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EXHIBIT 10.7
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CREDIT AGREEMENT
DATED AS OF
SEPTEMBER 11, 1998
by and among
XXXX, INC.
as Borrower,
and
WACHOVIA BANK, N.A.,
as Bank
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS.........................................................................................1
SECTION 1.01. Definitions.........................................................................1
SECTION 1.02. Accounting, Terms and Determinations...............................................10
SECTION 1.03. References.........................................................................10
ARTICLE II
REVOLVING CREDIT FACILITY..........................................................................11
SECTION 2.01. Revolving Credit Loans.............................................................11
SECTION 2.02. Procedure for Advances of Loans....................................................11
(a) Requests for Borrowing..................................................................11
(b) Disbursement of Loans...................................................................11
(c) FMA/Commercial Loan Access Agreement....................................................12
SECTION 2.03. Repayment of Loans.................................................................12
(a) Repayment on Termination Date...........................................................12
(b) Mandatory Repayment of Excess Loans.....................................................12
(c) Prepayment under FMA/Commercial Loan Access Agreement...................................12
SECTION 2.04. Note...............................................................................12
SECTION 2.05. Termination of Credit Facility.....................................................12
SECTION 2.06. Use of Proceeds....................................................................12
SECTION 2.07. Interest...........................................................................13
(a) Interest Rate Options...................................................................13
(b) Default Rate............................................................................13
(c) Interest Payment and Computation........................................................13
(d) Maximum Rate............................................................................13
SECTION 2.08. Notice and Manner of Conversion or Continuation of Loans...........................14
SECTION 2.09. Manner of Payment..................................................................14
SECTION 2.10. Crediting of Payments and Proceeds.................................................14
ARTICLE III
CHANGE IN CIRCUMSTANCES; COMPENSATION..............................................................14
SECTION 3.01. Basis for Determining Interest Rate Inadequate or Unfair...........................14
SECTION 3.02. Illegality.........................................................................15
SECTION 3.03. Increased Cost and Reduced Return..................................................15
SECTION 3.04. Base Rate Loan Substituted for Affected LIBOR Rate Loan............................16
SECTION 3.05. Compensation.......................................................................17
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ARTICLE IV
CONDITIONS TO LOAN CLOSING.........................................................................17
SECTION 4.01. Conditions to Loan Closing.........................................................17
SECTION 4.02. Conditions to all Loans............................................................18
(a) Continuation of Representations and Warranties..........................................18
(b) No Existing Default.....................................................................18
(c) Officer's Compliance Certificate........................................................18
ARTICLE V
REPRESENTATIONS AND WARRANTIES.....................................................................18
SECTION 5.01. Corporate Existence and Power......................................................19
SECTION 5.02. Corporate and Governmental Authorization, Contravention............................19
SECTION 5.03. Binding Effect.....................................................................19
SECTION 5.04. Financial Information..............................................................19
SECTION 5.05. Litigation.........................................................................19
SECTION 5.06. Compliance with ERISA..............................................................20
SECTION 5.07. Taxes..............................................................................20
SECTION 5.08. Subsidiaries.......................................................................20
SECTION 5.09. Not an Investment Company..........................................................20
SECTION 5.10. Ownership of Property; Liens.......................................................20
SECTION 5.11. No Default.........................................................................20
SECTION 5.12. Full Disclosure....................................................................20
SECTION 5.13. Environmental Matters..............................................................21
SECTION 5.14. Compliance with Laws...............................................................21
SECTION 5.15. Capital Stock......................................................................21
SECTION 5.16. Margin Stock.......................................................................21
SECTION 5.17. Insolvency.........................................................................22
SECTION 5.18. Survival of Representations and Warranties, Etc....................................22
ARTICLE VI
COVENANTS..........................................................................................22
SECTION 6.01. Information........................................................................22
SECTION 6.02. Notice of Certain Events...........................................................23
SECTION 6.03. Corporate Existence................................................................24
SECTION 6.04. Payment of Indebtedness; Performance of Other Obligations..........................24
SECTION 6.05. Maintenance of Books and Records; Inspection.......................................25
SECTION 6.06. Comply with ERISA..................................................................25
SECTION 6.07. Maintenance of Properties; Conduct of Business. ...................................25
SECTION 6.08. Insurance..........................................................................26
SECTION 6.09. Observe all Laws...................................................................26
SECTION 6.10. Year 2000..........................................................................26
SECTION 6.11. Subsidiary Guaranties..............................................................26
SECTION 6.12. Merger and Dissolution; Sale of Assets.............................................27
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SECTION 6.13. Acquisitions.......................................................................27
SECTION 6.14. Indebtedness.......................................................................27
SECTION 6.15. Liens and Encumbrances.............................................................28
SECTION 6.16. Transactions With Related Persons..................................................28
SECTION 6.17. Sale and Leaseback.................................................................28
SECTION 6.18. New Business.......................................................................28
SECTION 6.19. Subsidiaries.......................................................................28
SECTION 6.20. Guaranties.........................................................................29
SECTION 6.21. Restrictive Transactions...........................................................29
SECTION 6.22. Hazardous Wastes...................................................................29
SECTION 6.23. Change in Fiscal Year..............................................................29
SECTION 6.24. Amendments.........................................................................29
SECTION 6.25. Leverage-Ratio.....................................................................29
SECTION 6.26. Fixed Charge Coverage Ratio........................................................29
SECTION 6.27. Net Worth..........................................................................29
SECTION 6.28. Additional Covenants...............................................................30
SECTION 6.29. Use of Proceeds....................................................................30
SECTION 6.30. Crestar Facility...................................................................31
ARTICLE VII
DEFAULTS...........................................................................................31
SECTION 7.01. Events of Default..................................................................31
SECTION 7.02. Remedies on Default................................................................33
SECTION 7.03. Security Interest, Offset, Sharing of Offsets......................................33
ARTICLE VIII
MISCELLANEOUS......................................................................................33
SECTION 8.01. Notices............................................................................33
SECTION 8.02. No Waivers.........................................................................34
SECTION 8.03. Expenses; Documentary Taxes........................................................34
SECTION 8.04. Amendments and Waivers.............................................................35
SECTION 8.05. Successors and Assigns.............................................................35
SECTION 8.06. Confidentiality....................................................................36
SECTION 8.07. Governing Law......................................................................37
SECTION 8.08. Counterparts.......................................................................37
SECTION 8.09. Severability.......................................................................37
SECTION 8.10. Captions...........................................................................37
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SCHEDULES
Schedule 1.1 Existing Liens
Schedule 6.12 Purchases, Mergers and Exchanges
Schedule 6.13 Acquisitions
Schedule 6.14 Existing Indebtedness
Schedule 6.19 Creation of Subsidiaries
EXHIBITS
Exhibit A Form of Promissory Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Officer's Compliance Certificate
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Notice of Account Designation
Exhibit G Form of Borrower Opinion
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, made as of the 11th day of September,
1998 (this "Agreement"), by and among XXXX, INC., a Delaware corporation
(together with its successors, the "Borrower"), and WACHOVIA BANK, N.A., a
national banking association (together with its endorsees, successors and
assigns, the "Bank").
