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LOAN AND SECURITY AGREEMENT
DATED AS OF DECEMBER 30, 1996
BETWEEN
XXXXXXX XXXXXXXX COMPANY, INC.
XXXXXXXXXX/LANSING COMPANY
THE XXXXXXX THREAD GROUP, LLC
XXXXXX INTERNATIONAL INC.
XXXXXXXX THREADS, INC.
AMERICAN COLLARS, INC.
THE BRIDGE REALTY COMPANY
AS BORROWERS,
AND
SANWA BUSINESS CREDIT CORPORATION,
AS CO-AGENT, COLLATERAL MONITORING AGENT AND AS LENDER
AND
XXXXXX FINANCIAL, INC.,
AS CO-AGENT, ADMINISTRATIVE AND DOCUMENTATION AGENT AND AS LENDER
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS............................................................ 1
1.1 Certain Defined Terms................................... 1
1.2 Accounting Terms........................................ 14
1.3 Other Definitional Provisions........................... 15
SECTION 2. LOANS AND COLLATERAL................................................... 16
2.1 Loans................................................... 16
(A)(1) Term Loan A..................................... 16
(A)(2) Term Loan B..................................... 17
(B) Revolving Loan................................. 17
(C) Changes in Borrowing Base...................... 18
(D) Eligible Collateral............................ 18
(E) Borrowing Mechanics............................ 21
(F) Notes.......................................... 21
(G) Evidence of Revolving Loan Obligations......... 21
(H) Letters of Credit.............................. 22
(1) Maximum Amount......................... 22
(2) Reimbursement.......................... 22
(3) Conditions of Issuance................. 23
(4) Request for Letters of Credit.......... 23
(I) Other Letter of Credit Provisions.............. 23
(1) Obligations Absolute................... 23
(2) Nature of Lender's Duties.............. 24
(3) Liability.............................. 24
2.2 Interest................................................ 25
(A) Rate of Interest............................... 25
(B) Interest Periods............................... 25
(C) Computation and Payment of Interest............ 26
(D) Interest Laws.................................. 27
(E) Conversion or Continuation..................... 27
2.3 Fees.................................................... 28
(A) Unused Line Fee................................ 28
(B) Letter of Credit Fees.......................... 28
(C) Prepayment Fees................................ 29
(D) Loan Administration Fee........................ 29
(E) Audit Fees..................................... 29
(F) Other Fees and Expenses........................ 29
(G) Closing Fee.................................... 29
2.4 Payments and Prepayments................................ 29
(A) Manner and Time of Payment..................... 29
(B) Mandatory Prepayments.......................... 30
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(1) Overadvance............................ 30
(2) Proceeds of Asset Dispositions......... 30
(3) Prepayments from Excess Cash Flow...... 31
(4) Prepayment upon Sale of Thread
Division............................... 31
(C) Voluntary Prepayments and Repayments........... 31
(D) Payments on Business Days...................... 31
2.5 Term of this Agreement.................................. 32
2.6 Statements.............................................. 32
2.7 Grant of Security Interest.............................. 32
2.8 Capital Adequacy and Other Adjustments.................. 32
2.9 Taxes................................................... 33
(A) No Deductions.................................. 33
(B) Changes in Tax Laws............................ 34
2.10 Required Termination and Prepayment..................... 34
2.11 Optional Prepayment/Replacement of Co-Agents or
Lenders in Respect of Increased Costs................... 35
2.12 Compensation............................................ 35
2.13 Booking of LIBOR Loans.................................. 36
2.14 Assumptions Concerning Funding of LIBOR Loans........... 36
SECTION 3. CONDITIONS TO LOANS.................................................... 36
3.1 Conditions to Loans..................................... 36
(A) Closing Deliveries............................. 36
(B) Security Interests............................. 36
(C) Closing Date Availability...................... 37
(D) Representations and Warranties................. 37
(E) Fees........................................... 37
(F) No Default..................................... 37
(G) Performance of Agreements...................... 37
(H) No Prohibition................................. 37
(I) No Litigation.................................. 37
(J) Audit.......................................... 37
(K) Real Estate Appraisal.......................... 38
(L) Machinery and Equipment Appraisal.............. 38
(M) INTENTIONALLY OMITTED.......................... 38
(N) Projections.................................... 38
(O) Environmental Matters.......................... 38
(P) Insurance...................................... 38
SECTION 4. BORROWERS' REPRESENTATIONS AND WARRANTIES.............................. 38
4.1 Organization, Powers, Capitalization.................... 39
(A) Organization and Powers........................ 39
(B) Capitalization................................. 39
4.2 Authorization of Borrowing, No Conflict................. 39
4.3 Financial Condition..................................... 40
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4.4 Indebtedness and Liabilities............................ 40
4.5 Account Warranties...................................... 40
4.6 Names................................................... 41
4.7 Locations; FEIN......................................... 41
4.8 Title to Properties; Liens.............................. 41
4.9 Litigation; Adverse Facts............................... 41
4.10 Payment of Taxes........................................ 41
4.11 Performance of Agreements............................... 42
4.12 Employee Benefit Plans.................................. 42
4.13 Intellectual Property................................... 42
4.14 Broker's Fees........................................... 42
4.15 Environmental Compliance................................ 42
4.16 Solvency................................................ 42
4.17 Disclosure.............................................. 43
4.18 Insurance............................................... 43
4.19 Compliance with Laws.................................... 43
4.20 Bank Accounts........................................... 44
4.21 Subsidiaries............................................ 44
4.22 Employee Matters........................................ 44
4.23 Governmental Regulation................................. 44
SECTION 5. AFFIRMATIVE COVENANTS.................................................. 44
5.1 Financial Statements and Other Reports.................. 44
(A) Monthly Financials............................. 45
(B) Quarterly Financials........................... 45
(C) Year-End Financials............................ 45
(D) Accountants' Certification and Reports......... 46
(E) Compliance Certificate......................... 46
(F) Borrowing Base Certificates, Registers and
Journals....................................... 46
(G) Reconciliation Reports, Inventory Reports and
Listings and Agings............................ 46
(H) Management Report.............................. 47
(I) Appraisals..................................... 47
(J) Government Notices............................. 47
(K) Events of Default, etc......................... 47
(L) Trade Names.................................... 48
(M) Locations...................................... 48
(N) Bank Accounts.................................. 48
(O) Litigation..................................... 48
(P) Projections.................................... 48
(Q) Other Indebtedness Notices..................... 49
(R) Securities Reports............................. 49
(S) Other Information.............................. 49
5.3 Inspection.............................................. 49
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5.4 Collateral Records...................................... 49
5.5 Account Covenants; Verification......................... 50
5.6 Collection of Accounts and Payments..................... 50
5.7 Endorsement............................................. 51
5.8 Corporate Existence..................................... 51
5.9 Payment of Taxes........................................ 51
5.10 Maintenance of Properties; Insurance.................... 51
5.11 Compliance with Laws.................................... 52
5.12 Further Assurances...................................... 52
5.13 Collateral Locations.................................... 52
5.14 Bailees................................................. 52
5.15 Mortgages; Title Insurance; Surveys..................... 53
(A) Title Insurance................................ 53
(B) Additional Mortgaged Property.................. 53
(C) Surveys........................................ 53
5.16 Use of Proceeds and Margin Security..................... 54
SECTION 6. FINANCIAL COVENANTS.................................................... 54
6.1 Net Worth............................................... 54
6.2 INTENTIONALLY OMITTED................................... 55
6.3 Minimum EBITDA.......................................... 55
6.4 INTENTIONALLY OMITTED................................... 55
6.5 Capital Expenditure Limits.............................. 55
6.6 Fixed Charge Coverage................................... 55
6.7 INTENTIONALLY OMITTED................................... 56
SECTION 7. NEGATIVE COVENANTS..................................................... 56
7.1 Indebtedness and Liabilities............................ 56
7.2 Guaranties.............................................. 56
7.3 Transfers, Liens and Related Matters.................... 57
(A) Transfers...................................... 57
(B) Liens.......................................... 57
(C) No Negative Pledges............................ 57
(D) No Restrictions on Subsidiary Distributions to
Borrower....................................... 57
7.4 Investments and Loans................................... 58
7.5 Restricted Junior Payments.............................. 58
7.6 Restriction on Fundamental Changes...................... 58
7.7 INTENTIONALLY OMITTED................................... 58
7.8 Transactions with Affiliates............................ 58
7.9 Environmental Liabilities............................... 59
7.10 Conduct of Business..................................... 59
7.11 Compliance with ERISA................................... 59
7.12 Tax Consolidations...................................... 59
7.13 Subsidiaries............................................ 59
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7.14 Fiscal Year............................................. 59
7.15 Press Release; Public Offering Materials................ 59
7.16 Bank Accounts........................................... 59
SECTION 8. DEFAULT, RIGHTS AND REMEDIES........................................... 59
8.1 Event of Default........................................ 59
(A) Payment........................................ 60
(B) Default in Other Agreements.................... 60
(C) Breach of Certain Provisions................... 60
(D) Breach of Warranty............................. 60
(E) Other Defaults Under Loan Documents............ 60
(F) Change in Control.............................. 60
(G) Involuntary Bankruptcy; Appointment of
Receiver, etc.................................. 61
(H) Voluntary Bankruptcy; Appointment of
Receiver, etc.................................. 61
(I) Liens.......................................... 61
(J) Judgment and Attachments....................... 61
(K) Dissolution.................................... 62
(L) Solvency....................................... 62
(M) Injunction..................................... 62
(N) Invalidity of Loan Documents................... 62
(O) Failure of Security............................ 62
(P) Damage, Strike, Casualty....................... 62
(Q) Licenses and Permits........................... 62
(R) Forfeiture..................................... 63
8.2 Suspension of Commitments............................... 63
8.3 Acceleration............................................ 63
8.4 Remedies................................................ 63
8.5 Appointment of Attorney-in-Fact......................... 64
8.6 Limitation on Duty of Co-Agents with Respect to
Collateral.............................................. 65
8.7 Application of Proceeds................................. 65
8.8 License of Intellectual Property........................ 66
8.9 Waivers, Non-Exclusive Remedies......................... 66
SECTION 9. ASSIGNMENT AND PARTICIPATION........................................... 66
9.1 Assignments and Participations in Loans................. 66
9.2 Co-Agents............................................... 67
(A) Appointment.................................... 67
(B) Nature of Duties............................... 68
(C) Rights, Exculpation, Etc....................... 68
(D) Reliance....................................... 69
(E) Indemnification................................ 70
(F) Xxxxxx and Sanwa Individually.................. 70
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(G) Successor Administrative and Documentation
Agent.......................................... 70
(1) Resignation............................ 70
(2) Appointment of Successor............... 71
(3) Successor.............................. 71
(H) Collateral Matters............................. 71
(1) Release of Collateral.................. 71
(2) Confirmation of Authority; Execution of
Releases............................... 72
(3) Absence of Duty........................ 72
(I) Agency for Perfection.......................... 73
(J) Exercise of Remedies........................... 73
9.3 Consents................................................ 73
9.4 Set Off and Sharing of Payments......................... 74
9.5 Disbursement of Funds................................... 74
9.6 Settlements, Payments and Information................... 75
(A) Revolving Advances and Payments; Fee
Payments....................................... 75
(B) Availability of Lender's Pro Rata Share........ 76
(C) Return of Payments............................. 76
9.7 Dissemination of Information............................ 77
9.8 Discretionary Advances.................................. 77
SECTION 10. MISCELLANEOUS......................................................... 77
10.1 Expenses and Attorneys' Fees............................ 77
10.2 Indemnity............................................... 78
10.3 Amendments and Waivers.................................. 78
10.4 Notices................................................. 79
10.5 Survival of Warranties and Certain Agreements........... 80
10.6 Indulgence Not Waiver................................... 81
10.7 Marshaling; Payments Set Aside.......................... 81
10.8 Entire Agreement........................................ 81
10.9 Independence of Covenants............................... 81
10.10 Severability............................................ 81
10.11 Lenders' Obligations Several; Independent
Nature of Lenders' Rights............................... 82
10.12 Headings................................................ 82
10.13 APPLICABLE LAW.......................................... 82
10.14 Successors and Assigns.................................. 82
10.15 No Fiduciary Relationship; Limitation of
Liabilities............................................ 82
10.16 CONSENT TO JURISDICTION................................. 83
10.17 WAIVER OF JURY TRIAL.................................... 83
10.18 Construction............................................ 83
10.19 Counterparts; Effectiveness............................. 84
10.20 No Duty................................................. 84
10.21 Confidentiality......................................... 84
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SECTION 11. BORROWING AGENCY...................................................... 85
11.1 Borrowing Agency Provisions............................. 85
11.2 Waiver of Subrogation................................... 86
SECTION 12. CROSS-GUARANTY........................................................ 86
12.1 Cross Guaranty.......................................... 86
12.2 Contribution with Respect to Guaranty Obligations....... 86
12.3 Obligations Absolute.................................... 87
12.4 Waiver.................................................. 88
12.5 Recovery................................................ 89
12.6 Liability Cumulative.................................... 89
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LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT is dated as of December 30, 1996 and
entered into among XXXXXXX XXXXXXXX COMPANY, INC., a Delaware corporation
("Holdings"), XXXXXXXXXX/LANSING COMPANY, a Delaware corporation ("Xxxxxxxxxx"),
THE XXXXXXX THREAD GROUP, LLC, a limited liability company formed under the laws
of Connecticut ("Thread"), XXXXXX INTERNATIONAL INC., a New Jersey corporation
("Xxxxxx"), XXXXXXXX THREADS, INC., a Connecticut corporation ("Xxxxxxxx"),
AMERICAN COLLARS, INC. a Connecticut corporation ("Collars") and THE BRIDGE
REALTY COMPANY, a Connecticut corporation ("Realty"), (each of Holdings,
Xxxxxxxxxx, Thread, Culver, Danfield, Collars and Realty a "Borrower" and,
jointly and severally, "Borrowers"), with their principal places of business as
set forth on Schedule A hereto, the financial institution(s) listed on the
signature pages hereof and their respective successors and assigns (each
individually a "Lender" and collectively "Lenders"), SANWA BUSINESS CREDIT
CORPORATION, a Delaware corporation (in its individual capacity, "Sanwa") with
offices at 000 Xxxxxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000, for itself as
a Lender, as Co-Agent and as Collateral Monitoring Agent and XXXXXX FINANCIAL,
INC., a Delaware corporation (in its individual capacity, "Xxxxxx"), with
offices at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, for itself as a
Lender, as Co-Agent and as Administrative and Documentation Agent. All
capitalized terms used herein are defined in Section 1 of this Agreement.
WHEREAS, Borrowers desire that Lenders extend a credit facility to
provide working capital financing and to provide funds for other general
corporate purposes; and
WHEREAS, Borrowers desire to secure their obligations under the Loan
Documents by granting to Administrative and Documentation Agent, for the benefit
of Lenders, a security interest in and lien upon each Borrower's property;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Collateral Monitoring
Agent, Administrative and Documentation Agent, Co-Agents and Lenders agree as
follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Accounts" means all "accounts" (as defined in the UCC), accounts
receivable, contract rights and general intangibles relating thereto, notes,
drafts and other forms of obligations owed to or owned by Borrowers arising or
resulting from the sale of goods or the rendering of services.
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"Additional Mortgaged Property" has the meaning assigned to that term
in subsection 5.15.
"Affiliate" means any Person (other than any Co-Agent or Lender): (a)
directly or indirectly controlling, controlled by, or under common control with,
any Loan Party; (b) directly or indirectly owning or holding five percent (5%)
or more of any equity interest in any Borrower; (c) five percent (5%) or more of
whose stock or other equity interest having ordinary voting power for the
election of directors or the power to direct or cause the direction of
management, is directly or indirectly owned or held by any Borrower; or (d)
which has a senior executive officer who is also a senior executive officer of
any Borrower. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with") means the possession directly or indirectly of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or other equity interest, or
by contract or otherwise.
"Administrative and Documentation Agent" means Xxxxxx in its capacity
as agent for the Lenders under the Loan Documents and any successor in such
capacity appointed pursuant to subsection 9.2.
"Agreement" means this Loan and Security Agreement as it may be
amended, restated, supplemented or otherwise modified from time to time.
"Asset Disposition" means the disposition, whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise, of any or all of
the assets of any Borrower or any of its Subsidiaries other than sales of
Inventory in the ordinary course of business.
"Asset Purchase Agreement" means the Asset Purchase Agreement dated as
of December 12, 1996 among Holdings, Thread, Danfield, Culver, Collars, Realty,
HP Belt Acquisition Corporation and Hicking Pentecost PLC.
"Assets" shall have the meaning given to such term in accordance with
GAAP.
"Bank Letter of Credit" means each letter of credit issued by a bank
acceptable to and approved by Collateral Monitoring Agent for the account of any
Borrower and supported by a Risk Participation Agreement.
"Base Rate" means a variable rate of interest per annum equal to the
higher of (a) the rate of interest from time to time published by the Board of
Governors of the Federal Reserve System as the "Bank Prime Loan" rate in Federal
Reserve Statistical Release H.15(519) entitled "Selected Interest Rates" or any
successor publication of the Federal Reserve System reporting the Bank Prime
Loan rate or its equivalent, or (b) the Federal Funds Effective Rate. The
statistical release generally sets forth a Bank Prime Loan rate for each
Business Day. In the event the Board of Governors of the Federal Reserve System
ceases to publish a Bank Prime Loan rate or its equivalent, the term "Base Rate"
shall mean a variable rate of interest per annum equal to the highest of the
"prime rate", "reference rate", "base rate", or other similar rate announced
from time to time by any of Bankers Trust
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Company, The Chase Manhattan Bank, or their successors (with the understanding
that any such rate may merely be a reference rate and may not necessarily
represent the lowest or best rate actually charged to any customer by any such
bank).
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate.
"Blocked Accounts" has the meaning assigned to that term in subsection
5.6.
"Borrower" and "Borrowers" have the meanings assigned to those terms in
the preamble to this Agreement.
"Borrowing Agent" means Holdings.
"Borrowing Base" has the meaning assigned to that term in subsection
2.1(B)(2).
"Borrowing Base Certificate" means a certificate and assignment
schedule duly executed by an officer of each Borrower appropriately completed
and in substantially the form of Exhibit A.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of Illinois or is a day on
which banking institutions located in any such state are closed, or for the
purposes of LIBOR Loans only, a day on which commercial banks are open for
dealings in Dollar deposits in the London, England (U.K.) market.
"Button Division" means the business conducted by Holdings and
Xxxxxxxxxx.
"Capital Expenditures" means all expenditures (including deposits) for,
or contracts for expenditures (excluding contracts for expenditures under or
with respect to Capital Leases, but including cash down payments for assets
acquired under Capital Leases) with respect to any fixed assets or improvements,
or for replacements, substitutions or additions thereto, which have a useful
life of more than one year, including the direct or indirect acquisition of such
assets by way of increased product or service charges, offset items or
otherwise.
"Capital Lease" means any lease of any property (whether real, personal
or mixed) that, in conformity with GAAP, should be accounted for as a capital
lease.
"Cash Equivalents" means: (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within six (6) months from the date of acquisition thereof;
(b) commercial paper maturing no more than six (6) months from the date issued
and, at the time of acquisition, having a rating of at least A-1 from Standard &
Poor's Corporation or at least P-1 from Xxxxx'x Investors Service, Inc.; and
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(c) certificates of deposit or bankers' acceptances maturing within six (6)
months from the date of issuance thereof issued by, or overnight reverse
repurchase agreements from, any commercial bank organized under the laws of the
United States of America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $250,000,000 and not subject to
setoff rights in favor of such bank.
"Chemical" means Xxxxxxx Chemical Industries, Inc., a Delaware
corporation.
"Closing Date" means December 30, 1996.
"Co-Agents" means each of Xxxxxx and Sanwa in their capacity as
co-agents for Lenders under this Agreement.
"Collateral" has the meaning assigned to that term in subsection 2.7.
"Collateral Monitoring Agent" means Sanwa in its capacity as collateral
monitoring agent for Lenders under this Agreement and any successor in such
capacity appointed pursuant to Section 9.2.
"Collateral Monitoring Agent's Account" means ABA No. 000-000-000,
Account No. 000-000-0 at Xxxxxx Bank and Trust Company, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, Reference: Sanwa Business Credit for the benefit of
Xxxxxxx Xxxxxxxx.
"Collecting Banks" has the meaning assigned to that term in subsection
5.6.
"Commitment" or "Commitments" means the commitment or commitments of
Lenders to make Loans as set forth in subsection 2.1(A) and/or 2.1(B) and to
provide Lender Letters of Credit as set forth in subsection 2.1(H).
"Commitment Percentage" of any Lender shall mean the percentage set
forth below such Lender's name on the signature page hereof as same may be
adjusted upon any assignment by a Lender pursuant to Section 9.1 hereof.
"Compliance Certificate" means a certificate duly executed by the chief
executive officer or chief financial officer of Holdings appropriately completed
and in substantially the form of Exhibit B.
"Default" means a condition, act or event that, after notice or lapse
of time or both, would constitute an Event of Default if that condition or event
were not cured or removed within any applicable grace or cure period.
"Default Rate" has the meaning assigned to that term in subsection 2.2.
"EBITDA" means, for any period, without duplication, the total of the
following for Holdings and its Subsidiaries on a consolidated basis, each
calculated for such period: (1)
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net income determined in accordance with GAAP; plus, to the extent included in
the calculation of net income, (2) the sum of (a) income and franchise taxes
paid or accrued; (b) Interest Expenses, net of interest income, paid or accrued;
(c) interest paid in kind; (d) amortization and depreciation and (e) other
non-cash charges (excluding accruals for cash expenses made in the ordinary
course of business); less, to the extent included in the calculation of net
income, (3) the sum of (a) the income of any Person (other than wholly-owned
Subsidiaries of Holdings or of a wholly owned Subsidiary of any other Borrower)
in which Holdings or a wholly owned Subsidiary of any other Borrower has an
ownership interest except to the extent such income is received by Holdings or
any other Borrower in a cash distribution during such period; (b) gains or
losses from sales or other dispositions of assets (other than Inventory in the
normal course of business); and (c) extraordinary or non-recurring gains, but
not net of extraordinary or non-recurring "cash" losses.
"Eligible Accounts" has the meaning assigned to that term in subsection
2.1(D).
"Eligible Inventory" has the meaning assigned to that term in
subsection 2.1(D).
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of any
Loan Party or any ERISA Affiliate or (b) has at any time within the preceding
six (6) years been maintained for the employees of any Loan Party or any current
or former ERISA Affiliate.
"Environmental Claims" means claims, liabilities, investigations,
litigation, administrative proceedings, judgments or orders relating to
Hazardous Materials.
"Environmental Laws" means any present or future federal, state or
local law, rule, regulation or order relating to pollution, waste, disposal or
the protection of human health or safety, plant life or animal life, natural
resources or the environment.
"Equipment" means all "equipment" (as defined in the UCC), including,
without limitation, all furniture, furnishings, fixtures, machinery, motor
vehicles, trucks, trailers, vessels, aircraft and rolling stock and all parts
thereof and all additions and accessions thereto and replacements therefor.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Loan Party, means any Person who
is a member of a group which is under common control with any Loan Party, who
together with any Loan Party is treated as a single employer within the meaning
of Section 414(b) and (c) of the IRC.
"Event of Default" means each of the events set forth in subsection
8.1.
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"Excess Cash Flow" means, for any period, the greater of (A) zero (0);
or (B) without duplication, the total of the following for Holdings and its
Subsidiaries on a consolidated basis, each calculated for such period: (1)
EBITDA; plus (2) tax refunds actually received; less (3) Capital Expenditures
(to the extent actually made in cash and/or due to be made in cash within such
period but in no event more than the amount permitted by subsection 6.5 hereof);
less (4) income and franchise taxes paid or accrued excluding any provision for
deferred taxes included in the determination of net income; less (5) decreases
in deferred income taxes resulting from payments of deferred taxes accrued in
prior periods; less (6) Interest Expenses paid or accrued; less (7) scheduled
amortization of Indebtedness actually paid in cash and/or due to be paid in cash
within such period and permitted under subsection 7.5; less (8) voluntary
prepayments and mandatory prepayments made under subsection 2.4 (B) (2), but
only to the extent that the transaction that precipitated the mandatory
prepayment increased EBITDA.
"Federal Funds Effective Rate" means, for any day, the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the
immediately following Business Day by the Federal Reserve Bank of New York or,
if such rate is not published for any Business Day, the average of the
quotations for the day of the requested Loan received by Collateral Monitoring
Agent from three Federal funds brokers of recognized standing selected by
Collateral Monitoring Agent.
"Fiscal Year" means each twelve month period ending on the last day of
December in each year.
"Fixed Charge Coverage" means, for any period, Operating Cash Flow
divided by Fixed Charges.
"Fixed Charges" means, for any period, and each calculated for such
period (without duplication), (a) Interest Expenses paid or accrued by Holdings
and its Subsidiaries on a consolidated basis; plus (b) scheduled payments of
principal with respect to all Indebtedness of Holdings and its Subsidiaries;
plus (c) any provision for (to the extent it is greater than zero) income or
franchise taxes included in the determination of net income, excluding any
provision for deferred taxes; plus (d) payment of deferred taxes accrued in any
prior period.
"Funding Date" means the date of each funding of a Loan or issuance of
a Lender Letter of Credit.
"GAAP" means 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 that are applicable to the
circumstances as of the date of determination.
"Goldwyn Litigation" means Case No. 96-60411 in the Superior Court for
New York County between Holdings and Xxxxx Xxxxxxx ("Xxxxxxx") pursuant to which
Holdings
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seeks damages from Goldwyn of approximately $1,400,000 for breach of certain
representations and warranties and Goldwyn counterclaimed seeking payment, on an
accelerated basis, of a promissory note in the sum of $530,964, plus accumulated
interest and attorneys' fees.
"Guarantor" means (a) Xxxxxxx Chemical Industries, Inc., a Delaware
corporation, and (b) The Xxxxxxxx & Xxxxxxxx Manufacturing Company, a
Connecticut corporation, and "Guarantors" means the collective reference to each
such Person.
"Hazardous Material" means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
Environmental Laws or regulations as "hazardous substances", "hazardous
materials", "hazardous wastes", "toxic substances" or any other formulation
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity, or
toxicity; (b) oil, petroleum or petroleum derived substances, natural gas,
natural gas liquids or synthetic gas and drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (c) any flammable substances or
explosives or any radioactive materials; and (d) asbestos in any form or
electrical equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls.
"H&B" means The Xxxxxxxx & Xxxxxxxx Manufacturing Company, a
Connecticut corporation.
"Indebtedness", as applied to any Person, means without duplication:
(a) all indebtedness for borrowed money; (b) obligations under leases which in
accordance with GAAP constitute Capital Leases; (c) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money; (d) any obligation owed for all or any part of
the deferred purchase price of property or services if the purchase price is due
more than six months from the date the obligation is incurred or is evidenced by
a note or similar written instrument; (e) all indebtedness secured by any Lien
on any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is non
recourse to the credit of that Person and (f) obligations in respect of letters
of credit.
"Intangible Assets" means all intangible assets (determined in
conformity with GAAP) including, without limitation, goodwill, Intellectual
Property, licenses, organizational costs, deferred amounts, covenants not to
compete, unearned income and restricted funds.
"Intellectual Property" means all present and future designs, patents,
patent rights and applications therefor, trademarks and registrations or
applications therefor, trade names, inventions, copyrights and all applications
and registrations therefor, software or computer programs, license rights, trade
secrets, methods, processes, know-how, drawings, specifications, descriptions,
and all memoranda, notes and records with respect to any research and
development, whether now owned or hereafter acquired, all goodwill associated
with
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any of the foregoing, and proceeds of all of the foregoing, including, without
limitation, proceeds of insurance policies thereon.
"Interest Expenses" means, without duplication, for any period, the
following, for Holdings and its Subsidiaries on a consolidated basis each
calculated for such period: interest expenses deducted in the determination of
net income (excluding (i) the amortization of fees and costs with respect to the
transactions contemplated by this Agreement which have been capitalized as
transaction costs in accordance with the provisions of subsection 1.2; and (ii)
interest paid in kind).
"Interest Period" has the meaning assigned to that term in subsection
2.2(B).
"Interest Rate" has the meaning assigned to that term in subsection
2.2(A).
"Inventory" means all "inventory" (as defined in the UCC), including,
without limitation, finished goods, raw materials, work in process and other
materials and supplies used or consumed in a Person's business, and goods which
are returned or repossessed.
"Inventory Report" means a report duly executed by an officer of each
Borrower appropriately completed and in substantially the form of Exhibit C.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute and all rules and regulations promulgated
thereunder.
