$100,000,000
FIRST AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
HAGGAR CLOTHING CO.,
A NEVADA CORPORATION,
HAGGAR CORP.,
A NEVADA CORPORATION,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
INDIVIDUALLY AND AS AGENT,
AND
THE BANKS LISTED HEREIN
DATED AS OF SEPTEMBER 18, 1996
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS. . . . . . . . . . . . . . . 1
1.1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1
1.2. GENDER AND NUMBER. . . . . . . . . . . . . . . . . . . . 18
1.3. REFERENCES TO AGREEMENT. . . . . . . . . . . . . . . . . 18
ARTICLE 2
THE CREDITS . . . . . . . . . . . . . . . 18
2.1. ADVANCES AND LETTERS OF CREDIT . . . . . . . . . . . . . 18
2.2. USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . 19
2.3. OPTIONAL PRINCIPAL PAYMENTS. . . . . . . . . . . . . . . 19
2.4. REDUCTION OR TERMINATION OF COMMITMENTS. . . . . . . . . 19
2.5. FEES.. . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.6. METHODS OF BORROWING AND APPLICATION AND ISSUANCE OF
LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . 20
2.7. METHOD OF SELECTING RATE OPTIONS AND INTEREST
PERIODS; CALCULATION OF INTEREST.. . . . . . . . . . . . 24
2.8. BORROWING BASE AND BORROWING BASE CERTIFICATE. . . . . . 25
2.9. METHOD OF PAYMENT. . . . . . . . . . . . . . . . . . . . 25
2.10. NOTES; TELEPHONIC NOTICES. . . . . . . . . . . . . . . . 26
2.11. INTEREST PAYMENT DATES; INTEREST BASIS.. . . . . . . . . 26
2.12 MANDATORY PRINCIPAL PAYMENTS.. . . . . . . . . . . . . . 27
2.13. NOTIFICATION OF LOANS, INTEREST RATES, PREPAYMENTS
AND COMMITMENT REDUCTIONS. . . . . . . . . . . . . . . . 27
2.14. MAXIMUM INTEREST; HIGHEST LAWFUL RATE. . . . . . . . . . 27
2.15. INTEREST RECAPTURE.. . . . . . . . . . . . . . . . . . . 28
ARTICLE 3
CHANGE IN CIRCUMSTANCES; INDEMNIFICATION . . . . . . . . 28
3.1. YIELD PROTECTION.. . . . . . . . . . . . . . . . . . . . 28
3.2. AVAILABILITY OF INTEREST RATE. . . . . . . . . . . . . . 30
3.3 DISCRETION OF BANKS AS TO MANNER OF FUNDING. . . . . . . 30
3.4. FAILURE TO PAY OR BORROW ON CERTAIN DATES. . . . . . . . 30
3.5. BANK CERTIFICATES; SURVIVAL OF INDEMNITY.. . . . . . . . 31
i
ARTICLE 4
CONDITIONS PRECEDENT . . . . . . . . . . . . . 31
4.1. AMENDMENT AND RESTATEMENT. . . . . . . . . . . . . . . . 31
4.2. EACH ADVANCE.. . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 5
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 33
5.1. CORPORATE EXISTENCE AND AUTHORITY. . . . . . . . . . . . 33
5.2. COMPLIANCE WITH LAWS.. . . . . . . . . . . . . . . . . . 34
5.3. LITIGATION.. . . . . . . . . . . . . . . . . . . . . . . 34
5.4. COMPLIANCE WITH LAWS AND CONTRACTS.. . . . . . . . . . . 34
5.5. FINANCIAL STATEMENTS.. . . . . . . . . . . . . . . . . . 34
5.6. MATERIAL ADVERSE EFFECT. . . . . . . . . . . . . . . . . 34
5.7. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.8. GOVERNMENT REGULATION. . . . . . . . . . . . . . . . . . 35
5.9. PROPERTIES; LIENS. . . . . . . . . . . . . . . . . . . . 35
5.10. LEASES.. . . . . . . . . . . . . . . . . . . . . . . . . 35
5.11. SUBSIDIARIES.. . . . . . . . . . . . . . . . . . . . . . 35
5.12. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.13. DEFAULTS.. . . . . . . . . . . . . . . . . . . . . . . . 35
5.14. ACCURACY OF INFORMATION. . . . . . . . . . . . . . . . . 35
5.15. USE OF PROCEEDS, MARGIN STOCK. . . . . . . . . . . . . . 36
5.16. NO FINANCING OF CORPORATE TAKEOVERS. . . . . . . . . . . 36
5.17. INSIDER. . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 6
AFFIRMATIVE COVENANTS. . . . . . . . . . . . . 37
6.1. FINANCIAL REPORTING. . . . . . . . . . . . . . . . . . . 37
6.2. USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . 38
6.3. NOTICE OF DEFAULT, ETC.. . . . . . . . . . . . . . . . . 38
6.4. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.5. PAYMENT AND PREPAYMENT OF OBLIGATIONS. . . . . . . . . . 38
6.6. MAINTENANCE OF CORPORATE EXISTENCE, ASSETS, BUSINESS
AND INSURANCE. . . . . . . . . . . . . . . . . . . . . . 38
6.7. INSPECTION.. . . . . . . . . . . . . . . . . . . . . . . 39
6.8. COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . . 39
6.9. ERISA COMPLIANCE.. . . . . . . . . . . . . . . . . . . . 39
ii
ARTICLE 7
NEGATIVE COVENANTS. . . . . . . . . . . . . . 39
7.1. LIENS. . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.2. LINES OF BUSINESS. . . . . . . . . . . . . . . . . . . . 40
7.3. INDEBTEDNESS.. . . . . . . . . . . . . . . . . . . . . . 40
7.4. MERGERS AND ACQUISITIONS.. . . . . . . . . . . . . . . . 40
7.5. AFFILIATES.. . . . . . . . . . . . . . . . . . . . . . . 41
7.6. FIXED CHARGE REQUIREMENT.. . . . . . . . . . . . . . . . 41
7.7. FUNDED DEBT LIMITATION.. . . . . . . . . . . . . . . . . 41
7.8 TANGIBLE NET WORTH.. . . . . . . . . . . . . . . . . . . 41
7.9. INVENTORY TURN.. . . . . . . . . . . . . . . . . . . . . 42
7.10. SALE OF ASSETS.. . . . . . . . . . . . . . . . . . . . . 42
7.11. SUBSIDIARIES.. . . . . . . . . . . . . . . . . . . . . . 43
7.12. FOREIGN SUBSIDIARIES.. . . . . . . . . . . . . . . . . . 43
7.13. DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . 43
7.14. INTERCOMPANY INDEBTEDNESS. . . . . . . . . . . . . . . . 43
ARTICLE 8
DEFAULTS . . . . . . . . . . . . . . . . 44
8.1. REPRESENTATION OR WARRANTY . . . . . . . . . . . . . . . 44
8.2. NONPAYMENT.. . . . . . . . . . . . . . . . . . . . . . . 45
8.3. PREPAYMENT.. . . . . . . . . . . . . . . . . . . . . . . 45
8.4. COVENANTS. . . . . . . . . . . . . . . . . . . . . . . 45
8.5. OTHER. . . . . . . . . . . . . . . . . . . . . . . . . 45
8.6. MATERIAL INDEBTEDNESS. . . . . . . . . . . . . . . . . 45
8.7. INSOLVENCY. . . . . . . . . . . . . . . . . . . . . . . 45
8.8. RECEIVER. . . . . . . . . . . . . . . . . . . . . . . . 46
8.9. APPROPRIATION. . . . . . . . . . . . . . . . . . . . . 46
8.10. JUDGMENTS. . . . . . . . . . . . . . . . . . . . . . . 46
8.11. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . 46
8.12. MATERIAL AGREEMENT. . . . . . . . . . . . . . . . . . . 46
8.13. CHANGE IN CONTROL. . . . . . . . . . . . . . . . . . . 46
ARTICLE 9
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES. . . . . . . 46
9.1. REMEDIES UPON DEFAULT. . . . . . . . . . . . . . . . . . 46
9.2. REMEDIES UPON UNMATURED DEFAULT. . . . . . . . . . . . . 47
9.3. AMENDMENTS AND WAIVERS.. . . . . . . . . . . . . . . . . 48
9.4. PRESERVATION OF RIGHTS.. . . . . . . . . . . . . . . . . 48
9.5. PERFORMANCE BY LENDER. . . . . . . . . . . . . . . . . . 49
9.6. RIGHTS OF SETOFF.. . . . . . . . . . . . . . . . . . . . 49
9.7. REMEDIES CUMULATIVE, CONCURRENT AND NON-EXCLUSIVE. . . . 49
iii
ARTICLE 10
GENERAL PROVISIONS. . . . . . . . . . . . . . 50
10.1. BENEFIT OF AGREEMENT.. . . . . . . . . . . . . . . . . . 50
10.2. ASSIGNMENTS AND PARTICIPATIONS.. . . . . . . . . . . . . 50
10.3. SURVIVAL OF REPRESENTATIONS. . . . . . . . . . . . . . . 52
10.4. GOVERNMENT REGULATION. . . . . . . . . . . . . . . . . . 52
10.5. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . 53
10.6. CHOICE OF LAW. . . . . . . . . . . . . . . . . . . . . . 53
10.7. HEADINGS.. . . . . . . . . . . . . . . . . . . . . . . . 53
10.8. ENTIRETY; WRITTEN AGREEMENT. . . . . . . . . . . . . . . 53
10.9. ACCOUNTING.. . . . . . . . . . . . . . . . . . . . . . . 53
10.10. SEVERAL OBLIGATIONS . . . . . . . . . . . . . . . . . . 53
10.11. EXPENSES; INDEMNIFICATION. . . . . . . . . . . . . . . . 53
10.12. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . 54
10.13. CHOICE OF FORUM. . . . . . . . . . . . . . . . . . . . . 54
10.14. REVOLVING CREDIT . . . . . . . . . . . . . . . . . . . . 54
10.15. PRIOR AGREEMENT. . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 11
THE AGENT. . . . . . . . . . . . . . . . 55
11.1. APPOINTMENT AND POWERS.. . . . . . . . . . . . . . . . . 55
11.2. POWERS.. . . . . . . . . . . . . . . . . . . . . . . . . 55
11.3. POSSESSION OF INSTRUMENTS BY THE AGENT.. . . . . . . . . 55
11.4. DEBTOR-CREDITOR RELATIONSHIP.. . . . . . . . . . . . . . 55
11.5. GENERAL IMMUNITY.. . . . . . . . . . . . . . . . . . . . 56
11.6. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC.. . . . . . . 56
11.7. RIGHT TO INDEMNITY.. . . . . . . . . . . . . . . . . . . 56
11.8. ACTION ON INSTRUCTIONS OF THE BANKS. . . . . . . . . . . 56
11.9. EMPLOYMENT OF THE AGENT AND COUNSEL. . . . . . . . . . . 56
11.10. RELIANCE ON DOCUMENTS; COUNSEL. . . . . . . . . . . . . 57
11.11. MAY TREAT PAYEE AS OWNER . . . . . . . . . . . . . . . . 57
11.12. THE AGENT'S REIMBURSEMENT. . . . . . . . . . . . . . . . 57
11.13. RIGHTS AS A LENDER. . . . . . . . . . . . . . . . . . . 57
11.14. BANK CREDIT DECISION . . . . . . . . . . . . . . . . . . 57
11.15. SUCCESSOR AGENT. . . . . . . . . . . . . . . . . . . . . 57
11.16. DISTRIBUTION OF INFORMATION. . . . . . . . . . . . . . 58
11.17. NON-ADVANCING BANKS. . . . . . . . . . . . . . . . . . . 58
11.18. BENEFIT OF THE BANKS . . . . . . . . . . . . . . . . . . 59
iv
ARTICLE 12
RATABLE PAYMENTS . . . . . . . . . . . . . . 59
12.1. RATABLE PAYMENTS.. . . . . . . . . . . . . . . . . . . . 59
ARTICLE 13
NOTICES . . . . . . . . . . . . . . . . 59
13.1. GIVING NOTICE. . . . . . . . . . . . . . . . . . . . . . 59
13.2. CHANGE OF ADDRESS. . . . . . . . . . . . . . . . . . . . 59
ARTICLE 14
COUNTERPARTS . . . . . . . . . . . . . . . 60
SCHEDULES
Schedule 1 - Current Members of the Boards of Directors of Haggar and the
Company
Schedule 2 - Existing Standby Letters of Credit
Schedule 3 - Domestic and Foreign Subsidiaries
Schedule 4 - Current Obligations
Schedule 5 - Pending Litigation
Schedule 6 - Existing Affiliate Transactions
Schedule 7 - Capacity Adjustment Costs
EXHIBITS
Exhibit A - Form of Application for Standby Letter of Credit
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Note
Exhibit D - Consent of Haggar
Exhibit E - Subsidiary Guaranty
Exhibit F - Consent of Domestic Subsidiaries
Exhibit G - Compliance Certificate
v
FIRST AMENDED AND RESTATED
CREDIT AGREEMENT
This First Amended and Restated Credit Agreement is entered into as of
September 18, 1996, by and among Haggar Clothing Co., a Nevada corporation,
Haggar Corp., a Nevada corporation, the Banks listed on the signature pages of
this Agreement and Texas Commerce Bank National Association, a national banking
association, individually and as Agent for the Banks.
R E C I T A L S :
A. The Parties and Texas Commerce Bank, National Association entered into
that certain Credit Agreement dated as of September 14, 1992, which Credit
Agreement was amended by (i) First Amendment to Credit Agreement dated as of
Xxxxx 00, 0000, (xx) Second Amendment to Credit Agreement dated as of Xxxxx 00,
0000, (xxx) Third Amendment to Credit Agreement dated as of November 9, 1994,
(iv) Fourth Amendment to Credit Agreement dated as of March 17, 1995, and (v)
Fifth Amendment to Credit Agreement dated as of December 31, 1995 (such Credit
Agreement, as amended, the "Prior Agreement").
B. The Parties desire to amend the Prior Agreement and restate it in its
entirety as hereinafter provided.
In consideration of the mutual covenants and agreements herein contained,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged and confessed, and subject to the terms of all the Loan
Documents, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1. DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
"Advance" means a Eurodollar Advance, a Fixed CD Rate Advance or a Floating
Rate Advance.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 1
"Affiliate" means any Person directly or indirectly controlling, controlled
by or under direct or indirect common control with any other Person. A Person
shall be deemed to control another Person if the controlling Person owns ten
percent (10%) or more of any class of stock of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of stock, by contract or otherwise.
"Agent" means Texas Commerce Bank National Association, in its capacity as
agent for the Banks (but not in its capacity as a Bank), and any successor Agent
appointed pursuant to Section 11.15.
"Agreement" means this First Amended and Restated Credit Agreement, as it
may be further amended or modified from time to time.
"Alternate Base Rate" means, for any date, a rate per annum (rounded
upwards, if necessary, to the next higher 1/100%) equal to the greater of (a)
the Prime Rate in effect on such day or (b) the Fed Funds Rate in effect for
such day plus one-half percent (1/2%). Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Fed Funds Rate shall be effective on
the effective date of such change in the Prime Rate or the Fed Funds Rate. If
for any reason the Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Fed Funds
Rate for any reason, including the inability or failure of the Agent to obtain
sufficient bids or publications in accordance with the terms hereof, the
Alternate Base Rate shall be the Prime Rate until the circumstances giving rise
to such inability no longer exist.
"Application" means any Application and Agreement for Standby Letter of
Credit delivered to the Agent for or in connection with any Standby Letter of
Credit, and substantially in the form attached hereto as EXHIBIT A.
"Assessment Rate" means, for any CD Interest Period, the net assessment
rate per annum payable to the Federal Deposit Insurance Corporation (or any
successor) for the insurance of domestic deposits of the Agent, in its capacity
as a Bank, during the calendar year in which the first day of such CD Interest
Period falls, as reasonably estimated by the Agent on the first day of such CD
Interest Period.
"Authorized Officer" means the Chief Executive Officer, President, Chief
Financial Officer, any Senior Vice President of Finance, any Vice President of
Finance or the Treasurer, in each case acting singly.
"Banks" means the banks listed on the signature pages of this Agreement
(including Texas Commerce Bank National Association in its capacity as a Bank
but not in its capacity as the Agent), and their respective successors and
assigns.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 2
"Base Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Eurodollar Interest Period, the rate determined by the Agent as the
rate at which deposits in U.S. Dollars are offered to the Agent in the interbank
Eurodollar market where the Agent (or its Affiliates) conducts foreign exchange
and currency operations, at or before 10:00 a.m. (Dallas, Texas time) two (2)
Business Days prior to the first day of such Eurodollar Interest Period, in the
approximate amount of such Eurodollar Advance and having a maturity
approximately equal to such Eurodollar Interest Period, for delivery in
immediately available funds on the first day of such Eurodollar Interest Period.
"Base Fixed CD Rate" means, with respect to a Fixed CD Rate Advance for the
relevant CD Interest Period, the rate determined by the Agent as the prevailing
bid rate for the purchase at face value at or before 10:00 a.m. (Dallas, Texas
time) on the first day of such CD Interest Period by three (3) certificate of
deposit dealers in New York, New York of recognized standing selected by the
Agent (or its Affiliates) of certificates of deposit of the Agent in the
approximate amount of such Fixed CD Rate Advance and having a maturity
approximately equal to such CD Interest Period.
"Borrowing Base" means an amount calculated as of the last day of each
fiscal month, equal to the sum of (i) eighty percent (80%) of Eligible
Receivables, and (ii) fifty percent (50%) of Eligible Inventory (each of [i] and
[ii] as determined pursuant to the most recent Borrowing Base Certificate
delivered by the Company to the Agent pursuant to Sections 2.8 or 6.1[d]);
PROVIDED, HOWEVER, that the portion of the Borrowing Base attributable to
Eligible Inventory shall not be greater than fifty percent (50%) of the
Borrowing Base, other than in the months of January, June, July and December,
when such Eligible Inventory may constitute up to sixty percent (60%) of the
Borrowing Base.
"Borrowing Base Availability" means at any time the amount by which the
Borrowing Base exceeds the sum of the principal amount of all outstanding
Advances.
"Borrowing Base Certificate" means a certificate substantially in the form
of EXHIBIT B to this Agreement, duly executed by the Chief Financial Officer of
the Company.
"Borrowing Base Deficiency" means the amount, if any, by which the sum of
the outstanding principal balance of all Notes exceeds the Borrowing Base in
effect on such date.
"Borrowing Date" means a date, which shall be a Business Day, on which an
Advance is made hereunder.
"Business Day" means (a) with respect to borrowing, payment or rate
selection of Eurodollar Advances, a day on which banks are open for business in
Dallas, Texas and London, England and on which dealings in U.S. Dollars are
carried on in the interbank Eurodollar market where Agent (or its Affiliates)
conducts foreign exchange and currency operations, and (b) for all other
purposes, a day on which banks are open for business in Dallas, Texas, and New
York, New York.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 3
"Capacity Adjustment Costs" means amounts not to exceed $14,000,000 in the
aggregate which are accrued or expensed by the Company after June 30, 1996, and
prior to July 1, 1997, in connection with the adjustment by the Company Group of
its manufacturing capacity, which Capacity Adjustment Costs shall be comprised
of the items reflected on SCHEDULE 7 attached hereto. Capacity Adjustment Costs
shall not include amounts accrued or expensed in connection with the closing of
the Company Group's Bowie, Olney and Robstown facilities unless such amounts are
expensed or accrued during or after the fiscal quarter in which Capacity
Adjustment Costs are accrued or expensed with respect to the adjustment of its
manufacturing capacity at its remaining domestic facilities.
"Capital Expenditures" means capital expenditures according to GAAP LESS
the amount thereof financed by any long-term Indebtedness, the terms of which
are acceptable to the Banks.
"Capitalized Lease Obligations" means any obligation, as lessee or
guarantor, to pay rent under a lease of real or personal property, which
obligation is required to be capitalized on a balance sheet of the lessee or
guarantor prepared in accordance with GAAP. As used herein, a principal payment
on a Capitalized Lease Obligation shall mean the portion of any payment which is
treated as a principal payment on the financial statements of the lessee or
guarantor, prepared in accordance with GAAP.
"CD Interest Period" means, with respect to a Fixed CD Rate Advance, a
period of thirty (30), sixty (60), ninety (90) or one hundred eighty (180) days
(and, if all of the Banks elect in their sole discretion to offer a longer
period, then a longer period of days) commencing on a Business Day selected by
the Company pursuant to Section 2.7; provided that in no event shall any CD
Interest Period extend beyond the Termination Date. If such CD Interest Period
would end on a day that is not a Business Day, such CD Interest Period shall end
on the next succeeding Business Day.
"CD Margin" means (a) at any time when the Funded Debt Ratio is equal to or
less than 1.50 to 1, five-eighths of one percent (5/8%) per annum, (b) at any
time when the Funded Debt Ratio is greater than 1.50 to 1 but less than or equal
to 2.00 to 1, three-quarters of one percent (3/4%) per annum, (c) at any time
when the Funded Debt Ratio is greater than 2.00 to 1 but less than or equal to
2.50 to 1, seven-eighths of one percent (7/8%) per annum, (d) at any time when
the Funded Debt Ratio is greater than 2.50 to 1 but less than or equal to 3.00
to 1, one percent (1%) per annum, (e) at any time when the Funded Debt Ratio is
greater than 3.00 to 1 but less than or equal to 3.50 to 1, one and one-quarter
percent (1 1/4%) per annum, and (f) at any time when the Funded Debt Ratio is
greater than 3.50 to 1, one and one-half percent (1 1/2%) per annum. Each
adjustment to the previously calculated CD Margin shall be effective five (5)
Business Days following the Agent's receipt of the reports to be delivered by
the Company pursuant to Sections 6.1(a), (b) and (c).
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 4
A "Change in Control" shall be deemed to have occurred in any of the
following circumstances:
(a) if, at any time, any one (1) Person or any one (1) group (within
the meaning of Rule 13d-5 promulgated by the Securities and Exchange
Commission as in effect on the date hereof), other than a Person or group
consisting of (A) Existing Shareholders or their Affiliates, (B) members of
the Family Group, or (C) Persons who/which are not required to file a
Schedule 13D by virtue of Rule 13d-1(b)(1) promulgated by the Securities
and Exchange Commission, shall own, directly or indirectly, beneficially or
of record, in the aggregate shares representing more than twenty percent
(20%) of the voting power represented by the issued and outstanding capital
stock of the Company or Haggar or which upon the occurrence of an event or
passage of time or both could be converted into or could exercise twenty
percent (20%) of such aggregate voting power; or
(b) if, at any time, the individuals who are members of the Board of
Directors of Haggar or the Company, respectively, as of the date of this
Agreement, being those individuals listed in Schedule 1 attached hereto, or
any lesser combination thereof, do not constitute a majority of the
respective Boards of Directors of Haggar or the Company.
"Chief Financial Officer" means the officer of the Company or other entity
designated as such, or in absence of such designation, the President, Chief
Executive Officer or Senior Vice President - Finance of the same.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, for any Bank, the amount set forth opposite such Bank's
signature hereto, as such amount may be reduced pursuant to Section 2.4.
"Commitments" means the aggregate of such amounts for all of the Banks.
"Company" means Haggar Clothing Co., a Nevada corporation.
"Company Group" means, at any time, Haggar, the Company, and their
respective Subsidiaries.
"Compliance Certificate" means a certificate substantially in the form of
EXHIBIT G to this Agreement and Annexes thereto, duly executed by the Chief
Financial Officer of the Company.
"Consent of Haggar" and "Consent of Domestic Subsidiaries" have,
respectively, the meanings ascribed thereto in the definitions of Parent
Guaranty and Subsidiary Guaranty.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 5
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
that, together with the Company, are treated as a single employer under Section
414(b) or 414(c) of the Code.
"Customer Service and Distribution Center" means a facility in Fort Worth,
Texas, to be operated by the Company as a customer service and distribution
facility, for which the costs of construction and equipment shall be
approximately $38,000,000.
"Dated Invoice" means an invoice having an effective date later than the
date of the sale and delivery of the Inventory or services giving rise to such
invoice.
"Debtor Relief Laws" means the Bankruptcy Code of the United States, as
amended from time to time, and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization or similar debtor relief Laws from time to time in
effect affecting the rights of creditors generally.
"Default" means an event described in Article 8.
"Default Rate" means the lesser of (a) the Highest Lawful Rate or (b) the
Alternate Base Rate plus five percent (5%) per annum.
"Distributions" of any Person means (a) with respect to any stock issued by
such Person, the retirement, redemption, purchase or other acquisition for value
of any such stock (other than pursuant to contractual obligations existing as of
the date of this Agreement to repurchase the outstanding shares of the stock of
Haggar from any holder thereof which is an officer, director or employee of any
member of the Company Group), (b) the declaration or payment of any dividend or
other distribution on or with respect to such stock, (c) any loan or advance by
such Person to, or other investment by such Person in, the holder of any such
stock (other than advances to shareholders reflected as accounts receivable, to
the extent that the aggregate amounts thereof do not exceed the greater of (i)
the amounts permitted be made pursuant to the provisions of Section 7.13, or
(ii) $250,000, after deducting therefrom all loans or advances due and owing by
the Company Group, in the aggregate, to its shareholders, in the aggregate), and
(d) any other payment (other than salaries of employees or advances made in the
ordinary course of business to employees for travel and other expenses incurred
in the ordinary course of business, including, but not limited to, premiums for
policies of insurance) by such Person with respect to such stock.
"Dollars" and the "$" symbol refer to currency of the United States of
America.
"Domestic Subsidiaries" means any Subsidiary which is organized under the
laws of a State of, or maintains its principal operations in, the United States
of America.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 6
"Eligible Inventory" means Inventory as to which the Company furnished to
the Agent the information required under Sections 2.8 or 6.1.(c) and (d), and
that strictly complies with all of the Company's representations, warranties and
covenants contained herein with respect thereto; provided, however, that
Eligible Inventory shall not include any Inventory subject to any Lien.
"Eligible Receivables" means Receivables as to which the Company furnished
to the Agent the information required under Sections 2.8 or 6.1.(d), and that
strictly complies with all of the Company's representations, warranties and
covenants contained herein with respect thereto; provided, however, that
Eligible Receivables shall not include the following:
(a) Receivables that represent amounts due from Affiliates or
employees of the Company;
(b) Receivables that remain unpaid more than ninety (90) days after
the date of the original invoice (or the effective date of Dated Invoices,
provided that no more than five percent [5%] of Eligible Receivables shall
arise from Dated Invoices) giving rise to the Receivable or Receivables
which are known to be uncollectible or the subject of dispute;
(c) Receivables that are subject to any Lien; and
(d) Receivables with respect to which goods are placed on
consignment, guaranteed sale or other terms by reason of which the payment
obligation of the account debtor may be conditional, but only to the extent
that such Receivables equal or exceed $500,000 in the aggregate.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Advance" means that portion of the aggregate Loans made by the
Banks bearing interest at a particular Eurodollar Rate for a particular
Eurodollar Interest Period.
"Eurodollar Interest Period" means, with respect to a Eurodollar Advance, a
period of one (1), two (2), three (3) or six (6) months (and, if all of the
Banks elect in their sole discretion to offer a longer period, then a longer
period of months) commencing on a Business Day selected by the Company pursuant
to Section 2.7; provided that in no event shall any Eurodollar Interest Period
extend beyond the Termination Date. A month means a period starting on one day
in a calendar month and ending on the numerically corresponding day in the next
calendar month. If there is no such numerically corresponding day in the
calendar month in which a Eurodollar Interest Period ends, such Eurodollar
Interest Period shall end on the last Business Day of such calendar month. If a
Eurodollar Interest Period would otherwise end on a day that
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 7
is not a Business Day, such Eurodollar Interest Period shall end on the next
succeeding Business Day; provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Eurodollar Interest Period
shall end on the immediately preceding Business Day.