BACKGROUND
The Borrower desires to borrow from the Bank loans in the
aggregate principal amount of up to $150,000,000, the proceeds of which will be
used to finance seasonal working capital requirements, and the Bank is willing
to make such loans on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
promises herein contained, and each intending to be legally bound hereby, the
parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this Section
1.01 shall, for all purposes of this Agreement and any amendment hereto (except
as herein otherwise expressly provided or unless the context otherwise
requires), have the meanings set forth herein (terms defined in the singular to
have the same meanings when used in the plural and vice versa):
"Affiliate" means, with respect to any Person, any other Person
(i) directly or indirectly controlling (including, but not limited to, all
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person or (ii) that directly or indirectly
owns more than 5% of the voting securities of such Person. A Person shall be
deemed to control a corporation if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Alternate Rate" means for any Alternate Rate Loan for any day,
(i) the rate per annum offered by the Bank in its discretion and agreed to by
the Borrower, or (ii) in the event the Borrower and the Bank do not agree on
such offered rate, three-quarters of one percent above the Federal Funds Rate
for such day per annum.
"Alternate Rate Loans" means the Loans or any portion of the
Loans during periods which the Loans or such portion of the Loans bears
interest calculated by reference to the Alternate Rate.
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"Applicable Law" means all applicable provisions of
constitutions, laws, statutes, ordinances, rules, treaties, regulations,
permits, licenses, approvals, interpretations and orders of all Governmental
Authorities and all orders and decrees of all courts and arbitrators.
"Assignee" has the meaning set forth in Section 8.05(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 8.05(c) in the form attached hereto as
Exhibit E.
"Base Rate" means for any Base Rate Loan for any day, the rate
per annum equal to the higher as of such day of (i) the Prime Rate, or (ii)
one-half of one percent above the Federal Funds Rate for such day. For purposes
of determining the Base Rate for any day, changes in the Prime Rate shall be
effective on the date of each such change.
"Base Rate Loans" means the Loans or any portion of the Loans
during periods in which the Loans or such portion of the Loans bears interest
calculated by reference to the Base Rate.
"Big Five" means the listing of the largest certified public
accounting firms currently comprised of Xxxxxx Xxxxxxxx, Xxxxx & Xxxxx, KPMG,
Deloitte and Touche, and Price Waterhouse Coopers, or any similar listing as
may be expanded or reduced in the future.
"Business Day" means (i) for all purposes other than as set
forth in clause (ii) below, any day other than a Saturday, Sunday or legal
holiday on which banks in Charlotte, North Carolina are open for the conduct of
their commercial banking business, and (ii) with respect to all notices and
determinations in connection with, and payments and interest on, any LIBOR Rate
Loan, any day that is a Business Day described in clause (i) and that is also a
day for trading by and between banks in Dollar deposits in the London interbank
market.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in capital stock
(whether voting or nonvoting, and whether common or preferred) of such
corporation, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership, limited liability company or other equity
interests of such Person; and in each case, any and all warrants, rights or
options to purchase any of the foregoing.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq. and its implementing
regulations and amendments.
"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability Inventory System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section 3.02.
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"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code.
"Commitment" means the obligation of the Bank to make Loans to
the Borrower hereunder in an aggregate principal amount at any time outstanding
not to exceed $150,000,000.00, as the same may be reduced or modified at any
time or from time to time pursuant to the terms hereof.
"Comprehensive Income" means comprehensive income of Borrower
and its Subsidiaries on a consolidated basis determined in accordance with
Generally Accepted Accounting Principles.
"Consistent Basis" means, in reference to the application of
Generally Accepted Accounting Principles, that the accounting principles
observed in the period referred to are comparable in all material respects to
those applied in the preceding period, except as to any changes consented to by
the Bank or required by Generally Accepted Accounting Principles.
"Consolidated Net Income" means, for any period of computation
thereof, the net income of the Borrower and its Subsidiaries (excluding
extraordinary items) as determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles applied on a Consistent Basis.
"Consolidated Tangible Net Worth" means, at any date of
determination, the total stockholders' equity (including Capital Stock,
additional paid-in capital and retained earnings after deducting treasury
stock), less any intangible assets (excluding Lease Intangibles) of the
Borrower and its Subsidiaries and calculated on a consolidated basis in
accordance with Generally Accepted Accounting Principles.
"Contingent Obligation" means, with respect to any Person, any
direct or indirect liability of such Person with respect to any Indebtedness,
liability or other obligation (the "primary obligation") of another Person (the
"primary obligor"), whether or not contingent, (a) to purchase, repurchase or
otherwise acquire such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or provide funds (i) for the
payment or discharge of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor in respect thereof to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of any such primary obligation against loss or failure or inability
to perform in respect thereof, provided, however, that, with respect to the
Borrower and its Subsidiaries, the term Contingent Obligation shall not include
endorsements for collection or deposit in the ordinary course of business.
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"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 of the Code.
"Credit Facility" means the revolving credit facility
established pursuant to Article II hereof.
"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.
"Dollars" or "$" means dollars in lawful currency of the United
States of America.
"EBITDA" means, for any period, the aggregate of (i)
Consolidated Net Income for such period, plus (ii) the sum of the following:
(a) interest expense, (b) federal, state, local and other income taxes, and (c)
depreciation, amortization and non-cash charges incurred solely in compliance
with FASB Statement of Financial Accounting Standards No. 121, all to the
extent taken into account in the calculation of such Consolidated Net Income
for such period and determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles applied on a Consistent Basis.
"Environmental Authorizations" means all licenses, permits,
orders, approvals, notices, registrations or other legal prerequisites, for
conducting the business of the Borrower or any Subsidiary required by any
Environmental Requirement.
"Environmental Requirements" means any legal requirement
relating to health, safety or the environment and applicable to the Borrower,
any Subsidiary or the Properties, including but not limited to any such
requirement under CERCLA or similar state legislation and all federal, state
and local laws, ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law, including any rules
or regulations promulgated thereunder. Any reference to any provision of ERISA
shall also be deemed to be a reference to any successor provision or provisions
thereof.
"Event of Default" shall have the meaning assigned to such term
in Section 7.01.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided, that (i) if the day for which such rate is
to be determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (ii) if such
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rate is not so published for any day, the Federal Funds Rate for such day shall
be the average rate charged to the Bank on such day on such transactions.
"Financing Charges" means those charges owed and allocated to
third parties with respect to any on or off balance sheet asset financing
transaction to which the Borrower or any Subsidiary of the Borrower is a party,
such transactions to include, without limitation, securitizations, sales to
commercial paper conduits, synthetic leases, or other similar financing
techniques.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
"Fixed Charge Coverage Ratio" means, as of the last day of any
Fiscal Quarter of the Borrower and its Subsidiaries, commencing January 30,
1999, for the consecutive four-quarter period ending on such date (or in the
case of the Fiscal Quarter ending on January 30, 1999, the consecutive
three-quarter period ending on such date), the ratio of (i) EBITDA for such
period plus, to the extent deducted in arriving at EBITDA, lease, rental and
all other payments made in respect of or in connection with operating leases,
to (ii) Fixed Charges for such period.
