JUNIOR SUBORDINATED NOTE AGREEMENT
THIS JUNIOR SUBORDINATED NOTE AGREEMENT (the "Agreement") is made and
entered into as of this 30th day of April, 1998 by and among GENERAL TEXTILES, a
California corporation (the "Company"), AMERICAN ENDEAVOUR FUND LIMITED, a
Jersey corporation ("Endeavour"), and LONDON PACIFIC LIFE & ANNUITY COMPANY, a
North Carolina joint stock life insurer ("London Pacific"). Endeavour and London
Pacific shall sometimes be referred to herein collectively as the "Noteholders."
RECITAL
The Company and the Noteholders have entered into a Note Exchange
Agreement in which they have agreed that the Company will issue, among other
things, a total of $17,335,097.65 principal amount of Notes to the Noteholders
in exchange for a total of $17,335,097.65 principal amount of the Company's
Junior Subordinated Reorganization Notes.
AGREEMENT
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, and of any extension of credit by the Noteholders to or on behalf of the
Company heretofore, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE
DEFINITIONS AND INCORPORATION BY REFERENCE
"Actual Knowledge" means the actual knowledge of any executive officer
of the Company; provided, however, that each executive officer of the Company
shall be deemed to have actual knowledge of any fact that would have come to
such officer's attention if he or she had exercised reasonable care in
performing his or her duties, given the nature of his or her duties and the
Company's business and organization.
"Affiliate" means (i) any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, (ii)
any spouse, immediate family member or other relative, provided such individual
has the same principal residence, of any Person described in clause (i) above,
(iii) any trust in which any Person described in clauses (i) or (ii) above has a
beneficial interest, and (iv) any corporation or other organization of which the
Persons described in clauses (i) or (ii) above individually or collectively own
a general partnership interest or equity securities or trust certificates with
more than five percent (5%) of the total voting power for the election of
directors or persons exercising similar authority of such corporation or other
organization; provided, however, that the term Affiliate shall not include any
wholly owned subsidiary of the Company. For this purpose, "control" means
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
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"Board of Directors" means the Board of Directors of the
Company or any committee of the Board authorized to act for it.
"Business Day" means any day other than a Legal Holiday.
"Company" means General Textiles, a California corporation, and its
successors and assigns.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Debtors' Laws.
"Debtors' Laws" means all applicable liquidation, conservatorship,
bankruptcy, moratorium, fraudulent conveyance, arrangement, receivership,
insolvency, reorganization or similar laws or general equitable principles from
time to time in effect affecting the rights of creditors generally.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Endeavour" means American Endeavour Fund Limited, a Jersey corporation.
"Event of Default" has the meaning assigned to such term in Section
5.01 hereof.
"Factory 2-U" means Factory 2-U, Inc., a Delaware corporation which, at
the date of this Agreement, is wholly owned by Family Bargain.
"Family Bargain" means Family Bargain Corporation, a Delaware
corporation which, at the date of this Agreement, is the sole stockholder of the
Company.
"Indebtedness" means, with respect to any Person and without
duplication, all: (i) liabilities or obligations, direct and contingent, matured
or unmatured, liquidated or unliquidated, including, without limitation, trade
debt; (ii) liabilities or obligations of others for which such Person is
directly or indirectly liable, by way of guaranty (whether by direct guaranty,
suretyship, discount, endorsement, take-or-pay agreement, agreement to purchase
or advance or keep in funds or other agreement having the effect of a guaranty)
or otherwise; (iii) liabilities or obligations secured by liens on any assets of
such Person, whether or not such liabilities or obligations shall have been
assumed by it; and (iv) liabilities or obligations of such Person, direct or
contingent, with respect to letters of credit issued for the account of such
Person and bankers' acceptances created for such Person, whether now in
existence or hereafter incurred; and (v) the Notes and the Subordinated Notes.
"IRS" means the United States Internal Revenue Service.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in New York, New York or San Diego,
California.
"London Pacific" means London Pacific Life & Annuity Company, a North
Carolina joint stock life insurer.
