Exhibit 10.1
CREDIT AGREEMENT
This CREDIT AGREEMENT (as amended, supplemented or modified
from time to time, this "Agreement") is dated as of August 29, 2003 and is
between XXXXXXX FURNITURE COMPANY, INC. and SOUTHTRUST BANK.
The parties hereto agree as follows:
ARTICLE I
GENERAL DEFINITIONS
Section 1.1. Definitions. The following terms, as used
herein, have the following meanings:
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.3(b)(i).
"Advance" means a Loan other than a Letter of Credit Loan.
"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Borrower (a "Controlling
Person") or (ii) any Person (other than the Borrower or a Subsidiary) which is
controlled by or is under common control with a Controlling Person. As used
herein, the term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise.
"Application" means any Application and Agreement for Standby
Letter of Credit executed and delivered by the Borrower to the Bank in
accordance with the terms and conditions of this Agreement, substantially in the
form of the Bank's standard Application and Agreement for Standby Letter of
Credit and appropriately completed; or such other form, containing such relevant
revisions as to which the Bank and the Borrower shall mutually agree in order to
conform such form to the terms and conditions of this Agreement, as shall be
appropriately completed, executed and delivered by the Borrower to the Bank; and
all extensions, supplements and modifications thereto, and renewals thereof; and
"Applications" means all of said applications.
"Auto-Borrow Documents" has the meaning set forth in Section
2.2(c).
"Bank" means SouthTrust Bank, an Alabama banking corporation,
and its successors and assigns.
"Borrower" means Xxxxxxx Furniture Company, Inc., a Delaware
corporation, and its successors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means initially $25,000,000.00, as such amount
may be reduced from time to time thereafter pursuant to Section 2.7.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements as of such date.
"Date of Maturity" has the meaning set forth in Section 2.12.
"Debt" shall mean with respect to any Person, at any date of
determination, (i) all indebtedness for borrowed money which such Person has
directly or indirectly created, incurred or assumed (including, without
limitation, all Capitalized Lease Obligations); (ii) all indebtedness, whether
or not for borrowed money, secured by any Lien on any property or asset owned or
held by such Person subject thereto, whether or not the indebtedness secured
thereby shall have been assumed by such Person; (iii) any indebtedness, whether
or not for borrowed money, with respect to which such Person has become directly
or indirectly liable and which represents or has been incurred to finance the
purchase price (or a portion thereof) of any property or services or business
acquired by such Person, whether by purchase, consolidation, merger or otherwise
other than any trade payable in the ordinary course of business that is a
current liability under GAAP); (iv) any indebtedness of the character referred
to in clauses (i), (ii) or (iii) of this definition deemed to be extinguished
under GAAP but for which such Person remains legally liable to the extent the
market value of any assets such Person has placed in trust for the benefit of
the holders of that indebtedness is less than the aggregate amount of that
indebtedness; and (v) any indebtedness of any other Person of the character
referred to in subdivision (i), (ii), (iii) or (iv) of this definition with
respect to which the Person whose Debt is being determined has become liable by
way of a Guarantee; all as determined in accordance with GAAP, provided,
however, Debt shall not include indorsement of negotiable instruments for
collection in the ordinary course of business.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in Birmingham, Alabama are
authorized by law to close.
"Domestic Lending Office" means the Bank's office located at
its address set forth on the signature pages hereof (or identified on the
signatures pages hereof as its Domestic Lending Office) or such other office as
the Bank may hereafter designate as its Domestic Lending Office by notice to the
Borrower; provided that the Bank may from time to time by notice to the Borrower
designate separate Domestic Lending Offices for its Prime Advances, in which
case all references herein to the Domestic Lending Office of the Bank shall be
deemed to refer to either or both of such offices, as the context may require.
"Effective Date" means the date of this Agreement.
"Euro-Dollar Advance" means at any time any Advance which
bears interest at such time at a rate equal to or based on a Euro-Dollar Rate.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means the Bank's office, branch
or affiliate located at its address set forth on the signature pages hereof (or
identified on the signature pages hereof as its Euro-Dollar Lending Office) or
such other office, branch or affiliate as the Bank may hereafter designate as
its Euro-Dollar Lending Office by notice to the Borrower.
"Euro-Dollar Rate" means a rate of interest determined in
accordance with Section 2.3(b).
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.3(b)(i).
"Event of Default" has the meaning set forth in Section 8.1.
"Financial Covenants" means the covenants set forth in
Sections 5.2 through 5.4, inclusive, as from time to time in effect.
"Fixed Euro-Dollar Advance" has the meaning set forth in
Section 2.3(b)(i).
"Fixed Euro-Dollar Rate" has the meaning set forth in Section
2.3(b)(i).
"Floating Euro-Dollar Advance" has the meaning set forth in
Section 2.3(b)(ii).
"Floating Euro-Dollar Rate" means the rate of interest
determined in accordance with Section 2.3(b)(ii).
"GAAP" means generally accepted accounting principles in the
United States.
"Government" means any federal, state or local government,
authority, agency, court or other body, officer or entity, and any arbitrator
with authority to bind a party at law.
"Guarantee" shall mean, with respect to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any Debt, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, indorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or non-furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof. The amount of any
Guarantee shall be equal to the outstanding principal amount of the obligation
guaranteed or such lesser amount to which the maximum exposure of the guarantor
shall have been specifically limited.
"Interest Period" means, with respect to each Fixed
Euro-Dollar Advance, the period commencing on the date of borrowing specified in
the applicable Notice of Borrowing or on the date specified in the applicable
Notice of Interest Rate Election and ending one, two, three, four, five, or six
months thereafter, as specified in such Notice; provided that:
(i) any Interest Period which would otherwise end on
a day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(ii) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Euro-Dollar Business
Day of a calendar month; and
(iii) if any such Interest Period includes the Date
of Maturity but does not end on such date, then said Interest Period
shall end on the Date of Maturity, subject to clauses (i) and (ii)
above.
"Lending Office" means the Bank's Domestic Lending Office or
its Euro-Dollar Lending Office, as the context may require, and "Lending
Offices" means both of said offices.
"Letter of Credit" means any irrevocable standby letter of
credit issued by the Bank for the account of the Borrower pursuant to the terms
hereof and of an Application, including all extensions, supplements and
modifications thereto, and renewals thereof; and "Letters of Credit" means all
of said letters of credit.
"Letter of Credit Loans" has the meaning set forth in Section
2.1.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, the Borrower 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.
"Loan" means any Euro-Dollar Advance, Prime Advance, or Letter
of Credit Loan, and "Loans" means all of said loans.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.3(b)(i).
"Note" means the promissory note of the Borrower,
substantially in the form of Exhibit A hereto, evidencing the obligation of the
Borrower to repay the Advances.
"Notice of Borrowing" has the meaning set forth in Section
2.2.
"Notice of Interest Rate Election" has the meaning set forth
in Section 2.4(a).
"Outstanding Letter of Credit Balance" means the aggregate of
(i) the undrawn amount of all outstanding Letters of Credit, plus (ii) all
amounts paid by the Bank in connection with drawings under Letters of Credit for
which the Bank has not been reimbursed in accordance with the related
Application (including by any Advance).
"Permitted Liens" means the Liens referred to in clauses (i)
through (vii) of Section 6.8(a).
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Plan" has the meaning set forth in Section 7.1.
"Prime Rate" means the rate of interest publicly announced by
the Bank in Birmingham, Alabama from time to time as its prime rate. It is a
rate set by the Bank based upon various factors, including its costs and desired
return, general economic conditions and other factors, and is used by the Bank
as a reference point for pricing some loans, which may be priced at, above or
below the Prime Rate. Any change in the Prime Rate shall take effect on the
opening of business on the day specified in the announcement of such change.
"Prime-Based Rate" means a rate of interest based on the Prime
Rate as provided in Section 2.3(a).
"Prime Advance" means at any time any Advance which bears
interest at such time at a Prime-Based Rate.
"Revolving Credit Period" means the period from the Effective
Date to but excluding the Date of Maturity, or, if earlier, the date of
termination pursuant to Section 2.7.
"Revolving Loan Balance" means, at any time, the outstanding
principal balance of Advances plus the Outstanding Letter of Credit Balance, at
such time.
"Subsidiary" has the meaning set forth in Section 5.1.
"Tax" means any fee (including license, filing and
registration fee), tax (including any income, gross receipts, franchise, sales,
use or real, personal, tangible or intangible property tax), interest
equalization or stamp tax, assessment, levy, impost, duty, charge or withholding
of any kind or nature whatsoever, imposed or assessed by any Government,
together with any penalty, fine or interest thereon.
"Unfunded Vested Liabilities" has the meaning set forth in
Section 7.1.
"Wholly-Owned Consolidated Subsidiary" shall mean any
Subsidiary, all of the voting stock of which or other equity interest in the
profits or capital thereof shall, at the time of determination, be owned by the
Borrower or another Wholly-Owned Consolidated Subsidiary.
Section 1.2. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Borrower's independent public
accountants) with the most recent audited consolidated financial statements of
the Borrower and its Consolidated Subsidiaries delivered to the Bank.
ARTICLE II
THE CREDIT
Section 2.1. Commitment to Make Loans. The Bank agrees, on the
terms and conditions set forth in this Agreement, the Applications and the Note,
from time to time during the Revolving Credit Period to make Advances to the
Borrower and to issue Letters of Credit for the account of the Borrower ("Letter
of Credit Loans"); provided, however, that the Revolving Loan Balance shall at
no time exceed the Commitment. Subject to the foregoing, the Borrower may borrow
under this Section 2.1, prepay or repay, and re-borrow. To the extent, at any
time, the Revolving Loan Balance exceeds the Commitment, such excess amount
shall be immediately due and payable by the Borrower without notice or demand.
Section 2.2. Method of Borrowing.
(a) The Borrower shall give the Bank notice (which may be oral
if promptly confirmed in writing) (a "Notice of Borrowing") not later than 11:30
a.m. (Central Time) on the date of each Loan (unless the Loan is a Euro-Dollar
Advance, in which case such notice shall be given two (2) Euro-Dollar Business
Days before such Loan, or a Letter of Credit Loan, in which case such notice
shall be given two (2) Domestic Business Days before such Loan), specifying:
(i) the date of such Loan, which shall be a Domestic
Business Day (unless such Loan is a Euro-Dollar Advance, in which case
the date of such Loan shall be a Euro-Dollar Business Day);
(ii) the amount of such Loan;
(iii) whether such Loan is an Advance or a Letter of
Credit Loan;
(iv) if an Advance, whether such Advance is to bear
interest initially at the Prime-Based Rate, the Fixed Euro-Dollar Rate,
or the Floating Euro-Dollar Rate; and
(iv) if such Advance is to bear interest at the Fixed
Euro-Dollar Rate, the duration of the initial Interest Period
applicable thereto, which shall comply with the definition of Interest
Period.
