REVOLVING CREDIT AGREEMENT
Dated as of January 26, 1996
By And Among
XXXXXX INDUSTRIES, INC.
AND
SUNTRUST BANK, ATLANTA individually, as Agent,
and as Administrative Agent,
FIRST UNION NATIONAL BANK OF SOUTH CAROLINA,
individually and as Agent, and
NATWEST BANK N.A.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; CONSTRUCTION. . . . . . . . . . . . . . 2
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . 2
Section 1.02. Accounting Terms and
Determination. . . . . . . . . . . . . . . . . 26
Section 1.03. Other Definitional Terms . . . . . . . . . . . 26
Section 1.04. Exhibits and Schedules . . . . . . . . . . . . 26
ARTICLE II REVOLVING CREDIT COMMITMENTS . . . . . . . . . . . . 26
Section 2.01. Commitment; Use of Proceeds. . . . . . . . . . 26
Section 2.02. Notes; Repayment of Principal. . . . . . . . . 27
Section 2.03. Voluntary Reduction of Commitments . . . . . . 27
ARTICLE III GENERAL LOAN TERMS . . . . . . . . . . . . . . . . . 28
Section 3.01. Funding Notices. . . . . . . . . . . . . . . . 28
Section 3.02. Disbursement of Funds. . . . . . . . . . . . . 29
Section 3.03. Interest . . . . . . . . . . . . . . . . . . . 30
Section 3.04. Interest Periods . . . . . . . . . . . . . . . 31
Section 3.05. Fees . . . . . . . . . . . . . . . . . . . . . 33
Section 3.06. Prepayments of Borrowings. . . . . . . . . . . 33
Section 3.07. Payments, etc. . . . . . . . . . . . . . . . . 34
Section 3.08. Interest Rate Not Ascertainable,
etc. . . . . . . . . . . . . . . . . . . . . . 36
Section 3.09. Illegality . . . . . . . . . . . . . . . . . . 36
Section 3.10. Increased Costs. . . . . . . . . . . . . . . . 37
Section 3.11. Lending Offices. . . . . . . . . . . . . . . . 38
Section 3.12. Funding Losses . . . . . . . . . . . . . . . . 39
Section 3.13. Assumptions Concerning Funding of
Eurodollar Advances. . . . . . . . . . . . . . 39
Section 3.14 Apportionment of Payments. . . . . . . . . . . 40
Section 3.15. Sharing of Payments, Etc.. . . . . . . . . . . 40
Section 3.16. Capital Adequacy . . . . . . . . . . . . . . . 40
Section 3.17. Benefits to Guarantors . . . . . . . . . . . . 41
ARTICLE IV CONDITIONS TO BORROWINGS . . . . . . . . . . . . . . 41
Section 4.01. Conditions Precedent to
Initial Loans. . . . . . . . . . . . . . . . . 41
Section 4.02. Conditions to All Loans. . . . . . . . . . . . 45
ARTICLE V REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . 46
Section 5.01. Organization and Qualification . . . . . . . . 46
Section 5.02. Corporate Authority. . . . . . . . . . . . . . 46
Section 5.03. Financial Statements . . . . . . . . . . . . . 47
Section 5.04. Tax Returns. . . . . . . . . . . . . . . . . . 48
Section 5.05. Judgments, Actions, Proceedings. . . . . . . . 48
Section 5.06. Title to Properties. . . . . . . . . . . . . . 48
Section 5.07. Enforceability of Agreement. . . . . . . . . . 49
Section 5.08. Consent. . . . . . . . . . . . . . . . . . . . 49
Section 5.09. Use of Proceeds; Federal Reserve
Regulations. . . . . . . . . . . . . . . . . . 49
Section 5.10. ERISA. . . . . . . . . . . . . . . . . . . . . 49
Section 5.11. Ownership Structure. . . . . . . . . . . . . . 52
Section 5.12. Outstanding Debt . . . . . . . . . . . . . . . 52
Section 5.13. Burdensome Documents . . . . . . . . . . . . . 52
Section 5.14. No Defaults. . . . . . . . . . . . . . . . . . 52
Section 5.15. Compliance with Laws . . . . . . . . . . . . . 53
Section 5.16. Pollution and Other Regulations. . . . . . . . 53
Section 5.17. Possession of Franchises, Licenses,
Etc. . . . . . . . . . . . . . . . . . . . . . 54
Section 5.18 Intangibles. . . . . . . . . . . . . . . . . . 54
Section 5.19. Governmental Consent . . . . . . . . . . . . . 54
Section 5.20. Disclosure . . . . . . . . . . . . . . . . . . 55
Section 5.21. Insurance Coverage . . . . . . . . . . . . . . 55
Section 5.22. Labor Matters. . . . . . . . . . . . . . . . . 55
Section 5.23. Name Changes, Mergers,
Acquisitions . . . . . . . . . . . . . . . . . 56
Section 5.24 Condition of Assets. . . . . . . . . . . . . . 56
ARTICLE VI AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . 56
Section 6.01. Corporate Existence, Etc.. . . . . . . . . . . 56
Section 6.02. Compliance with Laws, Etc. . . . . . . . . . . 56
Section 6.03. Payment of Taxes and Claims, Etc.. . . . . . . 57
Section 6.04. Books and Records. . . . . . . . . . . . . . . 57
Section 6.05. Inspections and Audits . . . . . . . . . . . . 57
Section 6.06. Maintenance and Repairs. . . . . . . . . . . . 58
Section 6.07. Reporting Covenants. . . . . . . . . . . . . . 58
Section 6.08. Financial Covenants. . . . . . . . . . . . . . 62
Section 6.09. Notices Under Certain Other
Indebtedness . . . . . . . . . . . . . . . . . 63
Section 6.10. Additional Significant Subsidiaries. . . . . . 64
Section 6.11. Ownership of Significant4
Subsidiaries . . . . . . . . . . . . . . . . . 64
Section 6.12. Insurance. . . . . . . . . . . . . . . . . . . 64
Section 6.13. Copies of Corporate Documents. . . . . . . . . 64
ARTICLE VII NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . 65
Section 7.01. Reserved . . . . . . . . . . . . . . . . . . . 65
Section 7.02. Liens. . . . . . . . . . . . . . . . . . . . . 65
Section 7.03. Mergers, Acquisitions. . . . . . . . . . . . . 66
Section 7.04. Investments, Loans, Etc. . . . . . . . . . . . 66
Section 7.05. Capital Expenditures . . . . . . . . . . . . . 67
Section 7.06. Minimum Tangible Net Worth . . . . . . . . . . 67
Section 7.07. Sale and Leaseback Transactions. . . . . . . . 67
Section 7.08. Transactions with Affiliates . . . . . . . . . 67
Section 7.09. Optional Prepayments . . . . . . . . . . . . . 68
Section 7.10. Changes in Business. . . . . . . . . . . . . . 69
Section 7.11. ERISA Obligations. . . . . . . . . . . . . . . 69
Section 7.12. Additional Negative Pledges. . . . . . . . . . 69
Section 7.13. Limitation on Payment Restrictions
Affecting Consolidated Companies . . . . . . . 70
Section 7.14. Actions Under Certain Documents. . . . . . . . 70
Section 7.15. Redemptions, Distributions . . . . . . . . . . 70
Section 7.16. Stock Issuance . . . . . . . . . . . . . . . . 70
Section 7.17. Fiscal Year. . . . . . . . . . . . . . . . . . 70
Section 7.18. Hazardous Material . . . . . . . . . . . . . . 71
ARTICLE VIII EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . 71
Section 8.01. Payments . . . . . . . . . . . . . . . . . . . 71
Section 8.02. Covenants Without Notice . . . . . . . . . . . 71
Section 8.03. Other Covenants. . . . . . . . . . . . . . . . 71
Section 8.04. Representations. . . . . . . . . . . . . . . . 71
Section 8.05. Non-Payments of Other Indebtedness . . . . . . 71
Section 8.06. Defaults Under Other Agreements. . . . . . . . 72
Section 8.07. Bankruptcy . . . . . . . . . . . . . . . . . . 72
Section 8.08. Judgment . . . . . . . . . . . . . . . . . . . 73
Section 8.09. Attachments. . . . . . . . . . . . . . . . . . 73
Section 8.10. ERISA. . . . . . . . . . . . . . . . . . . . . 73
Section 8.11. Ownership of Credit Parties
and Pledged Entities . . . . . . . . . . . . . 73
Section 8.12. Change in Control of Borrower. . . . . . . . . 74
Section 8.13. Credit Documents . . . . . . . . . . . . . . . 74
ARTICLE IX THE AGENT. . . . . . . . . . . . . . . . . . . . . . 74
Section 9.01. Appointment of Agent and the
Administrative Agent . . . . . . . . . . . . . 74
Section 9.02. Nature of Duties of Agent and
the Administrative Agent . . . . . . . . . . . 75
Section 9.03. Lack of Reliance on Agent and
the Administrative Agent . . . . . . . . . . . 75
Section 9.04. Certain Rights of the Agent and
the Administrative Agent . . . . . . . . . . . 76
Section 9.05. Reliance by Agent and Administrative
Agent. . . . . . . . . . . . . . . . . . . . . 76
Section 9.06. Indemnification of the Agent and
the Administrative Agent . . . . . . . . . . . 77
Section 9.07. The Agent and Administrative Agent
in their Individual Capacities . . . . . . . . 77
Section 9.08. Holders of Notes . . . . . . . . . . . . . . . 77
Section 9.09. Successor Agent; Successor
Administrative Agent . . . . . . . . . . . . . 78
ARTICLE X MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . 78
Section 10.01. Notices. . . . . . . . . . . . . . . . . . . . 78
Section 10.02. Amendments, Etc. . . . . . . . . . . . . . . . 79
Section 10.03. No Waiver; Remedies Cumulative . . . . . . . . 79
Section 10.04. Payment of Expenses,Indemnity, Etc.. . . . . . 80
Section 10.05. Right of Setoff. . . . . . . . . . . . . . . . 82
Section 10.06. Benefit of Agreement . . . . . . . . . . . . . 82
Section 10.07. Governing Law; Submission to
Jurisdiction . . . . . . . . . . . . . . . . . 85
Section 10.08. Independent Nature of Lenders'
Rights . . . . . . . . . . . . . . . . . . . . 86
Section 10.09. Counterparts . . . . . . . . . . . . . . . . . 86
Section 10.10. Effectiveness; Survival. . . . . . . . . . . . 86
Section 10.11. Severability . . . . . . . . . . . . . . . . . 86
Section 10.12. Independence of Covenants. . . . . . . . . . . 86
Section 10.13. Change in Accounting Principles,
Fiscal Year or Tax Laws. . . . . . . . . . . . 86
Section 10.14. Headings Descriptive; Entire
Agreement. . . . . . . . . . . . . . . . . . . 87
Section 10.15. Time is of the Essence . . . . . . . . . . . . 87
Section 10.16. Usury. . . . . . . . . . . . . . . . . . . . . 87
Section 10.17. Construction . . . . . . . . . . . . . . . . . 87
Section 10.18. Release of Collateral. . . . . . . . . . . . . 88
Section 10.19. Confidentiality. . . . . . . . . . . . . . . . 88
Section 10.20 Provisions Relating to the
Refinanced Indebtedness. . . . . . . . . . . . 88
SCHEDULES
Schedule 1.01 Applicable Margin Percentages
Schedule 5.01 Organization and Ownership of
Subsidiaries
Schedule 5.03 Material Changes since 9/30/95
Schedule 5.05 Certain Pending and Threatened
Litigation
Schedule 5.08 Governmental Approvals and Consents
Schedule 5.10 Employee Benefit Plans
Schedule 5.12 Existing Indebtedness
Schedule 5.16 Environmental Matters
Schedule 5.18 Patent, Trademark, License, and
Other Intellectual Property
Matters
Schedule 5.22 Labor and Employment Matters
Schedule 5.23 Name Change, etc.
Schedule 6.10 Additional Significant Subsidiaries
Documentation
Schedule 7.02 Existing Liens
EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Borrower Security Agreement
Exhibit C Form of Guarantor Security Agreement
Exhibit D Form of Guaranty
Exhibit E Form of Promissory Note
Exhibit F Form of Closing Certificate of Borrower
Exhibit G-1 Form of Opinion of Counsel to the
Borrower
Exhibit G-2 Form of Opinion of Counsel to the
Guarantor
Exhibit G-3 Form of Opinion of Local Counsel to the
Credit Parties in Alabama, Georgia,
South Carolina North Carolina
Exhibit H Form of Borrowing Base Certificate
Exhibit I Form of Standby Agreement
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of January 26, 1996 (the
"Agreement") by and among XXXXXX INDUSTRIES, INC. ("Borrower"), a Delaware
corporation, SUNTRUST BANK, ATLANTA ("SunTrust"), a Georgia banking corporation,
FIRST UNION NATIONAL BANK OF SOUTH CAROLINA, a national banking association
("First Union"), and NATWEST BANK N.A., a national banking association
("NatWest") (SunTrust, First Union and NatWest are hereinafter referred to
collectively, as the "Lenders" and, individually, as a "Lender"), SUNTRUST and
FIRST UNION as Agent for the Lenders, and SUNTRUST as Administrative Agent for
Lenders.
W I T N E S S E T H :
WHEREAS, SunTrust and NatWest have each made a $12,500,000 revolving credit
facility available to the Borrower pursuant to that certain Loan Agreement,
dated as of March 26, 1993, among the Borrower, SunTrust and NatWest, as
heretofore amended or modified, and SunTrust and NatWest have independently made
guidance lines of credit available to the Borrower in the principal amounts of
$10,000,000 and $5,000,000, respectively;
WHEREAS, First Union has made a guidance line of credit available to the
Borrower in the principal amount of $10,000,000;
WHEREAS the Borrower has requested that SunTrust, NatWest and First Union
amend and restate their existing facilities and increase the total principal
amount of such facilities to $60,000,000, and the Lenders are willing to do so
subject to the terms and conditions hereof, including without limitation, the
guarantees of the Borrower's significant subsidiaries and a lien upon certain
assets of the Borrower and its significant subsidiaries;
NOW, THEREFORE, for and in consideration of the mutual covenants made
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01. Definitions. As used in this Agreement, and in any
instrument, certificate, document or report delivered pursuant hereto, the
following terms shall have the following meanings (to be equally applicable to
both the singular and plural forms of the term defined):
"Adjusted LIBO Rate" shall mean, with respect to each Interest Period for a
Eurodollar Advance, the rate obtained by dividing (A) LIBOR for such Interest
Period by (B) a percentage equal to 1 minus the then stated maximum rate (stated
as a decimal) of all reserves requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) applicable to any
member bank of the Federal Reserve System in respect of Eurodollar liabilities
as defined in Regulation D (or against any successor category of liabilities as
defined in Regulation D).
"Administrative Agent" shall mean SunTrust Bank, Atlanta, a Georgia banking
corporation, and each successor Administrative Agent.
"Advance" shall mean any principal amount advanced and remaining
outstanding at any time under the Loans, which Advance shall be made or
outstanding as a Base Rate Advance or Eurodollar Advance, as the case may be.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by, or under common control with, such Person, whether
through the ownership of voting securities, by contract or otherwise. For
purposes of this definition, "control" (including with correlative meanings, the
terms "controlling", "controlled by", and "under common control with") as
applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
Person, provided that, in any event: (i) any Person that owns directly or
indirect thirty percent (30%) or more of the securities have the ordinary voting
power for the election of directors or other governing body of a corporation or
thirty percent (30%) or more of the partnership or other ownership interests of
any other Person (other than a limited partner of such other Person) will be
deemed to control such corporation or other Person; and (ii) each director and
officer of the Borrower shall be deemed to be an Affiliate of the Borrower.
"Agent" shall mean SunTrust and First Union, jointly and severally, as
agent for the Lenders hereunder and under the other Credit Documents, and each
successor Agent.
"Agreement" shall mean this Revolving Credit Agreement, either as
originally executed or as it may be from time to time supplemented, amended,
restated, renewed or extended and in effect.
"Applicable Law" shall mean (i) all applicable common law and principles of
equity and (ii) all applicable provisions of all (a) constitutions, statutes,
rules, regulations and orders of Governmental Agencies, (b) Governmental
Approvals and (c) orders, decisions, judgments and decrees of all courts and
arbitrators.
"Applicable Margin" shall mean, (i) with respect to all Eurodollar Advances
outstanding under the Commitments through March 31, 1996, two and three-quarters
of one percent (2.75%) per annum, (ii) with respect to all Base Rate Advances
outstanding under the Commitments through March 31, 1996, three-quarters of one
percent (0.75%) per annum, and (iii) with respect to all Advances outstanding
under to the Commitments commencing on April 1, 1996 and thereafter, the
relevant percentage indicated on Schedule 1.01 hereto for the Consolidated
Companies' Funded Debt to EBITDA Ratio and Leverage Ratio, based upon the
financial statements delivered to the Lenders pursuant to Section 6.07(a) or
Section 6.07(b) hereof, as the case may be, with such Applicable Margin to be
effective with respect to calculations based upon the financial statements
delivered pursuant to Section 6.07(b) as of the first day of the second fiscal
quarter immediately following the fiscal quarter for which such financial
statements are delivered and with such Applicable Margin to be effective with
respect to calculations based upon the financial statements delivered pursuant
to Section 6.07(a) on the earlier of (y) delivery of such financial statements
(but in no event earlier than 90 days after the end of any fiscal year), and (z)
the date which is 120 days after the end of each fiscal year of the Borrower.
"Asbestos Laws" shall mean the common law in all federal, state and local
and foreign jurisdictions and other laws in such jurisdictions, and regulations,
codes, orders, decrees, judgments or injunctions issued, promulgated, approved
or entered thereunder, now or hereafter in effect relating to or concerning
asbestos or asbestos-containing material, including without limitation, exposure
to asbestos or asbestos-containing material.
"Asset Sale" shall mean the conveyance, sale, lease, assignment, transfer
or other disposition by the Borrower or any of its Subsidiaries of any of their
respective properties, assets or business.
"Asset Value" shall mean, with respect to any property or asset of any
Consolidated Company as of any particular date, an amount equal to the greater
of (i) the then book value of such property or asset as established in
accordance with GAAP, and (ii) the then fair market value of such property or
asset as determined in good faith by the board of directors of such Consolidated
Company.
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an Eligible Assignee in accordance with the terms of this
Agreement and substantially in the form of Exhibit A.
"Avondale" shall mean Avondale Xxxxx, Inc., an Alabama corporation.
"Avondale Debt" shall mean all Indebtedness and other obligations owed by
the Borrower to Avondale (including, without limitation, principal, interest,
premiums, make-whole and yield maintenance amounts, fees, costs and expenses and
all other amounts owing by the Borrower to Avondale) arising under or evidenced
by the Avondale Note, the Convertible Note to Avondale and the Subordinated Debt
Documents.
"Avondale Note" shall mean that certain Subordinated 10% Promissory Note,
dated as of the date hereof, executed by the Borrower in favor of Avondale in
the principal amount of $7,500,000, as any of the foregoing may hereafter
amended, restated, replaced, supplemented or otherwise modified from time to
time with the prior written consent of the Lenders.
"Avondale/Gintel Documents" shall mean, collectively, (i) that certain
Registration Rights Agreement, dated as of the date hereof, among the Borrower,
Gintel and Avondale, (ii) the Standby Agreement, (iii) that certain Note
Purchase Agreement, dated as of December 28, 1995, among the Borrower, Gintel
and Avondale and (iv) all other documents and agreements executed in connection
therewith, as any of the foregoing may be hereafter amended, restated, replaced,
supplemented or otherwise modified with the prior written consent of the
Lenders.
"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as amended and in
effect from time to time (11 U.S.C. 101 et seq.).
"Base Rate" shall mean (with any change in the Base Rate to be effective as
of the date of change of either of the following rates) the higher of (a) the
rate which the Administrative Agent designates from time to time to be its prime
lending rate, as in effect from time to time, and (b) the Federal Funds Rate, as
in effect from time to time, plus one-half of one percent (0.50%) per annum. The
Administrative Agent's prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers; the
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Administrative Agent's prime lending rate.
"Base Rate Advance" shall mean an Advance bearing interest based on the
Base Rate.
"Base Rate Loan" shall mean any Loan hereunder which bears interest based
on the Base Rate.
"Borrower Security Agreement" shall mean that certain Security Agreement
(Borrower), dated as of the date hereof, executed by the Borrower in favor of
the Collateral Agent, substantially in the form of Exhibit B, as the same may
hereafter be amended, restated, supplemented or otherwise modified from time to
time.
"Borrowing" shall mean the incurrence by Borrower of Advances of one Type
concurrently having the same Interest Period or the continuation or conversion
of an existing Borrowing or Borrowings in whole or in part.
"Borrowing Base" shall mean, at any time, an amount equal to the sum of:
(i) eighty percent (80%) of Eligible Accounts Receivable,
plus
(ii) the lesser of (A) fifty percent (50%) of Eligible Finished Goods
Inventory and (B) (1) $35,000,000 at any time on or prior to April 30, 1996
and (2) $30,000,000 thereafter, plus
(iii) (A) thirty percent (30%) of Eligible Work-In-Process Inventory
during the period commencing January 1, 1996 and ending on Xxxxx 00, 0000,
(X) twenty-five percent (25%) of Eligible Work-In-Process Inventory during
the period commencing on April 1, 1996 and ending on May 31, 1996 and (C)
none of Eligible Work-In-Process Inventory after May 31, 1996, plus
(iv) $5,000,000 during the period commencing on November 1 and ending
on May 31 during each year, including, without limitation the period
commencing as of the Closing Date and ending on May 31, 1996.
"Business Day" shall mean, with respect to Eurodollar Loans, any day other
than a day on which commercial banks are closed or required to be closed for
domestic and international business, including dealings in Dollar deposits on
the London Interbank Market, and with respect to all other Loans and matters,
any day other than Saturday, Sunday and a day on which commercial banks are
closed or required to be closed for business in Atlanta, Georgia, Greenville,
South Carolina or New York, New York.
"Capital Expenditures" shall mean, for any fiscal period of the Borrower,
the total capital expenditures of the Consolidated Companies on a consolidated
basis made during such period, as determined in accordance with GAAP.
"Capitalized Lease Obligations" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real or personal property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act as amended by the Super Fund Amendments and Reauthorization Act,
42 U.S.C. 9601 et seq., and as amended from time to time.
"Closing Date" shall mean the date on or before January 26, 1996, on which
the initial Loans are made and the conditions set forth in Section 4.01 are
satisfied or waived in accordance with Section 10.02.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral Agent" shall mean SunTrust Bank, Atlanta, in its capacity as
collateral agent for the Lenders and Prudential, and its successors and assigns.
"Commitment" shall mean, for any Lender at any time, the amount of such
commitment set forth opposite such Lender's name on the signature pages hereof
under the caption "Commitment", as the same may be increased or decreased from
time to time as a result of any reduction thereof pursuant to Section 2.03, any
assignment thereof pursuant to Section 10.06, or any amendment thereof pursuant
to Section 10.02.
"Consolidated Companies" shall mean, collectively, Borrower and all of its
Subsidiaries.
"Consolidated EBITDA" shall mean, for any fiscal period of the Borrower, an
amount equal to the sum of (A) Consolidated Net Income (Loss), plus (B) to the
extent deducted in determining Consolidated Net Income (Loss), (i) Consolidated
Interest Expense, (ii) provisions for taxes based on income for the Consolidated
Companies, and (iii) depreciation expense and amortization expense of the
Consolidated Companies.
"Consolidated EBITR" shall mean, for any fiscal period of the Borrower, an
amount equal to the sum of (A) Consolidated Net Income (Loss), plus (B) to the
extent deducted in determining Consolidated Net Income (Loss), (i) provisions
for taxes based on income for the Consolidated Companies for such period, (ii)
Consolidated Interest Expense, and (iii) Consolidated Rental Expense.
"Consolidated Interest Expense" shall mean, for any fiscal period of
Borrower, total interest expense (including without limitation, interest expense
attributable to capitalized leases) of the Consolidated Companies for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean, for any fiscal period of
Borrower, the net income (or loss) of the Consolidated Companies for such
period, determined on a consolidated basis in accordance with GAAP;
"Consolidated Rental Expense" shall mean, for any fiscal period of
Borrower, total operating lease expense of the Consolidated Companies for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Subsidiary" shall mean, as at any particular time, any
corporation included as a consolidated Subsidiary of Borrower in Borrower's most
recent financial statements furnished to its stockholders and certified by
Borrower's independent public accountants, provided that under then generally
accepted accounting principles approved by such independent public accountants,
such corporation may continue to be so included as a consolidated Subsidiary of
Borrower in any financial statements thereafter certified by such accountants.