"Eurodollar Margin" means (a) at any time when the Funded Debt Ratio is
equal to or less than 1.50 to 1, one-half of one percent (1/2%) per annum,
(b) at any time when the Funded Debt Ratio is greater than 1.50 to 1 but less
than or equal to 2.00 to 1, five-eighths of one percent (5/8%) per annum, (c) at
any time when the Funded Debt Ratio is greater than 2.00 to 1 but less than or
equal to 2.50 to 1, three-quarters of one percent (3/4%) per annum, (d) at any
time when the Funded Debt Ratio is greater than 2.50 to 1 but less than or equal
to 3.00 to 1, seven-eighths of one percent (7/8%) per annum, (e) at any time
when the Funded Debt Ratio is greater than 3.00 to 1 but less than or equal to
3.50 to 1, one and one-eighth percent (1-1/8%) per annum, and (f) at any time
when the Funded Debt Ratio is greater than 3.50 to 1, one and three-eighths
percent (1-3/8%) per annum. Each adjustment to the previously calculated
Eurodollar Margin shall be effective five (5) Business Days following Agent's
receipt of the reports to be delivered by the Company pursuant to Sections
6.1(a), (b) and (c).
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Eurodollar Interest Period, a rate of interest per annum, calculated on
the basis of a three hundred sixty (360) day year, equal to the sum of (a) the
Base Eurodollar Rate applicable to that Eurodollar Interest Period, plus (b) the
applicable Eurodollar Margin; provided that in no event shall the Eurodollar
Rate exceed the Highest Lawful Rate.
"Existing Shareholders" means those Persons that are shareholders of Haggar
or the Company on the date of this Agreement.
"Existing Standby Letters of Credit" means those Letters of Credit more
particularly described on SCHEDULE 2 attached hereto.
"Family Group" means X. X. Xxxxxx, X. X. Xxxxxx, Xx. and Xxxxxxxx Xxxxxx
Xxxxxxx, and their respective spouses, children, children's spouses,
grandchildren, grandchildren's spouses, and any trust existing or established
for the benefit of any of the foregoing.
"Fed Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three (3) federal funds
brokers of recognized standing selected by it.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 8
"Fixed CD Rate" means, with respect to a Fixed CD Rate Advance for the
relevant CD Interest Period, a rate of interest per annum, calculated on the
basis of a three hundred sixty (360) day year, equal to the sum of (a) the
Base Fixed CD Rate applicable to that CD Interest Period, plus (b) the
Assessment Rate applicable to that CD Interest Period, plus (c) the
applicable CD Margin; provided that in no event shall the Fixed CD Rate
exceed the Highest Lawful Rate.
"Fixed CD Rate Advance" means that portion of the aggregate Loans made
by the Banks bearing interest at a particular Fixed CD Rate for a particular
CD Interest Period.
"Fixed Charge Ratio" means the ratio of Operating Cash Flow to Fixed
Charges as measured in accordance with Section 7.6 and as measured at the end
of each fiscal quarter.
"Fixed Charges" means, for the Company Group on a consolidated basis for
any period, in accordance with GAAP, the sum of (a) all interest on and
principal of Indebtedness (not including employee severance payments) that is
paid or required to be paid or accrued during such period, (b) all dividends
paid in cash during such period with respect to the securities of any member
of the Company Group to any recipient other than a member of the Company
Group, and (c) all cash payments made during such period for Capital
Expenditures (but not including (i) expenditures of up to $38,000,000
attributable to the Customer Service and Distribution Center, and (ii)
expenditures for the purchase of a corporate headquarters [to the
extent such expenditures in the aggregate do not exceed the net cash
amount realized by the Company from any sale of its existing headquarters
situated at 0000 Xxxxxx Xxxxxx, Xxxxxx Xxxxx]).
"Fixed Rate" means the Fixed CD Rate or the Eurodollar Rate.
"Fixed Rate Advance" means a Eurodollar Advance or a Fixed CD Rate Advance.
"Floating Rate Advance" means that portion of the aggregate Loans made by
the Banks bearing interest at the Alternate Base Rate for the applicable period
outstanding.
"Funded Debt" means, for the Company Group on a consolidated basis for any
period, all amounts advanced and outstanding with respect to any Indebtedness
(excluding, however, any Indebtedness of the type described in clause (f) of the
definitions of such term) of any member of the Company Group, including, without
limitation, the Obligations.
"Funded Debt Ratio" means the ratio, as measured at the end of each fiscal
quarter, of Funded Debt as of the end of such quarter to Operating Cash Flow for
the preceding twelve (12) month period.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 9
"GAAP" means generally accepted accounting principles in the United States
of America consistently applied as in effect at the time of application of the
provisions hereof; provided, however, that to the extent any such generally
accepted accounting principle conflicts with any applicable enforceable rule of
the Securities and Exchange Commission, if any, then such enforceable rule shall
control; and provided further, however, that wherever in this Agreement
principles of consolidation different from those required by generally accepted
accounting principles are specified, the principles of consolidation specified
in this Agreement shall govern.
"Guarantors" means Haggar and each of the Company's now or hereafter
existing Domestic Subsidiaries, including, without limitation, those
Subsidiaries listed on SCHEDULE 3 attached to this Agreement as Domestic
Subsidiaries.
"Guarantee" of any Person means any obligation, contingent or otherwise,
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation (whether arising by virtue of partnership arrangements, by
agreements to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions, by "comfort letter"
or other similar undertaking of support or otherwise), or (b) entered into for
the purpose of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business.
"Haggar" means Haggar Corp., a Nevada corporation.
"Highest Lawful Rate" means the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the Loans under the Laws of the United States and the
Laws of the State of Texas as may be applicable thereto that are presently in
effect or, to the extent allowed by Law under such applicable Laws of the United
States and the Laws of the State of Texas, which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable Laws now
allow. To the extent, if any, that Chapter One of Title 79, Texas Revised Civil
Statutes, 1925, as amended (the "Act") establishes the highest nonusurious rate,
the Highest Lawful Rate shall be the "indicated rate ceiling," as defined in the
Act in effect from time to time, calculated on the basis of a 365/366 day year;
provided, however, that to the extent permitted by the Act, the Banks at their
election may substitute for the "indicated rate ceiling" the "annual ceiling" or
the "quarterly ceiling," as these terms are defined in the Act, upon the giving
of the notices provided for by the Act and effective upon the giving of such
notices, such substitution to have the effect provided for in Section (h)(1) of
the Act and to be automatically renewable for additional periods as therein
provided.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 10
"Indebtedness" for any Person means any and all (a) obligations for
borrowed money, whether or not evidenced by a note or other similar
instrument or agreement, (b) obligations representing the deferred purchase
price of property or services other than accounts payable arising in the
ordinary course of business and in accordance with past practice, (c)
obligations, whether or not assumed, secured by Liens on or payable out of
the proceeds or production from specified property now or hereafter owned or
acquired by such Person, (d) obligations that are evidenced by notes,
acceptances or other instruments or agreements, including, but not limited
to, employee severance agreements (but not including non-capitalized lease
obligations), (e) Capitalized Lease Obligations and (f) obligations under any
Guarantee.
"Intercompany Indebtedness" means, at any time, any Indebtedness owing
from one member of the Company Group to another member of the Company Group.
"Interest Period" means a CD Interest Period or a Eurodollar Interest
Period.
"Inventory" means, at any time, goods, merchandise or other personal
property held for sale in the ordinary course of business of the Company
Group on a consolidated basis.
"Laws" means all applicable statutes, laws, rules, ordinances,
regulations, orders, writs, judgments, awards, injunctions or decrees of any
Tribunal.
"Letter of Credit Commitment" means, for any Bank, the lesser of (a)
such Bank's Ratable Share of $30,000,000, or (b) such Bank's Ratable Share of
the Total Commitments if the Total Commitments are less than $30,000,000.
"Letter of Credit Exposure" means the aggregate amount of all issued and
outstanding Letters of Credit.
"Letter of Credit Facility" means the aggregate of all Letter of Credit
Commitments.
"Letters of Credit" means Standby Letters of Credit.
"Lien" means any security interest, mortgage, pledge, lien, charge,
encumbrance, title retention agreement, lessor's interest under a Capitalized
Lease Obligation or other similar interest in, of or on any property of the
Company or any Subsidiary of the Company.
"Litigation" means any proceeding, claim, lawsuit and/or investigation
conducted or threatened in writing (and known to the Person in question) by
or before any Tribunal.
"Loan" means any loan made under this Agreement.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 11
"Loan Documents" means this Agreement, each of the Notes, the Parent
Guaranty, the Subsidiary Guaranty, the Applications and all other documents
executed or delivered (or to be executed or delivered) pursuant to any of the
foregoing documents.
"Material Adverse Effect" means any set of circumstances or event that
(a) would have any adverse effect whatsoever upon the validity or
enforceability of any of the Loan Documents, (b) is or, upon the passage of
time or the happening of an event will be, material and adverse to the
consolidated financial position or business operations of the Company Group,
or (c) would materially impair the ability of the members of the Company
Group, taken as a whole, to fulfill the obligations of the Loan Documents.
"Material Indebtedness" means any Indebtedness (excluding Intercompany
Indebtedness) in an amount equal to or exceeding $5,000,000.
"Net Worth" means, as of any date, the total shareholder's equity
(including common and preferred stock, additional paid-in capital and
retained earnings after deducting treasury stock) which would appear on a
consolidated balance sheet of the Company Group, or on a balance sheet of the
Company, as the case may be, prepared as of such date in accordance with GAAP.
"Note" means each promissory note in substantially the form of EXHIBIT C
to this Agreement, duly executed and delivered to the Agent by the Company
and payable to the order of a Bank in the amount of its Commitment, including
any amendment, modification, renewal or replacement of such promissory note.
"Obligations" means all unpaid principal and accrued and unpaid interest
under the Notes, all accrued and unpaid fees hereunder, and all other
obligations of the Company and each Guarantor to the Banks or to any Bank or
the Agent arising under the Loan Documents, including, but not limited to,
the Parent Guaranty and the Subsidiary Guaranty.
"Operating Cash Flow" means, for any period, (a) the net income of the
Company Group on a consolidated basis (before accounting for the gains and
losses on the sale of capital assets, discontinued operations and other like
extraordinary or nonrecurring events, including all Capacity Adjustment
Costs), plus (b) depreciation or amortization, plus (c) interest expense,
plus (d) federal and state income taxes, as set forth on the financial
statements of the Company and its Subsidiaries and as determined in
accordance with GAAP. In no event shall Operating Cash Flow include any
income or loss attributable to any changes in the accounting for pension,
profit sharing or employee benefits.
"Parties" means the Company, Haggar, the Banks and the Agent.
"Parent Guaranty" means that certain continuing guaranty, dated of even
date with the Prior Agreement, executed by Haggar, pursuant to which Haggar
unconditionally guaranteed the
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 12
full payment of the obligations described therein together with that certain
Consent of Haggar (herein so called), dated of even date with this Agreement,
executed by Haggar, in the form of EXHIBIT D attached hereto.
"Payment Date" means each March 31, June 30, September 30 and December 31
during the term of this Agreement.
"Permitted Indebtedness" means the obligations of the Company Group
listed on SCHEDULE 4 hereto, together with any obligations of a same or
similar character incurred in the ordinary course of business which, when
taken together with the outstanding amount of the obligations listed on
SCHEDULE 4 hereof, do not exceed, in the aggregate, the amount of
$40,140,692, plus any or all of the following Indebtedness:
(a) obligations to reimburse advances made under commercial letters
of credit or similar instruments incurred in the ordinary course of
business but only to the extent that the aggregate outstanding amount
thereof does not exceed $30,000,000;
(b) obligations to reimburse advances made under standby letters of
credit (other than Standby Letters of Credit) incurred in the ordinary
course of business but only to the extent that the aggregate outstanding
amount thereof does not exceed $2,000,000;
(c) obligations (i) to advance monies for the repurchase of the
outstanding shares of the stock of Haggar from any holder thereof which is
an officer, director or employee of any member of the Company Group, or
(ii) to pay any sum or sums of money as a settlement of existing or future
compensation expectations or agreements with any such officer, director or
employee, in each case in connection with the resignation, severance or
termination of such relationship, but only to the extent that the aggregate
amount payable over any twelve (12) month period does not exceed
$2,500,000.00 (not including the amount of any severance compensation paid
to hourly wage employees) and the aggregate amount of all such obligations
payable over their respective terms does not exceed $10,000,000;
(d) Indebtedness incurred in the ordinary course of business,
purchase money obligations and Capitalized Lease Obligations to the extent
that the aggregate outstanding amounts thereof do not exceed the sum of
$2,000,000 plus (i) $2,000,000 TIMES (ii) the number of fiscal years of the
Company ending during the period in which this Agreement has been in
effect;
(e) Intercompany Indebtedness, which shall be subordinate to the
Obligations in all respects (other than Intercompany Indebtedness with
Subsidiaries other than Domestic Subsidiaries incurred in the ordinary
course of business);
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 13
(f) accounts payable and other obligations to officers and directors
of the Company Group;
(g) the amount of any Guarantee to the extent the Indebtedness
guaranteed thereby constitutes Permitted Indebtedness of any member of the
Company Group;
(h) the amount of any Guarantee by the Company or Haggar of real
property leases for retail premises in favor of Haggar Direct, Inc.
provided that (i) the remaining liability under such Guarantee does not
exceed the rental payable during one lease year, or (ii) the aggregate
remaining liability in excess of the rental payable during one lease year
under all such Guarantees does not exceed (w) the sum of $1,000,000 for the
period from the date hereof through September 30, 1996, (x) the sum of
$2,000,000 for the period October 1, 1996, through September 30, 1997, (y)
the sum of $4,000,000 for the period October 1, 1997, through September 30,
1998, and (z) the sum of $6,000,000 for the period October 1, 1998,
through the Termination Date; and
(i) the Obligations.
"Permitted Liens" means (a) Liens for Taxes not yet due and payable,
mechanic's Liens and materialman's, shipper's or warehouseman's Liens for
services or materials and landlord's Liens for rental amounts for which payment
is not yet due or that are being contested in good faith and their enforcement
stayed by appropriate proceedings, (b) Liens securing any purchase money
Indebtedness if such Liens do not encumber any property other than the property
for which such purchase money Indebtedness was incurred, (c) the currently
existing Liens described in SCHEDULE 4 to this Agreement, if any, and renewals
thereof if the principal amounts secured thereby are not increased and the
renewed Lien does not cover any assets which are not covered by the existing
Lien renewed thereby, (d) pledges or deposits made to secure payment of worker's
compensation, or to participate in any fund in connection with worker's
compensation, unemployment insurance, pensions, or other social security
programs, (e) good-faith pledges or deposits made to secure performance of bids,
tenders, contracts (other than for the repayment of borrowed money) or leases,
not in excess of twenty percent (20%) of the aggregate amount due thereunder, or
to secure statutory obligation, surety or appeal bonds, or indemnity,
performance, or other similar bonds in the ordinary course of business, (f)
encumbrances consisting of zoning restrictions, easements or other restrictions
on the use of real property, none of which materially impair the operation by
the Company Group (taken as a whole) of their business, and none of which is
violated by existing or proposed structures or land use that materially impair
the operation by the Company Group (taken as a whole), and (g) the following, if
(i) the validity or amount thereof is being contested in good faith and by
appropriate and lawful proceedings and so long as levy and execution thereon
have been stayed and continue to be stayed, or (ii) they do not in the aggregate
materially detract from the value of any material assets or the operation by the
Company Group of their respective businesses: claims and Liens for Taxes due and
payable; any attachment of personal or real property or
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 14
other legal process prior to adjudication of a dispute on the merits; adverse
judgments on appeal; and Liens.
"Person" means any corporation, natural person, firm, joint venture,
partnership, trust, unincorporated organization, government or any department
or agency of any government.
"Plan" means an employee pension benefit plan that is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code and is either (a) maintained by the Company or any member of the
Controlled Group for employees of the Company or any member of the Controlled
Group (a "Single Employer Plan") or (b) maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Company or any
member of the Controlled Group is a party under which more than one employer
makes contributions (a "Multi-Employer Plan").
"Prime Rate" means, as of a particular date, the prime rate most
recently announced by the Agent, automatically fluctuating upward and
downward with and at the time specified in each such announcement without
special notice to the Company or any other Person, which prime rate may not
necessarily represent the lowest or best rate actually charged to a customer.
"Prior Agreement" has the meaning ascribed thereto in Recital A hereof.
"Ratable Share" of any Bank means that percentage which the Commitment
of such Bank bears to the Total Commitments.
"Rate Option" means the Eurodollar Rate, the Fixed CD Rate or the
Alternate Base Rate.
"Receivables" means the unpaid principal portion of the obligation, as
stated on the respective invoice, of any customer of the Company or any of
its Domestic Subsidiaries, to pay money arising out of or related to the sale
of Inventory or services by the Company and/or its Domestic Subsidiaries on a
consolidated basis in the ordinary course of business, net of any credits,
rebates or offsets owed to such customer and also net of any commissions
payable by the Company or such Domestic Subsidiary to third parties, other
than commissions payable with respect to sales of finished goods.
"Regulation D", "Regulation G", "Regulation U" and "Regulation X" means
respectively Regulation D, Regulation G, Regulation U and Regulation X of the
Board of Governors of the Federal Reserve System from time to time in effect
and shall include any successor or other regulation or official
interpretation of said Board of Governors.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA, other than a reportable event for which the ERISA notice
requirement has been waived.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 15
"Required Banks" means (a) Banks in the aggregate holding at least sixty
percent (60%) of the sum of (i) the aggregate unpaid principal amount of the
outstanding Loans plus (ii) the Letter of Credit Exposure, or (b) if no Loans
or Letters of Credit are outstanding, Banks in the aggregate having at least
sixty percent (60%) of the Commitments.
"Reserve Requirement" means, with respect to a Eurodollar Interest
Period or a CD Interest Period, the maximum aggregate reserve requirement
imposed on the Agent (including all basic, supplemental, marginal and other
reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements during such Interest Period) that
is imposed under Regulation D on non-personal time deposits of $100,000 or
more with a maturity equal to that of the CD Interest Period (in the case of
Fixed CD Rate Advances) or on Eurocurrency liabilities with a maturity equal
to that of the Eurodollar Interest Period (in the case of Eurodollar
Advances).
"Section" or "Article" means a numbered section or article of this
Agreement, unless another document or Law is specifically referenced.
"Shortfall" shall have the meaning ascribed thereto in Section 2.9(b).
"Standby Letter of Credit" means a standby letter of credit issued by
the Agent for the account of the Company, and all renewals, extensions or
replacements thereof, and includes an Existing Standby Letter of Credit.
"Subsidiary" means any corporation or other entity, more than fifty
percent (50%) of the outstanding voting securities of which shall at the time
be owned or controlled, directly or indirectly, by any Person, including, but
not limited to, any foreign business organization that is so owned or
controlled.
"Subsidiary Guaranty" means those certain continuing guaranties,
executed by each of the Company's Domestic Subsidiaries, pursuant to which
the Company's Domestic Subsidiaries unconditionally guaranteed the full
payment of the obligations described therein, together with (a) each and
every other continuing guaranty which is hereafter executed and delivered
pursuant to the provisions of Section 7.11, in each case substantially in the
form of EXHIBIT E attached hereto, and (b) that certain Consent of Domestic
Subsidiaries (herein so called), dated of even date with this Agreement,
executed by each of the Company's Domestic Subsidiaries in the form attached
hereto as EXHIBIT F.
"Tangible Net Worth" means, at any time, an amount equal to Net Worth
LESS the following (without duplication of deductions in respect of items
already deducted in arriving at surplus and retained earnings): (a) the book
value of all assets that would be treated as intangibles in accordance with
GAAP, including, without limitation, goodwill, trademarks, trade names,
copyrights, patents, unamortized debt discount and expense, unamortized
organization
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 16
and reorganization expense and costs in excess of the net asset value of
acquired property or Persons; (b) all amounts representing any write-up in
the book value of any assets of the Company Group resulting from the
revaluation thereof, but only to the extent any such write-up exceeds the
original cost of such asset; and (c) the aggregate amount of accounts
receivable and other assets of the Company Group relating to loans or
advances due and owing from officers and directors of the Company Group,
unless such obligations have been secured by collateral approved by the
Required Banks, as evidenced by their written consent thereto, but only in
the event that such amount exceeds $1,000,000, in the aggregate, after
deducting therefrom all loans or advances due and owing from the Company
Group, in the aggregate, to their respective officers and directors, in the
aggregate.
"Taxes" means all taxes, assessments, filing or other fees, levies,
imposts, duties, deductions, withholdings, stamp taxes, interest equalization
taxes, capital transaction taxes, foreign exchange taxes or charges, or other
similar charges from time to time or at any time imposed by any Law or
Tribunal.
"Termination Date" means December 31, 1998, unless the Commitments are
terminated prior to such date pursuant to Sections 2.4 or 9.1; provided,
however, if the Agent receives written notice from the Company by April 30,
1997, and each April 30 thereafter, of its intention to extend for one (1)
additional year (and the Company receives notice from the Agent by June 15,
1997, and each June 15 thereafter, of the election of all the Banks to so
extend), then the Termination Date shall be extended for one (1) additional
year, unless the Commitments are terminated prior to such extended date
pursuant to Sections 2.4 or 9.1.
"Total Commitments" means the aggregate Commitments of all the Banks.
"Total Liabilities" means the total of all amounts that would be treated
as liabilities on a consolidated balance sheet of the Company Group prepared
in accordance with GAAP, including, without limitation, accrued taxes and
accrued expenses.
"Tribunal" means any relevant court or government department,
commission, board, bureau, agency or instrumentality of or any state,
commonwealth, nation, territory, possession, county, parish or municipality,
whether now or hereafter constituted or existing.
"Unfunded Liabilities" means (a) in the case of Single Employer Plans,
the amount (if any) by which the present value of all vested non-forfeitable
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent
valuation date for such Plan, and (b) in the case of Multi-Employer Plans,
the withdrawal liability of the Company Group.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default; provided, however,
that the failure to maintain any
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 17
of the financial ratios set forth in Sections 7.6, 7.7 and 7.9 as of a
specific point in time prior to the end of a fiscal quarter shall not
constitute an Unmatured Default unless the Required Banks reasonably
determine that it is likely that at the end of such fiscal quarter a Default
will exist with respect to any of the financial ratios set forth in Section
7.6, 7.7 or 7.9, as applicable.
1.2. GENDER AND NUMBER. Words of any gender used in this Agreement
shall be held and construed to include any other gender; and, words in the
singular number shall be held to include the plural, and vice versa, unless
the context requires otherwise.
1.3. REFERENCES TO AGREEMENT. Use of the words "herein", "hereof",
"hereinabove", and the like are and shall be construed as references to this
Agreement.
ARTICLE 2
THE CREDITS
2.1. ADVANCES AND LETTERS OF CREDIT.
(a) Each Bank severally agrees, on the terms and conditions set forth
in this Agreement, to make Advances to the Company from time to time prior
to the Termination Date, in amounts not to exceed in the aggregate at any
one time outstanding the amount of its Commitment, which Advances shall be
each Bank's Ratable Share of such amounts as the Company may request up to,
but not exceeding, a total principal amount equal to the lesser of (i) the
Total Commitments MINUS any Letter of Credit Exposure, or (ii) the
Borrowing Base; provided, however, that no Bank shall be obligated to make
any Advance pursuant to a particular Rate Option at any time when such Rate
Option exceeds the Highest Lawful Rate. Subject to the terms of this
Agreement, the Company may borrow, repay and reborrow at any time prior to
the Termination Date. Such loans may be Floating Rate Advances, Fixed CD
Rate Advances or Eurodollar Advances, or a combination thereof, determined
in accordance with Section 2.7. Each Advance shall bear interest at one of
the Rate Options selected in accordance with Section 2.7 or otherwise as
provided in Section 2.7, and shall be paid in full by the Company on the
Termination Date.
(b) Each Bank severally agrees, on the terms and conditions set forth
in this Agreement and each Application, that the Agent shall, and the Agent
agrees on behalf of the Banks to the extent of their Ratable Share to,
issue Standby Letters of Credit from time to time, as requested by the
Company and otherwise in accordance with Subsection 2.6(c). The Existing
Standby Letters of Credit are and shall constitute Standby Letters of
Credit issued under this Agreement on behalf of the Banks in their Ratable
Share. Upon the issuance of each Standby Letter of Credit (and
contemporaneously herewith as
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 18
to Existing Standby Letters of Credit), each Bank shall automatically
acquire a participation in the liability of the Agent thereunder equal
to such Bank's Ratable Share thereof, as the same may be reduced,
increased, renewed, extended or replaced from time to time in
accordance with this Agreement.
2.2. USE OF PROCEEDS. The proceeds of the Advances shall be used by the
Company in compliance with Section 5.15 hereof, for working capital and
general corporate purposes, in compliance with Section 7.2 in all respects
and in the ordinary course of its business. Proceeds of the Advances may
also be used to fund the repurchase of shares of the common stock of Haggar
on the open market or through privately negotiated transactions; provided,
however, that proceeds used for such purpose, in the aggregate over the term
of the Obligations, shall not exceed $25,000,000. The provisions of this
Section 2.2 are subject to, and shall not limit, modify or otherwise affect,
the other covenants and agreements contained in this Agreement, including,
without limitation, the covenants contained in Article 7 hereof.
2.3. OPTIONAL PRINCIPAL PAYMENTS. The Company may from time to time pay
all outstanding Advances or, in a minimum aggregate amount of $1,000,000 (or
any integral multiple thereof), any portion of the outstanding Advances (a)
at any time, in the case of a Floating Rate Advance, and (b) upon one (1)
Business Day's notice to the Agent, in the case of a Fixed Rate Advance;
PROVIDED, HOWEVER, that each Fixed Rate Advance may be paid only on the last
day of its applicable Interest Period, whether in connection with a total or
a partial prepayment.
2.4. REDUCTION OR TERMINATION OF COMMITMENTS. The Commitments may or
shall be reduced as follows:
(a) The Company may permanently reduce the Commitments, in whole or
in part, ratably among the Banks in integral multiples of $1,000,000, upon
at least thirty (30) Business Days' prior notice to the Agent, which
written notice shall specify the amount of any such reduction; provided,
however, that the Commitments may not be reduced below the sum of (i) the
outstanding principal amount of the Advances plus (ii) any Letter of Credit
Exposure.
(b) Any reduction of the Commitments shall first reduce the
Commitments other than the Letter of Credit Commitments prior to any
reduction in the Letter of Credit Facility.
2.5. FEES. The Company shall pay to the Agent for the account of the
Banks in their respective Ratable Shares (except as set forth in subsection
[b][i] below), from the date of this Agreement to and including the Termination
Date, the following fees:
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 19
(a) On each Payment Date and on the Termination Date, a commitment
fee equal to a fluctuating percentage of the average daily amount of the
Total Commitments minus the sum of (i) the outstanding principal amount of
all Advances and (ii) the Letter of Credit Exposure during the quarter
ending on and including such Payment Date, or such shorter period ending on
and including the Termination Date, as the case may be. The percentage
shall be equal to the following: (a) at any time when the Funded Debt
Ratio is equal to or less than 1.50 to 1, three-sixteenths of one percent
(3/16%) per annum, (b) at any time when the Funded Debt Ratio is greater
than 1.50 to 1 but less than or equal to 2.00 to 1, one-fifth of one
percent (1/5%) per annum, (c) at any time when the Funded Debt Ratio is
greater than 2.00 to 1 but less than or equal to 3.50 to 1, one-quarter of
one percent (1/4%) per annum, and (d) at any time when the Funded Debt
Ratio is greater than 3.50 to 1, three-eighths of one percent (3/8%) per
annum. Each adjustment to the percentage used to calculate the Commitment
Fee shall be effective five (5) Business Days following Agent's receipt of
the reports to be delivered by the Company pursuant to Sections 6.1(a), (b)
and (c);
(b) On each Payment Date and on the Termination Date, (i) a Letter of
Credit issuance fee payable to the Agent (which issuance fee shall not be
shared with the Banks), in an amount equal to one-eighth of one percent
(1/8%) of the Letter of Credit Exposure during the quarter ending on and
including such Payment Date, or such shorter period ending on and including
the Termination Date, as the case may be, calculated on the number of days
in such quarterly or shorter period, as the case may be, and (ii) a Letter
of Credit fee equal to the Eurodollar Margin then in effect TIMES the
Letter of Credit Exposure during the quarter ending on and including such
Payment Date, or such shorter period ending on and including the
Termination Date, as the case may be, calculated on the number of days in
such quarterly or shorter period, as the case may be;
provided, however, if the Commitments are terminated in their entirety prior to
the Termination Date as provided herein, all accrued and unpaid commitment fees
shall be payable on the effective date of such termination, and, notwithstanding
the termination of the Commitments, the Letter of Credit commitment fees
referred to in clause (b) above shall continue to accrue and be due and payable
as set forth therein until the extinguishment in full of any Letter of Credit
Exposure. All such fees shall be calculated on the basis of a year consisting
of three hundred sixty (360) days and, except as set forth in this Section 2.5,
of four (4) quarterly periods of ninety (90) days each.