(b) Unless the Bank determines that any applicable condition
specified in this Agreement has not been satisfied, the Bank will credit the
amount of each requested Advance to the general deposit account of the Borrower
with the Bank. If the Loan is a Letter of Credit Loan, the Bank shall comply
with the instructions set forth in the related Application.
(c) In the event the Borrower and the Bank enter into a Cash
Management Service Agreement and other documents and agreements in connection
with the Bank's "SouthSweep Plus" service, or any similar successor service
("Auto-Borrow Documents"), then any conflict between the terms of this Section
2.2 and the terms of the Auto-Borrow Documents shall be resolved in favor of the
Auto-Borrow Documents.
Section 2.3. Interest Rates.
(a) Prime-Based Rate. If the Borrower elects, or this
Agreement otherwise provides, that an Advance shall bear interest at a
Prime-Based Rate, interest shall accrue on the outstanding principal amount of
such Advance for each day from the date such Advance is made until it becomes
due, at a variable rate per annum equal at all times to the Prime Rate from time
to time in effect, minus one percent (1.0%).
(b) Euro-Dollar Rates.
(i) If the Borrower elects that an Advance shall bear
interest at a Fixed
Euro-Dollar Rate (each, a "Fixed Euro-Dollar Advance"), interest shall accrue on
the outstanding principal amount of such Advance, for each Interest Period
applicable thereto, at a rate per annum equal to the applicable Fixed
Euro-Dollar Rate; provided that if any Fixed Euro-Dollar Advance or any portion
thereof shall, as a result of clause (iii) of the definition of Interest Period,
have an Interest Period of less than 30 days, such Euro-Dollar Advance or
portion thereof shall bear interest for each day during such Interest Period at
the Floating Euro-Dollar Rate for such day. As used herein, the following terms
have the following meanings:
(A) The "Fixed Euro-Dollar Rate" applicable to any
Fixed Euro-Dollar Advance for any Interest Period means a rate per
annum equal to the sum of one-half of one percent (0.50%) plus the
applicable Adjusted London Interbank Offered Rate.
(B) The "Adjusted London Interbank Offered Rate"
means a rate per annum equal to the quotient obtained (rounded upwards,
if necessary, to the next higher 1/100 of 1%) by dividing the
applicable London Interbank Offered Rate by 1.00 minus the Euro-Dollar
Reserve Percentage.
(C) The "London Interbank Offered Rate" means the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Euro-Dollar Business Days prior to the
first day of the applicable Interest Period for a term comparable to
such Interest Period (in the case of a Fixed Euro-Dollar Advance) or at
approximately 11:00 a.m. (London time) on each day a Floating
Euro-Dollar Advance is outstanding, for a term comparable to a 30-day
interest period beginning on such day (in the case of a Floating
Euro-Dollar Advance); provided, however, if more than one rate is
specified on Telerate Page 3750, the applicable rate shall be the
arithmetic mean of all such rates. If, for any reason, such rate is not
available, the term "London Interbank Offered Rate" shall mean the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Euro-Dollar Business Days prior to the first day of such Interest
Period for a term comparable to the applicable Interest Period (in the
case of a Fixed Euro-Dollar Advance) or at approximately 11:00 a.m.
(London time) on each day a Floating Euro-Dollar Advance is
outstanding, for a term comparable to a 30-day interest period
beginning on such day (in the case of a Floating Euro-Dollar Advance);
provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such
rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
(D) "Euro-Dollar Reserve Percentage" means for any
day that percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in
Birmingham, Alabama with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which consists of or includes deposits by
reference to which the interest rate on Euro-Dollar Advances is
determined or any category of extensions of credit or other assets
which consists of or includes loans by a non-United States office of
the Bank to United States residents). The Adjusted London Interbank
Offered Rate shall be adjusted automatically on and as of the effective
date of any change in the Euro-Dollar Reserve Percentage.
(ii) If the Borrower elects, or this Agreement
otherwise provides, that an Advance
shall bear interest at the "Floating Euro-Dollar Rate" (each, a "Floating
Euro-Dollar Advance"), interest shall accrue on the outstanding principal amount
of such Advance for each day from the date such Advance is made until it becomes
due, at a variable rate per annum equal at all times to the thirty (30) day
Adjusted London Interbank Offered Rate, as such Adjusted London Interbank
Offered Rate may change on not less than a daily basis, plus one-half of one
percent (0.50%).
(c) Any amount of principal not paid to the Bank within
fifteen (15) days after the date such payment is due shall bear interest,
payable ON DEMAND, for each day until paid at a rate per annum equal to the sum
of 4% plus the otherwise applicable interest rate.
(d) The Bank shall give prompt notice to the Borrower by
telephone of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.
Section 2.4. Method of Electing Interest Rates. (a) Each
Advance shall bear interest initially at the type of rate specified by the
Borrower in the applicable Notice of Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
such Advance (subject in each case to the provisions of Article IX), as follows:
(i) if such Advance is bearing interest at a
Prime-Based Rate, the Borrower may elect to change the applicable rate
to a Euro-Dollar Rate as of any Euro-Dollar Business Day;
(ii) if the Advance is bearing interest at a
Euro-Dollar Rate, the Borrower may elect to change the applicable rate
to the other Euro-Dollar Rate or the Prime-Based Rate, in the case of
an existing Fixed Euro-Dollar Rate, beginning on the last day of the
then current Interest Period applicable to such Advance;
(iii) if the Advance is bearing interest at a Fixed
Euro-Dollar Rate, the Borrower may elect to continue such Advance at
the then current Fixed Euro-Dollar Rate, or at a different Fixed
Euro-Dollar Rate, for a corresponding Interest Period, beginning on the
last day of the then current Interest Period applicable to such
Advance;
(iv) if the Advance is bearing interest at the
Prime-Based Rate or the Floating Euro-Dollar Rate, the Borrower may
elect to designate such Advance as any combination of Prime Advances or
Euro-Dollar Advances as of any Euro-Dollar Business Day (subject to the
definition of Interest Period); and
(v) if the Advance is bearing interest at a Fixed
Euro-Dollar Rate, the Borrower may elect to designate the Advance as
any combination of Prime Advances or Euro-Dollar Advances as of the
last day of the then current Interest Period applicable to such Advance
(subject to the definition of Interest Period).
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Bank not later than 11:30 a.m. (Central Time) on the date
the new type of interest rate selected in such notice is to begin (unless any
Advance or Advances are to bear interest at a Fixed Euro-Dollar Rate, in which
case such notice shall be delivered to the Bank at least two (2) Euro-Dollar
Business Days before the Interest Period selected in such notice is to begin).
(b) Each Notice of Interest Rate Election shall specify with
respect to the outstanding Advance or Advances to which such notice applies:
(i) the date on which the new type of interest rate
or additional Interest Period selected in such notice is to begin,
which shall comply with the applicable clauses of subparagraph (a)
above;
(ii) if the type of interest rate borne by the
Advance or Advances is to be changed, the new type of interest rate
selected and, if the new rate is a Fixed Euro-Dollar Rate, the duration
of the initial Interest Period;
(iii) if the Advance or Advances are currently
bearing interest at a Fixed Euro-Dollar Rate and such type of rate is
to be continued for an additional Interest Period, the duration of such
additional Interest Period; and
(iv) if any Advance or Advances are to be designated
as a combination of Prime Advances and Euro-Dollar Advances, the
information specified in clauses (i) through (iii) above as to each
such Prime Advance and Euro-Dollar Advance.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) If the Borrower fails to deliver a timely Notice of
Interest Rate Election to the Bank selecting a new type of interest rate for an
additional Interest Period for any Fixed Euro-Dollar Advance, such Advance shall
bear interest at the Floating Euro-Dollar Rate commencing on the last day of the
then current Interest Period and continuing until the Borrower selects a
different type of interest rate for such Advance as provided in this Section.
Section 2.5. Note and Applications.
(a) The Advances shall be evidenced by a single Note of the
Borrower payable to the order of the Bank for the account of such Lending Office
or Lending Offices as the Bank shall direct in an amount equal to the aggregate
unpaid principal amount of the Advances.
(b) The Bank shall record, and prior to any transfer of the
Note shall endorse on the schedule forming a part thereof appropriate notations
to evidence, the date and amount of each Advance and the date and amount of each
payment of principal made by the Borrower with respect thereto; provided,
however, that any failure by the Bank to make such a notation or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Advances in accordance with the terms of the Note. The Bank is hereby
irrevocably authorized by the Borrower so to endorse the Note and to attach to
and make a part of the Note a continuation of any such schedule as and when
required.
(c) The obligation of the Borrower to reimburse the Bank for
amounts paid by the Bank under a Letter of Credit shall be evidenced by an
Application with respect to said Letter of Credit.
Section 2.6. Fees.
(a) During the Revolving Credit Period, the Borrower shall pay
to the Bank a commitment fee at the rate of ten and one-half (10.5) basis points
per annum on the average daily unused portion of the Commitment for each
calendar quarter. As used herein, (i) "unused portion of the Commitment" means,
for any day, the amount of the Commitment minus the Revolving Loan Balance for
such day, and (ii) "average daily" means, for any calendar quarter, the sum of
each day's unused portion of the Commitment, divided by the number of days in
said calendar quarter. Such commitment fee shall be payable on the fifth day of
each calendar quarter in arrears, commencing on the first such date following
the Effective Date, and on the Date of Maturity.
(b) As to each Letter of Credit, the Borrower shall pay to the
Bank a letter of credit fee in an amount equal to one-half of one percent
(0.50%) of the outstanding amount of said Letter of Credit. Each letter of
credit fee shall be payable prior to or simultaneously with the issuance of each
Letter of Credit and upon each anniversary thereof, if any. Upon the occurrence
of an Event of Default, the letter of credit fee shall be automatically
increased to three percent (3%) of the amount of each Letter of Credit.
Section 2.7. Optional Termination or Reduction of the
Commitment. The Borrower may, upon at least three Domestic Business Day's notice
to the Bank, terminate at any time, or reduce from time to time by an aggregate
amount of $5,000,000.00 or any larger multiple of $1,000,000.00, the unused
portion of the Commitment. If the Commitment is terminated in its entirety, any
accrued commitment fee shall be payable on the effective date of such
termination.
Section 2.8. Optional Prepayments.
(a) The Borrower may prepay the Prime Advances and the
Floating Euro-Dollar Advances in whole or in part by paying the principal amount
to be prepaid and, unless the prepayment is a principal payment made pursuant to
the Auto-Borrow Documents, accrued interest thereon to the date of prepayment.