"Lender" or "Lenders" has the meaning assigned to that term in the
preamble to this Agreement.
"Lender Addition Agreement" means an agreement among Administrative and
Documentation Agent, a Lender and such Lender's assignee regarding their
respective rights and obligations with respect to assignments of the Loans, the
Commitments and other interests under this Agreement and the other Loan
Documents substantially in the form of Exhibit D.
"Lender Letter of Credit" has the meaning assigned to that term in
subsection 2.1(H).
"Letter of Credit Liability" means, all reimbursement and other
liabilities of Borrowers or any of their Subsidiaries with respect to each
Lender Letter of Credit, whether contingent or otherwise, including: (a) the
amount available to be drawn or which may become available to be drawn; (b) all
amounts which have been paid or made available by any Lender issuing a Lender
Letter of Credit or any bank issuing a Bank Letter of Credit to the extent not
reimbursed; and (c) all unpaid interest, fees and expenses related thereto.
"Letter of Credit Reserve" means, at any time, an amount equal to (a)
the aggregate amount of Letter of Credit Liability with respect to all Lender
Letters of Credit outstanding at such time plus, without duplication, (b) the
aggregate amount theretofore paid by
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Collateral Monitoring Agent or any Lender under Lender Letters of Credit and not
debited to the Loan Account pursuant to subsection 2.1(H)(2) or otherwise
reimbursed by Borrowers.
"Liabilities" shall have the meaning given that term in accordance with
GAAP and shall include Indebtedness.
"LIBOR" means, for each Interest Period, a rate of interest equal to:
(a) the rate of interest determined by Collateral Monitoring Agent at
which deposits in Dollars for the relevant Interest Period are offered based on
information presented on the Reuters Screen LIBOR Page as of 11:00 A.M. (London
time) on the day which is two (2) Business Days prior to the first day of such
Interest Period; provided that if at least two such offered rates appear on the
Reuters Screen LIBOR Page in respect of such Interest Period, the arithmetic
mean of all such rates (as determined by Collateral Monitoring Agent) will be
the rate used; provided further that if Reuters ceases to provide LIBOR
quotations, such rate shall be the average rate of interest determined by
Collateral Monitoring Agent at which deposits in Dollars are offered for the
relevant Interest Period by Bankers Trust Company, The Chase Manhattan Bank, or
its successors to prime banks in the London interbank market as of 11:00 A.M.
(London time) on the applicable interest rate determination date, divided by
(b) a number equal to 1.0 minus the aggregate (but without duplication)
of the rates (expressed as a decimal fraction) of reserve requirements in effect
on the day which is two (2) Business Days prior to the beginning of such
Interest Period (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other governmental authority having jurisdiction with
respect thereto, as now and from time to time in effect) for Eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
such Board) which are required to be maintained by a member bank of the Federal
Reserve System:
(such rate to be adjusted to the nearest one sixteenth of one percent (1/16 of
1%) or, if there is not a nearest one sixteenth of one percent (1/16 of 1%), to
the next higher one sixteenth of one percent (1/16 of 1%).
"LIBOR Loans" means at any time that portion of the Loans bearing
interest at rates determined by reference to LIBOR.
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, whether voluntary or involuntary, (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest).
"Loan" or "Loans" means an advance or advances under the Term Loan
Commitment or the Revolving Loan Commitment.
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"Loan Documents" means this Agreement, the Notes, the Mortgages, and
all other instruments, documents and agreements executed by or on behalf of any
Borrower and delivered concurrently herewith or at any time hereafter to or for
Administrative and Documentation Agent, Collateral Monitoring Agent or any
Lender in connection with the Loans, any Lender Letter of Credit, and other
transactions contemplated by this Agreement, all as amended, restated,
supplemented or modified from time to time.
"Loan Party" means each Borrower, each Borrower's Subsidiaries and any
other Person (other than Administrative and Documentation Agent, Collateral
Monitoring Agent or any Lender) which is or becomes a party to any Loan
Document.
"Loan Year" means each period of twelve (12) consecutive months
commencing on the Closing Date and on each anniversary thereof.
"Material Adverse Effect" means a material adverse effect upon (a) the
business, operations, prospects, properties, assets or condition (financial or
otherwise) of the Button Division or the Thread Division or of all Borrowers
taken as a whole or (b) the ability of the Thread Division or the Button
Division to perform any obligations under any Loan Document or of Administrative
and Documentation Agent, Collateral Monitoring Agent or any Lender to enforce or
collect any of the Obligations.
"Maximum Revolving Loan Amount" has the meaning assigned to that term
in subsection 2.1(B).
"Mortgage" means each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignments of leases or other
real estate security documents delivered by any Loan Party to Administrative and
Documentation Agent, on behalf of Lenders, with respect to Mortgaged Property or
Additional Mortgaged Property, all in form and substance satisfactory to
Administrative and Documentation Agent.
"Mortgaged Property" means the real property owned or leased by
Borrower or its Subsidiaries as described on Schedule 1.1(A).
"Net Worth" of Holdings means, as of any date, the sum of the capital
stock and additional paid-in capital plus retained earnings (or minus
accumulated deficit) for Holdings on a consolidated basis calculated in
conformity with GAAP.
"Notes" means the Revolving Notes and the Term Notes.
"Notice of Borrowing" has the meaning assigned to that term in
subsection 2.1(E).
"Obligations" means all obligations, liabilities and indebtedness of
every nature of each Loan Party from time to time owed to Administrative and
Documentation Agent, Collateral Monitoring Agent or to any Lender under the Loan
Documents including the
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principal amount of all debts, claims and indebtedness (whether incurred before
or after the Termination Date), accrued and unpaid interest and all fees, costs
and expenses, whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now and/or from time to time hereafter owing, due or
payable including, without limitation, all interest, fees, cost and expenses
accrued or incurred after the filing of any petition under any bankruptcy or
insolvency law.
"Operating Cash Flow" means, for any period, (a) EBITDA; less (b)
Capital Expenditures; less (c) payments applied to liability reserves with
respect to pension, environmental, unfavorable leases and post-retirement
benefits.
"Permitted Encumbrances" means the following types of Liens: (a) Liens
(other than Liens relating to Environmental Claims or ERISA) for taxes,
assessments or other governmental charges not yet due and payable; (b) statutory
Liens of landlords, carriers, warehousemen, mechanics, materialmen and other
similar liens imposed by law, which are incurred in the ordinary course of
business for sums not more than thirty (30) days delinquent; (c) Liens (other
than any Lien imposed by ERISA) incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment insurance and
other types of social security, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money); (d) easements, rights-of-way, restrictions,
and other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the businesses of the Loan Parties or any
of their Subsidiaries taken as a whole; (e) Liens for purchase money
obligations, provided that (i) the purchase of the asset subject to any such
Lien is permitted under subsection 6.5, (ii) the Indebtedness secured by any
such Lien is permitted under subsection 7.1, and (iii) such Lien encumbers only
the asset so purchased or is otherwise a Permitted Encumbrance; (f) Liens in
favor of Administrative and Documentation Agent, on behalf of Lenders, and (g)
Liens set forth on Schedule 1.1(B).
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
"Pledge Agreement" means, the stock pledge agreement executed and
delivered by Holdings, in favor of Administrative and Documentation Agent, on
behalf of Lenders, in form and substance satisfactory to Administrative and
Documentation Agent and the Pledge of Membership Interests executed and
delivered by Holdings and H&B, in favor of Administrative and Documentation
Agent, on behalf of Lenders, in form and substance satisfactory to
Administrative and Documentation Agent.
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"Pro Forma" means the unaudited consolidated and consolidating balance
sheet of Holdings as of November 30, 1996 after giving effect to the
transactions contemplated by this Agreement. The Pro Forma is annexed hereto as
Schedule 1.1(C).
"Pro Rata Share" means (a) with respect to matters relating to a
particular Commitment of a Lender, the percentage obtained by dividing (i) such
Commitment of that Lender by (ii) all such Commitments of all Lenders and (b)
with respect to all other matters, the percentage obtained by dividing (i) the
Total Loan Commitment of a Lender by (ii) the Total Loan Commitments of all
Lenders, in either case as such percentage may be adjusted by assignments
permitted pursuant to subsection 9.1; provided, however, if any Commitment is
terminated pursuant to the terms hereof, then "Pro Rata Share" means the
percentage obtained by dividing (x) the aggregate amount of such Lender's
outstanding Loans related to such Commitment by (y) the aggregate amount of all
outstanding Loans related to such Commitment.
"Projections" means (i) Holdings's forecasted consolidated and (ii)
with respect to the Button Division and Thread Division, Holding's forecasted
consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash flow
statements; and (d) capitalization statements, all prepared on a division by
division consolidated basis consistent with Holdings's historical financial
statements, together with appropriate supporting details and a statement of
underlying assumptions.
"Reconciliation Report" means a report duly executed by the chief
executive officer or chief financial officer of each Borrower appropriately
completed and in substantially the form of Exhibit E.
"Requisite Lenders" means Lenders holding or being responsible for
fifty percent (50%) or more of the sum of (a) outstanding Loans, (b) outstanding
Letter of Credit Liability and (c) unutilized Commitments so long as Sanwa
retains Commitments equal to or greater than fifty percent (50%) and, if Sanwa
holds or is responsible for less than fifty percent (50%) of the Commitments,
then Requisite Lenders shall mean Lenders holding or being responsible for
sixty-six and two-thirds percent (66.66%) or more.
"Restricted Junior Payment" means: (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
or any membership interest of any Borrower or any of its Subsidiaries now or
hereafter outstanding, except a dividend payable solely with shares of the class
of stock on which such dividend is declared; (b) any redemption, conversion,
exchange, retirement, defeasance, sinking fund, or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
stock or of any membership interest of any Borrower or any of its Subsidiaries
now or hereafter outstanding, or the issuance of a notice of an intention to do
any of the foregoing; (c) any payment made to retire, or to obtain the surrender
of, any outstanding warrants, options or other rights to acquire shares of any
class of stock or of any membership interest of any Borrower or any of its
Subsidiaries now or hereafter outstanding; and (d) any payment by
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any Borrower or any of its Subsidiaries of any management, consulting or similar
fees to any Affiliate, whether pursuant to a management agreement or otherwise.
"Revolving Advance" means each advance made by Lender(s) pursuant to
subsection 2.1 (B).
"Revolving Loan" means the outstanding balance of all Revolving
Advances and any amounts added to the principal balance of the Revolving Loan
pursuant to this Agreement.
"Revolving Loan Commitment" means (a) as to any Lender, the commitment
of such Lender to make Revolving Advances pursuant to subsection 2.1 (B), and to
purchase participations in Lender Letters of Credit pursuant to subsection
2.1(H) in the aggregate amount set forth on the signature page of this Agreement
opposite such Lender's signature or in the most recent Lender Addition
Agreement, if any, executed by such Lender and (b) as to all Lenders, the
aggregate commitment of all Lenders to make Revolving Advances and to purchase
participations in Lender Letters of Credit.
"Revolving Note" means each promissory note of Borrowers in a form
reasonably acceptable to Administrative and Documentation Agent and Collateral
Monitoring Agent, issued pursuant to subsection 2.1(F).
"Risk Participation Agreement" has the meaning assigned to that term in
subsection 2.1(H).
"Scheduled Installment" has the meaning assigned to that term in
subsection 2.1(A).
"Scheduled Installment of Term Loan B" has the meaning assigned to that
term in subsection 2.1(A)(2).
"Settlement Date" has the meanings assigned to that term in subsection
9.6(A)(2).
"Solvent" means, with respect to any Person, if the aggregate of, at a
fair valuation, such Person's Assets exceeds such Person's Liabilities.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than fifty percent (50%) of
the total voting power of shares of stock (or equivalent ownership or
controlling interest) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other subsidiaries of that Person or a combination thereof.
"Subsidiary Stock" shall mean (i) the common stock of Holding's
corporate Subsidiaries which has been pledged by Holdings and (ii) the
membership interests in Thread, which has been pledged by Holdings and H&B,
respectively, to Administrative and Documentation Agent, on behalf of Lenders,
pursuant to the respective Pledge Agreement.
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"Term Loans means the unpaid balance of the term loans made pursuant to
subsection 2.1 (A).
"Term Loan A" means the advances made pursuant to subsection 2.1(A)(1).
"Term Loan B" means the advances made pursuant to subsection 2.1(A)(2).
"Term Loan Commitment" means (a) as to any Lender, the commitment of
such Lender to make its Pro Rata share of the Term Loans in the maximum
aggregate amount set forth on the signature page of this Agreement opposite such
Lender's signature or in the most recent Lender Addition Agreement, if any,
executed by such Lender and (b) as to all Lenders, the aggregate commitment of
all Lenders to make the Term Loans.
"Term Note" or "Term Notes" means, collectively, Term Note A and Term
Note B.
"Term Note A" means, collectively, the promissory notes of Borrowers in
a form reasonably acceptable to Administrative and Documentation Agent and
Collateral Monitoring Agent, issued pursuant to subsection 2.1(F).
"Term Note B" means, collectively, the promissory notes of Borrowers in
a form reasonably acceptable to Administrative and Documentation Agent and
Collateral Monitoring Agent, issued pursuant to subsection 2.1(F).
"Termination Date" means the date this Agreement is terminated as
specified in the notice given by either party in the manner set forth in
subsection 2.5.
"Thread Division" means the business conducted by Thread, Culver,
Danfield, Collars and Realty.
"Total Loan Commitment" means as to any Lender the aggregate
commitments of such Lender with respect to its Revolving Loan Commitment and,
Term Loan Commitment.
"UCC" means the Uniform Commercial Code as in effect on the date hereof
in the State of Illinois, as amended from time to time, and any successor
statute.
1.2 Accounting Terms. For purposes of this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to such
terms in conformity with GAAP. Financial statements and other information
furnished to Administrative and Documentation Agent, Collateral Monitoring Agent
or any Lender pursuant to subsection 5.1 shall be prepared in accordance with
GAAP (as in effect at the time of such preparation) on a consistent basis and
shall include Chemical and H&B for any such financial statement and such other
information being provided by Holdings on a consolidated basis. In the event any
"Accounting Changes" (as defined below) shall occur and such changes affect
financial covenants, standards or terms in this Agreement, then Borrowers and
Lenders agree to enter into negotiations in order to amend such provisions of
this Agreement so as to
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equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the financial condition of Borrowers shall be the same
after such Accounting Changes as if such Accounting Changes had not been made,
and until such time as such an amendment shall have been executed and delivered
by Borrowers and Requisite Lenders, (A) all financial covenants, standards and
terms in this Agreement shall be calculated and/or construed as if such
Accounting Changes had not been made, and (B) each Borrower shall prepare
footnotes to each Compliance Certificate and the financial statements required
to be delivered hereunder that show the differences between the financial
statements delivered (which reflect such Accounting Changes) and the basis for
calculating financial covenant compliance (without reflecting such Accounting
Changes). "Accounting Changes" means: (a) changes in accounting principles
required by GAAP and implemented by Borrowers; (b) changes in accounting
principles recommended by Borrowers' certified public accountants; and (c) any
other adjustments that, in each case, were applicable to, but not included in,
the Pro Forma. All such adjustments resulting from expenditures made subsequent
to the Closing Date (including, but not limited to, capitalization of costs and
expenses or payment of pre-Closing Date liabilities) shall be treated as
expenses in the period the expenditures are made and deducted as part of the
calculation of EBITDA in such period.
1.3 Other Definitional Provisions. References to "Sections",
"subsections", "Exhibits" and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in subsection 1.1 may, unless
the context otherwise requires, be used in the singular or the plural depending
on the reference. In this Agreement, words importing any gender include the
other genders; the words "including," "includes" and "include" shall be deemed
to be followed by the words "without limitation"; references to agreements and
other contractual instruments shall be deemed to include subsequent amendments,
assignments, and other modifications thereto, but only to the extent such
amendments, assignments and other modifications are not prohibited by the terms
of this Agreement or any other Loan Document; references to Persons include
their respective permitted successors and assigns or, in the case of
governmental Persons, Persons succeeding to the relevant functions of such
Persons; and all references to statutes and related regulations shall include
any amendments of same and any successor statutes and regulations.
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SECTION 2. LOANS AND COLLATERAL
2.1 Loans.
(A)(1) Term Loan A. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of each
Borrower and the other Loan Parties set forth herein and in the other Loan
Documents, each Lender, severally, agrees to lend to Borrowers, on the Closing
Date, its Pro Rata Share of the Term Loan A which is in the amount of
$14,000,000. The Term Loan A shall be funded in one drawing. Amounts borrowed
under this subsection 2.1(A)(1) and repaid may not be reborrowed. Borrowers
shall make principal payment in the amount of the applicable Scheduled
Installment of Term Loan A (or such lesser principal amount as shall then be
outstanding) on the dates and in the amounts set forth below.
"Scheduled Installment of Term Loan A means, for each date set forth
below, the amount set forth opposite such date.
Date Scheduled Installment
March 31, 1998 $1,000,000 less Scheduled Installment Term
Loan B
June 30, 1998 $1,000,000 less Scheduled Installment Term
Loan B
September 30, 1998 $1,000,000 less Scheduled Installment Term
Loan B
December 31, 1998 $1,000,000 less Scheduled Installment Term
Loan B
March 31, 1999 $1,000,000
June 30, 1999 $1,000,000
September 30, 1999 $1,000,000
December 31, 1999 $1,000,000
March 31, 2000 $1,000,000
June 30, 2000 $1,000,000
September 30, 2000 $1,000,000
December 31, 2000 $1,000,000
March 31, 2001 $1,500,000
June 30, 2001 $1,500,000
September 30, 2001 $1,500,000
December 30, 2001 $1,500,000
If at any time prior to the commencement of Scheduled Installments of
Term Loan A set forth above, Term Loan B is fully repaid, then Scheduled
Installments of Term Loan
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A shall commence on the next date set forth pursuant to subsection 2.1(A)(2)
below, and such payments shall be in the amounts set forth in subsection
2.1(A)(2) corresponding to such dates, but shall be applied to repayment of Term
Loan A in inverse order of maturity.
(A)(2) Term Loan B. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of each
Borrower and the other Loan Parties set forth herein and in the other Loan
Documents, each Lender, severally, agrees to lend to Borrowers on the Closing
Date its Pro Rata Share of the Term Loan B which is in the amounts of
$8,000,000. Term Loan B shall be funded in one drawing. Amounts borrowed under
this subsection 2.1(A)(2) and repaid may not be reborrowed. Borrowers shall make
principal payments in the amounts of the applicable Scheduled Installments of
Term Loan B (or such lesser principal amount of Term Loan B as shall then be
outstanding) on the dates and in the amounts set forth below.
"Scheduled Installment of Term Loan B" means, for each date set forth
below, the amount set forth opposite such date.
Date Scheduled Installment
March 31, 1997 $1,000,000
June 30, 1997 $1,000,000
September 30, 1997 $1,000,000
December 31, 1997 $1,000,000
March 31, 1998 $1,000,000
June 30, 1998 $1,000,000
September 30, 1998 $1,000,000
December 31, 1998 $1,000,000
(B) Revolving Loan. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of each
Borrower and the other Loan Parties set forth herein and in the other Loan
Documents, each Lender, severally, agrees to lend to Borrowers from time to time
its Pro Rata Share of each Revolving Advance. The aggregate amount of all
Revolving Loan Commitments shall not exceed at any time $20,000,000. Amounts
borrowed under this subsection 2.1(B) may be repaid and reborrowed at any time
prior to the earlier of (i) the termination of the Revolving Loan Commitment
pursuant to subsection 8.3 or (ii) the Termination Date. Except as otherwise
provided herein, no Lender shall have any obligation to make an advance under
this subsection 2.1(B) to the extent such advance would cause the Revolving Loan
(after giving effect to any immediate application of the proceeds thereof) to
exceed (a) with respect to all Borrowers, the Maximum Revolving Loan Amount and
(b) with respect to each Borrower,
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such Borrower's Individual Borrowing Base minus the Letter of Credit Reserve
applicable to such Borrower.
(1) "Maximum Revolving Loan Amount" means, as of any date of
determination, the lesser of (a) the Revolving Loan Commitment(s) of all Lenders
minus the Letter of Credit Reserve and (b) the Borrowing Base minus the Letter
of Credit Reserve.
(2) "Borrowing Base" means, as of any date of determination,
an amount equal to the sum of (a) eighty-five percent (85%) of Eligible Accounts
plus (b) the lesser of (i) $10,000,000, and (ii) sixty percent (60%) of Eligible
Inventory consisting of raw materials and finished goods and fifty percent (50%)
of Eligible Inventory consisting of work-in-process plus (c)(i) sixty (60%) of
Inventory ordered but not received, the payment for which is to be made under
documentary Lender Letters of Credit ("Letter of Credit Inventory") less (ii)
duty and freight due with respect to the Letter of Credit Inventory, and less,
in each case, such reserves as Collateral Monitoring Agent in its reasonable
discretion may elect to establish, including, without limitation, any reserves
established by Collateral Monitoring Agent if it determines in its reasonable
discretion that the ratio of Inventory consisting of work-in-process, finished
goods and/or raw materials materially changes at any time.
(3) "Individual Borrowing Base" means, as of any of
determination for any Borrower, an amount equal to the sum of (a) eighty-five
percent (85%) of such Borrower's Eligible Accounts plus (b) the lesser of (i)
$10,000,000 and (ii) the sum of (x) sixty percent (60%) of the Eligible
Inventory consisting of raw materials and finished goods and (y) fifty percent
(50%) of the Eligible Inventory consisting of work in process, and less in each
case such reserves as Collateral Monitoring Agent in its reasonable discretion
may elect to establish.
(C) Changes in Borrowing Base. On the Closing Date, Collateral
Monitoring Agent shall establish the reserves set forth on Schedule 2.1(C).
Following the Closing Date, Collateral Monitoring Agent shall promptly notify
Borrowing Agent and Administrative and Documentation Agent if (1) any Accounts
or Inventory previously considered to constitute "Eligible Accounts" or
"Eligible Inventory", respectively, are no longer to be considered eligible for
borrowing purposes for reasons not otherwise set forth in this Agreement, and
(2) any additional reserves are being established which reduce the Borrowing
Base.
(D) Eligible Collateral.
"Eligible Accounts" means, as at any date of determination,
the aggregate of all Accounts that Collateral Monitoring Agent, in its
reasonable judgment, deems to be eligible for borrowing purposes. Without
limiting the generality of the foregoing, unless otherwise agreed by Collateral
Monitoring Agent and Administrative and Documentation Agent, the following
Accounts are not Eligible Accounts:
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(1) Accounts which, at the date of issuance of the respective
invoice therefor, were payable more than sixty (60) days after the date of
issuance of such invoice;
(2) Accounts which remain unpaid for more than sixty (60) days
after the due date specified in the original invoice or for more than ninety
(90) days after invoice date if no due date was specified;
(3) Accounts which are otherwise eligible with respect to
which the account debtor is owed a credit by any Borrower, but only to the
extent of such credit;
(4) Accounts due from a customer whose principal place of
business is located outside the United States of America or Canada unless such
Account is backed by a letter of credit, in form and substance acceptable to
Collateral Monitoring Agent and issued or confirmed by a bank that is organized
under the laws of the United States of America or a State thereof, that is
acceptable to Collateral Monitoring Agent; provided that such letter of credit
has been delivered to Collateral Monitoring Agent as additional collateral;
(5) Accounts due from a customer which Collateral Monitoring
Agent has notified Borrowing Agent does not have a satisfactory credit standing;
(6) Accounts with respect to which the customer is the United
States of America, any state or any municipality, or any department, agency or
instrumentality thereof unless Borrower has, with respect to such Accounts,
complied with the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or
any applicable statute or municipal ordinance of similar purpose and effect;
(7) Accounts with respect to which the customer is an
Affiliate of any Borrower or a director, officer, agent, stockholder or employee
of any Borrower or any of its Affiliates;
(8) Accounts due from a customer if more than twenty-five
percent (25%) of the aggregate amount of Accounts of such customer have at the
time remained unpaid for more than sixty (60) days after due date or ninety (90)
days after the invoice date if no due date was specified;
(9) Accounts with respect to which there is any unresolved
dispute with the respective customer (but only to the extent of such dispute);
(10) Accounts evidenced by an "instrument" or "chattel paper"
(as defined in the UCC) not in the possession of Collateral Monitoring Agent, on
behalf of Lenders;
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(11) Accounts with respect to which Administrative and
Documentation Agent, on behalf of Lenders, does not have a valid, first priority
and fully perfected security interest;
(12) Accounts subject to any Lien except those in favor of
Administrative and Documentation Agent, on behalf of Lenders;
(13) Accounts with respect to which the customer is the
subject of any bankruptcy or other insolvency proceeding to the extent such
proceedings are continuing as of the relevant date;
(14) Accounts due from a customer to the extent that such
Accounts exceed in the aggregate an amount equal to twenty percent (20%) of the
aggregate of all Accounts at said date;
(15) Accounts with respect to which the customer's obligation
to pay is conditional or subject to a repurchase obligation or right to return
or with respect to which the goods or services giving rise to such Account have
not been delivered (or performed, as applicable) and accepted by such account
debtor, including progress xxxxxxxx, xxxx and hold sales, guarantied sales, sale
or return transactions, sales on approval or consignment sales;
(16) Accounts with respect to which the customer is located in
Indiana, New Jersey, Minnesota, or any other state denying creditors access to
its courts in the absence of a Notice of Business Activities Report or other
similar filing, unless the applicable Borrower has either qualified as a foreign
corporation authorized to transact business in such state or has filed a Notice
of Business Activities Report or similar filing with the applicable state agency
for the then current year;
(17) Accounts with respect to which the customer is a creditor
of any Borrower, provided, however, that any such Account shall only be
ineligible as to that portion of such Account which is less than or equal to the
amount owed by such Borrower to such Person.
"Eligible Inventory" means, as at any date of determination,
the value (determined at the lower of cost or market on a first-in, first-out
basis) of all Inventory owned by and in the possession of any Borrower and
located in the United States of America that Collateral Monitoring Agent, in its
reasonable credit judgment, deems to be eligible for borrowing purposes. Without
limiting the generality of the foregoing, unless otherwise agreed by Collateral
Monitoring Agent and Administrative and Documentation Agent, the following is
not Eligible Inventory: (a) work-in-process that is not readily marketable in
its current form; (b) finished goods which do not meet the specifications of the
purchase order for such goods; (c) Inventory which Collateral Monitoring Agent
or Administrative and Documentation Agent determines, is unacceptable for
borrowing purposes due to age, quality, type, category and/or quantity; (d)
Inventory with respect to which Administrative
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and Documentation Agent, on behalf of Lenders, does not have a valid, first
priority and fully perfected security interest; (e) Inventory with respect to
which there exists any Lien in favor of any Person other than Administrative and
Documentation Agent, on behalf of Lenders; (f) Inventory produced in violation
of the Fair Labor Standards Act and subject to the so-called "hot goods"
provisions contained in Title 29 U.S.C. 215 (a)(i); and (g) Inventory located at
any location other than the locations set forth on Schedule 4.7, unless a waiver
of interest acceptable in form and substance is delivered to Collateral
Monitoring Agent.
(E) Borrowing Mechanics. (1) LIBOR Loans made on any Funding
Date shall be in an aggregate minimum amount of $500,000 and integral multiples
of $100,000 in excess of such amount. (2) On any day when Borrowers desire an
advance under this subsection 2.1, Borrowing Agent shall give Collateral
Monitoring Agent telephonic notice of the proposed borrowing by 12:00 p.m.
Eastern time on the Funding Date of a Base Rate Loan and three (3) Business Days
in advance of the Funding Date of a LIBOR Loan, which notice (a "Notice of
Borrowing") shall also specify the proposed Funding Date (which shall be a
Business Day), whether such Loans shall consist of Base Rate Loans or LIBOR
Loans, and for LIBOR Loans the Interest Period applicable thereto. Any such
telephonic notice shall be confirmed in writing on the same day. Neither
Collateral Monitoring Agent nor any Lender shall incur any liability to any
Borrower for acting upon any telephonic notice Collateral Monitoring Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to borrow on behalf of such Borrower or for otherwise acting
in good faith under this subsection 2.1(E). Neither Collateral Monitoring Agent
nor any Lender will make any advance pursuant to any telephonic notice unless
Collateral Monitoring Agent has also received the most recent Borrowing Base
Certificate and all other documents required under subsection 5.1(F) by 11:00
a.m. Central time. Each Revolving Advance shall be deposited by wire transfer in
immediately available funds in such account as Borrowing Agent may from time to
time designate to Collateral Monitoring Agent in writing. The becoming due of
any amount required to be paid under this Agreement or any of the other Loan
Documents as principal, accrued interest and fees shall be deemed irrevocably to
be a request by such Borrower for a Base Rate Revolving Loan on the due date of,
and in the amount required to pay, such principal, accrued interest and fees,
and the proceeds of each such Revolving Advance if made by Collateral Monitoring
Agent or any Lender shall be disbursed by Collateral Monitoring Agent or such
Lender by way of direct payment of the relevant obligation.
