FIRST AMENDMENT OF
AMENDED AND RESTATED NOTE AGREEMENT AND WAIVER
This First Amendment of Amended and Restated Note Agreement and
Waiver, entered into as of May 16, 2001 (this "AMENDMENT"), by and among
XXXXXXXX XXXXX, INC. (the "COMPANY") and each of the Purchasers (as defined in
the Note Agreement referred to below) listed on the attached Schedule A
(collectively, "NOTEHOLDERS").
WHEREAS, the Company and each of the Noteholders have executed and
delivered an Amended and Restated Note Agreement dated as of November 6, 2000
(as amended hereby and as it may be further amended, modified or supplemented,
collectively, the "NOTE AGREEMENT");
WHEREAS, the Company has requested a modification of, among other
things, the financial covenants under the Note Agreement;
WHEREAS, the Company has advised the Noteholders, and hereby
acknowledges, that the Company has breached the Interest Coverage Ratio covenant
contained in Section 10.8 of the Note Agreement as it existed prior to being
replaced pursuant to this Amendment (the "REPLACED INTEREST COVERAGE COVENANT"),
the Leverage Ratio covenant contained in Section 10.10 of the Note Agreement as
it existed prior to being replaced pursuant to this Amendment (the "REPLACED
LEVERAGE RATIO COVENANT") and the Consolidated Tangible Net Worth covenant
contained in Section 10.11 of the Note Agreement as it existed prior to being
replaced pursuant to this Amendment (the "REPLACED NET WORTH COVENANT"), for the
Fiscal Quarter ending on or about March 31, 0000 (xxx "XXXXXX XXXXXXX XX0000";
such breaches of the Replaced Interest Coverage Covenant, the Replaced Leverage
Ratio Covenant and the Replaced Net Worth Covenant for the Second Quarter FY2001
being collectively referred to as the "SECOND QUARTER FY2001 REPLACED FINANCIAL
COVENANT DEFAULTS"), and requested that the Noteholders waive the Event of
Default which has occurred under such Sections as a result of the Second Quarter
FY2001 Replaced Financial Covenant Defaults, and the Noteholders have agreed to
such waiver, subject to the terms and conditions hereof;
WHEREAS, Noteholders are willing to enter into this Amendment subject
to the satisfaction of conditions and terms set forth herein;
WHEREAS, capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Note Agreement; and
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. AMENDMENTS TO NOTE AMENDMENT.
1A. AMENDMENT TO SECTION 7.4 OF THE NOTE AGREEMENT. Section 7.4(a) is
amended in its entirety to read as follows:
(a) NO DEFAULT. If no Default or Event of Default
then exists, at the expense of the Company no more than
four times per year and for any additional visits at the
expense of such holder and upon reasonable prior notice to
the Company, to visit the principal executive office of the
Company, to discuss the affairs, finances and accounts of
the Company and its Subsidiaries with the Company's
officers, and, with the consent of the Company (which
consent will not be unreasonably withheld) its independent
public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit
the other offices and properties of the Company, and each
Subsidiary, all at such reasonable times and as often as
may be reasonably requested in writing; and
1B. AMENDMENT TO SECTION 8.3 OF THE NOTE AGREEMENT. Section 8.3 of
the Note Agreement is amended in its entirety to read as follows:
8.3 MANDATORY OFFER TO PREPAY.
(a) On each date on which the Commitments are
reduced under the Credit Agreement and a repayment of the
loans outstanding under the Credit Agreement (the "BANK
LOANS") is required, the Company shall prepay the Bank
Loans and offer to prepay the Notes in accordance with
clause (l) of this Section 8.3 in an amount equal to the
amount required to be paid under the Credit Agreement.
(b) After the Effective Date, upon receipt by the
Company or any Domestic Subsidiary of Net Proceeds of Asset
Dispositions from any Receivables Securitization Program,
the Company shall certify to the Purchasers the amount of
Net Proceeds of Asset Dispositions so received and the
current amount of Maximum Available Proceeds under such
Receivables Securitization Program and prepay the
outstanding Bank Loans and offer to prepay the Notes (as
provided in clause (l) below) in an aggregate principal
amount equal to 85% of such Net Proceeds of Asset
Dispositions, but including such Net Proceeds of Asset
Dispositions only to the extent they are derived from sales
of Receivables in an aggregate amount in excess of the
highest level of aggregate sales of Receivables for which
Net Proceeds of Asset Dispositions have previously been
paid pursuant to this paragraph (b).
(c) After the Effective Date, each time during
any Fiscal Year in which Net Proceeds of Asset Dispositions
in excess of $100,000 from any sale or disposition of any
Collateral (other than sales of Inventory in the ordinary
course of business or in connection with a Receivables
Securitization Program or Permitted Factoring Arrangement),
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has been received by the Company or any Domestic Subsidiary
since the later of (x) the first day of such Fiscal Year
and (y) the date of the most recent prepayment made during
such Fiscal Year pursuant to this Section 8.3(c), if any
(each such later date being a "COLLATERAL NET PROCEEDS
AGGREGATION DATE"), within three Domestic Business Days
after such Collateral Net Proceeds Aggregation Date, the
Company shall certify to the Purchasers the amount of Net
Proceeds of Asset Dispositions so received as of such
Collateral Net Proceeds Aggregation Date and after any
prior Collateral Net Proceeds Aggregation Date during such
Fiscal Year, and prepay the Bank Loans and offer to prepay
the Notes (as provided in clause (l) below) by an aggregate
principal amount equal to 100% of such Net Proceeds of
Asset Dispositions received as of such Collateral Net
Proceeds Aggregation Date and after any prior Collateral
Net Proceeds Aggregation Date during such Fiscal Year.
(d) After the Effective Date, each time during
any Fiscal Year in which Net Proceeds of Asset Dispositions
from any sale or disposition of any asset in excess
$100,000 from any sale or disposition of any asset (other
than Collateral, sales of Inventory in the ordinary course
of business or in connection with a Receivables
Securitization Program or Permitted Factoring Arrangement),
has been received by the Company or any Domestic Subsidiary
since the later of (x) the first day of such Fiscal Year
and (y) the date of the most recent prepayment made during
such Fiscal Year pursuant to this Section 8.3(d), if any
(each such later date being a "NON-COLLATERAL NET PROCEEDS
AGGREGATION DATE"), within three Domestic Business Days
after such Non-Collateral Net Proceeds Aggregation Date,
the Company shall certify to the Purchasers the amount of
Net Proceeds of Asset Dispositions so received as of such
Non-Collateral Net Proceeds Aggregation Date and after any
prior Non-Collateral Net Proceeds Aggregation Date during
such Fiscal Year, and prepay the outstanding Bank Loans and
offer to prepay the Notes (as provided in clause (l) below)
by an aggregate principal amount equal to 75% of such Net
Proceeds of Asset Dispositions received as of such
Non-Collateral Net Proceeds Aggregation Date and after any
prior Non-Collateral Net Proceeds Aggregation Date during
such Fiscal Year.
(e) Except as expressly provided in the Morelos
Assets Sale Letter, after the Effective Date, within 5
Domestic Business Days after any Foreign Subsidiary
receives Net Proceeds of Asset Dispositions from any
Foreign Sale-Leaseback Transaction, the Company shall
certify to the Purchasers the amount of Net Proceeds of
Asset Dispositions so received and prepay the outstanding
Bank Loans and offer to prepay the Notes (as provided in
clause (l) below) in an aggregate principal amount equal to
100% of the amount of such Net Proceeds of Asset
Dispositions.
(f) After the Effective Date, within three
Domestic Business Days after the Company or any Domestic
Subsidiary receives Net Proceeds of Debt in excess of
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$250,000, the Company shall certify to the Purchasers the
amount of Net Proceeds of Debt so received and prepay the
outstanding Bank Loans and offer to prepay the Notes (as
provided in clause (l) below) in an aggregate principal
amount equal to 100% of the amount by which such Net
Proceeds of Debt exceeds an aggregate amount of Net
Proceeds of Debt so received since the Effective Date of
$250,000.
(g) After the Effective Date, within five
Domestic Business Days after any Foreign Subsidiary
receives Net Proceeds of Debt or incurs any obligations
under a Foreign Capital Lease (in each case other than Debt
permitted by Section 10.14(a)), the Company shall certify
to the Purchasers the amount of Net Proceeds of Debt
pertaining thereto and prepay the outstanding Bank Loans
and offer to prepay the Notes (as provided in clause (l)
below) in an aggregate principal amount equal to 75% of the
amount of such Net Proceeds of Debt, or, in the case of a
Foreign Capital Lease, the present value (using a discount
rate equal to the implicit interest rate of such Foreign
Capital Lease) of the aggregate amount of basic rent
(excluding taxes, insurance and similar other charges)
required to be paid during the term of such Foreign Capital
Lease (excluding any renewal term, but including any
payment required to be made at the end of the term as a
result of failure to renew or purchase the property).
(h) After the Effective Date, within three
Domestic Business Days after the Company or any Foreign
Subsidiary receives any repayment of Investments made as
permitted by Section 10.6(xii), (xiii) or (xiv), the
Company shall certify to the Purchasers the amount of the
Net Proceeds of Loan Repayment so received and prepay the
outstanding Bank Loans and offer to prepay the Notes (as
provided in clause (l) below) in an aggregate principal
amount equal to 100% of such Net Proceeds of Loan
Repayment.
(i) After the Effective Date, within three
Domestic Business Days after the Company or any
Consolidated Subsidiary receives any Net Proceeds of
Capital Stock (excluding Net Proceeds of Capital Stock
issued in connection with the exercise of any management or
employee stock option, so long as the Company or such
Consolidated Subsidiary does not incur any net cash cost in
connection with the exercise of such option), the Company
shall certify to the Purchasers the amount of Net Proceeds
of Capital Stock pertaining thereto and prepay the
outstanding Bank Loans and offer to prepay the Notes (as
provided in clause (l) below) in an aggregate principal
amount equal to 100% of the amount of such Net Proceeds of
Capital Stock.
(j) Upon receipt by the Company or any Domestic
Subsidiary of Net Proceeds of Special Transaction, the
Company shall certify to the Purchasers the amount of Net
Proceeds of Special Transaction so received and prepay the
outstanding Bank Loans and offer to prepay the Notes (as
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provided in clause (l) below) in an aggregate principal
amount equal to 100% of such Net Proceeds of Special
Transaction.
(k) Concurrently with the delivery of the annual
financial statements of the Company pursuant to Section
7.1(b) (but in no event later than the date such financial
statements are required to be delivered pursuant to such
Section, if they have not been timely delivered), the
Company shall certify to the Purchasers the amount of
Consolidated Excess Cash Flow for the Fiscal Year then
ended and prepay the outstanding Bank Loans and offer to
prepay the Notes (as provided in clause (l) below) in an
aggregate principal amount equal to 75% of such
Consolidated Excess Cash Flow for such Fiscal Year.
(l) The offer to prepay Notes contemplated by the
foregoing clauses (a) through (k), inclusive, shall be made
in writing to each holder of a Note at least ten Business
Days before the proposed date of prepayment specifying such
proposed date and the amount available for prepayment. A
holder of a Note may accept such offer to prepay by causing
a notice of such acceptance to be delivered to the Company
within seven Business Days after receipt of the notice
required pursuant to this clause (l). A failure by a holder
of Notes to respond to an offer to prepay made pursuant to
this clause (l) within such seven Business Day period shall
be deemed to constitute an acceptance of such offer by such
holder. The amount of all prepayments pursuant to clauses
(a) through (k), inclusive, shall be made (x) ratably to
each holder of a Note accepting an offer to prepay made
under this Section 8.3 and (y) ratably to Wachovia, as
Administrative Agent for the ratable benefit of the Banks.
For purposes of this clause (l), each Note's pro rata share
shall be a fraction, the numerator of which is the sum of
the unpaid principal balance of such Note on the date of
such prepayment plus the Make-Whole Amount, if any, with
respect to such Note on such date (such amounts
collectively, the "NOTE PREPAYMENT AMOUNT"), and the
denominator of which is the sum of the Note Prepayment
Amount for such Note plus the Note Prepayment Amount for
each other Note to be prepaid on the date of prepayment
plus the unpaid principal balance of the Bank Loans on the
date of such prepayment.