"Fixed Charges" means, for any period, the aggregate (without
duplication) of the following, all determined on a consolidated basis for the
Borrower and its Subsidiaries in accordance with Generally Accepted Accounting
Principles for such period: (a) interest expense for such period, (b) to the
extent deducted in arriving at EBITDA, lease, rental and all other payments
made in respect of or in connection with operating leases, (c) Financing
Charges, and (d) the aggregate (without duplication) of all scheduled payments
of principal on Funded Debt with an original maturity of more than one year
required to have been made by the Borrower and its Subsidiaries during such
period (whether or not such payments are actually made).
"FMA/Commercial Loan Access Agreement" means that certain
Financial Management Account agreement dated September 11, 1998 between the
Borrower and the Bank and that certain Financial Management Account
Investment/Commercial Loan Access Agreement dated September 11, 1998 between
the Borrower and the Bank, as the same may be amended or supplemented from
time to time.
"Funded Debt" means all Indebtedness for borrowed money of the
Borrower and its Subsidiaries on a consolidated basis (including, without
limitation, all current maturities and borrowings under short term loans) plus
all indebtedness incurred in connection with or arising from any on or off
balance sheet asset financing transaction to which the Borrower or any
Subsidiary of the Borrower is a party, such transactions to include, without
limitation, securitizations, sales to commercial paper conduits, synthetic
leases, or other similar financing techniques.
"Generally Accepted Accounting Principles" means those
principles of accounting set forth in pronouncements of the Financial
Accounting Standards Board and its predecessors or
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Pronouncements of the American Institute of Certified Public Accountants or
those principles of accounting which have other substantial authoritative
support and are applicable in the circumstances as of the date of application,
as such principles are from time to time supplemented or amended.
"Governmental Approval" means all authorizations, consents,
approvals, licenses, and exemptions of, registrations and filings with, and
reports to, all Governmental Authorities.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any central bank thereof, any
municipal, local, city or county government, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Guarantee" means, with respect to any Person, any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to secure, purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation
(whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to provide
collateral security, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Indebtedness against loss in respect
thereof (in whole or in part); provided, that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Substances" means any substances or materials (i)
that are or become defined as hazardous wastes, hazardous substances,
pollutants, contaminants or toxic substances under any Environmental Law, (ii)
that are defined by any Environmental Law, as toxic, explosive, corrosive,
ignitable, infectious, radioactive, mutagenic or otherwise hazardous (iii) the
presence of which require investigation or response under any Environmental
Law, (iv) that constitute a nuisance, trespass or health or safety hazard to
Persons or neighboring properties, (v) that consist of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance or (vi) that contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or wastes, crude oil, nuclear fuel, natural gas or synthetic
gas.
"Indebtedness" means, with respect to any Person (without
duplication), (i) all indebtedness and obligations of such Person for borrowed
money or in respect of loans or advances of any kind, (ii) all obligations of
such Person evidenced by notes, bonds, debentures or similar instruments, (iii)
all reimbursement obligations of such Person with respect to surety bonds,
letters of credit and bankers' acceptances (in each case, whether or not drawn
or matured and in the stated amount thereof), (iv) all obligations of such
Person to pay the deferred purchase price of property or services, (v) all
indebtedness created or arising under any conditional sale or other title
retention agreement
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with respect to property acquired by such Person, (vi) all obligations of such
Person as lessee under leases that are or are required to be, in accordance
with Generally Accepted Accounting Principles, recorded as capital leases,
(vii) all Contingent Obligations of such Person and (viii) all indebtedness
referred to in clauses (i) through (vii) above secured by any Lien on any
property or asset owned or held by such Person regardless of whether the
indebtedness secured thereby has been assumed by such Person or is nonrecourse
to the credit of such Person.
"Lease Intangibles" means the amount of lease intangibles
appearing on the balance sheet of the Borrower determined in accordance with
Generally Accepted Accounting Principles.
"Leverage Ratio" means, as of the last day of any Fiscal
Quarter, the ratio of (i) Funded Debt as of such date to (ii) EBITDA for the
period of four consecutive Fiscal Quarters then ending.
"Lending Office" means the Bank's office located at its address
set forth on the signature pages hereof (or identified on the signature pages
hereof as its Lending Office) or such other office as the Bank may hereafter
designate as its Lending Office by notice to the Borrower.
"LIBOR Market Index Rate" means, as determined each Business
Day, the rate per annum (rounded upward, if necessary, to the next higher
1/100th of 1%) which is equal to:
(i) the rate for deposits in Dollars which appears
on the Telerate Page 3750 at approximately 11:00
a.m. (London time) on such day for a term equal to
one month, from time to time, with each change in
such rate to be effective as of the opening of
business on the effective date of the change in
such rate; provided, that if the day for which
such rate is to be determined is not a Business
Day, the LIBOR Market Index Rate for such day
shall be such rate for the next preceding Business
Day; provided further, that if such rate is not
reported on Telerate Page 3750, such rate shall be
the rate determined by the Bank from another
recognized source or interbank quotation, divided
by (ii) 1.00 minus the reserve requirement
(expressed as a percentage) with respect to
eurocurrency liabilities prescribed for member
banks of the Federal Reserve System by the Board
of Governors of the Federal Reserve System from
time to time (if and only to the extent that the
Banks have eurocurrency liabilities subject
thereto) and any other similar reserve
requirements imposed against a category of
liabilities which includes eurocurrency deposits
or a category of assets which includes
eurocurrency loans.
(ii) If, for any reason, the rate described in
clause (i) is not available, such rate shall be
the rate per annum at which, in the reasonable
opinion of the Bank, Dollars in an amount
substantially equal to the amount of the
applicable Loan are being offered by
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leading reference banks for settlement in the
London interbank market at approximately 11:00
a.m. (London time), on the second Business Day
next preceding the applicable date for a term
equal to one month.
"LIBOR Rate Loan" means the Loans or any portion of the Loans
during periods in which the Loans or such portion of the Loans bears interest
calculated by reference to the LIBOR Market Index Rate.
"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 or any Subsidiary shall
be deemed to own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"Loan" means any Revolving Credit Loan made to the Borrower
under Section 2.01, and all such Loans collectively as the context requires.
"Loan Documents" means this Agreement, the Note, and any other
document guaranteeing, evidencing or securing the Loans.
"Margin Stock" means "margin stock" as defined in Regulations T,
U or X of the Board of Governors of the Federal Reserve System, as in effect
from time to time, together with all official rulings and interpretations
issued thereunder.
