company, any ERISA Affiliate with respect to such request,
and (C) promptly, and in any event within 3 Business Days after receipt by
the Company, any of its Subsidiaries or, to the knowledge of the Company,
any ERISA Affiliate, of the PBGC's intention to terminate a Benefit Plan or
to have a trustee appointed to administer a Benefit Plan, copies of each
such notice.
(ii) Cause to be delivered to such Purchaser, each of the
following: (A) a copy of each Plan (or, where any such plan is not in
writing, complete description thereof) (and if applicable, related trust
agreements or other funding instruments) and all amendments thereto, all
written interpretations thereof and written descriptions thereof that have
been distributed to employees or former employees of the Company or its
Subsidiaries; (B) the most recent determination letter issued by the IRS
with respect to each Benefit Plan; (C) for the three most recent plan
years, annual reports on Form 5500 Series required to be filed with any
governmental agency for each Benefit Plan; (D) all actuarial reports
prepared for the last three plan years for each Benefit Plan; (E) a listing
of all Multiemployer Plans, with the aggregate amount of the most recent
annual contributions required to be made by the Company or any ERISA
Affiliate to each such plan and copies of the collective bargaining
agreements requiring such contributions; (F) any information that has been
provided to the Company or any ERISA Affiliate regarding withdrawal
liability under any Multiemployer Plan; and (G) the aggregate amount of the
most recent annual payments made to former employees of the Company or its
Subsidiaries under any Retiree Health Plan.
8.3. Officer's Certificate.
(a) Covenant Compliance. Each set of annual and quarterly financial
statements delivered to a holder of Notes pursuant to Section 8.1(a) and Section
8.1(b) hereof shall be accompanied by a certificate of a Senior Financial
Officer setting forth the information (including calculations in reasonable
detail) required in order to establish whether the Company was in compliance
with the requirements of Sections 9.1, 11.1, 11.2, 11.6, 11.7, 11.18 and 11.19,
inclusive, during the quarterly or annual period covered by the statements then
being furnished (including with respect to each such Section, where applicable,
the calculations of the maximum or minimum amount, ratio or percentage, as the
case may be, permissible under the terms of such Sections, and the calculation
of the amount, ratio or percentage then in existence);
(b) Defaults. Each set of annual, quarterly and monthly financial
statements delivered to a holder of Notes pursuant to Section 8.1(a), Section
8.1(b) or Section 8.1(c) hereof shall be accompanied by a certificate of a
Senior Financial Officer setting forth a statement that such officer has
reviewed the relevant terms thereof and has made, or caused to be made, under
his or her supervision a review of the transactions and conditions of the
Company and the Subsidiaries from the beginning of the period covered by the
statements then being furnished to the date of the certificate and that such
review has not disclosed the existence during such period of any condition or
event that constitutes a Default or, if any such condition or event existed or
exists (including, without limitation, any such event or condition resulting
from the failure of the Company to comply with any Environmental Law),
specifying the nature and period of existence thereof and what action the
Company shall have taken or proposes to take with respect thereto.
8.4. Inspection.
At the request of the Collateral Agent or any Purchaser, the Company
shall permit the representatives of the Collateral Agent and such Purchaser:
(a) if no Default then exists, at the expense of the Collateral Agent
or such Purchaser, as the case may be, and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with the
Company's officers, and (with the consent of the Company, which consent will not
be unreasonably withheld) its independent public accountants, and (with the
consent of the Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each Subsidiary, all
at such reasonable times and as often as may be reasonably requested in writing;
and
(b) if a Default then exists, at the expense of the Company, to visit
and in respect any of the offices or properties of the Company or any
Subsidiary, to examine all of their respective books of account, records,
reports and other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective officers
and independent public accountants (and by this provision the Company authorizes
said accountants to discuss the affairs, finances and accounts of the Company
and its Subsidiaries), all at such times and as often as may be requested. 9.
PREPAYMENT OF THE NOTES.
9.1. Special Prepayments from Average Available Cash and After Sale of Assets or
Change of Control.
The Company shall make prepayments of the principal amount of the
Notes hereunder as follows:
(a) Average Available Cash. In the event that, as at the end of any
calendar month, the Average Available Cash for the month (the "Applicable
Month") during the preceding period of six consecutive calendar months with the
lowest Average Available Cash exceeds $11,000,000, the Company shall apply in
multiples of not less than $1,000,000 the amount by which the Average Available
Cash for the Applicable Month exceeds $11,000,000 to the pro rata prepayment of
Notes ("Available Cash Payments"); provided, however, that the total amount of
Available Cash Payments required under this subsection shall not exceed
$15,000,000. Not later than 10 Business Days after the last day of each calendar
month, the Company shall deliver a notice to the holders of the Notes, which
notice shall specify the amount of Average Available Cash for each month during
the preceding period of six consecutive calendar months and the resulting
Available Cash Payment, if any, for such month, shall refer to this subsection,
shall specify the date fixed for such prepayment (which shall not be less than 5
Business Days and not more than 10 Business Days after the date such notice is
given) and shall specify the aggregate principal amount of the Notes held by
each holder thereof to be prepaid (with calculations in reasonable detail of how
such amounts were determined). On the prepayment date specified in such notice,
the Company shall prepay the Notes at 100% of the principal amount to be
prepaid, together with accrued interest to the date fixed for prepayment.
(b) Sales of Non-Excluded Assets and Worn-Out Equipment. Without
limiting the obligation of the Company to obtain the consent of the Required
Holders to any Disposition other than a Permitted Disposition and subject to the
terms of the Intercreditor Agreement, the Company agrees, on or prior to the
occurrence of any Disposition other than a Disposition described in clause (a)
of the definition of Permitted Disposition, to deliver to the Note Agent a
statement certified by a Senior Financial Officer, in form and detail
satisfactory to the Note Agent in its reasonable determination, of the estimated
amount of (i) the Net Cash Proceeds from such Disposition of any Non-Excluded
Assets and (ii) any Net Cash Proceeds in excess of $1,600,000 in the aggregate
from the Disposition of Excluded Assets that will (on the date of such
Disposition) be received by the Company or any of its Subsidiaries in cash and,
except as provided in Section 9.1(c) below, the Company will apply to the pro
rata prepayment of the Notes hereunder, as follows:
(i) upon the date 30 days following such Dispositions, an
aggregate amount equal to 75% of such estimated amount of the Net Cash
Proceeds of such Dispositions, to be determined at the time of each
Disposition, to the extent received by the Company or any of its
Subsidiaries in cash on the date of such Disposition; and
(ii) thereafter, quarterly, on the date of the delivery by the
Company to the Note Agent pursuant to Section 8.1 of the financial
statements for any quarterly fiscal period or fiscal year, to the extent
the Company or any of its Subsidiaries shall receive Net Cash Proceeds
during the quarterly fiscal period ending on the date of such financial
statements in cash under deferred payment arrangements or Disposition
Investments entered into or received in connection with any Disposition to
which this Section 9.1(b) applies, an amount equal to (a) 75% of the
aggregate amount of such Net Cash Proceeds minus (b) any transaction
expenses associated with such Dispositions and not previously deducted in
the determination of Net Cash Proceeds plus (or minus, as the case may be)
(c) any other adjustment received or paid by the Company or any of its
Subsidiaries pursuant to the respective agreements giving rise to such
Dispositions and not previously taken into account in the determination of
the Net Cash Proceeds of such Dispositions, provided that if prior to the
date upon which the Company would otherwise be required to make a
prepayment under this subclause (ii) with respect to any quarterly fiscal
period the aggregate amount of such Net Cash Proceeds (after giving effect
to the adjustments provided for in this subclause (ii)) shall exceed
$500,000, then the Company shall within 3 Business Days from the date of
receipt of such Net Cash Proceeds make a prepayment under this subclause
(ii) in an amount equal to such required prepayment.
(c) Sale of Excluded Assets. The Company shall not be required to make
a prepayment pursuant to Section 9.1(b) above with the Net Cash Proceeds from
the Disposition of Excluded Assets and shall be permitted to retain such Net
Cash Proceeds for working capital purposes, provided that,
(i) the Company advises the Purchasers at the time a prepayment
would otherwise be required to be made under Section 9.1(b) above that it
intends to use such Net Cash Proceeds for working capital purposes; and
(ii) the aggregate amount of Net Cash Proceeds from the
Disposition of Excluded Assets not subject to prepayment pursuant to
Section 9.1(b) does not exceed $1,600,000.
(d) Change in Control.
(i) Notice of Change in Control or Control Event. The Company
will, within 10 Business Days after any Responsible Officer has knowledge
of the occurrence of any Change in Control, give written notice of such
Change in Control to each holder of Notes unless notice in respect of such
Change in Control shall have already been given pursuant to this Section
9.1(d). If a Change in Control has occurred, such notice shall contain and
constitute an offer to prepay Notes as described in subparagraph (iii) of
this Section 9.1(d) and shall be accompanied by the certificate described
in subparagraph (vii) of this Section 9.1(d).
(ii) Condition to Company Action. The Company will not take any
action that consummates or finalizes a Change in Control unless (i) at
least 10 days prior to such action it shall have given to each holder of
Notes written notice containing and constituting an offer to prepay Notes
as described in subparagraph (iii) of this Section 9.1(d), accompanied by
the certificate described in subparagraph (vii) of this Section 9.1(d), and
(ii) contemporaneously with such action, it prepays all Notes required to
be prepaid in accordance with this Section 9.1(d).
(iii) Offer to Prepay Notes. The offer to prepay Notes
contemplated by this Section 9.1(d) shall be an offer to prepay, in
accordance with and subject to this Section 9.1(d), all, but not less than
all, the Notes held by each holder (in this case only, "holder" in respect
of any Note registered in the name of a nominee for a disclosed beneficial
owner shall mean such beneficial owner) on a date specified in such offer
(the "Proposed Prepayment Date"). If such Proposed Prepayment Date is in
connection with an offer contemplated by this Section 9.1(d), such date
shall be not less than 20 days and not more than 30 days after the date of
such offer.
(iv) Acceptance. A holder of Notes may accept the offer to prepay
made pursuant to this Section 9.1(d) by causing a notice of such acceptance
to be delivered to the Company at least 10 days prior to the Proposed
Prepayment Date. A failure by a holder of Notes to respond to an offer to
prepay made pursuant to this Section 9.1(d) shall be deemed to constitute
an acceptance of such offer by such holder.
(v) Prepayment. Prepayment of the Notes to be prepaid pursuant to
this Section 9.1(d) shall be at 101% of the principal amount of such Notes,
together with interest on such Notes accrued to the date of prepayment.
(vi) Deferral Pending Change in Control. The obligation of the
Company to prepay Notes pursuant to the offers required by and accepted in
accordance with this Section 9.1(d) is subject to the occurrence of the
Change in Control in respect of which such offers and acceptances shall
have been made. In the event that such Change in Control does not occur on
the Proposed Prepayment Date in respect thereof, the prepayment shall be
deferred until and shall be made on the date on which such Change in
Control occurs. The Company shall keep each holder of Notes reasonably and
timely informed of (i) any such deferral of the date of prepayment, (ii)
the date on which such Change in Control and the prepayment are expected to
occur, and (iii) any determination by the Company that efforts to effect
such Change in Control have ceased or been abandoned (in which case the
offers and acceptances made pursuant to this Section 9.1(d) in respect of
such Change in Control shall be deemed rescinded).