"Contractual Obligation" of any Person shall mean any provision of any
security issued by such Person or of any agreement, instrument or undertaking
under which such Person is obligated or by which it or any of the property owned
by it is bound.
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414(b), 414(c) or 414(m) of the Code and Section
4001(a)(14) of ERISA.
"Convertible Notes" shall have the meaning set forth in Section 7.09
hereof.
"Credit Documents" shall mean, collectively, this Agreement, the Notes, the
Guaranty Agreement, the Security Agreements, the Intercreditor Agreement, the
Subordination Agreement, all UCC-1 financing statements and other instruments of
perfection executed in connection therewith and all other documents and
instruments relating to, guaranteeing or securing the Loans, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"Credit Parties" shall mean, collectively, each of Borrower, the
Guarantors, and each other Person who from time to time executes a Credit
Document with respect to all or any portion of the Obligations.
"Current Assets" shall mean, for any fiscal period of the Borrower, the
current assets of the Consolidated Companies determined on a consolidated basis
in accordance with GAAP.
"Current Liabilities" shall mean, for any fiscal period of the Borrower,
the current liabilities of the Consolidated Companies determined on a
consolidated basis in accordance with GAAP, and shall include, without
limitation, as of the date of any determination thereof: (i) all Indebtedness
payable on demand or maturing within one year after such date without any option
on the part of the obligor to extend or renew beyond such year, (ii) final
maturities, installments and prepayments of Indebtedness required to be made
within one year after such date, (iii) the unpaid principal balance of the Notes
due within one year after such date, and (iv) all other items (including taxes
accrued as estimated and reserves for deferred income taxes) that would be
included on a balance sheet as current liabilities in accordance with GAAP.
"Current Ratio" shall mean the ratio of (A) Current Assets to (B) Current
Liabilities, but excluding all Loans then outstanding to the extent included in
Current Liabilities.
"Debt Instrument" shall mean, as to any Person, any bond, note, debenture,
credit or loan agreement, indenture, guaranty, trust agreement, security
agreement, pledge agreement, deed of trust, capital lease, mortgage or similar
agreement or instrument to which such Person is a party, by which it is bound or
by which any of its properties or assets may be affected.
"Debt Service Coverage Ratio" shall mean, as at the end of any fiscal
period of Borrower, the ratio of (A) the sum of Consolidated Net Income (Loss),
plus to the extent deducted in determining such Consolidated Net Income,
depreciation expense and amortization expense of the Consolidated Companies,
plus Consolidated Interest Expense to (B) an amount equal to the current
maturities of Long-term Indebtedness of the Consolidated Companies, minus to the
extent deducted in determining current maturities of Long-term Indebtedness, the
principal amount of the Loans then outstanding, plus Consolidated Interest
Expense, in each case determined on a consolidated basis in accordance with
GAAP.
"December 1995 Factoring Agreement" shall have the meaning assigned to such
term in Section 10.20 hereof.
"Default" shall mean any condition or event which, with notice or lapse of
time or both, would constitute an Event of Default.
"Defined Contribution Plan" shall mean a plan which is not covered by Title
IV of ERISA or subject to the minimum funding standards of Section 412 of the
Code and which provides for an individual account for each participant and for
benefits based solely on the amount contributed to the participant's account,
and any income, expenses, gains and losses, and any forfeitures of accounts of
other participants which may be allocated to such participant's account.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful money of the
United States of America.
"Eligible Accounts Receivable" shall mean any Receivable of the Borrower or
a Guarantor which the Administrative Agent, in the reasonable exercise of its
credit judgment consistent with industry practice, deems eligible, provided,
that once a Receivable has been deemed eligible by the Administrative Agent and
therefore admitted to the Borrowing Base, the Administrative Agent cannot at any
later time (provided that the Receivable satisfies the requirements of clauses
(i) through and including (xi) below) deem such Receivable to be ineligible and
therefore remove such Receivable from the Borrowing Base (such Receivable to
remain in the Borrowing Base until the earlier of (i) such time as the
Receivable fails to meet the requirements of clauses (i) through and including
(xi) below or (ii) the account debtor owing such Receivable pays such
Receivable), provided, further, that the Administrative Agent shall have the
right to deem other Receivables from the same account debtor as ineligible as
and when they are presented to the Administrative Agent to be admitted to the
Borrowing Base, but must first give the Borrower or such Guarantor thirty days'
prior notice of the ineligibility of Receivables from such account debtor; and,
in any event, is a Receivable: (i) which is denominated and payable only in
Dollars in the United States; (ii) which constitutes the legal, valid and
binding obligation of the obligor of such Receivable enforceable against such
obligor in accordance with its terms, (iii) which is not subject to any dispute
or setoff, counterclaim or defense whatsoever; (iv) as to which the Borrower or
such Guarantor, as applicable, has good and marketable title thereto free and
clear of all adverse claims or other claims of any kind, any setoff,
counterclaim or defense of any kind; (v) which together with any contract
related thereto, does not contravene in any material respect any federal or
state law, statute, rule, regulation, ordinance, code, order and judgment (a
"Law") applicable thereto and with respect to which no party to any contract
related thereto is in violation of any such Law in any material respect; (vi)
which satisfies all applicable requirements of the credit and collection
policies and practices of the Borrower or such Guarantor (which are subject to
approval by the Administrative Agent, which approval shall not be unreasonably
withheld and which approval shall be consistent with industry practice); (vii)
payments which may not be avoided as a preferential transfer under the
Bankruptcy Code and all other applicable dissolution, liquidation,
conservatorship, bankruptcy, moratorium, readjustment of debt, compromise,
rearrangement, receivership, insolvency, reorganization or similar debtor relief
laws affecting creditors' rights generally; (viii) that is no more than 60 days
delinquent past the date due as stated on the invoice relating thereto; (ix) not
representing customer deductions from previous payments; (x) for an amount
which, when combined with the aggregate amount of all other Receivables owed by
the same account debtor or affiliate thereof, does not equal or exceed
$5,000,000, unless the Administrative Agent has been given its prior consent
thereto and (xi) the obligor of which is not bankrupt or insolvent.
"Eligible Assignee" means any of the following (i) a commercial bank
organized under the laws of the United States, or any State thereof, and having
total assets in excess of $100,000,000; (ii) a savings and loan association or
savings bank organized under the laws of the United States, or any State
thereof, and having total assets in excess of $100,000,000; (iii) a commercial
bank organized under the laws of any other country having total assets in excess
of $100,000,000, provided that such bank is acting through a branch or agency
located in the United States; (iv) a finance company, insurance company or other
financial institution, lender or fund (whether a corporation, partnership or
other entity) which is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business, and having total assets
in excess of at least $100,000,000; (v) any Lender or any Affiliate of any
Lender; or (vi) any other Person consented to by the Borrower and the Agent,
such consent not unreasonably to be withheld.
"Eligible Finished Goods Inventory" shall mean Eligible Inventory of the
Borrower or any Guarantor that consists of finished goods.
"Eligible Inventory" shall mean the lower of FIFO cost or market value of
Inventory of the Borrower or any Guarantor which the Administrative Agent, in
the reasonable exercise of its credit judgment consistent with industry
practice, shall deem eligible, provided that any changes in credit judgment of
the Administrative Agent shall effective on the thirtieth (30th) day after the
Administrative Agent gives the Borrower or such Guarantor notice of such change
in credit judgment; and, in any event, such Inventory must meet the following
criteria:
(a) the Inventory must be subject to a perfected first-priority Lien in
favor of the Collateral Agent, other than Inventory located outside the
United States for which a Permitted Bailee has executed in favor of, and
delivered to, the Collateral Agent a bailee letter in substantially the form
of Exhibit A to the Company Security Agreement, provided that the value of
Inventory as measured as set forth above at locations outside the United
States which are not owned or leased by the Borrower or any of its
Subsidiaries may not at any time exceed $5,000,000;
(b) except for the Lien in favor of the Collateral Agent, the Borrower
or the Guarantors must otherwise have clear title to all Inventory,
regardless of where located, free and clear of all other Liens;
(c) the Inventory must be (i) located at one of the places of business
of the Borrower listed on Schedule 1 of the Borrower Security Agreement or
of the Guarantors listed on Schedule 1 of the Guarantor Security Agreement,
or (ii) in transit from one such location to another;
(d) the Inventory may not be located at any third-party finishing or
processing location or public warehouse, other than with a Permitted Bailee,
and the Inventory may not be in the possession of a bailee other than a
Permitted Bailee;
(e) the Inventory consists of finished goods Inventory or work in
process Inventory, and does not consist of raw materials Inventory used in
the manufacture of finished goods or processing supplies, packaging,
advertising, promotional materials, stores or other non-product related
items;
(f) the Inventory has been inspected and does not consist of returned
goods which are currently unsalable in the ordinary course of the business
of the Borrower or the Guarantor;
(g) the Inventory is not under consignment to or from
any Person or under any xxxx and hold or like arrangement;
(h) the Inventory is of good and merchantable quality, has been
accurately graded as first quality, second quality or third quality, and has
been accurately valued to reflect its status as first quality, second
quality or third quality as the case may be;
(i) the Inventory meets all standards imposed by any
Governmental Agency having regulatory authority over such
Inventory; and
(j) with respect to such Inventory, any representation or warranty
contained herein or in any other Credit Documents applicable to Inventory
has not been breached;
the Administrative Agent hereby acknowledges that as of the Closing Date the
amount and mix of the Inventory is acceptable in the reasonable exercise of the
Administrative Agent's credit judgment; provided, that the Administrative Agent
may, in the exercise of its reasonable credit judgment at any time after the
Closing Date, find the amount and mix of the Inventory unacceptable, even if the
amount and mix of the Inventory is the same as the amount and mix of the
Inventory as of the Closing Date, and therefore deem some or all of such
Inventory ineligible based upon such factors, such change in credit judgment to
be effective on the thirtieth (30th) day after the Administrative Agent gives
the Borrower or such Guarantor notice thereof.
"Eligible Work-In-Process Inventory" shall mean Eligible Inventory of the
Borrower or any Guarantor that consists of work in process.
"Employee Benefit Plan" shall mean any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrower or any of its ERISA Affiliates or (b) has at any time within the
preceding six (6) years been maintained for employees of the Borrower or any
current ERISA Affiliate while an ERISA Affiliate.
"Employee Welfare Benefit Plan" shall mean any employee benefit plan within
the meaning of Section 3(q) of ERISA.
"Environmental Laws" shall mean all federal, state, local and foreign
statutes and codes or regulations, rules or ordinances issued, promulgated, or
approved thereunder, now or hereafter in effect (including, without limitation,
those with respect to asbestos or asbestos containing material or exposure to
asbestos or asbestos containing material), relating to pollution or protection
of the environment and relating to public health and safety, relating to (i)
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial toxic or hazardous constituents,
substances or wastes, including without limitation, any "hazardous substance" as
defined in CERCLA, petroleum including crude oil or any fraction thereof, any
petroleum product or other waste, chemicals or substances regulated by any
Environmental Law, into the environment (including without limitation, ambient
air, surface water, ground water, land surface or subsurface strata), or (ii)
the manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of any "hazardous substances" as defined in
CERCLA, petroleum including crude oil or any fraction thereof, any petroleum
product or other waste, chemicals or substances regulated by any Environmental
Law, and (iii) underground storage tanks and related piping, and emissions,
discharges and releases or threatened releases therefrom, such Environmental
Laws to include, without limitation (A) CERCLA, (B) RCRA, (C) the Federal Clean
Air Act (42 U.S.C. 7401 et seq.), (D) the Clean Water Act (33 U.S.C. 1251 et
seq.), (E) the Toxic Substances Control Act (15 U.S.C. 2601 et seq.) and (F) the
Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.).
"Environmental Liability" shall mean any liability under any applicable law
for any release of a hazardous substance caused by the seeping, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing of hazardous wastes or other chemical substances,
pollutants or contaminants into the environment, and any liability for the costs
of any clean-up or other remedial action including, without limitation, costs
arising out of security fencing, alternative water supplies, temporary
evacuation and housing and other emergency assistance undertaken by any
environmental regulatory body having jurisdiction over the Borrower or any
Subsidiary to prevent or minimize any actual or threatened release by the
Borrower or any Subsidiary of any Hazardous Materials into the environment that
would endanger the public health or the environment.
"Environmental Matter(s)" shall mean a release of any toxic or hazardous
waste or other Hazardous Materials into the environment or the generation,
treatment, storage or disposal of any toxic or hazardous wastes or other
Hazardous Materials.
"Environmental Proceeding" shall mean any judgment, action, proceeding or
investigation pending before any court or Governmental Agency, including,
without limitation, any environmental regulatory body, with respect to, or to
the best of the Borrower's knowledge threatened against, the Borrower or any
Subsidiary or relating to the assets of liabilities of any of them, including,
without limitation, in respect of any "facility" owned, leased or operated by
any of them under CERCLA or any other Environmental Law in respect thereof, in
connection with any release of any toxic or hazardous waste or other Hazardous
Materials into the environment, or with the generation, storage or disposal of
any toxic or hazardous wastes or other chemical substances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time, and the regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to the Borrower, any
corporation, person or trade or business which is a member of the Borrower's
Controlled Group.
"Eurodollar Advance" shall mean an Advance bearing interest based on the
Adjusted LIBO Rate.
"Eurodollar Loan" shall mean any Loan hereunder which bears interest based
on the Adjusted LIBO Rate.
"Event of Default" shall have the meaning set forth in Article IX.
"Excess Cash Flow" shall mean, as of the end of any fiscal quarter of the
Borrower, an amount equal to the Consolidated Companies' (a) Consolidated Net
Income for such fiscal quarter, plus (b) depreciation expense for such fiscal
quarter determined on a consolidated basis in accordance with GAAP, plus (c)
amortization expense for such fiscal quarter determined on a consolidated basis
in accordance with GAAP, plus (d) increases in deferred taxes (or minus
decreases in deferred taxes) for such fiscal quarter determined on a
consolidated basis in accordance with GAAP, minus (e) increases in Working
Capital (or plus decreases in Working Capital) (but excluding increases or
decreases in Working Capital attributable to the net cash proceeds received by
the Borrower from the issuance of the Subordinated Debt or any other
Indebtedness evidenced by a Debt Instrument (except to the extent required
pursuant to Section 7.02(f) hereof to be used to repay the Obligations), the
exercise of the Gintel Warrant and the consummation of the Rights Offering),
minus (f) Capital Expenditures for such fiscal quarter, minus (g) all payments
of principal applied to current maturities of Long-term Indebtedness for such
fiscal quarter, in each case measured as of the last Business Day of such fiscal
quarter; provided, however, that to the extent that the foregoing amount is
negative, the Excess Cash Flow Payment shall be deemed to be zero.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute thereto.
"Facility" or "Facilities" shall mean the Revolving Loan Commitments and
Loans.
"Factored Receivables" shall mean all accounts receivable purchased by
SunTrust from the Borrower pursuant to the December 1995 Factoring Agreement
which remain uncollected in whole or in part on the Closing Date.
"Fayette Alabama Plant Expenditures" shall mean all Capital Expenditures
made by the Borrower and its Subsidiaries at their Fayette, Alabama facility.
"Federal Funds Rate" shall mean 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 member banks of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of Atlanta, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by the Administrative Agent.
"Final Maturity Date" shall mean the date on which all commitments have
been terminated and all amounts outstanding under this Agreement have been
declared or have automatically become due and payable pursuant to the provisions
of Article IX.
"Financial Statements" shall mean (i) the consolidated audited Balance
Sheet of the Consolidated Companies as at September 30, 1995, together with the
related audited Income Statement, Statement of Shareholders' Equity and
Statement of Cash Flows for the fiscal year then ended.
"Fixed Charge Coverage Ratio" shall mean, as at the end of any fiscal
period of Borrower, the ratio of (A) Consolidated EBITR to (B) the sum of (i)
Consolidated Interest Expense plus (ii) Consolidated Rental Expense.
"Funded Debt" of any Person shall mean all Indebtedness for money borrowed,
purchase money mortgages, Capitalized Lease Obligations, conditional sales
contracts and similar title retention debt instruments of such Person, including
any current maturities of such indebtedness, which by its terms matures more
than one year from the date of any calculation thereof or which is renewable or
extendable at the option of the obligor to a date beyond one year from such
date, including, without limitation, Long-term Indebtedness and short-term
Indebtedness. The calculation of Funded Debt of any Person shall include all
Funded Debt of such Person, plus (without duplication) all Funded Debt of other
entities or persons guaranteed by such Person or which is supported by a letter
of credit issued for the account of the such Person.
"Funded Debt Coverage Ratio" shall mean, as of the end of any fiscal period
of the Borrower, the ratio of (A) Funded Debt of the Consolidated Companies to
(B) Consolidated EBITDA of the Consolidated Companies.
"GAAP" shall mean generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, as from time to time in effect that are consistently applied and,
when used with respect to the Borrower, that are consistent with the accounting
practice of the Borrower, as reflected in the financial statements of the
Borrower.
"Gintel" shall mean Xxxxxx X. Xxxxxx, an individual whose principal place
of business is in Connecticut.
"Gintel Debt" shall mean all Indebtedness and other obligations owed by the
Borrower to Gintel (including, without limitation, principal, interest,
premiums, fees and all other amounts) pursuant to or evidenced by the Gintel
Notes, the Convertible Note to Gintel and the Subordinated Debt Documents.
"Gintel Notes" shall mean, collectively, (i) that certain Subordinated 10%
Promissory Note, dated as of the date hereof, executed by the Borrower in favor
of Gintel in the principal amount of $3,750,000, and (ii) that certain
Subordinated 10% Promissory Note, dated as of the date hereof, executed by the
Borrower in favor of Gintel in the principal amount of $3,750,000, as any of the
foregoing may be hereafter amended, restated, replaced, supplemented or
otherwise modified from time to time with the prior written consent of the
Lenders.
"Gintel Warrant" shall mean that certain Warrant, dated as of the date
hereof, issued by the Borrower to Gintel, for the purchase of 125,000 shares of
the common stock of the Borrower, as it may be hereafter amended, restated,
replaced, supplemented or otherwise modified from time to time with the prior
written consent of the Lenders.
"Governmental Agency" shall mean (a) any international, foreign, federal,
state, county or municipal government or political subdivision thereof, (b) any
governmental agency, authority, board, bureau, commission, department or
instrumentality, (c) any court or administrative tribunal, (d) any
non-governmental agency or entity that is vested by a governmental agency with
applicable jurisdiction over a Person, or (e) any arbitration tribunal or other
non-governmental authority to whose jurisdiction a Person has given its general
consent.
"Governmental Approval" shall mean any order, permission, authorization,
consent, approval, license, franchise, permit or validation of, exemption by,
registration or filing with, or report or notice to, any Governmental Agency.
"Guaranteed Indebtedness" of any Person shall mean any obligation of such
Person guaranteeing any Indebtedness, lease, dividend, or other obligation
("primary obligation") of any other Person (the "primary obligor") in any manner
including, without limitation, any obligation or arrangement of such Person (a)
to purchase or repurchase any such primary obligation, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, or (d) to
indemnify the owner of such primary obligation against loss in respect thereof.
"Guarantors" shall mean, collectively, Xxxxxx-Kinston Corp., a North
Carolina corporation, and all Significant Subsidiaries now or hereafter
existing, and their respective successors and permitted assigns.
"Guarantor Security Agreement" shall mean that certain Security Agreement
(Guarantors), dated as of the date hereof, executed by the Guarantors in favor
of the Collateral Agent, substantially in the form of Exhibit C, as the same may
hereafter be amended, restated, supplemented or otherwise modified from time to
time.
"Guaranty Agreement" shall mean that certain Guaranty Agreement executed by
the Guarantors in favor of the Lenders and the Agent, substantially in the form
of Exhibit D, as the same may be amended, restated, affirmed, supplemented or
otherwise modified from time to time.
"Hazardous Materials" shall mean oil, petroleum or chemical liquids or
solids, liquid or gaseous products, asbestos, or any other hazardous waste or
hazardous substances, including, without limitation, hazardous medical waste or
any other substance described in any Environmental Law.
"Indebtedness" of any Person shall mean, without duplication (i) all
liabilities and obligations, direct or indirect, of such Person which in
accordance with GAAP would be included in determining total liabilities as shown
on the liability side of a balance sheet of such Person as of the date of such
determination, including, without limitation, contingent liabilities that, in
accordance with GAAP, would be set forth in a specific dollar amount on the
liability side of such balance sheet, and Capitalized Lease Obligations of such
Person; (ii) all Guaranteed Indebtedness of such Person; (iii) all liabilities
and obligations secured by Liens on any assets of such Person, whether or not
such liabilities or obligations shall have been assumed by it; and (iv) all
liabilities and obligations of such Person, direct or contingent, with respect
to letters of credit (other than documentary letters of credit used in
connection with the purchase of goods) issued for the account of such Person and
bankers acceptances created for such Person.
"Interest Period" shall mean with respect to Eurodollar Advances, the
period of 1, 2 or 3 months selected by the Borrower, pursuant to the terms of
this Agreement and subject to customary adjustments in duration; provided, that
(a) the first day of an Interest Period must be a Business Day, (b) any Interest
Period that would otherwise end on a day that is not a Business Day for
Eurodollar Loans shall be extended to the next succeeding Business Day for
Eurodollar Loans, unless such Business Day falls in the next calendar month, in
which case the Interest Period shall end on the next preceding Business Day for
Eurodollar Loans, and (c) Borrower may not elect an Interest Period which would
extend beyond the Final Maturity Date.
"Inventory" shall mean goods held by the Borrower or any Guarantor for sale
or raw materials, work in process or materials used or consumed in the business
of the Borrower or any of the Guarantors.
"Investment" shall mean, with respect to any Person, (a) the amount paid or
committed to be paid, or the value of property and services contributed or
committed to be contributed, by such Person for or in consideration of the
acquisition by such Person of any stock, bonds, notes, debentures, partnership
or other ownership interest or other securities of any other Person; and (b) the
amount of any advance, loan or extension of credit by such Person to any other
Person, or guarantee or other similar obligation of such Person with respect to
any Indebtedness of such other Person, and (without duplication) any amount
committed to be advanced, loaned or extended by such Person to any other Person,
or any amount the payment of which is committed to be assured by guarantee or
similar obligation by such Person for the benefit of, such other Person.
"IRS" shall have the meaning assigned such term in Section 6.07(h) hereof.
"Latest Balance Sheet" shall have the meaning assigned such term in Section
5.03(a) hereof.
"Leases" shall mean all leases and subleases (other than Capitalized
Leases), licenses for the use of real property, easements, grants and other
attachment rights and similar instruments under which the Borrower or any of its
Subsidiaries has the right to use real or personal property or rights of way.
"Lender" or "Lenders" shall mean SunTrust, First Union, NatWest and their
respective successors and assigns.
"Lending Office" shall mean for each Lender the office such Lender may
designate in writing from time to time to Borrower and the Administrative Agent
with respect to each Type of Loan.
"Leverage Ratio" shall mean the ratio of (A) (i) Funded Debt of the
Consolidated Companies, less (ii) the principal amount of Subordinated Debt then
outstanding to (B) Total Capitalization of the Consolidated Companies.
"LIBOR" shall mean, with respect to any Interest Period for any Eurodollar
Advance, the rate per annum equal to the quotient of (i) the consensus of the
LIBOR settings as of 11:00 a.m. (London time) on the second Business Day
preceding the first day of such Interest Period as shown on page 3750 of
Telerate or as published by a comparable service selected by the Bank for
deposits in immediately available funds in U.S. Dollars on the first day of such
Interest Period in an amount substantially equal to the principal amount of such
Eurodollar Advance and for a period approximately equal to such Interest Period,
divided by (ii) a number equal to 1.00 minus the Reserve Percentage, the rate so
determined to be rounded upward to the nearest whole multiple of 1/100 of 1%.