(b) The Borrower may prepay, prior to the last day of any
Interest Period, the Fixed Euro-Dollar Advances to which such Interest Period
applies, in whole or in part, by paying the principal amount to be prepaid and,
unless the prepayment is a principal payment made pursuant to the Auto-Borrow
Documents, accrued interest thereon to the date of prepayment and any amounts
due pursuant to Section 2.10.
(c) Unless the prepayment is a principal payment made pursuant
to the Auto-Borrow Documents, the Borrower shall give the Bank notice of each
prepayment of all or any part of the principal amount of any Fixed Euro-Dollar
Advance at least two (2) Euro-Dollar Business Days before the date of each such
prepayment, specifying:
(i) the date of such prepayment;
(ii) the aggregate amount of principal to be prepaid;
and
(iii) the Advances to which such prepayment is to be
applied, which shall be selected by the Borrower subject to the
provisions of subsection (d) below.
(d) The aggregate amount of principal to be prepaid pursuant
to each notice of prepayment shall be applied to prepay the Advance or Advances
specified in such notice, provided that each such prepayment shall be applied
first to prepay Advances which bear interest at a Prime-Based Rate or the
Floating Euro-Dollar Rate or which have an Interest Period ending on the date of
such prepayment and then, only if all of the foregoing Advances are to be
prepaid in full, to prepay Advances having Interest Periods ending after the
date of such prepayment (in which case the Borrower shall in addition reimburse
the Bank for any resulting losses as provided in Section 2.10). No optional
prepayment of the Advances shall reduce the amount of any subsequent payment
required by the Note.
Section 2.9. General Provisions as to Payments. This Section
2.9 applies to payments other than payments made pursuant to the Auto-Borrow
Documents. The Borrower shall make each payment of principal of and interest on,
the Advances and of the commitment fee hereunder, not later than 11:00 a.m.
(Central Time) on the date when due, in Federal or other funds immediately
available in Birmingham, Alabama, to the Bank at its address referred to in
Section 10.1. Whenever any payment of principal of, or interest on, the Prime
Advances or of the commitment fee shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Advances shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day. If the date for any payment of
principal of is extended by operation of law or otherwise, interest thereon
shall be payable for such extended time.
Section 2.10. Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Euro-Dollar Advance or any Fixed
Euro-Dollar Advance is required to bear interest at a Floating Euro-Dollar Rate
or a Prime-Based Rate (pursuant to Article II or IX, or otherwise) on any day
other than the last day of an Interest Period applicable thereto, or if the
Borrower fails to borrow or prepay any Fixed Euro-Dollar Advance after the
related Notice of Borrowing or notice of prepayment therefor has been given to
the Bank, the Borrower shall reimburse the Bank on demand for any resulting loss
or expense incurred by it, including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties; provided that
the Bank shall have delivered to the Borrower a certificate as to the amount of
any loss or expense, which certificate shall be conclusive in the absence of
manifest error.
Section 2.11. Computation of Interest and Commitment Fee.
Interest on Advances and on the commitment fee hereunder shall be computed on
the basis of a year of 360 days and paid for the actual number of days elapsed,
calculated as to each Interest Period (if applicable) from and including the
first thereof to be but excluding the last day thereof.
Section 2.12. Date of Maturity. The Borrower may borrow, repay
and reborrow under the Note, the Applications and this Agreement from the
Effective Date until that date which is twenty-four (24) months after the
Effective Date (the "Initial Maturity Date"). The Borrower may request a twelve
(12) month extension beyond the Initial Maturity Date, said request to be
received by the Bank no later than four (4) months prior to the first
anniversary of the Effective Date, and the Bank will grant or refuse said
request for extension, in its sole discretion, within sixty (60) days after its
receipt of said request; provided, however, that the failure of the Bank either
to grant or refuse said request within said time shall be deemed a refusal of
said request. Borrower may request, and the Bank will consider, future one-year
extensions in the following manner:
(i) Each request must be in writing and specify the requested
new Date of Maturity, which new date must comply with the requirements
of this Section.
(ii) Each request must be received by the Bank no later than
sixteen (16) months prior to the then applicable Date of Maturity, and
the Bank will grant or refuse said request for extension, in its sole
discretion, within sixty (60) days after its receipt of said request;
provided, however, that the failure of the Bank either to grant or
refuse said request within said time shall be deemed a refusal of said
request.
(ii) Each request for an extension of the Date of Maturity
which is approved by the Bank shall take effect on the next following
anniversary of the Effective Date and the new Date of Maturity shall be
twenty-four (24) months from said anniversary.
If either party elects to terminate the Commitment and the Loans, then, subject
to Sections 2.7 and 8.1, all amounts under the Loans will become immediately due
and payable in full on the Initial Maturity Date or such later date as has been
agreed to (as applicable, the "Date of Maturity"); provided, however, the
obligation of the Bank to make Loans is subject to the terms, provisions, and
limitations set forth herein and in the Note and Applications, and, provided
further, upon termination of the Commitment and the Loans, all rights and
remedies of the Bank under this Agreement, the Applications and the Note shall
survive such termination until all amounts owing to the Bank under the Loans,
and said documents, have been paid in full.
Section 2.13. Terms of Letters of Credit. Each Letter of
Credit shall be issued pursuant to an Application and expire on a date not later
than the Domestic Business Day preceding the Date of Maturity. The Bank may, at
its option, but need not, make an Advance in order to reimburse itself for any
amount paid by it pursuant to a Letter of Credit. To the extent any amount paid
by the Bank as aforesaid is not, for any reason, paid with the proceeds of an
Advance, said amount shall be payable by the Borrower ON DEMAND and until paid
in full shall accrue interest at the rate then applicable under the related
Application. Any conflict between the terms of an Application and the terms of
this Agreement shall be resolved in favor of said terms as set forth in this
Agreement.
ARTICLE III
CONDITIONS TO LOANS
The obligation of the Bank to make each Loan is subject to the
satisfaction of the following conditions:
Section 3.1. All Loans. In the case of each Loan:
---------
(i) receipt by the Bank of Notice of Borrowing as
required by Section 2.2, or compliance with the Auto-Borrow Documents,
as applicable;
(ii) the fact that no Default has occurred and is
continuing or would result from such Loan;
(iii) the fact that the representations and
warranties of the Borrower contained in this Agreement shall be true in
all material respects on and as of the date of such Loan, or, if made
as of a specific date, as of such date; and
(iv) if the Loan is a Letter of Credit Loan, receipt
by the Bank of a duly executed and completed Application.
Each borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date thereof that the facts hereinabove set forth in clauses
(ii) and (iii) of this Section are true as of such date.
Section 3.2. First Loan. In the case of the first Loan:
----------
(i) receipt by the Bank of a duly executed Note dated
on or before the date of such Loan, complying with the provisions of
Section 2.5;
(ii) all legal matters incident to this Agreement,
the Note and any Application delivered at such time, and the
transactions contemplated hereby and thereby, shall be reasonably
satisfactory to Xxxxxxxx Xxxxxxx LLP, counsel for the Bank;
(iii) receipt by the Bank of (A) a copy of the
Borrower's certificate of incorporation, as amended, certified by the
appropriate office of the State of Delaware; (B) a certificate of such
office, dated as of a recent date, as to the good standing and charter
documents of the Borrower on file; and (C) a certificate of the
Secretary or an Assistant Secretary of the Company dated the date of
such Loan and certifying (1) that the certificate of incorporation of
the Borrower has not been amended since the date of the last amendment
thereto indicated on the certificate furnished pursuant to clause (B)
above, (2) as to the absence of dissolution or liquidation proceedings
by or against the Borrower, (3) that attached thereto is a true and
complete copy of the by-laws of the Borrower as in effect on the date
of such certification, (4) that attached thereto is a true, correct and
complete copy of resolutions adopted by the board of directors of the
Borrower authorizing the execution, delivery and performance of this
Agreement, the Note and any Applications delivered at such time and
that said resolutions have not been amended and are in full force and
effect on the date of such certificate and (5) as to the incumbency and
specimen signatures of each officer of the Borrower executing this
Agreement, the Note and any Applications delivered at such time, or any
other document delivered in connection herewith or therewith;
(iv) receipt by the Bank of an opinion of
McGuireWoods LLP, counsel for the Borrower, covering such matters
relating to the Borrower and the transactions contemplated hereby as
the Bank may reasonably request;
(v) receipt by the Bank of certified copies of
Requests for Information or Copies (Form UCC-11), or equivalent
reports, listing all effective financing statements that name the
Borrower (under its present name and any previous names) as debtor or
seller, together with copies of such financing statements (all of which
shall have been disclosed in writing to, and accepted by, the Bank);
(vi) receipt by the Bank of a certificate signed by
the President or Executive Vice President - Finance and Administration
of the Borrower, to the effect set forth in clauses (ii) and (iii) of
Section 3.1; and
(vii) receipt by the Bank of all documents it may
reasonably request relating to the existence of the Borrower and its
corporate authority to execute, deliver and perform this Agreement, the
Note and the Applications and the validity of this Agreement, the Note
and the Applications and any other matters relevant hereto or thereto,
all in form and substance satisfactory to the Bank.
All documents and opinions referred to in this Article shall be in form and
substance satisfactory to the Bank and its counsel.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
Section 4.1. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. The Borrower and each Subsidiary is duly
qualified as a foreign corporation, licensed and in good standing in each
jurisdiction where qualification or licensing is required by the nature of its
business or the character and location of its property, business or customers
and in which the failure to so qualify or be licensed, as the case may be, in
the aggregate, could reasonably be expected to have a material adverse effect on
the business, financial position, results of operations or properties of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
Section 4.2. Corporate and Governmental Authorization;
Contravention. The execution, delivery and performance by the Borrower of this
Agreement, the Note and the Applications are within its corporate power, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute (with or without the giving of notice or lapse of
time or both) a default under, any provision of applicable law or of the
articles of incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding upon or
affecting the Borrower or result in the creation or imposition of any Lien on
any of its assets.
Section 4.3. Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower, and the Note and Applications, when
executed and delivered in accordance with this Agreement, will constitute valid
and binding obligations of the Borrower, in each case enforceable against the
Borrower in accordance with its terms, except as (i) the enforceability hereof
and thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability.
Section 4.4. Financial Information.
(a) The most recent consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries, and the related consolidated financial
statements for the fiscal year then ended, reported on by PriceWaterhouseCoopers
LLP (or other independent certified public accountant satisfactory to the Bank),
copies of which have been delivered to the Bank, fairly present, in conformity
with GAAP, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of the date thereof and their results of operations
and changes in financial position for such fiscal year. As of the date of such
financial statements, the Borrower and its Consolidated Subsidiaries did not
have any material contingent obligation, contingent liability or liability for
Taxes, long-term lease or unusual forward or long-term commitment, which is not
reflected in any of such financial statements or notes thereto.