(vii) Officer's Certificate. Each offer to prepay the Notes
pursuant to this Section 9.1(d) shall be accompanied by a certificate,
executed by a Senior Financial Officer of the Company and dated the date of
such offer, specifying: (a) the Proposed Prepayment Date; (b) that such
offer is made pursuant to this Section 9.1(d); (c) the principal amount of
each Note offered to be prepaid; (d) the interest that would be due on each
Note offered to be prepaid, accrued to the Proposed Prepayment Date (or any
later date resulting from the deferral thereof); (e) that the conditions of
this Section 9.1(d) have been fulfilled; and (f) in reasonable detail, the
nature and date or proposed date of the Change in Control.
9.2. Optional Prepayments.
The Company may, at its option, upon notice as provided below, prepay,
without penalty or premium, at any time all, or from time to time any part of,
the Notes, in an amount not less than $1,000,000 of the aggregate principal
amount of the Notes then outstanding in the case of a partial prepayment, at
100% of the principal amount so prepaid. The Company will give each holder of
Notes written notice of each optional prepayment under this Section 9.2 not less
than 30 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date, the aggregate principal
amount of the Notes to be prepaid on such date, the principal amount of each
Note held by such holder to be prepaid (determined in accordance with Section
9.3), and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid.
9.3. Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes pursuant to
Section 9.1(a) or (b), the principal amount of the Notes to be prepaid shall be
allocated among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment.
9.4. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this Section 9,
the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date. From and after such date, unless the
Company shall fail to pay such principal amount when so due and payable,
together with the interest, as aforesaid, interest on such principal amount
shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to
the Company and cancelled and shall not be reissued, and no Note shall be issued
in lieu of any prepaid principal amount of any Note.
9.5. Purchase of Notes.
The Company will not and will not permit any Affiliate under its
control to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any
such Notes.
10. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
10.1. Compliance with Law.
The Company will comply, and will cause each of its Subsidiaries to
comply, with all laws, ordinances or governmental rules or regulations to which
each of them is subject, including, without limitation, Environmental Laws, and
will obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the ownership of
their respective properties or to the conduct of their respective businesses.
10.2. Accounting Systems.
The Company will maintain a standard and modern system of accounting
that enables the Company to produce financial statements in accordance with
GAAP, and maintain records pertaining to the Collateral that contain information
as from time to time may be requested by the Required Holders. The Company also
shall keep a modern inventory reporting system that shows all additions, sales,
claims, returns, and allowances with respect to the Inventory.
10.3. Collateral Reporting.
The Company shall provide upon the written request (which shall be
required to be given only a single time) of any Purchaser the following
documents or information to such Purchaser provided that such documents and
information are provided to the New Revolving Credit Lender by the Company under
the New Revolving Credit Agreement at the following times in the form furnished
to the New Revolving Credit Lender: (a) on a monthly basis and, in any event, by
no later than the 10th day of each month during the term of this Agreement, (i)
a detailed calculation of the Borrowing Base, (ii) a detailed aging, by total,
of the Accounts, together with a reconciliation to the detailed calculation of
the Borrowing Base previously provided to Foothill, and (iii) a report showing
the post-Petition Date loans and advances outstanding from the Company to its
Jamaican and Mexican Subsidiaries, and any changes in the balances thereof from
the last such report, (b) on a monthly basis and, in any event, by no later than
the 10th day of each month during the term of this Agreement, a summary aging,
by vendor, of the Company's accounts payable and any book overdraft, (c) on a
quarterly basis, a detailed list of the Company's customers.
10.4. Title to Equipment.
Upon the request of the Collateral Agent or the Required Holders, the
Company shall promptly deliver, and shall cause its Subsidiaries to deliver, to
the Collateral Agent, to the extent such items are in the possession or control
of the Company, or otherwise reasonably available to the Company or any
Subsidiary, properly endorsed, any and all evidences of ownership of,
certificates of title, or applications for title to any items of Equipment
included in the Collateral.
10.5. Maintain the Equipment and Improvements.
The Company shall maintain, and shall cause its Subsidiaries to
maintain, the Equipment and the Improvements (as such term is defined in the
Mortgages) in good operating condition and repair (ordinary wear and tear
excepted), and make all necessary replacements thereto so that the value and
operating efficiency thereof shall at all times be maintained and preserved.
Other than those items of Equipment that constitute fixtures on the Closing
Date, neither the Company nor any Subsidiary shall permit any item of Equipment
to become a fixture to real estate or an accession to other Property, and such
Equipment shall at all times remain personal Property.
10.6. Insurance.
(a) At its expense, the Company shall keep the Personal Property
Collateral insured against loss or damage by fire, theft, explosion, sprinklers,
and all other hazards and risks, and in such amounts, as are ordinarily insured
against by other owners in similar businesses. The Company also shall maintain
business interruption, public liability, product liability, and Property damage
insurance relating to the Company's ownership and use of the Personal Property
Collateral, as well as insurance against larceny, embezzlement, and criminal
misappropriation.
(b) At its expense, the Company shall obtain and maintain (i)
insurance of the type necessary to insure the Improvements and Equipment (as
such terms are defined in the Mortgages), for the full replacement cost thereof,
against any loss by fire, lightning, windstorm, hail, explosion, aircraft, smoke
damage, vehicle damage, elevator collision, and other risks from time to time
included under "extended coverage" policies, in such amounts as the Required
Holders reasonably may require, but in any event in amounts sufficient to
prevent the Company from becoming a co-insurer under such policies, (ii)
combined single limit bodily injury and Property damages insurance against any
loss, liability, or damages on, about, or relating to each parcel of Real
Property Collateral, in an amount of not less than [$_______], and (iii)
insurance for such other risks as the Required Holders may require. Replacement
costs, at the Required Holders' option, may be redetermined by an insurance
appraiser, satisfactory to the Required Holders, not more frequently than once
every 12 months at the Company's cost.
(c) All such policies of insurance shall be in such form, with such
companies, and in such amounts as may be satisfactory to the Purchasers in their
reasonable determination. All insurance required herein shall be written by
companies which are authorized to do insurance business in the States of Alabama
and South Carolina. All hazard insurance and such other insurance as the
Required Holders shall specify, shall contain a Form 438BFU (NS) mortgagee
endorsement, or an equivalent endorsement satisfactory to the Purchasers,
showing the Collateral Agent as loss payee thereof, as its interests may appear,
and shall contain a waiver of warranties. Every policy of insurance referred to
in this Section 10.6 shall contain an agreement by the insurer that it will not
cancel such policy except after 30 days prior written notice to the Collateral
Agent and that any loss payable thereunder shall be payable notwithstanding any
act or negligence of the Company or the Collateral Agent which might, absent
such agreement, result in a forfeiture of all or a part of such insurance
payment and notwithstanding (i) occupancy or use of the Real Property Collateral
for purposes more hazardous than permitted by the terms of such policy, (ii) any
foreclosure or other action or proceeding taken by the Collateral Agent pursuant
to the Mortgages upon the happening of an Event of Default, or (iii) any change
in title or ownership of the Real Property Collateral. The Company shall deliver
to the Collateral Agent certified copies of such policies of insurance and
evidence of the payment of all premiums therefor.
(d) Original policies or certificates thereof satisfactory to the
Purchasers evidencing such insurance shall be delivered to the Collateral Agent
at least 30 days prior to the expiration of the existing or preceding policies.
The Company shall give the Collateral Agent prompt notice of any loss covered by
such insurance, and the Collateral Agent shall have the right to adjust any
loss. The Collateral Agent shall have the exclusive right to adjust all losses
payable under any such insurance policies with respect to the Purchasers'
Primary Collateral without any liability to the Company whatsoever in respect of
such adjustments, absent gross negligence or willful misconduct on the part of
Collateral Agent. Any monies received as payment for any loss under any
insurance policy including the insurance policies mentioned above, to the extent
it pertains to the Purchasers' Primary Collateral, shall be paid over to the
Collateral Agent to be applied at the option of the Required Holders either to
the prepayment of the Notes without premium, in such order or manner as the
Required Holders may elect, but consistent with the terms of the Security
Documents and the Intercreditor Agreement, to the extent applicable, or shall be
disbursed to the Company under staged payment terms reasonably satisfactory to
the Required Holders for application to the cost of repairs, replacements, or
restorations. All repairs, replacements, or restorations shall be effected with
reasonable promptness and shall be of a value at least equal to the value of the
items or Property destroyed prior to such damage or destruction. Upon the
occurrence of an Event of Default, the Required Holders shall have the right to
cause the Collateral Agent to apply all prepaid premiums pertaining to insurance
that relates to the Purchasers' Primary Collateral to the payment of the Notes
in such order or form as the Purchasers shall determine.
(e) The Company shall not take out separate insurance concurrent in
form or contributing in the event of loss with that required to be maintained
under this Section 10.6, unless the Collateral Agent is included thereon as
named insured with the loss payable to the Collateral Agent, as its interests
may appear, under a standard 438BFU (NS) Mortgagee endorsement, or its local
equivalent. The Company immediately shall notify the Collateral Agent whenever
such separate insurance is taken out, specifying the insurer thereunder and full
particulars as to the policies evidencing the same, and originals of such
policies immediately shall be provided to the Collateral Agent.
10.7. No Setoffs or Counterclaims.
The Company will make payments, and will cause each of its
Subsidiaries to make payments, hereunder and under the other Basic Documents by
or on behalf of the Company or any of its Subsidiaries without setoff or
counterclaim and free and clear of, and without deduction or withholding for or
on account of, any Federal, state, or local taxes.
10.8. Location of Equipment.
The Company will keep, and will cause each of its Subsidiaries to
keep, the Equipment only at the locations identified on Schedule H and not
further remove same from the United States of America except for ordinary course
relocation of Equipment between locations in the United States of America,
Mexico, and Jamaica, to meet production requirements; provided, however, that
the Company may amend Schedule H so long as such amendment occurs by written
notice to the Purchasers not less than 10 days prior to the date on which
Equipment is moved to such new location, and so long as such new location is
within the United States of America (unless the Purchasers consent to removal to
additional locations outside the United States of America), and so long as, at
the time of such written notification (except with respect to Equipment that is
to be moved outside the United States of America with the Required Holders'
consent or pursuant to the provisions above that apply to certain movements of
Equipment and/or Inventory to Mexico or Jamaica), the Company provides any
financing statements or fixture filings necessary to perfect and continue
perfected the Purchasers' security interests in such Property and also, within
such 10 day period, provides to the Purchasers a Collateral Access Agreement if
requested by the Collateral Agent or the Required Holders.
10.9. Intentionally Left Blank.
This section has been intentionally left blank.
10.10. Leases.
The Company will pay when due, and will cause each of its Subsidiaries
to pay when due, all rents and other amounts payable under any leases to which
the Company or any of its Subsidiaries is a party or by which the Properties of
the Company or any of its Subsidiaries are bound, unless such payments are the
subject of a Permitted Protest.
10.11. Payment of Taxes and Claims.
The Company will file, and will cause each of its Subsidiaries to
file, all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them or any of
their Properties, income or franchises, to the extent such taxes and assessments
have become due and payable and before they have become delinquent, and all
claims for which sums have become due and payable that have or might become a
Lien on Properties of the Company or any Subsidiary, provided that neither the
Company nor any Subsidiary need pay any such tax or assessment or claims if (i)
the amount, applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate proceedings,
and the Company or such Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of the Company or such Subsidiary.