"Maturity Date" means May 28, 2005.
"Noteholders" has the meaning assigned to such term in the preamble to
this Agreement.
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"Notes" means the Company's Junior Subordinated Notes, which Notes
shall be substantially in the form set forth in Exhibit A attached hereto and
made a part hereof, and "Note" shall mean any one of the Notes.
"Officer" means the Chairman of the Board, the President, any
Vice-President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, or
government or any agency or political subdivision thereof.
"Senior Indebtedness" means the principal of and premium, if any, on
all Indebtedness of the Company, whether outstanding on the date hereof or
hereafter incurred or created, for money borrowed from banks, insurance
companies or other companies engaged in lending money as a regular part of their
business, other than (i) the Notes, and (ii) any indebtedness of Family Bargain
which becomes Indebtedness of the Company solely because of a merger of Family
Bargain and the Company.
"Subordinated Notes" means the Subordinated Notes due 2003 in the
aggregate principal amount of $3,250,000 issued by the Company in exchange for
$4,900,000 principal amount of its Subordinated Reorganization Notes.
ARTICLE 2.
THE NOTES
SECTION 2.01 The Junior Subordinated Notes. The Company is authorized
to execute and deliver Junior Subordinated Notes (each a "Note" and collectively
the "Notes"), substantially in the form of Exhibit A attached hereto and made a
part hereof. The Notes shall have an aggregate principal amount of not more than
Seventeen Million Three Hundred Thirty-Five Thousand Ninety-Seven Dollars and
Sixty-Five Cents ($17,335,097.65).
SECTION 2.02 Interest. The Notes shall not bear interest, except
as provided in Section 2.05.
SECTION 2.03 Payments of Principal. The Company will be required
to pay the principal of each Note in installments as follows:
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------------------------ ----------------------------------
Principal Payment Percentage of Original
Date Principal Amount to be Paid
------------------------ ----------------------------------
------------------------ ----------------------------------
December 31, 1999 5.768644%
December 31, 2000 5.768644%
December 31, 2001 11.537287%
December 31, 2002 11.537287%
December 31, 2003 17.305931%
December 31, 2004 17.305931%
Maturity Date 30.776276%
----------
100.000000%
------------------------ ----------------------------------
The Notes will mature on the Maturity Date and all principal and interest (if
any) which has not been paid prior to the Maturity Date will be due and payable
on the Maturity Date.
SECTION 2.04 Prepayment. The Company may prepay all or any portion of
the principal of the Notes at any time without prepayment penalty or premium. If
fewer than all of the Notes are to be prepaid, the Company shall allocate the
total principal amount to be prepaid pro rata as nearly as practicable among the
Notes based on the outstanding principal balances thereof. Any Note which is to
be prepaid only in part shall be surrendered to the Company (with, if the
Company so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company duly executed by, the holder of such Note or
its attorney duly authorized in writing), and the Company shall execute for the
holder of such Note a new Note equal in principal amount to the unprepaid
portion of the Note surrendered and identical to the Note surrendered in all
other respects.
SECTION 2.05 Overdue Payments; Business Days. If any principal amount
of any of the Notes is not paid when due, then interest shall accrue on the
entire Note outstanding from the date such sum is due until paid at the rate of
ten percent (10%) per annum, compounded quarterly, or at the maximum rate
permitted by law, whichever is less. Interest shall be calculated on the basis
of the actual number of days elapsed in a year of 360 days from the last day on
which interest was paid (or if no interest has been paid, from the day on which
interest began to accrue). Whenever any payment of principal or interest on any
of the Notes shall be stated to be due, or whenever any date specified in this
Agreement or in any of the Notes would otherwise occur on a Legal Holiday, such
payment shall be made, and such other date shall occur, on the next succeeding
Business Day. Any such extension of time shall be included in the computation of
interest payable.
ARTICLE 3.