(F) Notes. Each Borrower shall execute and deliver to each
Lender with appropriate insertions (i) a Term Note to evidence such Lender's
Term Loan Commitment, and (ii) a Revolving Note to evidence such Lender's
Revolving Loan Commitment. In the event of an assignment under subsection 9.1,
each Borrower shall, upon surrender of the assigning Lender's Notes, issue new
Notes to reflect the interest held by the assigning Lender and its assignee.
(G) Evidence of Revolving Loan Obligations. Each Revolving
Advance shall be evidenced by this Agreement, the Revolving Note, and notations
made from time to time by Collateral Monitoring Agent in its books and records,
including computer records.
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Collateral Monitoring Agent shall record in its books and records, including
computer records, the principal amount of the Revolving Loan owing to each
Lender from time to time. Collateral Monitoring Agent's books and records shall
constitute presumptive evidence, absent manifest error, of the accuracy of the
information contained therein. Failure by Collateral Monitoring Agent to make
any such notation or record shall not affect the obligations of Borrowers to
Lenders with respect to the Revolving Loans.
(H) Letters of Credit. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of
Borrowers herein set forth, the Revolving Loan Commitments may, in addition to
Revolving Advances be utilized, upon the request of Borrowers, for (i) the
issuance of letters of credit by Collateral Monitoring Agent, or with
Administrative and Documentation Agent's and Collateral Monitoring Agent's
consent any Lender, or (ii) the issuance by Collateral Monitoring Agent of risk
participations (a "Risk Participation Agreement") to banks to induce such banks
to issue letters of credit for the account of each Borrower (each of (i) and
(ii) above a "Lender Letter of Credit"). Each Lender shall be deemed to have
purchased a participation in each Lender Letter of Credit issued on behalf of
Borrower in an amount equal to its Pro Rata Share thereof. In no event shall any
Lender Letter of Credit be issued to the extent that the issuance of such Lender
Letter of Credit would cause the sum of the Letter of Credit Reserve (after
giving effect to such issuance) plus the Revolving Loan to exceed (1) with
respect to all Borrowers, the lesser of (x) the Borrowing Base and (y) the
Revolving Loan Commitment, and (2) with respect to each Borrower, the Individual
Borrowing Base for such Borrower.
(1) Maximum Amount. The aggregate amount of Letter of Credit
Liability with respect to all Lender Letters of Credit outstanding at any time
shall not exceed $2,000,000.
(2) Reimbursement. Borrowers shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind, to reimburse Collateral Monitoring Agent or the
issuer for any amounts paid with respect to a Lender Letter of Credit including
all fees, costs and expenses paid to any bank that issues a Bank Letter of
Credit. Borrowers hereby authorize and direct Collateral Monitoring Agent, at
Collateral Monitoring Agent's option, to debit the applicable Borrower's account
(by increasing the Revolving Loan) in the amount of any payment made with
respect to any Lender Letter of Credit. All amounts paid with respect to any
Lender Letter of Credit that are not immediately repaid by Borrowers with the
proceeds of a Revolving Advance or otherwise shall bear interest at the Default
Rate applicable to Base Rate Revolving Loans. In the event that Borrowers shall
fail to reimburse Collateral Monitoring Agent on the date of any payment under a
Lender Letter of Credit in an amount equal to the amount of such payment,
Collateral Monitoring Agent shall promptly notify each Lender of the
unreimbursed amount of such payment together with accrued interest thereon and
each Lender, on the next Business Day, shall deliver to Collateral Monitoring
Agent an amount equal to its respective participation in same day funds. The
obligation of each Lender to deliver to Collateral Monitoring Agent an amount
equal to its respective participation pursuant to the foregoing sentence shall
be absolute and unconditional and
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such remittance shall be made notwithstanding the occurrence or continuation of
an Event of Default or Default or the failure to satisfy any condition set forth
in Section 3. In the event any Lender fails to make available to Collateral
Monitoring Agent the amount of such Lender's participation in such Lender Letter
of Credit, Collateral Monitoring Agent shall be entitled to recover such amount
on demand from such Lender together with interest at the Base Rate.
(3) Conditions of Issuance. In addition to all other terms and
conditions set forth in this Agreement, the issuance of any Lender Letter of
Credit shall be subject to the satisfaction of all conditions applicable to
Revolving Advances, and the condition that the letter of credit which Borrowers
request be in such form, be for such amount, contain such terms and support such
transactions as are reasonably satisfactory to Collateral Monitoring Agent. The
expiration date of each Lender Letter of Credit shall be on a date which is at
least thirty (30) days prior to the Termination Date.
(4) Request for Letters of Credit. Borrowers shall give
Collateral Monitoring Agent at least three (3) Business Days prior notice
specifying the date a Lender Letter of Credit is to be issued, identifying the
beneficiary and describing the nature of the transactions proposed to be
supported thereby. The notice shall be accompanied by the form of the letter of
credit being requested.
(I) Other Letter of Credit Provisions.
(1) Obligations Absolute. The obligation of Borrowers to
reimburse Collateral Monitoring Agent or any Lender for payments made under, and
other amounts payable in connection with, any Lender Letter of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including the following
circumstances:
(a) any lack of validity or enforceability of any Lender
Letter of Credit, Bank Letter of Credit or any other agreement;
(b) the existence of any claim, set-off, defense or other
right which each Borrower, any of its Affiliates, Collateral Monitoring Agent or
any Lender, on the one hand, may at any time have against any beneficiary or
transferee of any Lender Letter of Credit or Bank Letter of Credit (or any
Persons for whom any such transferee may be acting), Collateral Monitoring
Agent, any Lender or any other Person, on the other hand, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between each Borrower or any
of its Affiliates and the beneficiary of the letter of credit);
(c) any draft, demand, certificate or any other document
presented under any Lender Letter of Credit or Bank Letter of Credit is alleged
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
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(d) payment under any Lender Letter of Credit or Bank
Letter of Credit against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such letter of credit; provided
that, in the case of any payment by Collateral Monitoring Agent or a Lender
under any Lender Letter of Credit, Collateral Monitoring Agent or such Lender
has not acted with gross negligence or willful misconduct (as determined by a
court of competent jurisdiction) in determining that the demand for payment
under such Lender Letter of Credit complies on its face with any applicable
requirements for a demand for payment under such Lender Letter of Credit;
(e) any other circumstance or happening whatsoever,
which is similar to any of the foregoing; or
(f) the fact that a Default or an Event of Default shall
have occurred and be continuing.
(2) Nature of Lender's Duties. As between Collateral
Monitoring Agent and Lenders, on the one hand, and Borrowers, on the other hand,
Borrowers assume all risks of the acts and omissions of, or misuse of any Lender
Letter of Credit by the beneficiary thereof. In furtherance and not in
limitation of the foregoing, neither Collateral Monitoring Agent nor any Lender
shall be responsible: (a) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document by any party in connection with the
application for and issuance of any Lender Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (b) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Lender Letter
of Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason; (c) for
failure of the beneficiary of any Lender Letter of Credit to comply fully with
conditions required in order to demand payment thereunder; provided that, in the
case of any payment by Collateral Monitoring Agent or any Lender under any
Lender Letter of Credit, Collateral Monitoring Agent or Lender has not acted
with gross negligence or willful misconduct (as determined by a court of
competent jurisdiction) in determining that the demand for payment under such
Lender Letter of Credit complies on its face with any applicable requirements
for a demand for payment thereunder; (d) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (e) for errors in
interpretation of technical terms; (f) for any loss or delay in the transmission
or otherwise of any document required in order to make a payment under any
Lender Letter of Credit; (g) for the credit of the proceeds of any drawing under
any Lender Letter of Credit; and (h) for any consequences arising from causes
beyond the control of Collateral Monitoring Agent or any Lender as the case may
be. None of the above shall affect, impair, or prevent the vesting of any of
Collateral Monitoring Agent's or any Lender's rights or powers hereunder.
(3) Liability. In furtherance and extension of and not in
limitation of, the specific provisions herein above set forth, any action taken
or omitted by Collateral Monitoring Agent or any Lender under or in connection
with any Lender Letter of Credit,
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if taken or omitted in good faith, shall not put Collateral Monitoring Agent or
any Lender under any resulting liability to any Borrower.
2.2 Interest.
(A) Rate of Interest. The Loans and all other Obligations shall bear
interest from the date such Loans are made or such other Obligations become due
to the date paid at a rate per annum equal to (i) in the case of Base Rate Loans
and other Obligations for which no other interest rate is specified, the Base
Rate plus (a) one and one-quarter percent (1.25%) with respect to the Revolving
Loan, (b) one and one-half percent (1.50%) with respect to Term Loan A and (c)
one and three-quarters percent (1.75%) with respect to Term Loan B and (ii) in
the case of LIBOR Loans, LIBOR plus (i) three and one-quarter percent (3.25%)
with respect to the Revolving Loan, (ii) three and one-half percent (3.50%) with
respect to Term Loan A and (iii) three and three-quarters percent (3.75%) with
respect to Term Loan B (the "Interest Rate"). The applicable basis for
determining the rate of interest shall be selected by Borrowers initially at the
time a Notice of Borrowing is given pursuant to subsection 2.1(E). The basis for
determining the interest rate with respect to any Loan or a portion of any Loan
may be changed from time to time pursuant to subsection 2.2(E). If on any day a
Loan or a portion of any Loan is outstanding with respect to which notice has
not been delivered to Collateral Monitoring Agent in accordance with the terms
of this Agreement specifying the basis for determining the rate of interest,
then for that day that Loan or portion thereof shall bear interest determined by
reference to the Base Rate.
After the occurrence and during the continuance of an Event of Default (i)
the Loans and all other Obligations shall, at the option of Requisite Lenders,
bear interest at a rate per annum equal to two percent (2%) plus the applicable
Interest Rate (the "Default Rate"), (ii) each LIBOR Loan shall automatically
convert to a Base Rate Loan at the end of any applicable Interest Period and
(iii) no Loans may be converted to LIBOR Loans.
Anything in this Section 2.2(A) to the contrary notwithstanding, the
applicable Interest Rate shall be reduced by (x) one-half of one percent (0.50%)
commencing April 1, 1998 if the financial statements delivered pursuant to
Section 5.1(C) for the fiscal year ended December 31, 1997 show that EBITDA for
such fiscal year was equal to or greater than $16,500,000 and that no Event of
Default has occurred and is continuing, and (y) if the Interest Rate has been
reduced pursuant to clause (x) above, then a further reduction of one-quarter of
one percent (0.25%) commencing April 1, 1999 if the financial statements
delivered pursuant to Section 5.1(C) for the fiscal year ended December 31, 1998
show that EBITDA for such fiscal year was equal to or greater than $16,500,000
and that no Event of Default has occurred and is continuing.
(B) Interest Periods. In connection with each LIBOR Loan, Borrowing
Agent shall elect an interest period (each an "Interest Period") to be
applicable to such Loan, which Interest Period shall be either a one, two, three
or six month period; provided that:
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(1) the initial Interest Period for any LIBOR Loan shall
commence on the Funding Date of such Loan;
(2) in the case of successive Interest Periods, each
successive Interest Period shall commence on the day on which the immediately
preceding Interest Period expires;
(3) if an Interest Period expiration date is not a Business
Day, such Interest Period shall expire on the next succeeding Business Day;
provided that if any Interest Period expiration date 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 immediately preceding Business Day;
(4) any Interest Period that begins on the last Business Day
of a calendar month (or 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 (5), below, end on the last Business Day of a calendar month;
(5) no Interest Period shall extend beyond the Termination
Date;
(6) no Interest Period may extend beyond a scheduled principal
payment date unless the sum of (a) the aggregate principal amount of Loans that
are Base Rate Loans or that have Interest Periods expiring on or before such
date and (b) the lesser of the available, unused (x) Revolving Loan Commitment
or (y) Borrowing Base, equals or exceeds the principal amount required to be
paid on the Loans on such date; and
(7) there shall be no more than five (5) Interest Periods
relating to LIBOR Loans outstanding at any time.
(C) Computation and Payment of Interest. Interest on the Loans and
all other Obligations shall be computed on the daily principal balance on the
basis of a 360 day year for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of funding
of the Loan or the first day of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted from a LIBOR Loan, the date of
conversion of such LIBOR Loan to such Base Rate Loan, shall be included; and the
date of payment of such Loan or the expiration date of an Interest Period
applicable to such Loan, or with respect to a Base Rate Loan being converted to
a LIBOR Loan, the date of conversion of such Base Rate Loan to such LIBOR Loan,
shall be excluded; provided that if a Loan is repaid on the same day on which it
is made, one day's interest shall be paid on that Loan. Interest on Base Rate
Loans and all other Obligations other than LIBOR Loans shall be payable to
Collateral Monitoring Agent for benefit of Lenders monthly in arrears on the
first day of each month, on the date of any prepayment of Loans, and at
maturity, whether by acceleration or otherwise. Interest on LIBOR Loans shall be
payable to Collateral Monitoring Agent for benefit of Lenders on the last day of
the applicable Interest Period for such Loan, on the date of any prepayment of
the Loans, and
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at maturity, whether by acceleration or otherwise. In addition, for each LIBOR
Loan having an Interest Period longer than three (3) months, interest accrued on
such Loan shall also be payable on the last day of each three (3) month interval
during such Interest Period.
(D) Interest Laws. Notwithstanding any provision to the contrary contained in
this Agreement or any other Loan Document, Borrowers shall not be required to
pay, and neither Collateral Monitoring Agent nor any Lender shall be permitted
to collect, any amount of interest in excess of the maximum amount of interest
permitted by applicable law ("Excess Interest"). If any Excess Interest is
provided for or determined by a court of competent jurisdiction to have been
provided for in this Agreement or in any other Loan Document, then in such
event: (1) the provisions of this subsection shall govern and control; (2) no
Borrower nor any other Loan Party shall be obligated to pay any Excess Interest;
(3) any Excess Interest that Collateral Monitoring Agent or any Lender may have
received hereunder shall be, at such Lender's option, (a) applied as a credit
against the outstanding principal balance of the Obligations or accrued and
unpaid interest (not to exceed the maximum amount permitted by law), (b)
refunded to the payor thereof, or (c) any combination of the foregoing; (4) the
interest rate(s) provided for herein shall be automatically reduced to the
maximum lawful rate allowed from time to time under applicable law (the "Maximum
Rate"), and this Agreement and the other Loan Documents shall be deemed to have
been and shall be, reformed and modified to reflect such reduction; and (5) no
Borrower nor any Loan Party shall have any action against Collateral Monitoring
Agent or any Lender for any damages arising out of the payment or collection of
any Excess Interest. Notwithstanding the foregoing, if for any period of time
interest on any Obligations is calculated at the Maximum Rate rather than the
applicable rate under this Agreement, and thereafter such applicable rate
becomes less than the Maximum Rate, the rate of interest payable on such
Obligations shall remain at the Maximum Rate until each Lender shall have
received the amount of interest which such Lender would have received during
such period on such Obligations had the rate of interest not been limited to the
Maximum Rate during such period.
(E) Conversion or Continuation. Subject to the provisions of
subsection 2.2(B), Borrowing Agent shall have the option to (1) convert at any
time all or any part of outstanding Loans equal to $500,000 and integral
multiples of $100,000 in excess of that amount from Base Rate Loans to LIBOR
Loans or (2) upon the expiration of any Interest Period applicable to a LIBOR
Loan, to (a) continue all or any portion of such LIBOR Loan equal to $500,000
and integral multiplies of $100,000 in excess of that amount as a LIBOR Loan or
(b) convert all or any portion of such LIBOR Loan to a Base Rate Loan. The
succeeding Interest Period(s) of such continued or converted Loan commence on
the last day of the Interest Period of the Loan to be continued or converted;
provided that no outstanding Loan may be continued as, or be converted into, a
LIBOR Loan, when any Event of Default or Default has occurred and is continuing.
Borrowing Agent shall deliver a notice of conversion/continuation to
Collateral Monitoring Agent no later than noon (New York time) at least three
(3) Business Days in advance of the proposed conversion/continuation date
("Notice of
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Conversion/Continuation"). A Notice of Conversion/Continuation shall
certify: (1) the proposed conversion/continuation date (which shall be a
Business Day); (2) the amount of the Loan to be converted/continued; (3) the
nature of the proposed conversion/continuation; (4) in the case of conversion
to, or a continuation of, a LIBOR Loan, the requested Interest Period; and (5)
that no Default or Event of Default has occurred and is continuing or would
result from the proposed conversion/continuation.
In lieu of delivering the Notice of Conversion/Continuation,
Borrowing Agent may give Collateral Monitoring Agent telephonic notice by the
required time of any proposed conversion/continuation under this subsection
2.2(E); provided that such notice shall be promptly confirmed in writing by
delivery of a Notice of Conversion/Continuation to Collateral Monitoring Agent
on or before the proposed conversion/continuation date.
Neither Collateral Monitoring Agent nor any Lender shall incur any
liability to Borrowers in acting upon any telephonic notice referred to above
that Collateral Monitoring Agent believes in good faith to have been given by a
duly authorized officer or other person authorized to act on behalf of Borrowers
or for otherwise acting in good faith under this subsection 2.2(E) and upon
conversion/continuation by Lenders in accordance with this Agreement pursuant to
any telephonic notice, Borrowers shall have effected such conversion or
continuation, as the case may be, hereunder.
2.3 Fees.
(A) Unused Line Fee. Borrowers shall pay to Collateral Monitoring
Agent, for the benefit of Lenders, a fee in an amount equal to the Revolving
Loan Commitment, as same may be adjusted pursuant to Section 2.4(B)(4) hereof,
less the sum of the average daily balance of the Revolving Loan plus the average
daily face amount of the Lender Letter of Credit Reserve during the preceding
month multiplied by one-half of one percent (0.50%) per annum, such fee to be
calculated on the basis of a 360 day year for the actual number of days elapsed
and to be payable monthly in arrears on the first day of the first month
following the Closing Date and the first day of each month thereafter and on the
last day of the term of this Agreement (whether due to any voluntary or
mandatory prepayment of the Obligations in full, or otherwise).
(B) Letter of Credit Fees. Borrowers shall pay to Collateral
Monitoring Agent for the account of Lenders, a fee with respect to the Lender
Letters of Credit in the amount of the average daily amount of Letter of Credit
Liability outstanding during such month multiplied by two percent (2.0%) per
annum. Such fees will be calculated on the basis of a 360 day year for the
actual number of days elapsed and will be payable monthly in arrears on the
first day of each month. Borrowers shall also reimburse Collateral Monitoring
Agent for any and all fees and expenses, if any, paid by Collateral Monitoring
Agent or any Lender to the issuer of any Bank Letter of Credit.
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(C) Prepayment Fees. If Borrowers voluntarily prepay the Obligations
in full or, in the case of any voluntary prepayment of the Term Loans, in part
(other than voluntary prepayments of the Revolving Loan which do not terminate
the Revolving Loan Commitment), Borrowers, at the time of prepayment, shall pay
to Collateral Monitoring Agent for the benefit of Lenders, as compensation for
the costs of being prepared to make funds available to Borrowers under this
Agreement, and not as a penalty, an amount determined by multiplying the
percentage set forth below by (1) in the case of a prepayment in full of the
Obligations, the sum of the Term Loans at the date of such prepayment plus the
average daily amount of outstanding Revolving Loans and of the Letter of Credit
Reserve for the prior twelve months or from the Closing Date to the date of such
prepayment if such period is less than twelve months or (2) in the case of a
prepayment of the Term Loans only, in whole or in part, the amount of such
prepayment: three percent (3%) upon a prepayment during the first Loan Year; two
percent (2%) upon a prepayment during the second Loan Year; and one percent (1%)
upon a prepayment during each Loan Year thereafter; provided, however, to the
extent any prepayment is made utilizing the proceeds of a sale of assets, as
permitted pursuant to this Agreement, no prepayment fee will be payable on the
portion of the prepayment which utilized such proceeds.
(D) Loan Administration Fee. On the Closing Date, Borrowers shall
pay to Administrative and Documentation Agent, for its own account, a
nonrefundable loan administration fee of $50,000; provided, however, for each
Loan Year after the first Loan Year such fee shall be shared equally by
Administrative and Documentation Agent and Collateral Monitoring Agent and shall
be paid by Borrowers to Collateral Monitoring Agent on each anniversary of the
Closing Date.
(E) Audit Fees. Borrowers agree to pay to Lenders for their own
accounts an audit fee for each inspection equal to $650 per auditor per day or
any portion thereof, together with out of pocket expenses, or the out of pocket
fees, costs and expenses paid to third party auditors.
(F) Other Fees and Expenses. Borrowers shall pay to Collateral
Monitoring Agent, for its own account, all charges for returned items and all
other bank charges incurred by Collateral Monitoring Agent, as well as
Collateral Monitoring Agent's standard wire transfer charges for each wire
transfer made under this Agreement.
(G) Closing Fee. Borrowers shall pay to Collateral Monitoring Agent,
for the ratable benefit of Lenders, a closing fee equal to the sum of (a)
$250,000 on the Closing Date plus (b) fifty percent (50%) of any refund of
extension fee from the Borrowers' current bank group upon receipt by Borrowers.
2.4 Payments and Prepayments.
(A) Manner and Time of Payment. In its sole discretion, or at the
direction of Administrative and Documentation Agent, Collateral Monitoring Agent
may charge interest and other amounts payable hereunder to the Revolving Loan,
all as set forth on
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Collateral Monitoring Agent's books and records. If Collateral Monitoring Agent
elects to xxxx Borrowers for any amount due hereunder, such amount shall be
immediately due and payable with interest thereon as provided herein. All
payments made by Borrowers with respect to the Obligations shall be made without
deduction, defense, setoff or counterclaim. All payments to Collateral
Monitoring Agent hereunder shall, unless otherwise directed by Collateral
Monitoring Agent, be made to Collateral Monitoring Agent's Account or in
accordance with subsection 5.6. Proceeds remitted to Collateral Monitoring
Agent's Account by wire transfer shall be credited to the Obligations on the
Business Day received; provided, however, for the purpose of calculating
interest on the Obligations such funds shall be deemed received the first
Business Day thereafter.
(B) Mandatory Prepayments.
(1) Overadvance. At any time that the Revolving Loan exceeds
the Maximum Revolving Loan Amount, Borrowers shall, immediately repay the
Revolving Loan to the extent necessary to reduce the principal balance to an
amount equal to or less than the Maximum Revolving Loan Amount.
(2) Proceeds of Asset Dispositions. Immediately upon receipt
by any Borrower or any of its Subsidiaries of proceeds of any Asset Disposition
(in one or a series of related transactions), which net proceeds (after
deduction for income and transfer taxes, capital gains taxes, brokerage
commission, professional fees and other closing costs incurred in connection
with such Asset Disposition) exceed $10,000 (it being understood that if the net
proceeds exceed $10,000, the entire amount and not just the portion above
$10,000 shall be subject to this subsection 2.4(B)(2)), Borrowers shall prepay
the Obligations in an amount equal to such proceeds, such prepayments shall
first be applied in payment of Scheduled Installments of Term Loan A, and then
in repayment of Term Loan B, each in inverse order of maturity, except if
Borrowers reasonably expect the net proceeds of any Asset Disposition to be
reinvested within 180 days to repair or replace such assets with like assets,
Borrowers shall deliver the proceeds to Collateral Monitoring Agent to be
applied to the Revolving Loan, and Borrowers may, so long as no Default or Event
of Default shall have occurred and be continuing, reborrow such proceeds only
for such repair or replacement, provided, however, that to the extent that the
net proceeds of any Asset Disposition exceed the amount of outstanding Revolving
Loans, Borrowers may apply any such excess for such repair or replacement. If
Borrowers fail to reinvest such proceeds within 180 days, Borrowers hereby
authorize Lenders to make a Revolving Loan to repay the Term Loans as required
hereby and/or if the Term Loans have been repaid in full, the Revolving Loan
shall remain reduced as provided herein.
All such prepayments shall first be applied in payment of Scheduled Installments
of Term Loan A and then in repayment of Term Loan B, each in inverse order of
maturity, and, at any time after the Term Loans, shall have been repaid in full,
such payments shall be applied as a permanent reduction of the Revolving Loan
Commitment.
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(3) Prepayments from Excess Cash Flow. Within ninety (90) days
after the end of each Fiscal Year commencing with Fiscal Year 1997, Borrowers
shall prepay the Obligations in an amount equal to fifty percent (50%) of Excess
Cash Flow for such prior Fiscal Year calculated on the basis of the audited
financial statements for such Fiscal Year delivered to Administrative and
Documentation Agent and Lenders pursuant to subsection 5.1(c). All such
prepayments from Excess Cash Flow shall first be applied in payment of Scheduled
Installments of Term Loan A, and then in repayment of Term Loan B, each in
inverse order of maturity, and, at any time after the Term Loans shall have been
repaid in full, such payments shall be applied as a permanent reduction of the
Revolving Loan Commitment. Concurrently with the making of any such payment,
each Borrower shall deliver to Administrative and Documentation Agent and
Lenders a certificate of such Borrower's chief executive officer or chief
financial officer demonstrating its calculation of the amount required to be
paid.
(4) Prepayment upon Sale of Thread Division. The provisions of
Section 2.4(B)(2) above notwithstanding, Borrowers shall prepay the Obligations
upon the sale or other disposition the Thread Division in an amount equal to (x)
the outstanding principal balance of the Term Loans, plus (y) the amount of the
outstanding principal balance of the Revolving Loan, so that after giving effect
to such prepayment the Maximum Revolving Loan Amount for the Button Division
shall exceed the Revolving Loan by at least $1,000,000. Upon such prepayments,
and subject to the condition that Co-Agents and Lenders shall be satisfied that
any remaining liabilities of the Thread Division shall not have an adverse
effect upon the Button Division, only Holdings and Xxxxxxxxxx shall be entitled
to borrow hereunder and the Revolving Credit Commitment of all Lenders shall be
reduced to $10,000,000 in the aggregate (such reduction in Revolving Credit
Commitments to be a pro rata reduction). Borrowers may prepay the Obligations in
full using the proceeds from the sale of the Thread Division and terminate this
Agreement concurrently with such prepayment without paying any prepayment fee.
(C) Voluntary Prepayments and Repayments. Except as provided in
subsection 2.4(B), Borrowers' Obligations may only be prepaid or repaid in full
and not in part. Borrowers may, at any time upon not less than three Business
Days' prior notice to Administrative and Documentation Agent and Collateral
Monitoring Agent, prepay the Term Loans or terminate the Revolving Loan
Commitment; provided, however, the Revolving Loan Commitment may not be
terminated by Borrowers until the Term Loans are paid in full. Upon termination
of the Revolving Loan Commitment, Borrowers shall cause Collateral Monitoring
Agent and each Lender to be released from all liability under any Lender Letters
of Credit or, at Collateral Monitoring Agent's option, Borrowers will deposit
cash collateral with Collateral Monitoring Agent in an amount equal to 105% of
the Letter of Credit Liability that will remain outstanding after prepayment or
repayment.
(D) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the
payment may be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the amount of interest or fees due
hereunder.
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2.5 Term of this Agreement. This Agreement shall be effective until
December 30, 2001 (the "Termination Date"). The Commitments shall (unless
earlier terminated) terminate upon the earlier of (i) the occurrence of an event
specified in subsection 8.3 or (ii) the Termination Date. Upon termination in
accordance with subsection 8.3 or on the Termination Date, all Obligations shall
become immediately due and payable without notice or demand. Notwithstanding any
termination, until all Obligations have been fully paid and satisfied,
Administrative and Documentation Agent, on behalf of Lenders, shall be entitled
to retain security interests in and liens upon all Collateral, and even after
payment of all Obligations hereunder, Borrowers' obligation to indemnify
Administrative and Documentation Agent, Collateral Monitoring Agent and each
Lender in accordance with the terms hereof shall continue.
2.6 Statements. Collateral Monitoring Agent shall render a monthly
statement of account to Borrowing Agent and to Administrative and Documentation
Agent within twenty (20) days after the end of each month. Such statement of
account shall constitute an account stated unless Borrowing Agent make written
objection thereto within thirty (30) days from the date such statement is mailed
to Borrowing Agent. Borrowers promise to pay all of their Obligations as such
amounts become due or are declared due pursuant to the terms of this Agreement.