(b) The most recent quarterly unaudited consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries and the related
unaudited consolidated financial statements for such quarter and for the portion
of the Borrower's fiscal year ended at the end of such quarter, copies of which
have been delivered to the Bank, fairly present, in conformity with GAAP applied
on a basis consistent with the financial statements referred to in clause (a) of
this Section, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their results of operations and
changes in financial position for such period (subject to normal year-end
adjustments).
(c) Since the date of latest balance sheet submitted to the
Bank, there has been no material adverse change in the business, financial
position or results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole.
Section 4.5. Litigation. There is no action, suit or
proceeding pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Consolidated Subsidiaries
before any court, governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could materially adversely
affect the business, financial position or results of operations of the Borrower
and its Consolidated Subsidiaries, considered as a whole, or which in any manner
draws into question the validity of this Agreement, the Note or any Application.
Section 4.6. Marketable Title. The Borrower has good and
marketable title to all its properties and assets (other than properties which
individually or in the aggregate are not material to the Borrower) subject to no
Lien, except Permitted Liens.
Section 4.7. Filings. All actions by or in respect of, and all
filing with, any governmental body, agency or official required in connection
with the execution, delivery and performance of this Agreement, the Note and the
Applications, or necessary for the validity or enforceability thereof or for the
protection or perfection of the rights and interests of the Bank thereunder,
will, prior to the date of delivery thereof, have been duly taken or made, as
the case may be, and will at all times thereafter remain in full force and
effect.
Section 4.8. Regulation U. The Borrower does not own any
"margin stock" as such term is defined in Regulation U. The proceeds of the
Loans will be used by the Borrower only for the purposes set forth in Section
6.13 hereof. None of the Loan proceeds will be used, directly or indirectly, for
the purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry margin stock or for any other purchase which might constitute the Loans
a "purpose credit" within the meaning of Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System.
Section 4.9. Taxes. United States Federal income tax returns
of the Borrower and its Subsidiaries have been examined and closed through the
fiscal year ended December 31, 1997. The Borrower and its Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all Taxes due
pursuant to such returns or pursuant to any assessment received by the Borrower
or any Subsidiary, other than Taxes being contested in good faith or Taxes the
failure to pay could not reasonably be expected to have a material adverse
effect on the business, financial position or results of operations of Borrower
and its Consolidated Subsidiaries, considered as a whole. The charges, accruals
and reserves on the books of the Borrower and its Subsidiaries in respect of
Taxes or other governmental charges are, in the opinion of the Borrower,
adequate.
Section 4.10. Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted, except for such
governmental licenses, authorization, consents and approvals the failure to
have, individually or in the aggregate, could not reasonably be expected to have
a material adverse effect on the business, financial position or results of
operations of the Borrower and its Consolidated Subsidiaries, considered as a
whole.
Section 4.11. Environmental Compliance. Except as set forth on Schedule 4.11:
(a) The Borrower (including for purposes of this Section 4.11,
any former or current Affiliate or Subsidiary of the Borrower) is in material
compliance with all applicable laws, rules, regulations and orders of all
governmental bodies, agencies and officials relating to environmental matters
and the release, handling and disposal of hazardous, toxic and polluting
substances.
(b) The Borrower has obtained and is in material compliance
with all required material Governmental permits, certificates, licenses,
approvals and other authorizations, and has filed all material notifications
relating to air emissions, effluent discharges and solid and hazardous waste
storage, treatment and disposal required in connection with its ownership or use
of real estate or the operation of its business.
(c) There are no outstanding notices of violation, orders,
written claims, citations, written complaints, penalty assessments, suits or
other proceedings, administrative, criminal or civil, at law or in equity,
pending against the Borrower or its properties that would have a material
adverse effect on the Borrower's business, financial position or results of
operations or on any facility or the operation of any facility, and no
investigation or review is pending or to the knowledge of the Borrower
threatened against the Borrower by any governmental body, agency or official
with respect to any material alleged violation of any governmental environmental
law, regulation, ordinance, standard, permit or order in connection with its
ownership or use of any real estate or the conduct of its business.
(d) All toxic or hazardous substances generated by the
Borrower have been transported in material compliance with law to storage,
treatment and disposal facilities permitted or authorized to handle such
substances by the governmental agency with jurisdiction thereof. No notification
of release of a hazardous substance pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("CERCLA"), the Federal Clean Water
Act or the Clean Air Act of any other environmental law, regulation or ordinance
has been filed as to any property now or formerly occupied or owned by the
Borrower.
(e) No hazardous, toxic or polluting substances have been
released, discharged or disposed of on property now or formerly owned or
occupied by the Borrower that would have a material adverse effect on the
Borrower's business, financial position or results of operations or any facility
or operation of such facility.
(f) The Borrower has not received from any environmental
regulatory entity and any requests for information, notices of claim, demand
letters or other notification that in connection with the ownership or use of
any real estate or the conduct of the Borrower's business it is or may be
potentially responsible to respect to any investigation or clean-up hazardous
substances or toxic waste or pollutants at any sites that could reasonably be
expected to have a material adverse effect on the business, financial position
or results of operations of Borrower and its Consolidated Subsidiaries,
considered as a whole or on any facility or the operation of such facility.
(g) To the best knowledge of the Borrower, no waste generated
by the Borrower has ever been sent, nor is waste generated by the Borrower being
sent, directly or indirectly, to any site listed or formerly proposed for
listing on the National Priority List promulgated pursuant to CERCLA or to any
site listed on any state list of hazardous substances sites requiring
investigation or clean up.
Section 4.12. Disclosure. None of this Agreement, any
Application, any schedule or exhibit thereto or document, certificate, report,
statement or other information furnished to the Bank in connection herewith or
therewith or with the consummation of the transactions contemplated hereby or
thereby contains any material misstatement of fact or, taken as a whole, omits
to state a material fact necessary to make the statements contained herein or
therein not misleading.
ARTICLE V
FINANCIAL COVENANTS
The Borrower agrees that so long as the Bank is committed to
make Loans hereunder or any amount payable hereunder or under the Note or any
Application remains unpaid or contingent:
Section 5.1. Certain Definitions. As used in this Article V
and elsewhere in this Agreement, the following terms have the following
meanings:
"Capitalized Lease Obligation" shall mean any rental
obligation which, under GAAP, would be required to be capitalized on the books
of the Borrower or any Subsidiary, taken at the amount thereof accounted for as
indebtedness (net of interest expense) in accordance with such principles.
"Consolidated" shall mean the consolidated financial
information of the Borrower and its Subsidiaries under GAAP.
"Consolidated Assets" shall mean, as at any date of
determination, the total assets of the Borrower and its Subsidiaries appearing
on a Consolidated balance sheet prepared under GAAP as of the date of
determination, after deducting any reserves applicable thereto and after
eliminating all intercompany transactions and all amounts properly attributable
to minority interests, if any, in the stock and surplus of Subsidiaries.
"Consolidated Capitalization" shall mean, at any time, the sum
of (i) Consolidated Debt at such time plus (ii) Consolidated Net Worth at such
time.
"Consolidated Fixed Charges" shall mean, for the Borrower and
its Subsidiaries on a Consolidated basis, the sum (without duplication) of: (i)
all Rentals (excluding all principal components of Rentals under Capitalized
Lease Obligations) paid during the most recently completed four fiscal quarters
(the "Prior Period"); and (ii) all Consolidated Interest Charges for the Prior
Period.
"Consolidated Interest Charges" shall mean, for the Borrower
and its Subsidiaries on a Consolidated basis for the four fiscal quarters most
recently ended, all interest expense (as determined in accordance with GAAP) on
all Debt (including Capitalized Lease Obligations) net of interest income.
"Consolidated Net Earnings" shall mean, for any applicable
period, for the Borrower and its Subsidiaries on a Consolidated basis, the
excess of (a) gross revenues over (b) all expenses and charges of a proper
character (including current and deferred taxes on income and current additions
to reserves) each for the applicable period, but not including in gross
revenues: (i) any gains (net of expenses and taxes applicable thereto) in excess
of losses resulting from the sales, conversions or other dispositions of capital
assets outside the ordinary course of business, (ii) any gains resulting from
the write-up of assets, (iii) any earnings or deferred credit (or amortization
of a deferred credit) of any Person acquired by the Borrower or any Subsidiary
through purchase, merger or consolidation or otherwise for any year prior to the
year of acquisition not included in gross revenues under GAAP, or (iv) any
deferred credit representing the excess of equity in any Subsidiary of the
Borrower at the date of acquisition over the cost of the investment in such
Subsidiary, (v) proceeds of life insurance policies on any Responsible Officer
exceeding $250,000 for such period, (vi) gains arising from the acquisition of
debt securities for a cost less than the principal amount and accrued interest,
(vii) extraordinary items or transactions of a non-recurring or non-operating
and material nature or arising from gains or sales relating to the
discontinuance of operations, or (viii) any portion of the net earnings
(included in the determination of such Consolidated Net Earnings or such
Consolidated Net Loss) of any Subsidiary which for any reason shall be
unavailable for payment of dividends to the Borrower, all as determined in
accordance with GAAP. If the above calculation results in an amount less than
zero, then for such period there shall be a Consolidated Net Loss as determined
in the definition thereof in this Section.
"Consolidated Net Loss" shall mean, for any applicable period,
for the Borrower and its Subsidiaries on a Consolidated basis, the excess of (a)
expenses and charges of a proper character (including current and deferred taxes
on income, provision for taxes on unremitted foreign earnings which are included
in gross revenues, and current additions to resources) over (b) gross revenues
for the same period, but not including in gross revenues those items listed in
clauses (i) through (iv), inclusive, in the definition of "Consolidated Net
Earnings" herein, all as determined in accordance with GAAP. If the above
calculation results in an amount of zero or more, then for such period there
shall be Consolidated Net Earnings as determined in the definition thereof in
this Section.
"Consolidated Net Worth" shall mean, at any time, for the
Borrower and its Subsidiaries on a Consolidated basis shareholders' equity at
such time determined in accordance with GAAP.
"Consolidated Operating Income" shall mean, for the Borrower
and its Subsidiaries on a Consolidated basis for the four fiscal quarters most
recently ended, Consolidated Net Earnings, or Consolidated Net Loss, as the case
may be, for such period, plus to the extent deducted in calculating such
Consolidated Net Earnings or Consolidated Net Loss, Taxes, Consolidated Interest
Charges and Rentals.
"Consolidated Priority Debt" means, on a Consolidated Basis at
any date of determination, the sum of the aggregate amount of Debt of all
Subsidiaries, plus Debt of any Person which is secured by, or otherwise
benefiting from, a Lien on any property, tangible or intangible, of the Borrower
or any Subsidiary, whether or not the Borrower or such Subsidiary has assumed or
become liable for the payment of such Debt, plus the present value of the
Rentals obligations of the Borrower or a Subsidiary as lessee under a
Capitalized Lease Obligation (discounted according to GAAP at the debt rate
implicit in the lease).