SUBORDINATION OF NOTES
SECTION 3.01 Agreement to Subordinate. The Company agrees, and each
holder of Notes, by accepting Notes, agrees, that all Notes shall be issued
subject to the provisions of this Article 3 and each holder of a Note, whether
upon original issue or upon transfer or assignment thereof, accepts and agrees
to and shall be bound by such provisions.
All Notes, to the extent and in the manner set forth in this Article 3,
shall be subordinated and subject in right of payment to the prior payment in
full of the principal of, premium, if any, on and interest on all Senior
Indebtedness.
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SECTION 3.02 No Payment on Notes if Senior Indebtedness in Default. In
addition to the restrictions set forth in Section 2.03 hereof, no payment on
account of the principal of, or interest on, the Notes shall be made if, at the
time of such payment or immediately after giving effect thereto, (a) there shall
exist a default in the payment of principal, premium, if any, sinking funds, or
interest with respect to any Senior Indebtedness, or (b) there shall have
occurred any other event of default (of which the Company shall have received
notice from any holder or trustee with respect to any Senior Indebtedness)
relating to any Senior Indebtedness, as defined therein or in the instrument
under which the same is outstanding, permitting the holders thereof to
accelerate the maturity thereof, and such event of default shall not have been
cured or waived or shall not have ceased to exist. In the event that the Notes
are declared due and payable before their expressed maturity because of the
occurrence of an Event of Default, the holders of Senior Indebtedness shall be
entitled to receive payment in full of all principal (and premium, if any) and
interest with respect to such indebtedness before the holders of the Notes shall
be entitled to receive any payment on account of principal or otherwise.
SECTION 3.03 Priority of Senior Indebtedness upon Distribution of
Assets. Upon any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors in the event of
any insolvency or bankruptcy proceedings, and any receivership, liquidation,
reorganization or other similar proceedings in connection therewith, relative to
the Company or to its property, or upon any such payment in the event of
proceedings for voluntary or involuntary liquidation, dissolution or other
winding up of the Company, whether or not involving insolvency or bankruptcy,
all principal, premium, if any, and interest due or to become due upon all
Senior Indebtedness shall first be paid in full, or payment thereof duly
provided for, before any payment is made on account of the Indebtedness
evidenced by the Notes. Upon any such proceedings (but subject to the power of a
court of competent jurisdiction to make other equitable provision with respect
to the rights of the holders of any Senior Indebtedness and the holders of the
Notes pursuant to a lawful plan of reorganization under applicable Debtors'
Laws) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the holders of the
Notes would be entitled, except for the provisions of this Article 3, shall be
paid or delivered by the Company or by any Custodian or other Person making such
payment or distribution, or by the holders of the Notes if received by them or
it, directly to the holders of Senior Indebtedness (pro rata to each such holder
on the basis of the respective amounts of Senior Indebtedness held by such
holder) or their representatives to the extent necessary to pay all Senior
Indebtedness in full after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment or
distribution is made to the holders of the Notes.
In the event that, notwithstanding the foregoing provisions of this
Section 3.03, any such payment or distribution of property or securities, shall
be received by the holders of the Notes before all Senior Indebtedness is paid
in full, or provision made for such payment, in accordance with its terms, such
payment or distribution shall be held for the benefit of, and shall be paid over
or delivered to, the holders of such Senior Indebtedness or their
representatives, as their respective interests may require, ratably as
aforesaid, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all such Senior Indebtedness in full in
accordance with its terms, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
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SECTION 3.04 Notice to Holders of Notes of Specified Events; Reliance
on Certificate of Liquidating Agent. The Company shall give prompt written
notice to the registered holders of the Notes of any proceedings of the type
specified in Section 3.03. The holders of the Notes shall be entitled to assume
that no such event has occurred unless the Company or any one or more holders of
Senior Indebtedness or any trustee therefor or any other Person has given such
notice to the registered holders of the Notes. Upon any payment or distribution
of assets of the Company referred to in this Article 3, the registered holders
of the Notes shall be entitled to rely upon a certificate of the Custodian or
other Person making such payment or distribution, delivered to such holders, for
the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
3. In the event that any holder of the Notes determines, in good faith, that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payments or distribution pursuant
to this Article 3, such holder may request such Person to furnish evidence to
the reasonable satisfaction of such holder as to the amount of Senior
Indebtedness held by such Person, as to the extent to which such Person is
entitled to participate in such payment or distribution, and as to other facts
pertinent to the rights of such Person under this Article 3, and if such
evidence is not furnished, such holder may defer any payment to such Person
pending judicial determination as to the right of such person to receive such
payment.