1C. AMENDMENT TO SECTION 8.7 OF THE NOTE AGREEMENT. Section 8.7 of
the Note Agreement is amended in its entirety to read as follows:
8.7. OFFER TO PREPAY NOTES IN THE EVENT OF
A CHANGE IN CONTROL OR REPAYMENT EVENT.
(i) NOTICE. The Company shall give to
each holder of Notes prompt written notice of any
impending (a) Change in Control for which it has
received a written offer or notice or (b)
Repayment Event.
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(ii) NOTICE OF OCCURRENCE OF CHANGE IN
CONTROL OR REPAYMENT EVENT. The Company will,
within five Business Days after any Responsible
Officer has knowledge of the occurrence of any
Change in Control or Repayment Event, give
written notice of such Change in Control or such
Repayment Event, as the case may be, to each
holder of Notes. If a Change in Control or
Repayment Event has occurred, such notice shall
contain and constitute an offer to prepay the
Notes as described in clause (iii) of this
paragraph 8.7 and shall be accompanied by the
certificate described in clause (vi) hereof.
(iii) OFFER TO PREPAY NOTES. The offer
to prepay Notes contemplated by the foregoing
clause (ii) shall be an offer to prepay, in
accordance with and subject to this paragraph
8.7, all, but not less than all, the Notes held
by each holder (in this case only, "holder" in
respect of any Note registered in the name of a
nominee for a disclosed beneficial owner shall
mean such beneficial owner) on a date specified
in such offer (the "PROPOSED PREPAYMENT DATE").
Such Proposed Prepayment Date shall be not less
than 30 days and not more than 90 days after the
date of such offer (if the Proposed Prepayment
Date shall not be specified in such offer, the
Proposed Prepayment Date shall be the 60th day
after the date of such offer).
(iv) REJECTION, ACCEPTANCE. A holder
of Notes may accept the offer to prepay made
pursuant to this paragraph 8.7 by causing a
notice of such acceptance to be delivered to the
Company within 60 days after receipt of the
notice required pursuant to clause (ii) of this
paragraph 8.7. A failure by a holder of Notes to
respond to an offer to prepay made pursuant to
this paragraph 8.7 within such 60-day period
shall be deemed to constitute an acceptance of
such offer by such holder.
(v) PREPAYMENT. Prepayment of the
Notes to be prepaid pursuant to this paragraph
8.7 shall be at 100% of the principal amount of
such Notes, plus the Make-Whole Amount, if any,
determined for the date of prepayment with
respect to such principal amount, together with
interest on such Notes accrued to the date of
prepayment. The prepayment shall be made on the
Proposed Prepayment Date.
(vi) OFFICER'S CERTIFICATE. Each offer
to prepay the Notes pursuant to this paragraph
8.7 shall be accompanied by a certificate,
executed by a Responsible Officer of the Company
and dated the date of such offer, specifying: (a)
the Proposed Prepayment Date; (b) that such offer
is made pursuant to this paragraph 8.7; (c) the
principal amount of each Note offered to be
prepaid; (d) the interest that would be due on
each Note offered to be prepaid, accrued to the
Proposed Prepayment Date; (e) that the conditions
of this paragraph 8.7 have been fulfilled; and
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(f) in reasonable detail, the nature and date of
the Change in Control or Repayment Event, as the
case may be.
1D. AMENDMENT TO SECTION 9.9 OF THE NOTE AGREEMENT. Section 9.9 of
the Note Agreement hereby is amended by adding at the end thereof new paragraphs
(c) and (d), as follows:
(c) attached as Schedule 9.9(c) is a description
of certain life insurance policies owned by the Company
(but excluding life insurance policies owned by Xxxxxxxx
Xxxxx, Inc. Management Compensation Trust) for its
employees identifying each insurer and showing, for each
employee covered by a policy issued by such insurer, the
insured (employee) name, the policy number, the cash
surrender value and the date issued. Within two Domestic
Business Days after receipt of a Life Insurance Assignment
for an insurer, the Company will execute and return to the
Collateral Agent such Life Insurance Assignment in favor of
the Collateral Agent, for the ratable benefit of the
Secured Parties, to secure the Secured Obligations, and
thereafter cooperate with the Collateral Agent in obtaining
the prompt completion and execution by such insurer of the
Acknowledgment of Receipt and Insurer Questionnaire at the
end thereof.
(d) At any time after the Effective Date, the
Required Holders may require the UK Subsidiaries to execute
and deliver UK Subsidiary Collateral Documents, in form and
substance reasonably satisfactory to the Collateral Agent
and the Required Holders, granting to the Collateral Agent,
for the ratable benefit of the Secured Parties, to secure
the Secured Obligations, a fixed or floating charge on all
UK Subsidiary Collateral, together with such officer's
certificates and organizational documents as the Collateral
Agent and the Required Holders may reasonably request and
opinions of counsel pertaining to the foregoing reasonably
acceptable to the Collateral Agent and the Required
Holders; provided, however, that the Company has indicated
that consent of a lender to one of the UK Subsidiaries (the
"UK Lender") to the granting of such a fixed and floating
charge is required, and the foregoing agreement is subject
to the obtaining of such consent of the UK Lender;
provided, further, that the Company hereby agrees that it
will use its best efforts to obtain such consent of the UK
Lender within 45 days after the Effective Date and, in the
event it is unable to obtain such consent of the UK Lender
within such period despite the exercise of its best
efforts, it will provide to the Collateral Agent and each
of the Secured Parties a written explanation of the efforts
expended by it and the response of the UK Lender. Such UK
Subsidiary Collateral Documents shall grant a fixed charge
over the UK Subsidiary Collateral, to the extent the
"control" required by applicable law can reasonably be
established with respect thereto, and a floating charge
over all other UK Subsidiary Collateral.
1E. AMENDMENT TO ARTICLE 9 OF THE NOTE AGREEMENT. A new Section 9.13
is added to the Note Agreement as follows:
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SECTION 9.13. If a Repayment Event shall occur,
the Company agrees to immediately offer to prepay the Notes
in accordance with Section 8.7 hereof.
1F. AMENDMENTS TO SECTION 10 OF THE NOTE AGREEMENT.
(i) Section 10.2(c) of the Note Agreement hereby is amended by
deleting it in its entirety and substituting the following therefor:
(c) the foregoing limitation on the sale, lease
or other transfer of assets and on the discontinuation or
elimination of a business line or segment shall not
prohibit, subject to Sections 8.3, 9.7(b) and 9.8(b), if
applicable, the following:
(1) any Foreign Sale-Leaseback;
and
(2) any sale, lease or other
transfer included in the Special Transaction
Investment, subject to the provisions of Section
10.6(xxiii);
(3) subject to any offer to prepay
required by Section 8.3, the Company or any
Subsidiary may sell and transfer any asset, (x)
as to assets having a book value less than
$3,000,000, so long as the aggregate cash
proceeds of such sale are not less than such book
value and (y) as to all other assets, so long as
the Required Secured Parties have consented to
such sale (and as to any Collateral for which the
Collateral Agent has obtained an appraisal
pursuant to this Agreement, the Required Secured
Parties shall be deemed to have so consented if
the aggregate cash proceeds of such sale are
equal to or greater than the appraised amount
therefor);
(4) the Company may enter into an
arrangement to sell Receivables pursuant to a
Receivables Securitization Program if, as of the
end of each of the two immediately preceding
Fiscal Quarters prior to entering into such
arrangement, the Leverage Ratio has been equal to
or less than 2.50 to 1.00.
If any assets permitted to be sold under this
Section 10.2(c) constitute Collateral, the Collateral Agent
shall release its Lien and security interest therein,
subject, except as to the Special Transaction Investment,
to its receipt of the Net Proceeds of Asset Disposition
with respect thereto.
(ii) Clause (xiii) of Section 10.6 of the Note Agreement is amended
in its entirety to read as follows:
(xiii) total Investments made for other capital
expenditures in Tamaulipas, Mexico for the completion of
dyeing, finishing and knitting and related facilities in an
aggregate amount not exceeding $54,500,000.
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(iii) Clause (xv) of Section 10.6 of the Note Agreement is amended in
its entirety to read as follows:
(xv) transfer of equipment in an aggregate
amount not exceeding $3,000,000 from the United States
to Mexico;
(iv) Clause (xix) of Section 10.6 of the Note Agreement is amended in
its entirety to read as follows:
(xix) Investments made after November 6, 2000 in
Xxxxx Fabrik, LLC in an aggregate amount not exceeding
$1,000,000 of which no greater than $750,000 is a cash
Investment (except that if Xxxxx Fabrik, LLC becomes a
Guarantor hereunder, clause (viii) above shall be
applicable and this clause shall have no further force or
effect),
(v) A new clause (xxiii) is added to Section 10.6 as follows:
(xxiii) Investments in the Special Transaction
Entity under terms acceptable to the Required Holders
including, but not limited to, the following: (a) final
operating, partnership or other governing agreement
pertaining to the Special Transaction Entity and capital
structure thereof acceptable to the Required Holders, (b)
assets contributed to the Special Transaction Entity are
limited to equipment and other tangible personal property
acceptable to the Required Holders and generally described
in the Special Transaction Letter, and cash of up to
$5,000,000 spent to ready the relevant plant and fund
working capital within the first three months of the
Special Transaction Investment startup, (c) the Company or
such Company's Subsidiary, as the case may be, pledges its
ownership in the Special Transaction Entity and any rights
to any put agreement which the Company, or the Company's
Subsidiary as the case may be, has pertaining to the
Special Transaction Investment to the Collateral Agent as
Collateral for the benefit of the Secured Parties, (d) the
Company, or the Company's Subsidiary, as the case may be,
shall not permit the Special Transaction Entity to pledge
its assets to a third party, (e) the Company shall not, or
permit its Subsidiaries to, make any additional Investment
in the Special Transaction Entity,
(vi) The proviso at the end of Section 10.6 of the Note Agreement is
amended in its entirety to read as follows:
provided, that after giving effect to the making of any
Investments permitted by clauses (xi) through (xxi) and
clause (xxiii) of this Section, if there are any Notes
outstanding at that time, no Default shall be in existence
or be created thereby.
(vii) Section 10.7 of the Note Agreement hereby is amended by adding
at the end thereof a new clause (k), as follows:
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(k) Domestic Purchase Money Liens securing
Domestic Purchase Money Debt.
(viii) Section 10.8 is amended in its entirety to read as follows:
SECTION 10.8. FIXED CHARGE COVERAGE RATIO. As of
the end of each Fiscal Quarter, the Fixed Charge Coverage
Ratio for the Fiscal Quarter then ended shall at no time be
less than the ratio set forth below as of the end of the
Fiscal Quarters set forth below:
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FISCAL QUARTER MINIMUM FIXED CHARGE COVERAGE RATIO
-------------------------------------------------------------------------------
2nd of 2001 Fiscal Year Not tested
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3rd of 2001 Fiscal Year 0.80 to 1.00
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4th of 2001 Fiscal Year 0.90 to 1.00
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1st of 2002 Fiscal Year 1.25 to 1.00
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2nd of 2002 Fiscal Year 1.30 to 1.00
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3rd of 2002 Fiscal Year 1.35 to 1.00
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4th of 2002 Fiscal Year and thereafter 1.35 to 1.00
-------------------------------------------------------------------------------
(ix) Section 10.10 is amended in its entirety to read as follows:
10.10. LEVERAGE RATIO. The Leverage Ratio for
the Fiscal Quarter then ended and the immediately preceding three
Fiscal Quarters shall at all times be less than the ratio set
forth below as of the end of the Fiscal Quarters set forth below:
------------------------------------------ --------------------------------
FISCAL QUARTER LEVERAGE RATIO
------------------------------------------ --------------------------------
2nd of 2001 Fiscal Year 7.00 to 1.00
------------------------------------------ --------------------------------
3rd of 2001 Fiscal Year 7.25 to 1.00
------------------------------------------ --------------------------------
4th of 2001 Fiscal Year 6.00 to 1.00
------------------------------------------ --------------------------------
1st of 2002 Fiscal Year 5.00 to 1.00
------------------------------------------ --------------------------------
2nd of 2002 Fiscal Year 4.00 to 1.00
------------------------------------------ --------------------------------
3rd of 2002 Fiscal Year 3.50 to 1.00
------------------------------------------ --------------------------------
4th of 2002 Fiscal Year and thereafter 3.00 to 1.00
------------------------------------------ --------------------------------
(x) Section 10.11 is amended in its entirety to read as follows:
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10.11. MINIMUM CONSOLIDATED TANGIBLE NET WORTH.