"Cumulative Amounts Available For Restricted Payments" shall
mean, for the period (taken as one accounting period) beginning on January 1,
1999, and ending as of the last day of the most recently completed fiscal
quarter before any proposed Restricted Payment,
(1) $25,000,000; plus
(2) 50% of Consolidated Net Earnings, or 100% of the Consolidated Net Loss,
as the case may be, during such period; plus
(3) the total net cash proceeds received by the Company from the sale of
its stock during such period;less
(4) the aggregate amount of all Restricted Payments made during such
period.
"Disposition" means the sale, lease, transfer or other
disposition of property, and "Disposed of" has a corresponding meaning to
Disposition.
"Rentals" shall mean for any period of determination all fixed
rents or charges (including as such all payments during any such period of
determination which the lessee is obligated to make on termination of the lease
or surrender of the property) payable by the Borrower or a Subsidiary (as
lessee, sublessee, licensee, franchisee or the like) for such period under a
lease, license, or other agreement for the use or possession of real or personal
property, tangible or intangible, as determined in accordance with GAAP.
"Responsible Officer" shall mean the chief executive officer,
chief operating officer, principal financial officer, principal accounting
officer, treasurer or assistant treasurer of the Borrower or any other senior
executive officer of the Borrower involved principally in its financial
administration or its controllership function.
"Stock Repurchase Plan" shall mean a plan approved by the
Board of Directors of the Borrower authorizing the appropriate officers of the
Borrower to purchase shares of stock of the Borrower, from time to time, on the
open market through negotiated purchases or otherwise.
"Subsidiary" shall mean any corporation, partnership or
limited liability company organized or formed under the laws of any state of the
United States of America which conducts the major portion of its business in and
makes the major portion of its sales to Persons located in the United States or
Canada, whose accounts are or are required to be consolidated with the
Borrower's under GAAP.
Section 5.2. Consolidated Operating Income to Consolidated
Fixed Charges. Consolidated Operating Income shall at all times be greater than
200% of Consolidated Fixed Charges. This covenant shall be tested on a rolling
four-quarter basis.
Section 5.3. Consolidated Debt to Consolidated Capitalization.
Consolidated Debt shall at no time exceed 55% of Consolidated Capitalization.
This covenant shall be tested quarterly at the end of each calendar quarter.
Section 5.4. Consolidated Priority Debt to Consolidated Net
Worth. Consolidated Priority Debt shall at no time exceed 10% of Consolidated
Net Worth. This covenant shall be tested quarterly at the end of each calendar
quarter.
Section 5.5. Sale of Assets. The Borrower will not, and will
not permit any Subsidiary to, Dispose of any property or assets, except:
(i) the Borrower or any Subsidiary may sell inventory in the
ordinary course of business;
(ii) any Subsidiary may dispose of its assets to the Borrower
or a Wholly-Owned Consolidated Subsidiary;
(iii) the Borrower or any Subsidiary may sell or otherwise
dispose of worn out or obsolete equipment in the ordinary course of business;
(iv) the Borrower or any Subsidiary may Dispose of its assets
(whether or not leased back) so long as, immediately after giving effect to such
proposed Disposition: (A) the consideration for such assets represents the fair
market value of such assets (as determined in good faith by the Borrower's Board
of Directors) at the time of such Disposition; and (B) the net book value of all
assets so Disposed of by the Borrower and its Subsidiaries during the prior 12
months, does not exceed 15% of Consolidated Assets; and (C) the amount of
Consolidated Operating Income produced by all assets so Disposed of by the
Borrower and its Subsidiaries during the prior 12 months, does not exceed 15% of
Consolidated Operating Income at the end of the most recently completed 12
months; and (D) no Default or Event of Default shall exist; provided, however,
if after any Disposition, the net book value of all assets Disposed of during
the prior 12 months exceeds 15% of Consolidated Assets or the Consolidated
Operating Income produced by all assets Disposed of during the prior 12 months
exceeds 15% of Consolidated Operating Income, the Borrower shall, within 12
months of the date of such Disposition, apply the proceeds (net of reasonable
expenses) from such Disposition (or such portion thereof as is necessary to
cause compliance with the provisions of this Section) to acquire operating
assets and equipment to be used in the furniture manufacturing business of the
Borrower and its Wholly-Owned Consolidated Subsidiaries.
For purposes of this Section 5.5, (a) the net book value of any assets shall be
determined as of the respective date of Disposition of those assets and the
Consolidated Operating Income produced by any assets shall be determined using
Consolidated Operating Income for the 12 month period before the respective date
of Disposition of those assets; and (b) in the case of the sale or issuance of
the stock of a Subsidiary, the amount of Consolidated Operating Income, or
amount of Consolidated Assets, as the case may be, contributed by the stock
Disposed of shall be assumed to be the percentage of outstanding stock sold or
to be sold. This covenant shall be tested quarterly at the end of each calendar
quarter.
Section 5.6. Restricted Payments. Except as otherwise
permitted by this Section, the Borrower will not pay or declare any dividend on
any class of its stock or make any other distribution on account of any class of
its stock; or redeem, purchase or otherwise acquire, directly or indirectly, any
shares of its stock (all of the foregoing being herein called "Restricted
Payments"); except out of Cumulative Amounts Available For Restricted Payments
and so long as (1) at the time of declaration of such Restricted Payment, no
Default or Event of Default exists or would exist as a result thereof and (2)
the Restricted Payment is made within 60 days after the declaration thereof;
provided, however, that for purposes of (1) and (2) above, purchases of any
shares of the Borrower's stock made pursuant to a Stock Repurchase Plan shall be
deemed to be declared on the date the Restricted Payment is made to acquire such
stock. This covenant shall be tested quarterly at the end of each calendar
quarter.
The calculation of Restricted Payments and Cumulative Amounts Available
For Restricted Payments shall exclude: (i) stock splits, dividends paid, or
distributions made, in stock of the Borrower; or (ii) exchanges of stock of one
or more classes of the Borrower, except to the extent cash or other value is
involved in such exchange. The term "stock" as used in this Section shall
include warrants or options to purchase stock.
ARTICLE VI
OTHER COVENANTS
The Borrower agrees that so long as the Bank is committed to
make Loans hereunder or any amount payable hereunder or under the Note or any
Application remains unpaid or contingent:
Section 6.1. Information. The Borrower will deliver or cause to be
delivered to the Bank:
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(i) as soon as available and in any event within 120 days after the end of each
fiscal year of the Borrower, a consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of the end of such fiscal year and the related
consolidated financial statements for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and accompanied by an opinion thereon by
PriceWaterhouseCoopers LLP or other independent public accountants satisfactory
to the Bank, which opinion shall state that such consolidated financial
statements present fairly the consolidated financial position of the Borrower
and its Consolidated Subsidiaries as of the date of such financial statements
and the results of their operations for the period covered by such financial
statements in conformity with GAAP applied on a consistent basis (except for
changes in the application of which such accountants concur) and shall not
contain any "going concern" or like qualification or exception or qualifications
arising out of the scope of the audit;
(ii) as soon as available and in any event within 45 days after the end of each
of the first three quarters of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries and the related
consolidated financial statements for such quarter and for the portion of the
Borrower's fiscal year ended at the end of such quarter, setting forth in each
case in comparative form the figures for the corresponding quarter and the
corresponding portion of the Borrower's previous fiscal year, all certified
(subject to normal year-end audit adjustments) as complete and correct by the
chief financial officer or chief accounting officer of the Borrower;
(iii) simultaneously with the delivery of each set of financial statements
referred to in clauses (i) and (ii) above, a certificate of the chief financial
officer or chief accounting officer of the Borrower, (A) setting forth in
reasonable detail the calculations required to establish whether the Borrower
was in compliance with the Financial Covenants and Sections 5.5 and 5.6 on the
date of such financial statements, (B) stating whether there exists on the date
of such certificate any Default and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto and (C) stating whether, since the date of the most
recent previous delivery of financial statements pursuant to clause (i) or (ii)
of this Section, there has been any material adverse change in the business,
financial position, results of operations or prospects of the Borrower and its
Consolidated Subsidiaries, considered as a whole, which has not been reported on
a filing made with the U. S. Securities and Exchange Commission and, if so, the
nature of such material adverse change;
(iv) forthwith upon any Responsible Officer's obtaining
knowledge of any Default, a certificate of the chief financial officer
or chief accounting officer of the Borrower setting forth the details
thereof and the action which the Borrower is taking or proposes to take
with respect thereto;
(v) as soon as reasonably practicable after obtaining
knowledge of the commencement of, or of a material threat of the
commencement of, an action, suit or proceeding against the Borrower or
any of its Subsidiaries which could reasonably be expected to
materially adversely affect the business, properties, financial
position or results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole, or which in any manner questions
the validity of this Agreement, the Note, any Application, or any of
the other transactions contemplated hereby or thereby, the nature of
such pending or threatened action, suit or proceeding and such
additional information as may be reasonably requested by the Bank;
(vi) promptly upon transmission thereof, copies of
all press releases and other statements made available generally by the
Borrower or its Subsidiaries to the public concerning material
developments in the results of operations, financial condition,
business or prospects of the Borrower or its Subsidiaries; and
(vii) from time to time such additional information regarding
the financial position, results of operations or business of the
Borrower or any of its Subsidiaries as the Bank may reasonably request.
Section 6.2. Payment of Obligations. The Borrower will, and
will cause each of its Subsidiaries to, pay and discharge, as the same shall
become due and payable, (i) all their respective obligations and liabilities,
including all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like persons which, in any such case, if
unpaid, might by law give rise to a Lien upon any of their properties or assets,
and (ii) all lawful Taxes, assessments and charges or levies made upon their
properties or assets, by any governmental body, agency or official except where
any of the items in clause (i) or (ii) of this Section 6.2 may be diligently
contested in good faith by appropriate proceedings, and the Borrower or such
Subsidiary shall have set aside on its books, if required under GAAP,
appropriate reserves for the accrual of any such items.
Section 6.3. Maintenance of Property; Insurance. The Borrower
will keep, and will cause each of its Subsidiaries to keep, all property useful
and necessary in their respective businesses in good working order and
condition, subject to ordinary wear and tear; will maintain with financially
sound and reputable insurance companies, insurance on all their respective
properties in at least such amounts and against at least such risks (and with
such risk retentions) as are usually insured against by companies engaged in the
same or a similar business; and will furnish to the Bank upon request full
information as to the insurance carried.
Section 6.4. Conduct of Business and Maintenance of Existence.