SECTION 3.05 Subrogation of Notes. Subject to the payment in full of
the principal of, premium, if any, on and interest on all Senior Indebtedness,
the holders of the Notes shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of assets of the
Company made on the Senior Indebtedness paid in full. For the purposes of such
subrogation, no payments or distributions to the holders of Senior Indebtedness
of any cash, property, or securities to which the holders of the Notes would be
entitled except for the provisions of this Article 3 shall, as between the
Company and the holders of the Notes, be deemed to be a payment by the Company
to or on account of Senior Indebtedness, it being understood that the provisions
of this Article 3 are and are intended solely for the purpose of defining the
relative rights of the holders of the Notes, on the one hand, and the holders of
the Senior Indebtedness, on the other hand.
SECTION 3.06 Obligation to Pay Not Impaired. Except as provided in
Section 2.03 hereof, nothing contained in this Article 3 or elsewhere in this
Agreement, or in the Notes, is intended to or shall impair as among the Company
and the holders of the Notes, the obligation of the Company, which is absolute
and unconditional, to pay to the holders of the Notes the outstanding principal
amount of the Notes, as and when the same shall become due and payable in
accordance with their terms, or to affect the relative rights of the holders of
the Notes nor shall anything herein or therein prevent the holders of the Notes
from exercising, subject to the terms hereof, all remedies otherwise permitted
by applicable law upon the occurrence of an Event of Default under this
Agreement, subject to the rights, if any, under this Article 3 of the holders of
the Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
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ARTICLE 4.
COVENANTS
SECTION 4.01 Corporate Existence. The Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence; provided, however, that the Company shall not be required
to preserve any right or privilege if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and that the loss thereof is not disadvantageous in any
material respect to the holders of the Notes.
SECTION 4.02 Payment of Taxes. The Company will pay or discharge or
cause to be paid or discharged, (i) all taxes, assessments and governmental
charges levied or imposed upon the Company or upon the income, profits or
property of the Company; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment or charge which is being contested in good faith by appropriate
proceedings.
SECTION 4.03 Limitation on Dividends. Until the Notes are paid in full,
the Company will not pay dividends or make other distributions with regard to
its outstanding stock of any class, unless the holders of two-thirds in
aggregate principal amount of the Notes outstanding consent, except that if all
or a portion of the principal of the Subordinated Notes due 2003, issued under
an Indenture between General Textiles and IBJ Xxxxxxxxx Bank & Trust Company,
held by Family Bargain on April 30, 1998 ("FB 2003 Notes") are eliminated or
satisfied without payment by the Company (whether because that principal is
contributed to the Company, because of a merger of the Company and Family
Bargain or otherwise), the Company may at any time when (i) all the Subordinated
Notes have been paid in full and (ii) no Event of Default has occurred and is
continuing, without the consent of any holders of Notes, declare dividends or
make other distributions to stockholders in an amount not exceeding (a) in any
year, $4 million and (b) in total, the amount of the principal of FB 2003 Notes
which is eliminated or satisfied without payment by the Company. This Section
4.03 will not prevent the Company from making payments to a parent which files a
consolidated Federal or state income tax return for an affiliated group which
includes the Company equal to the Federal or state income taxes the Company
would have had to pay if it had filed a separate return, and those payments will
not be treated as dividends or other distributions to stockholders.