10.12. Corporate Existence, etc.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Section 11.3, the Company will at all
times preserve and keep in full force and effect (a) the corporate existence of
each of its Subsidiaries (unless merged into the Company or a Subsidiary) and
(b) all rights and franchises of the Company and its Subsidiaries, except to the
extent that the failure to preserve and keep such rights and franchises in full
force and effect could not, individually or in the aggregate, be reasonably
expected to result in a Material Adverse Effect.
10.13. Certain Obligations Respecting Domestic Subsidiaries.
(a) Guarantors. The Company will take such action, and will cause each
of its Domestic Subsidiaries to take such action, from time to time as shall be
necessary to ensure that all Domestic Subsidiaries of the Company are
"Guarantors" and "Debtors" under the Subsidiary Guaranty and Security Agreement.
Without limiting the generality of the foregoing, in the event that the Company
or any of its Subsidiaries shall form or acquire any new Domestic Subsidiary
that shall constitute a Domestic Subsidiary hereunder, the Company and its
Subsidiaries will cause such new Domestic Subsidiary to
(i) become a "Guarantor" and "Debtor" under the Subsidiary Guaranty
and Security Agreement;
(ii) subject to the rights of Foothill under the terms of the
Intercreditor Agreement, cause such Domestic Subsidiary to take such action
(including, without limitation, delivering such shares of stock, executing
and delivering such Uniform Commercial Code financing statements and
executing and delivering mortgages or deeds of trust covering the real
Property and fixtures owned or leased by such Subsidiary) as shall be
necessary to create and perfect valid and enforceable first priority Liens
on substantially all of the Property of such new Domestic Subsidiary as
collateral security for the obligations of such new Subsidiary hereunder;
and
(iii) deliver such proof of corporate action, incumbency of officers,
opinions of counsel and other documents as is consistent with those
delivered by each Guarantor as the Collateral Agent or the Required Holders
may reasonably request.
(b) Ownership of Subsidiaries. The Company will, and will cause each
of its Subsidiaries to, take such action from time to time as shall be necessary
to ensure that each of its Subsidiaries is a Wholly Owned Subsidiary except as
disclosed on Schedule F. In the event that any shares of stock shall be issued
by any Subsidiary, the Company agrees, and agrees to cause each of its
Subsidiaries to deliver forthwith to the Collateral Agent pursuant to the
Security and Pledge Agreement or the Subsidiary Guaranty and Security Agreement,
as the case may be, the certificates evidencing such shares of stock,
accompanied by undated stock powers executed in blank and to take such other
action as the Collateral Agent or the Required Holders shall reasonably request
to perfect the security interest created therein; provided, however, that the
Company shall not be required to, or to cause any of its Domestic Subsidiaries
to, grant the Collateral Agent a security interest in shares of stock of any
Subsidiary that is not a Domestic Subsidiary in excess of 66% of all of the
outstanding shares of such Subsidiary.
10.14. Chief Executive Officer.
The Company shall at all times cause Xxxxxxx Xxxxxxxxxxx or another person
acceptable to the Required Holders in the Required Holders' reasonable
discretion to be the Chief Executive Officer of the Company.
10.15. Tax Returns.
Upon the written request (which shall be required to be made only a
single time) of any Purchaser, the Company shall deliver to such Purchaser
copies of each of the Company's future Federal income tax returns, and any
amendments thereto, within thirty days of the filing thereof with the Internal
Revenue Service.
10.16. Fayette Facilities.
The Company shall repay all of the IDB Indebtedness related to the
Fayette Facilities on the dates scheduled for repayment.
11. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
11.1. Indebtedness.
The Company will not, nor will it permit any of its Subsidiaries to,
create, incur or assume any Indebtedness unless at the date subsequent to the
Effective Date that such Indebtedness is created, incurred or assumed, and after
giving effect thereto and to the application of the proceeds thereof, the
Interest Coverage Ratio is at least 2.50 to 1, except:
(a) Indebtedness created hereunder and under the Guaranty and Security
Agreement;
(b) Indebtedness (including Capital Lease Obligations) set forth in
Schedule C, including any extensions, renewals or replacements of any such
Indebtedness;
(c) Intentionally left blank;
(d) Indebtedness of any Subsidiary to the Company or any other Subsidiary;
and
(e) additional Indebtedness of the Company; provided that the aggregate
principal amount of Indebtedness permitted by this clause (e) shall not exceed
$1,000,000 at any time outstanding.
11.2. Liens.
The Company will not, nor will it permit any of its Subsidiaries to,
create, incur, assume, permit or suffer to exist any Lien on any Property now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect thereof, except:
(a) Liens created pursuant to the Security Documents;
(b) any Lien on any Property of the Company or any of its Subsidiaries
existing on the Closing Date and set forth in Schedule G; provided that (i) such
Lien shall not apply to any other Property of the Company or any of its
Subsidiaries and (ii) such Lien shall secure only those obligations which it
secures on the date hereof;
(c) Permitted Encumbrances;
(d) any Lien existing on any Property of any Person that becomes a
Subsidiary after the Closing Date prior to the time such Person becomes a
Subsidiary; provided that (i) such Lien is not created in contemplation of or in
connection with such Person becoming a Subsidiary, (ii) such Lien shall not
apply to any other Property of the Company or any Subsidiary and (iii) such Lien
shall secure only those obligations which it secures on the date such Person
becomes a Subsidiary;
(e) Liens on fixed or capital assets acquired, constructed or improved
by the Company or any Subsidiary; provided that (i) such security interests
secure Indebtedness permitted by Section 11.1(b) or (e), (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed the cost of
acquiring, constructing or improving such fixed or capital assets, and (iv) such
security interests shall not apply to any other Property of the Company or any
Subsidiary;
(f) Liens (other than those permitted by paragraphs (a) through (e)
above) securing liabilities permitted hereunder in an aggregate amount not
exceeding $250,000 at any time outstanding; and
(g) Liens existing on the Closing Date in respect of the Indebtedness
under the New Revolving Credit Agreement.
11.3. Fundamental Changes.
(a) Mergers and Consolidations. Except for the Permitted Combination,
the Company will not, nor will it permit any of its Subsidiaries to, enter into
any transaction of merger, consolidation or amalgamation other than the
Permitted Combination, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); provided that, if at the time thereof and
immediately after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing hereunder, (i) any Subsidiary of the Company may
merge into or consolidate with the Company or any Subsidiary so long as the
Company is the continuing or surviving Person and has Net Worth not less than
that of the Company immediately prior to the transaction, (ii) any Subsidiary of
the Company may liquidate or dissolve into the Company, (iii) any Subsidiary
that is a Guarantor may merge into or consolidate with another Subsidiary so
long as the Subsidiary that is a Guarantor is the continuing or surviving
Person, or (iv) any Subsidiary of the Company may merge into or consolidate with
any Domestic Subsidiary of the Company so long as the Domestic Subsidiary is the
continuing or surviving Person.
(b) Dispositions. The Company will not, nor will it permit any of its
Subsidiaries to, sell, transfer, lease or otherwise dispose of all or any part
of its Property other than in a transaction constituting a Permitted
Disposition; provided that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing, any Subsidiary
may sell, transfer, lease or otherwise dispose of its assets to the Company or
another Subsidiary that is a Guarantor.
(c) Acquisitions. The Company will not, nor will it permit any of its
Subsidiaries to, acquire any business or Property or capital stock of, or be a
party to any acquisition of, any Person except:
(i) purchases of Equipment and other Property to be sold or used
in the ordinary course of the Company's business;
(ii) Investments permitted under Section 11.6; and
(iii) Capital Expenditures permitted under Section 11.19 of this
Agreement.
11.4. Intentionally Left Blank.
This subsection has intentionally been left blank.
11.5. Lines of Business.
The Company will continue, and will cause each Subsidiary to continue,
to engage in business of the same general type as now conducted by the Company
and its Subsidiaries, and will preserve, renew and keep in full force and
effect, and, subject to Section 11.3(a), will cause each Subsidiary to preserve,
renew and keep in full force and effect their respective corporate existence and
their respective rights, privileges and franchises necessary or desirable in the
normal conduct of business.
11.6. Investments.
The Company will not, nor will it permit any of its Subsidiaries to,
make or permit to remain outstanding any Investments except:
(a) Investments (including Investments made by the Company in any of
its Subsidiaries) outstanding on the Effective Date and identified in Schedule
N;
(b) the acquisition by the Company and/or one or more of its
Subsidiaries of the Strathleven Interest;
(c) operating deposit accounts with banks;
(d) Permitted Investments;
(e) Disposition Investments received by the Company upon a sale of
Property permitted under Section 11.3(b);
(f) loans by the Company to its employees not to exceed $250,000 in
the aggregate at any one time outstanding; and
(g) intercompany loans to the Mexican and Jamaican Subsidiaries (i)
not to exceed $3,000,000 in the aggregate during any fiscal quarter of the
Company and (ii) only to the extent that such loans are necessary to cover the
reasonable operating expenses of such Subsidiaries.
11.7. Restricted Payments.
The Company will not, nor will it permit any of its Subsidiaries to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except that so long as at the time thereof and after giving effect
thereto no Default shall have occurred and be continuing:
(a) the Company may declare and pay dividends with respect to its
common stock payable solely in additional shares of its common stock; and
(b) the Company may make a Restricted Payment of up to $200,000 to
acquire the Strathleven Interest.
Nothing herein shall be deemed to prohibit the payment of dividends by
any Subsidiary of the Company to the Company or to any other Subsidiary of the
Company.
11.8. Transactions with Affiliates.
The Company will not, nor will it permit any of its Subsidiaries to,
sell, lease or otherwise transfer any Property to, or purchase, lease or
otherwise acquire any Property from, or otherwise engage in any other
transactions (including aircraft leases, self-insurance compensation, real
estate transactions and loans and other Investments) with any of its Affiliates,
except (a) transactions in the ordinary course of business at prices and on
terms and conditions not less favorable to the Company or such Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties as
determined in good faith by the Company's board of directors, (b) transactions
between or among the Company and its wholly owned Subsidiaries not involving any
other Affiliate, (c) transactions set forth on Schedule O hereto, (d) any
Restricted Payment permitted by Section 11.7 and (e) transactions outside of the
ordinary course of business not in excess of $60,000 in each case.
11.9. Restrictive Agreements.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon (a)
the ability of the Company or any Subsidiary to create, incur or permit to exist
any Lien upon any of its Property, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital stock
or to make or repay loans or advances to the Company or any other Subsidiary or
to Guaranty Indebtedness of the Company or any other Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by law
or by this Agreement, (ii) the foregoing shall not apply to restrictions and
conditions, if any, contained in agreements existing on the date hereof and
identified on Schedule P (but shall apply to any extension or renewal of, or any
amendment or modification expanding the scope of, any such restriction or
condition), (iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause
(a) of the foregoing shall not apply to restrictions or conditions, if any,
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the Property or
assets securing such Indebtedness and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.
11.10. Change Name.
The Company will not change its name, FEIN, corporate structure
(within the meaning of Section 9402(7) of the Code), or identify, or add any new
fictitious name.