2.6. METHODS OF BORROWING AND APPLICATION AND ISSUANCE OF LETTERS OF
CREDIT.
(a) With respect to the making of any Advance requested by the
Company, the Company shall give to the Agent its notice of such request for
Advance in accordance with the provisions of Section 2.7 and, subject to
the terms and conditions set forth herein, each Bank shall make available
its Ratable Share of the Advance or Advances to
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 20
be made on a Borrowing Date (as determined in accordance with the
provisions of Section 2.7[a] below) not later than the day of such
Borrowing Date, in Dollars immediately available in Dallas, Texas,
to the Agent at its address specified pursuant to Article 13; PROVIDED,
HOWEVER, that the Agent shall advise such Bank not later than
1:00 p.m. (Dallas, Texas time) on the date of its receipt of any notice
of borrowing timely given by the Company pursuant to Subsection 2.7(a).
The Agent will make the funds so received from the Banks available to the
Company within two (2) hours of receipt by it.
(b) The Agent may (unless notified to the contrary by a Bank prior to
a Borrowing Date) assume that each Bank has made available to the Agent on
such Borrowing Date such Bank's Ratable Share of the Advance or Advances to
be made on such Borrowing Date pursuant to Subsection 2.6(a) above, and the
Agent may (but it shall not be required to), in reliance upon such
assumption, make available to the Company a corresponding amount. The
Agent shall notify the Company by telephone or telecopy to the treasurer or
another Authorized Officer of the Company of the failure of any Bank to
make available to the Agent its Ratable Share on such Borrowing Date if
such failure continues for a period of two (2) Business Days and the Agent
has made available to the Company an amount corresponding to such Bank's
Ratable Share, or, if the Agent has not made available such corresponding
amount, promptly after the account officer of the Agent with responsibility
for the Company's account obtains actual knowledge of such failure. If and
to the extent that such Bank shall not have so made such Ratable Share
available to the Agent and the Agent shall have made available such
corresponding amount to the Company, such Bank agrees to pay the same to
the Agent with interest at a rate equal to the Fed Funds Rate with respect
to such corresponding amount forthwith on, and as specified in, the Agent's
demand, and if such Bank shall fail to do so the Company agrees to pay to
the Agent within three (3) Business Days after demand, an amount equal to
such corresponding amount, together with interest thereon at the rate per
annum applicable to the Advance or Advances made on such Borrowing Date for
each day from the date the Agent shall make such amount available to the
Company until the date such amount is paid or repaid to the Agent,
PROVIDED, HOWEVER, that until and unless such payment has been made in full
by the Company, such Bank shall remain liable to the Agent for the full
amount of such payment, including interest as set forth above.
(c) With respect to the issuance of any Standby Letter of Credit
requested by the Company, the Company shall give to the Agent its notice of
such request at least two (2) Business Days in advance of the date of its
issuance by delivery of a duly executed and completed Application in the
form of EXHIBIT A attached hereto. Each Standby Letter of Credit (i) shall
be in form acceptable to the Agent and the Company, (ii) shall be dated the
date of issuance and (iii) shall expire on such date as may be requested by
the Company, but in no event later than the earlier of (1) three hundred
sixty-five (365)
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 21
days after its issuance date or (2) the Termination Date. Notwithstanding
anything herein or in any other Loan Documents to the contrary, in no
event shall the Company be entitled to the issuance of a Standby Letter
of Credit if the issuance of such Letter of Credit would cause the Letter
of Credit Exposure (including the requested Letter of Credit) to exceed
the LESSER of (A) the Letter of Credit Facility, or (B) the Total
Commitments MINUS the aggregate amount of all outstanding Advances.
(d) With respect to the issuance by the Agent of Letters of Credit,
the Agent shall provide to each of the Banks, as of the last day of each
calendar month and within twenty (20) days thereafter, a written report
setting forth all issued and outstanding Letters of Credit, their
respective amounts, issuance dates, expiration dates, identifying numbers,
and beneficiaries.
(e) All the terms and provisions of any and all Applications executed
and delivered pursuant to this Section 2.6 are incorporated herein by
reference; provided, however, that in the event of a conflict between the
provisions of this Agreement and any Application, the provisions of this
Agreement shall control. Without limitation of the foregoing, the
repayment of Advances occasioned by drawings under Letters of Credit,
interest to accrue thereon and remedies of the Banks in the event of
nonpayment of such Advances when due shall be governed by the terms of this
Agreement notwithstanding contrary terms in any Application. The Company
shall pay to the Agent on demand an amount equal to the face amount of each
draft drawn or purporting to be drawn under a Letter of Credit in
accordance with the terms of the Application. The Agent may debit the
Company's account with the Agent in order to pay each such draft, which the
Agent may do in reliance on the assumption that sufficient funds have been
made available to such account by the Company on the date when such drafts
are payable, PROVIDED that the Agent shall not be required to effect any
such debit if it determines insufficient funds exist in such account for
the payment in full of any such amounts. If the Company's account has
insufficient funds with which to pay such draft and if payment thereof is
not otherwise made or provided for on the maturity date of the draft, the
face amount of the maturing draft shall automatically be deemed to be an
Advance, payable by each of the Banks to the Agent in accordance with their
Ratable Share, in immediately available funds, not later than 2:00 p.m.,
Dallas, Texas time, on the day specified in the demand of the Agent to each
Bank. Such Advance shall be confirmed to the Agent by the Company in
writing not later than five (5) Business Days following the date the draft
matured. The failure of the Company to transmit such written confirmation
shall not affect the Company's obligation to repay the amount of such
Advance, which shall be deemed to be a Floating Rate Advance.
(f) Notwithstanding any other provision of this Agreement to the
contrary, each Bank shall be unconditionally and irrevocably liable,
without regard to the occurrence of a Default or Unmatured Default or any
other fact or circumstance which
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 22
would entitle such Bank to withhold, xxxxx, reduce or offset the making
of an Advance hereunder, to advance to or reimburse the Agent, in
accordance with the demand of the Agent, such Bank's Ratable Share of
the amount of each draft under a Letter of Credit payable or paid by
the Agent to the extent that such amount has not been reimbursed by the
Company pursuant to the provisions of Section 2.6(e) above. The Agent
may make the proceeds of any such draft under a Letter of Credit available
to the beneficiary thereof prior to its receipt of such funds from the
Banks in reliance on the assumption that each Bank will make available to
the Agent its Ratable Share on the date such amount has been demanded for
payment. If the Agent is required at any time (whether before or after
the expiration date of any Letter of Credit) to return to the Company or
to a trustee, receiver, liquidator, custodian or other similar official any
portion of the payments made by or on behalf of the Company to the Agent
in reimbursement of payments made by the Agent under any Letter of Credit
and interest thereon, each Bank shall, upon demand of the Agent, forthwith
pay over to the Agent such Bank's Ratable Share of such amount. All amounts
payable by any Bank under this Section 2.6(f) shall include interest
thereon from the day the applicable draft is made (or the date such Bank
was to have made such reimbursement payment, as appropriate), to but not
including the date such amount is paid by such Bank to the Agent, at a
rate equal to the Agent's Fed Funds Rate with respect to such amount as
specified in the Agent's demand. The obligations of Banks under this
Section 2.6(f) shall continue after the Termination Date and survive any
termination of this Agreement.
(g) The Agent agrees with each Bank that it will exercise and give
the same care and attention to each Letter of Credit as it gives to its
other letters of credit. Other than complying with the terms of the Letter
of Credit and/or this Agreement, including any drafts, certificates and
other documents required thereby, each Bank and the Company agrees that, in
paying any draft, the Agent shall not have any responsibility to obtain any
document or to ascertain or inquire as to the validity or accuracy of any
such document or the authority of the person delivering any such document.
Subject to the terms of the foregoing sentence, none of the Agent and its
representatives, directors, officers, employees, attorneys or agents shall
be liable to any Bank or the Company for (i) any action taken or omitted in
connection herewith at the request or with the approval of any Bank, (ii)
any action taken or omitted in the absence of gross negligence and the
absence of willful misconduct (it being the intention hereby that no
liability shall result from a negligent action or omission), (iii) any
recitals, statements, representations or warranties contained in any
document distributed to any Bank, (iv) the creditworthiness of the Company
or (v) the execution, effectiveness, genuineness, validity or
enforceability of any Loan Documents or any other document contemplated
hereby or thereby. The Agent and its officers, directors, employees,
attorneys and agents shall be entitled to rely and shall be fully protected
in relying on any writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telex or teletype message,
statement, order, or other document or conversation believed by it or them
to be genuine
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 23
and correct and to have been signed or made by the proper person and, with
respect to legal matters, upon opinions of counsel selected by the Agent.
2.7. METHOD OF SELECTING RATE OPTIONS AND INTEREST PERIODS; CALCULATION OF
INTEREST.
(a) The Company shall give the Agent irrevocable notice not later
than 10:00 a.m. (Dallas, Texas time) on the Borrowing Date of each Floating
Rate Advance, at least one (1) Business Day before the Borrowing Date of
each Fixed CD Rate Advance and at least three (3) Business Days before the
Borrowing Date for each Eurodollar Advance specifying: (i) the Borrowing
Date of such Advance; (ii) the aggregate amount of such Advance; (iii) the
Rate Option selected for the Advance; and (iv) in the case of each Fixed
Rate Advance, the Interest Period applicable thereto, the information
provided to the Agent in such notice to be confirmed to the Agent in
writing not later than five (5) Business Days following the Borrowing Date
The unpaid principal amount of each Fixed Rate Advance shall bear interest
from and including the first day of the Interest Period applicable thereto
to (but not including) the last day of such Interest Period at the Fixed
Rate applicable to such Fixed Rate Advance. Floating Rate Advances shall
bear interest at the Alternate Base Rate, and the interest rate on any
Floating Rate Advances shall change when and as the Alternate Base Rate
changes. Each Advance shall be in the minimum amount of $1,000,000 (and in
integral multiples of $1,000,000 if in excess thereof). The Company may,
at the expiration of any Interest Period, or at any time with respect to a
Floating Rate Advance, select an Interest Period and/or Rate Option to
apply to any Advance, or any portion or combination thereof, by the
delivery to the Agent of notice of such election in the same manner as is
provided in this Section 2.7 (a) with respect to the making of an Advance,
subject to the notice and minimum Advance amount provisions applicable to
the Rate Option selected. Notwithstanding the foregoing, in no event shall
the Company have more than seven (7) Fixed Rate Advances outstanding at any
one time, and the last day of a chosen Interest Period shall not be later
than the Termination Date. Any Advance not paid at maturity, whether by
acceleration or otherwise, shall bear interest until paid in full at the
Default Rate, except that in the case of a Fixed Rate Advance whose
Interest Period has not yet expired, the same shall bear interest at the
higher of the rate otherwise in effect for the existing Interest Period
plus five percent (5%) per annum or the Alternate Base Rate plus five
percent (5%) per annum, not to exceed, however, the Highest Lawful Rate.
The Company may not select a Fixed Rate for an Advance if there exists a
Default or Unmatured Default hereunder.
(b) Prior to the termination of each Interest Period with respect to
any Fixed Rate Advance, the Company shall notify the Agent whether it
desires to renew such Fixed Rate Advance and specifying in accordance with
Section 2.7(a) above the Rate Option and Interest Period to be applicable
thereto. Absent the delivery of such a notice, then, upon the expiration
of the Interest Period applicable to such Fixed Rate Advance,
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 24
the Company shall be deemed to have selected the Alternate Base Rate to
be applicable to the outstanding principal amount thereof.
2.8. BORROWING BASE AND BORROWING BASE CERTIFICATE. In no event shall the
Banks be required to make any Advance or the Agent be required to issue any
Letter of Credit hereunder if the making of such Advance or drawing under such
Letter of Credit (assumed for these purposes to be an Advance) would create a
Borrowing Base Deficiency. The Borrowing Base shall be initially computed as of
the date of this Agreement. Thereafter the Borrowing Base shall be recomputed
as of the last day of each fiscal month utilizing the required Borrowing Base
Certificate, which shall be furnished to the Agent within twenty (20) days after
the end of such fiscal or calendar month and certified as to correctness by an
Authorized Officer of the Company. If the Banks shall reasonably object to the
form or contents of, or any calculations made in, any Borrowing Base
Certificate, the Banks shall not be required to make any Advance hereunder until
such objection is resolved to the Banks' satisfaction.
2.9. METHOD OF PAYMENT.
(a) All payments of principal, interest and fees hereunder shall be
made in immediately available funds to the Agent at the Agent's address
specified pursuant to Article 13 by noon (Dallas, Texas time) on the date
when due. Each payment shall be distributed by the Agent ratably among the
Banks in the proportion by which the Commitment of each Bank bears to the
Commitments. On or before the time a principal payment is made on any of
the Loans, the Company shall inform the Agent as to the proportionate
application of such payment to the Floating Rate Advances and Fixed Rate
Advances. In the absence of such direction, such payment shall be applied
first to repay Floating Rate Advances then outstanding and thereafter in
such fashion as the Agent shall determine. Each payment delivered to the
Agent for the account of any Bank shall be delivered promptly by the Agent
to such Bank in the same type of funds that the Agent received at its
address specified pursuant to Article 13.
(b) The Agent is authorized to cause the delivery of payments of
principal, interest or fees owing to the Banks and/or the Agent by charging
the Company's account with the Agent, which the Agent may do in reliance on
the assumption that sufficient funds have been made available to such
account by the Company on the date when such payments are due or have been
directed by the Company to be made, PROVIDED THAT the Agent shall have no
obligation to cause such delivery if it determines insufficient funds exist
in such account for the payment of any such amounts. If and to the extent
that the Company fails to provide sufficient funds in its account to cover
the amount of any charges made for the payment of principal, interest or
fees charged to such account and delivered by the Agent pursuant to this
Section 2.9(b), the Company shall immediately pay to the Agent the amount
by which such payment(s) so charged exceed the amount on deposit in such
account (the "SHORTFALL"), together with interest thereon at the Default
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 25
Rate from the date of such charge to the date such amount is repaid to the
Agent. Nothing contained herein shall be construed to extend the date of
payment of any amount due by the Company to the Agent, the Banks, or any of
them, and in no event shall the delivery of any amount by the Agent to
itself or any Bank pursuant to this Section 2.9(b) be effective as a
payment by or on behalf of the Company absent the Company's delivery to the
Agent of such amount to the Agent on the date when due in accordance with
the terms of this Agreement. If and to the extent that the Company
continues to fail to provide the amount of such Shortfall and accrued
interest thereon, as required pursuant to the immediately preceding
sentence, for a period of three (3) Business Days following the Agent's
demand therefor, each Bank agrees to advance to the Agent, under the Note
held by it, its pro rata portion of the Shortfall, together with interest
at a rate equal to the Fed Funds Rate with respect to such amount,
forthwith on, and as specified in, the Agent's demand.
2.10. NOTES; TELEPHONIC NOTICES. The Advances shall be evidenced by
the Notes. Each Bank is hereby authorized to record the principal amount of
each Advance and each repayment on the schedule attached to its Note, whereupon
such schedule shall constitute a part of the Note for all purposes. Any such
recording shall constitute PRIMA FACIE evidence of the accuracy of the
information so recorded; PROVIDED, HOWEVER, that the absence or inaccuracy of
such schedule or any notation thereon shall not limit or otherwise affect the
Obligations. The Company hereby authorizes each Bank and the Agent to extend
Loans and effect Rate Option selections based on telephonic notices made by any
person or persons the Agent or such Bank in good faith believes to be acting on
behalf of the Company. The Company shall promptly confirm to the Agent any
telephonic notice by written confirmation signed by an Authorized Officer of the
Company as provided in Section 2.7. If the written confirmation differs in any
material respect from the action taken by the Agent and the Banks, the records
of the Agent and the Banks shall govern absent manifest error.
2.11. INTEREST PAYMENT DATES; INTEREST BASIS. Interest accrued and
unpaid on the outstanding principal of all Advances shall be due and payable on
the last day of each calendar quarter, on the Termination Date, and additionally
with respect to each Fixed Rate Advance, on the last day of the Interest Period
applicable to each Fixed Rate Advance. Interest shall be calculated for actual
days elapsed on the basis of a three hundred sixty (360) day year or, if such a
calculation would result in an amount which exceeds the Highest Lawful Rate,
then on the basis of the actual number of days contained in such year. Interest
shall be payable for the day a Loan is made but not for the day of any payment
on the amount paid if payment is received prior to noon (Dallas, Texas time) at
the place of payment. If any payment of principal of or interest on a Loan or
any other amount due hereunder shall become due on a day that is not a Business
Day, such payment shall be made on the next succeeding Business Day and, in the
case of a principal payment, such extension of time shall be included in
computing interest in connection with such payment.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 26
2.12 MANDATORY PRINCIPAL PAYMENTS. In the event (a) of the existence of
a Borrowing Base Deficiency (as set forth in the Borrowing Base Certificate
due pursuant to Section 6.1[d]), or (b) that the outstanding principal amount
of all Advances made by any Bank plus its Ratable Share of any Letter of
Credit Exposure exceeds the Commitment of such Bank (as the same may be
reduced from time to time in accordance with the provisions of Section 2.4),
the Company shall immediately make principal reductions on the Notes or
furnish cash to the Agent in the manner hereafter described to the extent
necessary to reduce the Borrowing Base Deficiency to zero or to reduce such
Obligations to an amount equal to or less than the amount of such Commitment
LESS the amount of its Ratable Share of any Letter of Credit Exposure, as the
case may be. Each payment under this Section 2.12 shall be applied in
reduction of any outstanding Floating Rate Advances, and then against the
outstanding Advances designated by the Company in a notice accompanying such
payment. In the event the Company fails to make such designation, such
payment shall be applied first against Fixed Rate Advances in the order of
the expiration of the Interest Periods applicable thereto. In the event that
a payment is required of the Company pursuant to this Section 2.12 solely by
virtue of Letter of Credit Exposure, such that there are no outstanding
Advances, the Company shall, within one (1) Business Day after becoming aware
of the occurrence of such Borrowing Base Deficiency or excess in the Advances
plus Letter of Credit Exposure as to the Total Commitments, remit to the
Agent a cash amount equal to the payment which is required of it, to be held
by the Agent for the benefit of the Banks in their Ratable Share as
collateral for the Obligations (with rights of offset). The Company agrees
to execute and deliver any and all pledge, assignment or other security
documents as the Agent shall deem necessary or desirable to further evidence
or perfect the pledge, assignment or grant of a security interest in such
cash deposit pursuant to this Section 2.12.
2.13. NOTIFICATION OF LOANS, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will
notify each Bank of the contents of each Commitment reduction notice, notice
contemplated by Section 2.7, and repayment notice received hereunder. The
Agent will notify each Bank of the interest rate applicable to each Fixed
Rate Advance promptly upon determination of such interest rate and will give
each Bank prompt notice of each change in the Alternate Base Rate.
2.14. MAXIMUM INTEREST; HIGHEST LAWFUL RATE. The parties hereto
intend to conform strictly to the usury Laws in force that apply to this
transaction. Accordingly, all agreements among the parties hereto
(including, without limitation, the Notes), whether now existing or hereafter
arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of the Loans
or otherwise, shall the interest (and all other sums that are deemed to be
interest) contracted for, charged or received by the Banks with respect to
the Loans and the Loan Documents, whether separately or in the aggregate,
exceed the Highest Lawful Rate. If, from any circumstance whatsoever,
interest under the Loans and/or Loan Documents would otherwise be payable in
excess of the Highest Lawful Rate, and if from any circumstance any of the
Banks shall ever receive anything of value deemed interest by applicable Law
in excess of the Highest Lawful Rate, such Bank's receipt
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 27
of such excess interest shall be deemed a mistake and the same shall, so long
as no Default shall be continuing, at the option of the Company, either be
repaid to the Company or credited to the unpaid principal of the Notes;
PROVIDED, HOWEVER, that if a Default shall have occurred and be continuing,
and any of the Banks shall receive an amount which, but for this Section
2.14, would constitute excess interest during such period, the Banks shall
have the option of either crediting such excess amount to principal or
refunding such excess amount to the Company. If the Loans are prepaid or the
maturity of the Loans is accelerated by reason of an election of the Required
Banks, unearned interest, if any, shall be canceled and, if theretofore paid,
shall either be refunded to the Company or credited on the Loans as the
Required Banks elect. All interest paid or agreed to be paid to the Banks
shall, to the extent allowed by applicable Law, be amortized, prorated,
allocated and spread throughout the full period until payment in full of the
principal (including the period of any renewal or extension) so that the
interest for such full period shall not exceed the Highest Lawful Rate.
Notwithstanding that the parties hereto in good xxxxx xxxx each and every fee
provided by this Agreement to be bona fide fees for services rendered and to
be rendered separate and apart from the lending of money or the provision of
credit, if any such fee is ever determined by a Tribunal of competent
jurisdiction or by the Banks to constitute interest, then the treatment of
such fee for usury purposes shall be controlled by the provisions of this
Section.
2.15. INTEREST RECAPTURE. If at any time and from time to time the
rate of interest calculated pursuant to the Rate Option applicable to an
Advance would exceed the Highest Lawful Rate but for provisions limiting the
same to the Highest Lawful Rate, then, notwithstanding the foregoing, the
rate of interest accruing on such Advance shall continue to be the Highest
Lawful Rate until the total amount of interest accrued on such Advance equals
the amount of interest that would have accrued on such Advance but for
provisions limiting the same to the Highest Lawful Rate.
ARTICLE 3
CHANGE IN CIRCUMSTANCES; INDEMNIFICATION
3.1. YIELD PROTECTION.
(a) If any existing or future Law (whether or not having the force of
law) or compliance of any Bank with such,
(i) subjects any Bank to any Tax, duty, charge or withholding
on or from payments due from the Company (excluding U.S.
taxation of the overall net income of any Bank) or changes
the basis of taxation of payments to any Bank in respect
of its Loans or other amounts due hereunder;
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 28
(ii) imposes or increases or deems applicable any reserve
(other than reserves included in the Reserve
Requirement with respect to Fixed Rate Advances), special
deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any
Bank; or
(iii) imposes any other condition the result of which is to
increase the cost to any Bank of making, funding or
maintaining Dollar loans or reduces any amount
receivable by any Bank in connection with Dollar loans,
or requires any Bank or any applicable lending office
to make any payment calculated by reference to the amount
of loans held or interest received by it, by an amount
deemed material by such Bank;
then, within fifteen (15) days of demand and the submission of reasonable
evidence in support thereof by such Bank, the Company shall pay such
Bank that portion of such increased expense incurred or the amount of
reduction in an amount received which such Bank reasonably determines
is attributable to making, funding and maintaining its Fixed Rate
Advances. The determination of any amount to be paid by the Company shall
take into consideration the policies of such Bank, or any corporation
controlling such Bank, and shall be based upon any reasonable averaging,
attribution and allocation methods.
(b) If any Bank shall reasonably determine that the application or
adoption after the date hereof of any law, rule, regulation, directive,
interpretation, treaty or guideline regarding capital adequacy, or any
change therein or in the interpretation or administration thereof after the
date hereof, whether or not having the force of law increases the amount of
capital required or expected to be maintained by such Bank, or any
corporation controlling such Bank, and such increase is based upon the
existence of such Bank's obligations hereunder by an amount reasonably
determined by such Bank, then from time to time, within fifteen (15) days
of demand and the submission of reasonable evidence in support thereof by
such Bank, such Bank may adjust the amount of the Commitment Fee thereafter
payable to it by an amount as will fairly compensate such Bank for such
increased capital requirement. The determination of any amount to be paid
by the Company shall take into consideration the policies of such Bank, or
any corporation controlling such Bank, and shall be based upon any
reasonable averaging, attribution and allocation methods.
(c) In the event that any Bank assesses against the Company any of
the costs contemplated in Sections 3.1 (a) and (b) preceding, the Company
may, at its option, prepay the amount of the Obligation owing with respect
to any Bank assessing such costs, without premium or penalty except as
provided in Section 3.4 hereof, terminate the Commitment of such Bank, and
cause one or more banking institutions reasonably
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 29
acceptable to the Agent and the Required Banks (not taking into account
the interest of the assessing Bank) to unconditionally offer in writing
to collectively purchase and assume, on a specified date not more than
thirty (30) days from the date on which such costs were due, all of such
Bank's rights hereunder and principal and interest in the Loans owing to
such Bank on the date of such proposed purchase, without recourse to such
Bank. If the assessing Bank fails to accept the proposed purchase offer,
the Company shall not be obligated to pay the costs so assessed by such
Bank for the period following the date of such purchase offer. If the
assessing Bank accepts the proposed purchase, and the proposed purchasing
bank(s) consummates the purchase of such rights and interest and assumes
such obligations on the specified date in accordance with the terms of such
offer, then such purchasing bank(s) shall be substituted for such Bank as
to all or any portion of such Bank's Commitment, in which event this
Agreement shall be modified and amended to reflect such substitution and,
if applicable, reduction in Commitment. Such substitution, however, shall
not relieve the Company of its obligation to reimburse any Bank for the
costs enumerated in Sections 3.1(a) and (b) incurred prior to the date of
the substitution of another banking institution.
3.2. AVAILABILITY OF INTEREST RATE. If any Bank determines that
maintenance of its portion of the Eurodollar Advances would violate any
applicable Law, whether or not having the force of law, or if the Required Banks
reasonably determine that (a) deposits of a type and maturity appropriate to
"match fund" Fixed Rate Advances are not generally available or (b) a Fixed Rate
does not accurately reflect the cost of making or maintaining a Fixed Rate
Advance, then the Agent shall suspend the availability of the affected Rate
Option and require any Fixed Rate Advances outstanding under an affected Rate
Option to be converted to an unaffected Rate Option. Subject to the provisions
of Article 2, the Company may select any unaffected Rate Option to apply to such
affected Advances. If the Company fails to select a new Rate Option, the
affected Advances shall be Floating Rate Advances.
3.3 DISCRETION OF BANKS AS TO MANNER OF FUNDING. Notwithstanding any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each Fixed Rate Advance during the Interest Period for such Advance
through the purchase of deposits having a maturity corresponding to the last day
of such Interest Period and bearing an interest rate equal to the Fixed Rate for
such Interest Period.
3.4. FAILURE TO PAY OR BORROW ON CERTAIN DATES. If any payment of a Fixed
Rate Advance occurs on a date that is not the last day of the applicable
Interest Period, or a Fixed Rate Advance is not made on the date specified by
the Company for any reason other than default by the Banks, the Company will
indemnify each Bank for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost (exclusive of any loss of
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 30
profit) in liquidating or employing deposits acquired to fund or maintain such
Fixed Rate Advance.
3.5. BANK CERTIFICATES; SURVIVAL OF INDEMNITY. To the extent reasonably
possible, each Bank shall designate an alternate lending office with respect to
its Fixed Rate Advances to reduce any liability of the Company to such Bank
under Section 3.1 or to avoid the unavailability of a Rate Option under Section
3.2, so long as such designation is not disadvantageous to such Bank. A
certificate of a Bank as to the amount due under Sections 3.1 or 3.4 shall be
final, conclusive and binding on the Company in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a Fixed
Rate Advance shall be calculated as though each Bank funded its portion of the
Fixed Rate Advance through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Fixed Rate
applicable to such Advance. Unless otherwise provided herein, the amount
specified in any such certificate shall be payable on demand after receipt by
the Company of such certificate. The obligations of the Company under Sections
3.1 and 3.4 shall survive payment of the Loans and termination of this
Agreement.