"Material Adverse Effect" means, with respect to the Borrower or
any of its Subsidiaries, a material adverse effect on the properties, business,
prospects, operations or condition (financial or otherwise) of any such Person
or the ability of any such Person to perform its obligations under this
Agreement or the other Loan Documents, in each case to which it is a party.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Note" means the Promissory Note made by the Borrower payable to
the order of the Bank, substantially in the form of Exhibit A attached hereto.
"Notice of Account Designation" shall have the meaning assigned
thereto in Section 2.02(b).
"Notice of Borrowing" shall have the meaning assigned thereto in
Section 2.02(a).
"Notice of Conversion/Continuation" shall have the meaning
assigned thereto in Section 2.08.
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"Officer's Compliance Certificate" shall have the meaning
assigned thereto in Section 6.01(d).
"Participant" has the meaning set forth in Section 8.05(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Liens" means any of the following liens securing any
indebtedness of the Borrower and its Subsidiaries on their property, real or
personal, whether now owned or hereafter acquired:
(i) Liens of carriers, warehousemen, mechanics,
contractors and materialmen incurred in the ordinary course of
business for sums not yet due and payable or that are being
contested in good faith and in appropriate proceedings and for
which bonds have been posted or other security acceptable to the
Bank provided, such bonds or other security to be in amounts
sufficient to pay off the liens during the pendency of any
controversies relating to them;
(ii) Liens incurred in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits,
or liens to secure the performance of letters of credit, bids,
tenders, statutory obligations, leases and contracts (other than
for borrowed funds) entered into in the ordinary course of
business or to secure obligations on surety or appeal bonds,
(iii) Liens of suppliers of inventory purchased on
credit in the ordinary course of business;
(iv) Liens for current taxes, assessments or other
governmental charges that are not delinquent or remain payable
without any penalty or that are being contested in good faith
and by appropriate proceedings and if reasonably requested by
the Bank, the Borrower shall establish reserves satisfactory to
the Bank with respect thereto;
(v) Liens securing Indebtedness as permitted by
the Bank from time to time; and
(vi) Liens set forth on Schedule 1.1.
"Person" means an individual, partnership, corporation, limited
liability company, trust unincorporated organization, association, joint
venture or a government or agency or political subdivision or instrumentality
thereof.
"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)
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maintained by a member of the Controlled Group for employees of any member 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 contribution.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by the Bank as its prime rate. Each change
in the Prime Rate shall be effective as of the opening of business on the day
such change in the Prime Rate occurs. The parties hereto acknowledge that the
rate announced publicly by the Bank as its Prime Rate is an index or base rate
and shall not necessarily be the lowest or best rate charged to its customers
or other banks.
"Properties" means all real property owned, leased or otherwise
used or occupied by the Borrower or any Subsidiary, wherever located.
"Reportable Event" has the meaning given such term in Section
4043(b) of Title V of ERISA.
"Subsidiary" means, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time. Unless the context
indicates otherwise, all references herein to Subsidiaries are references to
Subsidiaries of the Borrower.
"Termination Date" means the earliest of the dates referred to in
Section 2.05.
"Transferee" has the meaning set forth in Section 8.05(d).
"Wholly Owned Subsidiary" means any Subsidiary all of the shares
of capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the
Borrower.
SECTION 1.02. Accounting, Terms and Determinations. Unless
otherwise specified herein, all terms of an accounting character used herein
shall be interpreted, all accounting determinations hereunder shall be made,
and all financial statements required to be delivered hereunder shall be
prepared substantially in accordance with Generally Accepted Accounting
Principles as in effect from time to time, applied on a Consistent Basis.
SECTION 1.03. References. Except as otherwise expressly provided
in this Agreement: the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement
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as a whole, including the Schedules hereto which are a part hereof, and not to
any particular Section, Article, paragraph or other subdivision; the singular
includes the plural and the plural includes the singular; "or" is not
exclusive; the words "include," "includes" and "including" are not limiting; a
reference to any agreement or other contract includes past and future permitted
supplements, amendments, modifications and restatements thereto or thereof, a
reference to an Article, Section, paragraph or other subdivision is a reference
to an Article, Section, paragraph or other subdivision of this Agreement; a
reference to any law includes any amendment or modification to such law and any
rules and regulations promulgated thereunder; a reference to a Person includes
its permitted successors and assigns; any right may be exercised at any time
and from time to time; and, except as otherwise expressly provided therein, all
obligations under any agreement or other contract are continuing obligations
throughout the term of such agreement or contract.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.01. Revolving Credit Loans. Subject to the terms and
conditions of this Agreement, the Bank agrees to make Loans to the Borrower
from time to time from the Closing Date through the Termination Date as
requested by the Borrower in accordance with the terms of Section 2.02;
provided, that the aggregate principal amount of all outstanding Loans (after
giving effect to any amount requested) shall not exceed the Commitment. Subject
to the terms and conditions hereof, the Borrower may borrow, repay and reborrow
Loans hereunder until the Termination Date. Partial repayments hereunder shall
be in an aggregate amount of $100,000 or a whole multiple of $100,000 in excess
thereof.
SECTION 2.02. Procedure for Advances of Loans.
(a) Requests for Borrowing. The Borrower shall give the Bank
irrevocable prior written notice in the form attached hereto as Exhibit B (a
"Notice of Borrowing") not later than 1: 00 p.m. (Charlotte time) on the same
Business Day as each Loan of its intention to borrow specifying (i) the date of
such borrowing, which shall be a Business Day, (ii) the amount of such
borrowing, which shall be in an aggregate principal amount of $100,000 or a
whole multiple of $100,000 in excess thereof, and (iii) whether the Loans are
to be LIBOR Rate Loans or Base Rate Loans. Notices received after 1:00 p.m.
(Charlotte time) shall be deemed received on the next Business Day.
(b) Disbursement of Loans. Not later than 2:00 p.m. (Charlotte
time) on the proposed borrowing date, the Bank will make available to the
Borrower the Loans to be made on such borrowing date. The Borrower hereby
irrevocably authorizes the Bank to disburse the proceeds of each borrowing
requested pursuant to this Section 2.02 in immediately available funds by
crediting or wiring such proceeds to the deposit account of the Borrower
identified in the most recent Notice of Account Designation substantially in
the form of Exhibit F hereto (a "Notice of Account Designation") delivered by
the Borrower to the Bank or as may be otherwise agreed upon by the Borrower and
the Bank from time to time.
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(c) FMA/Commercial Loan Access Agreement. The Borrower and the
Bank agree that so long as no Default or Event of Default shall have occurred
and be continuing, proceeds of the Loans shall also be disbursed from time to
time pursuant to the FMA/Commercial Loan Access Agreement, provided that the
aggregate amount of all Loans outstanding at any time pursuant to Section
2.02(b) and this Section 2.02(c) shall not exceed the Commitment.
SECTION 2.03. Repayment of Loans.
(a) Repayment on Termination Date. The Borrower shall repay the
outstanding principal amount of all Loans in full on the Termination Date,
together with all accrued but unpaid interest thereon.