11.11. Prepayments and Amendments.
(a) Except in connection with a refinancing permitted by Section 11.1,
the Company will not, nor will it permit any of its Subsidiaries to, prepay
(except that the Company may make prepayments to the New Revolving Lender from
the proceeds of Accounts and Inventory in accordance with the terms of the new
Revolving Credit Agreement) or redeem, retire, defease, purchase, or otherwise
acquire any Indebtedness owing to any third person, other than the obligations
under the Notes, this Agreement and the other Basic Documents; and
(b) The Company will not, nor will permit any of its subsidiaries, to
amend, modify, alter, increase, or change, directly or indirectly, any of the
terms or conditions of any agreement, instrument, document, indenture, or other
writing evidencing or concerning Indebtedness permitted under Section 11.1(b).
11.12. Sale or Discount of Accounts.
The Company will not, nor will it permit any of its Subsidiaries to,
sell with recourse, or discount or otherwise sell for less than the face value
thereof, any of its Accounts.
11.13. Intentionally Left Blank.
This subsection has intentionally been left blank.
11.14. Accounting Methods.
The Company shall not, and shall not permit any Subsidiary to, modify
or change its method of accounting or enter into, modify, or terminate any
agreement currently existing, or at any time hereafter entered into with any
third party accounting firm or service bureau for the preparation or storage of
the Company's accounting records without said accounting firm or service bureau
agreeing to provide the Collateral Agent and the Purchasers information
regarding the Collateral or the Company's financial condition. The Company
waives, both for itself and its Subsidiaries, the right to assert a confidential
relationship, if any, it or they may have with any accounting firm or service
bureau in connection with any information requested by any Purchaser or the
Collateral Agent pursuant to or in accordance with this Agreement, and agrees
that the Collateral Agent and each Purchaser may contact directly any such
accounting firm or service bureau in order to obtain such information.
11.15. Suspension.
Except in connection with the Permitted Combination, the Company or any
Subsidiary shall not suspend or go out of a substantial portion of its business.
11.16. Change in Location of Chief Executive Office; Inventory and Equipment
with Bailees.
The Company shall not, and shall not permit any Subsidiary to,
relocate its chief executive office to a new location without providing 30 days
prior notification thereof to the Collateral Agent and so long as, at the time
of such written notification, the Company provides any financing statements or
fixture filings necessary to perfect and continue perfected the Collateral
Agent's security interests and also provides, or causes such Subsidiary to
provide, to the Collateral Agent a Collateral Access Agreement (a) in the case
of any Equipment stored with a bailee, warehouseman or similar party and (b) to
the extent provided to the New Revolving Credit Lender with respect to such new
location, in the case of Inventory stored with a bailee, warehouseman or similar
party. The Equipment shall not at any time now or hereafter be stored with a
bailee, warehouseman, or similar party without the Collateral Agent's prior
written consent. The Purchasers consent, both for themselves and the Collateral
Agent, to any bailment, warehousing or similar arrangements specifically
disclosed on Schedule H.
11.17. No Prohibited Transactions Under ERISA.
The Company shall not directly or indirectly:
(a) engage, or permit any Subsidiary or the Company to engage, in any
prohibited transaction which is reasonably likely to result in a civil penalty
or excise tax described in Sections 406 of ERISA or 4975 of the IRC for which a
statutory or class exemption is not available or a private exemption has not
been previously obtained from the Department of Labor;
(b) permit to exist with respect to any Benefit Plan any accumulated
funding deficiency (as defined in Sections 302 of ERISA and 412 of the IRC),
whether or not waived;
(c) fail, or permit any Subsidiary of the Company to fail, to pay
timely required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Subsidiary of the Company to terminate,
any Benefit Plan where such event would result in any liability of the Company,
any of its Subsidiaries or any ERISA Affiliate under Title IV of ERISA;
(e) fail, or permit any Subsidiary of the Company to fail, to make any
required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Subsidiary of the Company to fail, to pay any
required installment or any other payment required under Section 412 of the IRC
on or before the due date for such installment or other payment;
(g) amend, or permit any Subsidiary of the Company to amend, a Plan
resulting in an increase in current liability for the plan year such that either
of the Company, any Subsidiary of the Company or any ERISA Affiliate is required
to provide security to such Plan under Section 401(a)(29) of the IRC; or
(h) withdraw, or permit any Subsidiary of the Company to withdraw,
from any Multiemployer Plan where such withdrawal is reasonably likely to result
in any liability of any such entity under Title IV of ERISA; which, individually
or in the aggregate, results in or reasonably would be expected to result in a
claim against or liability of the Company, any of its Subsidiaries or any ERISA
Affiliate in excess of $100,000.
11.18. Minimum Net Worth.
The Company shall not fail to maintain Net Worth (in each case of the
Company and its consolidated Subsidiaries, on a consolidated basis, in
accordance with GAAP) in compliance with the following requirements: (a) as of
each Net Worth Testing Date, net worth of at least the Required Net Worth Amount
with respect to such date; and (b) if the Net Worth Testing Date occurs more
than 12 months after the Effective Date, net worth of not less than the net
worth 12 months prior to the Net Worth Testing Date minus $4,500,000.
11.19. Capital Expenditures.
The Company shall not make Capital Expenditures in any of the
Company's fiscal years 1998, 1999 or 2000 in excess of: (a) $3,200,000 with
respect to 1998; (b) $3,200,000 with respect to 1999; (c) $4,800,000 with
respect to 2000; and (d) $4,800,000 with respect to 2001.
12. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions
or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal of or
premium, if any, of any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than three Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any
term contained in any of Section 8.2(a)(i), Section 10.6 or Section 11; or
(d) (i) the Company fails or neglects to perform, keep, or observe any
term, provision, condition, covenant, or agreement contained in Sections 8.1
(Financial Information), 8.2(a)(ii), (iii), 8.2(b) (Business Information), 10.1
(Compliance with Laws), 10.4 (Title to Equipment), 10.8 (Location of Equipment),
10.9 (Employee Benefits), 10.10 (Leases), or 10.15 (Tax Returns) of this
Agreement and such failure continues for a period of 5 Business Days; (ii) the
Company fails or neglects to perform, keep or observe any term, provision,
condition, covenant or agreement contained in Sections 10.2 (Accounting
Systems), 10.3 (Collateral Reporting), or 10.5 (Maintain the Equipment and
Improvements) of this Agreement and such failure continues for a period of 15
Business Days; (iii) the Company fails or neglects to perform, keep, or observe
any term, provision, condition, covenant, or agreement contained in Section
10.14 (Chief Executive Officer) and such failure or neglect continues for a
period of 30 days; or (iv) the Company fails or neglects to perform, keep or
observe any term, provision, condition, covenant, or agreement contained herein
or in any other Basic Document (other than those referred to in paragraphs (a),
(b), (c), (d), (i), (ii) and (iii) and (g) of this Section 12) and such default
is not remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company receiving
written notice of such default from any holder of a Note or the Collateral Agent
(any such written notice to be identified as a "notice of default" and to refer
specifically to this paragraph (d) of Section 12), provided that the occurrence
of any "event of default" under, and as defined in, any of the Basic Documents,
after the expiration of any grace period in respect thereof as provided for
therein, be deemed to be an Event of Default under this clause (d) (without
giving effect to any grace period provided in this Section 12(d)); or
(e) any representation or warranty made in writing by or on behalf of
the Company or any Subsidiary or by any officer of the Company in this
Agreement, any of the other Basic Documents or in any writing furnished in
connection with the transactions contemplated hereby proves to have been false
or incorrect in any material respect on the date as of which it is made; or
(f) (i) the Company or any Subsidiary is in default (as principal or
as guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Indebtedness that is outstanding in an
aggregate principal amount of at least $1,000,000 beyond any period of grace
provided with respect thereto, or (ii) the Company or any Subsidiary is in
default in the performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount of at least $1,000,000
or of any mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition such
Indebtedness has become, or has been declared (or one or more Persons are
entitled to declare such Indebtedness to be), due and payable before its stated
maturity or before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or condition (other
than the passage of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests), (x) the Company or any Subsidiary has
become obligated to purchase or repay Indebtedness before its regular maturity
or before its regularly scheduled dates of payment (except by reason of a
mandatory prepayment provided for in the agreements relating to such
Indebtedness) in an aggregate outstanding principal amount of at least
$1,000,000, or (y) one or more Persons have the right to require the Company or
any Subsidiary to so purchase or repay such Indebtedness; or
(g) any Lien created by the Security Documents shall at any time not
constitute a valid and perfected Lien on the Collateral intended to be covered
thereby (to the extent perfection by filing, registration, recordation or
possession is required herein or therein) in favor of the Collateral Agent for
the ratable benefit of the Purchasers, free and clear of all other Liens (other
than Liens permitted under Section 11.2 or under the respective Security
Documents), or, except for (i) expiration in accordance with its terms, (ii) as
a result of a sale or other disposition of the applicable Collateral in a
transaction permitted hereunder and (iii) as a result of the Collateral Agent's
failure to maintain possession of any stock certificates or other instruments
delivered to it under the Security Documents, any of the Security Documents
shall for whatever reason be terminated or cease to be in full force and effect,
or the enforceability thereof shall be contested by any Obligor; or
(h) there is a Material Adverse Change; or
(i) any material portion of the Properties of any Obligor is attached,
seized, subjected to a writ or distress warrant, or is levied upon, or comes
into the possession of any third Person in connection with a claim of such
person of $100,000 or more; or
(j) any Obligor is enjoined, restrained, or in any way prevented by
court order from continuing to conduct all or any material part of its business
affairs; or
(k) notices of Lien, levy, or assessment are filed of record with
respect to any of the Properties of any Obligor which have not been cured within
ten days after the Lien has been filed which (a) represent claims in an
aggregate amount of in excess of $100,000 and which have priority over the
security interests of the Collateral Agent in the Collateral, or (b) represent
claims in an aggregate amount of in excess of $250,000 and which are junior to
the security interests of the Collateral Agent in the Collateral; or
(l) the Confirmation Order is vacated; or
(m) the Company makes any payment on account of Indebtedness that has
been contractually subordinated in right of payment to the payment of the
principal, interest, fees, expenses and any other amounts due under any of the
Basic Documents, except to the extent such payment is permitted by the terms of
the subordination provisions applicable to such Indebtedness; or
(n) the Company or any Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due, (ii)
files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its Property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
(o) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its Subsidiaries,
a custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its Property, or constituting
an order for relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any of its Subsidiaries, or any such
petition shall be filed against the Company or any of its Subsidiaries and such
petition shall not be dismissed within 60 days; or
(p) a final judgment or judgments for the payment of money aggregating
in excess of $100,000 are rendered against one or more of the Company and its
Subsidiaries, which judgments are not, within 30 days after entry thereof,
bonded, discharged or stayed pending appeal, or are not discharged within 30
days after the expiration of such stay; or
(q) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a waiver of
such standards or extension of any amortization period is sought or granted
under section 412 of the Code, (ii) a notice of intent to terminate any Plan
shall have been or is reasonably expected to be filed with the PBGC or the PBGC
shall have instituted proceedings under ERISA section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the
Company or any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit liabilities"
(within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined
in accordance with Title IV of ERISA, shall exceed $1,000,000, (iv) the Company
or any ERISA Affiliate shall have incurred or is reasonably expected to incur
any liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (v) the Company or
any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company
or any Subsidiary establishes or amends any employee welfare benefit plan that
provides post-employment welfare benefits in a manner that would increase the
liability of the Company or any Subsidiary thereunder.