The Borrower will continue, and will cause each of its Subsidiaries to continue,
to engage in the home furnishings business, and will preserve, renew and keep in
full force and effect, and will cause each of its Subsidiaries to preserve,
renew and keep in full force and effect, their respective existence and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business, except where the Borrower reasonably determines that
the existence of a Subsidiary is no longer required by the Borrower's business,
and prior written notice thereof is given to the Bank.
Section 6.5. Compliance with Laws. The Borrower will comply,
and will cause each of its Subsidiaries to comply, with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, ERISA and the rules and regulations thereunder)
except where the necessity of compliance therewith is contested in good faith by
appropriate proceedings, or where the failure to comply could not reasonably be
expected to have a material adverse effect on the business, financial position
or results of operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole.
Section 6.6. Accounting; Inspection of Property, Books and
Records. The Borrower will keep, and will cause each of its Subsidiaries to
keep, proper books of record and account in which full, true and correct entries
in conformity with GAAP shall be made of all dealings and transactions in
relation to their respective businesses and activities, will maintain, and will
cause each of its Subsidiaries to maintain, their respective fiscal reporting
periods on the present basis and will permit, and will cause each of its
Subsidiaries to permit, representatives of the Bank to visit and inspect any of
their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their officers, employees and independent public accountants,
all at such reasonable times and as often as may reasonably be desired.
Section 6.7. Debt. The Borrower and its Consolidated
Subsidiaries will not incur or at any time be liable with respect to any Debt
except:
(i) Debt of any Consolidated Subsidiary to the Borrower
or any Wholly-Owned Subsidiary;
(ii) other Debt of Consolidated Subsidiaries permitted
under the Financial Covenants; and
(iii) other Debt of the Borrower (other than Debt owed to a
Consolidated Subsidiary) if after giving effect
thereto, the Borrower is in compliance with the
provisions of the Financial Covenants.
Section 6.8. Restriction on Liens.
(a) The Borrower will not, and will not permit any of its
Subsidiaries to at any time create, assume or suffer to exist any Lien on any
property or asset now owned or hereafter acquired by the Borrower or any of its
Subsidiaries or assign or subordinate any present or future right to receive
assets except:
(i) Liens for Taxes (including ad valorem and property Taxes) and
assessments or governmental charges or levies not yet due or which are being
actively contested in good faith by appropriate proceedings;
(ii) other Liens incidental to the conduct of the Borrower's business or
the maintenance, operation, construction or ownership of its property and assets
(including pledges or deposits in connection with workers' compensation and
social security Taxes, assessments and charges, and landlords, mechanics and
materialmen Liens and survey exceptions or encumbrances, easements or
reservations, rights-of-way, or zoning restrictions) provided that (A) such
Liens were not incurred in connection with the borrowing of money, or the
obtaining of advances or credit or the payment of the deferred purchase price of
property and (B) the existence of such Lien does not materially detract from the
value of such property or assets to the Borrower or any Subsidiary or
unreasonably interfere with the ordinary conduct of business;
(iii) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business to secure (or to obtain letters of
credit that secure) the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, performance bonds, purchase, construction or
sales contracts and other similar obligations, in each case not incurred or made
in connection with Debt;
(iv) any Lien created to secure all or any part of the purchase price
incurred or assumed to pay all or any part of the purchase price of property
acquired by the Borrower or a Subsidiary after the Effective Date, provided
that: (A) any such Lien shall be confined solely to the item or items of
property so acquired and, if required by the terms of the instrument originally
creating such Lien, other property which is an improvement to or for specific
use with such acquired property; (B) the principal amount of the Debt secured by
any such Lien shall at no time exceed 100% of the lesser of (1) the cost to the
Borrower or the Subsidiary of the property acquired and (2) the fair market
value of such property (as determined in good faith by the Borrower's Board of
Directors) at the time of such acquisition; and (C) any such Lien shall be
created within three hundred sixty-five (365) days after the acquisition of the
property or completion of the improvements;
(v) Liens securing Capitalized Lease Obligations provided such Liens are
limited to the property subject to such leases;
(vi) other Liens securing Debt permitted under the Financial Covenants and
which is (a) Debt of any Subsidiary to the Borrower or any Wholly-Owned
Consolidated Subsidiary; (b) other Debt of Subsidiaries permitted under the
Financial Covenants; or (c) other Debt of the Borrower (other than Debt owed to
a Subsidiary) if after giving effect thereto, the Borrower is in compliance with
the provisions of the Financial Covenants; and
(vii) any right of set off or banker's lien (whether by common law,
statute, contract or otherwise) in favor of any Person to whom neither the
Borrower nor Subsidiary owes any Debt.
(b) Except as otherwise specifically set forth herein, Borrower agrees that
if it or any Subsidiary shall create or assume any Lien upon any of its property
or assets, whether now owned or hereafter acquired, other than Permitted Liens,
and unless prior written consent is obtained from the Bank, it will make or
cause to be made effective provisions whereby the Loans shall be secured by such
Lien equally and ratably with any and all other Debt thereby secured so long as
any such other Debt shall be so secured. The Borrower further agrees that if any
Person (other than the Borrower) Guarantees or provides collateral in any manner
for any Debt of the Borrower or any Subsidiary, it will simultaneously cause
such Person to Guarantee or provide collateral for the Loans equally and ratably
with all Debt Guaranteed or secured by such Person pursuant to documentation in
form and substance reasonably satisfactory to the Bank and such Person.
Section 6.9. Consolidations, Mergers. The Borrower will not,
and will not permit any Subsidiary to consolidate or merge with or into any
other Person, other than the Borrower or a Wholly-Owned Consolidated Subsidiary.
Section 6.10. Transactions with Affiliates. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly, pay
any funds to or for the account of, make any investment in, engage in any
transaction with or effect any transaction in connection with any joint
enterprise or other joint arrangement with, any Affiliate of the Borrower or any
of its Subsidiaries (other than a Wholly-Owned Consolidated Subsidiary), except
that the Borrower or any Subsidiary of the Borrower may make payment or provide
compensation (including without limitation the establishment of customary
employee benefit plans) for personal services rendered by employees and other
Persons on terms fair and reasonable in light of the circumstances under which
such services were or are to be rendered.
Nothing in this Section 6.10 shall prohibit the Borrower or
any Subsidiary of the Borrower from making sales to or purchases from any
Affiliate and, in connection therewith, extending credit or making payments, or
from making payments for services rendered by any Affiliate, if such sales or
purchases are made or such services are rendered in the ordinary course of
business and on terms and conditions at least as favorable to the Borrower or
such Subsidiary as the terms and conditions which would apply in a similar
transaction with a Person not an Affiliate, or prohibit the Borrower or any
Subsidiary of the Borrower from participating in, or effecting any transaction
in connection with, any joint enterprise or other joint arrangement with any
Affiliate if the Borrower or such Subsidiary participates in the ordinary course
of its business and on a basis no less advantageous than on the basis on which
such Affiliate participates.
Section 6.11. Investments. The Borrower will not, and will not
permit any of its Subsidiaries to, make or acquire any investment in any Person
(whether by share purchase, capital contribution, loan, time deposit or
otherwise) other than:
(i) any investment in a Subsidiary or an entity that becomes a Subsidiary
simultaneously with such investment,
(ii) any evidence of debt, maturing not more than one year after the date
of issue, issued by the United States of America, or any instrumentality or
agency thereof and guaranteed fully as to principal, interest and premium, if
any, by the United States of America,
(iii) any repurchase agreement or certificate of deposit, maturing not more
than one year after the date of purchase, issued by the Bank or a commercial
bank, bank holding company or trust company which is located within the United
States of America, organized under the laws of the United States of America or
the laws of any State thereof, is a member of the Federal Reserve System, has a
Xxxxxxxx Bank Watch Rating (or if no longer available, a comparable rating
system), at the time of determination, of "B" (or higher), and has a combined
capital and surplus and undivided profits of at least $500,000,000,
(iv) commercial paper, maturing not more than 270 days after the date of
purchase, issued by a corporation (other than the Borrower or any Subsidiary or
Affiliate) organized and existing under the laws of any state within the United
States of America with a rating, at the time as of which any determination
thereof is to be made, of "P-1" (or higher) according to Xxxxx'x Investors
Service (or if no longer available, a comparable rating system), or "A-1" (or
higher) according to Standard & Poor's Corporation (or if no longer available, a
comparable rating system),
(v) property or assets acquired solely in exchange for capital stock of the
Borrower, and
(vi) any other investment of the Borrower or any of its Subsidiaries, other
than investments specified in clauses (i) through (v) above if, after giving
effect to such investment, the Borrower is in compliance with the provisions of
the Financial Covenants.
Section 6.12. Transactions with Other Persons. The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any
agreement with any Person whereby any of them shall agree to any restriction on
the Borrower's right to amend or waive any of the provisions of this Agreement.
Section 6.13. Use of Proceeds. The proceeds of the Loans will
be used by the Borrower for general working capital and other general corporate
purposes, including, without limitation, stock repurchase plans. None of the
proceeds of the Loans will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any "margin
stock" within the meaning of Regulation U.
Section 6.14. Independence of Covenants. All covenants
contained herein shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact that
such action or condition would be permitted by an exception to, or otherwise be
within the limitations of another covenant shall not avoid the occurrence of a
Default if such action is taken or condition exists.
Section 6.15. Banking Relationship. The Borrower shall, and
shall cause its Subsidiaries to, maintain its principal operating accounts with
the Bank, as promptly as practicable after the Effective Date.
ARTICLE VII
EMPLOYEE BENEFIT PLANS
Section 7.1. Certain Definitions. As used in this
Article VII, the following terms have the following meanings:
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414(b) or 414(c) of the Code.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is either (i) maintained by a member
of the Controlled Group for employees of a member or members of the Controlled
Group or (ii) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which a member of the Controlled Group is then making or accruing an obligation
to make contributions or has within the preceding five plan years made
contributions.
"Unfunded Vested Liabilities" means, with respect to any Plan
at any time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the Controlled Group to the PBGC
or the Plan under Title IV of ERISA.
Section 7.2. Compliance with ERISA. Each member of the
Controlled Group has fulfilled its obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and is in compliance
in all material respects with provisions of ERISA and the Code presently
applicable to each Plan. No member of the Controlled Group has incurred any
liability, or has entered into any transaction that is likely to cause any
liability to be incurred, to the PBGC, other than for premiums not yet due, or
any Plan under Title IV of ERISA, other than for contributions not yet due. No
Lien has been attached and no Person has threatened to attach a Lien on any
property of the Borrower as a result of the Borrower's failure to comply with
ERISA.