2.7 Grant of Security Interest. To secure the payment and performance of
the Obligations, including all renewals, extensions, restructurings and
refinancings of any or all of the Obligations, each Borrower hereby grants to
Administrative and Documentation Agent, on behalf of Lenders, a continuing
security interest, lien and mortgage in and to all right, title and interest of
such Borrower in the following property of such Borrower, whether now owned or
existing or hereafter acquired or arising and regardless of where located (all
being collectively referred to as the "Collateral"): (A) Accounts, and all
guaranties and security therefor, and all goods and rights represented thereby
or arising therefrom including the rights of stoppage in transit, replevin and
reclamation; (B) Inventory; (C) general intangibles (as defined in the UCC); (D)
documents (as defined in the UCC) or other receipts covering, evidencing or
representing goods; (E) instruments (as defined in the UCC); (F) chattel paper
(as defined in the UCC); (G) Equipment; (H) Mortgaged Property; (I) Intellectual
Property; (J) the Subsidiary Stock; (K) all deposit accounts of such Borrower
maintained with any bank or financial institution; (L) all cash and other monies
and property of such Borrower in the possession or under the control of
Administrative and Documentation Agent, any Lender or any participant; (M) all
books, records, ledger cards, files, correspondence, computer programs, tapes,
disks and related data processing software that at any time evidence or contain
information relating to any of the property described above or are otherwise
necessary or helpful in the collection thereof or realization thereon; and (N)
proceeds of all or any of the property described above, including, without
limitation, the proceeds of any insurance policies covering any of the above
described property.
2.8 Capital Adequacy and Other Adjustments. In the event Administrative
and Documentation Agent, Collateral Monitoring Agent or any Lender shall have
determined that
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the adoption after the date hereof of any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order regarding capital
adequacy, reserve requirements or similar requirements or compliance by
Administrative and Documentation Agent, Collateral Monitoring Agent or such
Lender or any corporation controlling Administrative and Documentation Agent,
Collateral Monitoring Agent or such Lender with any request or directive
regarding capital adequacy, reserve requirements or similar requirements
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) from any central bank or governmental agency or
body having jurisdiction does or shall have the effect of increasing the amount
of capital, reserves or other funds required to be maintained by Administrative
and Documentation Agent, Collateral Monitoring Agent or such Lender or any
corporation controlling Administrative and Documentation Agent, Collateral
Monitoring Agent or such Lender and thereby reducing the rate of return on
Administrative and Documentation Agent's, Collateral Monitoring Agent's or such
Lender's or such corporation's capital as a consequence of its obligations
hereunder, then Borrowers shall from time to time within fifteen (15) days after
notice and demand from such Lender (with a copy to Administrative and
Documentation Agent and Collateral Monitoring Agent) or Administrative and
Documentation Agent or Collateral Monitoring Agent (together with the
certificate referred to in the next sentence) pay to Administrative and
Documentation Agent or Collateral Monitoring Agent or such Lender additional
amounts sufficient to compensate Administrative and Documentation Agent or
Collateral Monitoring Agent or such Lender for such reduction. A certificate as
to the amount of such cost and showing the basis of the computation of such cost
submitted by Administrative and Documentation Agent or Collateral Monitoring
Agent or any Lender to Borrowing Agent shall, absent manifest error, be final,
conclusive and binding for all purposes.
2.9 Taxes.
(A) No Deductions. Any and all payments or reimbursements made
hereunder or under the Notes shall be made free and clear of and without
deduction for any and all taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto; excluding, however, the
following: taxes imposed on the net income of any Lender, Collateral Monitoring
Agent or Administrative and Documentation Agent by the jurisdiction under the
laws of which Administrative and Documentation Agent, Collateral Monitoring
Agent or such Lender is organized or doing business or any political subdivision
thereof and taxes imposed on its net income by the jurisdiction of
Administrative and Documentation Agent's, Collateral Monitoring Agent's or such
Lender's applicable lending office or any political subdivision thereof (all
such taxes, levies, imposts, deductions, charges or withholdings and all
liabilities with respect thereto excluding such taxes imposed on net income,
herein "Tax Liabilities"). If any Borrower shall be required by law to deduct
any such Tax Liabilities from or in respect of any sum payable hereunder to
Administrative and Documentation Agent, Collateral Monitoring Agent or any
Lender, then the sum payable hereunder shall be increased as may be necessary so
that, after making all required deductions, Administrative and Documentation
Agent, Collateral Monitoring Agent or such Lender receives an amount equal to
the sum it would have received had no such deductions been made.
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(B) Changes in Tax Laws. In the event that, subsequent to the
Closing Date, (i) any changes in any existing law, regulation, treaty or
directive or in the interpretation or application thereof, (ii) any new law,
regulation, treaty or directive enacted or any interpretation or application
thereof, or (iii) compliance by Lender with any request or directive (whether or
not having the force of law) from any governmental authority, agency or
instrumentality:
(1) does or shall subject Administrative and Documentation
Agent, Collateral Monitoring Agent or any Lender to any tax of any kind
whatsoever with respect to this Agreement, the other Loan Documents or any Loans
made or Lender Letters of Credit issued hereunder, or change the basis of
taxation of payments to Administrative and Documentation Agent, Collateral
Monitoring Agent or such Lender of principal, fees, interest or any other amount
payable hereunder (except for net income taxes, or franchise taxes imposed in
lieu of net income taxes, imposed generally by federal, state or local taxing
authorities with respect to interest or commitment or other fees payable
hereunder or changes in the rate of tax on the overall net income of
Administrative and Documentation Agent, Collateral Monitoring Agent or such
Lender); or
(2) does or shall impose on Administrative and Documentation
Agent, Collateral Monitoring Agent or any Lender any other condition or
increased cost in connection with the transactions contemplated hereby or
participations herein; and the result of any of the foregoing is to increase the
cost to Administrative and Documentation Agent, Collateral Monitoring Agent or
such Lender of issuing any Lender Letter of Credit or making or continuing any
Loan hereunder, as the case may be, or to reduce any amount receivable
hereunder, then, in any such case, Borrower shall promptly pay to Administrative
and Documentation Agent, Collateral Monitoring or such Lender, upon its demand,
any additional amounts necessary to compensate Administrative and Documentation
Agent, Collateral Monitoring Agent or such Lender, on an after-tax basis, for
such additional cost or reduced amount receivable, as determined by
Administrative and Documentation Agent, Collateral Monitoring Agent or such
Lender with respect to this Agreement or the other Loan Documents. If
Administrative and Documentation Agent, Collateral Monitoring Agent or any
Lender becomes entitled to claim any additional amounts pursuant to this
subsection, it shall promptly notify Borrowing Agent of the event by reason of
which Administrative and Documentation Agent, Collateral Monitoring Agent or
such Lender has become so entitled. A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by Administrative and
Documentation Agent, Collateral Monitoring Agent or any Lender to Borrowing
Agent shall, absent manifest error, be final, conclusive and binding for all
purposes.
2.10 Required Termination and Prepayment. If on any date any Lender shall
have reasonably determined (which determination shall be final and conclusive
and binding upon all parties) that the making or continuation of its LIBOR Loans
has become unlawful or impossible by compliance by Lender in good faith with any
law, governmental rule, regulation or order (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful), then, and
in any such event, that Lender shall
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promptly give notice (by telephone confirmed in writing) to Borrowing Agent,
Collateral Monitoring Agent and Administrative and Documentation Agent of that
determination. Subject to prior withdrawal of a Notice of Borrowing or a Notice
of Conversion/Continuation or prepayment of LIBOR Loans as contemplated by the
subsection 2.12, the obligation of Lender to make or maintain its LIBOR Loans
during any such period shall be terminated at the earlier of the termination of
the Interest Period then in effect or when required by law and Borrowers shall
no later than the termination of the Interest Period in effect at the time any
such determination pursuant to this subsection 2.10 is made or, earlier when
required by law, repay or prepay LIBOR Loans together with all interest accrued
thereon or convert LIBOR Loans to Base Rate Loans.
2.11 Optional Prepayment/Replacement of Co-Agents or Lenders in Respect of
Increased Costs. Within fifteen (15) days after receipt by Borrowing Agent of
written notice and demand from Administrative and Documentation Agent,
Collateral Monitoring Agent or any Lender (an "Affected Lender") for payment of
additional costs as provided in subsection 2.8, Borrowing Agent may, at its
option, notify Administrative and Documentation Agent, Collateral Monitoring
Agent and such Affected Lender of its intention to do one of the following:
(A) Borrowing Agent may obtain, at its expense, a replacement Lender
("Replacement Lender") for such Affected Lender, which Replacement Lender shall
be reasonably satisfactory to Administrative and Documentation Agent and
Collateral Monitoring Agent. In the event Borrowing Agent obtains a Replacement
Lender within ninety (90) days following notice of its intention to do so, the
Affected Lender shall sell and assign its Loans and Commitments to such
Replacement Lender provided, that Borrowers have reimbursed such Affected Lender
for its increased costs for which it is entitled to reimbursement under this
Agreement through the date of such sale and assignment.
(B) Borrowers may prepay in full all outstanding Obligations owed to
such Affected Lender and terminate such Affected Lender's Commitments without
incurring any early payment fee hereunder with respect to such prepayment.
Borrowers shall, within ninety (90) days following notice of their intention to
do so, prepay in full all outstanding Obligations owed to such Affected Lender
(including such Affected Lender's increased costs for which it is entitled to
reimbursement under this Agreement through the date of such prepayment but
excluding the prepayment fee referenced in subsection 2.3(C)) and terminate such
Affected Lender's Commitments.
2.12 Compensation. Borrowers shall compensate each Lender, upon written
request by such Lender (which request shall set forth in reasonable detail the
basis for requesting such amounts and which shall, absent manifest error, be
conclusive and binding upon all parties hereto), for all reasonable losses,
expenses and liabilities including, without limitation, any loss sustained by
such Lender in connection with the re-employment of such funds: (i) if for any
reason (other than a default by such Lender) a borrowing of any LIBOR Loan does
not occur on a date specified therefor in a Notice of Borrowing, a Notice of
Conversion/Continuation or a telephonic request for borrowing or
Conversion/Continuation;
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(ii) if any prepayment of any of its LIBOR Loans occurs on a date that is not
the last day of an Interest Period applicable to that Loan; (iii) if any
prepayment of any of its LIBOR Loans is not made on any date specified in a
notice of prepayment given by Borrowing Agent; or (iv) as a consequence of any
other default by Borrowers to repay its LIBOR Loans when required by the terms
of this Agreement; provided that during the period while any such amounts have
not been paid, Collateral Monitoring Agent shall reserve an equal amount from
amounts otherwise available to be borrowed under the Revolving Loan.
2.13 Booking of LIBOR Loans. Each Lender may make, carry or transfer LIBOR
Loans at, to, or for the account of, any of its branch offices or the office of
an affiliate of Lender.
2.14 Assumptions Concerning Funding of LIBOR Loans. Calculation of all
amounts payable to any Lender under subsection 2.12 shall be made as though each
Lender had actually funded its relevant LIBOR Loan through the purchase of a
LIBOR deposit bearing interest at LIBOR in an amount equal to the amount of that
LIBOR Loan and having maturity comparable to the relevant Interest Period and
through the transfer of such LIBOR deposit from an offshore office to a domestic
office in the United States of America; provided, however, that each Lender may
fund each of its LIBOR Loans in any manner it sees fit and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
subsection 2.12.
SECTION 3. CONDITIONS TO LOANS
3.1 Conditions to Loans. The obligations of each Lender to make Loans and
the obligation of Collateral Monitoring Agent or any Lender to issue Lender
Letters of Credit (i) on the Closing Date are subject to satisfaction of all of
the conditions set forth below and (ii) on each Funding Date are subject to
satisfaction of the conditions set forth in subparagraphs (A) through (I) below.
(A) Closing Deliveries. Administrative and Documentation Agent shall
have received, in form and substance satisfactory to Administrative and
Documentation Agent, all documents, instruments and information identified on
Schedule 3.1(A) and all other agreements, notes, certificates, orders,
authorizations, financing statements, mortgages and other documents which
Administrative and Documentation Agent may at any time reasonably request.
(B) Security Interests. Administrative and Documentation Agent shall
have received reasonably satisfactory evidence that all security interests and
liens granted to Administrative and Documentation Agent for the benefit of
Lenders pursuant to this Agreement or the other Loan Documents have been duly
perfected and constitute first priority liens on the Collateral, subject only to
Permitted Encumbrances.
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(C) Closing Date Availability. After giving effect to the
consummation of the transactions contemplated hereunder on the Closing Date and
the payment by Borrower of all costs, fees and expenses relating thereto, the
Maximum Revolving Loan Amount on the Closing Date shall exceed the Revolving
Loan by at least $2,000,000.
(D) Representations and Warranties. The representations and
warranties contained herein and in the Loan Documents shall be true, correct and
complete in all material respects on and as of that Funding Date to the same
extent as though made on and as of that date, except for any representation or
warranty limited by its terms to a specific date and taking into account any
amendments to the Schedules or Exhibits as a result of any disclosures made by
Borrowing Agent to Administrative and Documentation Agent after the Closing Date
and approved by Administrative and Documentation Agent.
(E) Fees. With respect to Loans or Lender Letters of Credit to be
made or issued on the Closing Date, Borrower shall have paid the fees payable on
the Closing Date referred to in subsection 2.3(D) and subsection 2.3(G).
(F) No Default. No event shall have occurred and be continuing or
would result from the consummation of the requested borrowing or notice
requesting issuance of a Lender Letter of Credit that would constitute an Event
of Default or a Default.
(G) Performance of Agreements. Each Loan Party shall have performed
in all material respects all agreements and satisfied all conditions which any
Loan Document provides shall be performed by it on or before that Funding Date.
(H) No Prohibition. No order, judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin or restrain
Collateral Monitoring Agent or any Lender from making any Loans or issuing any
Lender Letters of Credit.
(I) No Litigation. There shall not be pending or, to the knowledge
of any Borrower, threatened, any action, charge, claim, demand, suit,
proceeding, petition, governmental investigation or arbitration by, against or
affecting any Loan Party or any of its Subsidiaries or any property of any Loan
Party or any of its Subsidiaries that has not been disclosed to Administrative
and Documentation Agent by Borrowers in writing, and there shall have occurred
no development in any such action, charge, claim, demand, suit, proceeding,
petition, governmental investigation or arbitration that, in the opinion of
Administrative and Documentation Agent, would reasonably be expected to have a
Material Adverse Effect.
(J) Audit. An audit by Administrative and Documentation Agent or its
representatives of Borrowers' business, operations, financial condition, and
assets, including the opportunity to meet with Borrowers' management.
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(K) Real Estate Appraisal. Real estate appraisals prepared by an
appraiser retained by Administrative and Documentation Agent in conformance with
FIRREA appraisal requirements.
(L) Machinery and Equipment Appraisal. A machinery and equipment
appraisal prepared by an appraiser acceptable to Administrative and
Documentation Agent.
(M) INTENTIONALLY OMITTED.
(N) Projections. Receipt of financial projections for Fiscal Year
1997 reasonably acceptable in form and content. Administrative and Documentation
Agent shall have the opportunity to discuss the financial projections with the
operating management of the Thread Division and Button Division, and be
satisfied, in its reasonable business judgment, as to the likelihood of its
successful implementation.
(O) Environmental Matters. An environmental audit report in scope
and substance reasonably satisfactory to Administrative and Documentation Agent
prepared by a nationally recognized environmental engineering firm acceptable to
Administrative and Documentation Agent. The report will be subject to a review
by environmental legal counsel.
Administrative and Documentation Agent shall be reasonably
satisfied that there are no existing or potential environmental liabilities
which would have a material adverse impact on the financial condition or
prospects of the Borrowers.
(P) Insurance. Receipt of insurance policies or binders for
insurance in types and amounts under terms and conditions reasonably
satisfactory to Administrative and Documentation Agent with appropriate
endorsements naming Administrative and Documentation Agent as loss payee.
SECTION 4. BORROWERS' REPRESENTATIONS AND WARRANTIES
To induce Administrative and Documentation Agent, Collateral Monitoring
Agent and each Lender to enter into this Agreement, to make Loans and to issue
Lender Letters of Credit, each Borrower represents and warrants to
Administrative and Documentation Agent, Collateral Monitoring Agent and each
Lender that the following statements are and will be true, correct and complete:
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4.1 Organization, Powers, Capitalization.
(A) Organization and Powers. (i) Each of the Loan Parties (other
than Thread) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and qualified to do
business in all states where such qualification is required except where failure
to be so qualified could not be reasonably expected to have a Material Adverse
Effect. Each of the Loan Parties has all requisite corporate power and authority
to own and operate its properties, to carry on its business as now conducted and
proposed to be conducted and to enter into each Loan Document. (ii) Thread is a
limited liability company duly organized, validly existing, and in good standing
under the laws of its jurisdiction of formation and qualified to do business in
all states where such qualification is required except where failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect.
Thread has all requisite power and authority to own and operate its properties,
to carry on its business as now conducted and proposed to be conducted and to
enter into each Loan Document.
(B) Capitalization. (i) The authorized capital stock of each of the
Loan Parties is as set forth on Schedule 4.1(B). All issued and outstanding
shares of capital stock of each of the Loan Parties (other than Thread) are duly
authorized and validly issued, fully paid, nonassessable, and, in all cases
except for Holdings, free and clear of all Liens other than those in favor of
Administrative and Documentation Agent for the benefit of Lenders, and such
shares were issued in compliance with all applicable state and federal laws
concerning the issuance of securities. The capital stock of each of the Loan
Parties (other than Thread and Holdings) is owned by the stockholders and in the
amounts set forth on Schedule 4.1(B). No shares of the capital stock of any Loan
Party (other than Thread), other than those described above, are issued and
outstanding. There are no preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or understandings for the
purchase or acquisition from any Loan Party (other than Thread), of any shares
of capital stock or other securities of any such entity (ii) The membership
interests of Thread are as set forth on Schedule 4.1(B). All such membership
interests are duly authorized and validly issued, fully paid and nonassessable,
and free and clear of all Liens other than those in favor of Administrative and
Documentation Agent for the benefit of Lenders, and such membership interests
were issued in compliance with all applicable state and federal laws concerning
the issuance of securities. No membership interests of Thread, other than those
described above, are issued and outstanding. There are no preemptive or other
outstanding rights or similar agreements or understandings for the purchase or
acquisition from Thread of any membership interests.
4.2 Authorization of Borrowing, No Conflict. Each Borrower has the power
and authority to incur the Obligations and to grant security interests in the
Collateral. On the Closing Date, the execution, delivery and performance of the
Loan Documents by each Loan Party signatory thereto will have been duly
authorized by all necessary corporate and shareholder action. The execution,
delivery and performance by each Loan Party of each Loan Document to which it is
a party and the consummation of the transactions contemplated by this Agreement
and the other Loan Documents by each Loan Party do not
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contravene and will not be in contravention of any applicable law, operating
agreement with respect to Thread or the corporate charter or bylaws of any other
Loan Party or any material agreement or order by which any Loan Party or any
Loan Party's property is bound. This Agreement is, and the other Loan Documents,
including the Notes when executed and delivered will be, the legally valid and
binding obligations of the applicable Loan Parties respectively, each
enforceable against the Loan Parties, as applicable, in accordance with their
respective terms, except as limited by applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting the enforcement of creditors'
rights and the availability of equitable remedies (regardless of whether such
enforceability is considered in a proceeding at law or equity).
4.3 Financial Condition. All financial statements concerning Holdings and
its Subsidiaries which have been or will hereafter be furnished by Holdings and
its Subsidiaries to Administrative and Documentation Agent, Collateral
Monitoring Agent or any Lender pursuant to this Agreement have been or will be
prepared in accordance with GAAP consistently applied throughout the periods
involved (except as disclosed therein) and do or will present fairly the
financial condition of Holdings and its Subsidiaries as at the dates thereof and
the results of their operations for the periods then ended. The Pro Forma was
prepared by Holdings based on the unaudited consolidated balance sheet of
Holdings dated November 30, 1996. The Projections delivered and to be delivered
have been and will be prepared by Holdings in light of the past operations of
the business of Holdings and its Subsidiaries, and such Projections represent
and will represent the good faith estimate of Holdings and its senior management
concerning the reasonably foreseeable course of its business as of the date such
Projections are prepared and delivered, provided that the Projections being
delivered on the Closing Date do not reflect, and have been prepared without any
adjustment for, any sale or divestiture of all or any part of the Thread
Division. The Projections and pro forma financial information contained in such
materials are based upon the good faith estimates of Holdings and assumptions
believed by Holdings to be reasonable at the time made, it being recognized by
Co-Agents and Lenders that such Projections are not to be viewed as facts and
that actual results during the period or periods covered by any Projections may
differ from the projected results.
4.4 Indebtedness and Liabilities. As of the Closing Date, neither any
Borrower nor any of its Subsidiaries has (a) any Indebtedness except as
reflected on the Pro Forma; or (b) any material Liabilities other than as
reflected on the Pro Forma or as incurred in the ordinary course of business
since the date of the Pro Forma.
4.5 Account Warranties. Each Borrower represents, warrants and covenants
as to each Account that, at the time of its creation, the Account is a valid,
bona fide account, representing an undisputed indebtedness incurred by the named
account debtor for goods actually sold and delivered or for services completely
rendered; there are no setoffs, offsets or counterclaims, genuine or otherwise,
which have been asserted against the Account or any genuine setoffs, offsets or
counterclaims which could be asserted against the Account based upon any
obligation owing by any Borrower to such named account debtor (Borrower agrees
that the foregoing representation and warranty shall not adversely affect the
rights of
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Co-Agents under Section 2.1(D)(17); the Account does not represent a
sale to an Affiliate or a consignment, sale or return or a xxxx and hold
transaction; no agreement exists permitting any deduction or discount (other
than the discount stated on the invoice); such Borrower is the lawful owner of
the Account and has the right to assign the same to Administrative and
Documentation Agent, for the benefit of Lenders; the Account is free of all
security interests, liens and encumbrances other than those in favor of
Administrative and Documentation Agent, on behalf of Lenders, and the Account is
due and payable in accordance with its terms.
4.6 Names. Schedule 4.6 sets forth all names, trade names, fictitious
names and business names under which each Borrower currently conducts business
or has at any time during the past five years conducted business.
4.7 Locations; FEIN. Schedule 4.7 sets forth the location of each
Borrower's principal place of business, the location of each Borrower's books
and records, the location of all other offices of each Borrower and all
Collateral locations, and such locations are Borrower's sole locations for its
business and the Collateral. Each Borrower's federal employer identification
number is set forth on Schedule 4.7.
4.8 Title to Properties; Liens. Each Borrower and each of its Subsidiaries
has good, sufficient and legal title, subject to Permitted Encumbrances, to all
its respective material properties and assets. Except for Permitted
Encumbrances, all such properties and assets are free and clear of Liens. To the
best knowledge of each Borrower after due inquiry, there are no actual,
threatened or alleged defaults with respect to any leases of real property under
which any Borrower or any of its Subsidiaries is lessee or lessor which would
have a Material Adverse Effect.
4.9 Litigation; Adverse Facts. Except as set forth in Schedule 4.9, there
are no judgments outstanding against any Loan Party or affecting any property of
any Loan Party nor is there any action, charge, claim, demand, suit, proceeding,
petition, governmental investigation or arbitration now pending or, to the best
knowledge of each Borrower after due inquiry, threatened against or affecting
any Loan Party or any property of any Loan Party which could reasonably be
expected to result in any Material Adverse Effect. Since December 31, 1995 no
Loan Party has received any opinion or memorandum or legal advice from legal
counsel to the effect that it is exposed to any liability which could reasonably
be expected to result in any Material Adverse Effect.
4.10 Payment of Taxes. Except as set forth on Schedule 4.10, all material
tax returns and reports of Holdings and each of its Subsidiaries required to be
filed by any of them have been timely filed, and all taxes, assessments, fees
and other governmental charges upon such Persons and upon their respective
properties, assets, income and franchises which are shown on such returns as due
and payable have been paid when due and payable. As of the Closing Date, none of
the United States income tax returns of Holdings or any of its Subsidiaries are
under audit. No tax liens have been filed and no claims (except as otherwise
permitted by Section 5.9) are being asserted with respect to any
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such taxes. The charges, accruals and reserves on the books of Holdings and each
of its Subsidiaries in respect of any taxes or other governmental charges are in
accordance with GAAP.
4.11 Performance of Agreements. Except as set forth in Schedule 4.11, none
of the Loan Parties and none of their respective Subsidiaries is in default in
any material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any material contractual
obligation of any such Person, and, to its knowledge after due inquiry, no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default.
4.12 Employee Benefit Plans. Except as set forth on Schedule 4.12,
Holdings, each of its Subsidiaries and each ERISA Affiliate is in compliance in
all material respects with all applicable provisions of ERISA, the IRC and all
other applicable laws and the regulations and interpretations thereof with
respect to all Employee Benefit Plans. Except as reflected in the Pro Forma, no
material liability has been incurred by Holdings, any Subsidiaries or any ERISA
Affiliate which remains unsatisfied for any funding obligation, taxes or
penalties with respect to any Employee Benefit Plan.
4.13 Intellectual Property. Each Borrower and each of its Subsidiaries
owns, is licensed to use or otherwise has the right to use, all Intellectual
Property used in or necessary for the conduct of its business as currently
conducted, and all such Intellectual Property is identified on Schedule 4.13.
4.14 Broker's Fees. No broker's or finder's fee or commission will be
payable with respect to any of the transactions contemplated hereby.
4.15 Environmental Compliance. Except as disclosed in the December 31,
1995 financial statements of Holdings, the environmental reports attached hereto
as Schedule 4.15 or in the Form 10-K for the fiscal year ending December 31,
1995 filed with the Securities and Exchange Commission, (a) each Loan Party
(other than H&B and Chemical) has been and is currently in compliance with all
applicable Environmental Laws, including obtaining and maintaining in effect all
material permits, licenses or other authorizations required by applicable
Environmental Laws, or in using, releasing, storing, transporting or disposing
of any Hazardous Material, and (b) there are no claims, liabilities,
investigations, litigation, administrative proceedings, whether pending or to
its knowledge after due inquiry, threatened, or judgments or orders relating to
any Hazardous Materials asserted or threatened against any Loan Party (other
than H&B and Chemical) or relating to any real property currently or formerly
owned, leased or operated by any such Loan Party which, if determined adversely
against such Loan Party could reasonably be expected to have a Material Adverse
Effect.
4.16 Solvency. After giving effect to the transactions contemplated by the
Loan Documents, and as of, from and after the date of this Agreement, Holdings
on a consolidated basis: (a) owns and will own assets the fair salable value of
which are (i)
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greater than the total amount of its consolidated liabilities (including
contingent liabilities) and (ii) greater than the amount that will be required
to pay its probable consolidated liabilities as they mature; (b) has capital
that is not unreasonably small in relation to its business as presently
conducted or any contemplated or undertaken transaction; and (c) does not intend
to incur and does not believe that it will incur debts beyond its ability to pay
such debts as they become due. There is no material fact known to any Borrower
that has or could have a Material Adverse Effect and that has not been fully
disclosed herein or in such other documents, certificates and statements
furnished to Administrative and Documentation Agent, Collateral Monitoring Agent
or Lenders for use in connection with the transactions contemplated hereby or in
the reports previously filed by Holdings with the Securities and Exchange
Commission.
4.17 Disclosure. No representation or warranty of any Borrower, any of its
Subsidiaries or any other Loan Party contained in this Agreement, the financial
statements, the other Loan Documents, or any other document, certificate or
written statement furnished to Administrative and Documentation Agent or any
Lender by or on behalf of any such Person for use in connection with the Loan
Documents contains any untrue statement of a material fact or omitted, omits or
will omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. The Projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by such Persons to be reasonable at the time made, it being recognized
by Administrative and Documentation Agent and Lenders that such projections as
to future events are not to be viewed as facts and that actual results during
the period or periods covered by any such projections may differ from the
projected results. There is no material fact known to any Borrower that has had
or will have a Material Adverse Effect and that has not been disclosed herein or
in such other documents, certificates and statements furnished to Administrative
and Documentation Agent, Collateral Monitoring Agent or any Lender for use in
connection with the transactions contemplated hereby or in the reports
previously filed by Holdings with the Securities and Exchange Commission.
4.18 Insurance. Each Borrower and each of its Subsidiaries maintains
adequate insurance policies for public liability, property damage for its
business and properties, product liability, and business interruption, no notice
of cancellation has been received with respect to such policies and each
Borrower and each of its Subsidiaries is in compliance with all conditions
contained in such policies.