As used in Section 12(q), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
13. REMEDIES ON DEFAULT, ETC.
13.1. Acceleration.
(a) If an Event of Default with respect to the Company described in
paragraph (n) or (o) of Section 12 (other than an Event of Default described in
clause (i) of paragraph (n) or described in clause (vi) of paragraph (n) by
virtue of the fact that such clause encompasses clause (i) of paragraph (n)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.
(b) If any Event of Default described in paragraph (a) or (b) of
Section 12 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.
(c) If any other Event of Default has occurred and is continuing, the
Required Holders may at any time, at their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
(d) Upon any Notes becoming due and payable under this Section 13.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus all accrued and unpaid
interest thereon and the Termination Premium, shall all be immediately due and
payable, in each and every case without presentment, demand, protest or further
notice, all of which are hereby waived. The Company acknowledges, and the
parties hereto agree, that each holder of a Note has the right to maintain its
investment in the Notes free from repayment by the Company (except as herein
specifically provided for).
13.2. Other Remedies.
If any Default has occurred and is continuing, and irrespective of
whether any Notes have become or have been declared immediately due and payable
under Section 13.1, the holder of any Note at the time outstanding may proceed
to protect and enforce the rights of such holder by an action at law, suit in
equity or other appropriate proceeding, whether for the specific performance of
any agreement contained herein or in any Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise of
any power granted hereby or thereby or by law or otherwise.
13.3. Rescission.
At any time after any Notes have been declared due and payable
pursuant to paragraphs (b) or (c) of Section 13.1, the holders of more than 50%
in principal amount of the Notes then outstanding, by notice to the Company, may
rescind and annul any such declaration and its consequences if (a) the Company
has paid all overdue interest on the Notes, all principal if any, on any Note
that is due and payable and is unpaid other than by reason of such declaration,
and all interest on such overdue principal, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 18.1, and (c) no judgment or decree has
been entered for the payment of any monies due pursuant hereto or to the Notes.
No rescission and annulment under this Section 13.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
13.4. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of any
Note in exercising any right, power or remedy shall operate as a waiver thereof
or otherwise prejudice such holder's rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 16, the
Company will pay to the Collateral Agent and the holder of each Note on demand
such further amount as shall be sufficient to cover all reasonable costs and
expenses of the Collateral Agent and such holder incurred in any enforcement or
collection under this Section 13, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.
14. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
14.1. Registration of Notes.
The Company shall keep, or shall cause the Note Agent to keep, at its
principal executive office (or, in the case of the Note Agent, at the office
where it keeps such records) a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company (and the Note Agent) shall not be affected by any notice
or knowledge to the contrary. The Company shall give, or shall cause the Note
Agent to give, to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of the names and
addresses of all registered holders of Notes.
14.2. Assignment and Exchange of Notes.
Upon surrender of any Note at the principal executive office of the
Company (or in the case of the Note Agent, at the office where it keeps such
records) for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or his attorney duly authorized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, or shall execute and deliver to the Note Agent for
redelivery, at the Company's expense (except as provided below), one or more new
Notes (as requested by the holder thereof) in exchange therefor, in an aggregate
principal amount equal to the unpaid principal amount of the surrendered Note.
Each such new Note shall be payable to such Person as such holder may request
and shall be substantially in the form of Exhibit 1. Each such new Note shall be
dated and bear interest from the date to which interest shall have been paid on
the surrendered Note or dated the date of the surrendered Note if no interest
shall have been paid thereon. The Company may require, or may cause the Note
Agent to require, payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Any
Purchaser may assign to one or more assignees all or a portion of its Note to
any Person other than the Persons listed on Schedule P (which Schedule may be
amended by the Company after the date hereof to list additional Competitors
without affecting in any way the validity or enforceability of any assignment
made by any Purchaser prior to the date of such amendment), provided that the
amount of the Note subject to such assignment shall not be less than $1,000,000,
provided further that if necessary to enable the registration of the assignment
by a holder of its entire holding of Notes, one Note may be in a denomination of
less than $1,000,000. Any assignee, by its acceptance of a Note registered in
its name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 7.
14.3. Replacement of Notes.
Upon receipt by the Company of evidence satisfactory to it in its
reasonable determination of the ownership of and the loss, theft, destruction or
mutilation of any Note (which evidence shall be, in the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and such
loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is
a nominee for, an original Purchaser or another holder of a Note with
a minimum net worth of at least $100,000,000, such Person's own
unsecured agreement of indemnity shall be deemed to be satisfactory),
or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
15. PAYMENTS ON NOTES.
15.1. Place of Payment.
Subject to Section 15.2, payments of principal and interest becoming
due and payable on the Notes shall be made in New York, New York at the
principal office of the Note Agent in such jurisdiction. The Company may change
at any time, by notice to each holder of a Note, the place of payment of the
Notes so long as such place of payment shall be either the principal office of
the Company in such jurisdiction or the principal office of a bank or trust
company in such jurisdiction.
15.2. Home Office Payment.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 15.1 or in such Note to the
contrary, the Company will pay to you or your nominee all sums becoming due on
such Note for principal and interest by the method and at the address specified
for such purpose below your name in Schedule A, or by such other method or at
such other address as you shall have from time to time specified to the Company
for such purpose, without the presentation or surrender of such Note or the
making of any notation thereon, except that upon request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, you shall surrender such Note for cancellation, reasonably promptly
after any such request, to the Company at its principal executive office or at
the place of payment designated pursuant to Section 15.1. Prior to any sale or
other disposition of any Note held by you or your nominee you will, at your
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section 14.2. The
Company will afford the benefits of this Section 15.2 to any Purchaser that is
the direct or indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such Note as you have
made in this Section 15.2.
15.3. Notification to Collateral Agent of Payment in Full.
Each Purchaser will notify the Collateral Agent promptly after the Note
Claims (as defined in the Intercreditor Agreement) relating to such Purchaser
and the Notes held by such Purchaser have been paid in full.
16. EXPENSES, ETC.
Except as otherwise provided in the Reorganization Plan with respect
to the fees and expenses of the Purchasers prior to the Effective Date, whether
or not the transactions contemplated hereby are consummated, the Company will
pay all costs and expenses (including reasonable attorneys' fees of a special
counsel (and, if reasonably required, local or other counsel) for all of the
holders of Notes) incurred by the Purchasers in connection with such
transactions and in connection with any amendments, waivers or consents under or
in respect of this Agreement, the Notes or the other Basic Documents (whether or
not such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses (including taxes, and insurance premiums)
incurred in enforcing or defending (or determining whether or how to enforce or
defend) any rights under this Agreement, the Notes or the other Basic Documents
or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement, the Notes or the
other Basic Documents, or by reason of being a holder of any Note, (b) the costs
and expenses, including financial advisors' fees, incurred in connection with
the insolvency or bankruptcy of the Company or any Subsidiary or in connection
with any work-out or restructuring of the transactions contemplated hereby, by
the Notes or by the other Basic Documents, (c) all transfers, stamp, documentary
or other similar taxes, assessments or charges levied by any Governmental
Authority in respect of this Agreement, the Notes or the other Basic Documents
or any other document referred to herein or therein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
any Basic Document or any other document referred to therein, and (d) all costs,
expenses and other charges in respect of title insurance and surveys procured
with respect to the Liens created pursuant to the Security Documents. The
Company will pay, and will save you and each other holder of a Note harmless
from, all claims in respect of any fees, costs or expenses, if any, of brokers
and finders (other than those retained by you). The Company will pay all of the
costs, expenses and fees of the Collateral Agent and the Note Agent, including
the reasonable fees and expenses of counsel, as provided for in the Security
Documents.
16.1. Survival.
The obligations of the Company under this Section 16 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
All representations and warranties contained herein and in the other
Basic Documents shall survive the execution and delivery of this Agreement and
the Notes, the purchase or transfer by you of any Note or portion thereof or
interest therein and the payment of any Note, and may be relied upon by any
subsequent holder of a Note, regardless of any investigation made at any time by
or on behalf of you or any other holder of a Note. All statements contained in
any certificate or other instrument delivered by or on behalf of the Company
pursuant to any of the Basic Documents shall be deemed representations and
warranties of the Company under this Agreement. Subject to the preceding
sentence, the Basic Documents embody the entire agreement and understanding
between you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
18. AMENDMENT AND WAIVER.
18.1. Requirements.
This Agreement and the Notes and the other Basic Documents may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no provision of
the Intercreditor Agreement may be amended or waived except in accordance with
the terms of the Intercreditor Agreement and (b) no such amendment or waiver
may, without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) change the provisions of Section 13 relating
to acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or
method of computation of interest on the Notes, (ii) change the percentage of
the principal amount of the Notes the holders of which are required to consent
to any such amendment or waiver, or (iii) amend any of Sections 9, 12(a), 12(b),
13, 18 or 21.
18.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each Purchaser
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of any of the other Basic Documents. The Company will deliver executed
or true and correct copies of each amendment, waiver or consent effected
pursuant to the provisions of this Section 18 to each holder of outstanding
Notes promptly following the date on which it is executed and delivered by, or
receives the consent or approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
18.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this Section 18
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of any holder of such Note. As used herein, the term
"this Agreement" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
18.4. Notes held by Company, etc.
For the purpose of determining whether the holders of the requisite
percentage of the aggregate principal amount of Notes then outstanding approved
or consented to any amendment, waiver or consent to be given under this
Agreement, the Notes or the other Basic Documents, or have directed the taking
of any action provided herein, in the Notes or the other Basic Documents to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Subsidiaries or any of its other
Affiliates controlled by it shall be deemed not to be outstanding.
19. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid).
Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other address
as you or it shall have specified to the Company in writing, or
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth
at the beginning hereof to the attention of [____________________________],
or at such other address as the Company shall have specified to the holder
of each Note in writing, or
(iv) if to the Note Agent, to the Note Agent at its address set
forth on the signature pages hereof to the attention of
[_______________________], or at such other address as the Note Agent shall
have specified to the holder of each Note in writing, or
(v) if to the Collateral Agent, to the Collateral Agent at its
address set forth on the signature pages hereof to the attention of
[_______________________], or at such other address as the Collateral Agent
shall have specified to the holder of each Note in writing.
Notices under this Section 19 will be deemed given only when actually received.
20. REPRODUCTION OF DOCUMENTS.
This Agreement, the Basic Documents and all documents relating hereto
or thereto, including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents received by you at
the Closing (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to you, may
be reproduced by you by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and you may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 20 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
21. CONFIDENTIAL INFORMATION.
For the purposes of this Section 21, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to you prior
to the time of such disclosure, (b) subsequently becomes publicly known through
no act or omission by you or any person acting on your behalf, (c) otherwise
becomes known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to you under
Section 8.1 that are otherwise publicly available. You will use your best
efforts to maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect confidential
information of third parties delivered to you, provided that you may deliver or
disclose Confidential Information to (i) your directors, officers, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your Notes), (ii)
your financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 21, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 21), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 21),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default has occurred
and is continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes, this Agreement and the
other Basic Documents. Each Purchaser, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 21 as though it were a party to this Agreement. On reasonable request by
the Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 21.