SECTION 4.04 Compliance Certificate. The Company shall deliver to the
holders of the Notes within 105 days after the end of each fiscal year of the
Company an Officers' Certificate stating that, after a review of the activities
of the Company during such period and of the Company's performance under this
Agreement, whether or not, to the best knowledge of the signers thereof based on
such review, there has been any Default or Event of Default by the Company in
performing any of its obligations under this Agreement or the Notes. If they do
know of any such Default or Event of Default, the certificate shall describe the
Default or Event of Default and its status.
SECTION 4.05 Notice of Default. In the event that any Default under
this Agreement shall occur, the Company will give prompt written notice of such
Default to each registered holder of the Notes, specifying the nature and status
of such default and the steps which the Company has taken or proposes to take in
order to cure such Default.
SECTION 4.06 Reports. The Company shall (i) within forty-five (45) days
of the close of each fiscal quarter of the Company cause to be furnished to each
registered holder of the Notes a copy of its consolidated balance sheet, income
statement and cash flow statement for the preceding fiscal quarter, each
prepared in accordance with generally accepted accounting principles applied on
a consistent basis and (ii) if the Company becomes required to file reports with
the Securities and Exchange Commission, within ten (10) days after the Company
files a report with the Securities and Exchange Commission, the Company will
furnish a copy of that report to each registered holder of Notes.
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ARTICLE 5.
DEFAULTS AND REMEDIES
SECTION 5.01 Events of Default. An "Event of Default" occurs if:
the Company defaults in the payment of any installment of the principal
or interest of any Note when the same becomes due and payable;
the Company fails to observe or perform in any
material respect any of its covenants or agreements in the Notes or
this Agreement, which failure continues for a period of 60 days after
the earlier of (i) the date on which written notice of such failure,
requiring the Company to remedy the same, shall have been given to the
Company by the holders of at least twenty-five percent (25%) in
aggregate principal amount of the Notes at the time outstanding or
(ii)Ethe date on which the Company had Actual Knowledge of such
failure;
the Company commits a default under any Senior
Indebtedness and as a result the obligation of the Company to pay
principal or interest with regard to any of that Senior Indebtedness is
accelerated so that it becomes due and payable prior to the date on
which it would otherwise have been due and payable, and that
acceleration is not rescinded or annulled within 30 days after the date
on which the Company had Actual Knowledge of the acceleration; provided
that if an event of default under Senior Indebtedness is cured or
waived, any Event of Default under this Section 5.01(c) relating to the
event of default under the Senior Indebtedness, and any Event of
Default under Section 5.01(a) because of failure to make an accelerated
payment of principal or a payment of interest which becomes due solely
because of the Event of Default under this Section 5.01(c), will be
deemed to have been cured at the same time the event of default under
the Senior Indebtedness is cured or waived, without any action by any
holders of Notes.
the entry of an order for relief under any Debtors'
Laws against the Company by any bankruptcy court of competent
jurisdiction which shall
approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition;
appoint a Custodian for any part of its property; or
order the dissolution of the Company or the
winding up or liquidation of its affairs and such order
remains unstayed and in effect for a period of thirty (30)
consecutive days;
the appointment of a Custodian for all or any
substantial part of the property of the Company, and such appointment
shall continue unstayed and in effect for a period of thirty (30)
consecutive days; and
the entry of judgment by a court of competent
jurisdiction against the Company and the scheduling of a sale of any
substantial part of the Company's property which is not stayed prior to
the scheduled date of such sale.
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SECTION 5.02 Acceleration. If an Event of Default occurs and is
continuing or has occurred and has continued for a period of not less than three
(3) months without having been waived, remedied or cured, the holders of not
less than two-thirds in principal amount of the Notes, or, in the case of an
Event of Default specified in Section 5.01(a) hereof, the holder of any of the
Notes, by notice to the Company, may declare the principal of the Notes to be
due and payable, and upon such declaration, the principal of the Notes shall be
due and payable immediately, provided that with regard to an Event of Default of
the type described in Section 5.01(c) or (d), the principal of the Notes will
become immediately due and payable when the Event of Default occurs, without the
passage of three (3) months time and, as to an Event of Default of the type
described in Section 5.01(d), without notice from, or any other action on the
part of, the holders of the Notes. The holders of not less than two-thirds of
the principal amount of the Notes may rescind an acceleration and its
consequences by notice to the Company if the rescission would not conflict with
any judgment or decree and if each outstanding Event of Default has been cured
or waived except, unless theretofore cured, nonpayment of principal that has
become due solely because of the acceleration. No such rescission shall affect
any subsequent Default or impair any right or remedy with respect thereto.