Consolidated Tangible Net Worth shall at no time be less
than $200,000,000 plus the sum of (i) 50% of the cumulative
Reported Net Income of the Company and its Consolidated
Subsidiaries during any period after the Fiscal Quarter
ending December 31, 2000 (taken as one accounting period),
calculated quarterly at the end of each Fiscal Quarter but
excluding from such calculations of Reported Net Income for
purposes of this clause (i), any Fiscal Quarter in which
the Reported Net Income of the Company and its Consolidated
Subsidiaries is negative, (ii) 100% of the cumulative Net
Proceeds of Capital Stock received during any period after
the Fiscal Quarter ending December 31, 2000, calculated
quarterly at the end of each Fiscal Quarter, and (iii) 100%
of any equity resulting from the conversions of any Debt of
the Company or its Consolidated Subsidiaries.
(xi) Section 10.12 of the Note Agreement hereby is amended by
deleting it in its entirety and substituting the following therefor:
SECTION 10.12. FACTORING ARRANGEMENTS.
The Company and its Subsidiaries shall not have
any factoring arrangements, except those which comply with
the provisions of this Section 10.12 ("PERMITTED FACTORING
ARRANGEMENTS"): (i) the aggregate face amount of factored
accounts receivable outstanding at any time shall not
exceed $40,000,000; (ii) any Factor Advances under a
Permitted Factoring Arrangement shall be included in the
computation of Debt for purposes of Section 10.14(b)(viii)
and may be secured by (x) accounts receivable (and other
receivables, including instruments, chattel paper,
documents and general intangibles, and returned and
repossessed goods related thereto) which are not sold and
have not been identified for sale to such factor
("NON-FACTORED ACCOUNTS"), so long as such factor has
expressly subordinated its Lien on such Non-Factored
Accounts to the Lien of the Collateral Agent, pursuant to a
subordination provision acceptable to the Required Holders,
which subordinated Liens shall be included in the
computation of Liens permitted by Section 10.7(j), and (y)
accounts receivable (and other receivables, including
instruments, chattel paper, documents and general
intangibles, and returned and repossessed goods related
thereto) which have been identified for sale to such factor
pursuant to the factoring arrangement but which have not
yet been sold ("IDENTIFIED ACCOUNTS"), which Liens shall be
included in the computation of Liens permitted by Section
10.7(j) until they are actually sold pursuant to such
factoring arrangement, but need not be subordinated
pursuant to the foregoing (and any Non-Factored Accounts
which become Identified Accounts shall no longer be subject
to such subordination provisions). Upon the actual sale of
Identified Accounts pursuant to such factoring arrangement
(such sold accounts being "FACTORED ACCOUNTS"), the Lien of
the Collateral Agent shall be automatically released
pursuant to the Security Agreement.
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(xii) Section 10.14 hereby is amended by deleting it in its entirety
and substituting the following therefor:
10.14. ADDITIONAL DEBT; DEBT OF RECEIVABLES
SUBSIDIARY. The Company shall not incur or permit to
exist, or permit any Consolidated Subsidiary other than
the Receivables Subsidiary to incur or permit to exist,
any Debt other than:
(a) Debt under credit facilities in Mexico in the
aggregate amount not exceeding the Dollar equivalent of
66,000,000 Mexican pesos, calculated based on the exchange
rate as of the Closing Date, debt under credit facilities
in the United Kingdom in the aggregate amount not exceeding
the Dollar equivalent of 5,000,000 British pounds sterling,
calculated based on the exchange rate as of the Closing
Date, term facilities in Portugal in the aggregate amount
not exceeding the Dollar equivalent of 900,000,000
Portuguese escudos, calculated based on the exchange rate
as of the Closing Date; and
(b) Subject to Section 8.3(g), (i) Debt in
existence on the Closing Date (including unsecured Debt in
the amount of $1,500,000 of Xxxxx Fabrik LLC, a limited
liability company in which the Company owns 50% on November
6, 2000, but in which it may thereafter acquire additional
interests), and extensions, renewals, refinancings or
refundings thereof (provided that the amount of such Debt
is not increased); (ii) the Debt under this Agreement;
(iii) Debt permitted to be secured by Liens permitted by
Section 10.7; (iv) Debt of the types described in clause
(vii) of the definition of Debt which is incurred in the
ordinary course of business in connection with the sale or
purchase of goods or to assure performance of an obligation
to a utility or a governmental entity or a worker's
compensation obligation; (v) Receivables Program
Obligations; (vi) Debt permitted by Section 10.6; (vii)
obligations to reimburse any bank or other Person in
respect of amounts paid or to be paid under any irrevocable
standby letter of credit, or letter of credit issued in
support of trade payables arising from the import of goods,
in an aggregate amount at any time for all such standby and
trade letters of credit not exceeding $5,000,000, (viii)
Foreign Capital Leases and other Permitted Foreign Debt and
(ix) Domestic Purchase Money Debt up to $40,000,000. The
Company shall not permit the Receivables Subsidiary to
incur any Debt or other liabilities other than in
connection with the Receivables Securitization Program.
(xiii) Section 10.15 is amended in its entirety to read as follows:
SECTION 10.15. CAPITAL EXPENDITURES.
(a) Capital Expenditures for the Fiscal Quarter
then ended and the 3 immediately preceding Fiscal Quarters
shall at no time be greater than the sum of (x) the
applicable amount set forth below as of the end of the
12
Fiscal Quarters set forth below, less (y) the cash portion
of the UK Restructuring Charges taken during such period:
----------------------------------------- -------------------------------------
FISCAL QUARTER MAXIMUM CAPITAL EXPENDITURES
----------------------------------------- -------------------------------------
2nd of 2001 Fiscal Year $71,000,000
----------------------------------------- -------------------------------------
3rd of 2001 Fiscal Year $73,000,000
----------------------------------------- -------------------------------------
4th of 2001 Fiscal Year $63,000,000
----------------------------------------- -------------------------------------
1st of 2002 Fiscal Year $61,000,000
----------------------------------------- -------------------------------------
2nd of 2002 Fiscal Year $53,000,000
----------------------------------------- -------------------------------------
3rd of 2002 Fiscal Year $52,000,000
----------------------------------------- -------------------------------------
4th of 2002 Fiscal Year and thereafter $50,000,000
----------------------------------------- -------------------------------------
(b) If, at the end of the first Fiscal Quarter
of the 2002 Fiscal Year or at the end of any Fiscal Quarter
thereafter, the Fixed Charge Coverage Ratio for the Fiscal
Quarter just ended is less than 1.25 to 1.00, the Company
shall not, or permit its Consolidated Subsidiaries to,
commit to future Capital Expenditures greater than 50% of
the Maximum Capital Expenditures, set forth above, for the
next 4 Fiscal Quarters as set forth in the table above.
(xiv) A new Section 10.18 is added to the Note Agreement as follows:
SECTION 10.18. MINIMUM CONSOLIDATED TOTAL EBITDA.
Consolidated Total EBITDA for the Fiscal Quarter just ended
and the 3 immediately preceding Fiscal Quarters shall be at
least the amounts set forth below as of the end of the
Fiscal Quarters set forth below:
---------------------------------------- --------------------------------------
FISCAL QUARTER MINIMUM EBITDA
---------------------------------------- --------------------------------------
2nd of 2001 Fiscal Year $43,000,000
---------------------------------------- --------------------------------------
3rd of 2001 Fiscal Year $42,000,000
---------------------------------------- --------------------------------------
4th of 2001 Fiscal Year $50,000,000
---------------------------------------- --------------------------------------
1st of 2002 Fiscal Year $60,000,000
---------------------------------------- --------------------------------------
2nd of 2002 Fiscal Year $78,000,000
---------------------------------------- --------------------------------------
3rd of 2002 Fiscal Year $88,000,000
---------------------------------------- --------------------------------------
4th of 2002 Fiscal Year and thereafter $95,000,000
---------------------------------------- --------------------------------------
1G. AMENDMENTS TO SECTION 11 OF THE NOTE AGREEMENT. Section 11 of the
Note Agreement shall be amended as follows:
(i) Clause (c) of Section 11 of the Note Agreement is amended in its
entirety to read as follows:
13
(c) the Company shall fail to observe or perform
any covenant contained in Section 5.15, Section 7.4,
Section 9.1, Section 9.13, Section 10.1, Section 10.2,
Sections 10.6 through 10.11, inclusive, Section 10.13,
Section 10.15 or Section 10.18; or
(ii) The word "or" shall be inserted after clause (o);
(iii) The following new clause shall be added at the end of Section
11:
(p) The Company shall refuse to permit the
engagement of a third-party business consultant or any
replacement of such consultant ("CONSULTANT") to be hired
by the Required Holders on terms and in a manner acceptable
to the Required Holders in their sole discretion or the
Company shall fail to pay any fees, expenses or other
obligations owing to the Consultant or otherwise fails to
comply in any material respect with the provisions of any
agreement entered into with the Consultant.
1H. AMENDMENT TO SCHEDULE B TO THE NOTE AGREEMENT.
(i) Schedule B to the Note Agreement is amended by inserting the
following defined terms in the appropriate alphabetical order in substitution of
the corresponding defined terms set forth therein:
"APPLICABLE RATE" shall mean 11.00% per annum,
provided, however, that if at any time the Company shall
comply with either of:
(i) the financial covenants set forth
on Annex A to this Agreement (the "ANNEX A
COVENANTS") for four consecutive Fiscal Quarters
following the Effective Date (such period, the
"COMPLIANCE PERIOD"), and for so long as the
Company continues to comply with the Annex A
Covenants, the Applicable Rate shall be reduced
by (a) .75 of one percent per annum in each of
the first, second and third Fiscal Quarters
following the Compliance Period and (b) .84 of
one percent per annum in the fourth Fiscal
Quarter following the Compliance Period; or
(ii) the financial covenants set forth
on Annex B to this Agreement (the "ANNEX B
COVENANTS") for the Compliance Period and for so
long as the Company continues to comply with the
Annex B Covenants, the Applicable Rate shall be
further reduced by (x) .20 of one percent per
annum in each of the first, second and third
Fiscal Quarters following the Compliance Period
and (y) .25 of one percent per annum in the
fourth Fiscal Quarter following the Compliance
Period,
provided, further, that if the Company shall fail to comply
with any one or more of the Annex A Covenants or Annex B
Covenants all reductions previously made with respect to
the Annex A Covenants and/or Annex B Covenants, as the case
14
may be, shall no longer be taken into account and the rate
of interest shall be increased by all such reductions
beginning with the next succeeding Fiscal Quarter and
provided, however, notwithstanding anything to the contrary
in the foregoing, in no event shall the Applicable Rate at
any time be less than 7.06% per annum. It being understood
that if the Company is in compliance with the Annex A
Covenants and the Annex B Covenants, the Applicable Rate
shall be adjusted by the cumulative amount as provided in
clause (i) and (ii) above.
"APPLICABLE RESTRUCTURING CHARGES" means, for
each applicable quarterly reporting period in which such
charges should be included: (i) the UK Restructuring
Charges, up to the amount set forth in the definition
thereof; (ii) other restructuring charges incurred in the
fourth Fiscal Quarter of the 2000 Fiscal Year in an amount
not exceeding $28,645,000, described in the Restructuring
Charges Letter; (iii) other restructuring charges to be
incurred in each Fiscal Quarter of the 2001 Fiscal Year
described in the Restructuring Charges Letter; provided,
that the aggregate of such Applicable Restructuring Charges
under this clause (iii) for the 2001 Fiscal Year shall not
exceed $16,060,000.
"CONSOLIDATED TOTAL EBITDA" means, as to the
Company and its Consolidated Subsidiaries calculated for
each Fiscal Quarter then ending, and the immediately
preceding three Fiscal Quarters (determined on a
consolidated basis and in accordance with GAAP), the sum of
(a) Consolidated Net Income, plus (b) Consolidated Interest
Expense (to the extent subtracted from Consolidated Net
Income), plus (c) Amortization (to the extent subtracted
from Consolidated Net Income), plus (d) Depreciation (to
the extent subtracted from Consolidated Net Income), plus
or minus (e) to the extent included in determining
Consolidated Net Income, provisions for taxes on income for
such period (subtract if net benefits are recognized), plus
(f) Applicable Restructuring Charges.