22. WAIVERS; INDEMNIFICATION.
22.1. Demand; Protest; etc.
The Company, for itself and on behalf of each of its Subsidiaries, waives
demand, protest, notice of protest, notice of default or dishonor, notice of
payment and nonpayment, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by the Purchasers or the Collateral Agent on which
the Company or any of its Subsidiaries may in any way be liable.
22.2. Liability of Collateral Agent and Purchasers.
So long as each of the Collateral Agent and the Purchasers comply with its
obligations, if any, under Section 9-207 of the Uniform Commercial Code, the
Company, for itself and on behalf of its Subsidiaries, agrees that neither the
Collateral Agent nor any Purchaser shall be in any way or manner liable or
responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage
thereto occurring or arising in any manner or fashion from any cause; (c) any
diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person. All risk of loss,
damage or destruction of the Collateral shall be borne by the Company and the
Subsidiaries.
22.3. Indemnification.
The Company shall pay, indemnify, defend, and hold each Purchaser, each
Participant, the Collateral Agent and each of their respective officers,
directors, employees, counsel, agents, and attorneys-in-fact (each, an
"Indemnified person") harmless (to the fullest extent permitted by law) from and
against any and all claims, demands, suits, actions, investigations,
proceedings, and damages, and all reasonable attorneys fees and disbursements
and other costs and expenses actually incurred in connection therewith (as and
when they are incurred and irrespective of whether suit is brought), at any time
asserted against, imposed upon, or incurred by any of them in connection with or
as a result of or related to the execution, delivery, enforcement, performance,
and administration of this Agreement and any other Basic Documents or the
transactions contemplated herein, and with respect to any investigation,
litigation, or proceeding related to this Agreement, and other Basic Document,
or the use of the proceeds of the credit provided hereunder (irrespective of
whether any Indemnified Person is a party thereto), or any act, omission, event
or circumstance in any manner related thereto (all of the foregoing,
collectively, the "Indemnified Liabilities"). The Company shall have no
obligation to any Indemnified Person under this Section 22.3 with respect to any
Indemnified Liability that a court of competent jurisdiction finally determines
to have resulted from the gross negligence or willful misconduct of such
Indemnified Person. This provision shall survive the termination of this
Agreement and the repayment of all amounts due to the Purchasers under the Notes
and the other Basic Documents.
23. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by notice
to the Company, which notice shall be signed by both you and such Affiliate,
shall contain such Affiliate's agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with respect to it of
the representation set forth in Section 7. Upon receipt of such notice, wherever
the word "you" is used in this Agreement (other than in this Section 22), such
word shall be deemed to refer to such Affiliate in lieu of you. In the event
that such Affiliate is so substituted as a purchaser hereunder and such
Affiliate thereafter transfers to you all of the Notes then held by such
Affiliate, upon receipt by the Company of notice of such transfer, wherever the
word "you" is used in this Agreement (other than in this Section 22), such word
shall no longer be deemed to refer to such Affiliate, but shall refer to you,
and you shall have all the rights of an original holder of the Notes under this
Agreement.
24. MISCELLANEOUS.
24.1. Successors and Assigns.
All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.
24.2. Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or premium or interest on any Note
that is due on a date other than a Business Day shall be made on the next
succeeding Business Day without including the additional days elapsed in the
computation of the interest payable on such next succeeding Business Day.
24.3. Severability.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
24.4. Collateral Agent.
The Purchasers agree that the duties of the Collateral Agent shall be
governed solely by the Agency Agreement, except as otherwise expressly set forth
herein. Notwithstanding any provision contained in this Agreement or any
Security Document, the Collateral Agent shall not be required to make any
determination or to take any action hereunder or thereunder unless it shall have
received timely instructions from the Required Holders.
24.5. Construction.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
24.6. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
24.7. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
(b) The Company hereby irrevocably and unconditionally submits, for
itself and its Property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, 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 such New
York State 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 Purchaser may otherwise have to bring any action or
proceeding relating to this Agreement in the courts of any other jurisdiction.
(c) The Company hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which 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 in any court referred to in
paragraph (b) of this Section 24.7. 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.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 19. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
24.8. Waiver of Jury Trial.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE BASIC DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 24.8.
* * * * *
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
XXXXXX INDUSTRIES, INC.
By
Title:
The foregoing is hereby
agreed to as of the
date thereof.
PURCHASERS:
XXXXXX XXXXX & CO. L.L.C.
00 Xxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
By: ____________________________
Title:
FOOTHILL CAPITAL CORP.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
By: _____________________________
Title:
UBS MORTGAGE FINANCE INC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
By: ____________________________
Title:
LAZARD FRERES & CO., L.L.P.
00 Xxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
By: _____________________________
Title:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
By: ___________________________
Title:
NOTE AGENT:
Accepted subject to the terms of
the Agency Agreement:
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Note Agent Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: ____________________________
Title:
EXHIBIT 1
XXXXXX INDUSTRIES, INC.
12% SENIOR SECURED NOTE DUE 2001
No. [_____] [Date]
$[_______] PPN[______________]
FOR VALUE RECEIVED, the undersigned, XXXXXX INDUSTRIES, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to [ ], or its registered assigns, the
principal sum of [ ] DOLLARS (or so much thereof as shall not have been prepaid)
on [ , ], with interest (computed on the basis of a 360-day year of twelve
30-day months) (a) on the unpaid balance thereof at the rate of 12% per annum
from the date hereof, payable monthly, on the [___] day of [__________] and
[_________] in each year, commencing with the [_________] or [_________] next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) following the occurrence of an Event of Default (as defined in
the Note Purchase Agreement), the unpaid balance thereof and all other unpaid
amounts at the rate of 13 1/2% per annum in accordance with the terms of the
Note Purchase Agreement, payable monthly as aforesaid (or, at the option of the
registered holder hereof, on demand).
Payments of principal of and interest on this Note are to be made in
lawful money of the United States of America at the principal office of IBJ
Xxxxxxxx Bank & Trust Company in New York, New York or at such other place as
the Company shall have designated by written notice to the holder of this Note
as provided in the Note Purchase Agreement referred to below.
This Note is one of a series of Senior Secured Notes (herein called
the "Notes") issued pursuant to a Note Purchase Agreement, dated as of
[_______], 1998 (as from time to time amended, the "Note Purchase Agreement"),
between the Company and the Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 21 of the Note Purchase Agreement and (ii) to have made the
representation set forth in Section 7 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreement. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not
otherwise.
This Note is secured by the Collateral as defined and provided for in
the Security Documents (as defined in the Note Purchase Agreement).
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price and with the effect
provided in the Note Purchase Agreement.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
XXXXXX INDUSTRIES, INC.
By_________________________
Title:
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
(A)Xxxxxx Xxxxx & Co. L.L.C.
00 Xxxxxxxx Xxxxx
Xxx Xxxx, XX 00000 $
(1) All payments by wire transfer
of immediately available
funds to:
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Mr. Xxxxxx Xxxxx, Jr.
Facsimile: 000-000-0000
(3) All other communications:
Mr. Xxxxxx Xxxxx, Jr.
Facsimile: 212-422-7282
(B)UBS Mortgage Finance, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 $
(1) All payments by wire transfer
of immediately available
funds to:
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Xx. Xxxxxxx X. Xxxxxxx
Facsimile: 000-000-0000
All other communications:
Xx. Xxxxxxx X. Xxxxxxx
Facsimile: 000-000-0000
(C)The Foothill Group, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000 $
(1) All payments by wire transfer
of immediately available
funds to:
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Xx. Xxxxx Xxxxxxx
Facsimile: 000-000-0000
All other communications:
Xx. Xxxxx Xxxxxxx
Facsimile: 000-000-0000
(D) Lazard Freres & Co., L.L.C.
00 Xxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000 $
(1) All payments by wire transfer
of immediately available funds to:
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Mr. Xxxxxx Xxxxxxxxx
Facsimile: 000-000-0000
All other communications:
Mr. Xxxxxx Xxxxxxxxx
Facsimile: 000-000-0000
(E) The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000 $
(1) All payments by wire transfer
of immediately available funds to:
Account No. 000-0000-000
The Bank of New York
New York, New York
Prudential Managed Account
(ABA No.: 021-000-018)
each such wire transfer shall set forth the name of the Company, a reference to
"12% Senior Secured Notes due ______, 2001, Security No. __________", and the
due date and application (as among principal, interest and premium) of the
payment being made.
(2) All notices of payments and
written confirmations of such
wire transfers:
Attention: Investment Operations Group
(Attention: Manager)
All other communications:
Xx. Xxx Xxxx
Facsimile: 000-000-0000
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Accounts" means all currently existing and hereafter arising
accounts, contracts rights, and all other forms of obligations owing to the
Company or any of its Subsidiaries arising out of the sale or lease of goods or
the rendition of services by the Company, or such Subsidiary, as the case may
be, irrespective of whether earned by performance, and any and all credit
insurance, guaranties, or security therefor.
"Additional Notes" means the 12% Senior Secured Notes due ______, 2001
issued by the Company in satisfaction of its obligation to pay interest on the
Notes , to the extent permitted under this Agreement.
"Affiliate" means, at any time, and with respect to any Person other
than a Purchaser that is a signatory to this Agreement, (a) any other Person
that at such time directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, such first
Person, and (b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests.
"Agency Agreement" means an Agency Agreement substantially in the form of
Exhibit 6 between IBJ, as Note Agent and Collateral Agent, and the Purchasers.
"Availability" has the meaning set forth in the New Revolving Credit
Agreement.
"Average Available Cash" means, for any calendar month, an amount equal to
the sum of (i) the average daily aggregate Availability and Supplemental
Availability (taking into account the Borrowing Base) plus (ii) the average
daily amount of the Company's cash and cash equivalents.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as heretofore
and hereafter amended, and codified as 11 U.S.C. Sections 101 et seq.
"Base Net Worth" means the greater of (a) $1,000,000, and (b) the Net Worth
of the Company and its Subsidiaries, on a consolidated basis, on the Net Worth
Covenant Commencement Date.
"Basic Documents" means, collectively, this Agreement, the Notes, the
Security Documents, all UCC-1 financing statements and other instruments of
perfection executed in connection therewith and all other documents and
instruments relating to, guaranteeing or securing the obligations of the Company
hereunder and under the Notes, as the same may be amended, restated,
supplemented or otherwise made from time to time.
"Borrowing Base" has the meaning set forth in the New Revolving Credit
Agreement.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which commercial banks in New York are required or authorized to be closed.
"Capital Expenditures" means, for any period, expenditures, whether paid in
cash or accrued as a liability (including the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such period computed in accordance with GAAP.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal Property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change of Control" shall be deemed to have occurred at such time as a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) other than any of the Purchasers or any
Affiliate of any of the Purchasers becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly,
of more than 50% of the total voting power of all classes of stock of the
Company then outstanding and entitled to vote in the election of directors. The
Permitted Combination shall not constitute a Change of Control.
"Class 2 Claims" shall have the meaning given to such term in the
Reorganization Plan.
"Closing" has the meaning set forth in Section 3.
"Closing Date" means the date on which the conditions specified in Section
5 are satisfied (or waived in accordance with Section 18).
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Collateral" means the Property of the Obligors subject to the Liens
granted under the Security Documents to the Collateral Agent for the ratable
benefit of the Purchasers.