"Lien" shall mean any mortgage, deed of trust, pledge, security interest,
encumbrance, lien or charge of any kind or description (including any agreement
to give any of the foregoing), any conditional sale or other title retention
agreement, any capitalized lease in the nature thereof including any lease or
similar arrangement with a public authority executed in connection with the
issuance of industrial development revenue bonds or pollution control revenue
bonds, and the filing of or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction.
"Loans" shall mean, collectively, the revolving credit loans made to
Borrower by the Lenders pursuant to Section 2.01.
"Long-term Indebtedness" shall mean (i) any Indebtedness payable more than
one year from the date of creation thereof (including, without limitation and
without duplication, any portion thereof payable on demand or maturing within
one year after such date), which under GAAP is shown on the balance sheets as a
liability (including Capitalized Lease Obligations but excluding reserves for
deferred income taxes and other reserves to the extent that such reserves do not
constitute an obligation), and (ii) Indebtedness payable more than one year from
the date of creation thereof (including, without limitation and without
duplication, any portion thereof payable on demand or maturing within one year
after such date), which is secured by any Lien on property owned by the Borrower
or any Subsidiary, whether or not the indebtedness secured thereby shall have
been assumed by the Borrower or such Subsidiary. Any obligation shall be treated
as Long-term Indebtedness, regardless of its term, if such obligation is
renewable pursuant to the terms thereof or of a revolving credit or similar
agreement effective for more than one year after the date of the creation of
such obligation, or may be payable out of the proceeds of a similar obligation
pursuant to the terms of such obligation or of any such agreement.
"Materially Adverse Effect" shall mean any event the occurrence of which
would have a material adverse effect on the business, operations, financial
condition or properties of the Borrower and its Subsidiaries on a consolidated
basis or on the ability of the Borrower or the Guarantors to perform their
respective obligations under the Credit Documents.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is a Pension Plan and to which the Borrower or
any ERISA Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions within the
preceding six (6) years while an ERISA Affiliate.
"Non-Notification Factoring Agreement" shall mean that certain
Non-Notification Factoring Agreement, dated as of December 16, 1988, as amended
by that certain First Amendment to Non-Notification Factoring Agreement, dated
as of March 17, 1995, between SunTrust and the Borrower, as hereafter amended,
restated, supplemented or otherwise modified from time to time.
"Note" shall mean a promissory note evidencing the Loans in the form
attached hereto as Exhibit E, either as originally executed or as the same may
be from time to time supplemented, modified, amended, renewed or extended.
"Notice of Borrowing" shall have the meaning provided in Section 3.01.
"Notice of Continuation/Conversion" shall have the meaning provided in
Section 3.01.
"Obligations" shall mean all amounts owing to the Agent, the Administrative
Agent or any Lender pursuant to the terms of this Agreement or any other Credit
Document, including without limitation, all Loans (including all principal and
interest payments due thereunder), fees, expenses, indemnification and
reimbursement payments, indebtedness, liabilities, and obligations of the Credit
Parties, direct or indirect, absolute or contingent, liquidated or unliquidated,
now existing or hereafter arising, together with all renewals, extensions,
modifications or refinancings thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" shall mean, at any time, 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: (i) maintained by the Borrower or
any ERISA Affiliate of any ERISA Affiliate, or (ii) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which the obligation to make
contributions or has, while an ERISA Affiliate, within the preceding five plan
years made contributions.
"Permitted Bailee" shall mean all parties that have executed a bailee
letter in favor of the Collateral Agent in substantially the form of Exhibit A
to the Company Security Agreement.
"Permitted Liens" shall mean, with respect to on any property of a
Consolidated Company, (a) Liens for taxes not yet subject to penalties for
non-payment, and Liens for taxes the payment of which is being contested in good
faith by appropriate proceedings and with respect to which adequate reserves are
being maintained; (b) Liens imposed by law, such as carrier's, warehousemen's,
materialmen's and mechanics' liens, or Liens arising out of judgments or awards
against such Person with respect to which such Person at such time shall
currently be prosecuting an appeal or proceedings for review; (c) pledges or
deposits made under workers' compensation laws, unemployment insurance laws,
social security laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment of
Indebtedness of such Person) or leases, to which such Person is a party, or
deposits to secure public or statutory obligations of such Person or deposits of
cash or United States Government Bonds to secure surety, appeal, performance or
other similar bonds to which such Person is a party, or deposits as security for
contested taxes or import duties or for the payment of rent; and (d) minor
survey exceptions, minor encumbrances, easements or reservations of, or rights
of, others for rights-of-way, highways and railroad crossings, sewers, electric
lines, telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real properties, or Liens incidental to the
conduct of the business of such Person or to the ownership of such Person's
property that were not incurred in connection with Indebtedness of such Person,
all of which Liens referred to in the preceding (d) do not in aggregate
materially detract from the value of the properties to which they relate or
materially impair their use in the operation of the business taken as a whole of
such Person and only to the extent arising and continuing in the ordinary course
of business.
"Person" shall mean and shall include an individual, a corporation, a
partnership, a joint venture, a trust or unincorporated organization, a joint
stock organization or other similar organization, a government or any political
subdivision thereof, a court or any other legal entity, whether acting in an
individual, fiduciary or other capacity.
"Plan" shall mean any employee benefit plan, program, arrangement, practice
or contract, maintained by or on behalf of the Borrower or an ERISA Affiliate,
which provides benefits or compensation to or on behalf of employees or former
employees, whether formal or informal, whether or not written.
"Projections" shall mean the Xxxxxx Industries, Inc. Statement of
Operations for the year ended September 30, 1996 dated December 18, 1995.
"Pro Rata Share" shall mean, with respect to each of the Commitments of
each Lender and each Loan to be made by and each payment (including, without
limitation, any payment of principal, interest or fees) to be made to each
Lender, the percentage designated as such Lender's Pro Rata Share of such
Commitments, such Loans or such payments, as applicable, set forth under the
name of such Lender on the respective signature page for such Lender, in each
case as such Pro Rata Share may change from time to time as a result of
assignments or amendments made pursuant to this Agreement.
"Prudential" shall mean The Prudential Insurance Company of America, a New
Jersey corporation.
"Prudential Agreement" shall mean that certain Note Agreement, dated as of
December 20, 1988, between the Borrower and Prudential, as heretofore amended or
modified, including, without limitation, as amended pursuant to that certain
Amendment No. 6, dated as of the date hereof, between the Borrower and
Prudential.
"Prudential Note" shall mean, collectively, all "Notes" (as defined in the
Prudential Agreement) issued by the Borrower pursuant to the Prudential
Agreement, and each promissory note delivered in substitution or exchange
therefor.
"RCRA" shall mean the Resource Conservation and Recovery Act of 1976, 42
U.S.C. 6901 et seq., as amended from time to time.
"Receivable" shall mean any "account", as such term is defined in the UCC
as in effect on the Closing Date in the State of Georgia.
"Refinanced Indebtedness" shall mean the outstanding balance under the (i)
the $12,500,000 revolving credit facility and the $10,000,000 guidance line of
credit made by SunTrust to the Borrowers (ii) $10,000,000 guidance line of
credit made by First Union to the Borrower and, (iii) the $12,500,000 revolving
credit facility and the $5,000,000 guidance line of credit made by NatWest to
the Borrower.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to time.
"Required Lenders" shall mean, at any time, Lenders holding at least
sixty-six and two-thirds percent (66 2/3%) of the then aggregate amount of the
Commitments and aggregate outstanding Loans.
"Requirement of Law" for any Person shall mean the articles or certificate
of incorporation and bylaws or other organizational or governing documents of
such Person, and any Applicable Law with respect to such Person or any of its
property or to which such Person or any of its property is subject.
"Reserve Percentage" shall mean, for any day, the stated maximum rate
(expressed as a decimal) of all reserves required to be maintained with respect
to liabilities or assets consisting of or including "Eurocurrency liabilities,"
as prescribed by Regulation D of the Board of Governors of the Federal Reserve
System (or by any other Governmental Agency having jurisdiction with respect
thereto), including, without limitation, any basic, marginal, emergency,
supplemental, special, transitional or other reserves, the rate so determined to
be rounded upward to the nearest whole multiple of 1/100 of 1%.
"Rights Offering" shall mean the offering of rights to purchase shares of
common stock of the Borrower contemplated by the Borrower to be made by June 1,
1996 and as otherwise described to the Lenders prior to the date hereof.
"Security Agreements" shall mean, collectively, the Borrower Security
Agreement and the Guarantor Security Agreement.
"Shareholders' Equity" shall mean, with respect to any Person as at any
date of determination, shareholders' equity of such Person, determined on a
consolidated basis in conformity with GAAP.
"Significant Subsidiary" shall mean each Subsidiary of Borrower, now
existing or hereinafter established or acquired, that (i) is either a
"significant" subsidiary under Rule 210.1-02(w) of the Security and Exchange
Commission's Regulation S-X or (ii) at any time prior to the Termination Date,
has or acquires total assets (A) that are ten percent (10%) or more of the total
assets of the Consolidated Companies determined on a consolidated basis in
accordance with GAAP at such time or (B) that accounted for or produced ten
percent (10%) or more of the Consolidated EBITR of the Consolidated Companies
during any fiscal year of Borrower.
"Standby Agreement" shall mean a Standby Agreement, to be executed after
the date hereof by the Borrower and agreed to by Gintel and Avondale,
substantially in form of Exhibit I hereto.
"Subordinated Debt" shall mean Indebtedness of Borrower and its
Subsidiaries that is subordinated to all obligations of Borrower and its
Subsidiaries or any other Credit Party arising under this Agreement, the Notes
and the Credit Documents upon terms and conditions, and in form and substance,
satisfactory to the Lenders, including without limitation, with respect to
interest rates, payment terms, maturities, amortization schedules, covenants,
defaults, remedies, and subordination provisions, as evidenced by the Lenders'
written consent thereto given prior to the creation of such Indebtedness; the
Lenders hereby consent to the Avondale Debt and the Gintel Debt in the form set
forth in the Avondale Note and the Gintel Notes as in effect on the Closing
Date.
"Subordinated Debt Documents" shall mean all notes, agreements and other
documents evidencing or governing the terms of the Subordinated Debt, together
with all certificates and opinions delivered in connection therewith, including,
without limitation, the Avondale Note, the Gintel Notes, the Convertible Notes
and all other documents hereafter executed pursuant to which any of the
foregoing may be guaranteed or secured and the Subordination Agreement.
"Subordination Agreement" shall mean that certain Subordination Agreement,
dated as of the date hereof, among the Lenders, Prudential, SunTrust Bank,
Atlanta as Senior Agent, Avondale and Gintel, and acknowledged and agreed to by
the Borrower and the Guarantors, as hereafter amended, restated, supplemented or
otherwise modified from time to time.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership, joint venture or other entity, whether now existing or hereafter
organized or acquired, of which a majority of the total combined voting power of
all classes of securities or other ownership interests having ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) are, at the time at which any
determination is made, owned by such Person, either directly or indirectly
through one or more other Subsidiaries.
"Tangible Net Worth" shall mean as of the date of any determination, the
sum of the Consolidated Companies' capital surplus, earned surplus and capital
stock, minus deferred charges, intangibles and treasury stock, in each case
determined on a consolidated basis in accordance with GAAP.
"Taxes" shall mean any present or future taxes, levies, imposts, duties,
fees, assessments, deductions, withholdings or other charges of whatever nature,
including without limitation, income, receipts, excise, property, sales,
transfer, license, payroll, withholding, social security and franchise taxes now
or hereafter imposed or levied by the United States, or any state, local or
foreign government or by any department, agency or other political subdivision
or taxing authority thereof or therein and all interest, penalties, additions to
tax and similar liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any designated page and
"LIBOR," the display page so designated on the Dow Xxxxx Telerate Service (or
such other page as may replace that page on that service for the purpose of
displaying rates comparable to "LIBOR").
"Termination Date" shall mean January 26, 1999.
"Termination Event" shall mean (a) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder for which the 30-day
notice requirement is not waived by the regulations; or (b) the withdrawal of
any Consolidated Company or any ERISA Affiliate from a Pension Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA; or (c)
the termination of a Pension Plan subject to Title IV of ERISA, the filing of a
notice of intent to terminate a Pension Plan subject to Title IV of ERISA, or
the treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA; or (d) the institution of proceedings to terminate a Pension Plan by the
PBGC; or (e) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of a trustee
to administer any Pension Plan subject to such Section 4042(a); or (f) the
partial or complete withdrawal of any Consolidated Company or any ERISA
Affiliate from a Multiemployer Plan; or (g) the imposition of a Lien pursuant to
Section 412 of the IRC or Section 302 of ERISA; or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Section 4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Capitalization" shall mean, as of any date of determination, the sum
of (A) Funded Debt of the Consolidated Companies and (b) Tangible Net Worth of
the Consolidated Companies.
"Total Commitment" shall mean the sum of the Lenders' Commitments, as such
Total Commitment may be reduced from time to time as provided herein.
"Type" of Borrowing shall mean a Borrowing consisting of Base Rate Advances
or Eurodollar Advances.
"Wholly Owned Subsidiary" shall mean any Subsidiary, all the stock or
ownership interest of every class of which, except directors' qualifying shares,
shall, at the time as of which any determination is being made, be owned by
Borrower either directly or indirectly.
"Working Capital" shall mean, as of the date of any determination, the
amount by which Current Assets (after excluding cash and cash equivalents)
exceeds Current Liabilities.
Section 1.02. Accounting Terms and Determination. Unless otherwise defined
or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared, and all financial records
shall be maintained in accordance with, GAAP.
Section 1.03. Other Definitional Terms. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule, Exhibit and like references are to
this Agreement unless otherwise specified.
Section 1.04. Exhibits and Schedules. All Exhibits and Schedules attached
hereto are by reference made a part hereof.
ARTICLE II
REVOLVING CREDIT COMMITMENTS
Section 2.01. Commitment; Use of Proceeds.
(a) Subject to and upon the terms and conditions herein set forth, each
Lender severally agrees to make to Borrower from time to time on and after the
Closing Date, but prior to the Termination Date, Loans in an aggregate amount
outstanding at any time not to exceed such Lender's Commitment. Borrower shall
be entitled to repay and reborrow Loans in accordance with the provisions
hereof.
(b) Each Loan shall, at the option of Borrower, be made or continued as, or
converted into, part of one or more Borrowings that shall consist entirely of
Base Rate Advances or Eurodollar Advances; provided, however, that the aggregate
amount of Eurodollar Advances that may be outstanding at any time shall be
limited to an amount equal to the sum of the amounts specified in clause (i) and
(ii) of the definition of Borrowing Base, and any Advances in excess of such
amount shall be Base Rate Advances. The aggregate principal amount of each
Borrowing of Loans shall be not less than $5,000,000 or a greater integral
multiple of $500,000, provided that each Borrowing of Loans comprised of Base
Rate Advances shall be not less than $1,000,000 or a greater integral multiple
of $100,000. At no time shall the number of Borrowings outstanding under this
Article II exceed eight; provided that, for the purpose of determining the
number of Borrowings outstanding and the minimum amount for Borrowings resulting
from conversions or continuations, all Borrowings of Base Rate Advances under
this Facility shall be considered as one Borrowing. The parties hereto agree
that (i) the aggregate principal balance of the Loans of the Lenders as a group
shall not exceed the Total Commitment, (ii) the aggregate principal balance of
the Loans of the Lenders as a group and the principal amount outstanding with
respect to the Prudential Note shall not exceed the Borrowing Base and (iii) no
Lender shall be obligated to make Loans in excess of the lesser of (A) the
Commitment of such Lender and (B) an amount equal to the Borrowing Base,
multiplied by the principal amount such Lender's Commitment, divided by (the
aggregate principal amount of the Commitments of all Lenders plus the principal
amount of the Prudential Note).
(c) The proceeds of Loans shall be used solely for the following purposes:
(i) To repay Refinanced Indebtedness of the
Consolidated Companies on the Closing Date, and to repurchase
the Factored Receivables; and
(ii) To fund working capital needs and Capital Expenditures
and to be used for other general corporate purposes.
Section 2.02. Notes; Repayment of Principal.
(a) Borrower's obligations to pay the principal of, and interest on, the
Loans to each Lender shall be evidenced by the records of the Administrative
Agent and such Lender and by the Note payable to such Lender (or the assignor of
such Lender) completed in conformity with this Agreement.
(b) All outstanding principal amounts under the Loans shall be due and
payable in full on the Termination Date.
Section 2.03. Voluntary Reduction of Commitments. Upon at least three (3)
Business Days' prior telephonic notice (promptly confirmed in writing) to the
Administrative Agent, Borrower shall have the right, without premium or penalty,
to terminate the Commitments, in part or in whole, provided that (i) any such
termination shall apply to proportionately and permanently reduce the
Commitments of each of the Lenders, (ii) any partial termination pursuant to
this Section 2.03 shall be in an amount of at least $1,000,000 and integral
multiples of $1,000,000, and (iii) no such reduction shall be permitted without
payment of all costs required to be paid hereunder with respect to a prepayment.
If the aggregate outstanding amount of the Loans exceeds the amount of the
Commitments as so reduced, Borrower shall immediately repay the Loans by an
amount equal to such excess, together with all accrued and unpaid interest on
such excess amount and any amounts due under Section 3.12 hereof.
ARTICLE III
GENERAL LOAN TERMS
Section 3.01. Funding Notices.
(a) Whenever Borrower desires to make a Borrowing with respect to the
Commitments (other than one resulting from a conversion or continuation pursuant
to Section 3.01(b)), it shall give the Administrative Agent prior written notice
(or telephonic notice promptly confirmed in writing) of such Borrowing (a
"Notice of Borrowing"), such Notice of Borrowing to be given prior to 11:00 A.M.
(local time for the Administrative Agent) at its Payment Office (x) one Business
Day prior to the requested date of such Borrowing in the case of Base Rate
Advances, and (y) two Business Days prior to the requested date of such
Borrowing in the case of Eurodollar Advances. Notices received after 11:00 A.M.
shall be deemed received on the next Business Day. Each Notice of Borrowing
shall be irrevocable and shall specify the aggregate principal amount of the
Borrowing, the date of Borrowing (which shall be a Business Day), and whether
the Borrowing is to consist of Base Rate Advances or Eurodollar Advances and (in
the case of Eurodollar Advances) the Interest Period to be applicable thereto.
(b) Whenever Borrower desires to convert all or a portion of an outstanding
Borrowing under the Commitments, which Borrowing consists of Base Rate Advances
or Eurodollar Advances, into one or more Borrowings consisting of Advances of
another Type, or to continue outstanding a Borrowing consisting of Eurodollar
Advances for a new Interest Period, it shall give the Administrative Agent (x)
at least one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each such Borrowing to be converted into Base Rate
Advances and (y) at least two Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) of each such Borrowing to be converted
into or continued as Eurodollar Advances. Such notice (a "Notice of
Conversion/Continuation") shall be given prior to 11:00 A.M. (local time for the
Administrative Agent) on the date specified at the Payment Office of the
Administrative Agent. Each such Notice of Conversion/Continuation shall be
irrevocable and shall specify the aggregate principal amount of the Advances to
be converted or continued, the date of such conversion or continuation and (in
the case of Eurodollar Advances) the Interest Period applicable thereto. If,
upon the expiration of any Interest Period in respect of any Borrowing of
Eurodollar Advances, Borrower shall have failed to deliver the Notice of
Conversion/Continuation, Borrower shall be deemed to have elected to convert
such Borrowing to a Borrowing consisting of Base Rate Advances. So long as any
Default or Event of Default shall have occurred and be continuing, no Borrowing
may be converted into or continued as (upon expiration of the current Interest
Period) Eurodollar Advances unless the Administrative Agent and each of the
Lenders shall have otherwise consented in writing. No conversion of any
Borrowing of Eurodollar Advances shall be permitted except on the last day of
the Interest Period in respect thereof.
(c) Without in any way limiting Borrower's obligation to confirm in writing
any telephonic notice, the Administrative Agent and the Lenders may act without
liability upon the basis of telephonic notice believed by the Administrative
Agent or the Lender in good faith to be from Borrower prior to receipt of
written confirmation. In each such case, Borrower hereby waives the right to
dispute the Administrative Agent's and the Lender's record of the terms of such
telephonic notice.
(d) The Administrative Agent shall promptly give each Lender notice by
telephone (confirmed in writing) or by telex, telecopy or facsimile transmission
of the matters covered by the notices given to the Administrative Agent pursuant
to this Section 3.01 with respect to the Commitments.
Section 3.02. Disbursement of Funds.
(a) No later than 11:00 A.M. (local time for the Administrative Agent) on
the date of each Borrowing pursuant to the Commitments (other than one resulting
from a conversion or continuation pursuant to Section 4.01(b)), each Lender will
make available its Pro Rata Share of the amount of such Borrowing in immediately
available funds at the Payment Office of the Administrative Agent. The
Administrative Agent will make available to Borrower the aggregate of the
amounts (if any) so made available by the Lenders to the Administrative Agent in
a timely manner by crediting such amounts to Borrower's demand deposit account
maintained with the Administrative Agent. In the event that the Lenders do not
make such amounts available to the Administrative Agent by the time prescribed
above, but such amount is received later that day, such amount may be credited
to Borrower in the manner described in the preceding sentence on the next
Business Day (with interest on such amount to begin accruing hereunder on such
next Business Day).
(b) Unless the Administrative Agent shall have been notified by any Lender
prior to the date of a Borrowing that such Lender does not intend to make
available to the Administrative Agent such Lender's portion of the Borrowing to
be made on such date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such date and the
Administrative Agent may make available to Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Administrative
Agent by such Lender on the date of Borrowing, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest at the Federal Funds Rate. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify Borrower, and Borrower
shall immediately pay such corresponding amount to the Administrative Agent
together with interest at the rate specified for the Borrowing. Nothing in this
subsection shall be deemed to relieve any Lender from its obligation to fund its
Commitments hereunder or to prejudice any rights which Borrower may have against
any Lender as a result of any default by such Lender hereunder.
(c) All Borrowings under the Commitments shall be loaned by the Lenders on
the basis of their Pro Rata Share of the Commitments. No Lender shall be
responsible for any default by any other Lender in its obligations hereunder,
and each Lender shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fund its Commitment
hereunder.
Section 3.03. Interest.
(a) Borrower agrees to pay interest in respect of all unpaid principal
amounts of the Loans from the respective dates such principal amounts were
advanced to maturity (whether by acceleration, notice of prepayment or
otherwise) at rates per annum (on the basis of a 360-day year) equal to the
applicable rates indicated below:
(i) For Base Rate Advances--The Base Rate in effect from
time to time plus the Applicable Margin for Base Rate Advances; and
(ii) For Eurodollar Advances--The relevant Adjusted
LIBO Rate plus the Applicable Margin for Eurodollar
Advances;
provided, however, that to the extent that the aggregate principal amount of all
Eurodollar Loans outstanding at any one time exceeds the sum of the amounts
specified in clause (i) and (ii) of the definition of Borrowing Base, such
excess shall be deemed to be a Base Rate Loan.
(b) Overdue principal and, to the extent not prohibited by applicable law,
overdue interest, in respect of the Loans and all other overdue amounts owing
hereunder, shall bear interest from each date that such amounts are overdue at
the higher of (i) the highest rate then in effect for any Eurodollar Advances
plus an additional two percent (2.0%) per annum or (ii) the rate in effect for
Base Rate Advances plus an additional two percent (2.0%) per annum; provided
that no Loan shall bear interest after maturity (whether by non-payment at
scheduled due date, acceleration, notice of prepayment or otherwise) at a rate
per annum less than two percent (2.0%) per annum in excess of the rate of
interest applicable thereto at maturity.
(c) Interest on each Loan shall accrue from and including the date of such
Loan to but excluding the date of any repayment thereof; provided that, if a
Loan is repaid on the same day made, one day's interest shall be paid on such
Loan. Interest on all outstanding Base Rate Advances shall be payable monthly in
arrears on the last calendar day of each calendar month of Borrower in each
year. Interest on all outstanding Eurodollar Advances shall be payable on the
last day of each Interest Period applicable thereto. Interest on all Loans shall
be payable on any conversion of any Advances comprising such Loans into Advances
of another Type, prepayment (on the amount prepaid), at maturity (whether by
acceleration, notice of prepayment or otherwise) and, after maturity, on demand.