ARTICLE 4
CONDITIONS PRECEDENT
4.1. AMENDMENT AND RESTATEMENT. The Banks shall not be required to amend
and restate the Prior Agreement unless the Company has furnished to the Agent:
(a) Copies of the Articles of Incorporation of the Company and the
Guarantors, together with all amendments, certified by the Secretary of
State of the State of their incorporation, and a certificate of good
standing of the Company, and the Guarantors, certified by the appropriate
office of the State of their incorporation;
(b) Copies, certified by the Secretary or Assistant Secretary of the
Company, of its Bylaws and of its Board of Directors resolutions
authorizing the execution of the Loan Documents;
(c) Copies, certified by the Secretary or Assistant Secretary of the
Guarantors, of their Bylaws and of their Board of Directors resolutions
authorizing the execution of the Consent of Haggar or the Consent of
Domestic Subsidiaries, as applicable;
(d) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Company and the Guarantors which shall identify by name
and title and bear the signature of the officers of the Company and the
Guarantors authorized to sign
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 31
the respective Loan Documents and to make borrowings hereunder, upon which
certificate the Banks shall be entitled to rely until informed in writing
of any change;
(e) A written opinion of the Company's and the Guarantors' counsel,
addressed to the Banks in form acceptable to the Agent and its counsel;
(f) A certificate, signed by the Treasurer of the Company or the
Chief Financial Officer of the Company, stating that as of the effective
date of this Agreement no Default or Unmatured Default has occurred and is
continuing;
(g) A Note payable to the order of each Bank in the amount of its
Commitment;
(h) The Consent of Haggar, executed by Haggar; and
(i) The Consent of Domestic Subsidiaries, executed by each of the
Company's Domestic Subsidiaries.
4.2. EACH ADVANCE. The Banks shall not be required to make any Advance,
except as otherwise contemplated by Sections 2.6(f) and (g), unless on the
relevant Borrowing Date:
(a) There exists no Default or Unmatured Default and no Default or
Unmatured Default will result from the requested Borrowing;
(b) The representations and warranties contained in Article 5 are
true and correct in all material respects as of such Borrowing Date except
for changes in the Schedules to this Agreement reflecting transactions
permitted by this Agreement;
(c) The sum of (i) the principal balance of the outstanding Loans
made by the Banks, (ii) the amount of the requested Advance, (iii) the
amount of any Advance previously requested and in process, and (iv) any
Letter of Credit Exposure (excluding any amounts thereof attributable to an
Advance then requested and in process), is equal to or less than the Total
Commitments;
(d) The sum of (i) the principal balance of the outstanding Loans
made by the Banks, (ii) the amount of the requested Advance, and (iii) the
amount of any Advance previously requested and in process, is equal to or
less than the Borrowing Base Availability;
(e) The Agent has received from the Company a notice that complies in
all respects with the requirements of Section 2.7;
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 32
(f) As of the date of the making of such Advance, no change that
would cause or result in a Material Adverse Effect has occurred since the
date of the financial statements delivered pursuant to Section 5.5;
(g) The most recent financial statements of the Company Group
delivered to the Banks pursuant to Section 6.1 are true, correct and
complete in all material respects, fairly represent the financial condition
of the Company and the Guarantors and have been prepared on a basis
consistent with prior periods. As of the date of such Advance, there are
no obligations, liabilities or Material Indebtedness (including contingent
and indirect liabilities and obligations or unusual forward or long-term
commitments) of the Company or the Guarantors which, separately or in the
aggregate, are material and which are not reflected or otherwise disclosed
in such financial statements; and
(h) All legal matters incident to the making of such Advance shall be
reasonably satisfactory to the Banks and their respective counsel.
Each request for an Advance hereunder shall be deemed to be a representation and
warranty by the Company to the Banks, as of the applicable Borrowing Date, as to
each of the matters specified in this Section 4.2.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Agreement and the other Loan
Documents and to make the Loans, the Company represents and warrants to the
Banks as follows:
5.1. CORPORATE EXISTENCE AND AUTHORITY. The Company and each of the
Guarantors (a) is a corporation duly incorporated, validly existing, and in good
standing under the Laws of its jurisdiction of incorporation, (b) is duly
qualified to transact business as a foreign corporation in each jurisdiction
where the nature or extent of its business and properties require the same,
except in such jurisdictions where the failure so to qualify would not
reasonably be expected to cause a Material Adverse Effect and (c) possesses all
requisite authority and power and material licenses, permits and franchises to
execute, deliver and comply with the terms of the Loan Documents, which have
been duly authorized and approved by all necessary corporate action, for which
no material approval or consent of any Person or Tribunal is required which has
not or will not have been obtained prior to the date of this Agreement, and each
of the Loan Documents constitutes the legal, valid and binding obligation of the
Company and the Guarantors (to the extent each of them is a party to the same)
enforceable against the Company and the Guarantors in accordance with its terms.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 33
5.2. COMPLIANCE WITH LAWS. Neither the Company nor any of the Guarantors
is in violation of (a) any Laws, other than such violations that, collectively,
could not reasonably be expected to cause a Material Adverse Effect, (b) the
terms of any material agreement, contract, document or instrument to which the
Company or any of the Guarantors is a party or by which it or any of its assets
is bound, other than such violations that, collectively, could not reasonably be
expected to cause a Material Adverse Effect, or (c) its respective Articles of
Incorporation or Bylaws in any material respect.
5.3. LITIGATION. There is no Litigation pending or, to the knowledge of
the Company, threatened against or affecting the Company or any of the
Guarantors other than that listed on SCHEDULE 5 attached hereto, and none of
such Litigation, collectively or individually, has or could reasonably be
expected to result in a Material Adverse Effect.
5.4. COMPLIANCE WITH LAWS AND CONTRACTS. Neither the execution and
delivery by the Company of the Loan Documents, the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will materially violate any material Law binding on the Company or any of the
Guarantors or the Company's or any of the Guarantors' Articles of Incorporation
or Bylaws, or the provisions of any indenture, instrument or agreement to which
the Company or any of the Guarantors is a party or is subject, or by which it or
its property is bound, or materially conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien (other than a
Permitted Lien) pursuant to the terms of any such indenture, instrument or
agreement. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any Tribunal is
required to authorize, or is required in connection with the execution, delivery
and performance of, or the legality, validity, binding effect or enforceability
of, any of the Loan Documents.
5.5. FINANCIAL STATEMENTS. The June 30, 1996, unaudited consolidated
financial statements of the Company Group heretofore delivered to the Banks were
prepared in accordance with historical practice, and the September 30, 1995,
consolidated financial statements of the Company Group audited by Xxxxxx
Xxxxxxxx & Co. heretofore delivered to the Banks were prepared in accordance
with GAAP in effect on the respective dates, such statements were prepared and
fairly present the consolidated financial condition and operations of the
Company Group at such dates and the consolidated results of their operations for
the respective periods then ended.
5.6. MATERIAL ADVERSE EFFECT. No Material Adverse Effect has occurred
since the date of the financial statements referred to in Section 5.5.
5.7. TAXES. To the best of the Company's knowledge, all tax returns of the
Company Group required to be filed (unless such filing dates have been validly
extended) by any Tribunal have been or will be filed prior to the date such
returns were or are due, and all Taxes imposed upon the Company Group by any
Tribunal in respect of periods ending on or before the initial
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 34
Borrowing Date which are due and owing unless subject to a good faith contest
by appropriate legal proceedings for which adequate reserves have been
established in accordance with GAAP, will be paid by the Company Group on or
before the initial Borrowing Date.
5.8. GOVERNMENT REGULATION. Neither the Company nor any of the Guarantors
nor any Affiliate of any of them is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Investment
Company Act of 1940, the Interstate Commerce Act (as any of the preceding acts
have been amended) , or any other Law (other than Regulation X of the Board of
Governors of the Federal Reserve System) that regulates the incurring by the
Company of Indebtedness, including, without limitation, Laws relating to common
or contract carriers or the sale of electricity, gas, steam, water or other
public utility services.
5.9. PROPERTIES; LIENS. Each of the Company and each Guarantor has good
and indefeasible title to all of its real and personal properties and fixtures
reflected on its balance sheet, subject to no defects in title thereto which
would reasonably be expected, collectively, to cause a Material Adverse Effect,
and there are no Liens on any material asset of the Company or any of the
Guarantors other than Permitted Liens.
5.10. LEASES. All material leases under which the Company or any of
the Guarantors is lessee or tenant are in full force and effect, and there does
not exist any default thereunder on the part of the Company or any of the
Guarantors or, to the best of the Company's knowledge, on the part of any other
party thereto which in either case could reasonably be expected to cause a
Material Adverse Effect.
5.11. SUBSIDIARIES. SCHEDULE 3 to this Agreement contains an accurate
list of all of the presently existing Subsidiaries of the Company, setting forth
their respective jurisdictions of incorporation and the percentage of their
respective capital stock owned by the Company Group; all of the issued and
outstanding shares of capital stock of the Domestic Subsidiaries of the Company
have been duly authorized and issued and are fully paid and non-assessable.
5.12. ERISA. Each Plan complies in all material respects with all
applicable requirements of Law, no Reportable Event which could result in a
Material Adverse Effect has occurred with respect to any Plan, neither the
Company nor any of the Guarantors has withdrawn from any Plan or initiated steps
to do so, and no steps have been taken to terminate any Plan. On the date of
this Agreement, no Unfunded Liabilities exist.
5.13. DEFAULTS. No Default or Unmatured Default has occurred and is
continuing.
5.14. ACCURACY OF INFORMATION. No information, exhibit or report
furnished by the Company or any of the Guarantors to the Agent in connection
with the negotiation of the Loan Documents contained any material misstatement
of fact or omitted to state a material fact or any
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 35
fact necessary to make the statements contained therein not misleading, in
light of the circumstances under which furnished. There is no material fact
that the Company has not disclosed to the Agent which would have a Material
Adverse Effect.
5.15. USE OF PROCEEDS, MARGIN STOCK. The proceeds of the Advances will
be used by the Company solely for the purposes specified in this Agreement.
Except as expressly provided in Section 2.2, none of such proceeds will be used
for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U, Regulation X, or Regulation G, or for the purpose of reducing or
retiring any Debt that was originally incurred to purchase or carry a "margin
stock" or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of Regulation U, Regulation X, or Regulation
G. The Company is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stocks. Neither the Company nor any
Person acting on behalf of the Company has taken or will take any action which
might cause the Note or any of the other Loan Documents, including this
Agreement, to violate Regulation U, Regulation X, or Regulation G or any other
regulations of the Board of Governors of the Federal Reserve System or to
violate Section 8 of the Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect. Except as permitted by Section 2.2, the Company owns
no "margin stock" except for that described in the financial statements referred
to in Section 5.5 hereof and, the aggregate value of all "margin stock" owned by
the Company does not exceed twenty-five percent (25%) of the value of all of the
Company's assets.
5.16. NO FINANCING OF CORPORATE TAKEOVERS. No proceeds of the Advances
will be used to acquire any security in any transaction which is subject to
Section 13 or 14 of the Securities Exchange Act of 1934, including, without
limitation, Sections 13(d) and 14(d) thereof, except (a) for the purchases of
shares of the Company Group or any of them, and (b) to the extent permitted
under Section 7.4 hereof.
5.17. INSIDER. Except as to any circumstances which the Company has
previously disclosed to the Agent in writing, the Company is not, and no Person
having "control" (as that term is defined in 12 U.S.C. Section 375(b)(5) or in
regulations promulgated pursuant thereto) of the Company is, an "executive
officer," "director," or "principal shareholder" (as those terms are defined in
12 U.S.C. Section 375(b) or in regulations promulgated pursuant thereto) of the
Banks, of a bank holding company of which any Bank is a subsidiary, or of any
bank holding company of which any Bank is a subsidiary, or of any bank at which
any Bank maintains a "correspondent account" (as such term is defined in such
statute or regulations), or of any bank which maintains a correspondent account
with any Bank.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 36
ARTICLE 6
AFFIRMATIVE COVENANTS
To induce the Banks to enter into this Agreement and the other Loan
Documents and to make the Loans, Haggar and the Company covenant and agree that,
on behalf of themselves and the Company Group, during the term of this Agreement
and as long as all or any part of any Advances is outstanding, they will do or
cause to be done the following (unless the prior written consent of the Required
Banks is otherwise obtained):
6.1. FINANCIAL REPORTING. Maintain a system of accounting established and
administered in accordance with GAAP, and the Company, on behalf of the Company
Group, will furnish and deliver to the Agent, which will deliver to the Banks:
(a) Within ninety (90) days after the close of each fiscal year
commencing with the fiscal year ending September 30, 1996, an audited
consolidated and consolidating balance sheet of the Company Group, a
consolidated and consolidating statement of income and retained earnings of
the Company Group and a consolidated statement of cash flows of the Company
Group, each set forth in comparative form with corresponding figures from
the immediately preceding fiscal year, in each case such statements to be
furnished in reasonable detail and prepared in accordance with GAAP, and to
be accompanied by an unqualified opinion of independent certified public
accountants of nationally recognized standing acceptable to the Banks.
(b) Within forty-five (45) days after the close of each of the first
three (3) quarters of each fiscal year, a consolidated and consolidating
statement of income of the Company Group for the period from the beginning
of such fiscal year to the end of the quarter thereof, and a consolidated
and consolidating balance sheet of the Company Group as of the end of such
quarter, together with schedules detailing depreciation, amortization,
dividends, scheduled payments of principal on Indebtedness, all outstanding
letters of credit, and all capital expenditures, setting forth in
reasonable detail and prepared in accordance with historical practice,
which shall be certified by the Chief Financial Officer of the Company as
complete and correct in all material respects to the best knowledge and
belief of such officer after diligent inquiry.
(c) Together with the financial statements required hereunder, a
Compliance Certificate. The Compliance Certificate for the fiscal quarter
in which Capital Adjustment Costs are accrued or expensed and the
Compliance Certificate to be delivered for the succeeding four (4) fiscal
quarters shall include as an annex thereto the information contained on
SCHEDULE 7 hereof.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 37
(d) Within twenty (20) days after the end of each month, a Borrowing
Base Certificate.
(e) Within one hundred eighty (180) days after the close of each
fiscal year, a statement of the Unfunded Liabilities of each Plan, if any,
certified as correct by an actuary enrolled under ERISA.
(f) As soon as possible and in any event within ten (10) days after
the Company knows that any Reportable Event has occurred with respect to
any Plan, a statement, signed by the Chief Financial Officer or Treasurer
of the Company, describing said Reportable Event and the action which the
Company proposes to take with respect thereto.
(g) Such other material and pertinent information (including
non-financial information) as the Agent or the Banks, through the Agent,
may, from time to time, reasonably request.
6.2. USE OF PROCEEDS. Use all proceeds of the Advances for the purposes
set forth in Section 2.2.
6.3. NOTICE OF DEFAULT, ETC. Give prompt notice in writing to the Agent
of the occurrence of any Default or Unmatured Default and of any other
development, financial or otherwise, that has a substantial likelihood of a
Material Adverse Effect.
6.4. TAXES. Promptly pay when due any and all Taxes due and owing by it,
except Taxes that (a) are being contested in good faith by appropriate legal
proceedings and for which a reserve has been established in an amount determined
in accordance with GAAP and (b) do not, in the aggregate, materially detract
from the value of the properties of the Company and the Guarantors (taken as a
whole), materially impair the operation of their businesses (taken as a whole)
or give rise to any Lien other than a Permitted Lien.
6.5. PAYMENT AND PREPAYMENT OF OBLIGATIONS. Promptly pay or renew and
extend all of its Material Indebtedness for the payment of money as the same
become due, except for any such Material Indebtedness being contested in good
faith by appropriate legal proceedings, for which a reserve for the payment
thereof has been established in an amount determined in accordance with GAAP.
6.6. MAINTENANCE OF CORPORATE EXISTENCE, ASSETS, BUSINESS AND INSURANCE.
Except as otherwise permitted by Section 7.4, maintain (a) its corporate
existence and authority to transact business and good standing in its
jurisdiction of incorporation and in all other jurisdictions where the failure
to so maintain could reasonably be expected to cause a Material Adverse Effect,
(b) all material licenses, permits and franchises necessary for its business
except such as could not
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 38
in the aggregate reasonably be expected to cause a Material Adverse Effect,
(c) to the extent consistent with prudent business practices, all of its
assets which are useful and necessary in its business in good working order
and condition and make all necessary repairs and replacements thereto or
thereof and (d) insurance with such insurers, in such types and amounts, and
covering such casualties, contingencies and risks, as is customary in its
industry including, without limitation, worker's compensation insurance
(unless the Company maintains self-insurance with respect to such risk of
loss which is satisfactory to the Banks in all respects), liability
insurance, adequate business interruption insurance, and insurance on its
properties, assets and business, now owned or hereafter acquired.
6.7. INSPECTION. Permit the Agent, by its representatives and agents, to
inspect the properties, corporate books and financial records of the Company
Group, to examine and make copies of such of its books of accounts and other
financial records, and to discuss its affairs, finances and accounts with, and
to be advised as to the same by, its officers as shall be reasonably requested
at such reasonable times and intervals as the Agent may designate upon
reasonable notice. Each Bank agrees to treat all such information received by
it (except such information which is generally available or has been made
available to the public from sources other than the Banks or their respective
officers, employees or representatives) as confidential; provided, however,
nothing in this Section shall prohibit any Bank or the Agent from, or subject
any Bank or the Agent to liability for, disclosing any such information to any
Tribunal, or any representative thereof, to whose jurisdiction any Bank or the
Agent may be subject and to the extent required thereby.
6.8. COMPLIANCE WITH LAW. Shall, and shall cause each member of the
Company Group to comply with all laws applicable to it or any of its property,
business operations or transactions, a breach of which could have a Material
Adverse Effect.
6.9. ERISA COMPLIANCE. Shall (i) at all times, make, and cause to be made
prompt payment of all contributions required under all Plans, if any, and
required to meet the minimum funding standard set forth in ERISA with respect to
the Plans of each of such entities, and (ii) furnish to the Agent, upon request,
such additional information concerning any Plans as may be reasonably requested.
ARTICLE 7
NEGATIVE COVENANTS
To induce the Banks to enter into this Agreement and the other Loan
Documents and to make the Loans, Haggar and the Company covenant and agree that,
on behalf of themselves and the Company Group, during the term of this
Agreement, they will not, nor permit or suffer any
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 39
member of the Company Group to, do any of the following (unless the prior
written consent of the Required Banks is otherwise obtained):
7.1. LIENS. Directly or indirectly, create, incur or suffer or permit to
be created or incurred or to exist any Lien upon any of the assets (now owned or
hereafter acquired) of the Company Group, including, without limitation, the
Inventory and Receivables, except for Permitted Liens.
7.2. LINES OF BUSINESS. Directly or indirectly, engage in any lines of
business other than those in which they are presently engaged or reasonable
expansions or extensions thereof.
7.3. INDEBTEDNESS. Create, incur or suffer to exist any Indebtedness other
than Permitted Indebtedness.
7.4. MERGERS AND ACQUISITIONS.
(a) Dissolve or liquidate, or permit any Subsidiary of the Company to
dissolve or liquidate, provided that any Subsidiary of the Company may
dissolve or liquidate so long as the assets of such Subsidiary are
distributed to a member of the Company Group;
(b) Become or permit any Subsidiary of the Company to become, a party
to any merger or consolidation with or into any other Person, provided that
any Subsidiary may discontinue its operations or may merge or consolidate
with or into any member of the Company Group, provided that in the event of
a merger with the Company, the Company is the legally surviving entity;
(c) Acquire, or permit any Subsidiary of the Company to acquire, by
purchase, lease or otherwise, all or substantially all of the assets or
capital stock of any Person, provided that such acquisitions which, when
added to any other acquisitions since the effective date of this Agreement
and any permitted investments made pursuant to Section 7.4(d), do not
exceed $15,000,000 in the aggregate (including all consideration given in
connection with such acquisition), may be made so long as the assets or
Person acquired is involved with the same line of business, or an integral
part thereof, as is currently pursued by the Company Group; or
(d) Invest or acquire an ownership interest in, or permit any
Subsidiary of the Company to invest or acquire an ownership interest in,
any joint venture, partnership, corporation or other entity which is not an
Affiliate of any member of the Company Group, or otherwise invest in any
new business venture, provided that such investments which, when added to
any investments since the effective date of this Agreement and any
permitted acquisitions made pursuant to Section 7.4(c), do not exceed
$15,000,000 in the aggregate, may be made so long as no member of the
Company Group has any legal or
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 40
contractual liability or obligation in excess of such investment, and
the business venture in which the investment is made involves the same
line of business, or an integral part thereof, as is currently pursued
by the Company Group.
7.5. AFFILIATES. Enter into any material transaction (including, without
limitation, the purchase or sale of any property or service) with, or make any
material payment or transfer to, any Affiliate of the Company Group (other than
the Company or any Guarantor) or member of the Family Group except (a) in the
ordinary course of business and pursuant to the reasonable requirements of the
business of the Company Group and upon fair and reasonable terms no less
favorable than those that would result from a comparable arms-length
transaction, (b) those transactions set forth on SCHEDULE 6 hereof, (c)
repurchases of shares of the common stock of Haggar upon fair and reasonable
terms no less favorable than those that would result from a comparable arms-
length transaction, (d) the incurrence of Indebtedness which constitutes
Permitted Indebtedness; and (e) dividends paid by the Company Group in the
ordinary course of business.
7.6. FIXED CHARGE REQUIREMENT. Permit the ratio of Operating Cash Flow to
Fixed Charges for the prior twelve (12) months, as measured at the end of each
fiscal quarter, to be or become less than 1.10 to 1.0.
7.7. FUNDED DEBT LIMITATION. Permit the Funded Debt Ratio, as measured at
the end of each fiscal quarter, to be or become greater than 4.0 to 1.0.
7.8 TANGIBLE NET WORTH.
(a) Permit Tangible Net Worth of the Company Group to
be or become less than:
(i) for the period through September 30, 1996,
$155,000,000; and
(ii) beginning October 1, 1996 and thereafter (if
measured at a specific point in time), an amount
equal to the sum of (1) $155,000,000, plus (2)
fifty percent (50%) of the cumulative net income
of the Company Group, on a consolidated basis, for
the fiscal year ended September 30, 1996, and each
subsequently completed fiscal year, plus (3) in
the event Haggar or the Company shall make a
registered public offering of its capital stock,
sixty-six and two-thirds percent (66-2/3%) of that
portion of the net proceeds from such offering
attributable to the primary issuance of new shares
(but not the secondary issuance of existing
shares).
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 41
Notwithstanding the foregoing, the Tangible Net Worth
requirement of the Company Group may be reduced by the amount of any
sums used for the repurchase of shares of common stock of Haggar,
whether pursuant to Advances as contemplated in Section 2.2 or
otherwise (so long as such stock repurchase is made in compliance with
all covenants and agreements contained in this Agreement); PROVIDED,
HOWEVER, that the maximum cumulative reduction in such requirement
attributable to stock repurchases, whether pursuant to Advances as
contemplated in Section 2.2 or otherwise, shall not exceed $10,000,000
over the term of the Obligations. In addition, during the fiscal
quarter in which the Company Group accrues or expenses Capacity
Adjustment Costs, the Tangible Net Worth requirement of the Company
Group shall be reduced by an amount equal to the lesser of (1) the net
loss of the Company Group, on a consolidated basis, for such fiscal
quarter; or (2) sixty-two percent (62%) of the Capacity Adjustment
Cost accrued or expensed in that fiscal quarter.
(b) Permit Tangible Net Worth of the Company to be or
become less than $55,000,000.
(c) Notwithstanding the foregoing, in the event that
Tangible Net Worth is less than the amount required hereby, the
Company shall have a period of ten (10) days from the earlier of the
date on which Tangible Net Worth is disclosed to the Agent or is to be
disclosed to the Agent under Section 6.1 in which to cause Tangible
Net Worth to be in compliance with the terms hereof. Cumulative net
income shall be determined by reference to the statements of income
described in Section 6.1(a) and shall not be decreased by any losses
occurring during any fiscal year.
7.9. INVENTORY TURN. Permit the quotient, as measured for the Company
Group on a consolidated basis at the end of each fiscal quarter, with reference
to the financial statements described in Section 6.1, of (a) the cost of goods
sold during the prior twelve (12) months divided by (b) the Dollar amount of the
cost of Inventory at the end of such fiscal quarter, to be (if measured at a
specific point in time) or become less than 2.0.
7.10. SALE OF ASSETS. Sell, lease, transfer or otherwise dispose of,
in a single transaction or in a series of transactions, more than ten percent
(10%) of the assets of the Company Group other than (a) to a member of the
Company Group, and (b) sales of Inventory in the ordinary course of business;
PROVIDED, HOWEVER, that the provisions of this Agreement shall not prohibit the
Company or any other member of the Company Group from selling any of its capital
stock in a registered public offering, so long as such offering is in compliance
with all Laws and does not result in a Default under Section 8.13 hereof.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 42
7.11. SUBSIDIARIES. Create, nor permit any member of the Company Group
to create, any Domestic Subsidiary unless, contemporaneously therewith, such
Domestic Subsidiary executes and delivers to the Agent, for the benefit of the
Banks, a Subsidiary Guaranty.
7.12. FOREIGN SUBSIDIARIES. Permit more than ten percent (10%) of Net
Worth to be attributable at any time to Subsidiaries of the Company which are
not Domestic Subsidiaries unless (a) such Subsidiary has executed a Guaranty
which is legal, valid and enforceable against such Subsidiary in all respects
under the laws of any jurisdiction applicable to such Subsidiary, and (b) the
Agent has received from counsel to the Company a legal opinion as to such matter
and other matters as the Agent shall request, such counsel and opinion to be
satisfactory to the Agent and the Required Banks in all respects.
7.13. DISTRIBUTIONS. Make or agree to make any Distribution (other
than a Distribution of a Subsidiary of the Company to the Company) in any fiscal
year of the Company (a) unless the Fixed Charge Ratio is equal to or greater
than 1.10 to 1.00 (calculated by giving effect to any such Distribution), or (b)
if a Default or Unmatured Default exists at the time of such Distribution or,
after giving effect to any such Distribution, a Default or Unmatured Default
would occur.
7.14. INTERCOMPANY INDEBTEDNESS. Incur or permit to exist any
Intercompany Indebtedness which is not subordinate in right of payment to the
prior payment in full of the Obligations; any and all of such Intercompany
Indebtedness, whether now or hereafter owed, being hereby so subordinated in
right of payment to the prior payment in full of the Obligations. In connection
therewith, each member of the Company Group hereby agrees that:
(a) No member of the Company Group shall, after a Default (or an
Unmatured Default, in the case of payments or distributions made outside
the ordinary course of its business):
(i) demand, xxx for, take, or accept or receive, directly or
indirectly, any payment of principal or interest with
respect to such Intercompany Indebtedness, whether in cash
or other property;
(ii) claim any offset or other reduction of the Obligations
because of any such Intercompany Indebtedness; or
(iii) take any other action to make it the same.
(b) Any payments or distributions upon or with respect to the
Intercompany Indebtedness subordinated hereby which are received by any
member of the Company Group following a Default (or an Unmatured Default,
in the case of payments or distributions made outside the ordinary course
of business) shall be collected, enforced
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 43
and received by such member of the Company Group as trustee for the Banks
and paid over to the Agent on account of the Obligations.
(c) In the event of any distribution of all or any of the assets of
any member of the Company Group to its creditors upon the dissolution,
winding up, liquidation, arrangement, reorganization, adjustment,
protection or relief of any member of the Company Group or its debts,
whether in any bankruptcy, insolvency, arrangement, reorganization,
receivership, relief or similar proceedings, or upon an assignment for the
benefit of creditors or any other marshalling of the assets and liabilities
of any member of the Company Group, any payment or distribution of any kind
(whether in cash, property, or securities) which otherwise would be payable
or deliverable upon or with respect to the Intercompany Indebtedness
subordinated hereby shall be paid or delivered directly to the Agent for
the benefit of the Banks for application to (in the case of cash) or as
collateral for (in the case of non-cash property or securities) the payment
of the Obligations until the Obligations shall have been paid in full.