"SECURITY DOCUMENTS" means the Foreign Stock
Pledge Agreement, the Domestic Stock Pledge Agreement, the
Life Insurance Assignments, the Security Agreement, the
Patent Assignment, the Mortgages and any UK Subsidiary
Collateral Documents.
(ii) Schedule B to the Note Agreement is further amended by inserting
the following new defined terms in the appropriate alphabetical order:
"COLLATERAL" means: (i) the Foreign Pledged
Stock; (ii) the Domestic Pledged Stock and (if applicable,
the Receivables Subsidiary Pledged Stock); (iii) all of the
personal property described in the Security Agreement and
the Patent Assignment; provided, however, that from and
after the release of the Receivables Program Assets
pursuant to Section 22.6, all references to Collateral
pursuant to the Security Agreement shall exclude the
Receivables Program Assets and the Purchase Money Note, but
shall include the Receivables Subsidiary Pledged Stock;
15
(iv) all of the Plants and Designated Other Real Property;
(v) from and after execution and delivery of the Life
Insurance Assignments pursuant to Section 5.25(c) of the
Credit Agreement, the life insurance policies described in
the Life Insurance Assignments; and (vi) when and if the UK
Subsidiary Collateral Documents are executed and delivered
pursuant to Section 9.9(d) of the Credit Agreement, the UK
Subsidiary Collateral.
"COLLATERAL AGENT" shall have the meaning set
forth in the Intercreditor Agreement.
"CONSOLIDATED EXCESS CASH FLOW" means for any
period, the sum of the following calculated on a
consolidated basis for the Company and its Domestic
Subsidiaries (i) Consolidated Net income, plus (ii) to the
extent deducted (or minus to the extent included) in
determining Consolidated Net Income for such period,
non-cash items of income and expense (including
depreciation, amortization, and other similar non-cash
charges) minus (if a gain) or plus (if a loss) (iii) any
gain or loss from the dispositions of Property to the
extent taken into account in determining Consolidated Net
Income, minus (iv) Capital Expenditures not financed with
Purchase Money Debt, minus (v) any increase (or plus any
decrease) in the average of the Consolidated Net Working
Investment at the end of each month during the period, when
compared to the average of the Consolidated Net Working
Investment at the end of each month ending during the
corresponding period immediately prior thereto, minus (vi)
all scheduled principal payments made or long term Debt
paid (including prepayments pursuant to Section 8.3).
"CONSOLIDATED FIXED CHARGES" means the sum of
Consolidated Interest Expense for such period plus Capital
Expenditures not financed by Permitted Foreign Debt or
Domestic Purchase Money Debt for such period plus all
scheduled principal payments made on Debt coming due in the
next period.
"CONSOLIDATED NET WORKING INVESTMENT" means for
any period, the sum of the following calculated on a
consolidated basis, (i) the current assets (including gross
trade accounts receivable before Factor Advances, but
excluding cash and cash equivalents) of the Company and its
Domestic Subsidiaries, minus (ii) the current liabilities
(excluding Debt) of the Company and its Domestic
Subsidiaries.
"DOMESTIC PERMITTED PURCHASE MONEY LIEN" means
any Lien on an asset which is purchased after the Effective
Date and which is located in the United States of America
or any state, territory or possession thereof or the
District of Columbia, provided that (i) such Lien attaches
to such asset concurrently with the acquisition, (ii) such
Lien does not at any time encumber any Property other than
such asset, (iii) the amount of Debt secured by such asset
is not increased and (iv) the aggregate principal amount
16
outstanding at any time of all Domestic Purchase Money Debt
secured by Domestic Permitted Purchase Money Liens shall
not exceed $40,000,000.
"DOMESTIC PURCHASE MONEY DEBT" means Debt
incurred by the Company or any Domestic Subsidiary incurred
for the purpose of financing all or any part of the cost of
acquiring an asset located in the United States of America
or any state, territory or possession thereof or the
District of Columbia, which Debt is secured by a Domestic
Permitted Purchase Money Lien.
"EFFECTIVE DATE" means May 16, 2001, the
effective date of the First Amendment to Amended and
Restated Note Agreement and Waiver.
"FISCAL MONTH" means any fiscal month of the
Company.
"FIXED CHARGE COVERAGE RATIO" means the ratio of
the sum of Consolidated Total EBITDA for such period to
Consolidated Fixed Charges for such period.
"LIFE INSURANCE ASSIGNMENTS" means, individually
and collectively, as the context shall require, each
Collateral Assignment of Life Insurance executed and
delivered by the Company pursuant to Section 9.9(c) in
favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, to secure the Secured Obligations.
"MORELOS ASSETS SALE LETTER" means a letter dated
May 15, 2001 from the Company to the Secured Parties
pertaining to the sale of certain assets in Morelos,
Mexico.
"NET PROCEEDS OF SPECIAL TRANSACTION" means all
amounts paid in cash from time to time to the Company or
any Subsidiary by the Special Transaction Entity,
including, without limitation, cash dividends and other
cash distributions and payments under a put agreement or
other cash returns of capital paid to the Company or any
Subsidiary pursuant to the operating, partnership agreement
or any other agreement pertaining to the Special
Transaction Entity, and repayments of loans to the Special
Transaction Entity, in each case net of applicable taxes,
but excluding payments arising from ordinary course of
business transactions between the Company or any Subsidiary
and the Special Transaction Entity which are unrelated to
the Special Transaction Investment (such as receipt of
payment for goods sold).
"NET PROCEEDS OF LOAN REPAYMENT" means all cash
proceeds received in payment of intercompany loans between
the Company and or any Domestic Subsidiary and any of the
Foreign Subsidiaries made as permitted by Section
10.6(xii), (xiii) or (xiv), in each case net of applicable
taxes, and excluding "VAT" or "IVA" tax reimbursements
originally applied for during the 2001 Fiscal Year.
17
"REPAYMENT EVENT" means, at any time on or after
December 31, 2001, the Company shall (a) fail to meet
either or both of the financial covenants set forth below
and (b) the Credit Agreement shall be refinanced, replaced
or repaid in full.
(i) As of the end of each Fiscal
Quarter, the Fixed Charge Coverage Ratio for the
Fiscal Quarter then ended shall at no time be
less than the ratio set forth below as of the end
of the Fiscal Quarters set forth below:
----------------------------------------- --------------------------------------
FISCAL QUARTER MINIMUM FIXED CHARGE COVERAGE RATIO
----------------------------------------- --------------------------------------
1st of 2002 Fiscal Year 1.55 to 1.00
----------------------------------------- --------------------------------------
2nd of 2002 Fiscal Year 1.60 to 1.00
----------------------------------------- --------------------------------------
3rd of 2002 Fiscal Year 1.65 to 1.00
----------------------------------------- --------------------------------------
4th of 2002 Fiscal Year 1.65 to 1.00
----------------------------------------- --------------------------------------
1st of 2003 Fiscal Year and thereafter 1.80 to 1.00
----------------------------------------- --------------------------------------
(ii) The Leverage Ratio for the Fiscal
Quarter then ended and the immediately preceding
three Fiscal Quarters shall at all times be less
then the ratio set forth below as of the end of
the Fiscal Quarters set forth below:
------------------------------------ ----------------------------------------
FISCAL QUARTER LEVERAGE RATIO
------------------------------------ ----------------------------------------
1st of 2002 Fiscal Year 3.80 to 1.00
------------------------------------ ----------------------------------------
2nd of 2002 Fiscal Year 2.80 to 1.00
------------------------------------ ----------------------------------------
3rd of 2002 Fiscal Year 2.45 to 1.00
------------------------------------ ----------------------------------------
4th of 2002 Fiscal Year 2.20 to 1.00
------------------------------------ ----------------------------------------
1st of 2003 Fiscal Year 2.10 to 1.00
------------------------------------ ----------------------------------------
2nd of 2003 Fiscal Year 2.00 to 1.00
------------------------------------ ----------------------------------------
3rd of 2003 Fiscal Year 1.90 to 1.00
------------------------------------ ----------------------------------------
4th of Fiscal Year and thereafter 1.85 to 1.00
------------------------------------ ----------------------------------------
"REQUIRED SECURED PARTIES" shall have the meaning
set forth in the Intercreditor Agreement.
"SPECIAL TRANSACTION ENTITY" means the entity in
which the Special Transaction Investment will be made as
described in the Special Transaction Letter, subject to the
provisions of Section 10.6(xxiii).
"SPECIAL TRANSACTION INVESTMENT" means the
Investment to be made in the Special Transaction Entity
described in the Special Transaction Letter, subject to the
provisions of Section 10.6(xxiii).
18
"SPECIAL TRANSACTION LETTER" means a letter dated
May 15, 2001 from the Company to the Secured Parties which
(i) is entitled at the top thereof "SPECIAL TRANSACTION
LETTER", (ii) refers to this Agreement, as amended by that
certain First Amendment to Amended and Restated Note
Agreement and Waiver, (iii) describes the Special
Transaction Investment in the Special Transaction Entity
and (iv) describes the equipment to be contributed to the
Special Transaction Entity.
"UK RESTRUCTURING CHARGES" means restructuring
charges taken or to be taken in the 2001 Fiscal Year in
connection with the operations of UK Subsidiaries in an
aggregate amount not to exceed $4,800,000 and described in
a letter dated April 16, 2001 from the Company to the Banks
and the Purchasers.
"UK SUBSIDIARY" means any Subsidiary organized
under the laws of the United Kingdom and any Subsidiary
owned by a Subsidiary organized under the laws of the
United Kingdom.
"UK SUBSIDIARY COLLATERAL" means substantially
all of the assets (both real or personal) of any UK
Subsidiary as to which the Collateral Agent has taken a
fixed or floating charge pursuant to Section 9.9(d) for the
ratable benefit of the Secured Parties, to secure the
Secured Obligations.
"UK SUBSIDIARY COLLATERAL DOCUMENTS" means,
individually and collectively, as the context shall
require, any documents executed and delivered by any of the
UK Subsidiaries granting to the Collateral Agent, for the
ratable benefit of the Secured Parties, to secure the
Secured Obligations, a fixed or floating charge on any UK
Subsidiary Collateral pursuant to Section 9.9(d).
2. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective
on the date (the "EFFECTIVE DATE") when, and only when, (a) the Noteholders
shall have received all of the following documents, each (unless otherwise
indicated) being dated the date hereof, in form and substance satisfactory to
each of the Noteholders:
(i) executed originals of each of this Amendment and the Consent and
Reaffirmation of Guarantors, attached hereto;
(ii) an opinion letter (together with any opinions of local counsel
relied on therein) of (i) Weil, Gotshal & Xxxxxx LLP, special counsel for the
Company and the Guarantors, and (ii) Xxxxxx X. Xxxxx, Xx., General Counsel for
the Company and the Guarantors, each dated as of the Effective Date and covering
such matters relating hereto and to the transactions contemplated hereby as the
Purchasers may reasonably request;
(iii) resolutions of the boards of directors or other appropriate
governing body (or of the appropriate committee thereof) of the Company
certified by its secretary or assistant secretary as of the Effective Date,
approving and adopting this Amendment, and authorizing the execution and
delivery thereof and the matters contemplated hereby;
19
(iv) specimen signatures of officers or other appropriate
representatives executing this Amendment on behalf of the Company, certified by
the secretary or assistant secretary of the Company;
(v) the Organizational Documents of the Company certified as of a
recent date by the Secretary of State of its state of organization;
(vi) certificates issued as of a recent date by the Secretary of
State of the jurisdiction of formation of the Company as to the due existence
and good standing of the Company;
(vii) appropriate certificates of qualification to do business, good
standing and, where appropriate, authority to conduct business under assumed
name, issued in respect of the Company as of a recent date by the Secretary of
State or comparable official of each jurisdiction in which the failure to be
qualified to do business or authorized so to conduct business could have a
Material Adverse Effect;
(viii) receipt of and satisfaction with the amendment to the Credit
Agreement amending sections thereof to be consistent with the amendments
contained herein;
(ix) duly executed copy of the Morelos Assets Sale Letter and
approval thereof by each Secured Party; and
(x) duly executed copy of the Special Transaction Letter and approval
thereof by each Secured Party (subject to the provisions of Section
10.6(xxiii)).