(d) The Administrative Agent, upon determining the Adjusted LIBO Rate for
any Interest Period, shall promptly notify by telephone (confirmed in writing)
or in writing Borrower and the other Lenders. Any such determination shall,
absent manifest error, be final, conclusive and binding for all purposes.
Section 3.04. Interest Periods. In connection with the making or
continuation of, or conversion into, each Borrowing of Eurodollar Advances,
Borrower shall select an interest period (each an "Interest Period") to be
applicable to such Eurodollar Advances, which Interest Period shall be either a
1, 2 or 3 month period; provided that:
(a) The initial Interest Period for any Borrowing of
Eurodollar Advances shall commence on the date of such Borrowing (including
the date of any conversion from a Borrowing consisting of Base Rate
Advances) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest
Period expires;
(b) If any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period in respect of
Eurodollar Advances would otherwise expire on a day that is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding Business
Day;
(c) Any Interest Period which begins on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period shall, subject to part (iv) below, expire on the last
Business Day of such calendar month;
(d) No Interest Period shall extend beyond any date upon which
any principal payment is due with respect to the Term Loans.
Section 3.05. Fees.
(a) The Borrower shall pay to the Administrative Agent, for the account of
each Lender in accordance with its respective Pro Rata Share, a closing fee in
an amount equal to one percent (1%) of the Total Commitment, which fee shall be
due and payable on the Closing Date, fully earned when paid and nonrefundable.
(b) Borrower shall pay to the Administrative Agent, for the account of each
Lender in accordance with its respective Pro Rata share, a commitment fee for
the period commencing on the Closing Date to and including the Termination Date,
computed at a rate equal to three-eighths of one percent (0.375%) per annum
(calculated on the basis of a 360-day year, payable for the actual number of
days elapsed) on the average daily unused portion of the Total Commitment, such
fee being due and payable quarterly in arrears on the last calendar day of each
calendar quarter and on the Termination Date, provided, however, that such
commitment fee shall be reduced to a rate equal to one-quarter of one percent
(0.25%) for any calendar quarter ending on or after June 30, 1996 during which
the Applicable Margin for Eurodollar Advances was less than or equal to 1.75.
(c) Borrower shall pay to the Administrative Agent an administrative fee at
closing and thereafter annually in advance in the respective amount and on the
dates previously agreed in writing by Borrower with the Administrative Agent.
(d) Borrower shall pay to the Agent an agent fee at closing in the
respective amount previously agreed in writing by Borrower with the Agent.
Section 3.06. Prepayments of Borrowings.
(a) Borrower may, at its option, prepay Borrowings consisting of Base Rate
Advances at any time in whole, or from time to time in part, in amounts
aggregating $250,000 or any greater integral multiple of $100,000, by paying the
principal amount to be prepaid together with interest accrued and unpaid thereon
to the date of prepayment. Those Borrowings consisting of Eurodollar Advances
may be prepaid, at Borrower's option, in whole, or from time to time in part, in
the respective minimum amounts and multiples set forth in Section 2.01(b), by
paying the principal amount to be prepaid, together with interest accrued and
unpaid thereon to the date of prepayment, and all compensation payments required
pursuant to Section 3.12 if such prepayment is made on a date other than the
last day of an Interest Period applicable thereto. Each such optional prepayment
shall be applied in accordance with Section 3.06(e) below.
(b) Borrower shall immediately make a mandatory prepayment of the Loans if
at any time the aggregate principal amount of the Loans outstanding exceeds the
Borrowing Base, which prepayment shall be in a principal amount equal to such
excess together with accrued and unpaid interest thereon, plus all compensation
payments required pursuant to Section 3.12 if such prepayment is applied to
Eurodollar Loans and is made on a date other than the last day of an Interest
Period applicable thereto. Each such mandatory prepayment shall be applied in
accordance with Section 3.06(e) below.
(c) Borrower shall make a mandatory prepayment of Loans within fifteen (15)
days after the earlier of (i) the date the Borrower delivers its financial
statements to the Lenders in accordance with Section 6.07(a) and Section 6.07(b)
hereof or (ii) the date such financial statements are required to have been
delivered in accordance with Section 6.07(a) or Section 6.07(b) hereof, in an
amount equal to the Excess Cash Flow for the fiscal quarter to which such
financial statements relate (and the last fiscal quarter covered by the
financial statements delivered pursuant to Section 6.07(a) hereof), less net
reductions in the Obligations for the fiscal quarter for which such financial
statements relate, plus all compensation payments required pursuant to Section
3.12 if such prepayment is applied to Eurodollar Loans and is made on a date
other than the last day of an Interest Period applicable thereto. Each such
mandatory prepayment shall be applied in accordance with Section 3.06(e) below.
(d) Borrower shall give written notice (or telephonic notice confirmed in
writing) to the Administrative Agent of any intended voluntary or mandatory
prepayment of the Loans (i) not less than one Business Day prior to any
prepayment of Base Rate Advances and (ii) not less than two Business Days prior
to any prepayment of Eurodollar Advances. Such notice, once given, shall be
irrevocable; provided, however, that same day notice shall be permitted for
mandatory prepayments required under Section 3.06(b) hereof. Upon receipt of
such notice of prepayment pursuant to the first sentence of this paragraph (d),
the Administrative Agent shall promptly notify each Lender of the contents of
such notice and of such Lender's share of such prepayment.
(e) All amounts voluntarily or mandatorily prepaid pursuant to this Section
3.06 shall be applied first to Borrowings consisting of Eurodollar Loans, in
inverse order based upon the length of the remaining Interest Periods, and
thereafter to Borrowings of Base Rate Loans. All prepayments shall be applied to
the payment of any unpaid interest before application to principal.
Section 3.07. Payments, etc.
(a) Except as otherwise specifically provided herein, all payments under
this Agreement and the other Credit Documents, other than the payments specified
in clause (ii) below, shall be made without defense, set-off or counterclaim to
the Administrative Agent, not later than 11:00 A.M. (local time for the
Administrative Agent) on the date when due and shall be made in Dollars in
immediately available funds at the respective Payment Office.
(b) (i) All such payments shall be made free and clear of and without
deduction or withholding for any Taxes in respect of this Agreement, the Notes
or other Credit Documents, or any payments of principal, interest, fees or other
amounts payable hereunder or thereunder (but excluding any Taxes imposed on the
overall net income of the Lenders pursuant to the laws of the jurisdiction in
which the principal executive office or appropriate Lending Office of such
Lender is located). If any Taxes are so levied or imposed, Borrower agrees (A)
to pay the full amount of such Taxes, and such additional amounts as may be
necessary so that every net payment of all amounts due hereunder and under the
Notes and other Credit Documents, after withholding or deduction for or on
account of any such Taxes (including additional sums payable under this Section
3.07), will not be less than the full amount provided for herein had no such
deduction or withholding been required, (B) to make such withholding or
deduction and (C) to pay the full amount deducted to the relevant authority in
accordance with applicable law. Borrower will furnish to the Agent and each
Lender, within thirty (30) days after the date the payment of any Taxes is due
pursuant to applicable law, certified copies of tax receipts evidencing such
payment by Borrower. Borrower will indemnify and hold harmless the Agent, the
Administrative Agent and each Lender and reimburse the Agent, the Administrative
Agent and each Lender upon written request for the amount of any Taxes so levied
or imposed and paid by the Agent, the Administrative Agent or any Lender and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes were correctly or illegally asserted.
A certificate as to the amount of such payment by the Agent, the Administrative
Agent or such Lender, absent manifest error, shall be final, conclusive and
binding for all purposes.
(ii) Each Lender that is organized under the laws of any jurisdiction other
than the United States of America or any State thereof (including the District
of Columbia) agrees to furnish to Borrower and the Administrative Agent, prior
to the time it becomes a Lender hereunder, two copies of either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001 or any
successor forms thereto (wherein such Lender claims entitlement to complete
exemption from or reduced rate of U.S. Federal withholding tax on interest paid
by Borrower hereunder) and to provide to Borrower and the Administrative Agent a
new Form 4224 or Form 1001 or any successor forms thereto if any previously
delivered form is found to be incomplete or incorrect in any material respect or
upon the obsolescence of any previously delivered form; provided, however, that
no Lender shall be required to furnish a form under this paragraph (ii) if it is
not entitled to claim an exemption from or a reduced rate of withholding under
applicable law. A Lender that is not entitled to claim an exemption from or a
reduced rate of withholding under applicable law, promptly upon written request
of Borrower, shall so inform Borrower in writing.
(c) Subject to Section 3.04(b), whenever any payment to be made hereunder
or under any Note shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
and, with respect to payments of principal, interest thereon shall be payable at
the applicable rate during such extension.
(d) All computations of interest and fees shall be made on the basis of a
year of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or fees
are payable (to the extent computed on the basis of days elapsed). Interest on
Base Rate Advances shall be calculated based on the Base Rate from and including
the date of such Loan to but excluding the date of the repayment or conversion
thereof. Interest on Eurodollar Advances shall be calculated as to each Interest
Period from and including the first day thereof to but excluding the last day
thereof. Each determination by the Administrative Agent of an interest rate or
fee hereunder shall be made in good faith and, except for manifest error, shall
be final, conclusive and binding for all purposes.
(e) Payment by Borrower to the Administrative Agent in accordance with the
terms of this Agreement shall, as to Borrower, constitute payment to the Lenders
under this Agreement.
Section 3.08. Interest Rate Not Ascertainable, etc. In the event that the
Administrative Agent, in the case of the Adjusted LIBO Rate, shall have
determined (which determination shall be made in good faith and, absent manifest
error, shall be final, conclusive and binding upon all parties) that on any date
for determining the Adjusted LIBO Rate for any Interest Period, by reason of any
changes arising after the date of this Agreement affecting the London interbank
market or the Administrative Agent's position in such market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the basis
provided for in the definition of Adjusted LIBO Rate, then, and in any such
event, the Administrative Agent shall forthwith give notice (by telephone
confirmed in writing) to Borrower and to the Lenders of such determination and a
summary of the basis for such determination. Until the Administrative Agent
notifies Borrower that the circumstances giving rise to the suspension described
herein no longer exist, the obligations of the Lenders to make or permit
portions of the Loans to remain outstanding past the last day of the then
current Interest Periods as Eurodollar Advances shall be suspended, and such
affected Advances shall bear the same interest as Base Rate Advances.
Section 3.09. Illegality.
(a) In the event that any Lender shall have determined (which determination
shall be made in good faith and, absent manifest error, shall be final,
conclusive and binding upon all parties) at any time that the making or
continuance of any Eurodollar Advance has become unlawful by compliance by such
Lender in good faith with any applicable law, governmental rule, regulation,
guideline or order (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful), then, in any such event, the
Lender shall give prompt notice (by telephone confirmed in writing) to Borrower
and to the Administrative Agent of such determination and a summary of the basis
for such determination (which notice the Administrative Agent shall promptly
transmit to the other Lenders).
(b) Upon the giving of the notice to Borrower referred to in subsection (a)
above, Borrower's right to request and such Lender's obligation to make
Eurodollar Advances shall be immediately suspended, and such Lender shall make
an Advance as part of the requested Borrowing of Eurodollar Advances as a Base
Rate Advance, which Base Rate Advance shall, for all other purposes, be
considered part of such Borrowing.
Section 3.10. Increased Costs.
(a) If, by reason of (x) after the date hereof, the introduction of or any
change (including, without limitation, any change by way of imposition or
increase of reserve requirements) in or in the interpretation of any law or
regulation, or (y) the compliance with any guideline or request from any central
bank or other Governmental Agency exercising control over banks or financial
institutions generally (whether or not having the force of law):
(i) any Lender (or its applicable Lending Office) shall be subject to
any tax, duty or other charge with respect to its Eurodollar Advances or its
obligation to make Eurodollar Advances, or the basis of taxation of payments
to any Lender of the principal of or interest on its Eurodollar Advances or
its obligation to make Eurodollar Advances shall have changed (except for
changes in the tax on the overall net income of such Lender or its
applicable Lending Office imposed by the jurisdiction in which such Lender's
principal executive office or applicable Lending Office is located); or
(ii) any reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System), special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender's applicable Lending Office shall be
imposed or deemed applicable or any other condition affecting its Eurodollar
Advances or its obligation to make Eurodollar Advances shall be imposed on
any Lender or its applicable Lending Office or the London interbank market
or the United States secondary certificate of deposit market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Advances
(except to the extent already included in the determination of the applicable
Adjusted LIBO Rate for Eurodollar Advances), or there shall be a reduction in
the amount received or receivable by such Lender or its applicable Lending
Office, then Borrower shall from time to time (subject, in the case of certain
Taxes, to the applicable provisions of Section 3.07(b)), upon written notice
from and demand by such Lender on Borrower (with a copy of such notice and
demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender within five Business Days after the date of such notice
and demand, additional amounts sufficient to indemnify such Lender against such
increased cost. A certificate as to the amount of such increased cost, submitted
to Borrower and the Administrative Agent by such Lender in good faith and
accompanied by a statement prepared by such Lender describing in reasonable
detail the basis for and calculation of such increased cost, shall, except for
manifest error, be final, conclusive and binding for all purposes.
(b) If any Lender shall advise the Administrative Agent that at any time,
because of the circumstances described in clauses (x) or (y) in Section 3.10(a)
or any other circumstances beyond such Lender's reasonable control arising after
the date of this Agreement affecting such Lender or the London interbank market
or such Lender's position in such market, the Adjusted LIBO Rate, as determined
by the Administrative Agent, will not adequately and fairly reflect the cost to
such Lender of funding its Eurodollar Advances, then, and in any such event:
(i) the Administrative Agent shall forthwith give notice (by
telephone confirmed in writing) to Borrower and to the other Lenders of such
advice;
(ii) Borrower's right to request and such Lender's obligation
to make or permit portions of the Loans to remain outstanding past the last
day of the then current Interest Periods as Eurodollar Advances shall be
immediately suspended;
(iii) such Lender shall thereafter make all Advances as part of
requested Borrowings of Eurodollar Advances as Base Rate Advances, which
such Base Rate Advance shall, for all other purposes, be considered part of
such Borrowing; and
(iv) Borrower may convert all Eurodollar Advances from such
Lender to Base Rate Advances without payment of amounts required under
Section 3.12 hereof.
Section 3.11. Lending Offices.
(a) Each Lender agrees that, if requested by Borrower, it will use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate an alternate Lending Office with respect to any of its Eurodollar
Advances affected by the matters or circumstances described in Sections 3.07(b),
3.08, 3.09 or 3.10 to reduce the liability of Borrower or avoid the results
provided thereunder, so long as such designation is not disadvantageous to such
Lender as determined by such Lender, which determination if made in good faith,
shall be conclusive and binding on all parties hereto. Nothing in this Section
3.11 shall affect or postpone any of the obligations of Borrower or any right of
any Lender provided hereunder.
(b) If any Lender that is organized under the laws of any jurisdiction
other than the United States of America or any State thereof (including the
District of Columbia) issues a public announcement with respect to the closing
of its lending offices in the United States such that any withholdings or
deductions and additional payments with respect to Taxes may be required to be
made by Borrower thereafter pursuant to Section 3.07(b), such Lender shall use
reasonable efforts to furnish Borrower notice thereof as soon as practicable
thereafter; provided, however, that no delay or failure to furnish such notice
shall in any event release or discharge Borrower from its obligations to such
Lender pursuant to Section 3.07(b) or otherwise result in any liability of such
Lender.
Section 3.12. Funding Losses. Except as set forth in clause (iv) of Section
3.10(b) hereof, Borrower shall compensate each Lender, upon its written request
to Borrower (which request shall set forth the basis for requesting such amounts
in reasonable detail and which request shall be made in good faith and, absent
manifest error, shall be final, conclusive and binding upon all of the parties
hereto), for all losses, expenses and liabilities (including, without
limitation, any interest paid by such Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Advances, in either case to the extent not
recovered by such Lender in connection with the re-employment of such funds and
including loss of anticipated profits), which the Lender may sustain: (i) if for
any reason (other than a default by such Lender) a borrowing of, or conversion
to or continuation of, Eurodollar Advances to Borrower does not occur on the
date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn), (ii) if any repayment
(including mandatory prepayments and any conversions pursuant to Section
3.09(b)) of any Eurodollar Advances to Borrower occurs on a date which is not
the last day of an Interest Period applicable thereto, or (iii), if, for any
reason, Borrower defaults in its obligation to repay its Eurodollar Advances
when required by the terms of this Agreement.
Section 3.13. Assumptions Concerning Funding of Eurodollar Advances.
Calculation of all amounts payable to a Lender under this Article III shall be
made as though that Lender had actually funded its relevant Eurodollar Advances
through the purchase of deposits in the relevant market bearing interest at the
rate applicable to such Eurodollar Advances in an amount equal to the amount of
the Eurodollar Advances and having a maturity comparable to the relevant
Interest Period and, in the case of Eurodollar Advances, through the transfer of
such Eurodollar Advances from an offshore office of that Lender to a domestic
office of that Lender in the United States of America; provided however, that
each Lender may fund each of its Eurodollar Advances in any manner it sees fit
and the foregoing assumption shall be used only for calculation of amounts
payable under this Article III.
Section 3.14. Apportionment of Payments. Aggregate principal and interest
payments in respect of Loans and payments in respect of facility fees and
commitment fees shall be apportioned among all outstanding Commitments and Loans
to which such payments relate, proportionately to the Lenders' respective pro
rata portions of such Commitments and outstanding Loans. The Administrative
Agent shall promptly distribute to each Lender at its payment office set forth
beside its name on the appropriate signature page hereof or such other address
as any Lender may request its share of all such payments received by the
Administrative Agent.
Section 3.15. Sharing of Payments, Etc. If any Lender shall obtain any
payment or reduction (including, without limitation, any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of the Obligations (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its pro rata portion of
payments or reductions on account of such obligations obtained by all the
Lenders, such Lender shall forthwith (i) notify each of the other Lenders and
the Administrative Agent of such receipt, and (ii) purchase from the other
Lenders such participations in the affected obligations as shall be necessary to
cause such purchasing Lender to share the excess payment or reduction, net of
costs incurred in connection therewith, ratably with each of them, provided that
if all or any portion of such excess payment or reduction is thereafter
recovered from such purchasing Lender or additional costs are incurred, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery or such additional costs, but without interest unless the Lender
obligated to return such funds is required to pay interest on such funds.
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 3.15 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation.
Section 3.16. Capital Adequacy. Without limiting any other provision of
this Agreement, in the event that any Lender shall have determined that any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy not currently in effect or fully applicable as
of the Closing Date, or any change therein or in the interpretation or
application thereof after the Closing Date, or compliance by such Lender with
any request or directive regarding capital adequacy not currently in effect or
fully applicable as of the Closing Date (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful) from a central
bank or Governmental Agency having jurisdiction, does or shall have the effect
of reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder to a level below that which such Lender could have
achieved but for such law, treaty, rule, regulation, guideline or order, or such
change or compliance (taking into consideration such Lender's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then within ten (10) Business Days after written notice and demand by such
Lender (with copies thereof to the Administrative Agent), Borrower shall from
time to time pay to such Lender additional amounts sufficient to compensate such
Lender for such reduction (but, in the case of outstanding Base Rate Advances,
without duplication of any amounts already recovered by such Lender by reason of
an adjustment in the applicable Base Rate). Each certificate as to the amount
payable under this Section 3.16 (which certificate shall set forth the basis for
requesting such amounts in reasonable detail), submitted to Borrower by any
Lender in good faith, shall, absent manifest error, be final, conclusive and
binding for all purposes.
Section 3.17. Benefits to Guarantors. In consideration for the execution
and delivery by the Guarantors of their Guaranty Agreement, Borrower agrees to
make the benefit of extensions of credit hereunder available to the Guarantors.
ARTICLE IV.
CONDITIONS TO BORROWINGS
The obligations of each Lender to make Advances to Borrower hereunder is
subject to the satisfaction of the following conditions:
Section 4.01. Conditions Precedent to Initial Loans. At the time of the
making of the initial Loans hereunder on the Closing Date, (A) all obligations
of Borrower hereunder incurred prior to the initial Loans (including, without
limitation, Borrower's obligations to reimburse the reasonable fees and expenses
of counsel to the Agent and any fees and expenses payable to the Agent and the
Lenders as previously agreed with Borrower) shall have been paid in full, (B)
the Avondale Debt and the Gintel Debt shall have been issued subject to terms
and conditions satisfactory to the Lenders, the Borrower shall have received the
proceeds therefrom and the Avondale Note, the Gintel Notes, the Gintel Warrant
and the Avondale/Gintel Documents shall be in form and substance satisfactory to
the Lenders and (C) the Agent shall have received the following, in form and
substance reasonably satisfactory in all respects to the Lenders:
(a) the duly executed counterparts of this Agreement;
(b) the duly completed and executed Notes evidencing the
Commitments;
(c) the duly executed Guaranty Agreement;
(d) the duly executed Security Agreements, together with (i) such duly
executed UCC financing statements to be recorded in such jurisdictions as
the Required Lenders deem necessary or desirable to perfect the security
interests granted thereunder and (ii) such bailee letters filed with such
parties holding inventory of the Credit Parties, as the Required Lenders
deem necessary or desirable to perfect the security interest granted
thereunder;
(e) Lien search reports listing all effective financing statements
which name the Borrower or any Significant Subsidiaries as debtor, together
with copies of such other financing statements (none of which shall cover
the Collateral purported to be covered by either of the Security Agreements,
other than financing statements executed pursuant to clause (d) above);
(f) Evidence satisfactory to the Required Lenders that all other
actions necessary or desirable to perfect and protect the security interests
created by the Security Agreements have been taken;
(g) a duly executed Intercreditor Agreement, dated as of the date
hereof, among the Lenders and acknowledged by the Borrower;
(h) a duly executed Subordination Agreement, dated as of the date
hereof, among the Lenders, Avondale and Gintel, and acknowledged by the
Borrower;
(i) a duly executed closing certificate of Borrower in substantially
the form of Exhibit F attached hereto and appropriately completed;
(j) certificates of the Secretary or Assistant Secretary of each of the
Credit Parties attaching and certifying copies of (1) the certificate or
articles of incorporation of such entity certified by the Secretary of State
the state of such entity's incorporation, (2) the bylaws or comparable
governing documents of such entity, (3) the resolutions of the board of
directors of such entity, authorizing as applicable the execution, delivery
and performance of the Credit Documents, and (4) the name, title and true
signature of each officer of such entity executing the Credit Documents;
(k) certificates of good standing or existence, as may be available
from the Secretary of State of the jurisdiction of incorporation or
organization of such Credit Party and each other jurisdiction in which the
failure of such Credit Party to be in good standing would have a Materially
Adverse Effect;
(l) copies of all documents and instruments, including all consents,
authorizations and filings, required or advisable under any Requirement of
Law or by any material Contractual Obligation of the Credit Parties, in
connection with the execution, delivery, performance, validity and
enforceability of the Credit Documents and the other documents to be
executed and delivered hereunder, and such consents, authorizations, filings
and orders shall be in full force and effect and all applicable waiting
periods shall have expired;
(m) acknowledgment from C.T. Corporation as to its appointment as
agent for service of process for the Borrower;
(n) certified copies of all Debt Instruments securing Indebtedness of
any Consolidated Company described on Schedule 5.12;
(o) certificates, reports and other information as the Agent may
reasonably request from any Consolidated Company in order to satisfy the
Lenders as to the absence of any material liabilities or obligations arising
from matters relating to employees of the Consolidated Companies, including
employee relations, collective bargaining agreements, Plans, and other
compensation and employee benefit plans;
(p) certificates, reports, environmental audits and investigations, and
other information as the Agent may reasonably request from any Consolidated
Company in order to satisfy the Lenders as to the absence of any material
liabilities or obligations arising from environmental and employee health
and safety exposures to which the Consolidated Companies may be subject, and
the plans of the Consolidated Companies with respect thereto;
(q) certificates, reports and other information as the Agent may
reasonably request from any Consolidated Company in order to satisfy the
Lenders as to the absence of any material liabilities or obligations arising
from litigation (including without limitation, products liability and patent
infringement claims) pending or threatened against the Consolidated
Companies;
(r) certificates of insurance issued by the Borrower's insurers,
describing in reasonable detail the insurance maintained by the Borrower,
together with appropriate evidence showing that the Administrative Agent,
the Agent and the Lenders have been named as loss payee or additional
insured, as their interest may appear, on all insurance policies insuring
property of the Borrower and its Subsidiaries;
(s) the favorable opinion of Blau, Kramer, Wactler & Xxxxxxxxx, P.C.,
counsel to the Borrower, substantially in the form of Exhibit G-1 addressed
to the Agent, the Administrative Agent and each of the Lenders;
(t) the favorable opinion of Womble, Carlyle, Xxxxxxxxx & Rice, counsel
to the Guarantor in North Carolina, substantially in the form of Exhibit G-2
addressed to the Agent, the Administrative Agent and each of the Lenders;
(u) the favorable opinions of (1) Haskell, Slaughter, Young & Xxxxxxx,
local counsel to the Credit Parties in Alabama, (2) Xxxxxxx & Montgomery,
local counsel to the Credit Parties in Georgia, and (3) Womble, Carlyle,
Xxxxxxxxx & Rice, local counsel to the Credit Parties in North Carolina and
South Carolina, each substantially in the form of Exhibit G-3 addressed to
the Agent, the Administrative Agent and each of the Lenders;
(v) the audited financial statements of Borrower and its Subsidiaries,
on a consolidated basis for the fiscal year ended on September 30, 1995;
(w) certified copies of all Subordinated Debt Documents, certified as
true and correct copies by the President or Chief Financial Officer of the
Borrower;
(x) certified copies of the Prudential Agreement and all amendments
thereto, including the Amendment No. 6 to be executed on the date hereof,
amending the Prudential Agreement to reflect changes in certain financial
covenants and certified copies of all opinions and other documents delivered
in connection therewith, if any, all certified as true and correct copies by
the President or Chief Financial Officer of the Borrower; and
(y) an audit of the working capital assets of the Borrower and its
Subsidiaries.