(b) Mandatory Repayment of Excess Loans. If at any time the
outstanding principal amount of all Loans exceeds the Commitment, the Borrower
shall repay immediately upon notice from the Bank, Loans in an amount equal to
such excess. Each such repayment shall be accompanied by any amount required to
be paid pursuant to Section 3.05 hereof.
(c) Prepayment under FMA/Commercial Loan Access Agreement. The
Loans shall be prepaid from time to time in accordance with the provisions of
the FMA/Commercial Loan Access Agreement.
SECTION 2.04. Note. The Bank's Loans and the obligation of the
Borrower to repay such Loans shall be evidenced by the Note executed by the
Borrower payable to the order of the Bank representing the Borrower's
obligation to pay the Bank's Commitment or, if less, the aggregate unpaid
principal amount of all Loans made and to be made by the Bank to the Borrower
hereunder, plus interest and all other fees, charges and other amounts due
thereon. The Note shall be dated the date hereof and shall bear interest on the
unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 2.07.
SECTION 2.05. Termination of Credit Facility. The Credit
Facility shall terminate on the earliest of (a) May 31, 1999, (b) the date of
termination by the Bank pursuant to Section 7.02 and (c) the date on which the
Bank shall give the Borrower notice of the termination of the Credit Facility
and make demand for payment of the Credit Facility. It is the intention of the
Borrower and the Bank that the Credit Facility be immediately due and payable
in full on demand of the Bank at its option notwithstanding the inclusion in
this Agreement of provisions regarding Defaults and Events of Default, the
occurrence and continuation of which would permit the Bank to declare the Note
and the Loans immediately due and payable as provided in Section 7.02.
SECTION 2.06 Use of Proceeds. The Borrower shall use the
proceeds of the Loans to finance its seasonal working capital needs.
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SECTION 2.07. Interest.
(a) Interest Rate Options. Subject to the provisions of this
Section 2.07, at the election of the Borrower, the principal balance of the
Note or any portion thereof shall bear interest per annum at (i) the Base Rate
or (ii) the LIBOR Market Index Rate plus 0.60% or (iii) under the circumstances
specified in Section 3.04 only, the Alternate Rate. The Borrower shall select
the rate of interest applicable to any Loan at the time a Notice of Borrowing
is given pursuant to Section 2.02 or at the time a Notice of
Conversion/Continuation is given pursuant to Section 2.08. Each Loan or portion
thereof bearing interest based on the Base Rate shall be a "Base Rate Loan,"
each Loan or portion thereof bearing interest based on the LIBOR Market Index
Rate shall be a "LIBOR Rate Loan" and each Loan or portion thereof bearing
interest based on the Alternate Rate shall be an "Alternate Rate Loan." Any
Loan or any portion thereof as to which the Borrower has not duly specified an
interest rate as provided herein shall be deemed a Base Rate Loan. The Borrower
is deemed to have elected the LIBOR Market Index Rate plus 0.60% as the
interest rate for all Loans funded pursuant to Section 2.02(c).
(b) Default Rate. Upon the occurrence and during the continuance
of an Event of Default, (i) the Borrower shall no longer have the option to
request LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall be
converted to Base Rate Loans and (iii) all outstanding Loans shall bear
interest at a rate per annum equal to two percent (2 %) in excess of the rate
then applicable to Base Rate Loans. Interest shall continue to accrue on the
Note after the filing by or against the Borrower of any petition seeking any
relief in bankruptcy or under any act or law pertaining to insolvency or debtor
relief, whether state, federal or foreign.
(c) Interest Payment and Computation. Notwithstanding the
provisions of the FMA/Commercial Loan Access Agreement, interest on each Loan
shall be payable in arrears on the last Business Day of each Fiscal Quarter of
the Borrower commencing October 30, 1998. All interest rates, fees and
commissions provided hereunder shall be computed on the basis of a 360-day year
and assessed for the actual number of days elapsed.
(d) Maximum Rate. In no contingency or event whatsoever shall
the aggregate of all amounts deemed interest hereunder or under the Note
charged or collected pursuant to the terms of this Agreement or pursuant to the
Note exceed the highest rate permissible under any Applicable Law which a court
of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such a court determines that the Bank has charged or
received interest hereunder in excess of the highest applicable rate, the rate
in effect hereunder shall automatically be reduced to the maximum rate
permitted by Applicable Law and the Bank shall at its option promptly refund to
the Borrower any interest received by the Bank in excess of the maximum lawful
rate or shall apply such excess to the principal balance of the Loans. It is
the intent hereof that the Borrower not pay or contract to pay, and that the
Bank not receive or contract to receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may be paid by the Borrower under
Applicable Law.
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SECTION 2.08. Notice and Manner of Conversion or Continuation of
Loans. Provided that no Event of Default has occurred and is then continuing,
the Borrower shall have the option to (a) convert at any time all or any
portion of its outstanding Base Rate Loans in a principal amount equal to
$100,000 or any whole multiple of $100,000 in excess thereof into one or more
LIBOR Rate Loans, (b) convert all or any part of its outstanding LIBOR Rate
Loans in a principal amount equal to $100,000 or a whole multiple of $100,000
in excess thereof into Base Rate Loans, or (c) continue such LIBOR Rate Loans
as LIBOR Rate Loans. Whenever the Borrower desires to convert or continue Loans
as provided above, the Borrower shall give the Bank irrevocable prior written
notice in the form attached as Exhibit C (a "Notice of
Conversion/Continuation") not later than 1:00 p.m. (Charlotte time) on the
Business Day on which a proposed conversion or continuation of such Loan is to
be effective specifying (i) the Loans to be converted or continued, (ii) the
effective date of such conversion or continuation (which shall be a Business
Day), and (iii) the principal amount of such Loans to be converted or
continued.
SECTION 2.09. Manner of Payment. Each payment by the Borrower on
account of the principal of or interest on the Loans or of any fee, commission
or other amounts payable to the Bank under this Agreement or the Note (other
than payments made pursuant to the FMA/Commercial Loan Access Agreement, which
payments shall be made as therein provided) shall be made not later than 1:00
p.m. (Charlotte time) on the date specified for payment under this Agreement to
the Bank at the Bank's Lending Office in Dollars, in immediately available
funds and shall be made without any set-off, counterclaim or deduction
whatsoever. Any payment received after such time but before 2:00 p.m.
(Charlotte time) on such day shall be deemed a payment on such date for the
purposes of Section 7.01, but for all other purposes shall be deemed to have
been made on the next succeeding Business Day. Any payment received after 2:00
p.m. (Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes.
SECTION 2.10. Crediting of Payments and Proceeds. In the event
that the Borrower shall fail to pay any of the Loans when due and the Loans
have been accelerated pursuant to Section 7.02 or Bank demands payment of the
Loans, all payments received by the Bank upon the Note and the other Loans and
all net proceeds from the enforcement of the Loans shall be applied first to
all expenses then due and payable by the Borrower hereunder, then to all
indemnity obligations then due and payable by the Borrower hereunder, then to
all fees, if any, then due and payable, then to accrued and unpaid interest on
the Note, then to the principal amount of the Note.