Section 7.3. Prohibited Transactions. The Borrower will not at any time
permit any Plan to:
(i) engage in any "prohibited transaction", as such term is defined in
Section 4975 of the Code or in Section 406 of ERISA, that is not exempt under
Section 4975(d) of the Code or Section 408 of ERISA;
(ii) incur any "accumulated funding deficiency", as such term is defined in
Section 302 of ERISA, whether or not waived; or
(iii) be terminated in a manner which could result in the imposition of a
Lien on the property of the Borrower pursuant to Section 4068 of ERISA.
Section 7.4. Information. The Borrower agrees that so long as
the Bank is committed to make Loans hereunder, or any amount payable hereunder
or under the Note or any Application remains unpaid or contingent, the Borrower
will deliver or cause to be delivered to the Bank if and when any member of the
Controlled Group (i) gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA, a
copy of such notice; or (iii) receives notice from the PBGC under Title IV of
ERISA of an intent to terminate or appoint a trustee to administer any Plan, a
copy of such notice.
ARTICLE VIII
DEFAULTS
Section 8.1. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
(i) the Borrower shall fail to pay when due and for five (5) days
thereafter any principal of or interest on any Loan, any fee or any other amount
payable hereunder or under the Note or any Application;
(ii) the Borrower shall fail to observe or perform any covenant contained
in Article V or in Section 6.7, 6.8, 6.9, 6.12 or 6.13;
(iii) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clauses (i)
or (ii) above) for thirty (30) days after the earlier to occur of (A) the date
written notice thereof has been given to the Borrower by the Bank, and (B) the
date notice thereof should have been given to the Bank under Section 6.1(iv);
(iv) any representation, warranty, certification or statement made by the
Borrower in this Agreement or any Application, or by the Borrower in any
certificate, financial statement or other document delivered pursuant hereto or
thereto shall prove to have been incorrect in any material respect when made;
(v) the Borrower or any Subsidiary of the Borrower shall fail to make any
payment in respect of any Debt (other than the Note or an Application) when due
and after any applicable grace period, where the aggregate of all such Debt,
combined with the aggregate of all Debt described in clause (vi), below, without
duplication, exceeds $3,500,000;
(vi) any event or condition shall occur which results or would result in
the acceleration of the maturity of any Debt of the Borrower or any Subsidiary
of the Borrower, or enables (or, with the giving of notice or lapse of time or
both, would enable) the holder of such Debt or any Person acting on such
holder's behalf to accelerate the maturity thereof or cause the Borrower or said
Subsidiary to repurchase said Debt, where the aggregate of all such Debt,
combined with the aggregate of all Debt described in clause (v), above, without
duplication, exceeds $3,500,000;
(vii) the Borrower or any Subsidiary of the Borrower shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporation action to authorize any of the
foregoing;
(viii) an involuntary case or other proceeding shall be commenced against
the Borrower or any Subsidiary of the Borrower seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against the Borrower
or any Subsidiary of the Borrower under the federal bankruptcy laws as now or
hereafter in effect;
(ix) any member of the Controlled Group shall fail to pay when due an
amount or amounts aggregating in excess of $200,000.00 which it shall have
become liable to pay to the PBGC, any Plan or any Plan trustee under Title IV of
ERISA or ss. 412 of the Code; or notice of intent to terminate a Plan or Plans
having aggregate Unfunded Vested Liabilities in excess of $500,000.00
(collectively, a "Material Plan") shall be provided under Title IV of ERISA by
any member of the Controlled Group, any plan administrator or any combination of
the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate or to cause a trustee to be appointed to administer any Material
Plan or a proceeding shall be instituted by a fiduciary of any Material Plan
against any member of the Controlled Group to enforce Section 515 of ERISA; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or
(x) one or more final judgments or orders for the payment of money in
excess of $3,500,000.00 shall be rendered against the Borrower or any Subsidiary
of the Borrower for which no insurer has acknowledged, in writing,
responsibility for liability, subject to customary deductibles, and such
judgment or order shall continue unsatisfied and unstayed for a period of 60
days; then, and in every such event, the Bank, at its option, may by notice to
the Borrower terminate the Commitment and it shall thereupon terminate, and may,
at its option, by notice to the Borrower declare the Note (together with accrued
interest thereon) to be, and the Note shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; provided that in the case of any
of the Events of Default specified in paragraph (vii) or (viii) above with
respect to the Borrower, without any notice to the Borrower or any other act by
the Bank, the Commitment shall thereupon terminate and the Note (together with
accrued interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower. Upon the occurrence of any Event of Default,
then, or at any time after the happening of the same, the Bank may, at its
option, demand that the Borrower, within ten (10) days of such demand, arrange
for the cancellation of each outstanding Letter of Credit such that the Bank has
no further liability under any Letter of Credit, or in the event the Borrower
fails to procure the cancellation of any Letter of Credit within such ten (10)
day period, demand that the Borrower pay to the Bank, as cash collateral, the
remaining amounts available to be drawn, if any, under all Letters of Credit not
so canceled and such amounts shall thereupon become immediately due and payable.
In the event the Borrower pays to the Bank or the Bank collects from the
Borrower sums representing the remaining amounts available to be drawn under
said outstanding Letters of Credit, the Bank shall hold such sums in a
non-interest-bearing account as security for the Borrower's obligation to
reimburse the Bank for amounts paid by the Bank under the Letters of Credit or
otherwise due hereunder. Upon the expiration of each of the Letters of Credit
and the Bank's reasonable determination that it has no further liability
thereunder, and provided the Borrower shall have no other unpaid Debt to the
Bank under this Agreement, the Note, or any of the Applications, the Bank shall
repay such sums to the Borrowers to the extent they exceed the remaining amounts
actually paid by the Bank under said Letter of Credit. The Bank's rights under
this Section 8.1 are in addition to other rights and remedies which the Bank may
have.
ARTICLE IX
CHANGE IN CIRCUMSTANCES
AFFECTING EURO-DOLLAR ADVANCES
Section 9.1. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period, with
respect to a Fixed Euro-Dollar Advance, or at any time, with
respect to Floating Euro-Dollar Advances (as applicable, the
"Determination Date"),
(i) the Bank determines that deposits in Dollars (in the applicable
amounts) are not being offered to it in the relevant market on such
Determination Date, or
(ii) the Bank determines that the Adjusted London Interbank Offered Rate,
or LIBOR, as the case may be, as determined by the Bank, will not adequately and
fairly reflect the cost to it of funding the Euro-Dollar Advances on or after
the Determination Date, the Bank shall forthwith give notice thereof to the
Borrower, whereupon until the Bank notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, the right of the Borrower to
elect to have Advances bear interest at the applicable Euro-Dollar Rate, shall
be suspended and each outstanding Euro-Dollar Advance affected thereby shall
begin bearing interest at the Prime-Based Rate on the last day of the then
current Interest Period applicable thereto or on the Determination Date, as the
case may be, notwithstanding any prior election by the Borrower to the contrary.
Nothing in this Section shall limit the right of the Borrower under Article II
to elect interest rates which are not affected by the circumstances giving rise
to a notice under this Section.
Section 9.2. Illegality. If, after the date of this Agreement, the adoption
of any applicable law, rule or regulation, or any change therein, or any change
in the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for the Bank (or its Euro-Dollar Lending Office) to make, maintain
or fund the Euro-Dollar Advances and the Bank shall so notify the Borrower,
whereupon until the Bank notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligation of the Bank to make
Euro-Dollar Advances shall be suspended. Before giving any notice to the
Borrower pursuant to this Section, the Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid the need for giving
such notice and will not, in the judgment of the Bank, be otherwise
disadvantageous to it. If such notice is given, all Euro-Dollar Advances then
outstanding shall begin bearing interest at the Prime-Based Rate,
notwithstanding any prior election by the Borrower to the contrary, either (i)
on the last day of the then current Interest Period applicable to Fixed
Euro-Dollar Advances, if the Bank may lawfully continue to maintain and fund
such Loans at the applicable Euro-Dollar Rate to such day, or (ii) immediately,
with respect to Floating Euro-Dollar Advances, or if the Bank may not lawfully
continue to maintain and fund such Loans at the applicable Fixed Euro-Dollar
Rate to such day (in which case the Borrower shall in addition reimburse the
Bank for any resulting losses as provided in Section 2.10).
Section 9.3. Increased Cost and Reduced Return.
(a) If after the date hereof, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Bank (or its Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) shall subject the Bank (or its Lending Office) to
any Tax, duty or other charge with respect to the Euro-Dollar Advances,
the Note or its obligation to make Euro-Dollar Advances, or shall
change the basis of taxation of payments to the Bank (or its Lending
Office) of the principal of or interest on the Euro-Dollar Advances or
any other amounts due under this Agreement in respect of its
Euro-Dollar Advances or its obligation to make Euro-Dollar Advances
(except for changes in the rate of tax on the overall net income of the
Bank or its Lending Office imposed by the jurisdiction in which the
Bank's principal executive office or Lending Office is located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System, but excluding, with respect to any
Euro-Dollar Advance, any such requirement included in an applicable
Euro-Dollar Reserve Percentage) against assets of, deposits with or for
the account of, or credit extended by, the Bank's Lending Office or
shall impose on the Bank (or its Lending Office) or on the United
States market for certificates of deposit or the London interbank
market any other condition affecting the Euro-Dollar Advances, the Note
or its obligation to make Euro-Dollar Advances;
and the result of any of the foregoing is to increase the cost to the Bank (or
its Lending Office) or making or maintaining any Euro-Dollar Advance, or to
reduce the amount of any sum received or receivable by the Bank (or its Lending
Office) under this Agreement or under the Note with respect thereto, by an
amount deemed by the Bank to be material, then, within 15 days after demand by
the Bank, the Borrower shall pay to the Bank such additional amount or amounts
as will compensate the Bank for such increased cost or reduction. The Bank will
promptly notify the Borrower of any event of which it has knowledge, occurring
after the date hereof, which will entitle the Bank to compensation pursuant to
this Section and will designate a different Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of the Bank, be otherwise disadvantageous to it. A
certificate of the Bank claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount, the
Bank may use any reasonable averaging and attribution methods. If any such
additional compensation is subsequently determined to be invalid or
inapplicable, the Bank will promptly refund any amount erroneously billed to the
Borrower.
(b) If the Bank shall determine that any applicable law, rule,
regulation or guideline, or the adoption after the date hereof of any other law,
rule, regulation or guidelines regarding capital adequacy, or any change in any
of the foregoing or in the interpretation or administration of any of the
foregoing by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by the
Bank (or its Lending Office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on the Bank's capital or the capital of any Person controlling the Bank
as a consequence of the Bank's obligations hereunder to a level below that which
the Bank or such controlling Person could have achieved but for such law,
adoption, change or compliance (taking into consideration the Bank's policies
with respect to capital adequacy) by an amount deemed by the Bank to be
material, then from time to time, within ten days after demand by the Bank, the
Borrower shall pay to the Bank such additional amount or amounts as will
compensate the Bank for such reduction. A certificate of the Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining any such amount, the Bank may use any reasonable
averaging and attribution methods. If any such additional compensation is
subsequently determined to be invalid or inapplicable, the Bank will promptly
refund any amount erroneously billed to the Borrower.