(b) The execution and delivery by each of the Secured Parties of a
First Amendment to Intercreditor Agreement and by each of the parties to the
Consent and Reaffirmation of the Company and the Guarantors attached thereto.
(c) The Company shall have paid in immediately available funds, the
nonrefundable restructuring fee to each of the Noteholders;
(d) The Company shall have paid all costs and expenses (including
legal fees) incurred by any Noteholder;
(e) Such other documents, instruments, approvals or opinions as any
Noteholder may reasonably request; and
(f) Other than the Second Quarter FY 2001 Replaced Financing Covenant
Default and as disclosed in writing to the Noteholders, the representations and
warranties contained herein shall be true on and as of the date hereof, there
shall exist on the date hereof, no Event of Default or Default; there shall
exist no material adverse change in the financial condition, business operation
or prospects of the Company or its Subsidiaries since November 6, 2000; and the
Company shall have delivered to the Noteholders an Officer's Certificate to such
effect.
20
3. WAIVER. Effective upon satisfaction of the conditions to
effectiveness set forth in Section 2 hereof, and subject to the other terms and
conditions set forth herein, each of the Noteholders waives the Second Quarter
FY2001 Replaced Financial Covenant Defaults.
4. REPRESENTATIONS AND WARRANTIES.
(a) The Company hereby repeats and confirms each of the
representations and warranties made by it in the Note Agreement, as amended
hereby, as though made on and as of the date hereof, with each reference therein
to "this Agreement", "hereof", "hereunder", "thereof", "thereunder" and words of
like import being deemed to be a reference to the Note Agreement as amended
hereby.
(b) The Company further represents and warrants as follows:
(i) The execution, delivery and performance by the Company of this
Amendment is within its corporate powers, have been duly authorized
by all necessary corporate action and do not contravene (A) its
charter or by-laws, (B) law or (C) any legal or contractual
restriction binding on or affecting the Company; and such execution,
delivery and performance do not or will not result in or require the
creation of any Lien upon or with respect to any of its properties.
(ii) No governmental approval is required for the due execution,
delivery and performance by the Company of this Amendment, except for
such governmental approvals as have been duly obtained or made and
which are in full force and effect on the date hereof and not subject
to appeal.
(iii) This Amendment constitutes the legal, valid and binding
obligations of the Company enforceable against the Company in
accordance with its terms.
(iv) There are no pending or threatened actions, suits or proceedings
affecting the Company or any of its Subsidiaries or the properties of
the Company or any of its Subsidiaries before any court, governmental
agency or arbitrator, that may, if adversely determined, materially
adversely affect the financial condition, properties, business,
operations or prospects of the Company and it Subsidiaries,
considered as a whole, or affect the legality, validity or
enforceability of the Note Agreement or the Notes, as amended by this
Amendment.
5. MISCELLANEOUS.
5A. REFERENCE TO AND EFFECT ON THE NOTE AGREEMENT. (a) Upon the
effectiveness of this Amendment, on and after the date hereof each reference in
the Note Agreement to "this Agreement", "hereunder", "hereof" or words of like
import referring to the Note Agreement, and each reference in any other document
to "the Note Agreement", "thereunder", "thereof" or words of like import
referring to the Note Agreement, shall mean and be a reference to the Note
Agreement, as amended hereby and each reference to the Notes, and each reference
in any other document to "the Notes", "thereunder", "thereof" or words of like
import referring to the Notes, shall mean and be a reference to the Notes, as
21
amended hereby. The waiver set forth in Section 3 hereof shall (i) relate only
to the Second Quarter FY2001 Replaced Financial Covenant Defaults, and (ii) be
effective as of the end of the Second Quarter FY2001, subject to satisfaction of
the conditions precedent set forth in Section 2 hereof. The waiver hereby
granted by the Noteholders shall not apply to any other past, present or future
noncompliance with any provision of the Note Agreement (including, without,
limitation, any Event of Default occurring or in existence under Sections 10.8,
10.10 and 10.11 of the Note Agreement as amended by this Amendment on and after
the last day of the Second Quarter FY2001), and all rights, powers and remedies
of the Noteholders are reserved with respect thereto.
(b) Except as specifically amended above, the Note Agreement and the
Notes, and all other related documents, are and shall continue to be in full
force and effect and are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any holder of a Note under the Note Agreement or the Notes,
nor constitute a waiver of any provision of any of the foregoing.
5B. COSTS AND EXPENSES. The Company agrees to pay on demand all costs
and expenses incurred by any holder of a Note in connection with the
preparation, execution and delivery of this Amendment, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel. The
Company further agrees to pay on demand all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses of
counsel), incurred by any holder of a Note in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Amendment, including, without limitation, counsel fees and expenses in
connection with the enforcement of rights under this paragraph 5B.
5C. EXECUTION IN COUNTERPARTS. This Amendment 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 to be an original
and all of which taken together shall constitute but one and the same
instrument.
5D. GOVERNING LAW. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.
5E. FURTHER ASSURANCES. The Company agrees to take such further
actions as the Required Holders shall reasonably request in connection herewith
to evidence the amendments herein contained.
22
0X. XXXXXXXX. To induce the Noteholders to enter into this Amendment,
the Company hereby acknowledges and agrees that, as of the Effective Date, there
exists no right of offset, defense or counterclaim in favor of the Company
against any holder of the Notes with respect to the obligations of the Company
to any such holder, either with or without giving effect to this Amendment.
[Signatures on Next Page.]
23
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
XXXXXXXX XXXXX, INC.
By: Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Treasurer
Schedule 9.9 Life Insurance Policies
[Signature Continue on Next Page.]
S-2
NOTEHOLDERS:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: Xxxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Information for Notices:
c/o Prudential Capital Group
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Managing Director
Telecopier number: 000-000-0000
Confirmation number: 000-000-0000
with a copy to:
c/o Prudential Capital Group
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Law Department
Telecopier: (000) 000-0000
[Signature Continue on Next Page.]
S-3
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: C. Xxxxx Xxxxxx
----------------------------------------------
Name: C. Xxxxx Xxxxxx
Title: Investment Officer
Information for Notices:
The Variable Annuity Life Insurance Company
and PA 54
c/o State Street Bank and Trust Company
Insurance Services WES2S
000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Telecopier number: 000-000-0000
Confirmation number: 781-___-____
and
The Variable Annuity Life Insurance Company
c/o American General Corporation
Attn: Investment Xxxxxxxx Xxxxxxxxxx, X00-00
X.X. Xxx 0000
Overnight Mail: 0000 Xxxxx Xxxxxxx, X0000
Xxxxxxx, Xxxxx 0000-0000
Telecopier number: 000-000-0000
Tax I.D. Number 00-0000000
[Signature Continue on Next Page.]
S-4
AMERICAN GENERAL ANNUITY INSURANCE COMPANY
By: C. Xxxxx Xxxxxx
-----------------------------------------------
Name: C. Xxxxx Xxxxxx
Title: Investment Officer
Information for Notices:
American General Annuity Insurance Company
and WE1B
c/o State Street Bank and Trust Company
Insurance Services WES2S
000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Telecopier number: 000-000-0000
Confirmation number: 781-___-____
and
American General Annuity Insurance Company
c/o American General Corporation
Attn: Investment Xxxxxxxx Xxxxxxxxxx, X00-00
X.X. Xxx 0000
Overnight Mail: 0000 Xxxxx Xxxxxxx, X0000
Xxxxxxx, Xxxxx 0000-0000
Telecopier number: 000-000-0000
Tax I.D. Number 00-0000000
[Signature Continue on Next Page.]
S-5
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc. as
Investment Adviser
By: Xxxxxx Xx
---------------------------------------------
Name: Xxxxxx Xx
Title: Managing Director
Information for Notices:
Massachusetts Mutual Life Insurance Company
c/o Xxxxx X. Xxxxxx & Company Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx Xx
Telecopier number: 000-000-0000
Confirmation number: 000-000-0000
[Signature Continue on Next Page.]
S-6
C. M. LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc. as
Investment Sub-Adviser
By: Xxxxxx Xx
--------------------------------------------
Name: Xxxxxx Xx
Title: Managing Director
Information for Notices:
C.M. Life Insurance Company
c/o Xxxxx X. Xxxxxx & Company Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx Xx
Telecopier number: 000-000-0000
Confirmation number: 000-000-0000
CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing
Amendment of Note Agreement (the "AMENDMENT"), (ii) consents to the execution
and delivery of the Amendment and the transaction contemplated thereby by the
parties thereto, and (iii) reaffirms all of its obligations and covenants under
the Amended and Restated Guaranty Agreement dated as of November 6, 2000, and
agrees that none of such obligations and covenants shall be affected by the
execution and delivery of the Amendment or the transaction contemplated thereby.
Each Guarantor hereby acknowledges and agrees that there exists no right of
offset, defense or counterclaim in favor of itself against any holder of the
Notes with respect to the obligations of such Guarantor to any such holder,
either with or without giving effect to this Amendment. This Consent and
Reaffirmation 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 to be an original and all of which counterparts, taken
together, shall constitute but one and the same instrument.
[Signatures On Next Page.]
GOLD XXXXX, INC.,
a Delaware corporation (SEAL)
RASCHEL FASHION INTERKNITTING, LTD.,
a New York corporation (SEAL)
CURTAINS AND FABRICS, INC.,
a New York corporation (SEAL)
GUILFORD INTERNATIONAL, INC.,
a U.S. Virgin Islands corporation (SEAL)
GFD FABRICS, INC.,
a North Carolina corporation (SEAL)
GFD SERVICES, INC.,
a Delaware corporation (SEAL)
MEXICAN INDUSTRIES OF NORTH
CAROLINA, INC.,
a North Carolina corporation (SEAL)
XXXXXXX LACES, LTD.,
a New York corporation (SEAL)
ADVISORY RESEARCH SERVICES, INC.
a North Carolina corporation (SEAL)
XXXXXXXX XXXXX (MICHIGAN), INC.
a Michigan corporation (SEAL)
GUILFORD AIRMONT, INC.,
a North Carolina corporation (SEAL)
GOLD XXXXX FARMS, INC.,
a New York corporation (SEAL)
GMI COMPUTER SALES, INC.
a North Carolina corporation (SEAL)
By:
Title:
TWIN RIVERS TEXTILE PRINTING AND FINISHING,
a North Carolina general partnership
By: Advisory Research Services, Inc.