"Collateral Access Agreement" means a landlord waiver, mortgagee waiver,
bailee letter, or acknowledgement agreement of any warehouseman, processor,
lessor, consignee, or other Person in possession of, having a Lien upon, or
having rights or interests in the Equipment or Inventory, in each case, in form
and substance satisfactory to the Purchasers.
"Collateral Agent" means IBJ, in its capacity as Collateral Agent under the
Security Documents.
"Company" means Xxxxxx Industries, Inc., a Delaware corporation.
"Competitor" means any Person other than a "Qualified Institutional Buyer"
as such term is used in Rule 144A of the Securities Act with whom the Company
competes in its lines of business.
"Confidential Information" is defined in Section 21.
"Confirmation Order" means an order of the Court confirming the
Reorganization Plan under Section 1129 of the Bankruptcy Code, which order shall
be in full force and effect and shall not have been stayed, reversed or
modified.
"Consolidated Assets" means, at any time, the total assets of the
Company and its Subsidiaries which would be shown as assets on a consolidated
balance sheet of the Company and its Subsidiaries as of such time prepared in
accordance with GAAP, after eliminating all amounts properly attributable to
minority interests, if any, in the stock and surplus of Subsidiaries.
"Consolidated Net Income" means the net income of the Company and its
Subsidiaries, determined on a consolidated basis without duplication in
accordance with GAAP, excluding:
(a) the proceeds of any life insurance policy;
(b) any net gain or loss arising from (1) the sale or other
disposition of any Property (other than current assets) to the extent that
the aggregate amount of the gain exceeds the aggregate amount of losses
from the sale, abandonment or other disposition of Property (other than
current assets), (2) any write-up of assets, or (3) the acquisition of
outstanding Indebtedness securities of the Company or any Subsidiary;
(c) any net amount representing any interest in the undistributed
earnings of any other Person (other than a Subsidiary);
(d) any net earnings, prior to the date of acquisition, of any Person
acquired in any manner, and any earnings of any Subsidiary accrued prior to
becoming a Subsidiary;
(e) any net deferred credit (or amortization of a deferred credit)
arising from the acquisition of any Person;
(f) any net earnings denominated in any currency which is not fully
convertible into Dollars, provided that any net earnings excluded pursuant
to this clause (G) may be included in the year in which they are actually
converted into Dollars;
(g) any net gain arising from the termination of a Plan; and (h) any
portion of the net income of any Subsidiary which for any reason is
unavailable for payment of dividends to the Company.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Court" means the United States Bankruptcy Court for the District of
Delaware.
"Default" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"Default Rate" means the rate of 13 1/2% per annum.
"Deposit Account Security Agreement" means the Deposit Account Security
Agreement between the Company and the Collateral Agent substantially in the form
of Exhibit 15.
"Disclosure Statement" shall mean the Disclosure Statement filed by the
Company with the Court on January __, 1998, as the same may be amended,
supplemented or otherwise modified (except for Immaterial Changes).
"Disposition" means any sale, assignment, transfer or other disposition of
any Property (whether now owned or hereafter acquired) by the Company or any of
its Subsidiaries to any other Person.
"Disposition Investment" means, with respect to any Disposition, any
promissory notes or other evidences of Indebtedness or Investments received by
the Company or any of its Subsidiaries in connection with such Disposition.
"dollars" or "$" refers to lawful money of the United States of America.
"Domestic Subsidiary" means any Subsidiary of the Company organized under
the laws of the United States of America or any State thereof.
"EBITDA" means, for any period, Consolidated Net Income plus all amounts
deducted in computing such Consolidated Net Income on account of Interest
Expense, taxes, amortization of intangibles and depreciation.
"EBITDA Requirement" shall mean, with respect to any period of 12 full
consecutive calendar months immediately preceding the month during which the
Company proposes to pay interest on the unpaid principal on the Notes by the
issuance of Additional Notes, EBITDA equal to or greater than $6,000,000,
determined in accordance with GAAP.
"Effective Date" means the "effective date" of the Reorganization Plan, as
defined therein.
"Environmental Laws" means any and all federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties, legal and expert fees or indemnities, and including any Lien filed
against any of the Real Property Collateral or any part thereof in favor of any
governmental entity), of the Company or any Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"Equipment" means all of the Company's and each of its Domestic
Subsidiaries' present and hereafter acquired machinery, machine tools, motors,
equipment, furniture, furnishings, fixtures, vehicles (including motor vehicles
and trailers), tools, parts, goods (other than consumer goods, farm products, or
Inventory), wherever located, including all attachments, accessories,
accessions, replacements, substitutions, additions, and improvements to any of
the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under section 414
of the Code.
"ERISA Event" means (a) a Reportable Event with respect to any Plan or
Multiemployer Plan, (b) the withdrawal of the Company, any of its Subsidiaries
or ERISA Affiliates from a Benefit Plan during a plan year in which it was a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA), (c) the
providing of notice of intent to terminate a Benefit Plan in a distress
termination (as described in Section 4041(c) of ERISA), (d) the institution by
the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan, (e)
any event or condition (i) that provides a basis under Section 4042(a)(1), (2),
or (3) of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan or Multiemployer Plan, or (ii) that may result in
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205 of
ERISA, of the Company, any of its Subsidiaries or ERISA Affiliates from a
Multiemployer Plan, or (g) providing any security to any Plan under Section
401(a)(29) of the IRC by the Company or its Subsidiaries or any of their ERISA
Affiliates.
"Event of Default" is defined in Section 12.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Assets" means the Property of the Company and its Subsidiaries
identified on Schedule R.
"Existing Notes" means the Existing Revolving Notes and the Existing
Prudential Note.
"Existing Prudential Documents" means the Existing Prudential Note, the
Note Agreement dated as of December 20, 1988 between the Company and Prudential,
as amended prior to the Petition Date, and all of the related security
agreements, instruments and other documents executed and delivered by the
parties in connection therewith.
"Existing Prudential Note" means the promissory note executed and delivered
by the Company pursuant to that certain Note Agreement dated as of December 20,
1988 between the Company and Prudential, as amended prior to the Petition Date.
"Existing Revolving Credit Agreement" means that certain Revolving Credit
Agreement, dated as of January 26, 1996, as amended prior to the Petition Date,
by and among the Company and the institutions signatory thereto.
"Existing Revolving Credit Documents" means the Existing Revolving Credit
Agreement, the Existing Revolving Credit Notes and all of the security
agreements, instruments, the and other documents executed and delivered by the
parties in connection therewith.
"Existing Revolving Notes" means, collectively, the promissory notes
executed and delivered by the Company to the institutions party to the Existing
Revolving Credit Agreement.
"Fair Market Value" means, at any time and with respect to any Property,
the sale value of such Property that would be realized in an arm's-length sale
at such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell).
"Fayette Facilities" means the apparel and textile plants operated by the
Company in Fayette, Alabama.
"FEIN" means Federal Employer Identification Number.
"Foothill" means Foothill Capital Corporation, a California corporation.
"Foothill Subordinated Note" means the 10% Subordinated Promissory Note due
2008 substantially in the form of Exhibit 7 issued by the Company to Foothill.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other political
subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any Property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation;
(c) to lease Properties or to purchase Properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or obligation
against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the Indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Guaranty Assumption Agreement" means a Guaranty Assumption Agreement
substantially in the form of Exhibit 10 by any Subsidiary that pursuant to
Section 10.13 is required to become a "Guarantor" in favor of the Collateral
Agent.
"Hazardous Material" means any and all pollutants, petroleum products,
toxic or hazardous wastes or any other substances including Hazardous Substances
(as defined by CERCLA) that might pose a hazard to health or safety, the removal
of which may be required or give rise to liability or the generation,
manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage,
or filtration of which is or shall be restricted, prohibited or penalized by any
applicable law (including, without limitation, asbestos, urea formaldehyde foam
insulation and polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Note Agent pursuant to
Section 14.1.
"IBJ" means IBJ Xxxxxxxx Bank & Trust Company.
"IDB Indebtedness" means Indebtedness of the Company arising in
connection with its transactions with The Industrial Development Board of The
City of Fayette, Alabama.
"Immaterial Changes" shall mean, when used with respect to any motion,
order, stipulation, document, instrument or other writing, changes to the most
recent draft thereof distributed to the holders of Class 2 Claims and their
special counsel which, individually and in the aggregate, shall have been
determined in the reasonable judgment of the Majority Holders, acting in good
faith, not to be materially adverse to the interests of the holders of the Class
2 Claims; provided that a modification or amendment that results in other than
uniform treatment of all Class 2 Claims may in no event be determined to be an
"Immaterial Change".
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of Property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under
any conditional sale or other title retention agreement with respect to any
such Property);
(c) all Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with
respect to any Property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (whether or not representing
obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Intercreditor Agreement" means an Intercreditor Agreement
substantially in the form of Exhibit 10 between IBJ, as Note Agent and
Collateral Agent, the Purchasers and the New Revolving Lender.
"Interest Coverage Ratio" means, as at any date of determination
thereof, the ratio of (a) EBITDA for the period of four fiscal quarters ending
on, or most recently ended prior to, such date to (b) Interest Expense for such
period.
"Interest Expense" means, for any period, the sum, for the Company and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of all interest in respect of Indebtedness (including,
without limitation, the interest component of any payments in respect of Capital
Lease Obligations) accrued or capitalized during such period (whether or not
actually paid during such period) but excluding the amortization of loan costs
charged to interest expense.
Notwithstanding the foregoing, (i) if during any period for which
Interest Expense is being determined the Company shall have consummated any
Disposition then, for all purposes of this Agreement, Interest Expense shall be
determined on a pro forma basis as if such Disposition had been made or
consummated (and any Indebtedness repaid as a result of such Disposition had
been incurred or repaid) on the first day of such period and (ii) if as at any
date (a "calculation date") fewer than four complete consecutive fiscal quarters
have elapsed subsequent to the Closing Date, Interest Expense shall be
calculated only for the portion of such period commencing on the Closing Date
and ending on the calculation date, and then shall be annualized by multiplying
the amount of such Interest Expense by a fraction, the numerator of which is 365
and the denominator of which is the number of days during the period commencing
on the day immediately following the Closing Date through and including the
calculation date.
"Inventory" means all present and future inventory in which the
Company has any interest, including goods held for sale or lease or to be
furnished under a contract of service and all of the Company's present and
future raw materials, work in process, finished goods, and packing and shipping
materials, wherever located.
"Investment" means, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including,
without limitation, any "short sale" or any sale of any securities at a time
when such securities are not owned by the Person entering into such sale); (b)
the making of any deposit with, or advance, loan or other extension of credit
to, any other Person (including the purchase of Property from another Person
subject to an understanding or agreement, contingent or otherwise, to resell
such Property to such Person), but excluding any such advance, loan or extension
of credit having a term not exceeding 90 days arising in connection with the
sale of programming or advertising time by such Person in the ordinary course of
business; (c) the entering into of any Guaranty of, or other contingent
obligation with respect to, Indebtedness or other liability of any other Person
and (without duplication) any amount committed to be advanced, lent or extended
to such Person.