(d) If any proceeding referred to in subsection (c) above is
commenced by or against any member of the Company Group, the Agent is
hereby irrevocably authorized and empowered (in its own name or in the name
of such member of the Company Group), but shall have no obligation, to
demand, xxx for, collect and receive every payment or distribution referred
to in subsection (c) above, and give acquittance therefor, and to file
claims and proofs of claim and take such other action (including, without
limitation, voting the Intercompany Indebtedness subordinated hereby or
enforcing any security interest or lien securing its payment) as it may
deem necessary or advisable for the exercise or enforcement of any of the
rights of the Agent and Banks hereunder.
(e) The Agent and/or the Banks are hereby authorized to demand
specific performance of the provisions of this Section 7.14 at any time
when any member of the Company Group shall have failed to comply with any
of the provisions hereof.
ARTICLE 8
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
8.1. REPRESENTATION OR WARRANTY. Any representation or warranty made by or
on behalf of the Company or any of the Guarantors to the Banks under or in
connection with any Loan Document shall be materially false as it relates to the
operations of the Company Group taken as a whole as of the date on which made or
deemed to be made.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 44
8.2. NONPAYMENT. Nonpayment of any Obligation (other than a nonpayment of
the nature described in Section 8.3) when the same becomes due and payable and,
with respect to any nonpayment when due of the Obligation constituting accrued
interest, the continuance thereof for a period of five (5) Business Days.
8.3. PREPAYMENT. The failure of the Company or any of the Guarantors to
make the mandatory prepayment or cash deposit required by Section 2.12 and the
continuance thereof for a period of ten (10) days from the date on which the
Borrowing Base Certificate which would disclose the obligation to make such
prepayment or cash deposit is delivered or to be delivered pursuant to Section
6.1(d).
8.4. COVENANTS. The breach by the Company or any of the Guarantors of any
of the terms or provisions of Sections 6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 6.9 or
Article 7.
8.5. OTHER. The breach by the Company or any of the Guarantors (other
than a breach which constitutes a Default under Sections 8.1, 8.2, 8.3 or
8.4) of (a) Section 6.1(d) that continues unremedied for a period of ten (10)
days, or (b) any other term or provision of this Agreement that continues
unremedied within thirty (30) days after written notice from the Agent or any
Bank specifying such breach.
8.6. MATERIAL INDEBTEDNESS. The default by the Company or any of the
Guarantors in the performance of any term, provision or condition contained in
any agreement under which any such Material Indebtedness was created or is
governed, the effect of which is to cause such Material Indebtedness to become
due prior to its stated maturity, or any such Material Indebtedness shall be
required to be prepaid prior to the stated maturity thereof.
8.7. INSOLVENCY. Any member of the Company Group shall (a) have an order
for relief entered with respect to it under any Debtor Relief Laws, (b) not pay,
or admit in writing its inability to pay, its debts generally as they become
due, (c) make an assignment for the benefit of creditors, (d) apply for, seek,
consent to or acquiesce in the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of its
property, (e) institute any proceeding seeking an order for relief under any
Debtor Relief Laws or seeking to adjudicate it as bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any Debtor Relief Laws or
fail to file an answer or other pleading denying the material allegations of any
such proceeding filed against it, (f) take any corporate action to authorize or
effect any of the foregoing actions set forth in this Section or (g) fail to
contest in good faith any appointment or proceeding described in Section 8.8;
PROVIDED, HOWEVER, that the foregoing as to any member of the Company Group
other than Haggar or the Company shall not constitute a Default if such an event
would not constitute a Material Adverse Effect.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 45
8.8. RECEIVER. A receiver, trustee, examiner, liquidator or similar
official shall be appointed for any member of the Company Group or any
substantial part of their respective property, or a proceeding described in
Section 8.7(e) shall be instituted against the Company or any of the Guarantors
and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of sixty (60) consecutive days; PROVIDED,
HOWEVER, that the foregoing as to any member of the Company Group other than
Haggar or the Company shall not constitute a Default if such an event would not
constitute a Material Adverse Effect.
8.9. APPROPRIATION. Any Tribunal shall condemn, seize or otherwise
appropriate, or take custody or control of all or any substantial portion of the
property of the Company Group taken as a whole.
8.10. JUDGMENTS. The Company or any of the Guarantors shall fail
within thirty (30) days to pay, bond or otherwise discharge any judgment or
order for the payment of money in excess of $1,000,000 which is not stayed on
appeal or otherwise being appropriately contested in good faith.
8.11. ERISA. Any member of the Company Group shall fail to meet the
minimum funding requirements required by the provisions of Section 412 of the
Code and Section 302 of ERISA with respect to any Plan, if applicable, or any
Reportable Event causing a Material Adverse Effect shall occur in connection
with any Plan.
8.12. MATERIAL AGREEMENT. The occurrence of a default (including the
passage of any applicable period of grace or cure) under any other material
agreement, document or instrument to which the Company or any of the Guarantors
is a party or by which any of their respective assets are bound, the effect of
which would constitute a Material Adverse Effect.
8.13. CHANGE IN CONTROL. A Change in Control shall occur.
Any notice that may be required hereunder need be delivered to the Company
only, and no other Person shall be entitled to receive any notices whatsoever
under this Agreement, regardless of whether the action, inaction, default or
other matter to which such notice relates is by or concerning a Person other
than the Company.
ARTICLE 9
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
9.1. REMEDIES UPON DEFAULT. If any Default described in Section 8.7 or
8.8 occurs, the Commitments of the Banks to make Advances hereunder shall
automatically terminate and
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 46
the Obligations shall immediately become due and payable without any election
or action on the part of the Agent or any Bank. If any other Default occurs
and is continuing, the Required Banks shall have and may exercise any one or
more of the following rights and remedies, and any other remedies provided in
any of the Loan Documents:
(a) terminate the Commitments of the Banks to make Advances
hereunder;
(b) declare the Obligations to be due and payable, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest, notice of default, notice of intention to accelerate or of
acceleration, or other notice of any kind, all of which are hereby
expressly waived, anything contained herein or in any of the Loan Documents
to the contrary notwithstanding;
(c) reduce any claim to judgment; and/or
(d) without notice of default or demand, exercise, pursue or enforce
any of the Banks' rights and remedies under the Loan Documents or pursuant
to applicable law.
9.2. REMEDIES UPON UNMATURED DEFAULT. If any Unmatured Default occurs and
is continuing, the Required Banks may exercise, on behalf of the Banks, any one
or more of the following rights and remedies at their option:
(a) to the fullest extent permitted by law, restrict any payment or
withdrawals from any or all deposits and other sums at any time credited by
or due from such Banks, to Haggar or the Company (other than deposits and
other sums being held by such Bank(s) on behalf of Haggar or the Company as
fiduciary for or in trust for other Persons), without notice or demand and
without liability, for so long as and until such time as such Unmatured
Default and any other Unmatured Default is cured; PROVIDED, HOWEVER, that,
the foregoing shall in no way be construed to limit such Bank's right of
setoff provided to it under Section 9.6 hereof; and/or
(b) require the Company, on the next succeeding Business Day, to
deposit with the Agent cash in such amounts as the Agent may request, up to
a maximum amount equal to the aggregate existing Letter of Credit Exposure
of all the Banks. Any amounts so deposited shall be held by the Agent for
the ratable benefit of all the Banks as security for the outstanding
Letter of Credit Exposure and the other Obligations, and the Company will,
in connection therewith, execute and deliver such security agreements in
form and substance satisfactory to the Agent which it may reasonably
require. As drafts or demands for payment are presented under any Letter
of Credit, the Agent shall apply such cash to satisfy such drafts or
demands. When either (i) all Letters of Credit have expired and drawings
thereunder satisfied by the Company, or (ii) all Defaults and Unmatured
Defaults have been waived in writing by the Required Banks or cured to the
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 47
satisfaction of the Required Banks, the Agent shall release to the Company
any remaining cash deposited under this SECTION 9.2. In addition, as the
aggregate existing Letter of Credit Exposure is reduced, the Company may
receive, upon its request, return of a portion of such cash deposit equal
to the amount of the reduction. Whenever the Company is required to make
deposits under SECTIONS 2.12 AND 9.2 and fails to do so on the day such
deposit is due, the Agent or any Bank may, without notice to the Company,
make such deposit (whether by application of proceeds of any collateral for
the Obligations, by transfers from other accounts maintained with any Bank,
by Advances or otherwise) using any funds then available to any Bank of the
Company or Haggar; and/or
(c) seek such equitable relief to which the Banks may be entitled.
9.3. AMENDMENTS AND WAIVERS. Subject to the provisions of this Section
9.3, the Required Banks (or the Agent with the consent in writing of the
Required Banks), the Company and each of the Guarantors may enter into
agreements supplemental hereto for the purpose of adding any provisions to this
Agreement or changing in any manner the rights of the Banks or the Company
hereunder or waiving any Default or Unmatured Default hereunder; provided,
however, that no such supplemental agreement shall, without the consent of all
of the Banks:
(a) Change the maturity of any Note or the principal amount thereof,
or change the rate or the time of payment of interest thereon or of any
fees due hereunder, or waive any non-payment of principal, interest or fees
then existing;
(b) Reduce the percentage specified in the definition of Required
Banks;
(c) Permit the Company to assign its rights under this Agreement;
(d) Release the Parent Guaranty; or
(e) Amend this Section.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent.
9.4. PRESERVATION OF RIGHTS. No delay or omission of the Banks or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Banks required
pursuant to Section 9.3, and then only to the extent specifically set forth in
such writing.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 48
9.5. PERFORMANCE BY LENDER. Should the Company or any other Person
fail to perform any covenant, duty or agreement contained herein or in any of
the Loan Documents, the Agent or any Bank may perform or attempt to perform
such covenant, duty or agreement on behalf of the Company or such other
Person. In such event, the Company shall, at the request of the Agent or any
Bank, promptly pay any amount expended by the Agent or any Bank in such
performance or attempted performance to the Agent or any Bank at its
principal office as specified herein, together with interest thereon at the
Default Rate from the date of such expenditure until paid. Notwithstanding
the foregoing, the Agent and the Banks do not assume any liability or
responsibility for the performance of any duties of the Company or any other
Person hereunder or under any of the Loan Documents or other control over the
management and affairs of the Company or any other Person.
9.6. RIGHTS OF SETOFF. Haggar and the Company hereby expressly grant to
the Banks the right of setoff against all deposits and other sums at any time
credited by or due from the Banks, or any of them, to Haggar or the Company
(other than deposits and other sums being held by the Banks on behalf of Haggar
or the Company as fiduciary for or in trust for other Persons) in accordance
with the provisions of this Section 9.6. The rights of the Banks under this
Section 9.6 are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which the Banks, or any of them, may have
under law or equity or by agreement. Upon the occurrence and during the
continuance of any Default, the Banks are hereby authorized at any time and from
time to time, to the fullest extent permitted by law, at their option, without
notice or demand and without liability, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Banks to or for the credit
or the account of Haggar or the Company against any and all of their respective
Obligations now or hereafter existing under this Agreement, the Notes and the
other Loan Documents, in such order and manner as the Banks may determine in
their sole discretion, irrespective of whether the Banks shall have made any
demand under this Agreement or the Notes and although such Obligations may be
unmatured.
9.7. REMEDIES CUMULATIVE, CONCURRENT AND NON-EXCLUSIVE. The Banks shall
have all rights, options, remedies and recourses granted in the Loan Documents
and available at law or equity and same (a) shall be cumulative and concurrent,
(b) may be pursued separately, successively or concurrently against the Company
or any other Person obligated under the Loan Documents or against any one or
more of them, at the sole discretion of the Banks, (c) may be exercised as often
as the occasion therefor shall arise, it being agreed by the Company that the
exercise or failure to exercise any of same shall in no event be construed as a
waiver or release thereof or of any other right, remedy or recourse, and (d) are
intended to be, and shall be, non-exclusive.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 49
ARTICLE 10
GENERAL PROVISIONS
10.1. BENEFIT OF AGREEMENT. The terms and provisions of this Agreement
and the Notes shall be binding upon and inure to the benefit of the Company and
the Banks and their permitted successors and assigns. The Company shall not
have the right to assign any of its rights or transfer any of its obligations
under this Agreement. The Banks may assign only such of their rights under this
Agreement as is provided in Section 10.2.
10.2. ASSIGNMENTS AND PARTICIPATIONS.
(a) A Bank may sell, to any Person with a Standard & Poor's rating of
"A" or better, a participation consisting of all of its interests, rights
and obligations under this Agreement (including, without limitation, all of
its Commitment and the Note held by it), or may sell, to any Person at
least fifty percent (50%) owned by the selling Bank, or by a common parent
of both, or to another Bank, one or more participations in all or a portion
of its interests, rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and the
corresponding portion of the Note held by it); PROVIDED, HOWEVER, that
other than in the case of a participation sold to a Person at least fifty
percent (50%) owned by the selling Bank, or by a common parent of both, or
to another Bank, the Agent and the Company must give their respective prior
written consent, which consent will not be unreasonably withheld. Prior to
consenting to such participation, the Company shall be afforded a period
not to exceed sixty (60) days in which it may identify a participant
acceptable to it and reasonably acceptable to the selling Bank. In the
event any Bank shall sell any participation, (i) the Company, the Agent and
the other Banks shall continue to deal solely and directly with such
selling Bank in connection with such selling Bank's rights and obligations
under the Loan Documents (including the Note held by such selling Bank);
(ii) such Bank shall retain the sole right and responsibility to enforce
the obligations of the Company and the Guarantors relating to the Loans,
including the right to approve any amendment, modification or waiver of any
provision of this Agreement other than amendments, modifications or waivers
with respect to (1) any fees payable hereunder to the Banks, and (2) the
amount of principal or the rate of interest payable on, or the dates fixed
for the scheduled repayment of principal of, the Loans and other sums to be
paid to the Banks hereunder, and (iii) the Company and Haggar agree, to the
fullest extent they may effectively do so under applicable law, that any
participant of a Bank may exercise all rights of set-off, bankers' lien,
counterclaim or similar rights with respect to such participation as fully
as if such participant were a direct holder of Loans if such Bank has
previously given notice of such participation to the Company.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 50
(b) Each Bank may assign, to any Person with a Standard & Poor's
rating of "A" or better, all of its interests, rights and obligations under
this Agreement (including all of its Commitment and the related Note held
by it); PROVIDED, HOWEVER, that (i) other than in the case of an assignment
to a Person at least fifty percent (50%) owned by the assignor Bank, or by
a common parent of both, or to another Bank, the Agent and the Company must
give their respective prior written consent, which consent will not be
unreasonably withheld; (ii) the assigning Bank shall contemporaneously
assign to such assignee the assigning Bank's Letter of Credit Commitment;
and (iii) the parties to each such assignment shall execute and deliver to
the Agent, for its acceptance and recording in its records, an assignment
agreement, together with the Note subject to such assignment and a
processing fee of $2,000 (for which the Company shall have no liability).
Prior to consenting to such assignment, the Company shall be afforded a
period not to exceed sixty (60) days in which it may identify an assignee
acceptable to it and reasonably acceptable to the assigning Bank. Upon
such execution, delivery and acceptance, from and after the effective date
specified in each assignment agreement, (1) the assignee thereunder shall
be a party hereto and shall have the rights and obligations of a Bank
hereunder and (2) the Bank thereunder shall be released from its
obligations under this Agreement and such Bank shall cease to be a party
hereto.
(c) By executing and delivering an assignment agreement providing for
the assignment of all or a portion of the interests, rights and obligations
of a Bank under this Agreement, the Bank assignor thereunder and the
assignee thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than the representation and warranty
that it is the legal and beneficial owner of the interest being assigned
thereby, such assignor Bank makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document; (ii) such assignor Bank makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Company or the performance or observance by the Company of
any of its obligations under any Loan Document; (iii) such assignee
confirms that it has received a copy of this Agreement, together with
copies of the financial statements of the Company previously delivered in
accordance herewith and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into such an assignment agreement; (iv) such assignee will, independently
and without reliance upon the Agent, such assignor Bank or any other Bank
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents; (v) such assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto, and
(vi) such assignee agrees that it will perform in
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 51
accordance with their terms all obligations that by the terms of the Loan
Documents are required to be performed by it as a Bank.
(d) The Agent shall maintain at its office a copy of each assignment
agreement delivered to it and a record of the names and addresses of the
Banks and the Commitments of, and principal amount of the Loans owing to,
each Bank from time to time. The entries in such record shall be
conclusive, in the absence of manifest error, and the Company, the Agent
and the Banks may treat each Person the name of which is recorded therein
as a Bank hereunder for all purposes of the Loan Documents. Such records
shall be available for inspection by the Company or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an assignment agreement executed by an
assigning Bank and the assignee thereunder together with the Note subject
to such assignment, the written consent to such assignment and the fee
payable in respect thereto, the Agent shall, (i) accept such assignment
agreement; (ii) record the information contained therein in its records,
and (iii) give prompt notice thereof to the Company. Contemporaneously
with the receipt by the Agent of an assignment agreement, the Company, at
its own expense, shall execute and deliver to the Agent in exchange for
each surrendered Note a new Note payable to the order of such assignee in
an amount equal to the Commitment and/or Loans assumed by it pursuant to
such assignment agreement. Such new Note shall be in an aggregate
principal amount equal to the principal amount of each surrendered Note,
shall be dated the effective date of such assignment agreement and shall
otherwise be in substantially the form of the surrendered Note.
Thereafter, each surrendered Note shall be marked canceled and returned to
the Company.
(f) After the sixty (60) day period set forth in Sections 10.2(a) and
(b) above, as applicable, or with the prior written approval of the
Company, any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Company furnished to such Bank by or on behalf
of the Company.
10.3. SURVIVAL OF REPRESENTATIONS. All representations and warranties
of the Company and the Guarantors contained in this Agreement and the other Loan
Documents shall survive delivery of the Notes and the making of the Loans.
10.4. GOVERNMENT REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Bank shall be obligated to extend credit to the
Company in violation of any limitation or prohibition provided by any applicable
Law.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 52
10.5. TAXES. Any Taxes (excluding income or other Taxes payable with
respect to the assets or income of a bank generally) payable or ruled payable by
any Tribunal in respect of the Loan Documents shall be paid by the Company,
together with interest and penalties, if any.
10.6. CHOICE OF LAW. THE LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
TEXAS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
10.7. HEADINGS. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
10.8. ENTIRETY; WRITTEN AGREEMENT. (A) THE CONFIDENTIALITY LETTER
AGREEMENTS ENTERED INTO PRIOR TO THE DATE HEREOF, IN EACH CASE BETWEEN THE AGENT
AND A BANK, (B) THE LETTER DATED JUNE 24, 1996, BETWEEN THE COMPANY AND THE
AGENT, AND (C) THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
10.9. ACCOUNTING. Unless otherwise specified herein, all accounting
terms used herein shall be interpreted, all accounting determinations herein
shall be made, and all financial statements required to be delivered hereunder
shall be prepared in accordance with, GAAP as in effect from time to time,
applied on a consistent basis. Compliance with Sections 7.6, 7.7, 7.8, and 7.9
shall be determined on a consolidated basis for the Company Group, in accordance
with GAAP.
10.10. SEVERAL OBLIGATIONS. The respective obligations of the Banks
hereunder are several and not joint and no Bank shall be the partner or agent of
any other (except to the extent to which the Agent is authorized to act as
such). The failure of any Bank to perform any of its obligations hereunder
shall not relieve any other Bank from any of its obligations hereunder.
10.11. EXPENSES; INDEMNIFICATION. The Company shall reimburse the Banks
for any and all reasonable costs and out-of-pocket expenses (including
attorneys' fees) paid or incurred by the Banks in connection with the
preparation, execution and delivery of this Agreement and the amendment,
modification, enforcement of and collection under the Loan Documents. The
Company agrees to indemnify the Agent and each Bank, and its or their directors,
officers and employees against all losses, claims, damages, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agent or any
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 53
Bank is a party to such litigation) that may be imposed on, incurred by or
asserted against any of them in any way relating to, or arising out of, the
Loan Documents or any of the transactions contemplated, therein, but only to
the extent that such loss, claim, damage, liability or expense is occasioned
by or arises out of the action, failure to act or default of any member of
the Company Group. Each Bank against which an adverse judgment is entered
agrees to reimburse the Company (on a pro rata basis in accordance with their
respective Commitments to the extent that more than one Bank should be liable
to the Company therefor pursuant to this Section 10.11), for its expenses of
litigation or preparation therefor in any action against such Bank to enforce
the performance of its obligations hereunder, but only in the event that the
judgment in such action is adverse to such Bank. The obligations of the
Company under this Section shall survive the termination of this Agreement
and the payment of the Obligations.
10.12. 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 invalidity without invalidating
the remaining portions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
10.13. CHOICE OF FORUM. HAGGAR AND THE COMPANY, ON BEHALF OF THEMSELVES
AND THEIR SUBSIDIARIES, ACKNOWLEDGE AND AGREE THAT ALL OBLIGATIONS HEREUNDER AND
UNDER THE OTHER LOAN DOCUMENTS ARE FULLY PERFORMABLE IN DALLAS COUNTY, TEXAS.
ANY SUIT, ACTION OR PROCEEDING AGAINST ANY MEMBER OF THE COMPANY GROUP, THE
BANKS OR ANY OTHER PERSON WITH RESPECT TO THIS AGREEMENT, THE NOTE, OR ANY OTHER
LOAN DOCUMENT, OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF, SHALL BE
BROUGHT EITHER IN THE COURTS OF THE STATE OF TEXAS, COUNTY OF DALLAS, OR IN THE
UNITED STATES COURTS LOCATED IN THE STATE OF TEXAS, NORTHERN DISTRICT, AND
HAGGAR AND THE COMPANY, ON BEHALF OF THEMSELVES AND THEIR SUBSIDIARIES, AND THE
BANKS, HEREBY SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE
PURPOSE OF ANY SUCH SUIT, ACTION OR PROCEEDING.
10.14. REVOLVING CREDIT. The Company and the Banks hereby agree that,
except for Section 15.10(b) thereof, the provisions of Article 5069-15.01 et
seq. of the Revised Civil Statutes of Texas, as amended (regulating certain
revolving credit loans and revolving triparty accounts) shall not govern or in
any manner apply to this Agreement or the Loan.
10.15. PRIOR AGREEMENT. On the date the conditions set forth in Section
4.1 are satisfied, the Prior Agreement shall be of no further force and effect,
except as evidence of the obligations renewed hereunder and evidenced by this
Agreement and the Notes and except as to rights acquired by the Banks prior to
such date.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 54
ARTICLE 11
THE AGENT
11.1. APPOINTMENT AND POWERS. The Agent shall continue as the Agent
hereunder, and each of the Banks irrevocably authorizes the Agent to act as the
agent of such Bank. The Agent agrees to act as such upon the express conditions
contained in this Article. The duties of the Agent shall be administrative in
nature and the Agent shall not have a fiduciary relationship in respect of any
Bank by reason of this Agreement.
11.2. POWERS. The Agent shall have and may exercise such powers
hereunder and under the other Loan Documents as are specifically delegated to
the Agent by the terms hereof or by any other writing signed by the Required
Banks, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Banks, or any obligation to the Banks
to take any action hereunder or exercise any right or remedy with respect to any
Unmatured Default or Default, except as specifically provided by this Agreement
or requested by the Required Banks.
11.3. POSSESSION OF INSTRUMENTS BY THE AGENT. The Agent shall exercise
all rights and remedies under the Notes and the Loan Documents and take all
actions with respect thereto in accordance with the request or direction of the
Required Banks, or otherwise as and to the extent provided herein or in the
other Loan Documents; provided, however, that the Agent may take such actions in
its name without the joinder of the Banks, and all third parties shall be
entitled to rely on the actions taken by the Agent with respect to the Notes and
the execution by the Agent of any and all agreements, financing statements,
affidavits, notices or any other type of document or instrument pertaining
thereto, including, without limitation, in connection with the exercise of any
rights or remedies of the Banks under the Loan Documents (and specifically
including any legal proceedings), and the same shall be binding upon all the
Banks as to any third party relying on such actions of the Agent.
Notwithstanding anything to the contrary expressed or implied herein or in the
Notes or any other Loan Document, each Bank shall be deemed a holder of each
Note and a separate payee, with a separate right to payment thereunder to the
extent of its pro rata part of payments to be made thereunder in accordance with
the terms of this Agreement.
11.4. DEBTOR-CREDITOR RELATIONSHIP. Each Bank has and shall maintain a
direct creditor-debtor relationship with the Company and/or any of the
Guarantors and will have direct recourse, singly or in the aggregate, against
the Company and/or any of the Guarantors. Notwithstanding the foregoing, any
right, remedy, action, omission or waiver respecting this Agreement, the Notes
and the other Loan Documents shall only be exercised, made, taken, or permitted
by the Agent, acting upon the direction of the Required Banks, as the agent for
all the Banks; provided, that in the event of any bankruptcy proceedings or
other legal proceedings
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 55
relating to this Agreement against the Company or any of the Guarantors, each
Bank shall be entitled, at its option, to bring or join in such proceedings
in its own name.
11.5. GENERAL IMMUNITY. Neither the Agent nor any of its respective
directors, officers, agents or employees shall be liable to the Banks or any
Bank for any action taken or omitted to be taken by it or them hereunder or in
connection herewith, except for its or their own gross negligence or willful
misconduct, it being the intention of the Banks that such parties shall not be
liable for the consequences of their own negligence (other than gross
negligence).
11.6. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. The Agent shall not
be responsible to the Banks for any recitals, reports, statements, warranties or
representations herein or any Loans or be bound to ascertain or inquire as to
the performance or observance of any of the terms of this Agreement.
11.7. RIGHT TO INDEMNITY. Each of the Banks shall, ratably in
accordance with the percentage of its Commitment, indemnify the Agent (to the
extent not reimbursed by the Company) for and against any cost, expense
(including attorney's fees and disbursements), claim, demand, action, loss or
liability (except such as result from the Agent's gross negligence or willful
misconduct) that the Agent may suffer or incur in connection with this Agreement
or any action taken or omitted by the Agent hereunder, in its capacity as the
Agent, including, without limitation, matters arising out of the Agent's own
negligence (other than its gross negligence). The Agent shall be fully
justified in failing or refusing to take any action hereunder unless it shall
first be indemnified to its satisfaction by the Banks pro rata against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
11.8. ACTION ON INSTRUCTIONS OF THE BANKS. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with written instructions signed by the Required Banks, except as to
those matters enumerated in Section 9.3 as to which the consent of all of the
Banks is required, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks and on all holders of
Notes.
11.9. EMPLOYMENT OF THE AGENT AND COUNSEL. The Agent may execute any
of its respective duties as the Agent hereunder by or through employees, agents
and attorneys-in-fact and shall not be answerable to the Banks, except as to
money or securities received by it or them or its or their authorized agents,
for the default or misconduct of any such employees, agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
respective duties hereunder.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 56
11.10. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper Person or Persons, and,
in respect to legal matters, upon the opinion of counsel selected by the
Agent.
11.11. MAY TREAT PAYEE AS OWNER. The Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
received by the Agent. Any request, authority or consent of any Person, who
at the time of making such request or giving such authority or consent is the
holder of any Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in
exchange therefor.
11.12. THE AGENT'S REIMBURSEMENT. Each Bank agrees to reimburse the
Agent in proportion to such Bank's ratable share of the Commitments for any
expenses not reimbursed by the Company (a) for which the Agent is entitled to
reimbursement by the Company under the Loan Documents and (b) for any other
expenses incurred by the Agent on behalf of the Banks, including those in
connection with the amendment, modification, enforcement of, and collection
under the Loan Documents, but specifically excluding those in connection with
their preparation, execution or delivery.
11.13. RIGHTS AS A LENDER. With respect to its Commitment, Loans made
by it and the Note issued to it, the Agent shall have the same rights and
powers hereunder as any Bank and may exercise or refrain from exercising the
same as though it were not the Agent and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to and generally
engage in any kind of banking or trust business with Haggar, the Company or
any of the Guarantors as if it were not the Agent.
11.14. BANK CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based
on the financial statements referred to in Section 5.5 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent
or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement.