ARTICLE III
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 3.01. Basis for Determining Interest Rate Inadequate or
Unfair. If:
(a) the Bank determines that deposits in Dollars (in the
applicable amounts) are not being offered in the London interbank market, or
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(b) the Bank determines that the LIBOR Market Index Rate as
determined by the Bank will not adequately and fairly reflect the cost to the
Bank of funding LIBOR Rate Loans,
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 obligations of the Bank to make or maintain
LIBOR Rate Loans shall be suspended.
SECTION 3.02. Illegality. If, after the date hereof, the
adoption of any Applicable Law, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority (any
such event being referred to as a "Change of Law"), or compliance by the Bank
(or its Lending Office) with any request or directive (whether or not having
the force of law) of any Governmental Authority shall make it unlawful or
impossible for the Bank (or its Lending Office) to make, maintain or fund any
LIBOR Rate Loan 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 obligation of the Bank to make any
LIBOR Rate Loan shall be suspended. If the Bank shall determine that it may not
lawfully continue to maintain and fund any outstanding LIBOR Rate Loan to
maturity and shall so specify in such notice, such Loan shall immediately
become a Base Rate Loan.
SECTION 3.03. Increased Cost and Reduced Return.
(a) If after the date hereof, a Change of Law or compliance by
the Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any Governmental Authority:
(i) shall subject the Bank (or its Lending Office)
to any tax, duty or other charge with respect to any LIBOR Rate
Loan, the Note or its obligation to make or maintain any LIBOR
Rate Loan, or shall change the basis of taxation of payments to
the Bank (or its Lending Office) of the principal of or interest
on any LIBOR Rate Loan or any other amounts due under this
Agreement in respect of any LIBOR Rate Loan or its obligation to
make or maintain any LIBOR Rate Loan (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 LIBOR Rate Loan any applicable eurodollar reserve
requirement included in the definition of LIBOR Market Index
Rate) against assets of, deposits with or for the account of, or
credit extended by, the Bank (or its Lending Office); or
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(iii) shall impose on the Bank (or its Lending
Office) or the London interbank market any other condition
affecting any LIBOR Rate Loan, the Note or its obligation to
make or maintain any LIBOR Rate Loan;
and the result of any of the foregoing is to increase the cost to the Bank (or
its Lending Office) of making or maintaining any LIBOR Rate Loan, 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 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.
(b) If the Bank shall have determined that after the date hereof
the adoption of any Applicable Law regarding capital adequacy, or any change
therein, or any change in 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
Governmental Authority, has or would have the effect of reducing the rate of
return on the Bank's capital as a consequence of its obligations under this
Agreement with respect to its Loans to a level below that which the Bank could
have achieved but for such 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 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 reduction.
(c) 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. A certificate of the Bank
claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it and the calculation (with reasonable detail)
of such amount or amounts hereunder shall be conclusive in the absence of
manifest error. In determining, such amount, the Bank may use any reasonable
averaging and attribution methods.
(d) The provisions of this Section shall be applicable with
respect to any Participant in, or Assignee or other Transferee of, the
obligations of the Borrower hereunder to the Bank, and any calculations
required by such provision shall be made based upon the circumstances of such
Participant, Assignee or other Transferee.
SECTION 3.04. Base Rate Loan Substituted for Affected LIBOR Rate
Loan. If (a) the obligation of the Bank to make or maintain any LIBOR Rate Loan
has been suspended pursuant to Section 3.01 or Section 3.02 or (b) the Bank has
demanded compensation under Section 3.03, and if in either case the Borrower,
by at least one Business Day's prior notice to the Bank shall have elected that
the provisions of this Section shall apply, then, unless and until the Bank
notifies the Borrower that the circumstances giving rise to such suspension or
demand for compensation no longer apply:
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(i) the Loan or any portion thereof which would otherwise be a
LIBOR Rate Loan shall be instead an Alternate Rate Loan, and
(ii) after each LIBOR Rate Loan has been repaid, all payments of
principal which would otherwise be applied to repay any such LIBOR Rate Loan
shall be applied to repay an Alternate Rate Loan or Base Rate Loan instead.
SECTION 3.05. Compensation. Upon the request of the Bank,
delivered to the Borrower, the Borrower shall pay to the Bank, such amount or
amounts as shall compensate the Bank for any loss, cost or expense incurred by
the Bank as a result of:
(a) any optional or mandatory payment, prepayment or conversion
(pursuant to Section 3.02 or otherwise) of a LIBOR Rate Loan; or
(b) any failure by the Borrower to borrow on a date specified
therefor in a Notice of Borrowing or Notice of Conversion/Continuation;
such compensation to include, without limitation, an amount equal to the
excess, if any, of (x) the amount of interest which would have accrued on the
amount so paid or prepaid or not prepaid or borrowed, minus (y) the amount of
interest (as reasonably determined by the Bank) the Bank would have paid on
deposits in Dollars of comparable amounts having terms comparable to such
period placed with it by leading banks in the London interbank market.
ARTICLE IV
CONDITIONS TO LOAN CLOSING
SECTION 4.01. Conditions to Loan Closing. The obligation of the
Bank to make the Loans is subject to the satisfaction of the following
conditions:
(a) receipt by the Bank from the Borrower of a duly executed
counterpart of this Agreement signed by the Borrower;
(b) receipt by the Bank of the duly executed Note complying with
the provisions of Section 2.04;
(c) receipt by the Bank of an opinion of counsel of Xxxxxx X.
Xxxxx, Esq., counsel for the Borrower, substantially in the form of Exhibit G
hereto, and covering such additional matters relating to the transactions
contemplated hereby as the Bank may reasonably request;
(d) receipt by the Bank of a certificate from the chief
executive officer or chief financial officer of the Borrower, in form and
substance satisfactory to the Bank, to the effect that all representations and
warranties of the Borrower contained in this Agreement and the other Loan
Documents are true, correct and complete; that the Borrower is not in violation
of any of the
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covenants contained in this Agreement and the other Loan Documents; that, after
giving effect to the transactions contemplated by this Agreement, no Default or
Event of Default has occurred and is continuing; and that the Borrower has
satisfied each of the closing conditions;
(e) receipt by the Bank of all documents which the Bank may
reasonably request relating to the existence of the Borrower, the corporate
authority for and the validity of this Agreement, the Note, and any other
matters relevant hereto, all in form and substance satisfactory to the Bank,
including without limitation a certificate of incumbency of the Borrower,
signed by the Secretary or an Assistant Secretary of the Borrower, as
applicable, certifying as to the names, and incumbency of the officer or
officers of the Borrower authorized to execute and deliver the Loan Documents,
and certified copies of the following items as to the Borrower: (i) the
Certificate of Incorporation, (ii) the Bylaws, (iii) a certificate of the
Secretary of State (or other appropriate office) of the state of its
incorporation as to its good standing as a corporation of such jurisdiction,
and (iv) the action taken by the Board of Directors authorizing the execution,
delivery and performance of this Agreement, the Note and the other Loan
Documents to which the Borrower is a party; and
(f) receipt by the Bank of evidence satisfactory to the Bank
that on the Closing Date the Borrower is terminating and will pay in full its
existing seasonal facility provided by First Union National Bank and the Bank
pursuant to the Credit Agreement dated as of November 14, 1997.