In addition to the foregoing, the following conditions shall have been satisfied
or shall exist, all to the satisfaction of the Agent, as of the time the initial
Loans are made hereunder:
(x) the Loans to be made on the Closing Date and the use of proceeds
thereof shall not contravene, violate or conflict with, or involve the Agent
or any Lender in a violation of, any law, rule, injunction, or regulation,
or determination of any court of law or other Governmental Agency;
(y) all corporate proceedings and all other legal matters in connection
with the authorization, legality, validity and enforceability of the Credit
Documents shall be reasonably satisfactory in form and substance to the
Required Lenders; and
(z) the status of all pending and threatened litigation (including
products liability and patent claims) which might result in a Materially
Adverse Effect, including a description of any damages sought and the claims
constituting the basis therefor, shall have been reported in writing to the
Administrative Agent, the Administrative Agent shall have reported such
matters to the Lenders, and the Lenders shall be satisfied with such status.
Section 4.02. Conditions to All Loans. At the time of the making of all
Loans (before as well as after giving effect to such Loans and to the proposed
use of the proceeds thereof), the following conditions shall have been satisfied
or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Borrower contained herein
shall be true and correct in all material respects with the same effect as
though such representations and warranties had been made on and as of the
date of such Loans;
(c) since the date of the most recent financial statements of the
Consolidated Companies described in Section 5.03, and except as set forth on
Schedule 5.03 hereof, there shall have been no change which has had or could
reasonably be expected to have a Materially Adverse Effect.
(d) there shall be no action or proceeding instituted or pending before
any court or other Governmental Agency or, to the knowledge of Borrower,
threatened (i) which reasonably could be expected to have a Materially
Adverse Effect, or (ii) seeking to prohibit or restrict one or more Credit
Party's ownership or operation of any portion of its business or assets, or
to compel one or more Credit Party to dispose of or hold separate all or any
portion of its businesses or assets, where such portion or portions of such
business(es) or assets, as the case may be, constitute a material portion of
the total businesses or assets of the Consolidated Companies;
(e) the Loans to be made and the use of proceeds thereof shall not
contravene, violate or conflict with, or involve the Agent or any Lender in
a violation of, any law, rule, injunction, or regulation, or determination
of any court of law or other Governmental Agency applicable to Borrower; and
(f) the Agent shall have received such other documents or legal
opinions as the Agent or any Lender may reasonably request, all in form and
substance reasonably satisfactory to the Agent.
Each request for a Borrowing and the acceptance by Borrower of the proceeds
thereof shall constitute a representation and warranty by Borrower, as of the
date of the Loans comprising such Borrowing, that the applicable conditions
specified in Sections 4.01 and 4.02 have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Borrower represents, warrants and covenants to Lenders that:
Section 5.01. Organization and Qualification. (a) Each of the Borrower and
its Subsidiaries is duly organized and validly existing under the laws of its
state of incorporation and has the corporate power to own its assets and to
transact the business in which it is presently engaged and in which it proposes
to be engaged. Schedule 5.01 hereto accurately and completely lists, as to each
of the Borrower and each Subsidiary: (i) the state of incorporation or
organization, and the type of legal entity that each of them is, and (ii) the
classes and number of authorized and outstanding shares of capital stock of each
such corporation, and the owners of such outstanding shares of capital stock
(other than with respect to the Borrower). Schedule 5.01 also designates the
Significant Subsidiaries as of the Closing Date.
(b) Each of the Borrower and its Subsidiaries is in good standing in its
state of organization and in each state in which it is qualified to do business.
There are no jurisdictions other than as set forth on Schedule 5.01 hereto in
which the character of the properties owned or proposed to be owned by the
Borrower or any Subsidiary or in which the transaction of the business of the
Borrower or any Subsidiary as now conducted or as proposed to be conducted
requires or will require the Borrower or any Subsidiary to qualify to do
business and as to which failure so to qualify could have a Materially Adverse
Effect.
Section 5.02. Corporate Authority. The Borrower and each Guarantor has the
power to execute, deliver and perform the Credit Documents, the Borrower has the
power to borrow hereunder and the Guarantor has the power to guarantee the
obligations of the Borrower. The execution and delivery by Borrower and the
Guarantors of and the performance by Borrower and Guarantors of their
obligations under the Credit Documents have been duly authorized by all
requisite corporate action and all requisite shareholder action, if any, on the
part of Borrower and the Guarantors and do not and will not (i) violate any
provision of Applicable Law to the Borrower and its Subsidiaries, (ii) conflict
with or result in a breach of any order, writ, injunction, ordinance,
resolution, decree, or other similar document or instrument of any court or
Governmental Agency applicable to the Borrower and its Subsidiaries, (iii)
conflict with any certificate or articles of incorporation or bylaws of the
Borrower or any of its Subsidiaries, (iv) create (with or without the giving of
notice or lapse of time, or both) a default under or breach of, or give rights
of termination under, any Debt Instrument of the Borrower or any of its
Subsidiaries, or (v) result in the imposition of any Lien of any nature
whatsoever upon any of the properties or assets owned by or used in connection
with the business of the Borrower or its Subsidiaries, other than pursuant to
the Security Agreements.
Section 5.03. Financial Statements. (a) Each of the Financial Statements is
correct and complete and presents fairly the consolidated financial position,
the consolidated results of operations, and changes in financial position of the
Borrower and its Subsidiaries, as at and for its date, and has been prepared in
accordance with GAAP. Neither the Borrower nor any Subsidiary has any material
obligation, liability or commitment, direct or contingent (including, without
limitation, any Environmental Liability), that is required to be but is not
reflected in the Financial Statements. The Borrower's fiscal year is the
fifty-two/fifty-three week period ending on the closest Saturday to September
30th in each year.
(b) The Projections have been prepared on the basis of the assumptions
accompanying them and reflect as of the date thereof the Borrower's good faith
projections, after reasonable analysis, of the matters set forth therein, based
on such assumptions.
(c) Since the date of the latest balance sheet included in the Financial
Statements (the "Latest Balance Sheet") and except as is set forth on Schedule
5.03, (i) there has been no change in the condition (financial or otherwise) of
the business and operations of the Borrower, which either singly or in the
aggregate, is (or is likely to be) materially adverse to the Borrower; (ii) no
sale of goods or services or other transactions of the Borrower other than those
occurring in the ordinary and regular course of business; (iii) no material
change in the manner of conducting the business of the Borrower; (iv) no
material adverse change in the working capital position of the Borrower; and (v)
no financial or other commitments or obligations incurred by the Borrower except
such as may be incidental to carrying on the ordinary and regular course of
business.
Section 5.04. Tax Returns. Each of Borrower and its Subsidiaries has filed
all federal, state and local tax returns required to be filed by it, and has not
failed to pay any taxes, or interest and penalties relating thereto, on or
before the due dates thereof. Except to the extent that reserves therefor are
reflected in the Financial Statements: (i) there are no material federal, state
or local tax liabilities of the Borrower or any Subsidiary due or to become due
for any tax year ended on or prior to the date of the Latest Balance Sheet
relating to such entity, whether incurred in respect of or measured by the
income of such entity, that are not properly reflected in the Latest Balance
Sheet relating to such entity, and (ii) there are no material claims pending or,
to the knowledge of the Borrower, proposed or threatened against the Borrower or
any of its Subsidiaries for past federal, state or local taxes, except those, if
any, as to which proper reserves are reflected in the Financial Statements.
Section 5.05. Judgments, Actions, Proceedings. Except as disclosed on
Schedule 5.05 hereto, there are no outstanding judgments, actions or
proceedings, including, without limitation, any Environmental Proceeding,
pending before any court or Governmental Agency, with respect to or, to the best
of the Borrower's knowledge, threatened against or affecting the Borrower or any
Subsidiary involving, in the case of any court proceeding, a claim in excess of
$100,000, nor, to the best of the Borrower's knowledge, is there any reasonable
basis for the institution of any such action or proceeding that is probable of
assertion, nor are there any such actions or proceedings in which the Borrower
or any Subsidiary is a plaintiff or complainant.
Section 5.06. Title to Properties. Each of Borrower and its Subsidiaries
has (i) good and marketable fee simple title to its respective real properties
(other than real properties which it leases from others), including such real
properties reflected in the consolidated balance sheet of Borrower and its
Subsidiaries as of September 30, 1995 hereinabove described (other than real
properties disposed of in the ordinary course of business), subject to no Lien
of any kind except Liens permitted by Section 7.02 and (ii) good title to all of
its other respective properties and assets (other than properties and assets
which it leases from others), including the other properties and assets
reflected in the consolidated balance sheet of Borrower and its Subsidiaries at
September 30, 1995 hereinabove described (other than properties and assets
disposed of in the ordinary course of business), subject to no Lien of any kind
except Liens permitted by Section 7.02. Each of Borrower and its Subsidiaries
enjoys peaceful and undisturbed possession under all leases necessary in any
material respect for the operation of its respective properties and assets, none
of which contains any unusual or burdensome provisions which might materially
affect or impair the operation of such properties and assets, and all such
leases are valid and subsisting and in full force and effect.
Section 5.07. Enforceability of Agreement. The Borrower and the Guarantors
have duly executed and delivered each of the Credit Documents to which it is a
party, and such Credit Documents constitutes the valid and legally binding
obligation agreement of Borrower or such Guarantor, as the case may be,
enforceable against Borrower or such Guarantor, as the case may be, in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar
laws, now or hereafter in effect, relating to or affecting the enforcement of
creditors' rights generally and except that the remedy of specific performance
and other equitable remedies are subject to judicial discretion.
Section 5.08. Consent. No consent or approval of any Person (including,
without limitation, any Governmental Agency, any stockholder of the Borrower or
any landlord or mortgagee), no waiver of any Lien or right of distraint or other
similar right and no consent, license, certificate of need, approval,
authorization or declaration of any Governmental Agency is or will be required
in connection with the execution, delivery or performance by the Borrower or the
Guarantors, or the validity, enforcement or priority, of the Credit Documents or
any Lien created and granted thereunder, or in order to constitute the
Indebtedness to be incurred hereunder and under the Notes and the other Credit
Documents as "Senior Debt" or any similar term defined within each of the
Subordinated Notes, except as set forth on Schedule 5.08 hereto, each of which
either has been duly and validly obtained on or prior to the date hereof and is
now in full force and effect, or is designated on Schedule 5.08 as waived by the
Required Lenders.
Section 5.09. Use of Proceeds; Federal Reserve Regulations. The proceeds of
the Notes will be used solely for the purposes specified in Section 2.01(c), and
none of such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any "margin security" or "margin stock" or for the
purpose of reducing or retiring any indebtedness that originally was incurred to
purchase or carry a "margin security" or "margin stock" or for any other purpose
that might constitute this transaction a "purpose credit" within the meaning of
the regulations of the Board of Governors of the Federal Reserve System.
Section 5.10. ERISA.
(a) Except as disclosed on Schedule 5.10 hereto, no Pension Plan or Defined
Contribution Plan which is an Employee Benefit Plan, including without
limitation, any Multiemployer Plan, exists or has ever existed, and neither the
Borrower nor any ERISA Affiliate is a participating employer in any Pension Plan
which is an Employee Benefit Plan in which more than one employer makes
contributions as described in Sections 4063 and 4064 of ERISA. Except as
disclosed on Schedule 5.10, neither the Borrower nor any ERISA Affiliate has any
contingent liability with respect to any post-retirement benefit under any
Employee Welfare Benefit Plan which is a welfare plan (as defined in Section
3(1) of ERISA), other than liability for health plan continuation coverage
described in Part 6 of Title I of ERISA, which together with any disclosed
liability on Schedule 5.10, will not have a Materially Adverse Effect. The
Borrower has given to the Lenders true and complete copies of all the following:
each Pension Plan or Defined Contribution Plan which is an Employee Benefit Plan
and related trust agreement (including all amendments and commitments with
respect to such Employee Benefit plan or trust) which the Borrower or any ERISA
Affiliate maintains or is committed to contribute to as of the date hereof and
the most recent summary plan description, actuarial report, determination letter
issued by the IRS and Form 5500 filed in respect of each such Employee Benefit
Plan; a listing of all of the Multiemployer Plans to which the Borrower or any
ERISA Affiliate contributes or is committed to contribute and the aggregate
amount of the most recent annual contributions required to be made to each such
Multiemployer Plan, and any information which has been provided to the Borrower
or any ERISA Affiliate regarding withdrawal liability under any Multiemployer
Plan and the collective bargaining agreement pursuant to which such contribution
is required to be made.
(b) Each Employee Benefit Plan complies, in both form and operation in all
material respects, with its terms, ERISA and the Code including, without
limitation, Code Section 4980B, and no condition exists or event has occurred
with respect to any such plan which would result in the incurrence by the
Borrower or any ERISA Affiliate of any material liability, fine or penalty.
Neither the Borrower nor any ERISA Affiliate has incurred any liability to the
PBGC which remains outstanding other than the payment of premiums, and there are
no premiums which have become due which are unpaid. Neither the Borrower nor any
ERISA Affiliate has engaged in any transaction which could subject it to
liability under Section 4069 or Section 4212(c) of ERISA. Each Employee Benefit
Plan, related trust agreement, arrangement and commitment of the Borrower and
each ERISA Affiliate is legally valid and binding and in full force and effect.
Except as provided on Schedule 5.10 and subject to amendment and submission for
a determination letter with regard to the Tax Reform Act of 1986 requirements
and other post 1986 requirements, each Employee Benefit Plan that is intended to
be qualified under Section 401(a) of the Code has been determined by the IRS to
be so qualified, and each trust related to such plan has been determined to be
exempt under Section 501(a) of the Code. To the knowledge of the Borrower,
nothing has occurred or is expected to occur that would adversely affect the
qualified status of the Employee Benefit Plan or any related trust subsequent to
the issuance of such determination letter. No Employee Benefit Plan is being
audited or, to the knowledge of the Borrower, investigated by any government
agency or subject to any pending or threatened claim or suit.
(c) Each Pension Plan currently meets and always has met the minimum
funding standard of Section 302 of ERISA and Section 412 of the Code (without
regard to any funding waiver). All contributions or payments due and owing as
required by Section 302 of ERISA, Section 412 of the Code or the terms of any
Pension Plan have been made by the due date for such contributions or payments.
With respect to each Multiemployer Plan, the Borrower and each ERISA Affiliate
has paid or accrued all contributions pursuant to the terms of the applicable
collective bargaining agreement required to be paid or accrued by it. With
respect to each Pension Plan, the market value of assets (exclusive of any
contribution due to the Pension Plan) equals or exceeds the present value of
benefit liabilities as of the latest actuarial valuation date for such plan (but
not prior to 12 months prior to the date hereof), determined on the basis of a
shutdown of the Borrower or any ERISA Affiliate in accordance with actuarial
assumptions used by the PBGC in single-employer plan terminations and since its
last valuation date, there have been no amendments to such plan that materially
increased the present value of accrued benefits nor any other material adverse
changes in the funding status of such plan. Neither the Borrower nor any ERISA
Affiliate is required to provide security to a Pension Plan pursuant to Section
307 of ERISA or Section 401(a) (29) of the Code.
(d) Neither the Borrower nor any ERISA Affiliate nor any fiduciary of any
Employee Benefit Plan has engaged in a prohibited transaction under Section 406
of ERISA or Section 4975 of the Code with regard to any such Employee Benefit
Plans. The execution, delivery and carrying out of the terms of any agreements
that are related to this transaction will not constitute a prohibited
transaction under the aforementioned sections.
(e) No Termination Event has occurred or is reasonably expected to occur.
(f) None of the following "reportable events" which are subject to the
30-day notice requirement of Section 4043(b) of ERISA in respect of any of the
Pension Plans has occurred: (i) an inability to pay benefits when due, (ii)
bankruptcy or insolvency of the sponsor of the Pension Plan, (iii) liquidation
or dissolution of the sponsor of the Pension Plan, (iv) a failure to meet the
minimum funding standards, or (v) certain transactions involving a change of
employer. The Borrower has not received any notice from the PBGC that any of the
Pension Plans is being involuntarily terminated or from the Secretary of the
Treasury that any partial or full termination of any of the Employee Benefit
Plans has occurred and no event shall have occurred, and there shall exist as of
the date hereof no condition or set of circumstances which present a material
risk of the involuntary termination of any of the Pension Plans.
(g) There are no agreements which will provide payments to any officer,
employee, shareholder or highly compensated individual which will be "parachute
payments" under Section 280G of the Code that are nondeductible to the Borrower
and which will be subject to the tax under Section 4999 of the Code for which
the Borrower or any ERISA Affiliate would have a material withholding liability.
(h) All references to the Borrower in this Section 5.10 or in any other
Section of this Agreement relating to ERISA shall be deemed to refer to the
Borrower and any other entity which is considered an ERISA Affiliate.
(i) Neither the Borrower nor any ERISA Affiliate has ever contributed to a
Multiemployer Plan.
Section 5.11. Ownership Structure. All the outstanding shares of stock of
the Borrower and each of its Subsidiaries have been validly issued and are fully
paid and nonassessable and all such outstanding shares of the Subsidiaries,
except as noted on such Schedule 5.01, are owned by Borrower or a Wholly Owned
Subsidiary of Borrower free of any Lien or claim. Except as set forth on
Schedule 5.01, there are no outstanding warrants, options, contracts or
commitments of any kind entitling any Person to purchase or otherwise acquire
any shares of capital stock or other equity interests of the Borrower or any
Subsidiary, nor are there outstanding any securities that are convertible into
or exchangeable for any shares of capital stock or other equity interest of the
Borrower or any Subsidiary. Except as set forth on Schedule 5.01, neither the
Borrower nor any Subsidiary has any Subsidiary.
Section 5.12. Outstanding Debt. Except for the Refinanced Indebtedness to
be repaid and terminated on the Closing Date, and except for Indebtedness set
forth on Schedule 5.12 as of the Closing Date, and after giving effect to the
transactions contemplated by this Agreement, neither Borrower nor any of its
Subsidiaries has outstanding any Indebtedness evidenced by Debt Instruments.
Section 5.13. Burdensome Documents. None of the Consolidated Companies is a
party to or bound by any Contractual Obligation or Requirement of Law
(including, without limitation, any Environmental Matter) that has had or would
reasonably be expected to have a Materially Adverse Effect.
Section 5.14. No Defaults. Neither the Borrower nor any of its Subsidiaries
is (a) in default under any Debt Instrument relating to or evidencing
Indebtedness in a principal amount of $100,000 in the aggregate or (b) in
default under any other agreement, instrument, ordinance, resolution, decree,
order or judgment to which it is a party, by which it is bound, or by which any
of its properties or assets may be affected, which default could have a
Materially Adverse Effect.
Section 5.15. Compliance with Laws. The Borrower and each Subsidiary has
complied and is in compliance in all respects with all Applicable Laws,
including, without limitation, all applicable Environmental Laws, non-compliance
with which could have a Materially Adverse Effect.
Section 5.16. Pollution and Other Regulations.
(a) Each of the Borrower and its Subsidiaries has complied in all material
respects with all applicable Environmental Laws, including without limitation,
compliance with permits, licenses, standards, schedules and timetables, and is
not in violation of, and does not presently have outstanding any liability
under, has not been notified that it is or may be liable under and does not have
knowledge of any liability or potential liability (including any liability
relating to matters set forth on Schedule 5.16) except as set forth on Schedule
5.16, under any applicable Environmental Law, which violation, liability or
potential liability could reasonably be expected to have a Materially Adverse
Effect.
(b) Except as set forth on Schedule 5.16, the Borrower nor any of its
Subsidiaries has received a written request for information under CERCLA, any
other Environmental Laws or any comparable state law, or any public health or
safety or welfare law or written notice that any such entity has been identified
as a potential responsible party under CERCLA, any other Environmental Laws, or
any comparable state law, or any public health or safety or welfare law, nor has
any such entity received any written notification that any Hazardous Materials
that it or any of its respective predecessors in interest has generated, stored,
treated, handled, transported, or disposed of, has been released or is
threatened to be released at any site at which any Person intends to conduct or
is conducting a remedial investigation or other action pursuant to any
applicable Environmental Law, or any other Environmental Laws.
(c) Except as set forth on Schedule 5.16, each of the Borrower and its
Subsidiaries has obtained all permits, licenses or other authorizations required
for the conduct of their respective operations under all applicable
Environmental and Asbestos Laws where a failure to hold such permit, license or
other authorization would have a material adverse effect on the related property
or would otherwise have a Materially Adverse Effect, and each such authorization
is in full force and effect.
(d) Each of Borrower and its Subsidiaries complies in all material respects
with all laws and regulations relating to equal employment opportunity and
employee safety in all jurisdictions in which it is presently doing business,
and Borrower will use its best efforts to comply, and to cause each of its
Subsidiaries to comply, with all such laws and regulations which may be legally
imposed in the future in jurisdictions in which Borrower or any of its
Subsidiaries may then be doing business, non-compliance with which could have a
Materially Adverse Effect.
Section 5.17. Possession of Franchises, Licenses, Etc. Each of Borrower and
its Subsidiaries possesses all material licenses, permits, franchises and
authorizations from Governmental Agencies, free from burdensome restrictions,
that are necessary in any material respect for the ownership, maintenance and
operation of its properties and assets, and neither Borrower nor any of its
Subsidiaries is in violation of any thereof in any material respect.
Section 5.18. Intangibles. Each of Borrower and its Subsidiaries possesses
all patents, trademarks, service marks, trade names, copyrights, licenses and
other rights, free from burdensome restrictions, which are necessary to the
conduct of its business as now conducted and as proposed to be conducted,
without any conflict with the with the patents, trademarks, service marks, trade
names, and copyrights and rights with respect to the foregoing, of any other
Person, each of such patents, trademarks, service marks, trade names, copyrights
and rights with respect thereto, together with any pending applications
therefor, in each case which are material to the operations of the Borrower and
its Subsidiaries, are listed on Schedule 5.18 hereto. Nothing has come to the
attention of Borrower, any of its Subsidiaries or any of their respective
directors and officers to the effect that (i) any product, process, method,
substance, part or other material presently contemplated to be sold by or
employed by Borrower or any of its Subsidiaries in connection with its business
may infringe any patent, trademark, service xxxx, trade name, copyright, license
or other right owned by any other Person, (ii) there is pending or threatened
any claim or litigation against or affecting Borrower or any of its Subsidiaries
contesting its right to sell or use any such product, process, method,
substance, part or other material or (iii) there is, or there is pending or
proposed, any patent, invention, device, application or principle or any
statute, law, rule, regulation, standard or code which would prevent, inhibit or
render obsolete the production or sale of any products of, or substantially
reduce the projected revenues of, or otherwise materially adversely affect the
business, condition or operations of, Borrower or any of its Subsidiaries.