11.15. SUCCESSOR AGENT. The Agent may resign at any time by giving
written notice thereof, no later than thirty (30) days prior to the date such
resignation will become effective, to the Banks, the Company and the
Guarantors, and may be removed at any time with or without cause by the
Required Banks. Upon any such resignation or removal, the Required Banks
shall have the right, with the consent of the Company, which consent shall
not be unreasonably withheld, to appoint, on behalf of the Company and the
Banks, a successor Agent. If no successor Agent shall have been so appointed
by the Required Banks and shall have accepted such appointment within thirty
(30) days after the retiring Agent's giving notice of resignation, then the
Company may appoint, with the consent of the Required Banks, which shall not
be unreasonably withheld, on behalf of the Banks, a successor agent. If no
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 57
successor agent shall have been so appointed by the Company and shall have
accepted such appointment within sixty (60) days after the retiring Agent's
giving notice of resignation, then the retiring Agent may appoint, on behalf
of the Company and the Banks, a successor Agent. Such successor Agent shall
be a commercial bank having capital and retained earnings of at least
$100,000,000. Upon the acceptance of any appointment as the Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
the Agent, the provisions of this Article shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as an Agent hereunder.
11.16. DISTRIBUTION OF INFORMATION. Subject to the provisions of
Section 6.7, the Company authorizes the Agent to discuss with and furnish to
the Banks all financial statements, audit reports and other information
pertaining to the Company and the Guarantors whether such information was
provided by the Company or prepared or obtained by such Agent and whether or
not such information was requested by the Agent or the Banks. Neither the
Agent nor any of its employees, officers, directors or agents makes any
representation or warranty regarding any audit reports or other analyses of
the Company's and the Guarantors' condition that the Agent distributes,
whether such information was provided by the Company or the Guarantors or was
prepared or obtained by the Agent, nor shall the Agent or any of its
employees, officers, directors or agents be liable to any Person or entity
receiving a copy of such reports or analyses for any inaccuracy or omission
contained in or relating thereto.
11.17. NON-ADVANCING BANKS. In the absence of an occurrence of a
Default and in the event that any Bank shall fail or refuse to advance its
pro rata portion of any Advance, as required hereunder, the Agent shall
notify the other Banks of such failure and such remaining Banks shall advance
such non-advancing Bank's portion but only to the extent that such additional
amount would not cause the outstanding principal balance of each such Bank's
Note to exceed its Commitment. Upon making any such Advance, and
notwithstanding anything to the contrary expressed or implied herein or in
the Notes or any of the Loan Documents, all subsequent payments made on the
Loans or from the exercise of right of setoff or other remedies under the
Loan Documents, shall be paid to only the Banks other than the non-advancing
Bank (and the non-advancing Bank shall not be entitled to receive the same),
to be applied pro rata in accordance with the amounts advanced by each such
advancing Bank, until the amounts advanced by such Banks on behalf of the
non-advancing Bank have been repaid in full. In addition, any Banks that
advance funds on behalf of a non-advancing Bank pursuant to this Section
11.17 shall have a claim against such non-advancing Bank for the amounts so
advanced and shall be entitled to all rights and remedies at law or in equity
to recover any unpaid
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 58
amounts. In the event of the foregoing, the Agent will use reasonable
efforts to suggest to the Company an alternative bank to replace such
non-advancing Bank, without any assurances in such connection that any
alternative bank may be amenable to becoming a Bank.
11.18. BENEFIT OF THE BANKS. Other than Section 11.15 and 11.17, all
terms, conditions and agreements set forth in this Article 11 are for the
sole and exclusive benefit of the Banks, and neither the Company, the
Guarantors nor any other Person shall be entitled to rely on or seek the
benefit of such provisions.
ARTICLE 12
RATABLE PAYMENTS
12.1. RATABLE PAYMENTS. In case at any time any Bank, whether by
setoff or otherwise, has payment made to it upon its Note in a greater
proportion than received by any other Bank upon its Note, such Bank so receiving
such greater proportionate payment agrees to purchase a portion of the Advances
held by the other Banks so that after such purchase each Bank will hold its
ratable proportion of the Advances. In case any such payment is disturbed by
legal process or otherwise, appropriate further adjustments shall be made. Any
Bank executing this Agreement may, to the fullest extent permitted by Law,
exercise all of its rights of payment as if such Bank were the direct creditor
of the Company (but without affecting in any way the provisions of Article 9
hereof).
ARTICLE 13
NOTICES
13.1. GIVING NOTICE. Any notice required or permitted to be given
under this Agreement may be given, and shall be deemed to be received, when
deposited in the United States mail, postage prepaid, by facsimile transmission
or telex when delivered to the appropriate office for transmission, charges
prepaid, or by private delivery service when delivery is receipted for,
addressed to the Company, the Banks or the Agent at the addresses indicated
below their signatures to the Agreement; provided, however, that notices given
pursuant to Section 8.4 shall be given by certified mail, return receipt
requested.
13.2. CHANGE OF ADDRESS. The Company, the Banks and the Agent may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 59
ARTICLE 14
COUNTERPARTS
This Agreement may be executed in any number counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Company, the Agent and the Banks and
each party has notified the Agent by telex or telephone, confirmed in writing,
that it has taken such action.
EXECUTED as of the date first above written.
HAGGAR CLOTHING CO., a Nevada corporation
f/k/a Haggar Apparel Company
By: /s/ X. X. XXXXXX, III
--------------------------------------
X. X. Xxxxxx, III
Chief Executive Officer
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
HAGGAR CORP., a Nevada corporation
By: /s/ X. X. XXXXXX, III
--------------------------------------
X. X. Xxxxxx, III
Chief Executive Officer
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 60
$22,222,222.22 NATIONSBANK OF TEXAS, N.A.
By: /s/ XXXX XXXXXXX
--------------------------------------
Xxxx Xxxxxxx
Senior Vice President
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000)000-0000
Telecopy: (000)000-0000
$14,814,814.81 COMERICA BANK - TEXAS
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxxx
Vice President
Comerica Bank - Texas
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 61
$14,814,814.81 THE BANK OF TOKYO-MITSUBISHI, LTD.
Dallas Office
By: /s/ XXXX X. XXXXXX
--------------------------------------
Xxxx X. Xxxxxx
Vice President/Manager
The Bank of Tokyo-Mitsubishi, Ltd.
Xxxxx 0000 XX 000
Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
$11,111,111.12 NBD BANK, N.A.
By: /s/ XXXXXXX X. XXXXXXXXX
--------------------------------------
Xxxxxxx X. XxXxxxxxx
Vice President
NBD Bank, N.A.
000 Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000)000-0000
Telecopy: (000)000-0000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 62
$7,407,407.41 BANK OF SCOTLAND
By: /s/ Xxxxxxxxx X. Xxxxxxxx
---------------------------------------
Xxxxxxxxx X. Xxxxxxxx
Vice President
Bank of Scotland
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Copies to:
Xxxxx Xxxxxxx
Bank of Scotland
Citicorp Center
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone: (000)000-0000
Telecopy: (000)000-0000
$7,407,407.41 NATIONAL CITY BANK, KENTUCKY
By: /s/ XXXXXX X. XXXXXX, XX.
---------------------------------------
Xxxxxx X. Xxxxxx, Xx.
Vice President
National City Bank, Kentucky
000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000)000-0000
Telecopy: (000)000-0000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 63
COMMITMENT
$22,222,222.22 TEXAS COMMERCE BANK National Association,
successor by merger to Texas Commerce Bank,
National Association, Individually and as the
Agent
By: /s/ XXXX X. XXXX
---------------------------------------
Xxxx X. Xxxx
Senior Vice President
0000 Xxxx Xxxxxx, X-0 Xxxxx, Xxxxx 00
Xxxxxx, Xxxxx 00000
Xxxx Xxxxxx Xxx 000000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
WIRING INSTRUCTIONS:
Texas Commerce Bank National
Association, ABA #000000000
for Credit to Account #7001-20730-7800
Attn: Loan Syndication Services
Xxxx Xxxxxxx
Reference: (As Applicable)
FUNDS MANAGEMENT ADDRESS:
Xxxx Xxxxxxx, Manager
Phone: (000) 000-0000
Fax: (000) 000-0000
Loan Syndication Services
Texas Commerce Bank National
Association
P. O. Box 2558
1111 Xxxxxx Street
9th Floor, Mail Station 46
Xxxxxxx, Xxxxx 00000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 64
SCHEDULE 1
CURRENT MEMBERS OF THE BOARDS OF DIRECTORS
OF HAGGAR AND THE COMPANY
HAGGAR CORP. HAGGAR CLOTHING CO.
------------ -------------------
X.X. XXXXXX, III X. X. XXXXXX,III
XXXXX XXXXXXX XXXXX XXXXXXX
XXXXX XXXXXXX XXXXX XXXXXXX
XXXXXX XXXXXXX
XXXXXXX XXXXX
XXX XXXXX
XXXXXX XXXXX
SCHEDULE 2
STANDBY
LETTERS OF CREDIT OUTSTANDING
JUNE 30, 1996
BENEFICIARY LC# MATURITY AMO0UNT
------------------------------------------------------------------------------
NATIONAL UNION FIRE INSURANCE D424918 09/30/96 $7,934,093
COMPANY OF PITTSBURG, PA
TRAVELERS INSURANCE COMPANY D418099 12/31/96 $1,509,765
----------
$9,443,858
----------
----------
SCHEDULE 3
SUBSIDIARIES
COMPANY NAME & ADDRESS SITUS OF INCORPORATION
---------------------- ----------------------
DOMESTIC
--------
Bowie Manufacturing Company Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Corsicana Company Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Dallas Pant Manufacturing Company Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Greenville Pant Manufacturing Company Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
McKinney Pant Manufacturing Company Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Olney Manufacturing Company Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Waxahachie Garment Company Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
La Romana Manufacturing Corporation Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Haggar Services, Inc. Texas
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
AirHaggar Texas
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Duncan Manufacturing Company Oklahoma
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Haggar Corp. (Parent) Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Haggar Clothing Co. Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Weslaco Sewing, Inc. Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Weslaco Cutting, Inc. Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Haggar Direct, Inc. Nevada
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
SCHEDULE 3
SUBSIDIARIES
COMPANY NAME & ADDRESS SITUS OF INCORPORATION
---------------------- ----------------------
FOREIGN
-------
Haggar Mex. S.A. de C.V. Mexico
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
Haggar Apparel Ltd. United Kingdom
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
SCHEDULE 4
CURRENT OBLIGATIONS
APPROXIMATE
AMOUNT AT SECURED
OWED BY 6/30/96 NOTEHOLDER BY GUARANTOR
------------------------------------------------------------------------------------------------------------
AirHaggar $167,596 Bank of Boston Leasing Airplane Haggar Corp.
Bowie Mfg. Co. $2,900,000 TCB - I.R.B. Buildings/Equip. Haggar Clothing Co.
Bowie Mfg. Co. $175,826 City of Weslaco Equipment N/A
Haggar Clothing Co. $25,000,000 Allstate Life Insur. Co. N/A Haggar Corp.
Haggar Clothing Co. $9,469,070 National Life of VT C.V. of Life Insur. N/A
Haggar Clothing Co. $1,411,623 Texas Stadium Platinum Suite N/A
Haggar Direct, Inc. $1,016,577 Retail Lease Guar. (curr.> 12 mos.) Haggar Clothing Co.
-----------
$40,140,692
-----------
-----------
September 16, 1996
SCHEDULE 5
PENDING LITIGATION
CLAIMANT DESCRIPTION HAGGAR ATTORNEY CURRENT
-------- ----------- --------------- STATUS
-------
PENDING CLAIMS
--------------
Xxxxxxxxx Xxxxxxxxx Intentional infliction of Xxxxx Xxxxxxx, Xx. Pending
emotional distress (termination Xxxxx & XxXxxxxx
allegedly due to pregnancy) 0000 Xxxx Xxxxxx
and invasion of privacy. Xxxxx 0000
Xxxxxx, Xxxxx 00000
Xxxxxxx Xxxxxxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
violation of Workers Xxxxx & XxXxxxxx Trial - 11/4/96
Compensation Act, Article 0000 Xxxx Xxxxxx
0000x. Xxxxx 0000
Xxxxxx, Xxxxx 00000
Xxx Xxxxxxx Xxxxxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
violation of the Workers Xxxxx & XxXxxxxx
Compensation Act, Article 0000 Xxxx Xxxxxx
8307c, and intentional Suite 4500
infliction of emotional distress. Xxxxxx, Xxxxx 00000
Xxxxx X. Xxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
violation of Workers Xxxxx & XxXxxxxx
Compensation Act, Chapter 0000 Xxxx Xxxxxx
451 of the Texas Labor Code Suite 4500
(f/k/a Article 8307c), Texas Xxxxxx, Xxxxx 00000
Commission of Human Rights
Act, age discrimination, and
intentional infliction of
emotional distress.
Xxxxxxxx X. Xxxxxx Wrongful termination and Xxxxx Xxxxxxx, Xx. Pending
intentional infliction of Xxxxx & XxXxxxxx
emotional distress. 0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Xxxxxxxxxx Xxxxxxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
violation of the Workers Xxxxx & XxXxxxxx
Compensation Act, Article 0000 Xxxx Xxxxxx
8307c, intentional infliction of Suite 4500
emotional distress. Xxxxxx, Xxxxx 00000
Xxxxx X. Xxxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
violation of the Workers Xxxxx & XxXxxxxx
Compensation Act, Article 0000 Xxxx Xxxxxx
0000x. Xxxxx 0000
Xxxxxx, Xxxxx 00000
Xxxxxx Xxxxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
violation of Workers Xxxxx & XxXxxxxx
Compensation Act, Article 0000 Xxxx Xxxxxx
8307c, and intentional Suite 4500
infliction of emotional distress. Xxxxxx, Xxxxx 00000
Xxxxx Xxxxxxxx Breach of Contract, intentional Xxxxx Xxxxxxx, Xx. Pending
infliction of emotional distress, Xxxxx & XxXxxxxx
and invasion of privacy. 0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Xxxxxxxx Xxxxxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
violation of Workers Xxxxx & XxXxxxxx
Compensation Act, Article 0000 Xxxx Xxxxxx
8307c, and intentional Suite 4500
infliction of emotional distress. Xxxxxx, Xxxxx 00000
Xxxxx X. Xxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
violation of Workers Xxxxx & XxXxxxxx
Compensation Act, Article 0000 Xxxx Xxxxxx
8307c, intentional infliction of Suite 4500
emotional distress, and age Xxxxxx, Xxxxx 00000
discrimination in violation of
Texas Commission on Rights
Act.
Xxxxxx Xxxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
violation of article 8307c, Xxxxx & XxXxxxxx Trial - 11/18/96
intentional infliction of 0000 Xxxx Xxxxxx
emotional distress and Suite 4500
negligent hiring and retention. Xxxxxx, Xxxxx 00000
Xxx Xxxxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
violation of Article 8307c of Xxxxx & XxXxxxxx
the Workers Compensation Act 0000 Xxxx Xxxxxx
and intentional infliction of Suite 4500
emotional distress. Xxxxxx, Xxxxx 00000
Xxxxxxx Xxxxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Dismissed on
violation of the Workers Xxxxx & XxXxxxxx summary
Compensation Act, Article 0000 Xxxx Xxxxxx judgment on
8307c, and intentional Suite 4500 9/9/96.
infliction of emotional distress. Xxxxxx, Xxxxx 00000
Xxxxxxxx Xxxxxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
Xxxxx X. Xxxx violation of Workers Xxxxx & XxXxxxxx
Xxxxx X. Xxxxxxxxx Compensation Act, Article 0000 Xxxx Xxxxxx
Xxxxx Xxxxxx 8307c, negligent hiring and Suite 4500
retention, and violation of Xxxxxx, Xxxxx 00000
Texas Commission on Human
Rights Act (Xxxxx X. Xxxx,
only).
Xxxxx X. Xxxx Intentional infliction of Xxxxx Xxxxxxx, Xx. Pending
emotional distress. Xxxxx & XxXxxxxx
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Xxxxxxx Creek, et al Class Action for severance pay Xxxxx Xxxxxxx, Xx. Pending
v. (breach of contract and Xxxxx & XxXxxxxx (Class Action)
Haggar Apparel Co. d/b/a promissory estoppel) 0000 Xxxx Xxxxxx 97th Judicial
Olney & Bowie Mfg Xxxxx 0000 Xxxxxxxx Xxxxx,
Xxxxxx, Xxxxx 00000 Xxxxxxxx
Xxxxxx, Xxxxx
Trial - 12/3/96
Xxx Xxxxx, et al 351 former employees Xxxxx Xxxxxxx, Xx. Pending
v. claiming fraud and Xxxxx & XxXxxxxx
Xxxxxx Apparel Co. misrepresentation regarding 0000 Xxxx Xxxxxx
methods of pay and plant Suite 4500
closure, intentional infliction of Xxxxxx, Xxxxx 00000
emotional distress, violation of
the Fair Labor Standards Act Xxxxxx Xxxx
and Texas Workers Thornton, Summers,
Compensation Act, and Biechlim Xxxxxx
discrimination under the 000 Xxxxx Xxxxxxxxxx,
Xxxxxxxxx with Disability Act Xxxxx 000
Xxxxxx Xxxxxxx, Xxxxx
00000-0000
SCHEDULE 5
(CONTINUED)
Xxxxxx Xxxxx Sexual harassment and Xxxxxxx X. X. Xxxx Pending
discrimination based on sex, Carrington, Coleman, Trial 2/3/97
retaliation for complaining of Xxxxxx & Xxxxxxxxxx
harassment and discrimination, 000 Xxxxxxxx Xxxxx
intentional infliction of Suite 1500
emotional distress, negligent Xxxxxx, Xxxxx 00000
retention, assault and battery,
invasion of privacy, and
constructive termination.
Xxxxxxx Xxxxxxxxxx Personal injuries allegedly Xxxxxxx Xxxxxxxxxx Pending
Xxxxxx Xxx Xxxxx arising as a result of roof Xxxxxxxx & Xxxxxx P.C.
Xxxx Xxxxxxxx collapse on 5/5/95. 3300 First City Center,
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
PLAINTIFFS: Allegations of negligence, Xxxxxxx Xxxxxxxxxx Pending
Xxxxxx Xxxxxxxxx gross negligence, wrongful Xxxxxxxx & Xxxxxx P.C.
Xxxxxxx deaths and personal injuries 3300 First City Center,
Xxxxxxxxx, Xxxxx arising as a result of roof 0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxx collapse on 5/5/95 Xxxxxx, Xxxxx 00000
Xxxxxxxxx,
Begnigna X. Xxxxxxxx,
Individually and as
Representatives of
the Estate of Xxxxxx
Xxxxxxxx, Deceased;
INTERVENORS:
Xxxxx X. Xxxxxxx,
Individually and as next
Friend of Xxxxxxxx
Xxxxx, Christopher,
Henry, Xxx X. Xxxxxxx,
Minors, and as
Representative of the
Estate of Xxxxxxx X.
Xxxxx
Xxx X. Xxxxxx Personal Injury arising out of Xxxxxx X. Xxxxxx Dismissed with
product defect or product 300 Corporate Pointe prejudice
liability, negligence, breach of Suite 310
warranty ($10,000 actual Culver City, California
damages, $14,000 punitive 90230-7635
damages)
-4-
SCHEDULE 5
(CONTINUED)
Xxx Xxxxxxx, as father of Wrongful death as a result of Xxxxxxx X. Xxxxxxxxx Pending
Xxxxx Xxx Xxxxxxx, a collision between tractor Phelps, Jenkins, Xxxxxx
minor, deceased trailer and deceased's vehicle. & Xxxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx
00000
Xxxxx Xxxxxxx Personal injury arising out of Xxxxxxx Xxxxxxxxxx Pending
negligence--Claimant claims Xxxxxxxx & Knight P.C.
to have been struck by 3300 First City Center,
conveyor truck. 0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Daltex Services, Inc. Breach of contract, quantum Xxxxx X. Xxxxx, Xx. Settled
meruit, and sworn account Carrington, Coleman,
--Plaintiff claims non-payment Xxxxxx & Xxxxxxxxxx
of $211,476.65 for clean-up 000 Xxxxxxxx Xxxxx
services allegedly performed Suite 1500
after roof collapse. Xxxxxx, Xxxxx 00000
Xxxxx De La Xxx a/ka Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
Xxx X. Xxxxxx violation of Article 8307c of Xxxxx & XxXxxxxx
Filed: 8/16/96 the Workers Compensation Act 4500 Xxxxxxx Xxxx Ctr
and intentional infliction of 0000 Xxxx Xxxxxx
emotional distress. Xxxxxx, XX 00000
Xxxxxxxx Xxxxx Wrongful termination in Xxxxx Xxxxxxx, Xx. Pending
Filed: 8/24/96 violation of Article 8307c of Xxxxx & XxXxxxxx
the Workers Compensation 0000 Xxxxxxx Xxxx Xxx
Xxx. 0000 Xxxx Xxxxxx
Xxxxxx, XX 00000
E E O C
Xxxxxxx Childress Sex discrimination No attorney Pending
Xxxxxxx Xxxxxxxxx Failure to hire under ADA No attorney Pending
Xxxxxxx Xxxxxxx Harassment under ADA No attorney Pending
Xxxxxx Xxxxx Discrimination based on No attorney Pending
national origin
Xxxxx X. Xxxxxxxx Discrimination based on race No attorney Pending
-5-
SCHEDULE 5
(CONTINUED)
Xxxxx X. Xxxxxxx Discrimination based on race No attorney Pending
Filed: 7/8/96
received after 7/17/96
Xxxxxx Xxxxx Discrimination under No attorney Pending
Filed: 7/1/96 Americans with Disabilities
received after 7/17/96 Act
-6-
SCHEDULE 6
EXISTING AFFILIATE TRANSACTIONS
1. Continue existing Shiloh Road lease between Company, as lessee, and new,
non-family owner following the sale of property by X.X. Xxxxxx, X.X.
Xxxxxx, Xx., and Xxxxxxxx Xxxxxx Xxxxxxx.
2. Split Dollar Life Insurance Policies. The Company owns part of
policy and family member beneficiaries own part.
3. Haggar Clothing Co. makes available use of the Company Plane at a fixed
cost, Health Insurance, use of Product, and use of the New York
Apartment to Xx Xxxxxx and X.X. Xxxxxx, Xx. and an office for Xx Xxxxxx.
4. Haggar Clothing Co. has granted the use of the "Xxxxxx XxXxxxx" label to
Xxxxx Xxxxxx Xxxxxx.
SCHEDULE 7
CAPACITY ADJUSTMENT COSTS
FISCAL QUARTER ENDING ________________, 199___
TOTAL PAID THIS CUMULATIVELY
ACCRUAL QUARTER PAID
------- ------- ----
CLOSE (2) PLANTS
Severance Pay
Vacation
Extended Benefits
Workers Comp Claims
Unemployment Costs
Outplacement
Relocation and Setup
Legal Costs/Defense/Settlement
Lease Buyouts
Other Related
OBTAIN ADDITIONAL MEXICO CAPACITY
Start-Up Costs
Training Costs
Other Related
LEGAL COSTS
Defense and Settlements
Robstown
Bowie/Olney
Closed (2) Plants
TOTAL
------- ------- -------
EXHIBIT A
[Logo] APPLICATION AND AGREEMENT
FOR IRREVOCABLE STANDBY LETTER OF CREDIT
/ / WITHOUT RENEWALS / / WITH RENEWALS Renewable until _______________________.
To: TEXAS COMMERCE BANK NATIONAL ASSOCIATION FOR BANK USE ONLY LATEST DATE
X.X. Xxx 0000 ----------------------------------------------
Xxxxxxx, Xxxxx 00000-0000 Date: | L/C No.:
Date of this Application ________________________ ----------------------------------------------
Applicant No.:
----------------------------------------------
Beneficiary No.:
----------------------------------------------
Advising Bank No.:
----------------------------------------------
Gentlemen:
The undersigned Applicant(s) hereby request(s) you to establish an irrevocable Standby Letter of Credit
as set forth below in such language as you may deem appropriate, with such variations from such terms as
you may in your discretion determine are necessary and are not materially inconsistent with this
Application and Agreement, and forward the same by:
/ / Cable/telex (full details) / / Airmail / / Brief Cable/telex / / Other __________________
/ / Through your correspondent for delivery to the beneficiary or advised through ________________________
/ / Directly to beneficiary
All banking charges other than the issuing Bank's are for / / Beneficiary / / Applicant(s)
----------------------------------------------------------------------------------------------------------
Liability of | on Behalf of (as to appear on Letter of Credit)
|
|
|
|
|
|
|
__________ In favor of (Beneficiary) _______________ | __________________________________________________
|
|
| In figures:
|
|
|
| In words:
|
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|
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Partial drawings: / / Allowed / / Not Allowed | Expiring at the close of business on
If drawings are allowed in installments within |
given periods and no drawing is made for an |
installment within the applicable period, the |
credit |
| _________________________________________________
/ / Shall / / Shall not be available for | At your counters, unless otherwise indicated, for
subsequent installments | Sight Payment
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To be available by drafts at sight drawn on you duly signed and endorsed, or specify any other drawee:
_________________________________________
And accompanied by documents as specified below:
Beneficiary's manually signed statement on its letterhead reading exactly as follows:
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(Complete only when the beneficiary's bank or correspondent is to issue its undertaking based on the
issued Standby Letter of Credit)
/ / Request beneficiary's bank to issue and deliver their (specify type of undertaking, bid or performance
bond, or other)
____________________________________________________________
In favor of:
____________________________________________________________
For an amount not exceeding that specified above, effective immediately and expiring at their office
on _______________________________________________
(30 days prior to expiry date above)
relative to _______________________________________.
THE OPENING OF THIS CREDIT IS SUBJECT TO THE TERMS AND CONDITIONS AS SET FORTH ON THE FOLLOWING
PAGES, TO WHICH TERMS AND CONDITIONS WE AGREE Please date and sign this Application and Agreement on
page 4 hereof.
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Page 1 of 4
TERMS AND CONDITIONS FOR STANDBY LETTER OF CREDIT
In consideration of the issuance of the letter of credit and all
renewals, extensions, replacements and amendments thereof (herein called the
"Credit") by Bank in accordance with the Application and Agreement (this
"Agreement"), the undersigned (hereinafter called "Applicants," whether one
or more) jointly and severally agree to the following terms and conditions:
1. Applicants promise to pay to Bank on demand at its office shown on
front, in United States currency as follows:
A. As to drafts, draws, demands, or other evidence of amounts drawn
under or purporting to be drawn under the Credit which are payable in United
States currency, the amount paid thereon, or, if so demanded by Bank, to pay
Bank at its office in advance the amount required to pay such drafts, draws,
demands or other evidence of amounts drawn under or purporting to be drawn
under the Credit;
B. As to drafts, draws, demands, or other evidence of amounts drawn under
or purporting to be drawn under the Credit which are payable in currency
other than United States currency, either (i) the amount paid in the currency
of the Credit at the bank of Bank's choice in the country of such currency,
or (ii) the equivalent of the amount paid, in United States currency, at
Bank's then current selling rate for such currency;
C. All taxes, levies, imposts, duties, charges, fees, deductions or
withholdings of any nature whatsoever and by whomsoever and wherever imposed
in connection with this Agreement, the Credit or any transactions hereunder
or thereunder; and
D. Interest on all amounts owing to Bank hereunder at the maximum
nonusurious rate of interest permitted by applicable laws of the United
States of America or the State of Texas, from time to time in effect,
whichever shall permit the highest lawful rate (hereinafter called "the
Highest Lawful Rate"). At all times, if any, that Chapter One of Title 79,
Texas Revised Civil Statutes, 1925, as amended, establishes the Highest Lawful
Rate, the Highest Lawful Rate shall be the "indicated" rate ceiling (as
defined therein) from time to time in effect. It is the intention of
Applicants and Bank to conform strictly to applicable usury laws. It is
therefore agreed that: (i) if, for any reason, the interest received for the
actual period of the existence of any loan by Bank hereunder exceeds the
Highest Lawful Rate, Bank shall refund to applicants the amount of the excess
or shall credit the amount of the excess against amounts owing hereunder and
shall not be subject to any of the penalties provided by law for contracting
for, charging, or receiving interest in excess of the Highest Lawful Rate,
(ii) the aggregate of all interest and other charges constituting interest
under applicable law and contracted for, chargeable or receivable under this
Agreement or otherwise in connection with this Agreement or the Credit, shall
not for the actual period of the existence of any loan hereunder exceed the
maximum amount of interest, nor produce a rate in excess of the Highest
Lawful Rate, (iii) if, for any reason, usurious interest is contracted for,
charged or received, then the sole remedy of Applicants shall be to receive a
refund thereof or a credit on the accrued and unpaid interest and unpaid
principal under this Agreement equal to the usurious interest, it being
agreed that usurious interest shall mean the amount by which the total
interest contracted for, charged or received exceeds the amount of interest
allowed by applicable law; and this Agreement shall be automatically deemed
reformed so as to permit only the collection of the Highest Lawful Rate of
interest, and (iv) determination of the rate of interest on any loan
evidenced hereby shall be made by amortizing, prorating, allocating, and
spreading, in equal parts during the period of the full stated term of such
loan, all interest at any time contracted for, charged or received from
Applicants in connection with such loan.