4.19 Compliance with Laws. Except as set forth in the various Schedules
hereto, neither any Borrower nor any of its Subsidiaries is in violation of any
law, ordinance, rule, regulation, order, policy, guideline or other requirement
of any domestic or foreign government or any instrumentality or agency thereof,
having jurisdiction over the conduct of its business or the ownership of its
properties, which violation would subject such Borrower or any of its
Subsidiaries, or any of their respective officers to criminal liability or have
a Material Adverse Effect and no such violation has been alleged to its
knowledge after
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due inquiry. This Section 4.19 does not apply to compliance with Environmental
Laws, which compliance is covered by Section 4.15.
4.20 Bank Accounts. Schedule 4.20 sets forth the account numbers and
locations of all bank accounts of each Borrower and its Subsidiaries.
4.21 Subsidiaries. No Borrower has any Subsidiaries other than as set
forth on Schedule 4.21.
4.22 Employee Matters. Except as set forth on Schedule 4.22, (a) no Loan
Party nor any of such Loan Party's employees is subject to any collective
bargaining agreement, (b) no petition for certification or union election is
pending with respect to the employees of any Loan Party and no union or
collective bargaining unit has sought such certification or recognition with
respect to the employees of any Loan Party and (c) there are no strikes,
slowdowns, work stoppages or controversies pending or, to the best knowledge of
any Borrower after due inquiry, threatened between any Loan Party and its
respective employees, other than employee grievances arising in the ordinary
course of business, which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Except as set forth
on Schedule 4.22, neither any Borrower nor any of its Subsidiaries is subject to
an employment contract.
4.23 Governmental Regulation. None of the Loan Parties is, or after giving
effect to any loan will be, subject to regulation under the Public Utility
Holdings Company Act of 1935, the Federal Power Act or the Investment Company
Act of 1940 or to any federal or state statute or regulation limiting its
ability to incur indebtedness for borrowed money.
Borrowing Agent may, at any time and from time to time and subject to
subsection 5.13, amend any one or more of the Schedules referred in this Section
4 and any representation or warranty contained herein which refers to any such
Schedule shall from and after the date of any such amendment refer to such
Schedule as so amended, provided, however, that in no event may any Borrower
amend any such Schedule if such amendment would reflect or evidence a Default or
Event of Default.
SECTION 5. AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall be in effect and until payment in full of all Obligations and
termination of all Lender Letters of Credit, unless Requisite Lenders shall
otherwise give their prior written consent, each Borrower shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this Section 5
applicable to such Person.
5.1 Financial Statements and Other Reports. Holdings will maintain, and
cause each of its Subsidiaries to maintain, a system of accounting established
and administered in accordance with sound business practices to permit
preparation of financial statements in
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conformity with GAAP. Holdings will deliver to Administrative and Documentation
Agent, Collateral Monitoring Agent and each Lender (unless specified to be
delivered solely to Administrative and Documentation Agent or to Collateral
Monitoring Agent) the financial statements and other reports described below.
(A) Monthly Financials. As soon as available and in any event within
twenty-five (25) days after the end of each month, Holdings will deliver (1) the
unaudited consolidated balance sheet of Holdings and its Subsidiaries on a
divisional basis as at the end of such month and the related consolidated
statements of income, stockholders' equity and cash flow for such month and for
the period from the beginning of the then current Fiscal Year to the end of such
month, and (2) a schedule of the outstanding Indebtedness for borrowed money of
Holdings and its Subsidiaries describing in reasonable detail each such debt
issue or loan outstanding and the principal amount and amount of accrued and
unpaid interest with respect to each such debt issue or loan.
(B) Quarterly Financials. As soon as available and in any event
within forty-five (45) days after the end of each quarter of a Fiscal Year,
Holdings will deliver the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such period and the related consolidated
statements of income, stockholders' equity and cash flow for such quarter of a
Fiscal Year and for the period from the beginning of the then current Fiscal
Year to the end of such quarter of a Fiscal Year and such financial statements
shall have been reviewed by a firm of independent certified public accountants
selected by Holdings. So long as Holdings is obligated to deliver reports to the
Securities and Exchange Commission, the requirements of this Subsection 5.1(B)
shall be met if the requirements of Section 5.1(R) are met within the time frame
set forth in this Subsection 5.1(B).
(C) Year-End Financials. As soon as available and in any event
within ninety (90) days after the end of each Fiscal Year, Holdings will
deliver: (1) the consolidated balance sheet of Holdings and its Subsidiaries as
at the end of such year and the related consolidated statements of income,
stockholders' equity and cash flow for such Fiscal Year; (2) a schedule of the
outstanding Indebtedness of Holdings and its Subsidiaries describing in
reasonable detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest with respect to each such debt
issue or loan; (3) a report with respect to the financial statements from a firm
of independent certified public accountants selected by Holdings and acceptable
to Administrative and Documentation Agent and Collateral Monitoring Agent, which
report shall be unqualified as to going concern and scope of audit of Holdings
and its Subsidiaries and shall state that (a) such consolidated financial
statements present fairly the consolidated financial position of Holdings and
its Subsidiaries as at the dates indicated and the results of their operations
and cash flow for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years and (b) that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards; and (4) copies of
the consolidating financial statements of Holdings and its Subsidiaries,
including (a) consolidating balance sheets of Holdings and its Subsidiaries as
at the end of such Fiscal Year showing intercompany eliminations and
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(b) related consolidating statements of earnings of Holdings and its
Subsidiaries showing intercompany eliminations. So long as Holdings is obligated
to deliver reports to the Securities and Exchange Commission, the requirements
of this Subsection 5.1(C) shall be met if the requirements of Section 5.1(R) are
met within the time frame set forth in this Subsection 5.1(C).
(D) Accountants' Certification and Reports. Together with each
delivery of consolidated financial statements of Borrowers and its Subsidiaries
pursuant to subsection 5.1(C) (or with the delivery of the Form 10-K for the
applicable Fiscal Year), Holdings will deliver (1) a written statement by its
independent certified public accountants (a) stating that the examination has
included a review of the terms of this Agreement as same relate to accounting
matters and (b) stating whether, in connection with the examination, any
condition or event that constitutes a Default or an Event of Default has come to
their attention and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof and (2) a notice to such
accountants in form and substance satisfactory to Co-Agent to the effect that
Administrative and Documentation Agent, Collateral Monitoring Agent and Lenders,
and identifying Administrative and Documentation Agent, Collateral Monitoring
Agent and Lenders intend to rely on such professional services provided to
Holdings by such accountants. Promptly upon receipt thereof, Holdings will
deliver copies of all significant reports submitted to Holdings by independent
public accountants in connection with each annual, interim or special audit of
the financial statements of Holdings made by such accountants, including the
comment letter submitted by such accountants to management in connection with
their annual audit.
(E) Compliance Certificate. Together with the delivery of each set
of financial statements referenced in subparts (A), (B) and (C) of this
subsection 5.1, Borrowing Agent will deliver a Compliance Certificate, together
with copies of the calculations and work-up employed to determine Borrowers'
compliance or noncompliance with the financial covenants set forth in Section 6.
(F) Borrowing Base Certificates, Registers and Journals. On each
Business Day, Borrowing Agent shall deliver to Collateral Monitoring Agent: (1)
a Borrowing Base Certificate updated to reflect the most recent sales and
collections of each Borrower and an assignment schedule of all Accounts created
by Borrowers on that day; (2) an invoice register or sales journal describing
all sales of Borrowers for that day, in form and substance satisfactory to
Collateral Monitoring Agent, and, if Collateral Monitoring Agent so requests,
copies of invoices evidencing such sales and proofs of delivery relating
thereto; and (3) a cash receipts journal.
(G) Reconciliation Reports, Inventory Reports and Listings and
Agings. On the Closing Date and within fifteen (15) Business Days after the last
day of each month and from time to time upon the request of Collateral
Monitoring Agent or Administrative and Documentation Agent, Borrowing Agent will
deliver to Collateral Monitoring Agent: (1) an aged trial balance of all then
existing Accounts; and (2) an Inventory Report as of the last day of such
period. As soon as available and in any event within fifteen (15) Business Days
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after the last day of each month, and from time to time upon the request of
Collateral Monitoring Agent or Administrative and Documentation Agent, Borrowing
Agent will deliver to Collateral Monitoring Agent: (1) a Reconciliation Report
as at the last day of such period; (2) an aged trial balance of all then
existing accounts payable; and (3) a detailed inventory listing and cover
summary report. All such reports shall be in form and substance reasonably
satisfactory to Collateral Monitoring Agent.
(H) Management Report. Together with each delivery of financial
statements of Holdings and its Subsidiaries pursuant to subdivisions (B) and (C)
of this subsection 5.1, Borrowing Agent will deliver a management report: (1)
describing the operations and financial condition of Holdings and its
Subsidiaries for the period then ended and the portion of the current Fiscal
Year then elapsed (or for the Fiscal Year then ended in the case of year-end
financials); (2) setting forth in comparative form the corresponding figures for
the corresponding periods of the previous Fiscal Year and the corresponding
figures from the most recent Projections for the current Fiscal Year delivered
to Lenders pursuant to 5.1(P); and (3) discussing the reasons for any
significant variations. The information above shall be presented in reasonable
detail and shall be certified by the chief financial officer of Holdings to the
effect that such information fairly presents the results of operations and
financial condition of Holdings and its Subsidiaries as at the dates and for the
periods indicated. No separate management report need be delivered if such
information is otherwise contained for the applicable fiscal period in any
reports required to be filed with the Securities and Exchange Commission which
are timely delivered to each Lender.
(I) Appraisals. From time to time, upon the request of
Administrative and Documentation Agent and Collateral Monitoring Agent,
Borrowing Agent will obtain and deliver to Administrative and Documentation
Agent and Collateral Monitoring Agent, at Borrowers' expense, appraisal reports
in form and substance and from appraisers satisfactory to Administrative and
Documentation Agent and Collateral Monitoring Agent, stating the then current
fair market and orderly liquidation values of all or any portion of the
Collateral; provided, however, so long as no Event of Default is continuing,
Administrative and Documentation Agent and Collateral Monitoring Agent shall not
request an appraisal as to any particular category of Collateral to be performed
more than once every other Loan Year at Borrowers' expense.
(J) Government Notices. Each Borrower will deliver to Administrative
and Documentation Agent promptly after receipt copies of all material notices,
requests, subpoenas, inquiries or other writings received from any governmental
agency concerning any Employee Benefit Plan, the violation or alleged violation
of any Environmental Laws, the storage, use or disposal of any Hazardous
Material, the violation or alleged violation of the Fair Labor Standards Act or
such Borrowers' payment or non-payment of any taxes including any tax audit.
(K) Events of Default, etc. Promptly upon any officer of any
Borrower obtaining knowledge of any of the following events or conditions, such
Borrower shall
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deliver a certificate of such Borrower's chief executive officer
specifying the nature and period of existence of such condition or event and
what action such Borrower has taken, is taking and proposes to take with respect
thereto: (1) any condition or event that constitutes an Event of Default or
Default; (2) any notice of default that any Person has given to such Borrower or
any of its Subsidiaries or any other action taken with respect to a claimed
default which could reasonably be expected to have a Material Adverse Effect; or
(3) any other condition or event which could reasonably be expected to have a
Material Adverse Effect.
(L) Trade Names. Each Borrower and each of its Subsidiaries will
give Administrative and Documentation Agent at least thirty (30) days advance
written notice of any change of name or of any new trade name or fictitious
business name. Each Borrower's use of any trade name or fictitious business name
will be in compliance with all laws regarding the use of such names.
(M) Locations. Each Borrower will give Administrative and
Documentation Agent at least thirty (30) days advance written notice of any
change in such Borrower's principal place of business or any change in the
location of its books and records or the Collateral or of any new location for
its books and records or the Collateral.
(N) Bank Accounts. Each Borrower will give Administrative and
Documentation Agent and Collateral Monitoring Agent prompt notice of any new
bank accounts such Borrower or any of its Subsidiaries intends to establish
prior to their opening same.
(O) Litigation. Promptly upon any officer of any Borrower or its
subsidiaries obtaining knowledge of (1) the institution of any action, suit,
proceeding, governmental investigation or arbitration against or affecting any
Loan Party or any property of any Loan Party not previously disclosed by such
Borrower to Administrative and Documentation Agent and Collateral Monitoring
Agent of a type or nature required to be disclosed by any Borrowers or its
Subsidiaries or (2) any material development in any action, suit, proceeding,
governmental investigation or arbitration at any time pending against or
affecting any Loan Party or any property of any Loan Party which could
reasonably be expected to have a Material Adverse Effect, such Borrower will
promptly give notice thereof to Administrative and Documentation Agent and
Collateral Monitoring Agent and provide such other information as may be
reasonably available to them to enable Administrative and Documentation Agent
and Collateral Monitoring Agent and their respective counsel to evaluate such
matter.
(P) Projections. As soon as available and in any event no later than
thirty (30) days prior to the end of each Fiscal Year of Borrower, Holdings will
deliver consolidated and consolidating Projections of Holdings and its
Subsidiaries for the forthcoming Fiscal Year, month by month.
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(Q) Other Indebtedness Notices. Each Borrower shall promptly deliver
copies of all notices given or received by such Borrower and any of its
Subsidiaries with respect to noncompliance with any term or condition related to
any other Indebtedness, and shall promptly notify Lenders and Administrative and
Documentation Agent of any potential or actual event of default with respect to
any other Indebtedness.
(R) Securities Reports. Holdings shall deliver copies of all reports
required to be filed by Borrowers with the Securities and Exchange Commission.
(S) Other Information. With reasonable promptness, each Borrower
will deliver such other information and data with respect to any Loan Party, any
Subsidiary of any Loan Party or the Collateral as Administrative and
Documentation Agent, Collateral Monitoring Agent or any Lender may reasonably
request from time to time.
5.2 Access to Accountants and Management. Holdings authorizes
Administrative and Documentation Agent, Collateral Monitoring Agent and Lenders
to discuss the financial condition and financial statements of each Borrower and
its Subsidiaries with Holdings's independent public accountants, at mutually
agreeable and reasonable times, upon reasonable notice to Holdings of its
intention to do so (except no such notice shall be required if a Default or an
Event of Default shall be in existence) and under reasonable circumstances and
authorizes such accountants to respond to all of Administrative and
Documentation Agent's, Collateral Monitoring Agent's and Lenders' inquiries.
Each Lender may with the consent of Administrative and Documentation Agent and
Collateral Monitoring Agent, which will not be unreasonably denied, confer with
management of the Thread Division or Button Division directly regarding such
Division's business, operations and financial condition.
5.3 Inspection. Each Borrower shall permit Administrative and
Documentation Agent, Collateral Monitoring Agent and any authorized
representatives designated by Administrative and Documentation Agent or
Collateral Monitoring Agent to visit and inspect any of the properties of such
Borrower or any of its Subsidiaries, including its and their financial and
accounting records, and in conjunction with such inspection, to make copies and
take extracts therefrom, and to discuss its and their affairs, finances and
business with its and their officers and independent public accountants, at such
reasonable times during normal business hours and as often as may be reasonably
requested upon twenty-four (24) hours notice. Each Borrower acknowledges that
Administrative and Documentation Agent and Collateral Monitoring Agent intend to
make such inspections on at least a quarterly basis. Each Lender may with the
consent of Administrative and Documentation Agent and Collateral Monitoring
Agent, which will not be unreasonably denied, accompany Administrative and
Documentation Agent and Collateral Monitoring Agent on any such visit or
inspection.
5.4 Collateral Records. Each Borrower shall keep full and accurate books
and records relating to the Collateral and shall xxxx such books and records to
indicate
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Administrative and Documentation Agent's security interests in the Collateral,
for the benefit of Lenders.
5.5 Account Covenants; Verification. Each Borrower shall, at its own
expense: (a) cause all invoices evidencing Accounts and all copies thereof to
bear a notice that such invoices are payable to the lockboxes established in
accordance with subsection 5.6 and (b) use all reasonable efforts to assure
prompt payment of all amounts due or to become due under the Accounts. No
discounts, credits or allowances will be issued, granted or allowed by any
Borrower to customers and no returns will be accepted without Collateral
Monitoring Agent's prior written consent except in the ordinary course of its
business consistent with prior practices and industry custom; provided, that
until Collateral Monitoring Agent notifies such Borrower to the contrary, such
Borrower may presume consent. Each Borrower will immediately notify Collateral
Monitoring Agent in the event that a customer alleges any dispute or claim with
respect to an Account or of any other circumstances known to such Borrower that
may impair the validity or collectability of an Account. Collateral Monitoring
Agent shall have the right, at any time or times hereafter, to verify the
validity, amount or any other matter relating to an Account, by mail, telephone
or in person. After the occurrence of a Default or an Event of Default, no
Borrower shall without the prior consent of Collateral Monitoring Agent, adjust,
settle or compromise the amount or payment of any Account, or release wholly or
partly any customer or obligor thereof, or allow any credit or discount thereon.
5.6 Collection of Accounts and Payments. Borrowers shall establish
lockboxes and blocked accounts (collectively, "Blocked Accounts") in Borrowers'
name with such banks ("Collecting Banks") as are acceptable to Collateral
Monitoring Agent (subject to irrevocable instructions acceptable to Collateral
Monitoring Agent as hereinafter set forth) to which all account debtors shall
directly remit all payments on Accounts and in which each Borrower will
immediately deposit all payments made for Inventory or other payments
constituting proceeds of Collateral in the identical form in which such payment
was made, whether by cash or check. The Collecting Banks shall acknowledge and
agree, in a manner satisfactory to Collateral Monitoring Agent, that all
payments made to the Blocked Accounts are the sole and exclusive property of
Administrative and Documentation Agent, for the benefit of Lenders, and that the
Collecting Banks have no right of setoff against the Blocked Accounts and that
all such payments received will be promptly transferred to Collateral Monitoring
Agent's Account. Each Borrower hereby agrees that all payments received by
Administrative and Documentation Agent, or Collateral Monitoring Agent whether
by cash, check, wire transfer or any other instrument, made to such Blocked
Accounts or otherwise received by Collateral Monitoring Agent and whether on the
Accounts or as proceeds of other Collateral or otherwise will be the sole and
exclusive property of Administrative and Documentation Agent, for the benefit of
Lenders. Each Borrower shall irrevocably instruct each Collecting Bank to
promptly transfer all payments or deposits to the Blocked Accounts into
Collateral Monitoring Agent's Account. Any Borrower, and any of its Affiliates,
employees, agents or other Persons acting for or in concert with such Borrower,
shall, acting as trustee for Administrative and Documentation Agent, receive, as
the sole and exclusive property of Administrative and Documentation Agent, any
monies, checks, notes, drafts or
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any other payments relating to and/or proceeds of Accounts or other Collateral
which come into the possession or under the control of any Borrower or any of
such Borrower's Affiliates, employees, agents or other Persons acting for or in
concert with any Borrower, and immediately upon receipt thereof, such Borrower
or such Persons shall remit the same or cause the same to be remitted, in kind,
to the Blocked Accounts or to Collateral Monitoring Agent at its address set
forth in subsection 10.4 below.
5.7 Endorsement. Each Borrower hereby constitutes and appoints each of
Administrative and Documentation Agent and Collateral Monitoring Agent and all
Persons designated by Administrative and Documentation Agent or the Collateral
Monitoring Agent for that purpose as such Borrower's true and lawful
attorney-in-fact, with power to endorse such Borrower's name to any of the items
of payment or proceeds described in subsection 5.6 above and all proceeds of
Collateral that come into Administrative and Documentation Agent's or Collateral
Monitoring Agent's possession or under or Collateral Monitoring Agent's control
and to sign any Borrower's name on all financing statements or any other
documents or instruments deemed necessary by Collateral Monitoring Agent to
preserve, protect or perfect Administrative and Documentation Agent's interest
in the Collateral and to file same. Both the appointment of Administrative and
Documentation Agent and Collateral Monitoring Agent as each Borrower's attorney
and Administrative and Documentation Agent's and Collateral Monitoring Agent's
rights and powers are coupled with an interest and are irrevocable until payment
in full and complete performance of all of the Obligations.
5.8 Corporate Existence. Each Borrower will, and will cause each of its
Subsidiaries to, at all times preserve and keep in full force and effect its
corporate existence and all rights and franchises material to its business. Each
Borrower will promptly notify Administrative and Documentation Agent of any
change in its or its Subsidiaries' ownership or corporate structure.
5.9 Payment of Taxes. Each Borrower will, and will cause each of its
Subsidiaries to, pay all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or with respect to any of its
franchises, business, income or property before any penalty accrues thereon
provided that no such tax need be paid if such Borrower or one of its
Subsidiaries is contesting same in good faith by appropriate proceedings
promptly instituted and diligently conducted and if such Borrower or such
Subsidiary has established appropriate reserves as shall be required in
conformity with GAAP.
5.10 Maintenance of Properties; Insurance. Each Borrower will maintain or
cause to be maintained in good repair, working order and condition all material
properties used in the business of such Borrower and its Subsidiaries and will
make or cause to be made all appropriate repairs, renewals and replacements
thereof. Each Borrower will maintain or cause to be maintained, with financially
sound and reputable insurers, public liability and property damage insurance
with respect to its business and properties and the business and properties of
its Subsidiaries against loss or damage of the kinds customarily carried or
maintained by corporations of established reputation engaged in similar
businesses and in
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amounts acceptable to Administrative and Documentation Agent and
Collateral Monitoring Agent. Each Borrower shall cause Administrative and
Documentation Agent, for the benefit of Lenders, to be named as loss payee on
all insurance policies relating to any Collateral and as additional insured
under all liability policies, in each case pursuant to appropriate endorsements
in form and substance satisfactory to Administrative and Documentation Agent and
shall collaterally assign to Administrative and Documentation Agent, for the
benefit of Lenders, as security for the payment of the Obligations all business
interruption insurance of such Borrower. Each Borrower shall apply any proceeds
received from any policies of insurance relating to any Collateral to the
Obligations as set forth in subsection 2.4(B).
5.11 Compliance with Laws. Each Borrower will, and will cause each of its
Subsidiaries to, comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority as now in effect and which
may be imposed in the future in all jurisdictions in which such Borrower or any
of its Subsidiaries is now doing business or may hereafter be doing business,
other than those laws the noncompliance with which would not have a Material
Adverse Effect.
5.12 Further Assurances. Each Borrower shall, and shall cause each of its
Subsidiaries to, from time to time, execute such guaranties, financing or
continuation statements, documents, security agreements, reports and other
documents or deliver to Administrative and Documentation Agent such instruments,
certificates of title or other documents as Administrative and Documentation
Agent at any time may reasonably request to evidence, perfect or otherwise
implement the guaranties and security for repayment of the Obligations provided
for in the Loan Documents. At Administrative and Documentation Agent's request,
each Borrower shall cause any Subsidiaries of such Borrower promptly to guaranty
the Obligations and to grant to Administrative and Documentation Agent, on
behalf of Lenders, security interests in the real, personal and mixed property
of such Subsidiary to secure the Obligations.
5.13 Collateral Locations. Each Borrower will keep the Collateral at the
locations specified on Schedule 4.7. With respect to any new location (which in
any event shall be within the continental United States), each Borrower will
execute such documents and take such actions as Administrative and Documentation
Agent deems necessary to perfect and protect the security interests of the
Administrative and Documentation Agent, on behalf of Lenders, in the Collateral
prior to the transfer or removal of any Collateral to such new location.
5.14 Bailees. If any Collateral is at any time in the possession or
control of any warehouseman, bailee or any of any Borrower's agents or
processors, such Borrower shall, upon the request of Lenders, notify such
warehouseman, bailee, agent or processor of the security interests in favor of
Administrative and Documentation Agent, for the benefit of Lenders, created
hereby and shall instruct such Person to hold all such Collateral for
Administrative and Documentation Agent's account subject to Administrative and
Documentation Agent's instructions.
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5.15 Mortgages; Title Insurance; Surveys.
(A) Title Insurance. On the Closing Date (or within thirty (30) days
following delivery of any Mortgage with respect to Additional Mortgaged
Property), Borrowing Agent shall deliver or cause to be delivered to
Administrative and Documentation Agent ALTA lender's title insurance policies
issued by title insurers reasonably satisfactory to Administrative and
Documentation Agent (the "Mortgage Policies") in form and substance and in
amounts reasonably satisfactory to Administrative and Documentation Agent
assuring Administrative and Documentation Agent that the Mortgages are valid and
enforceable first priority mortgage liens on the respective Mortgaged Property
or Additional Mortgaged Property, free and clear of all defects and encumbrances
except Permitted Encumbrances. The Mortgage Policies shall be in form and
substance reasonably satisfactory to Administrative and Documentation Agent and
shall include an endorsement insuring against the effect of future advances
under this Agreement, for mechanics' liens and for any other matter that
Administrative and Documentation Agent may reasonably request, and shall provide
for affirmative insurance and such reinsurance as Administrative and
Documentation Agent may reasonably request. In the case of each leasehold
constituting Additional Mortgaged Property, Administrative and Documentation
Agent shall have received such estoppel letters, consents and waivers from the
landlords and non-disturbance agreements from any holders of mortgages or deeds
of trust on such real estate as may have been requested by Administrative and
Documentation Agent, which letters shall be in form and substance satisfactory
to Administrative and Documentation Agent.
(B) Additional Mortgaged Property. Administrative and Documentation
Agent may from time to time designate real property or leasehold interests of
any Loan Party or any Subsidiary of any Loan Party after the date hereof as
"Additional Mortgaged Property", in which case the applicable Person shall as
promptly as possible (and in any event within sixty (60) days after such
designation) deliver to Administrative and Documentation Agent a fully executed
Mortgage, in form and substance satisfactory to Administrative and Documentation
Agent together with title insurance policies and surveys as required by this
subsection 5.15. Borrowers agree that, following the taking of the actions with
respect to any Additional Mortgaged Property required by the immediately
preceding sentence, Administrative and Documentation Agent, on behalf of
Lenders, shall have a valid and enforceable mortgage on the respective
Additional Mortgaged Property, free and clear of all defects and encumbrances
except for Permitted Encumbrances.
(C) Surveys. On or before the Closing Date (or within thirty (30)
days following delivery of any Mortgage with respect to Additional Mortgaged
Property), Borrowing Agent shall deliver or cause to be delivered to
Administrative and Documentation Agent reports showing the items described on
Schedule 5.15(C) and within thirty (30) days of the Closing Date, Borrowing
Agent shall deliver a cause to be delivered to Administrative and Documentation
Agent current surveys, certified by a licensed surveyor, for all real property
that is the subject of the Mortgage Policies including Additional Mortgaged
Property for which a Mortgage Policy is issued. All such surveys shall be
sufficient to allow the issuer of the mortgage policy to issue an ALTA lender's
policy.
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5.16 Use of Proceeds and Margin Security. Each Borrower shall use the
proceeds of all Loans for proper business purposes (as described in the recitals
to this Agreement) consistent with all applicable laws, statutes, rules and
regulations. No portion of the proceeds of any Loan shall be used by any
Borrower or any of its Subsidiaries for the purpose of purchasing or carrying
margin stock within the meaning of Regulation G or Regulation U, or in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation T or Regulation X or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Exchange Act.
SECTION 6. FINANCIAL COVENANTS
Each Borrower covenants and agrees that so long as any of the Commitments
remain in effect and until payment in full of all Obligations and termination of
all Lender Letters of Credit, unless such Borrower has received the prior
written consent of Requisite Lenders, each Borrower shall comply with and shall
cause each of its Subsidiaries to comply with all covenants in this Section 6.
6.1 Net Worth. Borrower shall maintain Net Worth for Holdings on a
consolidated basis of at least the amounts set forth below at the end of each
quarter of a Fiscal Year set forth below.
Fiscal Quarter Amount
-------------- ------
December 31, 1996 $11,000,000
March 31, 1997 $11,500,000
June 30, 1997 $12,500,000
September 30, 1997 $14,000,000
December 31, 1997 $15,500,000
March 31, 1998 $15,500,000
June 30, 1998 $16,000,000
September 30, 1998 $17,000,000
December 31, 1998 $18,500,000
March 31, 1999 $19,500,000
June 30, 1999 $21,000,000
September 30, 1999 $22,000,000
December 31, 1999 $23,500,000
March 31, 2000 $25,000,000
June 30, 2000 $26,500,000
September 30, 2000 $28,000,000
December 31, 2000 $29,500,000
March 31, 2001 $31,000,000
June 30, 2001 $32,500,000
September 30, 2001 $34,000,000
December 31, 2001 $35,500,000
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6.2 INTENTIONALLY OMITTED.
6.3 Minimum EBITDA. Borrowers shall at all times maintain EBITDA for
Holdings on a consolidated basis of at least the amounts set forth below for any
rolling twelve month period ending on the last day of each month during the
periods set forth below.