SECTION 4.02. Conditions to all Loans. The obligations of the
Bank to make any Loan is subject to the satisfaction of the following
conditions precedent on the relevant borrowing date:
(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article V shall be true and correct
on and as of such borrowing date with the same effect as if made on and as of
such date; except for any representation and warranty made as of an earlier
date, which representation and warranty shall remain true and correct as of
such earlier date.
(b) No Existing Default. No Default or Event of Default shall
have occurred and be continuing hereunder on the borrowing date with respect to
such Loan or after giving effect to the Loans to be made on such date.
(c) Officer's Compliance Certificate; Additional Documents. The
Bank shall have received the current Officer's Compliance Certificate and each
additional document, instrument, legal opinion or other item of information
reasonably requested by it.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into this Agreement and to make the
Loans, the Borrower hereby represents and warrants to the Bank as follows:
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SECTION 5.01. Corporate Existence and Power. The Borrower is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, is duly qualified to transact
business in every jurisdiction where, by the nature of its business, such
qualification is necessary, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
SECTION 5.02. Corporate and Governmental Authorization,
Contravention. The execution, delivery and performance by the Borrower of this
Agreement, the Note and the other Loan Documents (a) are within the Borrower's
corporate powers, (b) have been duly authorized by all necessary corporate
action, (c) require no action by or in respect of, or filing with, any
governmental body, agency or official, (d) do not contravene, or constitute a
default under, any provision of Applicable Law or of the certificate of
incorporation or by-laws of the Borrower or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower or any
of its Subsidiaries, and (e) do not result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 5.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower enforceable in accordance with its terms,
and the Note and the other Loan Documents, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations
of the Borrower enforceable in accordance with their respective terms;
provided, that the enforceability hereof and thereof is subject in each case to
general principles of equity and to bankruptcy, insolvency and similar laws
affecting the enforcement of creditors' rights generally.
SECTION 5.04. Financial Information.
(a) The financial statements of the Borrower and its
Consolidated Subsidiaries dated as of January 31, 1998, reflecting its
operation during the Fiscal Year then ended, including a balance sheet, profit
and loss statement and statement of cash flows, with supporting schedules,
copies of which have been delivered to the Bank, and the unaudited
management-prepared quarterly financial statements of the Borrower and its
Consolidated Subsidiaries for the interim period ended May 2, 1998, copies of
which have been delivered to the Bank, fairly present, in substantial
conformity with Generally Accepted Accounting Principles, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
dates and their consolidated results of operations and cash flows for such
periods stated.
(b) Since January 31, 1998 there has been no material adverse
change in the business, financial position, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries.
SECTION 5.05. Litigation. There is no action, suit or proceeding
pending, or to the knowledge of the Borrower threatened, against or affecting
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could reasonably
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be expected to have a Material Adverse Effect, or which in any manner draws
into question the validity of, or could reasonably be expected to impair the
ability of the Borrower to perform its obligations under, this Agreement, the
Note or any of the other Loan Documents.
SECTION 5.06. Compliance with ERISA.
(a) The Borrower and each member of the Controlled Group have
fulfilled their obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and are in compliance in all material
respects with the presently applicable provisions of ERISA and the Code, and
have not incurred any liability to the PBGC or a Plan under Title IV of ERISA.
(b) Neither the Borrower nor any member of the Controlled Group
is or ever has been obligated to contribute to any Multiemployer Plan.
SECTION 5.07. Taxes. There have been filed on behalf of the
Borrower and its Subsidiaries all Federal, state and local income, excise,
property and other tax returns which are required to be filed by them and all
taxes due pursuant to such returns or pursuant to any assessment received by or
on behalf of the Borrower or any Subsidiary have been paid. 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 5.08. Subsidiaries. Each of the Borrower's Subsidiaries
is a corporation or limited liability company duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation or
organization, as the case may be, and has all corporate or limited liability
company powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
SECTION 5.09. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 5.10. Ownership of Property; Liens. Each of the Borrower
and its Consolidated Subsidiaries has title to its properties sufficient for the
conduct of its business. None of the properties of the Borrower or any
Subsidiary thereof is subject to any Lien except for Permitted Liens.
SECTION 5.11. No Default. Neither the Borrower nor any of its
Consolidated Subsidiaries is in default under or with respect to any agreement,
instrument or undertaking to which it is a party or by which it or any of its
property is bound which could reasonably be expected to have or cause a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
SECTION 5.12. Full Disclosure. All information heretofore
furnished by the Borrower to the Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such information
hereafter furnished by the Borrower to the Bank will be, true,
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accurate and complete in every material respect or based on reasonable
estimates on the date as of which such information is stated or certified. The
Borrower has disclosed to the Bank in writing any and all facts which could
reasonably be expected to have or cause a Material Adverse Effect.
SECTION 5.13. Environmental Matters. To the best of the
Borrower's knowledge:
(a) neither the Borrower nor any of its Subsidiaries is subject
to any Environmental Liability and neither the Borrower nor any Subsidiary
thereof has been designated as a potentially responsible party under CERCLA or
under any state statute similar to CERCLA. None of the Properties have been
identified on any current or proposed (i) National Priorities List under 40
C.F.R. ss. 300, (ii) CERCLIS list or (iii) any list arising from a state
statute similar to CERCLA.
(b) no Hazardous Substances have been or are being used,
produced, manufactured, processed, generated, stored, disposed of, managed at,
or shipped or transported to or from the Properties or are otherwise present
at, on, in or under the Properties, or, to the best of the knowledge of the
Borrower, at or from any adjacent site or facility, except for Hazardous
Substances, such as cleaning solvents, pesticides and other materials used,
produced, manufactured, processed, generated, stored, disposed of, and managed
in the ordinary course of business in compliance with all applicable
Environmental Requirements.
(c) the Borrower, and each of its Subsidiaries and Affiliates,
has procured all Environmental Authorizations necessary for the conduct of its
business, and is in compliance with all Environmental Requirements in
connection with the operation of the Properties and the Borrower's, and each of
its Subsidiary's and Affiliate's, respective businesses.
SECTION 5.14. Compliance with Laws. The Borrower and each
Subsidiary thereof is in compliance with all Applicable Law, including, without
limitation, all Environmental Requirements, except where any failure to comply
with any such laws could not reasonably be expected to, alone or in the
aggregate, have a Material Adverse Effect.