E. Applicants assume all risks (political, economic or otherwise) of
disruptions or interruptions in currency exchange with respect to any demand
payable in other than United States currency, and if there is no then
prevailing exchange rate, Bank may obtain the non-United States currency from
any commercially reasonable source, in which case Applicants shall pay Bank's
cost therefor, inclusive of all expenses, in United States currency.
F. Demand, for all purposes of this Agreement, shall be considered made at
the time Bank mails, telephones or otherwise sends notification to Applicants.
G. Applicants agree to pay to Bank, any Member and/or Correspondent (as
hereinafter defined), or its correspondents, annually in advance not later
than forty-five (45) days prior to the then current expiration date of the
Credit, all fees and commissions owing to or which become owing in respect of
the Credit. Such fees and commissions shall be payable at the then current
rate charged by Bank and/or such other entity(ies). Payment of such fees or
commissions in advance shall not affect the Bank's absolute right not to
renew the Credit; however, should bank decide in its sole and absolute
discretion not to renew the Credit, Bank shall refund such advance payment to
Applicants.
2. Applicants agree that if because of any law or regulation, or
because of any change in any existing law or regulation, or in the
interpretation thereof by any official authority, whether or not having the
force of law, which comes into effect after the date of this Agreement, (a)
Bank or Applicants should, with respect to this Agreement, the Credit or any
transactions hereunder or thereunder, be subject any tax, charge, fee,
insurance premium, deduction or withholding of any kind whatsoever, or (b)
reserve requirements, or changes in existing reserve requirements, should be
imposed on Bank with respect to this Agreement or the Credit or any
transactions hereunder or thereunder, and if any of the above-mentioned
measures, or any other similar measure, should result in (i) any increase in
the cost to Bank of issuing and maintaining the Credit pursuant to this
Agreement or of any transaction under or in connection with the Credit or
this Agreement, or (ii) any reduction in the payment or deposit of any amount
(principal, interest, fee, commission or otherwise) receivable by Bank in
respect of the Credit or this Agreement or of any transaction under the
credit or this Agreement, then Applicants shall pay to Bank upon demand such
increased cost or reduction, including such additional amounts as may be
necessary so that every net payment or deposit, after deduction or
withholding for or on account of such payment or deposit (including any taxes
levied on additional amounts paid pursuant to this paragraph), will not be
less than the corresponding amount provided for under the Credit or this
Agreement before giving effect to such increased costs or reduction; provided
that in no event shall any additional amounts which constitute interest exceed
what is considered, together with other interest payments, the Highest Lawful
Rate.
3. Availments under the Credit may be effected through Bank or any
advising or confirming bank (the "Payor") at the then current buying rate of
the Payor for banker's sight drafts at the place from which the Payor is to
receive reimbursement under the terms of the Credit, it being understood and
further agreed: (a) that the amount(s) disbursed to the beneficiary(ies)
relative thereto may be in the currency local to the site of the Payor, and
may be reduced by any taxes and/or other charges whether of the Payor or
otherwise, and (b) that an advice of an availment under the Credit from the
Payor shall be sufficient evidence to Bank of an availment under the Credit,
and such evidence thereof shall be binding upon Applicants for the purposes
of this Agreement.
4. If at any time(s) any funds and/or securities are paid to or
deposited with or under the control of Bank, not as payment under paragraph 1
hereof, but to be held relative hereto, same shall be held as collateral
security for the Obligations (as hereinafter defined) and without Applicants
having any right to dispose of the same while any Obligations (as hereinafter
defined) exist under this Agreement, but with the discretionary right in Bank
to release or surrender all or any part of said funds and/or securities to or
upon the order of Applicants. If any such funds are available to Bank at its
office in the currency of the Credit at time after any payment may become
due hereunder, Bank may (acting in each instance in its discretion and
without being required to make any prior demand for payment hereunder) apply
all or any part thereof at any time(s) on account of the Obligations (as
hereinafter defined), irrespective of the then current rate of exchange.
Should the aggregate market value of any such funds and/or securities at any
time(s) suffer any decline, or should any such property be unavailable at any
time for any reason to Bank at its office or fail to conform to legal
requirements, Applicants will, upon demand, make such payment(s) on account
of the aforesaid Obligations, or as additional collateral therefor, will
deposit and pledge with Bank additional property that is satisfactory to
Bank. If any such funds as aforesaid be other than United States dollars and
occasion arises for a refund by Bank of all or any portion thereof, it shall
be optional with Bank as to whether refund will be made (a) in United States
Dollars at the buying rate for the foreign currency on the date of refund, or
(b) in the amount and kind of the foreign currency on the date of refund, or
(c) by instructing a branch or correspondent of Bank to hold the refundable
amount of foreign currency for Applicants' account and risk.
5. Applicants hereby pledge, assign and hypothecate to Bank as security
for any and all of the obligations and liabilities of Applicants with respect
to the Credit, the Application portion of this Agreement (the "Application")
and this Agreement, whether hereinbefore or hereinafter referred to, now or
hereafter existing (herein called the "Obligations"), any and all property
of Applicants now or at any time(s) hereafter in Bank's possession or
control or in the possession or control of any third party acting in Bank's
behalf, whether for the express purpose of being used by Bank as collateral
security or for safekeeping or for any other or different purpose, including
such property as may be in transit by mail or carrier to or from Bank, a lien
and security interest being hereby given Bank upon and in any and all such
property for the aggregate amount of the Obligations; and Applicants
authorize Bank, at Bank's option, at any time(s), whether or not the property
then held by Bank as security hereunder is deemed by Bank to be adequate, to
appropriate and apply to or upon any and all of the Obligations, whether or
not then due, any and all monies now or hereafter with Bank on deposit or
otherwise to the credit of or belonging to Applicants and in Bank's
discretion, to hold any such monies as security for any such Obligations
until the exact amount thereof, if any, shall have been definitely ascertained
by Bank. Bank's rights, liens and security interest hereunder shall continue
unimpaired, and Applicants shall be and remain obligated in accordance with
the terms and provisions hereof, notwithstanding the release or substitution
of any property which may be held as collateral hereunder at any time(s) or
of any rights or interest therein, or any delay, extension of time, renewal,
compromise or other indulgence granted by Bank in reference to any of the
Obligations, or any promissory note, draft, xxxx of exchange or other
instrument given Bank in connection with any of the Obligations, Applicants,
and each of them individually, hereby waiving notice of any such delay,
extension, release, substitution, renewal, compromise or other indulgence,
and hereby consenting to be bound thereby as fully and effectually as if
Applicants had expressly agreed thereto in advance.
6. Applicants agree at any time and from time to time, on demand, (i)
to deliver, convey, transfer or assign to Bank, as security for any and all
of the Obligations, and also for any and all other obligations and/or
liabilities, absolute or contingent, due or to become due, which are now, or
may at any time hereafter, be owing by Applicants to Bank, additional security
of a value and character satisfactory to Bank, or (ii) to make such cash
payment(s) in partial or full satisfaction of the Obligations of such other
obligations or liabilities as Bank in its sole discretion may require.
7. Bank is hereby authorized, at its option and without any obligation
to do so, to transfer to and/or register in the name(s) of Bank's nominee(s)
all or any part of the property which may be held by it as security at any
times(s) hereunder, and to do so before or after the maturity of any of the
Obligations and with or without notice to Applicants.
8. The word "property" as used herein includes goods and merchandise (as
well as any and all documents relative thereto), securities, funds, monies
(whether United States currency or otherwise), choses in action and any and
all other forms of property, whether real, personal or mixed, tangible or
intangible, and any right or interest of Applicants, or any one or more of
them, therein or thereto. Bank is authorized, at its option, to file
financing statement(s) and continuation statement(s) without the signature of
Applicants with respect to any of the property, and Applicants jointly and
severally agree to pay the cost of any such filing and to sign upon request
any instruments, documents or other papers which Bank may require to perfect
its security interest in the property. A carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement.
Page 2 of 4
9. No proceeds of the Credit will be used for any purpose which would
constitute the Credit a "purpose credit" when the meaning of Regulation U of
the Board of Governors of the Federal Reserve System.
10. Applicants jointly and severally represent and warrant that (a) each
of them which is not a natural person is duly organized in good standing and
validly existing with full power and authority to execute this Agreement; (b)
the execution of this Agreement has been duly authorized by all necessary
action on the part of all Applicants and does not violate or contravene any
law, regulation, order or decree or the articles of incorporation, bylaws,
partnership agreement or any other organizational document of any Applicant;
(c) all requisite licenses, permits and franchises for the operation of
Applicant's business are in full force and effect; (d) any financial
statements delivered to Bank in connection herewith fairly present the
financial condition and results of operations of the subject or subjects
thereof as of the dates and for the periods indicated therein, and no
material adverse change has occurred in the financial condition of the
subject or subjects thereof since the dates thereof; (e) except as disclosed
in writing to Bank in connection herewith, no litigation or administrative
proceeding is pending or threatened against any Applicant; and (f) each
Applicant has filed all tax returns required to have been filed and paid all
taxes shown thereon to be due. Applicants further represent and warrant to
Bank that Applicants are not now in violation of any applicable limitations
on the aggregate amount of loans that may be made to a borrower by any lender
and that issuance of the Credit by Bank will not be, or cause the aggregate
credit outstanding to any or all Applicants to exceed such limitations, and
Applicants covenant and agree that Applicants will at all times during the
term of this Agreement fully comply with and fully advise Bank and Member, if
any, of all circumstances relevant to, all applicable lending limits.
11. Upon the non-performance of any of the promises to pay herein set
forth, or upon the non-payment of any of the Obligations or other obligations
or liabilities of Applicants herein, or upon the failure of Applicants to
furnish satisfactory additional collateral or to make payments on account as
hereinabove agreed, or to perform or comply with any of the other terms or
provisions of this Agreement, or in the event of default under any security
agreement or guaranty or other document securing or guaranteeing Applicants'
payment and performance of the Obligations, or should any information
supplied on behalf of Applicants prove to be incorrect, false or misleading,
or in the event of the death, insolvency, business failure, dissolution or
termination of existence of any Applicant, or in case any petition in
bankruptcy is filed by or against any Applicant, or any proceeding is
commenced for the relief or readjustment of any indebtedness of any
Applicant, either through reorganization, composition, extension or
otherwise, or if any Applicant should make an assignment for the benefit of
creditors or take advantage of any insolvency law, or if a receiver for any
property of any Applicant should be appointed at any time, and in each case
any of the foregoing is initiated under laws or regulations of any
jurisdiction relating to the relief of debtors, then upon such occurrence,
any or all of the Obligations shall, at Bank's option, become due and
payable immediately, without demand or notice, notice of acceleration and of
intention to accelerate being hereby expressly waived by each Applicant.
12. Upon Applicants' failure to pay any Obligation when due, as
aforesaid, or upon the occurrence of any of the events described in paragraph
11 above, Bank shall have, in addition to all other rights and remedies
allowed by law, the right immediately, without demand for performance and
without notice of intention to sell or of the time or place of sale or of
redemption or other notice or demand whatsoever to any Applicant, all of
which are hereby expressly waived, and without advertisement, to sell at any
broker's board, or at public or private sale, or to grant options to
purchase, or otherwise to realize upon the whole or from time to time any
part of the collateral upon which Bank shall have a security interest or lien
as aforesaid, or any interest which Applicants may have therein, and after
deducting from the proceeds of sale or other disposition of the said
collateral all expenses (including but not limited to reasonable attorneys'
fees for legal services of every kind and other expenses as set forth below)
shall apply the residue of such proceeds toward the payment of any of the
Obligations, in such order as Bank shall elect, and whether then due or not
due, Applicants remaining liable for any deficiency remaining unpaid after
such application. If notice of any sale or other disposition is required by
law to be given, each Applicant hereby agrees that a notice sent at least two
(2) days before the time of any intended public sale or of the time after
which any private sale or other disposition of the said collateral is to be
made, shall be reasonable notice of such sale or other disposition.
Applicants also agree to assemble the said collateral at such place or places
as Bank designates by written notice. At any such sale or other disposition,
Bank may itself purchase the whole or any part of the said collateral sold,
free from any right of redemption on the part of Applicants and free of any
right to require sale in inverse order of alienation, which rights are hereby
waived and released. Applicants agree that the said collateral secures, and
further agree to pay on demand, whether or not any default by Applicants has
occurred, all expenses (including but not limited to, reasonable attorneys'
fees for legal services of every kind, the cost of any insurance and the
payment of all taxes or other charges) of, or incidental to, the custody,
care, appraisal, sale or collection of, or realization upon, any of the said
collateral or in any way relating to the enforcement or protection of Bank's
rights hereunder. Where applicable, Bank shall have, to the maximum extent
permitted by applicable law, in addition to and cumulative of the rights
hereinabove provided, all of the rights and remedies provided to a secured
party by the Uniform Commercial Code in effect in the State of Texas on the
date of this Agreement.
13. No delay on the part of Bank in exercising any power of sale, lien,
option or other right hereunder, and no notice or demand which may be given
or made upon Applicants by Bank with respect to any power of sale, lien or
other right hereunder, shall constitute a waiver thereof or limit or impair
the right of Bank to take any action or to exercise any power of sale, lien,
option or any other right hereunder, without demand or notice or prejudice to
the rights of Bank as against Applicants in any respect. Any and all rights
and liens of Bank hereunder shall continue unimpaired, and Applicants shall
be and remain obligated in accordance with the terms and provisions hereof,
notwithstanding the release or substitution of any property as referred to
herein, or of any rights or interests therein, or any delay, extension of
time, renewal, compromise or other indulgence granted by Bank in reference to
any of the Obligations, Applicants each hereby waiving notice of any such
delay, extension, release, substitution, renewal, compromise or other
indulgence, and each hereby consenting to be bound thereby as fully and
effectually as if Applicants had expressly and specifically agreed thereto.
14. The users and beneficiaries of the Credit shall be deemed
Applicants' agents, and Applicants assume all risks of the acts or omissions
of the users or beneficiaries of the Credit. Neither Bank nor its
correspondents or affiliates shall assume any liability to anyone for failure
to pay or accept if such failure is due to any restriction in force at the
time and place of presentment, and Applicants agree to indemnify Bank from
any consequences that may arise therefrom. Neither Bank nor Bank's
correspondents or affiliates shall be liable or responsible in any respect
for any (a) error, omission, interruption or delay in transmission, dispatch
or delivery of any one or more messages or advices in connection with the
Application or the Credit, whether transmitted by cable, radio, telegraph,
twx, wireless, mail, electronic mail, telex, telefax, telecopy, SWIFT, or
otherwise and despite any cipher or code which may be employed, or (b) errors
in translation or for errors in interpretation of technical terms, or (c)
action, inaction or omission which may be taken or suffered by it or them in
good faith or through inadvertence in identifying or failing to identify any
beneficiary(ies) or otherwise in connection with the Credit, or (d) validity,
sufficiency or genuineness of document(s) even if such document(s) should in
fact prove to be in any or all respects invalid or insufficient, fraudulent
or forged, or (e) act, error, neglect or default, omission, insolvency or
failure in business of any of Bank's correspondents. The happening of any one
or more of the contingencies described above shall not affect, impair or
prevent the vesting of any of Bank's rights or powers hereunder. In
furtherance and extension and not in limitation of the specific provisions
hereinbefore set forth, it is hereby further agreed that any action,
inaction, or omission taken or suffered by Bank or by any of its
correspondents under or in connection with the Credit or the relative drafts,
demands, documents or property, if in good faith and in conformity with such
foreign or domestic laws, customs or regulations as Bank or any of its
correspondents may deem to be applicable thereto, shall be binding upon
Applicants and shall not place Bank or any of its correspondents under any
resulting liability to Applicants. If the Credit or this Agreement shall be
terminated or revoked by operation of law as to any Applicant, or if any
Applicant shall restrain the payment of the Credit by court order or any
other means, or if this Agreement or the Credit are amended, modified,
revoked or cancelled as provided for herein and any dispute, claim, demand or
cause of action arises with respect thereto, Applicants will jointly and
severally indemnify and save Bank harmless from any and all loss, cost,
damage, expense, suit, claim, cause of action, judgment and attorneys' fees
which may be suffered or incurred by Bank, whether caused in whole or in part
by the negligence of Bank or any correspondent or affiliate of Bank.
15. The Credit and this Agreement may be amended, modified, cancelled or
revoked only upon the receipt by Bank from all Applicants of a written
request therefor, and then only upon such terms and conditions as Bank may
prescribe and then only by a writing signed by all Applicants, the
beneficiaries and Bank. Notwithstanding the foregoing, however, Bank may,
upon receipt of a written request therefor, signed by all Applicants, extend
the expiration date and/or increase the amount of the Credit without the
written or oral acceptance or consent of any or all beneficiaries of the
Credit. Bank is authorized without reference to or approval by any Applicant
to set forth the terms appearing on the Application portion hereof in the
Credit and to modify or alter such terms in such language as Bank may deem
appropriate, with such variations from such terms as Bank may at its
discretion determine (which determination shall be conclusive and binding
upon Applicants) are necessary and are not materially inconsistent with such
terms.
16. Notwithstanding anything herein (except paragraph 17) to the
contrary, it is understood and agreed that, if the Credit is issued in favor
of a sovereign or commercial entity which is to issue a commitment or
guarantee on Applicants' behalf in connection herewith, each Applicant shall
remain liable on the Credit until Bank is fully released in writing by such
entity. Applicants jointly and severally agree to pay (a) all costs and
expenses incurred by Bank in collection of amounts advanced under the Credit
and any and all other amounts remaining unpaid hereunder through probate,
reorganization, bankruptcy or any other proceeding and (b) reasonable
attorneys' fees when and if collection of any such amount is placed in the
hands of an attorney for collection after default.
17. Notwithstanding anything contained herein or in any other separate
security agreement or other document executed heretofore, herewith or
hereafter in connection with or related to this credit obligation, if this is
a consumer credit obligation (as defined or described in 12 C.F.R. 227,
Regulation AA, promulgated by the Federal Reserve Board), the security for
this credit obligation shall not extend to any non-possessory security
interest in household goods (as defined in said Regulation AA) other than a
purchase money security interest, and no waiver of any notice contained
herein or therein shall be construed under any circumstances to extend to any
waiver of notice prohibited by Regulation AA.
18. This Agreement and the Credit are subject to and incorporate fully
herein (except as expressly modified herein or in the Credit) the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, (hereinafter referred to as "the
Uniform Customs"). THIS AGREEMENT AND THE RIGHTS OF APPLICANTS AND BANK
HEREUNDER SHALL BE SUBJECT TO AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE
STATE OF TEXAS, WITHOUT REGARD TO THE RULES REGARDING CONFLICTS OF LAWS,
EXCEPT WHEN THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS CONFLICT WITH THE
UNIFORM CUSTOMS, IN WHICH EVENT THE PROVISIONS OF THE UNIFORM CUSTOMS SHALL
GOVERN.
Page 3 of 4
19. If the Credit is governed by the laws of a foreign jurisdiction, the
Credit may require Bank to pay funds as Bank's primary obligation. In the
event Bank is, or in good xxxxx xxxxx itself to be, obligated to advance
funds to the beneficiary(ies) hereof. Applicants hereby expressly jointly and
severally agree to reimburse Bank on demand for all such advances made,
notwithstanding any expiration or cancellation of the Credit by Bank or under
Texas law or the Uniform Customs and even though Applicants may have an
unresolved controversy with a third party or the beneficiary(ies) related to
the transaction for which the Credit is being sought, including the proper
interpretation of the law of such foreign jurisdiction. In the event
Applicants have a dispute with the beneficiary(ies) or a third party,
Applicants are required to reimburse Bank on demand, and Applicants' remedy
is to seek reimbursement from the beneficiary(ies) or the third party. Bank
is expressly authorized to presume that all demands for payment made by the
beneficiary(ies) hereof are made in accordance with such foreign law.
20. Unless otherwise expressly stated herein or in the Credit, neither
the Credit nor this Agreement may be assigned by the beneficiary(ies) or any
Applicant without the prior written consent of Bank. Bank may assign or
transfer the Credit or this Agreement, or any instrument(s) evidencing all or
any of the Obligations, and may deliver all or any of the property then held
as security therefor, to the transferee(s) of Bank, who shall thereupon
become vested with all of the powers and rights in respect thereof given to
Bank herein or in the instrument(s) transferred, and Bank shall thereafter be
forever relieved and fully discharged from any liabilities or responsibility
with respect thereto, but Bank shall retain all rights and powers hereby
given with respect to any and all instrument(s), rights or property not so
transferred.
21. This Agreement, the Application and the Credit constitute the entire
agreement among the parties hereto, except for such agreements executed in
connection herewith which specifically refer to this Agreement, the
Application or the Credit or which grant to Bank a lien or security interest
to secure any debts or obligations of any Applicant, regardless of any
reference or lack thereof to this Agreement, Application or the Credit. Terms
used herein in the plural number shall be construed as singular as the
context requires and vice versa.
22. Although the Credit may refer to a particular agreement or other
obligation to the beneficiary(ies) executed by Applicants, the terms of such
agreement are not in any manner incorporated herein. Bank shall therefore
make payment upon demand under the Credit unless it appears that such demand,
on its face, does not comply with the terms of the Credit. Such payment shall
be made without regard to performance of any obligation by any contracting
party under such agreement.
23. Applicants agree that at all times now and hereafter they will
indemnify and save Bank harmless from and against all suits, judgments,
liabilities, losses or damages to it arising in any manner, including
negligence on the part of Bank in connection with the Credit or this
Agreement, unless due to gross negligence or willful misconduct on the part
of Bank, and from and against all costs, charges and expenses, including in
connection with all legal proceedings, whether groundless or otherwise,
attorneys' fees, it being the purpose of this Agreement to protect Bank fully
in the premises.
24. Applicants agree that no acceptance or payment of overdrafts or
irregular drafts or of drafts with irregular documents attached shall, if
assented to or approved by any Applicant orally or in writing, or if Bank in
good faith accepts an indemnity limited to the actual damage, if any, caused
by such irregularity or discrepancy, impair any rights which Bank may have
under this Agreement. In case of any variation between the documents called
for by the Credit or this Agreement and the documents accepted by Bank or
Bank's correspondents, Applicants shall each be deemed conclusively to have
waived any right to object to such variation with respect to any action by
Bank or Bank's correspondents relating to such documents and to have ratified
and approved such action as having been taken on Applicants' direction,
unless Applicants immediately upon receipt of such documents (and prior to
receipt thereof by any beneficiary or user of the Credit) file objection with
Bank in writing, or unless Bank has been provided with an indemnity, as
aforesaid. Applicants acknowledge and agree that, the information in the
Application portion of this Agreement may be transmitted to Bank and relied
on by Bank in issuing the Credit by any means acceptable to Bank, including
without limitation, SWIFT, electronic mail, telex, telephone, twx, telecopy
or telefax. Applicants, Member and Correspondent (both as hereinafter
defined) agree to hold Bank harmless from and against all claims, expenses,
costs, liabilities, attorneys' fees, suits, judgments, and causes of action
arising out of any discrepancy between the information in this Agreement,
including without limitation, the Application, and that transmitted to, or
received by, Bank.
25. Issuance by Bank of the Credit applied for herein shall constitute
acceptance by Bank of this Agreement.
26. If this Agreement contains the signature of a bank which is a
subsidiary of Texas Commerce Bancshares, Inc. (hereinafter referred to as the
"Member") or of a correspondent bank of Bank (hereinafter referred to as the
"Correspondent"), then this paragraph shall be applicable. In consideration
of Bank's issuing the Credit at the request of Correspondent or Member, as
applicable, Correspondent or Member as applicable, agrees that it is an
Applicant hereunder with respect to Bank, and it agrees to reimburse Bank on
demand and authorizes Bank, without demand or any notice whatsoever, to
charge, setoff against and otherwise exercise any rights Bank may have with
respect to, any monies now or hereafter on deposit with or otherwise to the
credit of or belonging to Correspondent or Member, as applicable, at or with
Bank for any and all Obligations hereunder, whether or not any demand has
been made on Applicants hereunder. As an Applicant hereunder, each
Correspondent or Member Bank, as applicable, makes the same representations,
warranties, covenants and agreements to Bank as the Applicants in paragraph
10 hereof and otherwise provided in this Agreement; provided, however unless
otherwise agreed to in writing, or stated herein neither Member nor
Correspondent agrees to furnish any security for this Agreement or the Credit
other than the aforementioned monies. Upon Member's or Correspondent's, as
applicable, payment to Bank of all Obligations hereunder, Bank thereupon
automatically, and without further action on the part of any party, assigns
and transfers its rights hereunder to Correspondent or Member, as
applicable, who shall be fully subrogated thereto, and Applicants agree to
indemnify and hold Bank harmless from and against any claims, costs,
expenses, suits or causes of action by Applicants or any beneficiary or user
of the Credit. APPLICANTS HEREBY AGREE THAT CORRESPONDENT OR MEMBER, AS
APPLICABLE, SHALL ALSO (IN ADDITION TO BANK) HAVE THE SAME RIGHTS, REMEDIES,
SECURITY INTERESTS AND OTHER LIENS AS ARE STATED HEREIN, TO THE SAME EFFECT
AS IF ADDITIONAL PARAGRAPHS WERE FULLY WRITTEN HEREIN CONTAINING THE SAME
TERMS BUT SUBSTITUTING "CORRESPONDENT" OR "MEMBER" FOR "BANK" THROUGHOUT. ALL
REFERENCES TO SECURED PARTY, BENEFICIARY OR OTHER SIMILAR TERM CONTAINED IN
ANY DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT OR OTHER DOCUMENT
OR INSTRUMENT EXECUTED CONTEMPORANEOUSLY HEREWITH OR PREVIOUSLY EXECUTED BY
ANY OF THE APPLICANTS FOR THE BENEFIT OF MEMBER OR CORRESPONDENT SHALL BE
DEEMED TO INCLUDE BANK AS WELL AS MEMBER OR CORRESPONDENT. ALL SUCH SECURITY
AGREEMENTS, FINANCING STATEMENTS, DEEDS OF TRUST AND OTHER DOCUMENTS AND
INSTRUMENTS ARE AMENDED TO THE EXTENT NECESSARY IN ORDER THAT THE OBLIGATIONS
OF APPLICANTS HEREUNDER ARE SECURED THEREBY AND BY THE COLLATERAL DESCRIBED
THEREIN ON A PARI PASSU BASIS WITH, AND IN ADDITION TO, ANY OTHER OBLIGATIONS
SECURED THEREBY.
27. / / If this box is checked this paragraph is applicable. Applicants
have requested Bank to issue a Credit which the Bank may, but is not
required, to renew on an annual basis until the "latest date" indicated on
the Application or such later date as any Applicant may hereafter request in
writing. Applicants agree that Bank has made no commitment to any beneficiary
or any Applicant, and that Bank has no obligation, to renew the Credit at or
prior to the original or any subsequent expiration date. Except as expressly
provided in the Credit, Bank shall have no liability to any beneficiary for
the renewal of, or failure to renew, the Credit for any reason. Except as
hereinafter agreed, the Bank shall not have any liability to Applicants due
to the renewal of, or failure to renew, the Credit for any reason. Except to
the extent any notice may be required in the Credit, Bank is not required to
notify any beneficiary or Applicant of the renewal, or failure to renew, the
Credit. Subject to the other conditions and indemnities in this Agreement,
including negligence by Bank, Bank and Applicants agree that Bank will not
renew the Credit if it receives, and an authorized officer of Bank
acknowledges such receipt in writing, written notification from any Applicant
at least 14 days and not more than 30 days prior to the earliest date on
which, pursuant to the terms of the Credit, Bank must either renew or decline
to renew the Credit or notify beneficiary(ies) of its decision to renew or
not to renew the Credit. Such written notification must specify to the
satisfaction of Bank the Credit, the then current expiration date, and such
Applicant's request that the Credit not be renewed.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
APPLICANTS: -----------------------------------
Printed Name
-----------------------------------
Printed Name By:
-------------------------------
By: Authorized Signature
-------------------------------
Authorized Signature CORRESPONDENT/MEMBER BANK:
----------------------------------- -----------------------------------
Printed Name Printed Name
By: By:
------------------------------- -------------------------------
Authorized Signature Authorized Signature
BANK ACCEPTANCE: The Bank's Acceptance evidenced by the undersigned
authorized representative's signature is provided as its acknowledgement that
this agreement represents the final agreement by the parties which may not be
contradicted by evidence of prior contemporaneous, or subsequent oral
agreements between the parties.