Amount for Rolling
Fiscal Quarter Ending Twelve Months
--------------------- ------------------
December 31, 1996 $14,000,000
March 31, 1997 $14,000,000
June 30, 1997 $14,250,000
September 30, 1997 $14,250,000
December 31, 1997
and thereafter $14,500,000
6.4 INTENTIONALLY OMITTED.
6.5 Capital Expenditure Limits. The aggregate amount of all Capital
Expenditures of Borrowers and its Subsidiaries (excluding trade-ins and
excluding Capital Expenditures in respect of replacement assets to the extent
funded with casualty insurance proceeds) will not exceed the amount set forth
below for each period set forth below. In the event that any Borrower or any of
its Subsidiaries enters into a Capital Lease or other contract with respect to
fixed assets, for purposes of calculating Capital Expenditures under this
subsection only, the amount of the Capital Lease or contract initially
capitalized on any Borrower's or any Subsidiary's balance sheet prepared in
accordance with GAAP shall be considered expended in full on the date that such
Borrower or any of its Subsidiaries enters into such Capital Lease or contract.
Permitted Capital Expenditures not made in any Fiscal Year may be carried over
for one year only to the next Fiscal Year provided, however, any carried-over
Capital Expenditure will be deemed used only after all otherwise Permitted
Capital Expenditures for that Fiscal Year have been used.
Period Amount
------ ------
December 31, 1996 $1,500,000
December 31, 1997 and thereafter $1,250,000
6.6 Fixed Charge Coverage. Borrowers shall not permit Fixed Charge
Coverage calculated for Holdings on a consolidated basis for the rolling twelve
(12) month period ending on the last day of each month during the periods set
forth below to be less than the amount set forth below for such periods.
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Ratio for Rolling
Fiscal Quarter Ending Twelve Months
--------------------- -----------------
December 31, 1996 1.00
March 31, 1997 1.00
June 30, 1997 1.00
September 30, 1997 1.00
December 31, 1997
and thereafter 1.05
6.7 INTENTIONALLY OMITTED.
SECTION 7. NEGATIVE COVENANTS
Each Borrower covenants and agrees that so long as any of the Commitments
remain in effect and until payment in full of all Obligations and termination of
all Lender Letters of Credit, unless such Borrower has received the prior
written consent of Requisite Lenders, such Borrower shall not and will not
permit any of its SubsidiarieS to:
7.1 Indebtedness and Liabilities. Directly or indirectly create, incur,
assume, guaranty, or otherwise become or remain directly or indirectly liable,
on a fixed or contingent basis, with respect to any Indebtedness except: (a) the
Obligations; (b) intercompany Indebtedness, among each Borrower and any other
Loan Party so long as after giving effect to such intercompany Indebtedness, the
Borrower to which the intercompany Indebtedness is owed has the ability to
borrow amounts hereunder within its Individual Borrowing Base which are
sufficient to enable it to meet its debts as they mature for the foreseeable
future; provided that such Indebtedness is subordinated in right of payment to
the Obligations; (c) Indebtedness (excluding Capital Leases) not to exceed
$50,000 in the aggregate for all Borrowers at any time outstanding secured by
purchase money Liens; (d) Indebtedness under Capital Leases not to exceed
$500,000 outstanding at any time in the aggregate; and (e) Indebtedness existing
on the Closing Date and identified on Schedule 7.1. Except for Indebtedness
described permitted in the preceding sentence, each Borrower will not, and will
not permit any of its Subsidiaries to, incur any Liabilities except for trade
payables and normal accruals in the ordinary course of business not yet due and
payable or with respect to which each Borrower or any of its Subsidiaries is
contesting in good faith the amount or validity thereof by appropriate
proceedings and then only to the extent that such Borrower or any of its
Subsidiaries has established adequate reserves therefor, if appropriate under
GAAP.
7.2 Guaranties. Except for endorsements of instruments or items of payment
for collection in the ordinary course of business, guaranty, endorse, or
otherwise in any way become or be responsible for any obligations of any other
Person, whether directly or indirectly by agreement to purchase the indebtedness
of any other Person or through the purchase of goods, supplies or services, or
maintenance of working capital or other balance
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sheet covenants or conditions, or by way of stock purchase, capital
contribution, advance or loan for the purpose of paying or discharging any
indebtedness or obligation of such other Person or otherwise.
7.3 Transfers, Liens and Related Matters.
(A) Transfers. Sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to any of the Collateral
or the assets of such Person, except that Borrowers and its Subsidiaries may (i)
sell inventory in the ordinary course of business; and (ii) make Asset
Dispositions if all of the following conditions are met: (1) except with respect
to the sale of Thread Division the market value of assets sold or otherwise
disposed of in any single transaction or series of related transactions does not
exceed $50,000 and the aggregate market value of assets sold or otherwise
disposed of in any Fiscal Year does not exceed $100,000; (2) the consideration
received is at least equal to the fair market value of such assets; (3) the sole
consideration received is cash or the cash portion of the consideration if not
all of the consideration consists of cash is in an amount at least sufficient to
discharge the Obligations then outstanding; (4) the net proceeds of such Asset
Disposition are applied as required by subsection 2.4(B); (5) if this Agreement
is not terminated as a result thereof, after giving effect to the sale or other
disposition of the assets included within the Asset Disposition and the
repayment of the Obligations with the proceeds thereof, Borrowers are in
compliance on a pro forma basis with the covenants set forth in Section 6
recomputed for the most recently ended month for which information is available
and is in compliance with all other terms and conditions contained in this
Agreement; and (6) no Default or Event of Default shall then exist or result
from such sale or other disposition.
(B) Liens. Except for Permitted Encumbrances, directly or indirectly
create, incur, assume or permit to exist any Lien on or with respect to any of
the Collateral or the assets of such Person or any proceeds, income or profits
therefrom.
(C) No Negative Pledges. Enter into or assume any agreement (other
than the Loan Documents) prohibiting the creation or assumption of any Lien upon
its properties or assets, whether now owned or hereafter acquired.
(D) No Restrictions on Subsidiary Distributions to Borrower. Except
as provided herein, directly or indirectly create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any such Subsidiary to: (1) pay dividends or make any
other distribution on any of such Subsidiary's capital stock or membership
interests owned by Borrower or any Subsidiary of any Borrower; (2) subject to
subordination provisions, pay any indebtedness owed to Borrower or any other
Subsidiary; (3) make loans or advances to any Borrower or any other Subsidiary;
or (4) transfer any of its property or assets to any Borrower or any other
Subsidiary.
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7.4 Investments and Loans. Make or permit to exist investments in or loans
to any other Person, except: (a) Cash Equivalents; and (b) loans and advances to
employees for moving, entertainment, travel and other similar expenses in the
ordinary course of business in an aggregate outstanding amount not in excess of
$200,000 at any time.
7.5 Restricted Junior Payments. Directly or indirectly declare, order,
pay, make or set apart any sum for any Restricted Junior Payment, except that:
(a) Subsidiaries of any Borrower may make Restricted Junior Payments with
respect to their common stock to the extent necessary to permit any Borrower to
pay the Obligations and to permit any Borrower to pay expenses incurred in the
ordinary course of business and for the purpose of dividending proceeds to
Holders from transactions permitted by Section 7.3(A) of this Agreement, and (b)
Holdings may, subject to the conditions set forth below, redeem and/or pay
dividends on its preferred stock in any Fiscal Year in an amount equal to
twenty-five percent (25%) of the Excess Cash Flow for the prior Fiscal Year.
Such payments on account of the of preferred stock by Holdings are subject to
the following conditions precedent: (x) Term Loan B has been repaid in full, (Y)
no Event of Default or Default would exist after giving effect to such payment,
and (Z) after giving effect to such payment, the Maximum Revolving Loan Amount
shall exceed the Revolving Loan by at least $1,000,000.
7.6 Restriction on Fundamental Changes. (a) Enter into any transaction of
merger or consolidation (other than with a Loan Party or an Affiliate thereof
upon thirty (30) days prior written notice thereof to Co-Agents so long as (i)
the survivor of such merger is a Borrower or the consolidated entity becomes a
borrower hereunder and the Administrative and Documentation Agent has a first
priority perfected Lien upon the assets of such survivor or consolidated entity,
and (ii) if such merger or consolidation is with an Affiliate, the Co-Agents
have consented to such transaction, which consent shall not be unreasonably
withheld); (b) liquidate, wind-up or dissolve itself (or suffer any liquidation
or dissolution); (c) except for asset dispositions authorized by Section 7.3(A)
of this Agreement, convey, sell, lease, sublease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or any substantial part
of its business or assets, or the capital stock of any of its Subsidiaries,
whether now owned or hereafter acquired (except for the sale of the Thread
Division so long as the requirements of Section 2.4(B)(4) are met); or (d)
acquire by purchase or otherwise all or any substantial part of the business or
assets of, or stock or other evidence of beneficial ownership of, any Person.
7.7 INTENTIONALLY OMITTED.
7.8 Transactions with Affiliates. Directly or indirectly, enter into or
permit to exist any transaction (including the purchase, sale or exchange of
property or the rendering of any service) with any Affiliate or with any
officer, director or employee of any Loan Party, except for transactions in the
ordinary course of and pursuant to the reasonable requirements of each
Borrower's business and upon fair and reasonable terms which are fully disclosed
to Administrative and Documentation Agent and Lenders and which are no less
favorable to such Borrower than it would obtain in a comparable arm's length
transaction with an unaffiliated Person.
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7.9 Environmental Liabilities. Except with respect to H&B and Chemical,
(a) Violate any applicable Environmental Law unless such violation could not
reasonably be expected to have a Material Adverse Effect; (b) dispose of any
Hazardous Materials (except in accordance with applicable law) into or onto or
from, any real property owned, leased or operated by any Loan Party; or (c)
permit any Lien imposed pursuant to any Environmental Law to be imposed or to
remain on any real property owned, leased or operated by any Loan Party.
7.10 Conduct of Business. From and after the Closing Date, engage in any
business other than businesses of the type engaged in by each Borrower or any
Subsidiary on the Closing Date.
7.11 Compliance with ERISA. Establish any new Employee Benefit Plan or
amend any existing Employee Benefit Plan if the liability or increased liability
resulting from such establishment or amendment is material. Neither any Borrower
nor any Subsidiary shall fail to establish, maintain and operate each Employee
Benefit Plan in compliance in all material respects with the provisions of
ERISA, the IRC and all other applicable laws and the regulations and
interpretations thereof.
7.12 Tax Consolidations. File or consent to the filing of any consolidated
income tax return with any Person other than Holdings or any of its
Subsidiaries; provided that in the event any Borrower files a return with
Holdings, such Borrower's contribution with respect to taxes as a result of the
filing of such consolidated return shall not be greater, nor the receipt of tax
benefits less, than they would have been had such Borrower not filed a
consolidated return with Holdings.
7.13 Subsidiaries. Establish, create or acquire any new Subsidiaries.
7.14 Fiscal Year. Change its Fiscal Year.
7.15 Press Release; Public Offering Materials. Disclose the name of
Administrative and Documentation Agent, Collateral Monitoring Agent or any
Lender in any press release or in any prospectus, proxy statement or other
materials filed with any governmental entity relating to a public offering of
the capital stock of any Loan Party except as may be required by law.
7.16 Bank Accounts. Establish any new bank accounts, or amend or
terminate any Blocked Account or lockbox agreement without Collateral Monitoring
Agent's prior written consent.
SECTION 8. DEFAULT, RIGHTS AND REMEDIES
8.1 Event of Default. "Event of Default" shall mean the occurrence or
existence of any one or more of the following:
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(A) Payment. Failure to make payment of any of the Obligations when
due and in the case of interest, such failure shall not be cured within five (5)
days of the applicable due date; or
(B) Default in Other Agreements. Except with respect to the Goldwyn
Litigation, (1) failure of any Borrower or any of its Subsidiaries to pay when
due any principal or interest on any Indebtedness (other than the Obligations)
or (2) breach or default of any Borrower or any of its Subsidiaries with respect
to any Indebtedness (other than the Obligations); if such failure to pay, breach
or default entitles the holder to cause such Indebtedness having an individual
principal amount in excess of $100,000 or having an aggregate principal amount
in excess of $250,000 to become or be declared due prior to its stated maturity;
or
(C) Breach of Certain Provisions. Failure of Borrower to perform or
comply with any term or condition contained in subsections 5.1, 5.3, 5.5 or 5.6
or contained in Section 6 or Section 7; or
(D) Breach of Warranty. Any representation, warranty, certification
or other statement made by any Loan Party in any Loan Document or in any
statement or certificate at any time given by such Person in writing pursuant or
in connection with any Loan Document is false in any material respect on the
date made; or
(E) Other Defaults Under Loan Documents. Any Borrower or any other
Loan Party defaults in the performance of or compliance with any term contained
in this Agreement or the other Loan Documents and such default is not remedied
or waived within ten (10) days after receipt by any Borrower of notice from
Administrative and Documentation Agent or Requisite Lenders of such default
(other than occurrences described in other provisions of this subsection 8.1 for
which a different grace or cure period is specified or which constitute
immediate Events of Default); or
(F) Change in Control. (1) As a result of any "Private Sale"
(defined below) effected by The Xxxx Group, Inc. ("Xxxx") at any time prior to
the expiration of the first Fiscal Year of this Agreement a "Change in Control"
(defined below) occurs, unless the Co-Agents have consented to such transaction,
which consent may be withheld by Co-Agents only if they have specific,
legitimate and reasonable objections as to the financial fitness or business
integrity of the proposed transferee, which grounds are communicated by the
Co-Agents to the Borrowing Agent and Xxxx in writing. As used herein, a "Private
Sale" means any private sale by Xxxx of all or any of its shares of preferred
stock of Holdings to any Person or "group" of Persons acting in concert within
the meaning of Section 13(d)(3) of the Securities Exchange act of 1934; and
"Change of Control" means that Xxxx ceases to control, directly or indirectly,
at least thirty-five percent (35%) of the issued and outstanding shares of
capital stock of Holdings entitled (without regard to the occurrence of any
contingency) to vote for the election of a majority of the members of the Board
of Directors of Holdings. For purposes of certainty, it is expressly
acknowledged and agreed that the term "Private Sale" does not include any
distribution by Xxxx of all or any of its shares of preferred or
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common stock of Holdings to its stockholders or to the redemption by Holdings of
all or any of such shares pursuant to the terms of Holding's Charter, or (2)
Holdings ceases to beneficially own and control one hundred percent (100%) of
the aggregate number of shares of any other Borrower's common stock (other than
Thread with respect to which Holdings and H&B own and control one hundred
percent (100%) of the membership interests and other than with respect to a sale
of the Thread Division effectuated by a sale of the stock of each Borrower in
the Thread Division); or
(G) Involuntary Bankruptcy; Appointment of Receiver, etc. (1) A
court enters a decree or order for relief with respect to any Borrower or any of
its Subsidiaries in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, which decree or
order is not stayed or other similar relief is not granted under any applicable
federal or state law; or (2) the continuance of any of the following events for
seventy-five (75) days unless dismissed, bonded or discharged: (a) an
involuntary case is commenced against any Borrower or any of its Subsidiaries,
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect; or (b) a decree or order of a court for the appointment of
a receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over any Borrower or any of its Subsidiaries, or over all or a
substantial part of their respective property, is entered; or (c) an interim
receiver, trustee or other custodian is appointed without the consent of any
Borrower or any of its Subsidiaries, for all or a substantial part of the
property of such Borrower or any such Subsidiary; or
(H) Voluntary Bankruptcy; Appointment of Receiver, etc. (1) An order
for relief is entered with respect to any Borrower or any of its Subsidiaries or
any Borrower or any of its Subsidiaries commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consents to the entry of an order for relief in an involuntary case
or to the conversion of an involuntary case to a voluntary case under any such
law or consents to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or (2)
any Borrower or any of its Subsidiaries makes any assignment for the benefit of
creditors; or (3) the board of directors of any Borrower or any of its
Subsidiaries adopts any resolution or otherwise authorizes action to approve any
of the actions referred to in this subsection 8.1(H); or
(I) Liens. Any lien, levy or assessment is filed or recorded with
respect to or otherwise imposed upon all or any part of the Collateral or the
assets of any Borrower or any of its Subsidiaries by the United States or any
department or instrumentality thereof or by any state, county, municipality or
other governmental agency (other than Permitted Encumbrances) and such lien,
levy or assessment is not stayed, vacated, paid or discharged within ten (10)
days; or
(J) Judgment and Attachments. Any money judgment, writ or warrant of
attachment, or similar process involving (1) an amount in any individual case in
excess of $250,000 or (2) an amount in the aggregate at any time in excess of
$500,000 (in either
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case not adequately covered by insurance as to which the insurance company has
acknowledged coverage) is entered or filed against any Borrower or any of its
Subsidiaries or any of their respective assets and remains undischarged,
unvacated, unbonded or unstayed for a period of thirty (30) days or in any event
later than five (5) days prior to the date of any proposed sale in connection
with such money judgment, writ or warrant of attachment or similar process; or
(K) Dissolution. Any order, judgment or decree is entered against
any Borrower or any of its Subsidiaries decreeing the dissolution or split up of
such Borrower or that Subsidiary and such order remains undischarged or unstayed
for a period in excess of twenty (20) days; or
(L) Solvency. Any Borrower ceases to be Solvent or admits in writing
its present or prospective inability to pay its debts as they become due; or
(M) Injunction. Any Borrower or any of its Subsidiaries is enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting all or any material part of
its business and such order continues for more than thirty (30) days; or
(N) Invalidity of Loan Documents. Any of the Loan Documents for any
reason, other than a partial or full release in accordance with the terms
thereof, ceases to be in full force and effect or is declared to be null and
void, or any Loan Party denies that it has any further liability under any Loan
Documents to which it is party, or gives notice to such effect; or
(O) Failure of Security. Administrative and Documentation Agent, on
behalf of Lenders, does not have or ceases to have a valid and perfected first
priority security interest in the Collateral (subject to Permitted
Encumbrances), in each case, for any reason other than the failure of
Administrative and Documentation Agent or any Lender to take any action within
its control; or
(P) Damage, Strike, Casualty. Any material damage to, or loss, theft
or destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy, or
other casualty which causes, for more than fifteen (15) consecutive days beyond
the coverage period of any applicable business interruption insurance, the
cessation or substantial curtailment of revenue producing activities at any
facility of any Borrower or any of its Subsidiaries if any such event or
circumstance could reasonably be expected to have a Material Adverse Effect.
(Q) Licenses and Permits. The loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by any
Borrower or any of its Subsidiaries, if such loss, suspension, revocation or
failure to renew could reasonably be expected to have a Material Adverse Effect.
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(R) Forfeiture. There is filed against any Borrower or any Guarantor
any civil or criminal action, suit or proceeding under any federal or state
racketeering statute (including, without limitation, the Racketeer Influenced
and Corrupt Organization Act of 1970), which action, suit or proceeding (1) is
not dismissed within one hundred twenty (120) days; and (2) could result in the
confiscation or forfeiture of any material portion of the Collateral.
8.2 Suspension of Commitments. Upon the occurrence of any Default or Event
of Default, notwithstanding any grace period or right to cure, Administrative
and Documentation Agent may or upon demand by Requisite Lenders shall, without
notice or demand, instruct Collateral Monitoring Agent to immediately cease
making additional Loans and the Commitments shall be suspended; provided that,
in the case of a Default, if the subject condition or event is waived or cured
within any applicable grace or cure period, the Commitments shall be reinstated.
8.3 Acceleration. Upon the occurrence of any Event of Default described in
the foregoing subsections 8.1(G) or 8.1(H), all Obligations shall automatically
become immediately due and payable, without presentment, demand, protest or
other requirements of any kind, all of which are hereby expressly waived by each
Borrower, and the Commitments shall thereupon terminate. Upon the occurrence and
during the continuance of any other Event of Default, Administrative and
Documentation Agent may, and upon demand by Requisite Lenders shall, by written
notice to any Borrower, (a) declare all or any portion of the Obligations to be,
and the same shall forthwith become, immediately due and payable and the
Commitments shall thereupon terminate and (b) demand that Borrowers immediately
deposit with Collateral Monitoring Agent an amount equal to one hundred five
percent (105%) of the Letter of Credit Reserve to enable Lender to make payments
under the Lender Letters of Credit when required and such amount shall become
immediately due and payable.
8.4 Remedies. If any Event of Default shall have occurred and be
continuing, in addition to and not in limitation of any other rights or remedies
available to Administrative and Documentation Agent and Lenders at law or in
equity, Administrative and Documentation Agent may and shall upon the request of
Requisite Lenders exercise in respect of the Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the UCC (whether or
not the UCC applies to the affected Collateral) and may also (a) notify any or
all obligors on the Accounts to make all payments directly to Collateral
Monitoring Agent; (b) require each Borrower to, and each Borrower hereby agrees
that it will, at its expense and upon request of Administrative and
Documentation Agent forthwith, assemble all or part of the Collateral as
directed by Administrative and Documentation Agent and make it available to
Administrative and Documentation Agent at a place to be designated by
Administrative and Documentation Agent which is reasonably convenient to both
parties; (c) instruct Collateral Monitoring Agent to withdraw all cash in the
Blocked Accounts and apply such monies in payment of the Obligations in the
manner provided in subsection 8.7; (d) without notice or demand or legal
process, enter upon any premises of any Borrower
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and take possession of the Collateral; and (e) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Administrative and Documentation
Agent's offices or elsewhere, at such time or times, for cash, on credit or for
future delivery, and at such price or prices and upon such other terms as
Administrative and Documentation Agent may deem commercially reasonable. Each
Borrower agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days notice to Borrowing Agent of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. At any sale of the Collateral, if permitted
by law, Administrative and Documentation Agent or any Lender may bid (which bid
may be, in whole or in part, in the form of cancellation of indebtedness) for
the purchase of the Collateral or any portion thereof for the account of
Administrative and Documentation Agent or such Lender. Administrative and
Documentation Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Borrowers shall remain liable
for any deficiency. Administrative and Documentation Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. To the extent permitted by law, each
Borrower hereby specifically waives all rights of redemption, stay or appraisal
which it has or may have under any law now existing or hereafter enacted.
Administrative and Documentation Agent shall not be required to proceed against
any Collateral but may proceed against any Borrower directly. Notwithstanding
anything herein to the contrary, in the event the Administrative and
Documentation Agent in its discretion or upon the request of Requisite Lenders
exercises the right to liquidate the Collateral, the Administration and
Documentation Agent shall adopt a plan of liquidation upon consultation with the
Collateral Monitoring Agent. If such plan requires the liquidation of accounts
or inventory (a "Specified Liquidation Event"), the liquidation of such assets
shall be conducted by the Collateral Monitoring Agent, in its sole discretion,
while the liquidation of the other Collateral shall be conducted by the
Administrative and Documentation Agent, in its sole discretion. The provisions
of this Section 8.4 applicable to Administrative and Documentation Agent shall
as well be applicable to Collateral Monitoring Agent during the existence of a
Specified Liquidation Event.
8.5 Appointment of Attorney-in-Fact. Each Borrower hereby constitutes and
appoints Administrative and Documentation Agent and Collateral Monitoring Agent,
as applicable, as such Borrower's attorney-in-fact with full authority in the
place and stead of such Borrower and in the name of such Borrower,
Administrative and Documentation Agent, Collateral Monitoring Agent or
otherwise, from time to time in Administrative and Documentation Agent's
discretion while an Event of Default is continuing to take any action and to
execute any instrument that Administrative and Documentation Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral; (b) to adjust, settle or compromise the amount or payment
of any Account, or release wholly or partly any customer or obligor thereunder
or allow any credit or discount thereon; (c) to receive, endorse, and collect
any drafts or other instruments, documents and chattel paper, in
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connection with clause (a) above; (d) to file any claims or take any action or
institute any proceedings that Administrative and Documentation Agent or
Collateral Monitoring Agent, as applicable, may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights of
Administrative and Documentation Agent or Collateral Monitoring Agent and
Lenders with respect to any of the Collateral; and (e) to sign and endorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, assignments, verifications and notices in connection with Accounts and
other documents relating to the Collateral. The appointment of Administrative
and Documentation Agent and Collateral Monitoring Agent as each Bor- rower's
attorney and Administrative and Documentation Agent's and Collateral Monitoring
Agent's rights and powers are coupled with an interest and are irrevocable until
payment in full and complete performance of all of the Obligations.
8.6 Limitation on Duty of Co-Agents with Respect to Collateral. Beyond the
safe custody thereof and the exercise of commercially reasonable care,
Administrative and Documentation Agent, Collateral Monitoring Agent and each
Lender shall have no duty with respect to any Collateral in its possession or
control (or in the possession or control of any agent or bailee) or with respect
to any income thereon or the preservation of rights against prior parties or any
other rights pertaining thereto. Administrative and Documentation Agent and
Collateral Monitoring Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which
Administrative and Documentation Agent and Collateral Monitoring Agent accords
its own property. Neither Administrative and Documentation Agent, Collateral
Monitoring Agent nor any Lender shall be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by Administrative and Documentation
Agent in good faith.
8.7 Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, (a) each Borrower irrevocably waives the
right to direct the application of any and all payments at any time or times
thereafter received by Administrative and Documentation Agent or Collateral
Monitoring Agent from or on behalf of such Borrower, and each Borrower hereby
irrevocably agrees that Collateral Monitoring Agent (with the consent of or at
the direction of Administrative and Documentation Agent) shall have the
continuing exclusive right to apply and to reapply any and all payments received
at any time or times after the occurrence and during the continuance of an Event
of Default against the Obligations in such manner as Collateral Monitoring Agent
(with the consent of or at the direction of Administrative and Documentation
Agent) may deem advisable notwithstanding any previous entry by Collateral
Monitoring Agent upon any books and records and (b) the proceeds of any sale of,
or other realization upon, all or any part of the Collateral shall be applied:
first, to all fees, costs and expenses incurred by Administrative and
Documentation Agent, Collateral Monitoring Agent or any Lender with respect to
this Agreement, the other Loan Documents or the Collateral; second, to all fees
due and owing to Administrative and Documentation Agent, Collateral Monitoring
Agent
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and Lenders; third, to accrued and unpaid interest on the Obligations; fourth,
to the principal amounts of the Obligations outstanding; and fifth, to any other
indebtedness or obligations of Borrowers owing to Administrative and
Documentation Agent, Collateral Monitoring Agent or any Lender and sixth, to
Borrowers to the extent of any balance remaining after application of such
proceeds or realization to the payments set forth above.
8.8 License of Intellectual Property. Each Borrower hereby assigns,
transfers and conveys to Administrative and Documentation Agent and Collateral
Monitoring Agent, as applicable, for the benefit Lenders, effective upon the
occurrence of any Event of Default hereunder, the non-exclusive right and
license to use all Intellectual Property owned or used by such Borrower together
with any goodwill associated therewith, all to the extent necessary to enable
Administrative and Documentation Agent and Collateral Monitoring Agent, as
applicable, to realize on the Collateral and any successor or assign to enjoy
the benefits of the Collateral. This right and license shall inure to the
benefit of all successors, assigns and transferees of Administrative and
Documentation Agent and Collateral Monitoring Agent, as applicable, and their
respective successors, assigns and transferees, whether by voluntary conveyance,
operation of law, assignment, transfer, foreclosure, deed in lieu of foreclosure
or otherwise. Such right and license is granted free of charge, without
requirement that any monetary payment whatsoever be made to such Borrower by
Administrative and Documentation Agent or Collateral Monitoring Agent, as
applicable.
8.9 Waivers, Non-Exclusive Remedies. No failure on the part of
Administrative and Documentation Agent, Collateral Monitoring Agent or any
Lender to exercise, and no delay in exercising and no course of dealing with
respect to, any right under this Agreement or the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise by
Administrative and Documentation Agent, Collateral Monitoring Agent or any
Lender of any right under this Agreement or any other Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights
in this Agreement and the other Loan Documents are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 9. ASSIGNMENT AND PARTICIPATION
9.1 Assignments and Participations in Loans.
(A) Each Lender may assign its rights and delegate its obligations
under this Agreement to another Person; provided, that (a) such Lender shall
first obtain the written consent of Administrative and Documentation Agent and
Collateral Monitoring Agent, which shall not be unreasonably withheld, (b) the
amount of Commitments and Loans of the assigning Lender being assigned shall in
no event be less than the lesser of (i) $5,000,000 or (ii) the entire amount of
the Commitments and Loans of such assigning Lender and (c)(i) each such
assignment shall be of a pro rata portion of all such assigning Lender's Loans
and Commitments hereunder, and (ii) the parties to such assignment shall execute
and deliver to Administrative and Documentation Agent for acceptance and
recording a Lender Addition
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Agreement together with (x) a processing and recording fee of $2,500 payable to
Administrative and Documentation Agent and (y) the Notes originally delivered to
the assigning Lender. Upon receipt of all of the foregoing, Administrative and
Documentation Agent shall notify Collateral Monitoring Agent and Borrowing Agent
of such assignment and each Borrower shall comply with its obligations under the
last sentence of subsection 2.1(F). In the case of an assignment authorized
under this subsection 9.1, the assignee shall have, to the extent of such
assignment, the same rights, benefits and obligations as it would if it were a
Lender hereunder. The assigning Lender shall be relieved of its obligations
hereunder with respect to its Commitment or assigned portion thereof. Each
Borrower hereby acknowledges and agrees that any assignment will give rise to a
direct obligation of such Borrower to the assignee and that the assignee shall
be considered to be a "Lender".