a General Partner
By:
Title:
SCHEDULE A
Noteholders
-----------
The Prudential Insurance Company of America
The Variable Annuity Life Insurance Company
American General Annuity Insurance Company
Massachusetts Mutual Lie Insurance Company
C.M. Life Insurance Company
SCHEDULE 9.9(C)
-------------------------------------------------------------------------------------------------------------------------------
INSURER POLICY NUMBER INSURED DATE ISSUED CSV AMOUNT
-------------------------------------------------------------------------------------------------------------------------------
ANNEX A COVENANTS
(I) INTEREST COVERAGE RATIO. The Interest Coverage Ratio for the
Fiscal Quarter just ended shall at no time be less than the ratio set forth
below as of the end of the Fiscal Quarters set forth below:
------------------------------------------- -----------------------------------
FISCAL QUARTER MINIMUM INTEREST COVERAGE RATIO
------------------------------------------- -----------------------------------
4th of 2000 Fiscal Year 4.00
------------------------------------------- -----------------------------------
1st of 2001 Fiscal Year 3.05
------------------------------------------- -----------------------------------
2nd of 2001 Fiscal Year 2.65
------------------------------------------- -----------------------------------
3rd of 2001 Fiscal Year 2.75
------------------------------------------- -----------------------------------
4th of 2001 Fiscal Year 3.20
------------------------------------------- -----------------------------------
1st of 2002 Fiscal Year 3.80
------------------------------------------- -----------------------------------
2nd of 2002 Fiscal Year 4.00
------------------------------------------- -----------------------------------
3rd of 2002 Fiscal Year 4.50
------------------------------------------- -----------------------------------
4th of 2002 Fiscal Year and thereafter 5.00
------------------------------------------- -----------------------------------
(II) LEVERAGE RATIO. The Leverage Ratio for the Fiscal Quarter just
ended shall at all times be less than the ratio set forth below as of the end of
the Fiscal Quarters set forth below:
---------------------------------------- ------------------------------
FISCAL QUARTER LEVERAGE RATIO
---------------------------------------- ------------------------------
4th of 2000 Fiscal Year 4.25
---------------------------------------- ------------------------------
1st of 2001 Fiscal Year 4.35
---------------------------------------- ------------------------------
2nd of 2001 Fiscal Year 4.50
---------------------------------------- ------------------------------
3rd of 2001 Fiscal Year 3.75
---------------------------------------- ------------------------------
4th of 2001 Fiscal Year 2.95
---------------------------------------- ------------------------------
1st of 2002 Fiscal Year 2.55
---------------------------------------- ------------------------------
2nd of 2002 Fiscal Year 2.50
---------------------------------------- ------------------------------
3rd of 2002 Fiscal Year 2.25
---------------------------------------- ------------------------------
4th of 2002 Fiscal Year and thereafter 2.00
---------------------------------------- ------------------------------
(III) MINIMUM CONSOLIDATED TANGIBLE NET WORTH. Consolidated Tangible
Net Worth will at no time be less than $245,000,000 plus the sum of (i) 50% of
the cumulative Reported Net Income of the Company and its Consolidated
Subsidiaries during any period after the Fiscal Quarter ending April 2, 2000
(taken as one accounting period), calculated quarterly at the end of each Fiscal
Quarter but excluding from such calculations of Reported Net Income for purposes
of this clause (i), any Fiscal Quarter in which the Reported Net Income of the
Company and its Consolidated Subsidiaries is negative, (ii) 100% of the
cumulative Net Proceeds of Capital Stock received during any period after the
Fiscal Quarter ending April 2, 2000, calculated quarterly at the end of each
Fiscal Quarter, and (iii) 100% of any equity resulting from the conversions of
any Debt of the Company or its Consolidated Subsidiaries.
For purposes of this Annex A, defined terms shall have the following
meanings:
"AMORTIZATION" means for any period of determination the sum of all
amortization charges of the Company and its Consolidated Subsidiaries for such
period as determined in accordance with GAAP, on a consolidated basis.
"APPLICABLE RESTRUCTURING CHARGES" means, for each applicable
quarterly reporting period in which such charges should be included: (i)
restructuring charges incurred in the fourth Fiscal Quarter of the 2000 Fiscal
Year in an amount not exceeding $28,645,000, described in the Restructuring
Charges Letter; (ii) restructuring charges to be incurred in each Fiscal Quarter
of the 2001 Fiscal Year described in the Restructuring Charges Letter; provided,
that the aggregate of such Applicable Restructuring Charges for the 2001 Fiscal
Year shall not exceed $14,015,000.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"COMPANY" means Xxxxxxxx Xxxxx, Inc., a Delaware corporation.
"CONSOLIDATED INTEREST EXPENSE" for any period means (i) interest,
whether expensed or capitalized, in respect of Consolidated Total Debt of the
Company or any of its Consolidated Subsidiaries outstanding during such period
and (ii) all discount, fees and program expenses payable under a Receivables
Securitization Program.
"CONSOLIDATED NET INCOME" means, for any period, the Net Income of
the Company and its Consolidated Subsidiaries determined on a consolidated
basis, but excluding (i) extraordinary items and (ii) any equity interests of
the Company or any Subsidiary in the unremitted earnings of any Person that is
not a Subsidiary.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, would be consolidated
with those of the Company in its consolidated financial statements as of such
date.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any time, Stockholders'
Equity, less the sum of the value, as set forth or reflected on the most recent
consolidated balance sheet of the Company and its Consolidated Subsidiaries,
prepared in accordance with GAAP, of:
(a) Any surplus resulting from any write-up of assets
subsequent to October 3, 1999;
(b) All assets which would be treated as intangible assets
for balance sheet presentation purposes under GAAP, including without
limitation goodwill (whether representing the excess of cost over
book value of assets acquired, or otherwise), trademarks, tradenames,
copyrights, patents and technologies, and unamortized debt discount
and expense;
(c) To the extent not included in (b) of this definition,
any amount at which shares of Capital Stock of the Company appear as
an asset on the balance sheet of the Company and its Consolidated
Subsidiaries;
(d) Loans or advances to stockholders, directors, officers
or employees; and
(e) To the extent not included in (b) of this definition,
deferred expenses.
"CONSOLIDATED TOTAL DEBT" means at any date the Debt of the Company
and its Consolidated Subsidiaries, determined on a consolidated basis as of such
date.
"CONSOLIDATED TOTAL EBITDA" means, as to the Company and its
Consolidated Subsidiaries calculated for each Fiscal Quarter then ending, and
the immediately preceding 3 Fiscal Quarters (determined on a consolidated basis
and in accordance with GAAP), the sum of (a) Consolidated Net Income, plus (b)
Consolidated Interest Expense (to the extent subtracted from Consolidated Net
Income), plus (c) Amortization (to the extent subtracted from Consolidated Net
Income), plus (d) Depreciation (to the extent subtracted from Consolidated Net
Income), plus (e) consolidated tax expenses for such period (to the extent
subtracted from Consolidated Net Income), minus or plus (f) to the extent
included in Consolidated Net Income, any non-operating gains and losses, up to
but not in excess of $2,500,000, plus (g) non cash charges up to but not in
excess of $5,000,000, plus (h) Applicable Restructuring Charges.
"CONTRIBUTED RECEIVABLES" means Receivables which are contributed to
the Receivables Subsidiary as equity Investments therein pursuant to a
Receivables Securitization Program.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, including Factor Advances, (ii)
all obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such Person as lessee
under capital leases, (v) all obligations of such Person to reimburse any bank
or other Person in respect of amounts payable under a banker's acceptance, (vi)
all Redeemable Preferred Stock of such Person (in the event such Person is a
corporation), (vii) all obligations of such Person to reimburse any bank or
other Person in respect of amounts paid or to be paid under a letter of credit
or similar instrument, but excluding letters of credit or similar instruments
having a stated maturity of less than one year from the date of issuance which
are issued in support of trade payables arising from the import of goods, (viii)
all Hedge Obligations, (ix) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person, (x) all Debt of
others Guaranteed by such Person, and (xi) all principal amounts outstanding and
owed to parties other than the Company or any Subsidiary under the items
described in clause (a) of the definition of Receivables Program Obligations.
"DEPRECIATION" means for any period the sum of all depreciation
expenses of the Company and its Consolidated Subsidiaries for such period, as
determined in accordance with GAAP.
"EXCLUDED RECEIVABLES ASSETS" means: (i) all inventory of the Company
or any of its Subsidiaries, other than returned or repossessed goods, if any,
relating to the sale that gave rise to any Purchased Receivables or Contributed
Receivables ("SPECIFIED RETURNED GOODS)"; (ii) Receivables which are not
Purchased Receivables or Contributed Receivables; and (iii) any Receivables or
other proceeds of inventory of the Company and the Subsidiaries created or
arising (x) after a the commencement of a case under 11 U.S.C.A, ss.101 et. seq.
(as amended from time to time) in which the Company or such Subsidiary is the
debtor (other than proceeds of Specified Returned Goods), (y) after termination
of purchases under the Receivables Securitization Program or (z) from the sale
or other disposition of any of the inventory of the Company and the Subsidiaries
(other than Specified Returned Goods) by Wachovia, as Collateral Agent, as a
secured party under the applicable Uniform Commercial Code.
"FACTOR ADVANCES" means all amounts advanced to the Company or a
Subsidiary in respect of an Identified Account prior to its stated maturity by a
factor in connection with a Permitted Factoring Arrangement.
"FISCAL QUARTER" means any fiscal quarter of the Company.
"FISCAL YEAR" means any fiscal year of the Company.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"HEDGE OBLIGATIONS" means all obligations of such Person with respect
to interest rate protection agreements, foreign currency exchange agreements or
other hedging arrangements (valued at the termination value thereof computed in
accordance with a method approved by the International Swap Dealers Association
and agreed to by such Person in the applicable hedging agreement, if any, and in
any case net of any benefits of such Person).
"IDENTIFIED ACCOUNTS" has the meaning set forth in Section 10.12.
"INTEREST COVERAGE RATIO" means the ratio of (i) Consolidated Total
EBITDA to (ii) Consolidated Interest Expense.
"INVESTMENT" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise.
"LEVERAGE RATIO" means the ratio of Consolidated Total Debt to
Consolidated Total EBITDA.
"NET INCOME" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"NET PROCEEDS OF CAPITAL STOCK" means any cash proceeds received by
the Company or a Consolidated Subsidiary in respect of the issuance of Capital
Stock, after deducting therefrom all reasonable and customary costs and expenses
incurred by the Company or such Consolidated Subsidiary directly in connection
with the issuance of such Capital Stock.
"PERMITTED FACTORING ARRANGEMENTS" has the meaning set forth in
Section 10.12.
"PERSON" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"PURCHASED RECEIVABLES" means Receivables which are actually
purchased pursuant to the Receivables Program Documents, for a purchase price
determined pursuant thereto.
"PURCHASER" is defined in Section 2.
"RECEIVABLES" means all rights of the Company or its Subsidiaries to
payment, whether constituting an account, chattel paper, instrument, general
intangible or otherwise, arising from the sale of goods or services (including
rights under xxxx and hold arrangements) by the Company or its Subsidiary (and
including the right to payment of any interest or finance charges and other
obligations with respect thereto).
"RECEIVABLES PROGRAM ASSETS" means (a) all Purchased Receivables and
Contributed Receivables transferred by the Company or its Subsidiaries
(including the Receivables Subsidiary) pursuant to the Receivables Program
Documents; provided, however, that the term "Receivables Program Assets" shall
not include any Excluded Receivables Assets, (b) all Receivables Program Related
Assets, and (c) all collections (including recoveries) and other proceeds of the
assets described in the foregoing clauses (a) and (b).
"RECEIVABLES PROGRAM DOCUMENTS" means (x) a receivables purchase
agreement, pooling and servicing agreement, credit agreement, agreements to
acquire undivided interests or other agreement to transfer, or create a security
interest in, Receivables Program Assets, in each case as amended, modified,
supplemented or restated and in effect from time to time entered into by the
Company and/or its Subsidiaries (including the Receivables Subsidiary), and (y)
each other instrument, agreement and other document entered into by the Company
or its Subsidiaries (including the Receivables Subsidiary) relating to the
transactions contemplated by the items referred to in clause (x) above, in each
case as amended, modified, supplemented or restated and in effect from time to
time.
"RECEIVABLES PROGRAM OBLIGATIONS" means (a) notes, trust
certificates, undivided interests, partnership interests or other interests
representing the right to be paid a specified principal amount from the
Receivables Program Assets, and (b) related obligations of the Company and/or
its Subsidiaries (including, without limitation, rights in respect of interest
or yield, breach of warranty claims and expense reimbursement and indemnity
provisions) and other Standard Securitization Undertakings.
"RECEIVABLES PROGRAM RELATED ASSETS" means, with respect to Purchased
Receivables and Contributed Receivables (but not Excluded Receivables Assets),
(i) rights of the seller or contributor thereof under the documentation
governing or relating to such Receivables, including all contracts pursuant to
which any account party or other party is obligated to make payment on any such
Receivable, and all related purchase orders, invoices and other agreements,
documents, books, records and other media for the storage of information
(including tapes, disks, punch cards, computer programs and databases and
related property), (ii) all of the right, title and interest of the seller or
contributor thereof in the goods, if any, relating to the sale that gave rise to
such Receivable, all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the contract described in clause (i) or otherwise, and all
letters of credit, guarantees and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Receivable,
whether pursuant to the contract described in clause (i) or otherwise and (iii)
all proceeds of all of the foregoing, including all funds received by any Person
in payment of any amounts owed (including invoice prices, finance charges,
interest and all other charges, if any) in respect thereof or otherwise applied
to repay or discharge any such Receivable (including insurance payments applied
in the ordinary course of business to amounts owed in respect of such Receivable
and net proceeds of any sale or other disposition of repossessed goods that were
the subject of any such Receivable) or other collateral or property of the
account party or other party directly or indirectly liable for payment of such
Receivables, and any lockboxes or accounts in which such proceeds are deposited,
(iv) all spread accounts and other similar accounts (and any amount on deposit
therein) established in connection with the Receivables Securitization Program
and (v) any warranty, indemnity, dilution and other intercompany claim arising
out of Receivables Program Documents.