Section 5.19. Governmental Consent. Neither the nature of Borrower or any
of its Subsidiaries nor any of their respective businesses or properties, nor
any relationship between Borrower and any other Person, nor any circumstance in
connection with the execution and delivery of the Credit Documents and the
consummation of the transactions contemplated thereby is such as to require on
behalf of Borrower or any of its Subsidiaries any consent, approval or other
action by or any notice to or filing with any court or Governmental Agency in
connection with the execution and delivery of this Agreement and the Credit
Documents.
Section 5.20. Disclosure. Neither this Agreement, the Credit Documents, the
Financial Statements, the Projections nor any other certificate, opinion,
documents or any other statement made or furnished to the Lenders in writing by
or on behalf of Borrower or any Subsidiary in connection herewith or the
transactions contemplated herein contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading, as of the date such statement was
made. To the knowledge of the Borrower, there is no fact peculiar to Borrower
which materially adversely affects or in the future may (so far as Borrower can
now foresee) materially adversely affect the business, property or assets,
financial condition or prospects of Borrower which has not been set forth in
this Agreement or in the Credit Documents, certificates and written statements
furnished to Lenders by or on behalf of Borrower prior to the date hereof in
connection with the transactions contemplated hereby.
Section 5.21. Insurance Coverage. Each property of Borrower or any of its
Subsidiaries is insured in amounts deemed adequate by Borrower's management and
no less than those amounts customary in the industry in which Borrower and its
Subsidiaries operate against risks usually insured against by Persons operating
businesses similar to those of Borrower or its Subsidiaries in the localities
where such properties are located, and the Agent, the Administrative Agent and
the Lenders have been named (1) as loss payee and additional insured, as their
interests may appear, on all property and casualty policies insuring any of the
Collateral and (2) as additional insured on all general and comprehensive
liability policies, as their interests may appear.
Section 5.22. Labor Matters. Except as set forth on Schedule 5.22: (a)
there are no collective bargaining agreements or other labor contracts covering
the Borrower or any Subsidiary; (b) no such collective bargaining agreement or
other labor contract will expire during the term of this Agreement; (c) no union
or other labor organization is seeking to organize, or to be recognized as
bargaining representative for, a bargaining unit of employees of the Borrower or
any Subsidiary; (d) there is no pending or threatened strike, work stoppage,
material unfair labor practice claim or charge, arbitration or other material
labor dispute against or affecting the Borrower or any Subsidiary or their
representative employees; (e) there has not been, during the five (5) year
period prior to the date hereof, a strike, work stoppage, material unfair labor
practice claim or charge, arbitration or other material labor dispute against or
affecting the Borrower or any Subsidiary or any of their representative
employees, and (f) there are no actions, suits, charges, demands, claims,
counterclaims or proceedings pending or, to the best of the Borrower's
knowledge, threatened against the Borrower or any of the Subsidiaries, by or on
behalf of, or with, its employees, other than employee grievances arising in the
ordinary course of business, that are not in the aggregate, material.
Section 5.23. Name Changes, Mergers, Acquisitions. Except as set forth on
Schedule 5.23, neither the Borrower nor any Subsidiary has within the five-year
period immediately preceding the date of this Agreement changed its name, been
the surviving entity of a merger or consolidation, or acquired all or
substantially all of the assets of any Person.
Section 5.24. Condition of Assets. All of the assets and properties of the
Borrower and the Subsidiaries that are reasonably necessary for the operation of
their respective businesses are in good working condition, ordinary wear and
tear excepted, and are able to serve the function for which they are currently
being used.
ARTICLE VI
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as it may borrow under this
Agreement or so long as any indebtedness remains outstanding under the Notes
that the Borrower shall, and cause each of its Subsidiaries to:
Section 6.01. Corporate Existence, Etc. Preserve and keep in full force and
effect its corporate existence and all permits, rights, privileges, franchises,
licenses, material patents and copyrights (for the scheduled duration thereof),
trademarks, trade names, and service marks, necessary for the proper conduct of
its business, and its qualification to do business as a foreign corporation in
all jurisdictions where it conducts business or other activities making such
qualification necessary, where the failure to do so would reasonably be expected
to have a Materially Adverse Effect, and continue to engage in the same line of
business and comply in all material respects with all applicable laws,
regulations and orders.
Section 6.02. Compliance with Laws, Etc. (a) Comply with all Requirements
of Law (including, without limitation, ERISA, the Code and the Environmental
Laws) and Contractual Obligations applicable to or binding on any of them where
the failure to comply with such Requirements of Law and Contractual Obligations
would reasonably be expected to have a Materially Adverse Effect;
(b) Operate all property owned or leased by it such that no obligation,
including a clean-up obligation, shall arise under any Environmental Law, which
obligation would constitute a Lien on any property of any Consolidated Company;
provided, however, that in the event that any such claim is made or any such
obligation arises, such Consolidated Company shall, at its own cost and expense
either (i) immediately satisfy such claim or obligation; or (ii) contests such
claim by appropriate proceedings and upon final judgment (subject to no further
appeal) immediately satisfy such judgment; provided, however, that in all such
cases, the Borrower shall file a bond when necessary to avoid the creation of a
Lien against any of the properties of the Consolidated Companies; and provided,
further, that the Borrower shall indemnify and hold harmless the Lenders from
any liability, responsibility or obligation in respect thereof or in respect of
any clean-up of any other liability, as successor, secured party or otherwise
for any reason, including, without limitation, the enforcement of the Lenders'
rights under any Credit Document or by operation of law.
Section 6.03. Payment of Taxes and Claims, Etc. Pay and discharge all of
its obligations and liabilities, including, without limitation, (i) all taxes,
assessments and governmental charges upon its income and properties when due,
and (ii) all claims (including, without limitation, claims for labor, materials,
supplies or services) which might, if unpaid, become a Lien upon its property,
unless but only to the extent that such obligations, liabilities, taxes,
assessments and governmental charges shall be contested in good faith and by
appropriate proceedings and that, to the extent required by GAAP, proper and
adequate book reserves relating thereto are established by the Borrower, or, as
the case may be, by the appropriate Subsidiary and then only to the extent that
a bond is filed in cases where the filing of a bond is necessary to avoid the
creation of a Lien, other than a Permitted Lien, against any of its properties.
Section 6.04. Books and Records. Keep proper books of record and account,
in a manner reasonably satisfactory to the Lenders, in which full, true and
correct entries in conformity with GAAP shall be made of all dealings or
transactions in relation to its business and activities.
Section 6.05. Inspections and Audits. Permit any representative of the
Agent or any Lender (i) to make or cause to be made, inspections and audits of
any books, records and papers of the Borrower and each of its Subsidiaries and
to make extracts therefrom and copies thereof, (ii) to discuss its affairs,
finances and accounts with its officers, and (iii) to make inspections and
examinations of any properties and facilities of the Borrower and the
Subsidiaries on reasonable notice, at all such reasonable times and as often as
the Agent or any Lender may reasonably require, in order to assure the Agent and
each Lender that the Borrower is and will be in compliance with its obligations
under the Credit Documents or to evaluate any Lender's investment in the then
outstanding Notes; ; provided, however, that at any time following the
occurrence and during the continuance of a Default or an Event of Default, the
Agent or any of the Lenders may take any of the above-mentioned actions at any
time, with no notice and at the Borrower's expense.
Section 6.06. Maintenance and Repairs. Maintain in good repair, working
order and condition, subject to normal wear and tear, all material properties
and assets from time to time owned by it and used in or necessary for the
operation of its business, and make all reasonable repairs, replacements,
additions and improvements thereto.
Section 6.07. Reporting Covenants. Furnish to each Lender:
(a) Annual Financial Statements. As soon as available and in any event
within 120 days after the end of each fiscal year of Borrower, balance sheets of
the Consolidated Companies as at the end of such year, presented on a
consolidated basis, and the related statements of income, shareholders' equity,
and cash flows of the Consolidated Companies for such fiscal year, presented on
a consolidated basis, setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail and accompanied by (i) a
report thereon of Xxxxxx Xxxxxxxx or other independent public accountants of
comparable recognized national standing, which such report shall be unqualified
as to going concern and scope of audit and shall state that such financial
statements present fairly in all material respects the financial condition as at
the end of such fiscal year on a consolidated basis, and the results of
operations and statements of cash flows of the Consolidated Companies for such
fiscal year in accordance with GAAP and that the examination by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards and (ii) a certificate of
such accountants to the effect that they are familiar with the terms and
provisions of this Agreement and that in making their audit they have not
discovered any condition, act or omission to act which would constitute a
Default or Event of Default;
(b) Quarterly Financial Statements. As soon as available and in any event
within 60 days after the end of each fiscal quarter of Borrower (other than the
fourth fiscal quarter), balance sheets of the Consolidated Companies as at the
end of such quarter presented on a consolidated basis and the related statements
of income, shareholders' equity, and cash flows of the Consolidated Companies
for such fiscal quarter and for the portion of Borrower's fiscal year ended at
the end of such quarter, presented on a consolidated basis setting forth in each
case in comparative form the figures for the corresponding quarter and the
corresponding portion of Borrower's previous fiscal year, all in reasonable
detail and certified by the chief financial officer or principal accounting
officer of Borrower that such financial statements fairly present in all
material respects the financial condition of the Consolidated Companies as at
the end of such fiscal quarter on a consolidated basis, and the results of
operations and statements of cash flows of the Consolidated Companies for such
fiscal quarter and such portion of Borrower's fiscal year, in accordance with
GAAP consistently applied (subject to normal year-end audit adjustments and the
absence of certain footnotes);
(c) No Default/Compliance Certificate. Together with the financial
statements required pursuant to subsections (a) and (b) above, a certificate of
the President, Chief Financial Officer, Treasurer or Principal Accounting
Officer of Borrower (i) to the effect that, based upon a review of the
activities of the Consolidated Companies and such financial statements during
the period covered thereby, there exists no Event of Default and no Default
under this Agreement, or if there exists an Event of Default or a Default
hereunder, specifying the nature thereof and the proposed response thereto, and
(ii) demonstrating in reasonable detail compliance as at the end of such fiscal
year or such fiscal quarter with Section 6.08 and Sections 7.02 through 7.04;
(d) Borrowing Base Certificate. Within two (2) Business Days after the end
of each calendar week, a Certificate of the President, Chief Financial Officer,
Treasurer or Principal Accounting Officer of the Borrower in the form of Exhibit
H hereto;
(e) Notice of Default. Promptly after Borrower has notice or knowledge of
the occurrence of an Event of Default or a Default, a certificate of the Chief
Financial Officer, Treasurer, or Principal Accounting Officer of Borrower
specifying the nature thereof and the proposed response thereto;
(f) Litigation. Promptly after (i) the occurrence thereof, notice of the
institution of or any adverse development in any litigation, legal proceeding or
dispute or any governmental investigation or any arbitration, before any court
or arbitrator or any Governmental Agency, involving amounts in excess of Five
Hundred Thousand ($500,000) Dollars, affecting any of the Consolidated Companies
or any of their respective properties, whether or not fully covered by
insurance, and regardless of the subject matter thereof (excluding, however, any
actions relating to workers' compensation claims or negligence claims relating
to use of motor vehicles, if fully covered by insurance, subject to deductibles)
or (ii) actual knowledge thereof, notice of the threat of any such litigation,
legal proceeding, dispute, investigation or arbitration;
(g) Environmental Notices. Prompt written notification if any Consolidated
Company (i) receives (A) any notice of any violation or administrative or
judicial complaint or order having been filed or about to be filed against such
Consolidated Company alleging violations of any Environmental Law, or (B) any
notice from any Governmental Agency or any other Person alleging that such
Consolidated Company is or may be subject to any Environmental Liability, in
each case providing the Lenders with a copy of such notice together with a
statement of the action such Consolidated Company intends to take with respect
thereto and (ii) has any actual or alleged spill, leak, disposal or other
release of any waste, petroleum product, or hazardous waste or Hazardous
Materials which could result in penalties, fines, claims or other liabilities to
any Consolidated Company in amounts in excess of $500,000 individually or in the
aggregate;
(h) ERISA.
(A) Promptly after the occurrence thereof with respect to any Plan
of any Consolidated Company or any ERISA Affiliate thereof, or any trust
established thereunder, written notice of (x) a "Reportable Event" as
defined in Section 404 of ERISA, if a notice of such Reportable event is
required under ERISA to be delivered to the PBGC within 30 days after the
occurrence thereof, together with a description of such Reportable Event and
a statement of the action that the Consolidated Company or such ERISA
Affiliate intends to take with respect thereto, together with a copy of the
notice thereof given to the PBGC, or (y) any other event which could subject
any Consolidated Company to any tax, penalty or liability under Title I or
Title IV of ERISA or Chapter 43 of the Code, or any tax or penalty resulting
from a loss of deduction under Sections 162, 404 or 419 of the Code, where
any such taxes, penalties or liabilities exceed or could exceed $250,000 in
the aggregate;
(B) Promptly after such notice must be provided to the PBGC, or to
a Plan participant, beneficiary or alternative payee, any notice required
under Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or 4041(c)(1)(A) of
ERISA or under Section 401(a)(29) or 412 of the Code with respect to any
Plan of any Consolidated Company or any ERISA Affiliate thereof;
(C) Promptly after receipt, any notice received by any
Consolidated Company or any ERISA Affiliate thereof (i) concerning the
intent of the PBGC or any other Governmental Agency to terminate a Plan of
such Company or ERISA Affiliate thereof which is subject to Title IV of
ERISA, or which will impose any liability on such Company or ERISA Affiliate
under Title IV of ERISA or Chapter 43 of the Code or (ii) an assessment of
withdrawal liability in connection with a complete or partial withdrawal
with respect to any Plan, and a statement of the action that the
Consolidated Company or such ERISA Affiliate intends to take with respect
thereto;
(D) Upon the request of the Administrative Agent, promptly upon
the filing thereof with the Internal Revenue Service ("IRS") or the
Department of Labor ("DOL"), a copy of IRS Form 5500 or annual report for
each Plan of any Consolidated Company or ERISA Affiliate thereof which is
subject to Title IV of ERISA;
(E) Upon the request of the Administrative Agent, (A) true and
complete copies of any and all documents, government reports and IRS
determination or opinion letters or rulings for any Plan of any Consolidated
Company from the IRS, PBGC or DOL, (B) any reports filed with the IRS, PBGC
or DOL with respect to a Plan of the Consolidated Companies or any ERISA
Affiliate thereof, or (C) a current statement of withdrawal liability for
each Multiemployer Plan of any Consolidated Company or any ERISA Affiliate
thereof;
(i) Liens. Promptly upon any Consolidated Company becoming aware thereof,
notice of the filing of any federal statutory Lien, tax or other state or local
government Lien or any other Lien affecting their respective properties, other
than those Liens expressly permitted by Section 7.02;
(j) Public Filings, Etc. Promptly upon the filing thereof or otherwise
becoming available, copies of all financial statements, annual, quarterly and
special reports, proxy statements and notices sent or made available generally
by Borrower to its public security holders, of all regular and periodic reports
and all registration statements and prospectuses, if any, filed by any of them
with any securities exchange, and of all press releases and other statements
made available generally to the public containing material developments in the
business or financial condition of Borrower and the other Consolidated
Companies;
(k) Accountants' Reports. Promptly upon receipt thereof, copies of all
financial statements of, and all reports submitted by, independent public
accountants to Borrower in connection with each annual, interim, or special
audit of Borrower's consolidated financial statements;
(l) Burdensome Restrictions, Etc. Promptly upon the existence or occurrence
thereof, notice of the existence or occurrence of (i) any Contractual Obligation
or Requirement of Law described in Section 5.13, (ii) failure of any
Consolidated Company to hold in full force and effect those material trademarks,
service marks, patents, trade names, copyrights, licenses and similar rights
necessary in the normal conduct of its business, and (iii) any strike, labor
dispute, slow down or work stoppage as described in Section 5.22;
(m) New Significant Subsidiaries. Within 30 days after the formation or
acquisition of any Significant Subsidiary, or any other event resulting in the
creation of a new Significant Subsidiary, notice of the formation or acquisition
of such Significant Subsidiary or such occurrence, including a description of
the assets of such entity, the activities in which it will be engaged, and such
other information as the Agent may request;
(n) Intercompany Asset Transfers. Promptly upon the occurrence thereof,
notice of the transfer of any assets from Borrower or any Guarantor to any other
Consolidated Company that is not Borrower or a Guarantor (in any transaction or
series of related transactions), excluding sales or other transfers of assets in
the ordinary course of business, where the Asset Value of such assets is greater
than $500,000;
(o) Subordinated Lenders. Concurrently with dissemination to the
Subordinated Lenders, all other reports as the Borrower shall, from time to
time, disseminate to the Subordinated Lenders; and
(p) Other Information. With reasonable promptness, such other information
about the Consolidated Companies as the Agent or any Lender may reasonably
request from time to time.
Section 6.08. Financial Covenants.
(a) Debt Service Coverage Ratio. Maintain as of the last day of each fiscal
quarter of the Borrower, commencing with the fiscal quarter ending on September
30, 1996, a minimum Debt Service Coverage Ratio, calculated for the immediately
preceding four fiscal quarters, of at least:
Fiscal Quarter Required
Ending On Ratio
September 30, 1996 1.00 to 1.0
December 31, 1996 1.40 to 1.0
March 31, 1997 and thereafter 1.50 to 1.0
(b) Leverage Ratio. Maintain as of the last day of each fiscal quarter of
the Borrower ending on December 31, June 30 and September 30, commencing with
the fiscal quarter ending on June 30, 1996, a maximum Leverage Ratio of no more
than 0.45:1.0, and maintain as of the last day of each fiscal quarter of the
Borrower ending on March 31, commencing with the fiscal quarter ending on March
31, 1996, a maximum Leverage Ratio of not more than 0.50:1.0.
(c) Fixed Charge Coverage Ratio. Maintain as of the last day of each fiscal
quarter of the Borrower, commencing with the fiscal quarter ending on September
30, 1996, a minimum Fixed Charge Coverage Ratio, calculated for the immediately
preceding four fiscal quarters, of at least:
Fiscal Quarter Required
Ending On Ratio
September 30, 1996 0.85 to 1.0
December 31, 1996 and 1.50 to 1.0
thereafter
(d) Current Ratio. Maintain as of the last day of each fiscal quarter of
the Borrower, commencing with the fiscal quarter ending as of March 31, 1996, a
minimum Current Ratio of at least 2.0 to 1.0.
(e) Funded Debt Coverage Ratio. Maintain as of the last day of each fiscal
quarter of the Borrower, commencing on September 30, 1996, a maximum Funded Debt
Coverage Ratio, calculated for the immediately preceding four fiscal quarters,
of no more than (i) 4.0 to 1.0 for the fiscal quarter ending on September 30,
1996; and (ii) 3.0 to 1.0 for each fiscal quarter thereafter ending on December
31, June 30 or September 30 and 3.5 to 1.0 for each fiscal quarter thereafter
ending on March 31.
Section 6.09. Notices Under Certain Other Indebtedness. Promptly upon
receipt thereof, furnish to the Agent a copy of any notice received by it or any
other Consolidated Company from the holder(s) of any Indebtedness of the
Borrower (or from any trustee, agent, attorney, or other party acting on behalf
of such holder(s)) in an amount which, in the aggregate, exceeds $100,000, where
such notice states or claims (i) the existence or occurrence of any default or
event of default with respect to such Indebtedness under the terms of any Debt
Instrument evidencing or governing such Indebtedness, or (ii) the existence or
occurrence of any event or condition which requires or permits holder(s) of any
Indebtedness to exercise rights under any "change in control" provision under
any Debt Instrument, in each case regardless of whether the holders of such
Indebtedness waive, or amend any Debt Instrument the effect of which is to
waive, such default or event of default. Borrower also agrees, promptly upon
receipt thereof, to furnish to the Agent a copy of any waiver or amendment to
any Debt Instrument which waives or has the effect of waiving any default or
event of default thereunder. Borrower further agrees to take such actions as may
be necessary to require the holder(s) of any Indebtedness (or any trustee or
agent acting on their behalf) incurred pursuant to Debt Instruments executed or
amended and restated after the Closing Date, to furnish copies of all such
notices, waivers and amendments directly to the Agent simultaneously with the
furnishing thereof to Borrower, and that such requirement may not be altered or
rescinded without the prior written consent of the Agent.
Section 6.10. Additional Significant Subsidiaries. Promptly after (i) the
formation or acquisition (provided that nothing in this Section shall be deemed
to authorize the acquisition of any entity) of any Significant Subsidiary not
listed on Schedule 5.01, (ii) the transfer of assets to any Consolidated Company
if notice thereof is required to be given pursuant to Section 4.07(q) and as a
result thereof the recipient of such assets becomes a Significant Subsidiary,
(iii) the occurrence of any other event creating a new Significant Subsidiary,
Borrower shall execute and deliver, and cause to be executed and delivered
documents of the kind described in Schedule 6.10, all of which must be in form
and substance satisfactory to the Agent and the Required Lenders.
Section 6.11. Ownership of Significant Subsidiaries. Maintain its
percentage of ownership existing as of the date hereof of all Significant
Subsidiaries, and shall not decrease its ownership percentage in each Person
which becomes a Significant Subsidiaries after the date hereof, as such
ownership exists at the time such Person becomes a Significant Subsidiary.
Section 6.12. Insurance. (a) Maintain or cause to be maintained with
financially sound and reputable insurance companies acceptable to the Lenders,
such insurance on such of its properties and business, in such amounts and
against such risks as is customarily maintained by similar businesses; (ii) file
with the Agent upon its request a detailed list of the insurance then in effect,
stating the names of the insurance companies, the amounts and rates of the
insurance, the dates of the expiration thereof and the properties and risks
covered thereby; and (iii) within ten (10) days after notice in writing from the
Agent, obtain such additional insurance as the Required Lenders may reasonably
request; provided, that, the Borrower may maintain self-insurance consistent
with its past practices and policies; and (b) carry all insurance available
through the PBGC or any private insurance companies covering its obligations to
the PBGC.
Section 6.13. Copies of Corporate Documents. Promptly deliver to the Agent
copies of any amendments or modifications to the certificate or articles of
incorporation and by-laws of the Borrower or any of its Subsidiaries, certified
with respect to the certificate or articles of incorporation by the Secretary of
State of the state of incorporation of the Borrower or such Subsidiary and, with
respect to the by-laws, by the secretary or assistant secretary of the Borrower
or such Subsidiary.
ARTICLE VII
NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as it may borrow under this
Agreement or so long as any Indebtedness remains outstanding under the Notes,
the Borrower shall not, and shall cause each of its Subsidiaries not to:
Section 7.01. Reserved.
Section 7.02. Liens. Create, or assume or permit to exist, any Lien on any
of the properties of the Consolidated Companies whether now owned or hereafter
acquired, except:
(a) Permitted Liens;
(b) Liens existing on the date hereof disclosed on Schedule 7.02 (excluding
Liens securing Refinanced Indebtedness);
(c) any Lien on any property securing Indebtedness incurred or assumed for
the purpose of financing all or a part of the acquisition cost of such property
and any refinancing thereof; provided that such Lien secures only the repayment
of the purchase price of such property and such Lien does not extend to any
other property;
(d) Liens securing a cash management line of credit in favor of the
Borrower in a principal amount not to exceed $2,500,000; provided, however, that
(1) the value of the collateral subject to such Liens does not exceed 143% of
the principal amount of such Indebtedness and (2) such collateral shall not
include, in whole or in part, the Collateral as defined in the Company Security
Agreement or the Guarantor Security Agreement;
(e) Liens granted in "Assigned Accounts" pursuant to and as defined in the
Non-Notification Factoring Agreement; and
(f) Liens securing any Indebtedness other than the cash management line of
credit described in clause (d) above; provided, however, that (1) sixty-six and
two-thirds percent (66.66%) of the proceeds from such Indebtedness must be
applied to repay Indebtedness outstanding hereunder, (2) the Commitments shall
be permanently reduced by an amount equal to sixty-six and two-thirds percent
(66.66%) of the proceeds from such Indebtedness and (3) the collateral secured
by such Liens shall not include, in whole or in part, the Collateral as defined
in the Company Security Agreement or the Guarantor Security Agreement.