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices. All notices, requests and other
communications to a party hereunder shall be in writing and shall be given to
such party at its address set forth on the signature pages hereof or such other
address as such party may hereafter specify for the purpose by notice to the
other. Each such notice, request or other communication shall be effective (i)
if given by mail, 48 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or (ii) if given by any
other means, when delivered at the address specified in this Section; provided
that notices to the Bank under Section 2.2, 2.4, 2.7, 2.8 and 2.12, and Article
IX, shall not be effective until received.
Section 10.2. No Waivers. No failure or delay by the Bank in
exercising any right, power or privilege hereunder or under the Note or any
Application shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 10.3. Expenses. The Borrower shall pay (i) all
out-of-pocket expenses of the Bank, including fees and disbursements of special
counsel for the Bank, in connection with the preparation and administration of
this Agreement, any waiver or consent hereunder, any amendment hereof, or any
Default hereunder and (ii) if an Event of Default occurs, all out-of-pocket
expenses incurred by the Bank, including fees and disbursements of counsel, in
connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom. The Borrower shall indemnify the Bank against
any transfer taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of this Agreement
or either Note.
Section 10.4. Right of Set-Off. Upon the occurrence and during
the continuance of any Event of Default, the Bank is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by the Bank
to or for the credit or the account of the Borrower against any and all of the
obligations now or hereafter existing under this Agreement, the Note or any
Application, irrespective of whether or not the Bank shall have made any demand
hereunder or under the Note and although such obligation may be unmatured. The
rights of the Bank under this Section 10.4 are in addition to other rights and
remedies (including, without limitation, other rights of set-offs) which the
Bank may have. The Borrower agrees, to the fullest extent it may effectively do
so under applicable law, that any holder of a participation in the Note or any
Application may exercise rights of set-off or counterclaim or other rights with
respect to such participation as fully as if such holder of a participation were
a direct creditor of the Borrower in the amount of such participation.
Section 10.5. Amendments and Waivers. Any provision of this
Agreement or of the Note or any Application may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by the Borrower
and the Bank.
Section 10.6. Successors and Assigns.
----------------------
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement without the prior written consent of the Bank.
(b) The Bank may at any time grant to one or more banks or
other institutions (each a "Participant") participating interests in the
Commitment or in any or all of the Loans or the Note. In the event of any such
grant by the Bank of a participating interest to a Participant, whether or not
upon notice to the Borrower, the Bank shall remain responsible for the
performance of its obligations hereunder, and the Bank shall continue to deal
solely and directly with the Borrower in connection with the Bank's rights and
obligations under this Agreement. Any agreement pursuant to which the Bank may
grant such a participating interest shall provide that the Bank shall retain the
sole right and responsibility to enforce the obligations of the Borrower
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
participation agreement may provide that the Bank will not agree to any
modification, amendment or waiver of this Agreement which would have the effect
of (i) increasing, decreasing or extending the Commitment or subjecting the Bank
to any additional obligation, (ii) reducing the principal of or rate of interest
on any Loan, (iii) postponing the date fixed for any payment of principal of or
interest on any Loan or fees hereunder or under the Note or any Application, or
(iv) extending the Revolving Credit Period. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) The Bank may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a proportionate part of all, of
its rights and obligations under this Agreement and the Note, and such Assignee
shall assume such rights and obligations, pursuant to an instrument executed by
such Assignee and the Bank, with (and subject to) the consent of the Borrower;
provided that if an Assignee is an affiliate of the Bank, no such consent shall
be required. Upon execution and delivery of such an instrument and payment by
such Assignee to the Bank of an amount equal to the purchase price agreed
between the Bank and such Assignee, such Assignee shall become a Bank party to
this Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding extent,
and no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank and the Borrower shall make appropriate arrangements so that, if required,
a new Note or Notes is issued to the Assignee. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall, prior to the first date on which interest or fees are payable
hereunder for its account deliver to the Borrower certification as to exemption
from deduction or withholding of any United States federal income taxes.
(d) The Bank may at any time assign all or any portion of its
rights under this Agreement, any Application and the Note to a Federal Reserve
Bank. No such assignment shall release the Bank from its obligations hereunder.
(e) Subject to Section 10.7, the Bank may furnish any
information concerning the Borrower in its possession from time to time to
Assignees and Participants (including prospective Assignees and Participants)
and may furnish such information in response to credit inquiries consistent with
general banking practice.
(f) No assignee or other transferee of the Bank's rights shall
be entitled to receive any greater payment under Section 9.3 than the Bank would
have been entitled to receive with respect to the rights assigned or otherwise
transferred.
Section 10.7 Confidential Information. The Bank hereby agrees
to use its best efforts to hold in confidence and not to disclose any
Confidential Information. The Bank may furnish any information concerning the
Borrower or any of its Subsidiaries in its possession from time to time (a) to
an Assignee or Participant (including prospective Assignee and Participant) who
is notified of the confidential nature of the information and agrees to use its
reasonable best efforts to keep confidential all Confidential Information from
time to time supplied to it, (b) to the state and federal regulators of the
Bank, its corporate parent, or any affiliate of the Bank, upon the request of
said governmental authorities, (c) in response to requests or orders of any
court, grand jury, or other judicial or quasi-judicial body (by oral questions,
interrogatories, requests for information or documents, subpoenas, civil
investigative demands, or similar process), provided the Bank gives the Borrower
prompt notice of any such request so that the Borrower may seek an appropriate
protective order, (d) to the Bank's accountants, attorneys and auditors,
provided the Bank advises such persons of the confidential nature of such
information and instructs them to keep such information confidential, (e) as
necessary or appropriate to enforce any right or remedy of the Bank under this
Agreement, including, without limitation, any proceeding described in Sections
10.10 or 10.11, and (f) pursuant to requests therefor by any Person subject to
the federal Right to Financial Privacy Act or any comparable state statute, if
made in compliance with said Act or state statute, or the Internal Revenue
Service, if made in compliance with the Code and applicable regulations. For the
purpose of this Section, the term "Confidential Information" shall mean
information about the Borrower or any Subsidiary furnished by the Borrower or
any Subsidiary to the Bank, but does not include any information (i) which is
publicly known, or otherwise known to the Bank, at the time of disclosure, (ii)
which subsequently becomes publicly known through no act or omission by the
Bank, or (iii) which otherwise becomes known to the Bank other than through
disclosure by the Borrower or any Subsidiary.
Section 10.8. Virginia Law. This Agreement and the Notes shall
be governed by and construed in accordance with the laws of the Commonwealth of
Virginia.
Section 10.9. Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when the Bank shall have
received counterparts hereof signed by both parties.
Section 10.10. Enforcement of Arbitration; Submission to
Jurisdiction. Any legal action or proceeding to enforce an arbitration award
pursuant to Section 10.11 shall be brought in the courts of the Commonwealth of
Virginia in Richmond, Virginia, or of the United States of America for the
Eastern District of Virginia and in no other courts, and by execution and
delivery of this Agreement the Bank and each Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The Borrower hereby irrevocably and unconditionally
waives any objection, including without limitation, any objection to the laying
of venue or based on the grounds of the forum non conveniens which it now or
hereafter may have to the bringing of any action or proceeding in such
respective jurisdictions.
Section 10.11. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN
OR AMONG THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS,
INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE
DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT
(OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS
AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
(i) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
RICHMOND, VIRGINIA, AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR;
IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION,
THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS
WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE
ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
(ii) RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION
PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
AGREEMENT OR (II) BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12
U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE
RIGHT OF THE BANK (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED
TO) SETOFF, OR (B) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH
AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT
OF A RECEIVER. THE BANK MAY EXERCISE SUCH SELF HELP RIGHTS, OR OBTAIN SUCH
PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS AGREEMENT. NEITHER THIS EXERCISE
OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR
PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
Section 10.12. Entire Agreement. This Agreement, the Note and
the Applications set forth the entire agreement of the parties with respect to
the subject matter hereof and thereof and supersede all previous understandings,
written or oral, in respect thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
XXXXXXX FURNITURE COMPANY, INC. [SEAL]
By /s/Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President -
Finance and Administration
0000 Xxxxxxxxxx Xxxx Xxxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
SOUTHTRUST BANK [SEAL]
By /s/Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Lending Offices: SouthTrust Tower
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Notice Address: 000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Schedule 4.11
The Borrower's facilities in Robbinsville, North Carolina, and West End, North
Carolina, are listed on the North Carolina Inactive Hazardous Waste Sites
Priority List.
EXHIBIT A
FORM OF NOTE
$25,000,000.00 August ____, 2003
FOR VALUE RECEIVED, XXXXXXX FURNITURE COMPANY, INC. a Delaware
corporation (the "Borrower"), promises to pay to the order of SOUTHTRUST BANK
(the "Bank") for the account of such Lending Office or Offices or as the Bank
shall direct, the principal sum of Twenty-five Million and no/100 Dollars
($25,000,000.00), or so much of that sum as the Bank may advance, together with
interest on the principal balance outstanding from time to time at the rate
provided in the Credit Agreement referred to below. All payments of principal
and interest shall be made in lawful money of the United States in immediately
available funds at the following address of the Bank:
Xxxx Xxxxxx Xxx 000000
Xxxxxxxxxx, XX 00000-0000
Attention: Commercial Loans.
All Advances made by the Bank to the Borrower pursuant to the
Credit Agreement and all repayments of the principal thereof shall be recorded
by the Bank and, prior to any transfer hereof endorsed by the Bank on the
schedule attached hereto, or on a continuation of such schedule attached to and
made a part hereof; provided, that any failure by the Bank to make such a
notation or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms hereof.
Interest on the outstanding principal balance of this Note
shall be payable in consecutive monthly installments on the __________ day of
each month, commencing __________, 2003; provided that unpaid principal,
interest and fees shall be due and payable in full on the Date of Maturity.
This Note is the "Note" referred to in the Credit Agreement
dated as of August 29, 2003, between the Borrower and the Bank (as the same may
be amended from time to time, the "Credit Agreement"). Terms defined in the
Credit Agreement are used herein with the same meanings. Reference is made to
the Credit Agreement for provisions for the prepayment hereof, the acceleration
of the maturity hereof, and other terms hereof.
XXXXXXX FURNITURE COMPANY, INC. [SEAL]
By____________________________
Title:
LOANS AND PAYMENTS OF PRINCIPAL
======= ========== ============ =========== =========== ===========
Amount of Unpaid
Type Amount Principal Principal Notation
Date of Loan of Loan Repaid Balance Made By
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