"RECEIVABLES SECURITIZATION PROGRAM" means any transaction or series
of transactions that may be entered into by the Company and its Subsidiaries
pursuant to which the Company and/or its Subsidiaries may sell, convey or
otherwise transfer to the Receivables Subsidiary and (in the case of a transfer
by the Receivables Subsidiary) any other Person, or may grant a security
interest in, any Receivables Program Assets (whether now existing or arising in
the future); provided that:
(a) no portion of the indebtedness or any other obligations
(contingent or otherwise) of a Receivables Subsidiary or Special
Purpose Vehicle (i) is guaranteed by the Company or its Subsidiaries
(other than the Receivables Subsidiary and excluding guarantees of
obligations pursuant to Standard Securitization Undertakings), (ii)
is recourse to or obligates the Company or its Subsidiaries (other
than the Receivables Subsidiary) for payment other than pursuant to
Standard Securitization Undertakings or (iii) subjects any property
or asset of the Company or its Subsidiaries (other than the
Receivables Subsidiary), directly or indirectly, contingently or
otherwise, to the satisfaction of obligations incurred in such
transactions, other than pursuant to Standard Securitization
Undertakings,
(b) the Company and its Subsidiaries (other than the
Receivables Subsidiary) do not have any obligation to maintain or
preserve the financial condition of a Receivables Subsidiary or a
Special Purpose Vehicle or cause such entity to achieve certain
levels of operating results; and
(c) the net purchase price payable to the Company or
Subsidiary with respect to Purchased Receivables thereunder (net of
all reserves, discounts, fees and charges) is not less than 75% of
the face amount of the Purchased Receivables.
"RECEIVABLES SUBSIDIARY" means a special purpose corporation, limited
liability company or other entity that is a wholly owned subsidiary of the
Company, created for the sole purpose of, and whose only business shall be,
acquisition of the Receivables Program Assets pursuant to the Receivables
Securitization Program and those activities incidental to the Receivables
Securitization Program.
"REDEEMABLE PREFERRED STOCK" of any Person means any preferred stock
issued by such Person which is at any time prior to December 18, 2008 either (i)
mandatorily redeemable (by sinking fund or similar payments or otherwise) or
(ii) redeemable at the option of the holder thereof.
"REPORTED NET INCOME" means, for any period, the Net Income of the
Company and its Consolidated Subsidiaries determined on a consolidated basis.
"RESTRUCTURING CHARGES LETTER" means a letter dated November 6, 2000
from the Company to the Wachovia, the Banks and each holder of Note as of such
date describing the Applicable Restructuring Charges.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by the Company or its
Subsidiaries (other than the Receivables Subsidiary) that are reasonably
customary in accounts receivable securitization transactions, as reasonably
determined in good faith by the Purchaser.
"STOCKHOLDERS' EQUITY" means, at any time, the shareholders' equity
of the Company and its Consolidated Subsidiaries, as set forth or reflected on
the most recent consolidated balance sheet of the Company and its Consolidated
Subsidiaries prepared in accordance with GAAP, but excluding any Redeemable
Preferred Stock of the Company or any of its Consolidated Subsidiaries.
Stockholders' equity generally would include, but not be limited to (i) the par
or stated value of all outstanding Capital Stock, (ii) capital surplus, (iii)
retained earnings, and (iv) various deductions such as (A) purchases of treasury
stock, (B) valuation allowances, (C) receivables due from an employee stock
ownership plan, (D) employee stock ownership plan debt guarantees, and (E)
translation adjustments for foreign currency transactions.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
ANNEX B COVENANTS
(I) ADJUSTED INTEREST COVERAGE RATIO. The Adjusted Interest Coverage
Ratio for the Fiscal Quarter just ended and the 3 immediately preceding Fiscal
Quarters shall at no time be less than (i) from the Closing Date through and
including the first Fiscal Quarter of the 2001 Fiscal Year, 1.05 to 1.00, (ii)
from and including the second Fiscal Quarter of the 2001 Fiscal Year through and
including the third Fiscal Quarter of the 2001 Fiscal Year, 1.25 to 1.0, (iii)
from and including the fourth Fiscal Quarter of the 2001 Fiscal Year through and
including the third Fiscal Quarter of the 2002 Fiscal Year, 1.75 to 1.0 and (iv)
thereafter, 2.50 to 1.00.
(II) LEVERAGE RATIO. The Leverage Ratio for the Fiscal Quarter just
ended and the immediately preceding 3 Fiscal Quarters shall at all times be less
than (i) from the Closing Date through and including the second Fiscal Quarter
of the 2000 Fiscal Year, 3.65 to 1.00, (ii) during the third Fiscal Quarter of
the 2000 Fiscal Year, 3.50 to 1.0, (iii) from and including the fourth Fiscal
Quarter of the 2000 Fiscal Year through and including the third Fiscal Quarter
of the 2001 Fiscal Year, 3.00 to 1.0, (iv) from and including the fourth Fiscal
Quarter of the 2001 Fiscal Year through and including the third Fiscal Quarter
of the 2002 Fiscal Year, 2.75 to 1.0 and (v) thereafter, 2.50 to 1.00.
(III) MINIMUM CONSOLIDATED TANGIBLE NET WORTH. Consolidated Tangible
Net Worth will at no time be less than $245,000,000 plus the sum of (i) 50% of
the cumulative Reported Net Income of the Borrower and its Consolidated
Subsidiaries during any period after the Fiscal Quarter ending April 2, 2000
(taken as one accounting period), calculated quarterly at the end of each Fiscal
Quarter but excluding from such calculations of Reported Net Income for purposes
of this clause (i), any Fiscal Quarter in which the Reported Net Income of the
Borrower and its Consolidated Subsidiaries is negative, (ii) 100% of the
cumulative Net Proceeds of Capital Stock received during any period after the
Fiscal Quarter ending April 2, 2000, calculated quarterly at the end of each
Fiscal Quarter, and (iii) 100% of any equity resulting from the conversions of
any Debt of the Borrower or its Consolidated Subsidiaries.
For purposes of this Annex B, defined terms shall have the following
meanings:
"ADJUSTED INTEREST COVERAGE RATIO" means the ratio of (i)
Consolidated Total EBITDA minus Capital Expenditures, to (ii) Consolidated
Interest Expense.
"AMORTIZATION" means for any period of determination the sum of all
amortization charges of the Borrower and its Consolidated Subsidiaries for such
period as determined in accordance with GAAP, on a consolidated basis.
"ASSIGNEE" has the meaning set forth in Section 9.08(c).
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance
executed in accordance with Section 9.08(c) in the form attached hereto as
Exhibit D.
"BANK" means each bank a party to the Credit Agreement.
"BORROWER" means Xxxxxxxx Xxxxx, Inc., a Delaware corporation, and
its successors and permitted assigns.
"CAPITAL EXPENDITURES" means for any period the sum of all capital
expenditures incurred during such period by the Borrower and its Consolidated
Subsidiaries, as determined in accordance with GAAP; provided that Capital
Expenditures shall not include capitalized interest or any amortized deferred
financing costs which are included in the computation of Consolidated Interest
Expense.
"CAPITAL STOCK" means any nonredeemable capital stock of the Borrower
or any Consolidated Subsidiary (to the extent issued to a Person other than the
Borrower), whether common or preferred.
"CASH MANAGEMENT AGREEMENTS" means, individually and collectively, as
the context shall require. any agreements between the Borrower, on the one hand,
and any Bank, on the other hand, whether now or hereafter in effect, pursuant to
which such Bank provides Cash Management Services, and all amendments thereto,
supplements thereof, and replacements therefor.
"CASH MANAGEMENT SERVICES OBLIGATIONS" means any and all obligations
of the Borrower and/or any of its Subsidiaries to any Cash Management Services
Provider and/or any of its Affiliates under any of the Cash Management
Agreements or otherwise relating to any of the Cash Management Services.
"CASH MANAGEMENT SERVICES" shall mean cash management services for
operating, collection, payroll and trust accounts of the Borrower and/or its
Subsidiaries provided by a Cash Management Services Provider and/or its
Affiliates, including, without limitation, automatic clearing house services,
control disbursement services, electronic funds transfer services, information
reporting services, lockbox services, stop payment services, and wire transfer
services.
"CASH MANAGEMENT SERVICES PROVIDER" means any Bank or Affiliate
thereof which provides Cash Management Services to the Borrower and/or any of
its Affiliates under any of the Cash Management Agreements or otherwise relating
to any of the Cash Management Services, in its capacity as the provider of such
services.
"CLOSING DATE" means May 26, 2000.
"COLLATERAL AGENT" means Wachovia, in its capacity as collateral
agent for the Secured Parties pursuant to the Intercreditor Agreement, or any
successor collateral agent appointed or designated pursuant thereto.
"CONSOLIDATED INTEREST EXPENSE" for any period means (i) interest,
whether expensed or capitalized, in respect of Consolidated Total Debt of the
Borrower or any of its Consolidated Subsidiaries outstanding during such period
and (ii) all discount, fees and program expenses payable under a Receivables
Securitization Program.
"CONSOLIDATED NET INCOME" means, for any period, the Net Income of
the Borrower and its Consolidated Subsidiaries determined on a consolidated
basis, but excluding (i) extraordinary items and (ii) any equity interests of
the Borrower or any Subsidiary in the unremitted earnings of any Person that is
not a Subsidiary.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, would be consolidated
with those of the Borrower in its consolidated financial statements as of such
date.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any time, Stockholders'
Equity, less the sum of the value, as set forth or reflected on the most recent
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries,
prepared in accordance with GAAP, of:
(A) Any surplus resulting from any write-up of assets
subsequent to October 3, 1999;
(B) All assets which would be treated as intangible assets
for balance sheet presentation purposes under GAAP, including without
limitation goodwill (whether representing the excess of cost over
book value of assets acquired, or otherwise), trademarks, tradenames,
copyrights, patents and technologies, and unamortized debt discount
and expense;
(C) To the extent not included in (B) of this definition,
any amount at which shares of Capital Stock of the Borrower appear as
an asset on the balance sheet of the Borrower and its Consolidated
Subsidiaries;
(D) Loans or advances to stockholders, directors, officers
or employees; and
(E) To the extent not included in (B) of this definition,
deferred expenses.
"CONSOLIDATED TOTAL DEBT" means at any date the Debt of the Borrower
and its Consolidated Subsidiaries, determined on a consolidated basis as of such
date.
"CONSOLIDATED TOTAL EBITDA" means, as to the Borrower and its
Consolidated Subsidiaries calculated for each Fiscal Quarter then ending, and
the immediately preceding 3 Fiscal Quarters (determined on a consolidated basis
and in accordance with GAAP), the sum of (a) Consolidated Net Income, plus (b)
Consolidated Interest Expense (to the extent subtracted from Consolidated Net
Income), plus (c) Amortization (to the extent subtracted from Consolidated Net
Income), plus (d) Depreciation (to the extent subtracted from Consolidated Net
Income), plus (e) consolidated tax expenses for such period (to the extent
subtracted from Consolidated Net Income), minus or plus (f) to the extent
included in Consolidated Net Income, any non-operating gains and losses, up to
but not in excess of $2,500,000, plus (g) non cash charges up to but not in
excess of $5,000,000.
"CONTRIBUTED RECEIVABLES" means Receivables which are contributed to
the Receivables Subsidiary as equity Investments therein pursuant to a
Receivables Securitization Program.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, including Factor Advances, (ii)
all obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such Person as lessee
under capital leases, (v) all obligations of such Person to reimburse any bank
or other Person in respect of amounts payable under a banker's acceptance, (vi)
all Redeemable Preferred Stock of such Person (in the event such Person is a
corporation), (vii) all obligations of such Person to reimburse any bank or
other Person in respect of amounts paid or to be paid under a letter of credit
or similar instrument, but excluding letters of credit or similar instruments
having a stated maturity of less than one year from the date of issuance which
are issued in support of trade payables arising from the import of goods, (viii)
all Hedge Obligations, (ix) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person, (x) all Debt of
others Guaranteed by such Person, and (xi) all principal amounts outstanding and
owed to parties other than the Borrower or any Subsidiary under the items
described in clause (a) of the definition of Receivables Program Obligations.