SECTION 5.03 Other Remedies. Notwithstanding any other provision of
this Agreement, if an Event of Default occurs and is continuing and the Notes
have been accelerated in accordance with Section 5.02 above, the holder of any
of the Notes may pursue any available remedy by proceeding at law or in equity
to collect the payment of the principal of the Notes or to enforce the
performance of any provision of the Notes or this Agreement.
The holder of any of the Notes may maintain a proceeding even if it
does not possess any of the Notes or does not produce any of them in the
proceeding. A delay or omission by any or all of the holders of the Notes in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All remedies are
cumulative.
In case any or all of the holders of the Notes shall have proceeded to
enforce any rights under this Agreement and such proceedings shall have been
discontinued or abandoned because of rescission or annulment or for any other
reason or shall have been determined adversely to the holders who participated
in such proceedings, then in every such case the Company and the holders of the
Notes shall, subject to any determination in such proceeding, be restored
respectively to their former positions and rights hereunder, and all rights,
remedies and powers of the Company and the holders of the Notes shall continue
as though no such proceeding had been taken.
ARTICLE 6.
MISCELLANEOUS
SECTION 6.01 Successors and Assigns in General. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer its
rights hereunder or any interest herein or delegate its duties hereunder (other
than in a merger or other combination of the type described in Section 4.01)
without the prior written consent of the holders of the Notes. Each holder of
the Notes may assign, pledge or transfer all or any portion of its Notes or its
rights hereunder to the extent permitted by law, including state and federal
securities laws. In the event of any such assignment, pledge or transfer, such
assignee shall, to the extent provided in such assignment, pledge or transfer,
be entitled to exercise the rights of the holder of a Note making such
assignment, pledge or transfer and shall be deemed a holder of a Note under this
Agreement.
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SECTION 6.02 Further Assurance. The Company shall, from time to time at
the request of any holder of a Note, execute and deliver to such holder or to
such Person or Persons as such holder may designate, any and all further
instruments as may in the reasonable opinion of such holder be necessary to give
full force and effect to any transfer or assignment contemplated by Section
6.01, and shall provide to such holder or to such Person or Persons as such
holder may designate, all such information as such holder may reasonably
request.
SECTION 6.03 No Waiver. No delay, failure or discontinuance of any
holder of any of the Notes, in exercising any right, power or remedy under this
Agreement or any of the Notes shall affect or operate as a waiver of such right,
power or remedy; nor shall any single or partial exercise of any such right,
power or remedy preclude, waive or otherwise affect any other or further
exercise thereof or the exercise of any other right, power or remedy. Any
waiver, permit, consent or approval of any kind by any holder of any of the
Notes, of any breach of or default under this Agreement or any of the Notes must
be in writing and shall be effective only to the extent set forth in such
writing.
SECTION 6.04 Set-Off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the first occurrence and during the continuance of any Event of Default
(after the giving of any notice and the expiration of any grace period contained
in the definition thereof), any holder of any of the Notes is hereby authorized
by the Company at any time or from time to time, without notice to the Company,
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and to apply to any and all Indebtedness at any time held
or owing by such holder to or for the credit or the account of the Company,
against and on account of the obligations and liabilities of the Company to such
holder under this Agreement and the Notes, including, but not limited to, all
claims of any nature or description arising out of or connected with this
Agreement or the Notes irrespective of whether or not (a) such holder shall have
made any demand hereunder, or (b) such holder shall have declared the principal
of and interest on the Notes and other amounts due hereunder to be due and
payable, and although said obligations and liabilities, or any of them, may be
contingent or unmatured.