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By:
--------------------------------
Page 4 of 4
EXHIBIT B
BORROWING BASE CERTIFICATE
(FOR THE MONTH ENDING ___________________ OR AS OF ____________________)
HAGGAR CLOTHING CO.
TO: TEXAS COMMERCE BANK National Association
0000 Xxxx Xxxxxx
X. X. Xxx 000000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxx
DATE: __________________, 199__
RE: First Amended and Restated Credit Agreement dated as of September 18,
1996 (the "Agreement"), by and among Haggar Clothing Co., Haggar Corp.,
Texas Commerce Bank National Association and the Banks Listed in the
Agreement, as amended
-------------------------------------------------------------------------------
1. RECEIVABLES
A. Total Receivables $ ____________
B. LESS:
(i) Receivables unpaid ($_________)
after 90 days
after date of
invoice (or the
effective date of
Dated Invoices)
(ii) all uncollectible ($____________)
Receivables
(iii) reserve for "discounts" ($____________)
(iv) reserve for "build-ups" ($____________)
(v) reserve for "deductions" ($____________)
(vi) reserve for GMI discounts ($____________)
(vii) other reserves ($____________)
C. Total Eligible Receivables $____________
D. 80% of Eligible Receivables $____________
2. INVENTORY
A. Total Inventory per attached $____________
summary schedule
B. less: ineligible Inventory ($____________)
C. Total Eligible Inventory $____________
D. 50% of Eligible Inventory $____________
3. BORROWING BASE
A. (i) 80% of Eligible Receivables $____________
(ii) 50% of Eligible Inventory $____________
B. Borrowing Base Formula Sum $____________
C. less: amount by which (A)(ii) is greater
than 50%* of the Borrowing
Base Formula Sum ($__________)
D. Borrowing Base $____________
4. BORROWING BASE AVAILABILITY
A. Borrowing Base $____________
B. less: Principal amount ($__________)
outstanding under
the Agreement
C. Borrowing Base Availability $____________
5. AVAILABLE COMMITMENT
A. Total Commitments $100,000,000**
B. less: (i) Principal amount ($__________)
outstanding under
the Agreement
(ii) aggregate amount ($__________)
of all issued and
outstanding
Letters of Credit
C. Available Commitment $____________
_________________
* 60% in the months of January, June, July and December.
** Subject to reduction as provided in the Agreement.
6. AVAILABILITY
A. Borrowing Base Availability $____________
B. Available Commitment $____________
C. Lesser of A or B $____________
I hereby certify that, to the best of my knowledge after appropriate
inquiry, the foregoing is true and correct as of the last day of the month
indicated.
----------------------------------
----------------------------------
Printed Name and Title
EXHIBIT C
NOTE
$__________________ _______________, 199__
FOR VALUE RECEIVED, Haggar Clothing Co., a Nevada corporation (the
"Company"), promises to pay to the order of _________________ (the "Bank"),
in accordance with the terms and provisions of that certain First Amended and
Restated Credit Agreement dated as of September 18, 1996, executed by and
among the Company, Haggar Corp., Texas Commerce Bank National Association,
individually and as the Agent, and the other Banks named therein (as amended,
supplemented or otherwise modified form time to time, the "Agreement"), the
principal sum of ________________________ ($______________) or the aggregate
unpaid principal amount of all Advances made by the Bank to the Company,
whichever is less, in immediately available funds at the main office of the
Agent, together with interest on the outstanding principal amount hereof at
the rates and on the dates set forth in the Agreement. The Company shall pay
each Advance in full on the dates set forth in the Agreement. All payments
hereunder shall be made by the Company without setoff, counterclaim or
deduction of any kind.
This Note has been executed and delivered pursuant to, and shall be
governed by, the terms and provisions of the Agreement. Each capitalized term
used herein and not otherwise defined herein shall have the same meaning
attributed to such term in the Agreement.
If any Default described in the Agreement shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon
may become or be declared due and payable without notice or demand in the
manner and with the effect provided in the Agreement.
THIS WRITTEN NOTE, TOGETHER WITH THE AGREEMENT AND THE OTHER LOAN
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE COMPANY AND THE BANK
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENT OF THE COMPANY AND THE BANK. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE COMPANY AND THE BANK.
The Bank may, and is hereby authorized to, record on the schedule attached
to this Note, or to otherwise record in accordance with its usual practice,
the date and amount of each Advance and the date and amount of each payment
of principal and/or interest on this Note, in the manner and with the effect
provided in the Agreement.
This Note has been executed and delivered in renewal of and substitution
and replacement for the Note dated September 14, 1992, payable to the order
of _______________ and originally delivered pursuant to the Prior Agreement.
HAGGAR CLOTHING CO., a Nevada corporation
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF HAGGAR CLOTHING CO.,
DATED___________, 199__
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Advance Period Paid Balance
---- --------- ----------- --------- -------
EXHIBIT D
CONSENT OF HAGGAR
Haggar hereby (a) agrees that the Parent Guaranty is and shall remain in
full force and effect to the additional effect that the Obligations under the
First Amended and Restated Credit Agreement (the "Agreement") to which this
Consent of Haggar is attached are a part of the Obligations under the Parent
Guaranty, (b) ratifies and confirms all terms and provisions of the Parent
Guaranty, as amended hereby, (c) acknowledges that there are no claims or
offsets against, or defenses or counterclaims to, the terms and provisions of
and the obligations created and evidenced by the Parent Guaranty, as amended
hereby, (d) reaffirms all agreements and obligations under the Parent
Guaranty, as amended hereby, with respect to the Loans, the Notes, the
Agreement and all other documents, instruments or agreements governing,
securing or pertaining to the Loans, and (e) represents and warrants that all
requisite corporate action necessary for it to execute this Consent of Haggar
has been taken.
HAGGAR CORP.,
a Nevada corporation
By:
--------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
Dated:
------------------------
EXHIBIT E
GUARANTY
OF DOMESTIC SUBSIDIARIES
THIS GUARANTY (this "GUARANTY") is executed as of ____________________,
199___, by each of the corporations that are signatories hereto (collectively,
the "GUARANTORS") in favor of TEXAS COMMERCE BANK National Association, a
national banking association, as agent (in such capacity, the "AGENT") for the
banks (the "BANKS") that are parties to the First Amended and Restated Credit
Agreement described below.
W I T N E S S E T H
WHEREAS, HAGGAR CLOTHING CO., a Nevada corporation (the "COMPANY"), is a
party to that certain First Amended and Restated Credit Agreement dated
July __, 1996, with the Agent and the Banks (as the same may from time to
time be amended, supplemented or otherwise modified, the "CREDIT AGREEMENT");
WHEREAS, pursuant to the terms of the Credit Agreement and the other Credit
Documents (as hereinafter defined), the Banks have agreed to make certain
Extensions of Credit (as hereinafter defined) to or for the benefit of the
Company;
WHEREAS, the Company owns directly or indirectly all of the issued and
outstanding stock of each Guarantor;
WHEREAS, the proceeds of Extensions of Credit will be used in part to
enable the Company to make Valuable Transfers (as hereinafter defined) to some
of the Guarantors in connection with the operation of their respective
businesses;
WHEREAS, the Company and the Guarantors are engaged in related businesses,
and each Guarantor will derive substantial direct and indirect benefit from the
making of the Extensions of Credit; and
WHEREAS, the obligation of the Banks to make the Extensions of Credit is
conditioned upon, among other things, the execution and delivery by the
Guarantors of this Guaranty;
NOW, THEREFORE, in consideration of the premises and to induce the Banks to
enter into the Credit Agreement and to make Extensions of Credit, each Guarantor
hereby agrees with and for the benefit of the Agent and the Banks as follows:
1. DEFINED TERMS. As used in this Guaranty, terms defined in the Credit
Agreement are used herein as therein defined, and the following terms shall have
the following meanings:
"ADJUSTED NET WORTH" of any Guarantor shall mean, as of any date of
determination thereof, the excess of (i) the amount of the "present fair
saleable value" of the assets of such Guarantor as of the date of such
determination, over (ii) the amount of all "liabilities of such Guarantor,
contingent or otherwise", as of the date of such determination, as such
quoted terms are determined in accordance with applicable Federal and state
laws governing determinations of the insolvency of debtors. In determining
the Adjusted Net Worth of any Guarantor for purposes of calculating the
Maximum Guaranteed Amount for such Guarantor in respect of any Extension of
Credit, the liabilities of such Guarantor to be used in such determination
pursuant to clause (ii) of the preceding sentence shall in any event (a)
include the liabilities of such Guarantor hereunder and under the other
Credit Documents in respect of all Extensions of Credit other than the
Extension of Credit in respect of which such calculation is being made and
(b) exclude liabilities of such Guarantor owing to any member of the
Company Group.
"CREDIT DOCUMENTS" shall mean the Credit Agreement, the Notes and the
other loan documents.
"EXTENSION OF CREDIT" shall mean all loans or advances made to the
Company under any Credit Document.
"MAXIMUM GUARANTEED AMOUNT" for any Guarantor shall mean, as of any
date of determination thereof, the lesser of (i) the outstanding amount of
any Extension of Credit (or portion thereof) as of such date and (ii) the
greater of (a) ninety-five percent (95%) of the Adjusted Net Worth of such
Guarantor at the time of such Extension of Credit and (b) ninety-five
percent (95%) of the Adjusted Net Worth of such Guarantor at the earliest
of (x) such date, (y) the date of the commencement of a case under Title 11
of the United States Code in which such Guarantor is a debtor and (z) the
date enforcement hereunder is sought.
"OBLIGATIONS" shall mean the unpaid principal of and interest on the
Notes and all other obligations and liabilities of the Company to the Agent
or the Banks, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Credit Agreement,
the Notes, the other Credit Documents or any other document made,
delivered or given in connection therewith, and each other obligation
and liability, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, of the Company
to the Agent or the Banks, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel to
the Agent or any Bank) or otherwise.
"VALUABLE TRANSFER" shall mean, in respect of any Guarantor, (i)
all loans, advances or capital contributions made to such Guarantor with
proceeds of Extensions of Credit, (ii) all debt securities or other
obligations of such Guarantor acquired from such Guarantor or retired by
such Guarantor with proceeds of Extensions of Credit, (iii) the fair
market value of all property acquired with proceeds for Extensions of
Credit, and transferred, absolutely and not as collateral, to such
Guarantor and (iv) all equity securities of such Guarantor acquired from
such Guarantor with proceeds of Extensions of Credit.
2. GUARANTY.
(a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Agent and the Banks and
their respective successors, endorsees, transferees and assigns, the prompt
and complete payment by the Company when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, and each
Guarantor further agrees to pay any and all expenses (including, without
limitation, all fees and disbursements of counsel) which may be paid or
incurred by the Agent or any Bank in enforcing, or obtaining advice of
counsel in respect of or collecting, any or all of the Obligations and/or
enforcing any rights with respect to, or collecting against, such Guarantor
under this Guaranty; PROVIDED, HOWEVER, that, anything herein or in any
other Credit Document to the contrary notwithstanding, the maximum
liability of each Guarantor hereunder and under the other Credit Documents
shall in no event exceed such Guarantor's Maximum Guaranteed Amount as
determined at the earlier of the date of the commencement of a case under
Title 11 of the United States Code in which such Guarantor is a debtor and
the date enforcement hereunder is sought.
(b) Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the Maximum Guaranteed Amount of such Guarantor or
of all of the Guarantors without impairing this Guaranty or affecting the
rights and remedies of the Agent and the Banks hereunder.
(c) No payment or payments made by the Company, any of the
Guarantors, any other guarantor or any other Person or received or
collected by the Agent or any Bank from the Company, any of the Guarantors,
any other guarantor or any other Person
by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in
payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor.
(d) Each Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Agent or any Bank on account of its
liability hereunder, it will notify the Agent in writing that such payment
is made under this Guaranty for such purpose.
3. RIGHT OF SET-OFF. Upon the occurrence of any Default specified in the
Credit Agreement, each Guarantor hereby irrevocably authorizes each Bank at any
time and from time to time without notice to such Guarantor or any other
Guarantor, any such notice being expressly waived by each Guarantor, to set-off
and appropriate and apply any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing to such Bank to or for the credit or the account of such Guarantor, or any
part thereof in such amounts as such Bank may elect, against and on account of
the obligations and liabilities of such Guarantor to such Bank hereunder and
claims of every nature and description of such Bank against such Guarantor, in
any currency, whether arising hereunder, under the Credit Agreement, the Notes,
the other Credit Documents or otherwise, as such Bank may elect, whether or not
the Agent or any Bank has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. Each Bank
agrees to notify such Guarantor promptly of any such set-off and the application
made by such Bank, PROVIDED that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Bank
under this paragraph are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Bank may have.
4. NO SUBROGATION. Notwithstanding any payment or payments made by any
of the Guarantors hereunder or any set-off or application of funds of any of the
Guarantors by any Bank, no Guarantor shall be entitled to be subrogated to any
of the rights of the Agent or any Bank against the Company or any other
Guarantor or any collateral security or guarantee or right of offset held by any
Bank for the payment of the Obligations, nor shall any Guarantor seek or be
entitled to seek any reimbursement from the Company or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Agent and the Banks by the Company on account of the Obligations are paid in
full and the Commitments are terminated. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Agent and the Banks, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Agent in the exact form received by such Guarantor (duly indorsed by
such Guarantor to the
Agent, if required), to be applied against the Obligations, whether matured
or unmatured, in such order as the Agent and the Banks may determine.
5. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF
RIGHTS. Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Agent or any Bank may be rescinded by such party and any
of the Obligations continued, and the Obligations, or the liability of any other
party upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Agent or any Bank (subject
to any other applicable requirement relating to the taking of such action) and
the Credit Agreement, the Notes, the other Credit Documents, any other
collateral security document or other guarantee or document in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Agent and/or any Bank may deem advisable from time to time (subject
to any other applicable requirement relating to the taking of such action), and
any collateral security, guarantee or right of offset at any time held by the
Agent or any Bank for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. When making any demand hereunder against any
of the Guarantors, the Agent or any Bank may, but shall be under no obligation
to, make a similar demand on the Company or any other Guarantor or guarantor,
and any failure by the Agent or any Bank to make any such demand or to collect
any payments from the Company or any such other Guarantor or guarantor or any
release of the Company or such other Guarantor or guarantor shall not relieve
any of the Guarantors in respect of which a demand or collection is not made or
any of the Guarantors not so released of their several obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Agent or any Bank against any
of the Guarantors. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
6. GUARANTY ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Agent or any Bank upon
this Guaranty or acceptance of this Guaranty; the Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guaranty; and all
dealings between the Company or any of the Guarantors and the Agent or any Bank
shall likewise be conclusively presumed to have been had or consummated in
reliance upon this Guaranty. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Company or any of the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that this Guaranty shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity, regularity or enforceability of the Credit Agreement, the
Notes, any of the other Credit
Documents, any of the Obligations or any other collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time
to time held by the Agent or any Bank (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at
any time be available to or be asserted by the Company against the Agent or
any Bank, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of the Company or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Company for
the Obligations, or of such Guarantor under this Guaranty, in bankruptcy or
in any other instance. This Guaranty shall remain in full force and effect
and be binding in accordance with and to the extent of its terms upon each
Guarantor and the successors and assigns thereof, and shall inure to the
benefit of the Agent and the Banks, and their respective successors,
endorsees, transferees and assigns, until all the Obligations and the
obligations of each Guarantor under this Guaranty shall have been satisfied
by payment in full and the Commitments shall be terminated, notwithstanding
that from time to time during the term of the Credit Agreement the Company
may be free from any Obligations.
7. REINSTATEMENT. This Guaranty shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Agent or any Bank upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of the Company or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Company or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
8. PAYMENTS. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Agent without set-off or counterclaim in Dollars at the
office of the Agent located at 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000.
9. SUBORDINATION. Each Guarantor hereby subordinates in right of payment
with respect to any and all Intercompany Indebtedness now or hereafter owed to
Guarantor to the prior payment in full of the Obligations, and agrees with the
Agent and the Banks that:
(a) Guarantor shall not, after a Default (or an Unmatured Default, in
the case of payments or distributions made outside the ordinary course of
its business):
(i) demand, xxx for, take, or accept or receive, directly or
indirectly, any payment of principal or interest with respect
to such Intercompany Indebtedness, whether in cash or other
property;
(ii) claim any offset or other reduction of Guarantor's obligations
hereunder because of any such Intercompany Indebtedness; or
(iii) take any other action to make it the same.
(b) Any payments or distributions upon or with respect to the
Indebtedness subordinated hereby which are received by such Guarantor
following a Default (or an Unmatured Default, in the case of payments or
distributions made outside the ordinary course of business) shall be
collected, enforced and received by Guarantor as trustee for the Banks and
paid over to the Agent on account of the Obligations.
(c) In the event of any distribution of all or any of the assets of
such Guarantor to its creditors upon the dissolution, winding up,
liquidation, arrangement, reorganization, adjustment, protection or relief
of such Guarantor or its debts, whether in any bankruptcy, insolvency,
arrangement, reorganization, receivership, relief or similar proceedings or
upon an assignment for the benefit of creditors or any other marshalling of
the assets and liabilities of such Guarantor, any payment or distribution
of any kind (whether in cash, property, or securities) which otherwise
would be payable or deliverable upon or with respect to the Intercompany
Indebtedness subordinated hereby shall be paid or delivered directly to the
Agent for the benefit of the Banks for application to (in the case of cash)
or as collateral for (in the case of non-cash property or securities) the
payment of the Obligations until the Obligations shall have been paid in
full.
(d) If any proceeding referred to in subsection (c) above is
commenced by or against such Guarantor, the Agent is hereby irrevocably
authorized and empowered (in its own name or in the name of such
Guarantor), but shall have no obligation, to demand, xxx for, collect and
receive every payment or distribution referred to in subsection (c) above,
and give acquittance therefor, and to file claims and proofs of claim and
take such other action (including, without limitation, voting the
Intercompany Indebtedness subordinated hereby or enforcing any security
interest or lien securing its payment) as it may deem necessary or
advisable for the exercise or enforcement of any of the rights of the Agent
and Banks hereunder.
(e) The Agent and/or the Banks are hereby authorized to demand
specific performance of this Guaranty at any time when such Guarantor shall
have failed to comply with any of the provisions of this Guaranty.
10. SEVERABILITY. Any provision of this Guaranty which 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 not invalidate or render unenforceable such provision in any
other jurisdiction.
11. PARAGRAPH HEADINGS. The paragraph headings used in this Guaranty are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
12. NO WAIVER; CUMULATIVE REMEDIES. Neither the Agent nor any Bank shall
by any act (except by a written instrument pursuant to paragraph 13 hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Unmatured Default or Default (as
such terms are defined in the Credit Agreement) or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Bank, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Agent or any Bank of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Agent
or such Bank would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any rights or remedies provided by law.
13. INTEGRATION; WAIVERS AND AMENDMENTS AND SUCCESSORS AND ASSIGNS. THIS
GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN EACH GUARANTOR AND THE AGENT AND
THE BANKS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENT OF EACH GUARANTOR, THE AGENT AND THE BANKS. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN EACH GUARANTOR, THE AGENT AND THE BANKS.
There are no promises or representations by the Agent or any Bank relative to
the subject matter hereof not reflected herein. None of the terms or provisions
of this Guaranty may be waived, amended or supplemented or otherwise modified
except by a written instrument executed by each Guarantor and the Agent,
PROVIDED that any provision of this Guaranty may be waived by the Agent and the
Banks in a letter or agreement executed by the Agent or by telex or facsimile
transmission from the Agent. This Guaranty shall be binding upon the successors
and assigns of each Guarantor and shall inure to the benefit of the Agent and
the Banks and their respective successors and assigns.
14. NOTICES. All notices, requests and demands to or upon the Guarantors
or the Agent or any Bank to be effective shall be in writing or by facsimile or
telex and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made as provided in Article 13 of the Credit Agreement, and
shall be addressed to a party at the address provided for such party pursuant to
SCHEDULE 1 hereto.
15. COUNTERPARTS. This Guaranty may be executed by one or more of the
parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
16. GOVERNING LAW. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS Of THE STATE OF TEXAS.
17. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR WITH RESPECT TO THIS GUARANTY OR OTHER
LOAN DOCUMENT TO WHICH IT IS A PARTY MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE OF TEXAS, DALLAS COUNTY, AND BY
EXECUTION AND DELIVERY OF THIS GUARANTY, EACH GUARANTOR ACCEPTS, FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY
FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE. ANY GUARANTOR IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
JURISDICTION. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty to be
duly executed and delivered by its duly authorized officer as of the day and
year first above written.
---------------------------------------------,
a
---------------------------------------------
By:
----------------------------------------
----------------------------------------
----------------------------------------
EXHIBIT F
CONSENT OF DOMESTIC SUBSIDIARIES
Each of the undersigned Subsidiaries hereby (a) agrees that the
Subsidiary Guaranty to which it is a signatory is and shall remain in full
force and effect to the additional effect that the Obligations under the
First Amended and Restated Credit Agreement (the "Agreement") to which this
Consent of Domestic Subsidiaries is attached are a part of the Obligations
under the respective Subsidiary Guaranty, (b) ratifies and confirms all terms
and provisions of the Subsidiary Guaranty to which it is a signatory, as
amended hereby, (c) acknowledges its consent to the Agreement, (d)
acknowledges that there are no claims or offsets against, or defenses or
counterclaims to, the terms and provisions of and the obligations created and
evidenced by the Subsidiary Guaranty to which it is a signatory, as amended
hereby, (e) reaffirms all agreements and obligations under the Subsidiary
Guaranty to which it is a signatory, as amended hereby, with respect to the
Loans, the Notes, the Agreement and all other documents, instruments or
agreements governing, securing or pertaining to the Loans, and (f) represents
and warrants that all requisite corporate action necessary for it to execute
this Consent of Domestic Subsidiaries has been taken.
BOWIE MANUFACTURING COMPANY,
a Nevada corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
CORSICANA COMPANY,
a Nevada corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
DALLAS PANT MANUFACTURING COMPANY,
a Nevada corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
GREENVILLE PANT MANUFACTURING COMPANY,
a Nevada corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
XXXXXXXX PANT MANUFACTURING COMPANY,
a Nevada corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
OLNEY MANUFACTURING COMPANY,
a Nevada corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
WAXAHACHIE GARMENT COMPANY,
a Nevada corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
LA ROMANA MANUFACTURING CORPORATION,
a Nevada corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
HAGGAR SERVICES, INC.,
a Texas corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
AIRHAGGAR, INC., f/k/a HAGAIR, INC.,
a Texas corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
DUNCAN MANUFACTURING COMPANY,
an Oklahoma corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
WESLACO CUTTING, INC.,
a Nevada corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
WESLACO SEWING, INC.,
a Nevada corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
HAGGAR DIRECT, INC.,
a Nevada corporation
By:
-------------------------------------
X.X. Xxxxxx, III
Chairman/Chief Executive Officer
Dated:
-----------------------------
EXHIBIT G
COMPLIANCE CERTIFICATE
As of the date indicated below, the undersigned hereby certifies that
(i) as reflected on the attached annexes, no Default or Unmatured Default (as
defined in the Credit Agreement) has occurred and is continuing under that
certain First Amended and Restated Credit Agreement (the "Credit Agreement")
among Haggar Clothing Co., Haggar Corp., Texas Commerce Bank National
Association and the Banks listed therein, and (ii) the value of all inventory
(as defined in the Credit Agreement) as reflected in the Company's financial
statements does not exceed its net realizable value.
HAGGAR CLOTHING CO.
By:
-------------------------------------
Its:
------------------------------------
Dated:
----------------------------------
ANNEX TO COMPLIANCE CERTIFICATE
Requirement Current Status
----------- --------------
Funded Debt Ratio - 4.00 to 1.00 ______________
Tangible Net Worth Company Group - $155,000,000 $_____________
Tangible Net Worth Company - $55,000,000 $_____________
Inventory Turns - 2.0 ______________
Fixed Change Ratio - 1.10 to 1 ______________
ANNEX TO COMPLIANCE CERTIFICATE
HAGGAR CORP.
FUNDED DEBT RATIO
12 MONTHS ENDED _____________, 199___
($000'S)
Funded Debt
-----------
Revolver $
Industrial Revenue Bonds + Other $
Notes $
Other Long Term Debt $______________
Subtotal $
Other Short Term Debt $______________
Total Funded Debt $
Operating Cash Flow
-------------------
Net Income $
-Gains/+Losses Cap/Extr Event $
+Depreciation $
+Interest Expense $
+Taxes $______________
Operating Cash Flow $_____________
Funded Debt/Operating Cash Flow ______________
ANNEX TO COMPLIANCE CERTIFICATE
HAGGAR CORP.
INVENTORY TURNS ANALYSIS
($000'S)
________________, 199__
PRIOR 12 MONTHS' COST OF SALES MENSWEAR & R.S.J.
3rd Prior Quarter:
_____________________ $
_____________________ $
_____________________ $_____________________
Total $
2nd Prior Quarter:
_____________________ $
_____________________ $
_____________________ $_____________________
Total $
Prior Quarter:
_____________________ $
_____________________ $
_____________________ $_____________________
Total $
Current Quarter:
_____________________ $
_____________________ $
_____________________ $_____________________
Total $
Total 12 Months $
Cost of Sales
Inventory Level, ________________, 199__ $_____________________
Inventory Turns
Rolling 12 Months, ______________, 199__ ______________________
ANNEX TO COMPLIANCE CERTIFICATE
HAGGAR CORP.
FIXED CHARGE RATIO
12 MONTHS ENDED ______________, 199__
($OOO'S)
12 Months
Qtr. Qtr. Qtr. Qtr. Ended
Net Income
[Gain Cap Sale]/Extr Evnt
+ Depreciation
+ Interest Expense
+ Taxes __________________________________________________
Total Cash Flow $ $ $ $ $
Interest Expense
Req. Principal Payments
Cash Dividends
Cash Capital Expenses* __________________________________________________
Total Fixed Charges $ $ $ $ $
Fixed Charge Ratio ______________
-------------------
* Excludes 38,000 CSC Construction Project
ANNEX TO COMPLIANCE CERTIFICATE
STANDBY
LETTERS OF CREDIT OUTSTANDING
_______________, 199__
LC# Maturity Amount
$_____________
$_____________
ANNEX TO COMPLIANCE CERTIFICATE
PERMITTED INDEBTEDNESS
(a) Commercial Letters of Credit $
($30,000,000 permitted)
(b) Standby Letters of Credit (other than
those issued by the Agent) $
($2,000,000 permitted)
(c) Share Repurchase Obligations $
Severance ($2,500,000 permitted)
$10,000,000 total permitted
(d) Indebtedness and Capitalized $
Lease Obligations
($_______________ permitted)
(e) Intercompany Indebtedness
(no amount to be indicated)
(f) Accounts payable to officers, directors
(no amount to be indicated)
(g) Guarantees (no amount to be indicated)
(h) Guarantees (Haggar Direct less than (no amount to
one years rental) be indicated)
Guarantees (Haggar Direct exceeding
one years rental) $
($2,000,000 initially permitted through 9/30/96
$3,000,000 permitted through 9/30/97
$5,000,000 permitted through 9/30/98)
(i) Obligations $100,000,000