"DEPRECIATION" means for any period the sum of all depreciation
expenses of the Borrower and its Consolidated Subsidiaries for such period, as
determined in accordance with GAAP.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXCLUDED RECEIVABLES ASSETS" means: (i) all inventory of the
Borrower or any of its Subsidiaries, other than returned or repossessed goods,
if any, relating to the sale that gave rise to any Purchased Receivables or
Contributed Receivables ("SPECIFIED RETURNED GOODS"); (ii) Receivables which are
not Purchased Receivables or Contributed Receivables; and (iii) any Receivables
or other proceeds of inventory of the Borrower and the Subsidiaries created or
arising (x) after a the commencement of a case under 11 U.S.C.A, ss.101 et. seq.
(as amended from time to time) in which the Borrower or such Subsidiary is the
debtor (other than proceeds of Specified Returned Goods), (y) after termination
of purchases under the Receivables Securitization Program or (z) from the sale
or other disposition of any of the inventory of the Borrower and the
Subsidiaries (other than Specified Returned Goods) by the Collateral Agent, as a
secured party under the applicable Uniform Commercial Code.
"FACTOR ADVANCES" means all amounts advanced to the Borrower or a
Subsidiary in respect of an Identified Account prior to its stated maturity by a
factor in connection with a Permitted Factoring Arrangement.
"FISCAL QUARTER" means any fiscal quarter of the Borrower.
"FISCAL YEAR" means any fiscal year of the Borrower.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those which, in accordance with Section 1.02, are to be
used in making the calculations for purposes of determining compliance with the
terms of this Agreement.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "GUARANTEE" used as a verb has a corresponding meaning.
"HEDGE OBLIGATIONS" means all obligations of such Person with respect
to interest rate protection agreements, foreign currency exchange agreements or
other hedging arrangements (valued at the termination value thereof computed in
accordance with a method approved by the International Swap Dealers Association
and agreed to by such Person in the applicable hedging agreement, if any, and in
any case net of any benefits of such Person).
"IDENTIFIED ACCOUNTS" has the meaning set forth in Section 5.23.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated as
of even date herewith, substantially in the form of Exhibit N, among the
Collateral Agent, the Banks, The Prudential Insurance Company of America, The
Variable Annuity Life Insurance Company, American General Annuity Insurance
Company, Massachusetts Mutual Life Insurance Company and C. M. Life Insurance
Company, together with the Acknowledgment and Agreement of the Borrower and the
Guarantors at the end thereof, as it may be amended or supplemented from time to
time.
"INVESTMENT" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise.
"LEVERAGE RATIO" means the ratio of Consolidated Total Debt to
Consolidated Total EBITDA.
"LIEN" means, with respect to any asset, any mortgage, deed to secure
debt, deed of trust, lien, pledge, charge, security interest, security title,
preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing (other
than an agreement with any creditor that if a Lien is granted to another Person,
an equal and ratable Lien will be granted to such creditor). For the purposes of
this Agreement, the Borrower or any Subsidiary shall be deemed to own subject to
a Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"NET INCOME" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"NET PROCEEDS OF CAPITAL STOCK" means any cash proceeds received by
the Borrower or a Consolidated Subsidiary in respect of the issuance of Capital
Stock, after deducting therefrom all reasonable and customary costs and expenses
incurred by the Borrower or such Consolidated Subsidiary directly in connection
with the issuance of such Capital Stock.
"PERMITTED FACTORING ARRANGEMENTS" has the meaning set forth in
Section 5.23.
"PERSON" means an individual, a corporation, a limited liability
corporation, a partnership, an unincorporated association, a trust or any other
entity or organization, including, but not limited to, a government or political
subdivision or an agency or instrumentality thereof.
"PURCHASED RECEIVABLES" means Receivables which are actually
purchased pursuant to the Receivables Program Documents, for a purchase price
determined pursuant thereto.
"RECEIVABLES PROGRAM ASSETS" means (a) all Purchased Receivables and
Contributed Receivables transferred by the Borrower or its Subsidiaries
(including the Receivables Subsidiary) pursuant to the Receivables Program
Documents; provided, however, that the term "RECEIVABLES PROGRAM ASSETS" shall
not include any Excluded Receivables Assets, (b) all Receivables Program Related
Assets, and (c) all collections (including recoveries) and other proceeds of the
assets described in the foregoing clauses (a) and (b).
"RECEIVABLES PROGRAM DOCUMENTS" means (x) a receivables purchase
agreement, pooling and servicing agreement, credit agreement, agreements to
acquire undivided interests or other agreement to transfer, or create a security
interest in, Receivables Program Assets, in each case as amended, modified,
supplemented or restated and in effect from time to time entered into by the
Borrower and/or its Subsidiaries (including the Receivables Subsidiary), and (y)
each other instrument, agreement and other document entered into by the Borrower
or its Subsidiaries (including the Receivables Subsidiary) relating to the
transactions contemplated by the items referred to in clause (x) above, in each
case as amended, modified, supplemented or restated and in effect from time to
time.
"RECEIVABLES PROGRAM OBLIGATIONS" means (a) notes, trust
certificates, undivided interests, partnership interests or other interests
representing the right to be paid a specified principal amount from the
Receivables Program Assets, and (b) related obligations of the Borrower and/or
its Subsidiaries (including, without limitation, rights in respect of interest
or yield, breach of warranty claims and expense reimbursement and indemnity
provisions) and other Standard Securitization Undertakings.
"RECEIVABLES PROGRAM RELATED ASSETS" means, with respect to Purchased
Receivables and Contributed Receivables (but not Excluded Receivables), (i)
rights of the seller or contributor thereof under the documentation governing or
relating to such Receivables, including all contracts pursuant to which any
account party or other party is obligated to make payment on any such
Receivable, and all related purchase orders, invoices and other agreements,
documents, books, records and other media for the storage of information
(including tapes, disks, punch cards, computer programs and databases and
related property), (ii) all of the right, title and interest of the seller or
contributor thereof in the goods, if any, relating to the sale that gave rise to
such Receivable, all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the contract described in clause (i) or otherwise, and all
letters of credit, guarantees and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Receivable,
whether pursuant to the contract described in clause (i) or otherwise and (iii)
all proceeds of all of the foregoing, including all funds received by any Person
in payment of any amounts owed (including invoice prices, finance charges,
interest and all other charges, if any) in respect thereof or otherwise applied
to repay or discharge any such Receivable (including insurance payments applied
in the ordinary course of business to amounts owed in respect of such Receivable
and net proceeds of any sale or other disposition of repossessed goods that were
the subject of any such Receivable) or other collateral or property of the
account party or other party directly or indirectly liable for payment of such
Receivables, and any lockboxes or accounts in which such proceeds are deposited,
(iv) all spread accounts and other similar accounts (and any amount on deposit
therein) established in connection with the Receivables Securitization Program
and (v) any warranty, indemnity, dilution and other intercompany claim arising
out of Receivables Program Documents.
"RECEIVABLES SECURITIZATION PROGRAM" means any transaction or series
of transactions that may be entered into by the Borrower and its Subsidiaries
pursuant to which the Borrower and/or its Subsidiaries may sell, convey or
otherwise transfer to the Receivables Subsidiary and (in the case of a transfer
by the Receivables Subsidiary) any other Person, or may grant a security
interest in, any Receivables Program Assets (whether now existing or arising in
the future); provided that:
(a) no portion of the indebtedness or any other obligations
(contingent or otherwise) of a Receivables Subsidiary or Special
Purpose Vehicle (i) is guaranteed by the Borrower or its Subsidiaries
(other than the Receivables Subsidiary and excluding guarantees of
obligations pursuant to Standard Securitization Undertakings), (ii)
is recourse to or obligates the Borrower or its Subsidiaries (other
than the Receivables Subsidiary) for payment other than pursuant to
Standard Securitization Undertakings or (iii) subjects any property
or asset of the Borrower or its Subsidiaries (other than the
Receivables Subsidiary), directly or indirectly, contingently or
otherwise, to the satisfaction of obligations incurred in such
transactions, other than pursuant to Standard Securitization
Undertakings,
(b) the Borrower and its Subsidiaries (other than the
Receivables Subsidiary) do not have any obligation to maintain or
preserve the financial condition of a Receivables Subsidiary or a
Special Purpose Vehicle or cause such entity to achieve certain
levels of operating results; and
(c) the net purchase price payable to the Borrower or
Subsidiary with respect to Purchased Receivables thereunder (net of
all reserves, discounts, fees and charges) is not less than 75% of
the face amount of the Purchased Receivables.
"RECEIVABLES SUBSIDIARY" means a special purpose corporation, limited
liability company or other entity that is a wholly owned subsidiary of the
Borrower, created for the sole purpose of, and whose only business shall be,
acquisition of the Receivables Program Assets pursuant to the Receivables
Securitization Program and those activities incidental to the Receivables
Securitization Program.
"RECEIVABLES" means all rights of the Borrower or its Subsidiaries to
payment, whether constituting an account, chattel paper, instrument, general
intangible or otherwise, arising from the sale of goods or services (including
rights under xxxx and hold arrangements) by the Borrower or its Subsidiary (and
including the right to payment of any interest or finance charges and other
obligations with respect thereto).
"REDEEMABLE PREFERRED STOCK" of any Person means any preferred stock
issued by such Person which is at any time prior to the Termination Date either
(i) mandatorily redeemable (by sinking fund or similar payments or otherwise) or
(ii) redeemable at the option of the holder thereof.
"REPORTED NET INCOME" means, for any period, the Net Income of the
Borrower and its Consolidated Subsidiaries determined on a consolidated basis.
"SECURED PARTIES" means the Banks and the Senior Note Holders,
together with Wachovia Bank, N.A., with respect to the Cash Management Services
Obligations.
"SENIOR NOTE HOLDERS" means, collectively, the holders from time to
time of the Senior Notes.
"SENIOR NOTES" means, collectively, Senior Notes issued pursuant to
the Note Purchase Agreements to the Senior Note Holders, in the following
original amounts: (i) the $3,000,000 7.06% Senior Note and $97,000,000 7.06%
Senior Note executed by the Borrower in favor of The Prudential Insurance
Company of America; (ii) the $10,000,000 7.06% Senior Note executed by the
Borrower in favor of The Variable Annuity Life Insurance Company; (iii) the
$15,000,000 7.06% Senior Note executed by the Borrower in favor of American
General Annuity Insurance Company; (iv) the $8,500,000 7.06% Senior Note, the
$5,600,000 7.06% Senior Note and the $4,900,000 7.06% Senior Note executed by
the Borrower in favor of Massachusetts Mutual Life Insurance Company; and (v)
the $1,000,000 7.06% Senior Note executed by the Company in favor of C. M. Life
Insurance Company, all such Senior Notes being dated as of December 18, 1998,
together with any amendments, supplements, renewals, replacements or
substitutions of any of such Senior Notes.
"SPECIAL PURPOSE VEHICLE" means a trust, partnership or other special
purpose Person established by the Borrower to implement the Receivables
Securitization Program.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by the Borrower or its
Subsidiaries (other than the Receivables Subsidiary) that are reasonably
customary in accounts receivable securitization transactions, as reasonably
determined in good faith by the Administrative Agent.
"STOCKHOLDERS' EQUITY" means, at any time, the shareholders' equity
of the Borrower and its Consolidated Subsidiaries, as set forth or reflected on
the most recent consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries prepared in accordance with GAAP, but excluding any Redeemable
Preferred Stock of the Borrower or any of its Consolidated Subsidiaries.
Stockholders' equity generally would include, but not be limited to (i) the par
or stated value of all outstanding Capital Stock, (ii) capital surplus, (iii)
retained earnings, and (iv) various deductions such as (A) purchases of treasury
stock, (B) valuation allowances, (C) receivables due from an employee stock
ownership plan, (D) employee stock ownership plan debt guarantees, and (E)
translation adjustments for foreign currency transactions.
"SUBSIDIARY" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower.
"TERMINATION DATE" means whichever is applicable of (i) May 26, 2003,
(ii) the date the Commitments are terminated pursuant to Section 6.01 following
the occurrence of an Event of Default, or (iii) the date the Borrower terminates
the Commitments entirely pursuant to Section 2.08.