(B) Each Lender may sell participations in all or any part of any
Loans made by it to another Person; provided, that any such participation shall
be in a minimum amount of $5,000,000, and provided, further, that all amounts
payable by Borrowers hereunder shall be determined as if that Lender had not
sold such participation and the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except action directly effecting (a) any reduction in the principal amount,
interest rate or fees payable with respect to any Loan in which such holder
participates; (b) any extension of the Termination Date or the date fixed for
any payment of principal interest or fees payable with respect to any Loan in
which such holder participates; and (c) any release of substantially all of the
Collateral (other than in accordance with the terms of this Agreement or the
Loan Documents). Borrowers hereby acknowledge and agree that the participant
under each participation shall for purposes of subsection 2.8, 2.9, 2.10, 9.4
and 10.2 be considered to be a "Lender".
(C) Except as otherwise provided in this subsection 9.1 no Lender
shall, as between Borrowers and that Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the Loans or
other Obligations owed to such Lender. Each Lender may furnish any information
concerning any Borrower and its Subsidiaries in the possession of that Lender
from time to time to assignees and participants (including prospective assignees
and participants) provided that the Persons obtaining such information agrees to
maintain the confidentiality of such information to the extent required by
subsection 10.21.
(D) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Loans owing
to it and the Notes held by it in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System).
9.2 Co-Agents.
(A) Appointment. Each Lender hereby designates and appoints (i)
Xxxxxx as its Administrative and Documentation Agent and (ii) Sanwa as its
Collateral Monitoring
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Agent, under this Agreement and the Loan Documents, and each Lender hereby
irrevocably authorizes Administrative and Documentation Agent and Collateral
Monitoring Agent to take such action or to refrain from taking such action on
its behalf under the provisions of this Agreement and the Loan Documents and to
exercise such powers as are set forth herein or therein, together with such
other powers as are reasonably incidental thereto. Administrative and
Documentation Agent is authorized and empowered to amend, modify, or waive any
provisions of this Agreement or the other Loan Documents on behalf of Lenders
subject to the requirement that certain of Lenders' consent be obtained in
certain instances as provided in subsection 9.3. Each of the Administrative and
Documentation Agent and the Collateral Monitoring Agent agrees to act as
Administrative and Documentation Agent and Collateral Monitoring Agent,
respectively, on the express conditions contained in this subsection 9.2. The
provisions of this subsection 9.2 are solely for the benefit of Administrative
and Documentation Agent, Collateral Monitoring Agent and Lenders and neither any
Borrower nor any Loan Party shall have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement, each of Administrative and Documentation Agent and Collateral
Monitoring Agent shall act solely as an administrative representative of Lenders
and does not assume and shall not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for Lenders, any Borrower or
any Loan Party. Administrative and Documentation Agent and Collateral Monitoring
Agent may perform any of its duties hereunder, or under the Loan Documents, by
or through its agents or employees.
(B) Nature of Duties. Administrative and Documentation Agent and
Collateral Monitoring Agent shall have no duties, obligations or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of Administrative and Documentation Agent and
Collateral Monitoring Agent shall be mechanical and administrative in nature.
Administrative and Documentation Agent and Collateral Monitoring Agent shall not
have by reason of this Agreement a fiduciary relationship in respect of any
Lender. Each Lender shall make its own independent investigation of the
financial condition and affairs of Borrowers in connection with the extension of
credit hereunder and shall make its own appraisal of the credit worthiness of
Borrowers, and Administrative and Documentation Agent and Collateral Monitoring
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 Closing Date or at any
time or times thereafter. If Administrative and Documentation Agent or
Collateral Monitoring Agent seeks the consent or approval of any Lenders to the
taking or refraining from taking any action hereunder, then Administrative and
Documentation Agent or Collateral Monitoring Agent shall send notice thereof to
each Lender. Administrative and Documentation Agent or Collateral Monitoring
Agent shall promptly notify each Lender any time that the applicable percentage
of Lenders have instructed Administrative and Documentation Agent or Collateral
Monitoring Agent to act or refrain from acting pursuant hereto.
(C) Rights, Exculpation, Etc. Neither Administrative and
Documentation Agent, nor Collateral Monitoring Agent nor any of their respective
officers, directors,
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employees or agents shall be liable to any Lender for any action taken or
omitted by them hereunder or under any of the Loan Documents, or in connection
herewith or therewith, except that Administrative and Documentation Agent and
Collateral Monitoring Agent shall be obligated on the terms set forth herein for
performance of its express obligations hereunder, and except that each of
Administrative and Documentation Agent and Collateral Monitoring Agent shall be
liable with respect to its own gross negligence or willful misconduct.
Collateral Monitoring Agent shall not be liable for any apportionment or
distribution of payments made by it in good faith and if any such apportionment
or distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
from other Lenders any payment in excess of the amount to which they are
determined to be entitled (and such other Lenders hereby agree to return to such
Lender any such erroneous payments received by them). In performing its
functions and duties hereunder, Administrative and Documentation Agent and
Collateral Monitoring Agent shall each exercise the same care which it would in
dealing with loans for its own account, but neither Administrative and
Documentation Agent nor Collateral Monitoring Agent shall be responsible to any
Lender for any recitals, statements, representations or warranties herein or for
the execution, effectiveness, genuineness, validity, enforceability,
collectability, or sufficiency of this Agreement or any of the Loan Documents or
the transactions contemplated thereby, or for the financial condition of any
Loan Party. Neither Administrative and Documentation Agent nor Collateral
Monitoring Agent shall be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any of the Loan Documents or the financial condition of any Loan
Party, or the existence or possible existence of any Default or Event of
Default. Each of Administrative and Documentation Agent and Collateral
Monitoring Agent may at any time request instructions from Lenders with respect
to any actions or approvals which by the terms of this Agreement or of any of
the Loan Documents Administrative and Documentation Agent or Collateral
Monitoring Agent is permitted or required to take or to grant, and
Administrative and Documentation Agent and Collateral Monitoring Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the Loan
Documents until it shall have received such instructions from the applicable
percentage of the Lenders. Without limiting the foregoing, no Lender shall have
any right of action whatsoever against Administrative and Documentation Agent or
Collateral Monitoring Agent as a result of Administrative and Documentation
Agent or Collateral Monitoring Agent acting or refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of the applicable percentage of the Lenders and notwithstanding the instructions
of Lenders, neither Administrative and Documentation Agent nor Collateral
Monitoring Agent shall have any obligation to take any action if it, in good
faith believes that such action exposes Administrative and Documentation Agent
or Collateral Monitoring Agent to any liability.
(D) Reliance. Each of Administrative and Documentation Agent and
Collateral Monitoring Agent shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents or any telephone message or
other communication
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(including any writing, telex, telecopy or telegram)
believed by it in good faith to be genuine and correct and to have been signed,
sent or made by the proper Person, and with respect to all matters pertaining to
this Agreement or any of the Loan Documents and its duties hereunder or
thereunder, upon advice of counsel selected by it. Each of Administrative and
Documentation Agent and Collateral Monitoring Agent shall be entitled to rely
upon the advice of legal counsel, independent accountants, and other experts
selected by it in its sole discretion.
(E) Indemnification. Each Lender, severally, agrees to reimburse and
indemnify Administrative and Documentation Agent and Collateral Monitoring
Agent, as applicable, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against Administrative and Documentation Agent or
Collateral Monitoring Agent, as the case may be, in any way relating to or
arising out of this Agreement or any of the Loan Documents or any action taken
or omitted by Administrative and Documentation Agent or Collateral Monitoring
Agent, as the case may be, under this Agreement or any of the Loan Documents, in
proportion to each Lender's Pro Rata Share; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements resulting from Administrative and Documentation Agent's or
Collateral Monitoring Agent gross negligence or willful misconduct. The
obligations of Lenders under this subsection 9.2(E) shall survive the payment in
full of the Obligations and the termination of this Agreement.
(F) Xxxxxx and Sanwa Individually. With respect to its Commitments
and the Loans made by it, and the Notes issued to it, Xxxxxx and Sanwa each
shall have and may exercise the same rights and powers hereunder and is subject
to the same obligations and liabilities as and to the extent set forth herein
for any other Lender. The terms "Lenders" or "Requisite Lenders" or any similar
terms shall, unless the context clearly otherwise indicates, include Xxxxxx and
Sanwa in their individual capacity as a Lender or one of the Requisite Lenders.
Xxxxxx and Sanwa may lend money to, and generally engage in any kind of banking,
trust or other business with any Loan Party as if it were not acting as
Administrative and Documentation Agent, or Collateral Monitoring Agent pursuant
hereto.
(G) Successor Administrative and Documentation Agent.
(1) Resignation. Administrative and Documentation Agent and
Collateral Monitoring Agent may each independently resign from the performance
of all its functions and duties hereunder at any time by giving at least thirty
(30) Business Days' prior written notice to Borrowing Agent and the Lenders.
Such resignation shall take effect upon the acceptance by a successor
Administrative and Documentation Agent or successor Collateral Monitoring Agent,
as the case may be, of appointment pursuant to clause (2) below or as otherwise
provided below.
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(2) Appointment of Successor. Upon any such notice of resignation
pursuant to clause (G)(1) above, Requisite Lenders shall, upon receipt of
Borrowing Agent's prior consent which shall not unreasonably be withheld,
appoint a successor Administrative and Documentation Agent or successor
Collateral Monitoring Agent, as the case may be, provided, however, that if
Xxxxxx is resigning as Administrative and Documentation Agent, then Requisite
Lenders shall, without the prior written consent of Borrowing Agent, initially
appoint Sanwa as the successor Administrative and Documentation Agent, which
appointment must be accepted or rejected by Sanwa within ten (10) days of the
date of such appointment, provided, further, if Sanwa is resigning as Collateral
Monitoring Agent, then Requisite Lenders shall, without the prior written
consent of Borrowing Agent, initially appoint Xxxxxx as the successor Collateral
Monitoring Agent, which appointment must be accepted or rejected by Xxxxxx
within ten (10) days of the date of such appointment. If a successor
Administrative and Documentation Agent or Collateral Monitoring Agent, as the
case may be shall not have been so appointed within said thirty (30) Business
Day period, the retiring Administrative and Documentation Agent or Collateral
Monitoring Agent, as the case may be, upon notice to Borrowing Agent, shall then
appoint a successor Administrative and Documentation Agent or Collateral
Monitoring Agent, as the case may be, who shall serve as Administrative and
Documentation Agent or Collateral Monitoring Agent, as the case may be, until
such time as Requisite Lenders, upon receipt of Borrowing Agent's prior written
consent which shall not be unreasonably withheld, appoint a successor
Administrative and Documentation Agent or Collateral Monitoring Agent, as the
case may be, as provided above.
(3) Successor. Upon the acceptance of any appointment as
Administrative and Documentation Agent or Collateral Monitoring Agent, as the
case may be, under the Loan Documents by a successor Administrative and
Documentation Agent or Collateral Monitoring Agent, as the case may be, such
successor Administrative and Documentation Agent or Collateral Monitoring Agent,
as the case may be, shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative and
Documentation Agent or Collateral Monitoring Agent, as the case may be, and the
retiring Administrative and Documentation Agent or Collateral Monitoring Agent,
as the case may be, shall be discharged from its duties and obligations under
the Loan Documents. After any retiring Administrative and Documentation Agent's
or retiring Collateral Monitoring Agent's resignation as Administrative and
Documentation Agent or Collateral Monitoring Agent, as the case may be, under
the Loan Documents, the provisions of this subsection 9.2 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative and Documentation Agent or Collateral Monitoring Agent, as the
case may be, under the Loan Documents.
(H) Collateral Matters.
(1) Release of Collateral. Lenders hereby irrevocably
authorize Co-Agents, at their option and in their discretion, to direct
Administrative and Documentation Agent to release any Lien granted to or held by
Administrative and Documentation Agent upon any property covered by this
Agreement or the Loan Documents (i) upon termination
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of the Commitments and payment and satisfaction of all Obligations; (ii)
constituting property being sold or disposed of if Borrowing Agent certifies to
Co-Agents that the sale or disposition is made in compliance with the provisions
of this Agreement (and Co-Agents may rely in good faith conclusively on any such
certificate, without further inquiry); or (iii) constituting property leased to
any Borrower under a lease which has expired or been terminated in a transaction
permitted under this Agreement or is about to expire and which has not been, and
is not intended by such Borrower to be, renewed or extended. In addition during
any Fiscal Year (x) Administrative and Documentation Agent, with the consent of
Co-Agents or Required Lenders if Sanwa does not hold 50% of the Commitments,
may release Collateral having a book value of not more than 25% of the book
value of all Collateral and (y) Administrative and Documentation Agent, with the
consent of Lenders having 90% of (i) the Total Loan Commitments and (ii) Loans,
may release more than 25% of the Collateral.
(2) Confirmation of Authority; Execution of Releases. Without
in any manner limiting Co-Agents' authority to act without any specific or
further authorization or consent by Lenders (as set forth in subsection
9.2(H)(1)), each Lender agrees to confirm in writing, upon request by Borrowing
Agent, the authority to release any property covered by this Agreement or the
Loan Documents conferred upon Administrative and Documentation Agent under
subsection 9.2(H)(1). So long as no Event of Default is then continuing, upon
receipt by Administrative and Documentation Agent of confirmation from the
requisite percentage of Lenders, of its authority to release any particular item
or types of property covered by this Agreement or the Loan Documents, and upon
at least five (5) Business Days prior written request by Borrowing Agent,
Co-Agents shall (and are hereby irrevocably authorized by Lenders to) direct
Administrative and Documentation Agent execute such documents as may be
necessary to evidence the release of the Liens granted to Administrative and
Documentation Agent for the benefit of Lenders herein or pursuant hereto upon
such Collateral; provided, however, that (i) Administrative and Documentation
Agent shall not be required to execute any such document on terms which, in
Administrative and Documentation Agent's opinion, would expose Administrative
and Documentation Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of any Loan Party, in respect of),
all interests retained by any Loan Party, including, without limitation, the
proceeds of any sale, all of which shall continue to constitute part of the
property covered by this Agreement or the Loan Documents.
(3) Absence of Duty. Administrative and Documentation Agent
shall have no obligation whatsoever to any Lender or any other Person to assure
that the property covered by this Agreement or the Loan Documents exists or is
owned by any Borrower or is cared for, protected or insured or has been
encumbered or that the Liens granted to Administrative and Documentation Agent
on behalf of Lenders herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of
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the rights, authorities and powers granted or available to Collateral Monitoring
Agent or Administrative and Documentation Agent in this subsection 9.2(H) or to
Administrative and Documentation Agent or Collateral Monitoring Agent in any of
the Loan Documents, it being understood and agreed that in respect of the
property covered by this Agreement or the Loan Documents or any act, omission or
event related thereto, Collateral Monitoring Agent and Administrative and
Documentation Agent may act in any manner they may deem appropriate, in their
discretion, given Collateral Monitoring Agent's or Administrative and
Documentation Agent's own interest in property covered by this Agreement or the
Loan Documents as one of the Lenders and that neither the Collateral Monitoring
Agent nor Administrative and Documentation Agent shall have any duty or
liability whatsoever to any of the other Lenders; provided, that Administrative
and Documentation Agent and Collateral Monitoring Agent shall each exercise the
same care which it would in dealing with loans for its own account.
(I) Agency for Perfection. Each Lender hereby appoints each other
Lender and Collateral Monitoring Agent as agent for the purpose of perfecting
Lenders' security interest in Collateral which, in accordance with Article 9 of
the Uniform Commercial Code in any applicable jurisdiction, can be perfected
only by possession. Should any Lender (other than Administrative and
Documentation Agent) obtain possession of any such Collateral (other than cash
proceeds which are received by Collateral Monitoring Agent), such Lender shall
notify Administrative and Documentation Agent thereof, and, promptly upon
Administrative and Documentation Agent's request therefor, shall deliver such
Collateral to Administrative and Documentation Agent or in accordance with
Administrative and Documentation Agent's instructions.
(J) Exercise of Remedies. Each Lender agrees that it will not have
any right individually to enforce or seek to enforce this Agreement or any Loan
Document or to realize upon any collateral security for the Loans, it being
understood and agreed that such rights and remedies may be exercised only by
Administrative and Documentation Agent or, to the extent provided for herein,
Collateral Monitoring Agent; provided, however, each Lender and the Collateral
Monitoring Agent shall be entitled to file a proof of claim with respect to its
pro rata share of the Obligations in any bankruptcy proceeding.
9.3 Consents.
(A) In the event Administrative and Documentation Agent requests the
consent of a Lender and does not receive a written denial thereof within five
(5) Business Days after such Lender's receipt of such request, then such Lender
will be deemed to have given such consent.
(B) In the event Administrative and Documentation Agent requests the
consent of a Lender and such consent is denied, then Xxxxxx may, at its option,
require such Lender (other than a Lender whose Commitment Percentage is greater
than or equal to Xxxxxx'x Commitment Percentage) to assign its interest in the
Loans to Xxxxxx for a price equal to the then outstanding principal amount
thereof plus accrued and unpaid interest and
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fees due such Lender, which interest and fees will be paid when collected from
Borrowers. In the event that Xxxxxx elects to require any Lender to assign its
interest to Xxxxxx, Xxxxxx will so notify such Lender in writing within
forty-five (45) days following such Lender's denial, and such Lender will assign
its interest to Xxxxxx no later than five (5) days following receipt of such
notice.
9.4 Set Off and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Lender is hereby authorized by each Borrower at any time or from time to
time, with reasonably prompt subsequent notice to such Borrower or to any other
Person (any prior or contemporaneous notice being hereby expressly waived) to
set off and to appropriate and to apply any and all (A) balances held by such
Lender or such holder at any of its offices for the account of such Borrower or
any of its Subsidiaries (regardless of whether such balances are then due to
such Borrower or its Subsidiaries), and (B) other property at any time held or
owing by such Lender or such holder to or for the credit or for the account of
any Borrower or any of its Subsidiaries, against and on account of any of the
Obligations which are not paid when due; except that no Lender or any such
holder shall exercise any such right without the prior written consent of
Administrative and Documentation Agent. Any Lender which has exercised its right
to set off shall, to the extent the amount of any such set off exceeds its Pro
Rata Share of the Obligations, purchase for cash (and the other Lenders or
holders shall sell) participations in each such other Lender's or holder's Pro
Rata Share of the Obligations as would be necessary to cause such Lender to
share such excess with each other Lender or holder in accordance with their
respective Pro Rata Shares. Each Borrower agrees, to the fullest extent
permitted by law, that (a) any Lender or holder may exercise its right to set
off with respect to amounts in excess of its Pro Rata Share of the Obligations
and may sell participations in such excess to other Lenders and holders, and (b)
any Lender or holder so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of Loans and other
Obligations in the amount of such participation.
9.5 Disbursement of Funds. Collateral Monitoring Agent may, on behalf of
Lenders, disburse funds to Borrowing Agent, or to such Borrower(s) as Borrowing
Agent shall direct, for Loans requested. Each Lender shall reimburse Collateral
Monitoring Agent on demand for all funds disbursed on its behalf by Collateral
Monitoring Agent, or if Collateral Monitoring Agent so requests, each Lender
will remit to Collateral Monitoring Agent its Pro Rata Share of any Loan before
Collateral Monitoring Agent disburses same to Borrowing Agent or pursuant to its
directions. If Collateral Monitoring Agent elects to require that funds be made
available prior to disbursement to Borrowing Agent or pursuant to its
directions, Collateral Monitoring Agent shall advise each Lender by telephone,
telex or telecopy of the amount of such Lender's Pro Rata Share of such
requested Loan no later than (a) one (1) Business Day prior to the Funding Date
applicable thereto for LIBOR Loans and (b) by 1:00 p.m. Central time on the
Funding Date for Base Rate Loans, and each such Lender shall pay Collateral
Monitoring Agent such Lender's Pro Rata Share of such requested
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Loan, in same day funds, by wire transfer to Collateral Monitoring Agent's
account not later than 10:00 a.m. Central time on such Funding Date for LIBOR
Loans and 3:00 p.m. Central time for Base Rate Loans. If any Lender fails to pay
the amount of its Pro Rata Share forthwith upon Collateral Monitoring Agent's
demand, Collateral Monitoring Agent shall promptly notify Borrowing Agent, and
Borrowers shall immediately repay such amount to Collateral Monitoring Agent.
Any repayment required pursuant to this subsection 9.5 shall be without premium
or penalty. Nothing in this subsection 9.5 or elsewhere in this Agreement or the
other Loan Documents, including without limitation the provisions of subsection
9.6, shall be deemed to require Collateral Monitoring Agent to advance funds on
behalf of any Lender or to relieve any Lender from its obligation to fulfill its
Commitments hereunder or to prejudice any rights that Collateral Monitoring
Agent or Administrative and Documentation Agent or Borrowers may have against
any Lender as a result of any default by such Lender hereunder.
9.6 Settlements, Payments and Information.
(A) Revolving Advances and Payments; Fee Payments.
(1) The Revolving Loan may fluctuate from day to day through
Collateral Monitoring Agent's disbursement of funds to, and receipt of funds
from, Borrowers. In order to minimize the frequency of transfers of funds
between Collateral Monitoring Agent and each Lender notwithstanding terms to the
contrary set forth in Section 2 and subsection 9.5, Revolving Advances and
repayments may be settled according to the procedures described in subsection
9.6(A)(2) and 9.6(A)(3) of this Agreement. Payments of principal, interest and
fees in respect of the Term Loans will be settled on the Business Day received
in accordance with the provisions of Section 2. Notwithstanding these
procedures, each Lender's obligation to fund its Pro Rata Share of any advances
made by Collateral Monitoring Agent to Borrowing Agent or pursuant to its
directions will commence on the date such advances are made by Collateral
Monitoring Agent. Such payments will be made by such Lender without set-off,
counterclaim or reduction of any kind.
(2) Once each week, or more frequently (including daily), if
Collateral Monitoring Agent so elects (each such day being a "Settlement Date"),
Collateral Monitoring Agent will advise each Lender by 1 p.m. Central time by
telephone, telex, or telecopy of the amount of each such Lender's Pro Rata Share
of the Revolving Loan. In the event payments are necessary to adjust the amount
of such Lender's share of the Revolving Loan to such Lender's Pro Rata Share of
the Revolving Loan, the party from which such payment is due will pay the other,
in same day funds, by wire transfer to the other's account not later than 3:00
p.m. Central time on the Settlement Date.
(3) On the first Business Day of each month ("Interest
Settlement Date"), Collateral Monitoring Agent will advise each Lender by
telephone, telefax or telecopy of the amount of interest and fees charged to and
collected from Borrowers for the proceeding month. Provided that such Lender has
made all payments required to be made by it under this Agreement, Collateral
Monitoring Agent will pay to such Lender, by wire
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transfer to such Lender's account (as specified by such Lender on the signature
page of this Agreement as amended by such Lender from time to time after the
date hereof pursuant to the notice provisions contained herein or in the
applicable Lender Addition Agreement) not later than 3 p.m. Central time on the
Interest Settlement Date such Lender's share of such interest and fees.
(B) Availability of Lender's Pro Rata Share.
(1) Unless Collateral Monitoring Agent has been notified by a
Lender prior to a Funding Date of such Lender's intention not to fund its Pro
Rata Share of the Loan amount requested by Borrowing Agent, Collateral
Monitoring Agent may assume that such Lender will make such amount available to
Collateral Monitoring Agent on the Funding Date or the next Settlement Date, as
applicable. If such amount is not, in fact, made available to Collateral
Monitoring Agent by such Lender when due, Collateral Monitoring Agent will be
entitled to recover such amount on demand from such Lender without set-off,
counterclaim or deduction of any kind.
(2) Nothing contained in this subsection 9.6(B) will be deemed
to relieve a Lender of its obligation to fulfill its Commitments or to prejudice
any rights Collateral Monitoring Agent or Borrowers may have against such Lender
as a result of any default by such Lender under this Agreement.
(3) Without limiting the generality of the foregoing, each
Lender shall be obligated to fund its Pro Rata Share of any Revolving Advance
made with respect to any draw on a Lender Letter of Credit.
(C) Return of Payments
(1) If Collateral Monitoring Agent pays an amount to a Lender
under this Agreement in the belief or expectation that a related payment has
been or will be received by Collateral Monitoring Agent from Borrowers and such
related payment is not received by Collateral Monitoring Agent, then Collateral
Monitoring Agent will be entitled to recover such amount from such Lender
without set-off, counterclaim or deduction of any kind.
(2) If Collateral Monitoring Agent determines at any time that
any amount received by Collateral Monitoring Agent under this Agreement must be
returned to any Borrower or paid to any other Person pursuant to any solvency
law or otherwise, then, notwithstanding any other term or condition of this
Agreement, Collateral Monitoring Agent will not be required to distribute any
portion thereof to any Lender. In addition, each Lender will repay to Collateral
Monitoring Agent on demand any portion of such amount that Collateral Monitoring
Agent has distributed to such Lender, together with interest at such rate, if
any, as Collateral Monitoring Agent is required to pay to any Borrower or such
other Person, without set-off, counterclaim or deduction of any kind.
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9.7 Dissemination of Information. Administrative and Documentation Agent
will provide Lenders with any information received by Administrative and
Documentation Agent from Borrowing Agent or any Borrower which is required to be
provided to a Lender hereunder; provided, however, that Administrative and
Documentation Agent shall not be liable to Lenders for any failure to do so,
except to the extent that such failure is attributable to Administrative and
Documentation Agent's gross negligence or willful misconduct.
9.8 Discretionary Advances. Co-Agents may, in their mutual discretion
direct Collateral Monitoring Agent to (i) provided that no Event of Default
exists, require Lenders to make Revolving Advances of up to 10% in excess of the
limitations set forth in subsection 2.1 (B)(1)(b) but not in excess of the
limitation set forth in subsection 2.1 (B)(1)(a) for a period of not more than
30 consecutive days and (ii) during the continuance of an Event of Default, make
Revolving Advances in an aggregate amount of not more than $500,000 in excess of
the limitations set forth in subsection 2.1 (B)(1) for the purpose of preserving
or protection the Collateral.
SECTION 10. MISCELLANEOUS
10.1 Expenses and Attorneys' Fees. Whether or not the transactions
contemplated hereby shall be consummated, Borrowers agree to promptly pay all
reasonable fees, (including, without limitation, the audit fees described in
Section 2.3(E)), out-of-pocket costs and expenses incurred by Administrative and
Documentation Agent and the Collateral Monitoring Agent, in connection with any
matters contemplated by or arising out of this Agreement or the other Loan
Documents including the following, and all such fees, out-of-pocket costs and
expenses shall be part of the Obligations, payable on demand and secured by the
Collateral: (a) fees, out-of-pocket costs and expenses (including attorneys'
fees, fees of environmental consultants, accountants and other professionals
retained by Administrative and Documentation Agent or Collateral Monitoring
Agent) incurred in connection with the examination, review, due diligence
investigation, documentation and closing of the financing arrangements evidenced
by the Loan Documents; (b) out-of-pocket fees, costs and expenses (including
attorneys' fees, and fees of environmental consultants, accountants and other
professionals retained by Administrative and Documentation Agent or Collateral
Monitoring Agent) incurred in connection with the review, negotiation,
preparation, documentation, execution, syndication, and administration of the
Loan Documents, the Loans, and any amendments, waivers, consents, forbearances
and other modifications relating thereto or any subordination or intercreditor
agreements; (c) fees, out-of-pocket costs and expenses incurred by
Administrative and Documentation Agent in creating, perfecting and maintaining
perfection of Liens in favor of Administrative and Documentation Agent, on
behalf of Lenders; (d) fees, costs and expenses incurred by Collateral
Monitoring Agent in connection with forwarding to any Borrower the proceeds of
Loans including Collateral Monitoring Agent's or any Lenders' standard wire
transfer fee; (e) fees, costs, expenses and bank charges, including bank charges
for returned checks, incurred by Collateral Monitoring Agent or any Lender in
establishing, maintaining and handling lock box accounts, blocked accounts or
other accounts for collection of the Collateral; (f) fees, costs, expenses
(including
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attorneys' fees) of Administrative and Documentation Agent or
Collateral Monitoring Agent or any Lender and costs of settlement incurred in
collecting upon or enforcing rights against the Collateral or incurred in any
action to enforce this Agreement or the other Loan Documents or to collect any
payments due from Borrowers or any other Loan Party under this Agreement or any
other Loan Document or incurred in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement, whether
in the nature of a "workout" or in connection with any insolvency or bankruptcy
proceedings or otherwise.