SECTION 6.05 Notices. Any notice or other communication provided for or
permitted hereunder, in order to be effective, shall, unless otherwise stated
herein, be in writing or by telex, telegram, telecopy or cable and mailed or
sent or delivered, as to each party hereto, at its address set forth in this
Section 6.05 or at such other address as shall be designated by such party in a
written notice to the other parties hereto as provided hereunder. All notices
and communications shall be effective, in the case of written notice, (i) when
delivered by hand, (ii) five days after having been given by certified mail,
return receipt requested, (iii) when delivered to the telegraph company in the
case of telegraphic notice, (iv) when sent in the case of telex or telecopied
notice, or (v) three Business Days after deposit with a recognized overnight
delivery service. The addresses of the parties hereto are as follows:
THE COMPANY: GENERAL TEXTILES
0000 Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: President
Telecopier (000) 000-0000
NOTEHOLDERS: AMERICAN ENDEAVOUR FUND LIMITED
c/o Kleinwort Xxxxxx (US) Asset Managers LLC
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopier: (000) 000-0000
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With a copy to:
Xxxxxxxxx Traurig Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx
MetLife Building
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
LONDON PACIFIC LIFE & ANNUITY COMPANY
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
with copies to:
BERKELEY INTERNATIONAL CAPITAL CORPORATION
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Telecopier: (000) 000-0000
Any notice delivered to an address outside the United States of America shall be
duplicated by counterpart telex or telecopy.
SECTION 6.06 Cost, Expenses and Attorney's Fees. The Company shall
promptly reimburse each holder of the Notes for all out-of-pocket costs and
expenses, including, without limitation, reasonable attorneys' fees expended or
incurred by such holder in the enforcement of this Agreement or any of the
Notes, actions for declaratory relief in any way related to this Agreement or
any holder of the Notes or the collection of any sum which becomes due to such
holder on any of the Notes or pursuant to this Agreement.
SECTION 6.07 Entire Agreement, Amendment. The Notes and this Agreement
constitute the entire agreement between the Company and the persons who from
time to time are holders of Notes with respect to the subject matter hereof and
thereof; supersede all prior negotiations, communications, discussions and
correspondence concerning the subject matter hereof and thereof; and may be
amended or modified, or any provision hereof may be waived, or any acceleration
rescinded, only with the written consent of the holders of two-thirds of the
principal amount of the Notes then outstanding, except that no such amendment or
modification shall become effective if it extends the maturity or reduces the
rate of interest payable with respect to the Notes, alters the terms of payment
of the principal or interest under the Notes, or reduces the percentage of
holders of principal amount of the Notes necessary to approve modifications or
amendments to this Agreement without the consent of each holder of the Notes
affected thereby.
SECTION 6.08 Time. Time is of the essence of each and every provision
of this Agreement and the Notes.
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SECTION 6.09 Good Faith and Fair Dealing. The Company agrees to perform
its obligations under this agreement and the Notes in good faith and in the
spirit of fair dealing.
SECTION 6.10 Severability of Provisions. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.
SECTION 6.11 Governing Law. This Agreement and the Notes shall be
governed by and construed in accordance with the substantive laws of the State
of New York.
SECTION 6.12 Counterparts. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures to each counterpart
were upon a single instrument. All counterparts shall be considered an original
of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Junior Subordinated
Note Agreement to be executed as of the date first above written.
THE COMPANY: GENERAL TEXTILES, a California corporation
By: /s/ Xxxxxxxx X. Xxxxx
Its: Executive Vice President
ENDEAVOUR: AMERICAN ENDEAVOUR FUND LIMITED,
a Jersey corporation (Involuntary Liquidation)
By:
Its: Liquidator
LONDON PACIFIC: LONDON PACIFIC LIFE & ANNUITY COMPANY,
a North Carolina joint stocklife insurer
By: /s/ Xxxxx X. Xxxxxxx
Its: V.P. & Treasurer