"Kinston" means Xxxxxx-Kinston Corp.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any Property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Majority Holders" shall mean, (a) Persons holding at least 51% in the
aggregate principal amount of all Class 2 Claims and (b) Persons (other than
Foothill and its Affiliates) holding at least 41% in the aggregate principal
amount of all Class 2 Claims.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, Properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"Material Adverse Change" means (a) a material adverse change in the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of the Company and its consolidated
Subsidiaries, on a consolidated basis, occurring after the Closing Date, (b) the
material impairment of the ability of the Company and its consolidated
Subsidiaries, on a consolidated basis, to perform their obligations under the
Basic Documents to which they are a party or of the Purchasers or the Collateral
Agent to enforce the obligations of the Obligors under the Basic Documents or
realize upon the Collateral, occurring after the Closing Date, or (c) a material
impairment of the priority of the Collateral Agent's Liens with respect to the
Collateral. The foregoing notwithstanding, if the Company's consolidated
financial results of operations and financial condition are in substantial
compliance with the projections of the Company most recently furnished to the
Purchasers prior to the Petition Date (as described in a letter from the Company
to the Purchasers dated January 20, 1998), then such financial results of
operations and financial condition shall not be considered as factors by the
Purchasers in determining whether a Material Adverse Change has occurred, and
shall not be relevant to such determination.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
or any of its Subsidiaries to perform its obligations under this Agreement, the
Notes or any of the other Basic Documents or (c) the validity or enforceability
of this Agreement, the Notes, or any of the other Basic Documents.
"Mortgage" means one or more Mortgage(s) executed by the Company and the
Subsidiaries covering the Real Property Collateral, including the real Property
and leasehold interests identified on Schedule E hereto.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such
term is defined in section 4001(a)(3) of ERISA).
"Net Cash Proceeds" means the aggregate amount of all cash payments
received by the Company and its Subsidiaries directly or indirectly in
connection with any Disposition, whether at the time of such Disposition or
after such Disposition under deferred payment arrangements or Investments
entered into or received in connection with such Disposition (including, without
limitation, Disposition Investments); provided, that
(a) Net Cash Proceeds of any Disposition shall be net of (i) the
amount of any legal, title and recording tax expenses, commissions and
other fees and expenses paid by the Company and its Subsidiaries in
connection with such Disposition and (ii) any Federal, state and local
income or other taxes estimated to be payable by the Company and its
Subsidiaries as a result of such Disposition (but only to the extent that
such estimated taxes are in fact paid to the relevant Federal, state or
local governmental authority within three months of the date of such
Disposition); and
(b) Net Cash Proceeds of any Disposition shall be net of any
repayments by the Company or any of its Subsidiaries of Indebtedness to the
extent that (i) such Indebtedness is secured by a Lien on the Property that
is the subject of such Disposition and (ii) the transferee of (or holder of
a Lien on) such Property requires that such Indebtedness be repaid as a
condition to the purchase of such Property.
"Net Worth" means total stockholders' equity determined in accordance with
GAAP.
"Net Worth Covenant Commencement Date" means, if the Effective Date is the
last day of a fiscal month of the Company, the Effective Date, or, otherwise,
the first day to occur after the Effective Date that is the last day of a fiscal
month of the Company.
"Net Worth Testing Dates" means the last day of each fiscal quarter of the
Company, commencing with the first such date to occur on or after the Closing
Date (which dates, as of the Closing Date, are the last days of each March,
June, September, and December ending on or after the Closing Date).
"New Common" means the shares of new common stock to be issued by the
Company pursuant to the Reorganization Plan.
"New Revolving Credit Agreement" means that certain Revolving Credit
Agreement substantially in the form of Exhibit 11 by and among the Company and
the New Revolving Credit Lender.
"New Revolving Credit Lender" means Foothill in its capacity as a party to
the New Revolving Credit Agreement.
"Non-Excluded Assets" means any Property of the Obligors other than (i)
Excluded Assets and (ii) subject to Section 11.12, Accounts and Inventory of any
Obligor.
"Notes" mean the 12% Senior Secured Notes due 2001 issued by the Company to
the Purchasers, including Additional Notes.
"Note Agent" means IBJ, in its capacity as Note Agent under this Agreement.
"Obligor" means, collectively, the Company, each Guarantor and any other
Subsidiary that is a party to any of the Basic Documents.
"Officer's Certificate" means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
"Original Principal Amount" means $37,500,000.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Permitted Combination" means either (a) the merger of Kinston with and
into the Company, with the Company as the surviving corporation, or (b) the
dissolution of Kinston and transfer of all its assets to the Company (subject to
the Liens of the Collateral Agent in such assets).
"Permitted Disposition" means any Disposition by any Obligor of (a) any
Inventory sold or disposed of in the ordinary course of business and on ordinary
business terms or, if otherwise disposed of, only if ten days' prior notice of
such disposition in reasonable detail shall have been furnished to the
Collateral Agent and the Purchasers, (b) any Disposition of Excluded Assets and
(c) any Disposition of obsolete or worn-out Equipment in the ordinary course of
business.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 10.11;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of
business and securing obligations that are not overdue by more than 60 days
or are being contested in compliance with Section 10.11;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under Section 12(l); and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real Property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected Property or interfere
with the ordinary conduct of business of the Company or any Subsidiary.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 365 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from Standard & Poor's Ratings Group or
Xxxxx'x Investors Services, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 365 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which
has a combined capital and surplus and undivided profits of not less than
$500,000,000; and
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) of this definition
and entered into with a financial institution satisfying the criteria
described in clause (c) of this definition.
"Permitted Protest" means the right of the Company and its Subsidiaries to
protest any Lien other than any such Lien that secures the obligations under the
Notes or the other basic Documents, tax (other than payroll taxes or taxes that
are the subject of a United States federal tax lien), or rental payment,
provided that (a) a reserve with respect to such obligations is established on
the books of the Company in an amount that is reasonably satisfactory to the
Purchasers, (b) any such protest is instituted and diligently prosecuted by the
Company or its Subsidiaries in good faith, and (c) the Purchasers are satisfied
that, while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of the Liens of the Collateral
Agent in and to the Collateral.
"Person" means an individual, partnership, corporation, company, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Personal Property Collateral" means all Collateral other than the Real
Property Collateral.
"Petition Date" means January __, 1998.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or are required to be made, by the Company or any ERISA Affiliate
or with respect to which the Company or any ERISA Affiliate may have any
liability.
"Preferred Stock" means any class of capital stock of a corporation that is
preferred over any other class of capital stock of such corporation as to the
payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Property" or "Properties" means, unless otherwise specifically limited,
real or personal Property of any kind, tangible or intangible, xxxxxx or
inchoate.
"Prudential" means The Prudential Insurance Company of America.
"Purchasers" means each holder of a Note and any of such holder's
successors and assigns.
"Purchasers' Primary Collateral" means that portion of the Collateral in
which the Lien of the Collateral Agent, for the ratable benefit of the
Purchasers, has priority over the Lien of the New Revolving Credit Lender
pursuant to the provisions of the Intercreditor Agreement.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued
by the United States Department of Labor.
"Real Property Collateral" means the parcel or parcels of real Property and
the related improvements thereto identified as Real Property Collateral on
Schedule ,and any real Property hereafter acquired by the Company or any of its
Subsidiaries.
"Reorganization Plan" means the plan of reorganization filed by the Company
and confirmed pursuant to a Final Order of the Bankruptcy Court.
"Required Holders" means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).
"Required Net Worth Amount" means, as of any date of determination thereof:
(a) the Base Net Worth minus $4,500,000; plus (b) the amount that is the product
of (y) $150,000 times (z) the number of months that have elapsed, as of and
including such date of determination, since the Effective Date (which number of
elapsed months, if not a whole number, shall be truncated downward to the
nearest whole number, e.g., if more than four, and less than five, months have
elapsed since the Effective Date, the number "4" would be multiplied times
$150,000 in making the foregoing determination).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"Restricted Payment" means (a) any cash interest payment to Foothill under
the Foothill Subordinated Note prior to the occurrence of a Cash Pay Interest
Event (as defined in the Foothill Subordinated Note), (b) any dividend or other
distribution (whether in cash, securities or other Property) in the aggregate
during any fiscal year with respect to any shares of any class of capital stock
of the Company or any of its Subsidiaries, or (c) any payment (whether in cash,
securities or other Property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such shares of capital stock of the Company or any of its
Subsidiaries or any option, warrant or other right to acquire any such shares of
capital stock of the Company or any of its Subsidiaries.
"Retiree Health Plan" means an "employee welfare benefit plan" within the
meaning of Section 3(1) of ERISA that provides benefits to individuals after
termination of their employment, other than as required by Section 601 of ERISA.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Security" has the meaning set forth in section 2(1) of the Securities
Act.
"Security and Pledge Agreement" means the Security and Pledge Agreement
between the Company and the Collateral Agent substantially in the form of
Exhibit 12.
"Security Documents" means, collectively, the Security and Pledge
Agreement, the Subsidiary Guaranty and Security Agreement, the Mortgage(s), the
Agency Agreement, the Intercreditor Agreement and all UCC-1 financing statements
and other instruments of perfection executed in connection therewith and all
other documents and instruments relating to, guaranteeing or securing the
obligations of the Company hereunder and under the Notes, as the same may be
amended, restated, supplemented or otherwise made from time to time.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Solvent" means, with respect to any Person on a particular date, that on
such date (a) such Person is able to realize upon its properties and assets and
pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (b) such Person
does not intend to, and does not believe that it will, incur debts beyond such
Person's ability to pay as such debts mature, and (c) 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 properties and assets would constitute
unreasonably small capital after giving due consideration to the prevailing
practices in the industry in which such Person is engaged. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that reasonably can
be expected to become an actual or matured liability.
"Strathleven Interest" means the ownership interest not held by the Company
as of the date hereof in Xxxxxx Strathleven, a Jamaican corporation.
"Subsidiary" means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its Subsidiaries
(unless such partnership or joint venture can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Subsidiary Guaranty and Security Agreement" means the Subsidiary Guaranty
and Security Agreement(s) substantially in the form of Exhibit 8 between the
Domestic Subsidiaries party thereto and the Collateral Agent.
"Supplemental Availability" has the meaning set forth in the New Revolving
Credit Agreement.
"Swaps" means, with respect to any Person, payment obligations with respect
to interest rate swaps, currency swaps and similar obligations obligating such
Person to make payments, whether periodically or upon the happening of a
contingency. For the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof as of the end
of the then most recently ended fiscal quarter of such Person, based on the
assumption that such Swap had terminated at the end of such fiscal quarter, and
in making such determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person thereunder or if any
such agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the net
amount so determined.
"Termination Premium" means (i) in the case of an acceleration of any Note
on or before the first anniversary of the Closing Date, an amount equal to 4% of
the Original Principal Amount times a fraction (the "Fraction") the numerator of
which is the principal amount of such Note and the denominator of which is the
aggregate principal amount of all Notes at the time outstanding (excluding Notes
held directly or indirectly by the Company or any of its Subsidiaries), (ii) in
the case of an acceleration of any Note after the first anniversary of the
Closing Date and on or before the second anniversary of the Closing Date, 3% of
the Original Principal Amount times the Fraction, and (iii) in the case of an
acceleration of any Note after the second anniversary of the Closing Date, 2% of
the Original Principal Amount times the Fraction.
"Trademark Security Agreement" means the Trademark Security Agreement
between the Company and the Collateral Agent substantially in the form of
Exhibit 14.
"Uniform Commercial Code" means the Uniform Commercial Code as in effect
from time to time in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection, or priority of the security interests and liens specified in the
Security Documents is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary one hundred
percent (100%) of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Subsidiaries at such time.