Section 7.03. Mergers, Acquisitions. Merge or consolidate with any Person
(whether or not the Borrower or any Subsidiary is the surviving entity), or
acquire all or substantially all of the assets or any of the capital stock of
any Person, except (a) any Subsidiary may merge with or into any other
Subsidiary or the Borrower (so long as the Borrower is the surviving entity) and
(b) as permitted pursuant to Section 7.04 hereof.
Section 7.04. Investments, Loans, Etc. Make, or suffer to exist, any
Investment in any Person, including, without limitation, any shareholder,
director, officer or employee of any Consolidated Company, except Investments:
(a) Investments in:
(i) obligations issued or guaranteed by the United
States of America;
(ii) certificates of deposit, bankers acceptances and other "money
market instruments" issued by any bank or trust company organized under the
United States of America or any State thereof and having capital and surplus
in an aggregate amount of not less than $200,000,000;
(iii) open market commercial paper bearing the highest credit rating
issued by Standard & Poor's Corporation or by another nationally recognized
credit rating agency;
(iv) repurchase agreements entered into with any bank or trust company
organized under the laws of the United States of America or any state
thereof and having capital and surplus in an aggregate amount of not less
than $200,000,000 relating to United States of America government
obligations; and
(v) shares of "money market funds", each having net
assets of not less than $100,000,000;
in each case maturing or being due or payable in full not more than 180 days
after the acquisition thereof.
(b) Investments by the Borrower in entities related to the business of the
Borrower in an aggregate amount not to exceed $1,000,000;
(c) Investments by the Borrower in its Subsidiaries which are outstanding
on the Closing Date;
(d) Investments in the form of loans or advances to employees; provided
that such Investments do not exceed $1,000,000 in the aggregate; and
(e) Investments consisting of the remainder of the outstanding shares of
stock of Xxxxxx-Strathleven Limited which it does not currently own for an
aggregate purchase price not to exceed $300,000.
Section 7.05. Capital Expenditures. Make any Capital Expenditures,
excluding Fayette Alabama Plant Expenditures, (i) in excess of $9,000,000 during
the 1996 fiscal year of the Borrower, of which no more than $6,000,000 may be
used for capital expenditures on property, plant and equipment, the remainder to
be used for other capital expenditures, including capital expenditures related
to transaction costs for this transaction, the Subordinated Debt transaction and
the rights offering contemplated to be made by the Borrower, and (ii) such
amount as the parties shall mutually and reasonably agree upon for fiscal years
1997 and 1998 fiscal years of the Borrower; the Borrower and the Lenders agree
to negotiate such cap on Capital Expenditures for the Borrower's 1997 and 1998
fiscal years in good faith prior to the end of July of each of the Borrower's
1996 and 1997 fiscal years, respectively.
Section 7.06. Minimum Tangible Net Worth. Permit the Consolidated Tangible
Net Worth at the end of any fiscal quarter of the Borrower, plus the amount of
all Subordinated Debt then outstanding, to be less than the sum of (i)
$82,000,000 plus (ii) (A) $2,000,000 at the end of the fiscal quarter ending on
June 30, 1996, (B) $4,000,000 at the end of the fiscal quarter ending on
September 30, 1996 and (C) $6,000,000 at the end of each fiscal quarter ending
on December 31, 1996 and thereafter, plus (iii) for each fiscal quarter ending
on March 31, 1997 and thereafter, 50% of Consolidated Net Income (but not loss)
for the period beginning October 1, 1996 and ending on the last day of such
fiscal quarter plus (iv) 100% of the proceeds of all Subordinated Debt and
equity offerings by the Borrower (in each case, net of taxes and reasonable
transactional costs incurred in connection therewith).
Section 7.07. Sale and Leaseback Transactions. Sell or transfer any
property, real or personal, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which any Consolidated
Company intends to use for substantially the same purpose or purposes as the
property being sold or transferred, to the extent that the aggregate fair market
value of any such property sold or transferred and then rented or leased back
does not exceed $5,000,000 per fiscal year of the Borrower.
Section 7.08. Transactions with Affiliates. Except as expressly permitted
by this Agreement, directly or indirectly: (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any assets
to an Affiliate; (c) merge into or consolidate with or purchase or acquire
assets from an Affiliate; or (d) enter into any other transaction directly or
indirectly with or for the benefit of any Affiliate (including, without
limitation, guarantees and assumptions of obligations of an Affiliate);
provided, however, that: (i) any Affiliate who is a natural person may serve as
an employee or director of the Borrower and receive reasonable compensation for
his services in such capacity, (ii) the Borrower may enter into any transaction
with an Affiliate providing for the leasing of property, the rendering or
receipt of services or the purchase or sale of product, inventory and other
assets in the ordinary course of business if the monetary or business
consideration arising therefrom would be substantially as advantageous to the
Borrower as the monetary or business consideration that would obtain in a
comparable arm's length transaction with a Person not an Affiliate, (iii) the
Borrower may issue the Gintel Notes, the Gintel Warrant, the Avondale Note and
the Convertible Notes and enter into and perform the Avondale/Gintel Documents
and (iv) for purposes of this Section 7.08, an Affiliate shall not be deemed to
include a Significant Subsidiary of the Borrower.
Section 7.09. Optional Prepayments. Directly or indirectly, prepay (other
than mandatory prepayments required under the Prudential Agreement), purchase,
redeem, retire (other than at scheduled maturity dates), defease or otherwise
acquire, or make any optional payment on account of any principal of, interest
on, or premium payable in connection with the optional prepayment, redemption or
retirement of, any of its Indebtedness, or give a notice of redemption with
respect to any such Indebtedness, or prepay any accounts payable other than in
the ordinary course of business, or make any payment in violation of the
subordination provisions of any Subordinated Debt, except that the following
shall be permitted: (1) prepayments of the Obligations under this Agreement and
the Notes, (2) prepayments of the Indebtedness and Capitalized Lease Obligations
described on Schedule 5.12 hereof owed to City of Fayette, Alabama (with respect
to the HUD UDAG loan of $353,077), Chase Home Mortgage Corporation (with respect
to the Mortgage Note of $57,131 and Spartanburg County, South Carolina (with
respect to the Industrial Revenue Bond of $270,000), (3) replacement of the
Avondale Note and one of the Gintel Notes with promissory notes convertible into
shares of common stock of the Borrower but which otherwise have substantially
the same terms as the promissory notes being replaced (including, without
limitation, with the same principal, interest rate, scheduled principal
payments, maturity date, on an unsecured basis and subject to the terms of the
Agreement) (the "Convertible Notes"), (4) conversion of the Convertible Notes
into, and the exercise of the Gintel Warrant for, shares of common stock of the
Borrower pursuant to their terms, (5) prepayment of any Subordinated Debt but
solely with, and in an amount equal to, the proceeds received by the Borrower
from the Rights Offering and (6) offset of the Avondale Note and one of the
Gintel Notes against the obligations of Avondale and Gintel, respectively, under
the Standby Agreement.
Section 7.10. Changes in Business; Sales or Pledges of Assets. Make any
material change in its business on a consolidated basis, or in the nature of its
operation, or liquidate or dissolve itself (or suffer any liquidation or
dissolution), or make any Asset Sales except (i) a sale of the Fingerville,
South Carolina plant, (ii) a sale of the corporate condominium located in
Georgetown County, South Carolina, (iii) sales in the ordinary course of
business and (iv) sales in connection with a transaction permitted under Section
7.07 hereof and in each case for a fair consideration; or dispose of any shares
of stock or any Indebtedness, whether now owned or hereafter acquired, or
discount, sell, pledge, hypothecate or otherwise dispose of accounts receivable,
except pursuant to the Security Agreements and except to SunTrust Bank, Atlanta
pursuant to the Non-Notification Factoring Agreement, so long as the proceeds
received therefrom are used to prepay Indebtedness outstanding hereunder.
Section 7.11. ERISA Obligations. (a) Permit the occurrence of any
Termination Event, or the occurrence of a termination or partial termination of
a Defined Contribution Plan which would have a Materially Adverse Effect on the
Borrower; or
(b) permit any accumulated deficiency (as defined in Section 302 of ERISA
and Section 412 of the Code) with respect to any Pension Plan, whether or not
waived; or
(c) engage, or permit the Borrower or any ERISA Affiliate to engage, in any
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
for which a civil penalty pursuant to Section 502(i) of ERISA or a tax pursuant
to Section 4975 of the Code which would have a Materially Adverse Effect on the
Borrower; or
(d) engage or permit the Borrower or any ERISA Affiliate to engage, in any
breach of fiduciary duty under Part 4 of Title I of ERISA for which 20 percent
of the applicable recovery amount under Section 502(l) of ERISA which would have
a Materially Adverse Effect on the Borrower; or
(e) fail, or permit any ERISA Affiliate to fail, to establish, maintain and
operate each Employee Benefit Plan in compliance in all material respects with
the provisions of ERISA, the Code and all other applicable laws and the
regulations and interpretations thereof.
Section 7.12. Additional Negative Pledges. Create or otherwise cause or
suffer to exist or become effective, directly or indirectly, any prohibition or
restriction on the creation or existence of any Lien upon any asset of any
Consolidated Company, other than pursuant to (i) any requirement of Applicable
Law or any regulatory authority having jurisdiction over any of the Consolidated
Companies or (ii) the Prudential Agreement.
Section 7.13. Limitation on Payment Restrictions Affecting Consolidated
Companies. Create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction on the ability of any Consolidated Company
to (i) pay dividends or make any other distributions on such Consolidated
Company's stock, or (ii) pay any indebtedness owed to Borrower or any other
Consolidated Company, or (iii) transfer any of its property or assets to
Borrower or any other Consolidated Company, except any consensual encumbrance or
restriction existing under the Credit Documents and the Prudential Agreement as
in effect on the Closing Date.
Section 7.14. Actions Under Certain Documents. Modify, amend, cancel or
rescind any agreements or documents evidencing or governing Subordinated Debt,
the Indebtedness outstanding to Prudential or any other Indebtedness secured by
a Lien permitted under clause (d) or (f) of Section 7.02 hereof.
Section 7.15. Redemptions, Distributions.
(a) Purchase, redeem, retire or otherwise acquire, directly or indirectly,
or make any sinking fund payments with respect to, or set apart any sum for
payment with respect to, the Subordinated Debt, any shares of any capital stock
of the Borrower, any options, warrants, or other rights to acquire such
Subordinated Debt or capital stock, whether now or hereafter outstanding;
provided, however, that (i) the Avondale Note and one of the Gintel Notes may be
replaced with Convertible Notes, (ii) the Convertible Notes may be converted
into, and the Gintel Warrant may be exercised for, shares of common stock of the
Borrower pursuant to their terms, (iii) the Borrower may prepay any Subordinated
Debt but solely with, and in an amount equal to, the proceeds received by the
Borrower from an Rights Offering and (iv) the Avondale Note and one of the
Gintel Notes may be offset against the obligations of Avondale and Gintel,
respectively, under the Standby Agreement, and tendered for credit against the
subscription price pursuant thereto; or
(b) Declare or pay any dividends or make any distribution of any kind on
the Borrower's outstanding capital stock, or set aside any sum for any such
purpose, except that the Borrower may declare or pay any dividend payable solely
in shares of its capital stock or the Borrower may distribute rights to purchase
its shares of common stock in the Rights Offering.
Section 7.16. Stock Issuance. Issue any additional shares or any right
or option to acquire any shares, or any security convertible into any shares, of
the capital stock of any Subsidiary, except to the Borrower or a directly or
indirectly wholly owned Subsidiary.
Section 7.17. Fiscal Year. Change its fiscal year.
Section 7.18. Hazardous Material. Cause or permit (i) any Hazardous
Materials to be placed, held, located or disposed of, on, under or at any real
property used in connection with the operation of the business of the Borrower
or any of its Subsidiaries ("Real Property") or any part thereof, except for
such Hazardous Materials which are necessary for the Borrower's operation of its
business thereon and which shall be used, stored and disposed of in compliance
with all applicable Environmental Laws or (ii) such Real Property or any part
thereof to be used as a collection, storage or dump site for any Hazardous
Material.
ARTICLE VIII
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
specified events (each, an "Event of Default"):
Section 8.01. Payments. Borrower shall fail to make promptly when due
(including, without limitation, by mandatory prepayment) any payment of
principal or interest with respect to the Notes, or Borrower shall fail to make
within three (3) days after the due date thereof any payment of any fee or other
amount payable hereunder;
Section 8.02. Covenants Without Notice. Borrower shall fail to observe or
perform any covenant or agreement contained in Section 6.08 or in Article 7;
Section 8.03. Other Covenants. Borrower shall fail to perform or observe
any other term, condition, covenant or agreement contained in this Agreement,
other than those referred to in Sections 8.01 and 8.02, or of any of the other
Credit Documents to which it is a party, which shall remain unremedied for a
period of 15 days after the earlier of (i) any of the executive officers of the
Borrower obtaining actual knowledge thereof, or (ii) notice thereof shall have
been given to Borrower by Agent or any Lender;
Section 8.04. Representations. Any representation or warranty made or
deemed to have been made to the Lenders under this Agreement or any other Credit
Document (including the Schedules attached thereto), or any certificate,
statement or report made or delivered in compliance with this Agreement or any
other Credit Document, shall have been false or misleading in any material
respect when made or deemed to be made or delivered;
Section 8.05. Non-Payments of Other Indebtedness. Any Consolidated Company
shall fail to make when due (whether at stated maturity, by acceleration, on
demand or otherwise, and after giving effect to any applicable grace period) any
payment of principal of or interest on any Indebtedness (other than (i) the
Obligations, (ii) any of the Borrower's accounts payable or (iii) any taxes,
assessments, governmental charges, accrued liabilities and deferred liabilities,
other than Indebtedness for borrowed money or Capitalized Lease Obligations, to
the extent that any dispute regarding such failure to pay is being contested in
good faith by appropriate proceedings and for which adequate reserves are being
maintained to the extent required by GAAP) exceeding $500,000 in the aggregate;
Section 8.06. Defaults Under Other Agreements. (a) Any Consolidated Company
shall fail to perform or observe any term, condition or covenant of any of its
Debt Instruments, so that, as a result of any such failure to perform or
observe, the Indebtedness included therein or secured or covered thereby is
accelerated, or the holder of such Indebtedness or any other Person would be
permitted to accelerate the maturity of such Indebtedness;
(b) Any event or condition referred to in any Debt Instrument of any
Consolidated Company shall occur or fail to occur, so that as a result thereof,
the Indebtedness included therein or secured or covered thereby is accelerated,
or the holder of such Indebtedness or any other Person is permitted to
accelerate the maturity of such Indebtedness;
(c) Failure to pay any Indebtedness for borrowed money when due;
provided, however, that the provisions of this Section 8.06 shall not be
applicable to any Debt Instrument of any Consolidated Company that relating to
or evidencing Indebtedness in a principal amount of less than $500,000 in the
aggregate;
Section 8.07. Bankruptcy. (a) The Borrower or any Subsidiary shall make an
assignment for the benefit of creditors, file a petition in bankruptcy, be
adjudicated insolvent, petition or apply to any tribunal for the appointment of
a receiver, custodian, or any trustee for it or a substantial part of its
assets, or shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect, or the Borrower or any
Subsidiary shall take any corporate action to authorize any of the foregoing
actions; or there shall have been filed any such petition or application, or any
such proceeding shall have been commenced against it, that remains undismissed
for a period of thirty (30) days or more; or any order for relief shall be
entered in any such proceeding; or the Borrower or any Subsidiary by any act or
omission shall indicate its consent to, approval of or acquiescence in any such
petition, application or proceeding or the appointment of a custodian, receiver
or any trustee for it or any substantial part of any of its properties, or shall
suffer any custodianship, receivership or trusteeship to continue undischarged
for a period of thirty (30) days or more;
(b) The Borrower or any Subsidiary shall generally not pay its debts as
such debts become due; or
(c) The Borrower or any Subsidiary shall have concealed, removed, or
permitted to be concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them or made or suffered a
transfer of any of its property that may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law; or shall have made any transfer of its
property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid; or shall have suffered or permitted,
while insolvent, any creditor to obtain a Lien upon any of its property through
legal proceedings or distraint that is not vacated within thirty (30) days from
the date thereof; or
Section 8.08. Judgment. A judgment or order for the payment of money in
excess of $500,000 or a non-monetary judgment having a Materially Adverse Effect
shall be rendered against Borrower or any other Consolidated Company and such
judgment or order shall continue unsatisfied (in the case of a money judgment)
and in effect for a period of 30 days during which execution shall not be
effectively stayed or deferred (whether by action of a court, by agreement or
otherwise);
Section 8.09. Attachments. An attachment, levy, execution or similar action
shall be made on or taken against any of the assets of any Consolidated Company
for any amount in excess of $500,000 in the aggregate and is not removed,
suspended or enjoined within thirty (30) days of the same being made or any
suspension or injunction being lifted;
Section 8.10. ERISA.
(a) The termination of any Pension Plan or the institution by the PBGC of
proceedings for the involuntary termination of any Pension Plan, in either case,
by reason of, or that results in, a "material accumulated funding deficiency"
under Section 412 of the Code;
(b) Failure by the Borrower to make required contributions, in accordance
with the applicable provisions of ERISA, to each of the Pension Plans hereafter
established or assumed by it;
Section 8.11. Ownership of Credit Parties and Pledged Entities. If Borrower
shall at any time fail to own and control the required percentage of the voting
stock of any Significant Subsidiary, either directly or indirectly through a
Wholly Owned Subsidiary of Borrower;
Section 8.12. Change in Control of Borrower. (a) Any "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other
than Gintel, shall become the "beneficial owner(s)" (as defined in said Rule
13d-3) of more than twenty-five percent (25%) of the shares of the outstanding
common stock of Borrower entitled to vote for members of Borrower's board of
directors, or (b) any event or condition shall occur or exist which, pursuant to
the terms of any change in control provision, requires or permits the holder(s)
of Indebtedness of any Consolidated Company to require that such Indebtedness be
redeemed, repurchased, defeased, prepaid or repaid, in whole or in part, or the
maturity of such Indebtedness to be accelerated in any respect; or
Section 8.13. Credit Documents. Any Credit Document ceases to be in full
force and effect or the validity or enforceability thereof is disaffirmed by or
on behalf of Borrower or any other Credit Party, or at any time it is or becomes
unlawful for Borrower or any other Credit Party to perform or comply with its
obligations under any Credit Document, or the obligations of Borrower or any
other Credit Party under any Credit Document are not or cease to be legal, valid
and binding on Borrower or any such Credit Party;
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the Agent may, and upon the written request of the
Required Lenders, shall, by written notice to Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent, any Lender or
the holder of any Note to enforce its claims against Borrower or any other
Credit Party: (i) declare all Commitments terminated, whereupon the Commitment
of each Lender shall terminate immediately and any commitment fee shall
forthwith become due and payable without any other notice of any kind; and (ii)
declare the principal of and any accrued interest on the Loans, and all other
Obligations owing hereunder, to be, whereupon the same shall become, forthwith
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by Borrower; provided, that, if an Event of
Default specified in Section 8.07 shall occur, the result which would occur upon
the giving of written notice by the Agent to any Credit Party, as specified in
clauses (i) and (ii) above, shall occur automatically without the giving of any
such notice.
ARTICLE IX
THE AGENT
Section 9.01. Appointment of Agent and the Administrative Agent. Each
Lender hereby designates SunTrust and First Union as Agent, and SunTrust as
Administrative Agent to administer all matters concerning the Loans and to act
as herein specified. Each Lender hereby irrevocably authorizes, and each holder
of any Note by the acceptance of a Note shall be deemed irrevocably to
authorize, the Agent and Administrative Agent to take such actions on its behalf
under the provisions of this Agreement, the other Credit Documents, and all
other instruments and agreements referred to herein or therein, and to exercise
such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Agent and Administrative Agent by
the terms hereof and thereof and such other powers as are reasonably incidental
thereto. Each Agent and Administrative Agent may perform any of its duties
hereunder by or through their agents or employees. The provisions of this
Section 9.01 are solely for the benefit of Agent and the Administrative Agent,
and Borrower and the other Consolidated Companies shall not have any rights as
third party beneficiaries of any of the provisions hereof. In performing its
functions and duties under this Agreement, each Agent and the Administrative
Agent, as the case may be, shall act solely as agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligations towards or
relationship of agency or trust with or for the Borrower and the other
Consolidated Companies.
Section 9.02. Nature of Duties of Agent and the Administrative Agent. The
Agent and Administrative Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the other Credit Documents. None
of the Agent and Administrative Agent nor any of their respective officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Agent and
Administrative Agent shall be ministerial and administrative in nature; the
Agent and Administrative Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender; and nothing in this Agreement,
express or implied, is intended to or shall be so construed as to impose upon
the Agent or Administrative Agent any obligations in respect of this Agreement
or the other Credit Documents except as expressly set forth herein.
Section 9.03. Lack of Reliance on the Agent and the Administrative Agent.
(a) Independently and without reliance upon the Agent or the Administrative
Agent, each Lender, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of the Credit Parties in connection with the taking or not
taking of any action in connection herewith, and (ii) its own appraisal of the
creditworthiness of the Credit Parties, and, except as expressly provided in
this Agreement, the Agent and the Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before the making of the Loans or at any time or times
thereafter.
(b) The Agent and Administrative Agent shall not be responsible to any
Lender for any recitals, statements, information, representations or warranties
herein or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Agreement, the
Notes, the Guaranty Agreement, or any other documents contemplated hereby or
thereby, or the financial condition of the Credit Parties, or be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement, the Notes, the Guaranty
Agreement, or the other documents contemplated hereby or thereby, or the
financial condition of the Credit Parties, or the existence or possible
existence of any Default or Event of Default; provided, however, to the extent
that the Agent or the Administrative Agent has been advised that a Lender has
not received any information formally delivered to the Agent or the
Administrative Agent pursuant to Section 6.07, the Agent or the Administrative
Agent, as the case may be, shall deliver or cause to be delivered such
information to such Lender.
Section 9.04. Certain Rights of the Agent and the Administrative Agent. If
the Agent or the Administrative Agent shall request instructions from the
Required Lenders with respect to any action or actions (including the failure to
act) in connection with this Agreement, the Agent or the Administrative Agent
shall be entitled to refrain from such act or taking such act, unless and until
it shall have received instructions from the Required Lenders; and the Agent and
the Administrative Agent shall not incur liability in any Person by reason of so
refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent or the Administrative Agent as a result of
the Agent or the Administrative Agent acting or refraining from acting hereunder
in accordance with the instructions of the Required Lenders.
Section 9.05. Reliance by Agent and Administrative Agent. The Agent and the
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cable gram, radiogram, order or other
documentary, teletransmission or telephone message believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person. The
Agent and the Administrative Agent may consult with legal counsel (including
counsel for any Credit Party), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 9.06. Indemnification of the Agent and the Administrative Agent. To
the extent the Agent and the Administrative Agent are not reimbursed and
indemnified by the Credit Parties, each Lender will reimburse and indemnify the
Agent and the Administrative Agent, ratably according to the respective amounts
of the Loans outstanding under all Facilities (or if no amounts are outstanding,
ratably in accordance with the Total Commitments), in either case, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent and the Administrative
Agent in performing its duties hereunder, in any way relating to or arising out
of this Agreement or the other Credit Documents; provided that no Lender shall
be liable to the Agent or the Administrative Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's or the
Administrative Agent's gross negligence or willful misconduct.
Section 9.07. The Agent and Administrative Agent in their Individual
Capacities. With respect to its obligation to lend under this Agreement, the
Loans made by it and the Notes issued to it, the Agent and the Administrative
Agent shall have the same rights and powers hereunder as any other Lender or
holder of a Note and may exercise the same as though it were not performing the
duties specified herein; and the terms "Lenders", "Required Lenders", "holders
of Notes", or any similar terms shall, unless the context clearly otherwise
indicates, include either the Agent or the Administrative Agent in its
individual capacity. The Agent and the Administrative Agent may accept deposits
from, lend money to, and generally engage in any kind of banking, trust,
financial advisory or other business with the Consolidated Companies or any
affiliate of the Consolidated Companies as if it were not performing the duties
specified herein, and may accept fees and other consideration from the
Consolidated Companies for services in connection with this Agreement and
otherwise without having to account for the same to the Lenders.