10.2 Indemnity. In addition to the payment of expenses pursuant to
subsection 10.1, whether or not the transactions contemplated hereby shall be
consummated, Borrowers agree to indemnify, pay and hold Administrative and
Documentation Agent, Collateral Monitoring Agent and each Lender and the
officers, directors, employees, agents, consultants, auditors, persons engaged
by Administrative and Documentation Agent, Collateral Monitoring Agent, or any
Lender to evaluate or monitor the Collateral, affiliates and attorneys of
Administrative and Documentation Agent, Collateral Monitoring Agent, Lender and
such holders (collectively called the "Indemnitees") harmless from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including the fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitee shall be
designated a party thereto) that may be imposed on, incurred by, or asserted
against that Indemnitee, in any manner relating to or arising out of this
Agreement or the other Loan Documents, the consummation of the transactions
contemplated by this Agreement, the statements contained in the commitment
letters, if any, delivered by Administrative and Documentation Agent, Collateral
Monitoring Agent or any Lender, Administrative and Documentation Agent's,
Collateral Monitoring Agent's and each Lender's agreement to make the Loans
hereunder, the use or intended use of the proceeds of any of the Loans or the
exercise of any right or remedy hereunder or under the other Loan Documents (the
"Indemnified Liabilities"); provided that Borrowers shall have no obligation to
an Indemnitee hereunder with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of that Indemnitee as determined by a
court of competent jurisdiction.
10.3 Amendments and Waivers.
(A) Except as otherwise provided herein, no amendment, modification,
termination or waiver of any provision of this Agreement or any Loan Document,
or consent to any departure by any Loan Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by Co-Agents if
Requisite Lenders is 50%, or by Requisite Lenders if Requisite Lenders is
greater than 50%, as applicable; provided, that no amendment, modification,
termination or waiver shall, unless in writing and signed by all Lenders, do any
of the following: (i) increase the Commitment of any Lender; (ii) reduce the
principal of, rate of interest on or fees payable with respect to any Loan;
(iii) extend the scheduled due date of any installment of principal of the
Loans; (iv) change the percentage
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of the Commitments or of the aggregate unpaid principal amount of the Loans, or
the percentage of Lenders which shall be required for Lenders or any of them to
take any action hereunder; (v) amend or waive this subsection 10.3 or the
definitions of the terms used in this subsection 10.3 insofar as the definitions
affect the substance of this subsection 10.3; (vi) consent to the assignment or
other transfer by any Loan Party of any of its rights and obligations under any
Loan Document; and (vii) increase the percentages contained in the definition of
Borrowing Base and provided, further, that no amendment, modification,
termination or waiver affecting the rights or duties of Administrative and
Documentation Agent or Collateral Monitoring Agent under any Loan Document shall
in any event be effective, unless in writing and signed by Administrative and
Documentation Agent, or Collateral Monitoring Agent, as the case may be, in
addition to the Lenders required herein above to take such action.
(B) Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for the specific purpose for which
it was given. No amendment, modification, termination or waiver shall be
required for Administrative and Documentation Agent to take additional
Collateral pursuant to any Loan Document.
(C) No amendment, modification or waiver of any provision of any
Lender Letter of Credit shall be applicable without the written concurrence of
the issuer of such Lender Letter of Credit. No notice to or demand on Borrowing
Agent or any other Loan Party in any case shall entitle Borrowing Agent or any
other Loan Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.3 shall be binding upon each
Lender, and, if signed by a Loan Party, on such Loan Party.
(D) In the event Administrative and Documentation Agent waives (1)
any Default arising under subsection 8.1(E) as a result of the breach of any of
the provisions of Section 5 of this Agreement (other than any such breach which
constitutes an Event of Default) or (2) any Default constituting a condition to
the funding of any Revolving Advance or issuance of any Lender Letter of Credit,
such waiver shall expire on the date upon which the Default which was the
subject of such waiver matures into an Event of Default pursuant to the terms of
this Agreement.
10.4 Notices. Unless otherwise specifically provided herein, all notices
shall be in writing addressed to the respective party as set forth below and may
be personally served, telecopied or sent by overnight courier service or United
States mail and shall be deemed to have been given: (a) if delivered in person,
when delivered; (b) if delivered by telecopy, on the date of transmission if
transmitted on a Business Day before 4:00 p.m. Central time or, if not, on the
next succeeding Business Day; (c) if delivered by overnight courier, two (2)
days after delivery to such courier properly addressed; or (d) if by U.S. Mail,
four (4) Business Days after depositing in the United States mail, with postage
prepaid and properly addressed.
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If to any Borrower,
care of Borrowing
Agent at: XXXXXXX XXXXXXXX COMPANY, INC.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
With a copy to: XXXXX XXXX LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
If to Administrative
and Documentation Agent
or to Xxxxxx: XXXXXX FINANCIAL, INC.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx, 00000
Attn: HBC Portfolio Manager
Telecopy No.: (000) 000-0000
With a copy to: XXXXXX FINANCIAL, INC.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Legal Department/HBC
Telecopy No.: (000) 000-0000
If to Collateral SANWA BUSINESS CREDIT CORPORATION
Monitoring Agent: 000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxxx
Senior Account Executive
Telecopy No.: (000) 000-0000
If to any Lender: Its address indicated on the signature page hereto, in a
Lender Addition Agreement or in a notice to Administrative and Documentation
Agent and Borrowing Agent or to such other address as the party addressed shall
have previously designated by written notice to the serving party, given in
accordance with this subsection 10.4.
10.5 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the making of the Loans hereunder.
Notwithstanding anything in this
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Agreement or implied by law to the contrary, the agreements of each Borrower set
forth in subsections 10.1 and 10.2 shall survive the payment of the Loans and
the termination of this Agreement.
10.6 Indulgence Not Waiver. No failure or delay on the part of
Administrative and Documentation Agent, Collateral Monitoring Agent or any
Lender or any holder of the Notes in the exercise of any power, right or
privilege hereunder or under the Notes shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege.
10.7 Marshaling; Payments Set Aside. Neither Administrative and
Documentation Agent, Collateral Monitoring Agent nor any Lender shall be under
any obligation to marshal any assets in favor of any Loan Party or any other
party or against or in payment of any or all of the Obligations. To the extent
that any Loan Party makes a payment or payments to Administrative and
Documentation Agent, Collateral Monitoring Agent and/or any Lender or
Administrative and Documentation Agent, Collateral Monitoring Agent and/or any
Lender enforces its security interests or exercise its rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the Obligations or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
10.8 Entire Agreement. This Agreement, the Notes and the other Loan
Documents referred to herein embody the final, entire agreement among the
parties hereto and supersede any and all prior commitments, agreements,
representations, and understandings, whether written or oral, relating to the
subject matter hereof and may not be contradicted or varied by evidence of
prior, contemporaneous, or subsequent oral agreements or discussions of the
parties hereto. There are no oral agreements among the parties hereto.
10.9 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 limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
condition exists.
10.10 Severability. The invalidity, illegality or unenforceability in any
jurisdiction of any provision in or obligation under this Agreement or the other
Loan Documents shall not affect or impair the validity, legality or
enforceability of the remaining provisions or obligations under this Agreement,
or the other Loan Documents or of such provision or obligation in any other
jurisdiction.
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10.11 Lenders' Obligations Several; Independent Nature of Lenders' Rights.
The obligation of each Lender hereunder is several and not joint and neither
Administrative and Documentation Agent, Collateral Monitoring Agent nor any
Lender shall be responsible for the obligation or commitment of any other Lender
hereunder. In the event that any Lender at any time should fail to make a Loan
as herein provided, the Lenders, or any of them, at their sole option, may make
the Loan that was to have been made by the Lender so failing to make such Loan.
Nothing contained in any Loan Document and no action taken by Administrative and
Documentation Agent, Collateral Monitoring Agent or any Lender pursuant hereto
or thereto shall be deemed to constitute Lenders to be a partnership, an
association, a joint venture or any other kind of entity. The amounts payable at
any time hereunder to each Lender shall be a separate and independent debt, and,
provided Administrative and Documentation Agent fails or refuses to exercise any
remedies against Borrowers after receiving the direction of the Requisite
Lenders, each Lender shall be entitled to protect and enforce its rights arising
out of this Agreement and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
10.12 Headings. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
10.13 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.14 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns except that no Borrower may assign its rights or obligations hereunder
without the written consent of Lenders.
10.15 No Fiduciary Relationship; Limitation of Liabilities.
(A) No provision in this Agreement or in any of the other Loan
Documents and no course of dealing between the parties shall be deemed to create
any fiduciary duty by Administrative and Documentation Agent, Collateral
Monitoring Agent or any Lender to any Borrower.
(B) Neither Administrative and Documentation Agent, Collateral
Monitoring Agent nor any Lender, nor any affiliate, officer, director,
shareholder, employee, attorney, or agent of Administrative and Documentation
Agent, Collateral Monitoring Agent or any Lender shall have any liability with
respect to, and each Borrower hereby waives, releases, and agrees not to xxx any
of them upon, any claim for any special, indirect, incidental, or consequential
damages suffered or incurred by such Borrower in connection with, arising out
of, or in any way related to, this Agreement or any of the other Loan Documents,
or any
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of the transactions contemplated by this Agreement or any of the other
Loan Documents. Each Borrower hereby waives, releases, and agrees not to xxx
Administrative and Documentation Agent, Collateral Monitoring Agent or any
Lender or any of Administrative and Documentation Agent's, Collateral Monitoring
Agent's or any Lender's affiliates, officers, directors, employees, attorneys,
or agents for punitive damages in respect of any claim in connection with,
arising out of, or in any way related to, this Agreement or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or any
of the transactions contemplated hereby.
10.16 CONSENT TO JURISDICTION. EACH BORROWER HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF XXXX
STATE OF ILLINOIS AND IRREVOCABLY AGREES THAT, SUBJECT TO ADMINISTRATIVE AND
DOCUMENTATION AGENT'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS SHALL BE
LITIGATED IN SUCH COURTS. EACH BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS AGREEMENT, THE NOTES, THE OTHER LOAN DOCUMENTS OR THE
OBLIGATIONS.
10.17 WAIVER OF JURY TRIAL. EACH BORROWER, EACH CO-AGENT, ADMINISTRATIVE
AND DOCUMENTATION AGENT, COLLATERAL MONITORING AGENT AND EACH LENDER HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE NOTES OR THE OTHER LOAN
DOCUMENTS. EACH BORROWER, EACH CO-AGENT, ADMINISTRATIVE AND DOCUMENTATION AGENT,
COLLATERAL MONITORING AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR
RELATED FUTURE DEALINGS. EACH BORROWER, EACH CO-AGENT, ADMINISTRATIVE AND
DOCUMENTATION AGENT, COLLATERAL MONITORING AGENT AND EACH LENDER FURTHER WARRANT
AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.
10.18 Construction. Each Borrower, each Co-Lender, Administrative and
Documentation Agent, Collateral Monitoring Agent and each Lender each
acknowledge that it has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan
Documents shall be construed as if jointly
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drafted by Borrowers, Co-Agents, Administrative and Documentation Agent,
Collateral Monitoring Agent and each Lender.
10.19 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents, or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one and the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto. Delivery of an executed counterpart of a signature
page to this Agreement, any amendments, waivers, consents or supplements, or to
any other Loan Document by telecopier shall be as effective as delivery of a
manually executed counterpart thereof.
10.20 No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by Administrative and
Documentation Agent, Collateral Monitoring Agent or any Lender shall have the
right to act exclusively in the interest of Administrative and Documentation
Agent, Collateral Monitoring Agent or such Lender and shall have no duty of
disclosure, duty of loyalty, duty of care, or other duty or obligation of any
type or nature whatsoever to any Borrower or any of such Borrower's shareholders
or any other Person.
10.21 Confidentiality. Administrative and Documentation Agent, Collateral
Monitoring Agent and Lenders shall hold all nonpublic information obtained
pursuant to the requirements hereof and identified as such by each Borrower in
accordance with such Person's customary procedures for handling confidential
information of this nature and in accordance with safe and sound business
practices and in any event may make disclosure to such of its respective
Affiliates, officers, directors, employees, agents and representatives as need
to know such information in connection with the Loans. If any Lender is
otherwise a creditor of a Borrower, such Lender may use the information in
connection with its other credits. Administrative and Documentation Agent,
Collateral Monitoring Agent and Lenders may also make disclosure reasonably
required by a bona fide offeree or assignee (or participation), or as required
or requested by any Governmental Authority or representative thereof, or
pursuant to legal process, or to its accountants, lawyers and other advisors,
and shall require any such offeree or assignee (or participant) to agree (and
require any of its offerees, assignees or participants to agree) to comply with
this Section 10.21. In no event shall Administrative and Documentation Agent,
Collateral Monitoring Agent or any Lender be obligated or required to return any
materials furnished by any Borrower; provided, however, each Offeree shall be
required to agree that if it does not become a assignee (or participant) it
shall return all materials furnished to it by each Borrower in connection
herewith.
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SECTION 11. BORROWING AGENCY
11.1 Borrowing Agency Provisions.
(A) Notwithstanding anything to the contrary herein provided, each
Borrower hereby irrevocably designates Borrowing Agent to be its attorney and
agent and in such capacity to borrow, sign and endorse notes, and execute and
deliver all instruments, documents, writings and further assurances now or
hereafter required hereunder, on behalf of such Borrower or Borrowers, and
hereby authorizes Collateral Monitoring Agent to pay over or credit all loan
proceeds hereunder in accordance with the request of Borrowing Agent.
(B) The handling of this credit facility as a co-borrowing facility
with a borrowing agent in the manner set forth in this Agreement is solely as an
accommodation to Borrowers and at their request. Neither Administrative and
Documentation Agent, Collateral Monitoring Agent nor any Lender shall incur
liability to Borrowers as a result thereof. To induce Administrative and
Documentation Agent, Collateral Monitoring Agent, and Lenders to do so and in
consideration thereof, each Borrower hereby indemnifies Administrative and
Documentation Agent, Collateral Monitoring Agent and Lenders and holds
Administrative and Documentation Agent, Collateral Monitoring Agent and Lenders
harmless from and against any and all liabilities, expenses, losses, damages and
claims of damage or injury asserted against Administrative and Documentation
Agent, Collateral Monitoring Agent and Lenders by any Person arising from or
incurred by reason of the handling of the financing arrangements of Borrowers as
provided herein, reliance by Administrative and Documentation Agent, Collateral
Monitoring Agent and Lenders on any request or instruction from Borrowing Agent
or any other action taken by Administrative and Documentation Agent, Collateral
Monitoring Agent and Lenders with respect to this Section 11.1 except due to
willful misconduct or gross (not mere) negligence by the indemnified party.
(C) All Obligations shall be joint and several, and each Borrower
shall make payment upon the maturity of the Obligations, by acceleration or
otherwise, and such obligation and liability on the part of each Borrower shall
in no way be affected by any extensions, renewals and forbearance granted by
Administrative and Documentation Agent or Requested Lenders to any Borrower,
failure of Collateral Monitoring Agent to give any Borrower notice of borrowing
or any other notice, any failure of Administrative and Documentation Agent,
Collateral Monitoring Agent or any Lender to pursue or preserve its rights
against any Borrower, the release by Administrative and Documentation Agent of
any Collateral now or thereafter acquired from any Borrower, and such agreement
by each Borrower to pay upon any notice issued pursuant hereto is unconditional
and unaffected by prior recourse by Administrative and Documentation Agent,
Collateral Monitoring Agent or any Lender to the other Borrowers or any
Collateral for such Borrower's Obligations or the lack thereof.
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11.2 Waiver of Subrogation. Each Borrower expressly waives any and all
rights of subrogation, reimbursement, indemnity, exoneration, contribution of
any other claim which such Borrower may now or hereafter have against the other
Borrowers or any other Person directly or contingently liable for the
Obligations hereunder, or against or with respect to the other Borrowers'
property (including, without limitation, any property which is Collateral for
the Obligations), arising from the existence or performance of this Agreement,
until all Obligations have been paid in full and the irrevocable termination of
this Agreement.
SECTION 12. CROSS-GUARANTY
12.1 Cross Guaranty. Each Borrower and Guarantor hereby acknowledges and
agrees that it is jointly and severally liable for, and hereby absolutely and
unconditionally guarantees to Administrative and Documentation Agent, Collateral
Monitoring Agent and Lenders the full and prompt payment of, all Obligations
owed or hereafter owing to such Person by each other Borrower and Guarantor.
Each Borrower and Guarantor further agrees to pay all costs and expenses
including, without limitation, all court costs and reasonable attorneys' and
paralegals' fees and expenses, paid or incurred by Administrative and
Documentation Agent, Collateral Monitoring Agent or Lenders in endeavoring to
collect all or any part of the Obligations from, or in prosecuting any action
against, such Borrower, Guarantor or any other guarantor of all or any part of
the Obligations.
12.2 Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Borrower or Guarantor, as the case may
be, shall make a payment under this Section 12 of all or any of the Obligations
for which such Borrower or Guarantor, as the case may be, is not primarily
liable (a "Guarantor Payment") which, taking into account all other Guarantor
Payments then previously or concurrently made by the other Borrowers and
Guarantors, as the case may be, exceeds the amount which such Borrower or
Guarantor, as the case may be, would otherwise have paid if each Borrower and
Guarantor had paid the aggregate Obligations satisfied by such Guarantor Payment
in the same proportion that such Borrower's and Guarantor's "Allocable Amount"
(as defined below) (in effect immediately prior to such Guarantor Payment) bore
to the aggregate Allocable Amounts of all of the Borrowers and Guarantors in
effect immediately prior to the making of such Guarantor Payment, then such
Borrower or Guarantor, as the case may be, shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, the other
Borrowers and Guarantors, as the case may be, for the amount of such excess, pro
rata based upon their respective Allocable Amounts in effect immediately prior
to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Borrower or Guarantor, as the case may be, shall be equal to the maximum amount
of the claim which could then be recovered from such Borrower or Guarantor, as
the case may be, under this Section 12 without rendering such claim voidable or
avoidable under Section
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548 of chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or
common law.
(c) This subsection 12.2 is intended only to define the relative
rights of the Borrowers and Guarantors and nothing set forth in this subsection
12.2 is intended to or shall impair the obligations of the Borrowers, jointly
and severally, to pay any amounts as and when the same shall become due and
payable in accordance with the terms of this Agreement, and nothing contained in
this subsection 12.2 shall limit the liability of any Borrower to pay the
Obligations for which it is primarily liable.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of any Borrower or
Guarantor, as the case may be, to which such contribution and indemnification is
owing.
12.3 Obligations Absolute. The liability of each Borrower and Guarantor to
Administrative and Documentation Agent, Collateral Monitoring Agent and Lenders
hereunder shall not be affected or impaired by any of the following: (i) the
validity or enforceability of the Obligations or any part thereof, or of any
Note or other instrument or document evidencing all or any part of the
Obligations, (ii) the absence of any attempt to collect the Obligations from a
Borrower, a Guarantor or any other guarantor or other action to enforce the
same, (iii) any acceptance of collateral security, guarantors, accommodation
parties or sureties for any or all Obligations; (iv) one or more extensions or
renewals of Obligations (whether or not for longer than the original period) or
any modification of the interest rates, fees, maturities or principal amount of,
or other contractual terms applicable to any Obligations; (v) any waiver or
indulgence granted to a Borrower or any Guarantor, as the case may be, any delay
or lack of diligence in the enforcement of Obligations, or any failure to
institute proceedings, file a claim, give any required notices or otherwise
protect any Obligations; (vi) any full or partial release of, compromise or
settlement with, or agreement not to xxx a Borrower, a Guarantor or any other
guarantor or other person liable in respect of any Obligations; (vii) any
release, surrender, cancellation or other discharge of any evidence of any of
the Obligations or the acceptance of any instrument in renewal or substitution
therefore; (viii) any failure to obtain collateral security (including rights of
setoff) for any of the Obligations, or to obtain or maintain the proper or
sufficient creation and perfection thereof, or to establish the priority
thereof, or to preserve, protect, insure, care for, exercise or enforce any
collateral security; (ix) any collection, sale, lease or disposition of, or any
other foreclosure or enforcement of or realization on, any collateral security;
(x) any assignment, pledge or other transfer of any of the Obligations or any
evidence thereof; (xi) any manner, order or method of application of any
payments or credits upon any of the Obligations; (xii) the Lenders' election, in
any case or proceedings under the Bankruptcy Code of the application of Section
1111(b)(2) thereof, (xiii) any borrowing or grant of a Lien by a Borrower as
debtor in possession under Section 364 of the Bankruptcy Code and (xiv) the
disallowance under the Bankruptcy Code of all or any portion of Lender's claim
for repayment of the Obligations. Each Borrower and Guarantor hereby waives any
and all legal and equitable defenses and discharges available to a surety,
guarantor, or accommodation co-obligor.
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Each Borrower and Guarantor hereby assumes responsibility for keeping
itself informed of the financial condition of the other Borrowers and
Guarantors, as the case may be, and any and all endorsers and other guarantors
of any agreement, instrument or document evidencing or securing all or any part
of the Obligations and of all other circumstances bearing upon the risk of
nonpayment of the Obligations or any part thereof that diligent inquiry would
reveal, and each Borrower and Guarantor hereby agrees that neither
Administrative and Documentation Agent, Collateral Monitoring Agent nor any
Lender shall have any duty to advise such Borrower or Guarantor, as the case may
be, of information regarding such condition or any such circumstances. Each
Borrower and Guarantor hereby acknowledges familiarity with each other
Borrower's and Guarantor's financial condition and has not relied on any
statements by Administrative and Documentation Agent, Collateral Monitoring
Agent or any Lender in obtaining such information. In the event Administrative
and Documentation Agent or Collateral Monitoring Agent, in its sole discretion,
undertakes at any time or from time to time to provide any such information to a
Borrower or a Guarantor, it shall not be under any obligation (i) to undertake
any investigation with respect thereto, (ii) to disclose any information which,
pursuant to accepted or reasonable credit practices, Administrative and
Documentation Agent or Collateral Monitoring Agent wishes to maintain
confidential or (iii) to make any other or future disclosures of such
information, or any other information, to such Borrower or Guarantor, as the
case may be.
12.4 Waiver. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, ADMINISTRATIVE
AND DOCUMENTATION AGENT MAY, AT ITS SOLE ELECTION, AND, UPON DEMAND BY REQUISITE
LENDERS, SHALL PROCEED DIRECTLY, WITHOUT NOTICE, AGAINST A BORROWER OR GUARANTOR
TO COLLECT AND RECOVER ALL OR ANY PART OF THE OBLIGATIONS WITHOUT FIRST
PROCEEDING AGAINST THE OTHER BORROWERS, ANY OTHER GUARANTOR, OR ANY COLLATERAL
FOR THE OBLIGATIONS.
EACH BORROWER AND GUARANTOR ALSO WAIVES ALL SETOFFS AND COUNTERCLAIMS AND
ALL PRESENTMENTS, DEMANDS FOR PERFORMANCE, NOTICES OF NONPERFORMANCE, PROTESTS,
NOTICES OF PROTEST, NOTICES OF DISHONOR, AND NOTICES OF ACCEPTANCE OF THIS
AGREEMENT. EACH BORROWER AND GUARANTOR FURTHER WAIVES ALL NOTICES OF THE
EXISTENCE, CREATION OR INCURRING OF NEW OR ADDITIONAL INDEBTEDNESS, ARISING
EITHER FROM ADDITIONAL LOANS EXTENDED TO THE OTHER BORROWERS OR OTHERWISE, AND
EXCEPT FOR NOTICES EXPRESSLY REQUIRED HEREUNDER, ALSO WAIVES ALL NOTICES THAT
THE PRINCIPAL AMOUNT, OR ANY PORTION THEREOF, OR ANY INTEREST ON ANY AGREEMENT,
INSTRUMENT OR DOCUMENT EVIDENCING OR SECURING ALL OR ANY PART OF THE OBLIGATIONS
IS DUE, NOTICES OF ANY AND ALL PROCEEDINGS TO COLLECT FROM THE MAKER, ANY
ENDORSER OR ANY OTHER GUARANTOR OF ALL OR ANY PART OF THE OBLIGATIONS, OR FROM
ANY OTHER PERSON, AND TO THE EXTENT PERMITTED BY LAW, NOTICES OF EXCHANGE, SALE,
SURRENDER OR OTHER HANDLING OF ANY COLLATERAL GIVEN TO ADMINISTRATIVE AND
DOCUMENTATION AGENT TO SECURE PAYMENT OF THE OBLIGATIONS.
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12.5 Recovery. Each Borrower and Guarantor agrees that, to the extent that
any other Borrower or Guarantor, as the case may be, makes a payment or payments
to Collateral Monitoring Agent or Administrative and Documentation Agent for the
benefit of Lenders, or Administrative and Documentation Agent receives any
proceeds of Collateral, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to such other Borrower or Guarantor, as the case may
be, its estate, trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
payment or repayment, the Obligations or the part thereof which has been paid,
reduced or satisfied by such amount shall be reinstated and continued in full
force and effect as of the date such initial payment, reduction or satisfaction
occurred, and this cross guaranty shall continue to be in existence and full
force and effect, irrespective of whether any evidence of the Obligations has
been surrendered or cancelled.
12.6 Liability Cumulative. The liability of the Borrowers and Guarantors
under this Section 12 is in addition to and shall be cumulative with all
liabilities of each Borrower and Guarantor to Administrative and Documentation
Agent, Collateral Monitoring Agent and Lenders under this Agreement and the Loan
Documents to which such Borrower or Guarantor, as the case may be, is a party or
in respect of any Obligations or obligation of any other Borrower or Guarantor,
as the case may be, without any limitation as to amount, unless the instrument
or agreement evidencing or creating such other liability specifically provides
to the contrary.
Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
XXXXXXX XXXXXXXX COMPANY, INC.,
XXXXXXXXXX/LANSING COMPANY,
XXXXXX INTERNATIONAL INC.
XXXXXXXX THREADS, INC.
AMERICAN COLLARS, INC.
THE BRIDGE REALTY COMPANY
By: /s/ X. Xxxx
----------------------------------
Title: ______________________ of each
of the foregoing corporations
THE XXXXXXX THREAD GROUP, LLC
By: /s/ X. Xxxx
Title: Manager
[SIGNATURE LINES CONTINUED ON FOLLOWING PAGE]
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XXXXXX FINANCIAL, INC., AS ADMINISTRATIVE AND
DOCUMENTATION AGENT, CO-AGENT AND LENDER
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------
Title: Senior Vice President
-----------------------
Revolving Loan Commitment:
$10,000,000
Term Loan A Commitment:
$7,000,000
Term Loan B Commitment:
$4,000,000
Commitment Percentage: 50%
SANWA BUSINESS CREDIT CORPORATION, AS
COLLATERAL MONITORING AGENT, CO-AGENT AND LENDER
By: /s/ Xxxx X. XxXxxxx
-------------------------
Title: First Vice President
-----------------------
Revolving Loan Commitment:
$10,000,000
Term Loan A Commitment
$7,000,000
Term Loan B Commitment
$4,000,000
Commitment Percentage: 50%
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ACCEPTED AND AGREED TO
AS TO SECTION 12:
XXXXXXX CHEMICAL INDUSTRIES, INC.
THE XXXXXXXX & XXXXXXXX MANUFACTURING COMPANY
By: /s/ X. Xxxx
--------------------------------
Title: VP of each of the foregoing corporations
----
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EXHIBITS
Borrowing Base Certificate
Compliance Certificate
Inventory Report
Lender Addition Agreement
Reconciliation Report
101
SCHEDULES
1.1(A) Mortgaged Property
1.1(B) Other Liens
1.1(C) Pro Forma
4.1(B) Capitalization of Loan Parties
3.1(A) List of Closing Documents
4.6 Trade Names (Present and Past Five Years)
4.7 Location of Principal Place of Business, Books and Records and
Collateral
4.9 Litigation
4.10 Tax Matters
4.11 Contract Disputes
4.12 Benefit Plans
4.13 Intellectual Property
4.15 Environmental Compliance
4.16 Material Events
4.20 Bank Accounts
4.21 Subsidiaries
4.22 Employee Matters
7.1 Permitted Indebtedness
A-2