Section 9.08. Holders of Notes. The Agent and the Administrative 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 filed with the Agent and the Administrative 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.
Section 9.09. Successor Agent; Successor Administrative Agent.
(a) The Agent and the Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and Borrower and may be removed at any
time with or without cause by the Required Lenders; provided, however, the Agent
and the Administrative Agent may not resign or be removed until a successor
Agent or Administrative Agent has been appointed and shall have accepted such
appointment. Upon any such resignation or removal, the Required Lenders shall
have the right to appoint a successor Agent or Administrative Agent subject to
Borrower's prior written approval. If no successor Agent or Administrative Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Agent's or Administrative
Agent's giving of notice of resignation or the Required Lenders' removal of the
retiring Agent or Administrative Agent, then the retiring Agent or
Administrative Agent may, on behalf of the Lenders, appoint a successor Agent or
Administrative Agent subject to Borrower's prior written approval, which shall
be a bank which maintains an office in the United States, or a commercial bank
organized under the laws of the United States of America or any State thereof,
or any Affiliate of such bank, having a combined capital and surplus of at least
$100,000,000. If at any time SunTrust is removed as a Lender, SunTrust shall
simultaneously resign as Agent and Administrative Agent. If at any time First
Union is removed as a Lender, First Union shall simultaneously resign as Agent.
(b) Upon the acceptance of any appointment as the Agent or the
Administrative Agent hereunder by a successor Agent or Administrative Agent,
such successor Agent or Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Agent or Administrative Agent, and the retiring Agent or Administrative Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Agent's or Administrative Agent's resignation or removal hereunder
as Agent or Administrative Agent, the provisions of this Article IX shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
an Agent or Administrative Agent under this Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telecopy or
similar teletransmission or writing) and shall be given to such party at its
address or applicable teletransmission number set forth on the signature pages
hereof, or such other address or applicable teletransmission number as such
party may hereafter specify by notice to the Administrative Agent, the Agent and
Borrower. Each such notice, request or other communication shall be effective
(i) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid, (ii) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified in
this Section and the appropriate confirmation is received, or (iii) if given by
any other means (including, without limitation, by air courier), when delivered
or received at the address specified in this Section; provided that notices to
the Agent and the Administrative Agent shall not be effective until received.
Section 10.02. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or the other Credit Documents, nor consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders do any of the following: (i)
increase the Commitments or other contractual obligations to Borrower under this
Agreement, (ii) reduce the principal of, or interest on, the Notes or any fees
hereunder (other than fees required under Section 3.05(c)), (iii) postpone any
date fixed for the payment in respect of principal of, or interest on, the Notes
or the fees owed pursuant to Section 3.05 hereof, including, without limitation,
the Termination Date, (iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number or identity of
Lenders which shall be required for the Lenders or any of them to take any
action hereunder, (v) release any Guarantor from its obligations under any
Guaranty Agreement or release any of the collateral securing the Loans, the
Notes or other obligations of the Borrower or any Significant Subsidiary to the
Lenders, whether granted pursuant to the Security Agreements or otherwise, (vi)
modify the definition of "Required Lenders" or "Borrowing Base" or (vii) modify
this Section 10.02. Notwithstanding the foregoing, no amendment, waiver or
consent shall, unless in writing and signed by the Agent and the Administrative
Agent in addition to the Lenders required hereinabove to take such action,
affect the rights or duties of the Agent and the Administrative Agent under this
Agreement or under any other Credit Document.
Section 10.03. No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent, the Agent, any Lender or any holder of a Note
in exercising any right or remedy hereunder or under any other Credit Document,
and no course of dealing between any Credit Party and the Administrative Agent,
the Agent, any Lender or the holder of any Note shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right or remedy hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Administrative Agent, the
Agent, any Lender or the holder of any Note would otherwise have. No notice to
or demand on any Credit Party not required hereunder or under any other Credit
Document in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent, the Agent, the Lenders or the holder of any
Note to any other or further action in any circumstances without notice or
demand.
Section 10.04. Payment of Expenses, Indemnity, Etc. Borrower shall:
(a) whether or not the transactions hereby contemplated are
consummated, pay all reasonable, out-of-pocket costs and expenses of the
Agent and the Administrative Agent in the administration (both before and
after the execution hereof and including reasonable expenses actually
incurred relating to advice of counsel as to the rights and duties of the
Agent and the Administrative Agent and the Lenders with respect thereto) of,
and in connection with the preparation, execution and delivery of,
preservation of rights under, enforcement of, and, after a Default or Event
of Default, refinancing, renegotiation or restructuring of, this Agreement
and the other Credit Documents and the documents and instruments referred to
therein, and any amendment, waiver or consent relating thereto (including,
without limitation, the reasonable fees actually incurred and disbursements
of counsel for the Agent and the Administrative Agent), and in the case of
enforcement of this Agreement or any Credit Document after an Event of
Default, all such reasonable, out-of-pocket costs and expenses (including,
without limitation, the reasonable fees actually incurred and disbursements
of counsel), for any of the Lenders;
(b) subject, in the case of certain Taxes, to the applicable
provisions of Section 3.07(b), pay and hold each of the Lenders harmless
from and against any and all present and future stamp, documentary, and
other similar Taxes with respect to this Agreement, the Notes and any other
Credit Documents, any collateral described therein, or any payments due
thereunder, and save each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to pay
such Taxes; and
(c) protect, indemnify and save harmless the Agent, the
Administrative Agent and each Lender, and their respective officers,
directors, employees, representatives and agents from, and hold each of them
harmless against, any and all costs, losses, liabilities, claims, damages or
expenses incurred by any of them (whether or not any of them is designated a
party thereto) (an "Indemnitee") arising out of or by reason of any
investigation, litigation or other proceeding related to any actual or
proposed use of the proceeds of any of the Loans or any Credit Party's
entering into and performing of the Agreement, the Notes, or the other
Credit Documents, including, without limitation, the reasonable fees
actually incurred and disbursements of counsel (including foreign counsel)
incurred in connection with any such investigation, litigation or other
proceeding; provided, however, Borrower shall not be obligated to indemnify
any Indemnitee for any of the foregoing arising out of such Indemnitee's
gross negligence or willful misconduct;
(d) without limiting the indemnities set forth in subsection
(iii) above, indemnify each Indemnitee for any and all expenses and costs
(including without limitation, remedial, removal, response, abatement,
cleanup, investigative, closure and monitoring costs), losses, claims
(including claims for contribution or indemnity and including the cost of
investigating or defending any claim and whether or not such claim is
ultimately defeated, and whether such claim arose before, during or after
any Credit Party's ownership, operation, possession or control of its
business, property or facilities or before, on or after the date hereof, and
including also any amounts paid incidental to any compromise or settlement
by the Indemnitee or Indemnitees to the holders of any such claim),
lawsuits, liabilities, obligations, actions, judgments, suits,
disbursements, encumbrances, liens, damages (including without limitation
damages for contamination or destruction of natural resources), penalties
and fines of any kind or nature whatsoever (including without limitation in
all cases the reasonable fees actually incurred, other charges and
disbursements of counsel in connection therewith) incurred, suffered or
sustained by that Indemnitee based upon, arising under or relating to
Environmental Laws based on, arising out of or relating to in whole or in
part, the existence or exercise of any rights or remedies by any Indemnitee
under this Agreement, any other Credit Document or any related documents
(but excluding those incurred, suffered or sustained by any Indemnitee as a
result of any action taken by or on behalf of the Lenders with respect to
any Subsidiary of Borrower (or the assets thereof) owned or controlled by
the Lenders.
If and to the extent that the obligations of Borrower under this Section 10.04
are unenforceable for any reason, Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
Section 10.05. Right of Setoff. In addition to and not in limitation of all
rights of offset that any Lender or other holder of a Note may have under
applicable law, each Lender or other holder of a Note shall, upon the occurrence
of any Event of Default and whether or not such Lender or such holder has made
any demand or any Credit Party's obligations are matured, have the right to
appropriate and apply to the payment of any Credit Party's obligations hereunder
and under the other Credit Documents, all deposits of any Credit Party (general
or special, time or demand, provisional or final) then or thereafter held by and
other indebtedness or property then or thereafter owing by such Lender or other
holder to any Credit Party, whether or not related to this Agreement or any
transaction hereunder. Each Lender shall promptly notify Borrower of any offset
hereunder.
Section 10.06. Benefit of Agreement.
(a) This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto,
provided that Borrower may not assign or transfer any of its interest hereunder
without the prior written consent of the Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the account
of, any of its branch offices or the office of an Affiliate of such Lender.
(c) Each Lender may assign all or a portion of its interests, rights and
obligations under this Agreement (including all or a portion of any of its
Commitments and the Loans at the time owing to it and the Notes held by it) to
any Eligible Assignee; provided, however, that (i) the Administrative Agent and,
so long as no Default or Event of Default exists or is continuing, Borrower must
give their prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed) unless such assignment is an Affiliate of the
assigning Lender (in which case no consent from the Administrative Agent or the
Borrower is required), (ii) the amount of the Commitments or Loans, in the case
of assignment of Loans, of the assigning Lender subject to each assignment
(determined as of the date the assignment and acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000, unless such amount constitutes the entire remaining Commitment and
Loans of the assigning Lender, (iii) the parties to each such assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a Note or Notes subject to such assignment and, unless such
assignment is to an Affiliate of such Lender, a processing and recordation fee
of $2500, (iv) so long as no Default has occurred hereunder and is continuing,
each of SunTrust and First Union agrees that it shall maintain at all times a
Commitment at least equal to the lesser of (A) $20,000,000 and (B) the amount of
the largest Commitment of any other Lender, unless the Borrower shall otherwise
give its consent to a Commitment in a lesser amount, and (v) so long as no
Default has occurred hereunder and is continuing, there may be no more than six
(6) Lenders under this Agreement at any one time. Borrower shall not be
responsible for such processing and recordation fee or any costs or expenses
incurred by any Lender or the Administrative Agent in connection with such
assignment. From and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days after
the execution thereof, the assignee thereunder shall be a party hereto and to
the extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement. Within five (5)
Business Days after receipt of the notice and the Assignment and Acceptance,
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent, in exchange for the surrendered Note or Notes, a new Note or Notes to the
order of such assignee in a principal amount equal to the applicable Commitments
or Loans assumed by it pursuant to such Assignment and Acceptance and, if
applicable, new Note or Notes to the assigning Lender in the amount of its
retained Commitment or Commitments or amount of its retained Loans. Such new
Note or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the date of
the surrendered Note or Notes which they replace, and shall otherwise be in
substantially the form attached hereto.
(d) Each Lender may, without the consent of Borrower, the Administrative
Agent or the Agent, sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments in the Loans owing to it and the
Notes held by it), (ii) such Lender's obligations under this Agreement shall
remain unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iv) the participating
bank or other entity shall not be entitled to the benefit (except through its
selling Lender) of the cost protection provisions contained in Article IV of
this Agreement, and (v) Borrower, the Agent, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with each Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Credit Documents, and such Lender shall retain the sole right to
enforce the obligations of Borrower relating to the Loans and to approve any
amendment, modification or waiver of any provisions of this Agreement. Any
Lender selling a participation hereunder shall provide prompt written notice to
Borrower of the name of such participant.
(e) Any Lender or participant may, in connection with the 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 Borrower or the other Consolidated Companies furnished
to such Lender by or on behalf of Borrower or any other Consolidated Company.
With respect to any disclosure of confidential, non-public, proprietary
information, such proposed assignee or participant shall agree to use the
information only for the purpose of making any necessary credit judgments with
respect to this credit facility and not to use the information in any manner
prohibited by any law, including without limitation, the securities laws of the
United States. The proposed participant or assignee shall agree not to disclose
any of such information except (i) to directors, employees, auditors, affiliates
or counsel to whom it is necessary to show such information, each of whom shall
be informed of the confidential nature of the information, (ii) in any statement
or testimony pursuant to a subpoena or order by any court or Governmental Agency
asserting jurisdiction over such entity, or as otherwise required by law or
regulatory process (provided prior notice is given to Borrower, the
Administrative Agent and the Agent unless otherwise prohibited by the subpoena,
order or law and except for routine bank regulatory examinations), and (iii)
upon the request or demand of any regulatory agency or authority with proper
jurisdiction. The proposed participant or assignee shall further agree to
return, upon request, all documents or other written material and copies thereof
received from any Lender, the Agent, the Administrative Agent or Borrower
relating to such confidential information unless otherwise properly disposed of
or safeguarded by such entity.
(f) Any Lender may at any time assign all or any portion of its rights in
this Agreement and the Notes issued to it to a Federal Reserve Bank; provided
that no such assignment shall release the Lender from any of its obligations
hereunder.
(g) If (i) any Taxes referred to in Section 3.07(b) have been levied or
imposed so as to require withholdings or deductions by Borrower and payment by
Borrower of additional amounts to any Lender as a result thereof, (ii) any
Lender shall make demand for payment of any material additional amounts as
compensation for increased costs pursuant to Section 3.10 or for its reduced
rate of return pursuant to Section 3.16, or (iii) any Lender shall decline to
consent to a modification or waiver of the terms of this Agreement or the other
Credit Documents requested by Borrower, then and in such event, upon request
from Borrower delivered to such Lender, the Administrative Agent and the Agent,
such Lender shall assign, in accordance with the provisions of Section 10.06(c),
all of its rights and obligations under this Agreement and the other Credit
Documents to another Lender or an Eligible Assignee selected by Borrower, in
consideration for the payment by such assignee to the Lender of the principal
of, and interest on, the outstanding Loans accrued to the date of such
assignment, and the assumption of such Lender's Total Commitment hereunder,
together with any and all other amounts owing to such Lender under any
provisions of this Agreement or the other Credit Documents accrued to the date
of such assignment.
Section 10.07. Governing Law; Submission to Jurisdiction.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND UNDER THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF GEORGIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE SUPERIOR COURT OF
XXXXXX COUNTY, GEORGIA, OR ANY OTHER COURT OF THE STATE OF GEORGIA OR OF THE
UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, BORROWER HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND BORROWER HEREBY IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO 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 SUCH
RESPECTIVE JURISDICTIONS.
(c) BORROWER HEREBY IRREVOCABLY DESIGNATES THE CT CORPORATION, ATLANTA,
GEORGIA, AS ITS DESIGNEE, APPOINTEE AND LOCAL AGENT TO RECEIVE, FOR AND ON
BEHALF OF BORROWER, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE NOTES OR ANY
DOCUMENT RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON
SUCH LOCAL AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE
SERVER OF SUCH PROCESS BY MAIL TO BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS
SIGNATURE BELOW, BUT THE FAILURE OF BORROWER TO RECEIVE SUCH COPY SHALL NOT
AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO BORROWER AT ITS SAID ADDRESS, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Agent, the Administrative
Agent, any Lender, any holder of a Note or any Credit Party to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against Borrower in any other jurisdiction.
Section 10.08. Independent Nature of Lenders' Rights. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights pursuant to
this Agreement and its Notes, and it shall not be necessary for any other Lender
to be joined as an additional party in any proceeding for such purpose.
Section 10.09. Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
Section 10.10. Effectiveness; Survival.
(a) This Agreement shall become effective on the date (the "Effective
Date") on which all of the parties hereto shall have signed a counterpart hereof
(whether the same or different counterparts) and shall have delivered the same
to the Administrative Agent pursuant to Section 10.01 or, in the case of the
Lenders, shall have given to the Agent or the Administrative Agent written
notice (actually received) that the same has been signed and mailed to them.
(b) The obligations of Borrower under Sections 3.07(b), 3.10, 3.12, 3.13,
3.16, and 10.04 hereof shall survive for ninety (90) days after the payment in
full of the Notes after the Final Maturity Date. All representations and
warranties made herein, in the certificates, reports, notices, and other
documents delivered pursuant to this Agreement shall survive the execution and
delivery of this Agreement, the other Credit Documents, and such other
agreements and documents, the making of the Loans hereunder, and the execution
and delivery of the Notes.
Section 10.11. Severability. In case any provision in or obligation under
this Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable, in whole or in part, in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 10.12. Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitation of, another covenant, shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
Section 10.13. Change in Accounting Principles, Fiscal Year or Tax Laws. If
(i) any preparation of the financial statements referred to in Section 6.07
hereafter occasioned by the promulgation of rules, regulations, pronouncements
and opinions by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accounts (or successors thereto or
agencies with similar functions) (other than changes mandated by FASB 106)
result in a material change in the method of calculation of financial covenants,
standards or terms found in this Agreement, (ii) there is any change in
Borrower's fiscal quarter or fiscal year, or (iii) there is a material change in
federal tax laws which materially affects any of the Consolidated Companies'
ability to comply with the financial covenants, standards or terms found in this
Agreement, Borrower and the Required Lenders agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such changes with the
desired result that the criteria for evaluating any of the Consolidated
Companies' financial condition shall be the same after such changes as if such
changes had not been made. Unless and until such provisions have been so
amended, the provisions of this Agreement shall govern.
Section 10.14. Headings Descriptive; Entire Agreement. The headings of the
several sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement. This Agreement, the other Credit Documents, and the
agreements and documents required to be delivered pursuant to the terms of this
Agreement constitute the entire agreement among the parties hereto and thereto
regarding the subject matters hereof and thereof and supersede all prior
agreements, representations and understandings related to such subject matters.
Section 10.15. Time is of the Essence. Time is of the essence in
interpreting and performing this Agreement and all other Credit Documents.
Section 10.16. Usury. It is the intent of the parties hereto not to violate
any federal or state law, rule or regulation pertaining either to usury or to
the contracting for or charging or collecting of interest, and Borrower and
Lenders agree that, should any provision of this Agreement or of the Notes, or
any act performed hereunder or thereunder, violate any such law, rule or
regulation, then the excess of interest contracted for or charged or collected
over the maximum lawful rate of interest shall be applied to the outstanding
principal indebtedness due to Lenders by Borrower under this Agreement.
Section 10.17. Construction. Should any provision of this Agreement require
judicial interpretation, the parties hereto agree that the court interpreting or
construing the same shall not apply a presumption that the terms hereof shall be
more strictly construed against one party by reason of the rule of construction
that a document is to be more strictly construed against the party who itself or
through its agents prepared the same, it being agreed that Borrower, Agent,
Administrative Agent, Lenders and their respective agents have participated in
the preparation hereof.
Section 10.18. Release of Collateral. At any time that no Default or Event
of Default has occurred and is continuing, the Borrower may request that the
Lenders release the collateral securing its obligations and those of the
Guarantors to the Lenders. The Lenders shall have no obligation to release such
collateral and will do so only in their sole and absolute discretion. The
Borrower acknowledges that release of such collateral will require the consent
of all Lenders holding all Commitments, and will require the consent of
Prudential independently of this Agreement. In considering such request by the
Borrower, the Lenders will take into consideration the operating performance of
the Consolidated Companies, the balance sheet leverage at the time the request
is made and the ability of the Consolidated Companies to issue unsecured
Long-term Indebtedness in the institutional market.
Section 10.19. Confidentiality. Each Lender agrees to exercise its best
efforts to keep any information delivered or made available by the Borrower to
it which is either financial or clearly indicated to be confidential
information, confidential from any one other than persons employed or retained
by such Lender who are or are expected to become engaged in evaluating,
approving, structuring or administering the Loans; provided, however, that
nothing herein shall prevent any Lender from disclosing such information (i) to
any other Lender, (ii) upon the order of any court or administrative agency,
(iii) upon the request or demand of any regulatory agency or authority having
jurisdiction over such Lender, (iv) to the extent reasonably required in
connection with any litigation to which the Agent, the Administrative Agent, any
Lender or their respective Affiliates may be a party, (v) to the extent
reasonably required in connection with the exercise of any remedy hereunder,
(vi) to such Lender's legal counsel and independent auditors and (vii) to any
actual or proposed participants or assignee of all or part of its rights
hereunder which has agreed in writing to be bound by the provisions of this
Section 10.19.
Section 10.20. Provisions relating to the Refinanced Indebtedness. Upon the
fulfillment of all conditions precedent to this Agreement set forth in Section
4.01 and 4.02 and after the application of the proceeds from the initial
Borrowing to repay the Refinanced Indebtedness and to repurchase the Factored
Receivables, (1) the promissory notes and other agreements relating to or
evidencing or governing the Refinanced Indebtedness shall be deemed terminated
and (2) that certain Factoring Agreement, dated as of December 27, 1995, between
the Borrower and SunTrust Bank, Atlanta (the "December 1995 Factoring
Agreement") shall be deemed terminated, and SunTrust shall be deemed to have
sold to the Borrower, and the Borrower shall be deemed to have purchased from
SunTrust, the Factored Receivables for an amount equal to the face amount of
such Factored Receivables, discounted by the same discount rate applied by
SunTrust when it purchased such Factored Receivables from the Borrower under the
December 1995 Factoring Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Atlanta, Georgia, by their duly authorized
officers as of the day and year first above written.
BORROWER:
XXXXXX INDUSTRIES, INC.
Address for Notices: By: /s/ Xxxxx X. Xxxx
4130 Faber Place Drive Xxxxx X. Xxxx
Suite 200 Chief Financial Officer
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx
Attest:/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Secretary
[CORPORATE SEAL]
Address for Notices: SUNTRUST BANK, ATLANTA,
P. O. Box 4418 individually, as Agent and as
Xxxxxxx, Xxxxxxx 00000 Administrative Agent
Attn: Mr. Xxxxx Xxxxxxxxxxx
and Xx. Xxx Xxxxxxxxx
By: /s/ Xxxxx Xxxxxxxxxxx
Title: Group Vice President
Telecopy No. 404/332-3940
By: /s/ Xxxxxx X. Xxxxxxxxx
Payment Office:
Title:____________________________
00 Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
-------------------------------------
Commitment: $25,000,000
Pro Rata Share of Commitment: 41.67%
Address for Notices: FIRST UNION NATIONAL BANK
OF SOUTH CAROLINA,
P. O. Box 1329 individually and as Agent
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxx, III By: /s/ Xxxxx X. Xxxxx
Title: Senior Vice President
Telecopier No: 803/255-8357
Payment Office:
P. O. Xxx 0000
Xxxxxxxxxx, XX 00000
-------------------------------------
Commitment: $25,000,000
Pro Rata Share of Commitment: 41.67%
Address for Notices: NATWEST BANK N.A.
000 Xxxxxxx Xxxxxxxxxx By: /s/ Xxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxxxx X. Title: Vice President
Xxxxxxxxxx
Telecopy No. 516/349-2098
Payment Office:
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
-------------------------------------
Commitment: $10,000,000
Pro Rata Share of Commitment: 16.66%
Schedule 1.01 to the Revolving Credit Agreement
Applicable Applicable
Funded Debt Funded Debt Margin for Margin for
to Total to EBITDA Eurodollar Base Rate
Capital Ratio Ratio Advances Advances
Less than 0.25 Less than 1.5
to 1.00 to 1.0 1.25 0.00
Greater than or
equal to 1.5 to
1.0, but less
than 2.5 to 1.0 1.50 0.00
Greater than or
equal to 2.5 1.75 0.00
Greater than or Less than 1.5 1.50 0.00
equal to .25 to to 1.0
1.00, but less
than .35 to 1.00
Greater than or 2.00 0.25
equal to 1.5 to
1.0, but less
than 2.5 to 1.0
Greater than or 2.25 0.50
equal to 2.5
Greater than or Less than 1.5 1.75 0.00
equal to .35 to 1.0
to 1.00
Greater than or 2.25 0.50
equal to 1.5 to
1.0, but less
than 2.5 to 1.0
Greater than or 2.75 0.75
equal to 2.5
Schedule 6.10 to the Revolving Credit Agreement
Additional Significant Subsidiaries Documentation
1. Supplement to Guarantor Security Agreement (as defined in
the Credit Agreement)
2. Supplement to Guaranty Agreement (as defined in the
Credit Agreement)
3. Lien Search Results in such locations as the Secured
Parties shall require
4. UCC Financing Statements in such locations as the Secured
Parties shall require
5. Opinions of Counsel as the Secured Parties shall require
6. Corporate Authority Documents (article of incorporation,
bylaws, resolutions of the Board of Directors,
incumbency)
7. Such other documents, instruments and certificates as the
Secured Parties shall reasonably require consistent with
the Credit Agreement
Schedule 7.02 to the Revolving Credit Agreement
[Attach Lien Summary]