SECTION 5.15. Capital Stock. All Capital Stock, debentures,
bonds, notes and all other securities of the Borrower and its Subsidiaries
presently issued and outstanding are validly and properly issued in accordance
with all Applicable Law, including, but not limited to, the "Blue Sky" laws of
all applicable states and the federal securities laws. The issued shares of
Capital Stock of the Borrower's Wholly Owned Subsidiaries are owned by the
Borrower free and clear of any Lien or adverse claim. At least a majority of
the issued shares of capital stock of each of the Borrower's other Subsidiaries
(other than Wholly Owned Subsidiaries) is owned by the Borrower free and clear
of any Lien or adverse claim.
SECTION 5.16. Margin Stock. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of purchasing or carrying any Margin Stock, and no part of the
proceeds of any Loan will be used to purchase or carry any Margin Stock
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or to extend credit to others for the purpose of purchasing or carrying any
Margin Stock, or be used for any purpose which violates, or which is
inconsistent with, the provisions of Regulation X.
SECTION 5.17. Insolvency. After giving effect to the execution
and delivery of the Loan Documents and the making of each Loan under this
Agreement, the Borrower will not be "insolvent," within the meaning of such
term as used in North Carolina General Statutes ss. 23-3 or as defined in ss.
101 of Title 11 of the United States Code or Section 2 of the Uniform
Fraudulent Transfer Act, or any other applicable state law pertaining to
fraudulent transfers, as each may be amended from time to time, or be unable to
pay its debts generally as such debts become due, or have an unreasonably small
capital to engage in any business or transaction, whether current or
contemplated.
SECTION 5.18. Survival of Representations and Warranties, Etc.
All representations and warranties set forth in this Article V and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date, shall survive the Closing Date and shall not be
waived by the execution and delivery of this Agreement, any investigation made
by or on behalf of the Bank or any borrowing hereunder.
ARTICLE VI
COVENANTS
Until all of the Loans have been finally and indefeasibly paid
in full and the Commitment terminated, unless consent has been obtained in the
manner provided for in Section 8.04, the Borrower hereby covenants and agrees
that:
SECTION 6.01. Information. The Borrower will deliver to the Bank
at its address set forth on the signature pages hereto, or such other office as
may be designated by the Bank from time to time:
(a) As soon as practicable and in any event within 45 days after
the close of each Fiscal Quarter, beginning with the close of the current
Fiscal Quarter for the Borrower and its Subsidiaries on a consolidated basis,
balance sheets and statements of income and cash flows for or relating to the
Fiscal Quarter then ended, all prepared in accordance with Generally Accepted
Accounting Principles (subject to normal year-end adjustments), applied on a
Consistent Basis, and certified by the chief financial officer of the Borrower.
The requirements of this paragraph shall be fully satisfied upon the delivery
to the Bank within the time period specified above of the Borrower's quarterly
report on form 10-Q with respect to any Fiscal Quarter, provided, that the
financial statements and accompanying notes are fully disclosed within such
filing;
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(b) As soon as practicable and in any event within 90 days
after, the close of each Fiscal Year, beginning with the close of the current
Fiscal Year, an audited consolidated balance sheet of Borrower and its
Subsidiaries as of the close of such Fiscal Year and audited consolidated
statements of income and cash flows for the Fiscal Year then ended prepared by
a Big Five independent certified public accounting firm in accordance with
Generally Accepted Accounting Principles, applied on a Consistent Basis, and
accompanied by a report thereon by such certified public accountants and, with
respect to such audited financial statements, containing an opinion that is not
qualified with respect to scope limitations imposed by Borrower, as to going
concern or with respect to accounting principles followed by Borrower not in
accordance with Generally Accepted Accounting Principles;
(c) Concurrently with the delivery of the financial statements
described in subsection (b) above, a certificate from the independent certified
public accountants stating that in making their examination of the financial
statements of the Borrower and its Subsidiaries, they obtained no knowledge of
the occurrence or existence of any condition or event which constitutes or
would constitute, upon the giving of notice or lapse of time or both, an Event
of Default, or a statement specifying the nature and period of existence of any
such condition or event disclosed by their examination;
(d) Concurrently with the delivery of the financial statements
described in subsections (a) and (b) above or at such other times as the Bank
may reasonably request, a certificate from the chief financial officer of the
Borrower certifying to the Bank that to the best of their knowledge after
review of this Agreement and appropriate inquiry, the Borrower has kept,
observed, performed and fulfilled each and every covenant, obligation and
agreement binding upon the Borrower contained in this Agreement, accompanied by
a worksheet completed in accordance with Generally Accepted Accounting
Principles detailing the Borrower's compliance with the financial covenants
contained in Sections 6.25, 6.26 and 6.27 hereto in form satisfactory to the
Bank, and that no Default or Event of Default has occurred or specifying any
such Default or Event of Default;
(e) Immediately upon issuance, each report to the Securities and
Exchange Commission and each notice, financial report or proxy statement
rendered to its shareholders;
(f) Immediately upon the Borrower's receipt thereof, copies of
any management letter or other written communications from certified public
accountants the effect of which would have a Material Adverse Effect on the
business of the Borrower or any Subsidiary; and
(g) Upon the Bank's request such other information about the
financial condition, business or operations of the Borrower and its
Subsidiaries as the Bank may from time to time reasonably request.
SECTION 6.02. Notice of Certain Events. The Borrower shall
promptly, after any officer of the Borrower learns or obtains knowledge of the
occurrence thereof, give written notice to the Bank of:
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(a) any litigation or proceedings brought against the Borrower
or any of its Subsidiaries or any attachments, judgments, liens, levies or
orders (other than Permitted Liens) that may be placed on or assessed against
or threatened against the Borrower or any of its Subsidiaries which are (i) not
otherwise covered by insurance or are contested by the insurer and (ii) in the
aggregate exceed $5,000,000 in uninsured exposure and the Borrower shall set up
such reserves as required by Generally Accepted Accounting Principles.
(b) any written notice of a violation received by the Borrower
or any of its Subsidiaries from any governmental regulatory body or law
enforcement authority which, if such violation were established, might have a
Material Adverse Effect on the business of the Borrower or any of its
Subsidiaries;
(c) any other matter that has resulted in a Material Adverse
Effect on the Borrower or any of its Subsidiaries;
(d) any breach or violation of or noncompliance with any
covenant or condition of this Agreement or any Event of Default hereunder; and
(e) any change in the name of the Borrower or any Subsidiary.
SECTION 6.03. Corporate Existence. Except as provided in Section
6.12, the Borrower will, and will cause each of its Subsidiaries to, maintain
and preserve its corporate or limited liability company existence and all
rights, privileges and franchises now enjoyed.
SECTION 6.04. Payment of Indebtedness; Performance of Other
Obligations. The Borrower will, and will cause each of its Subsidiaries to pay,
all material Indebtedness before such Indebtedness shall become past due, all
material taxes, assessments and other governmental charges that may be levied
or assessed upon it when due and all other material obligations in accordance
with customary trade practices, and comply in all material respects with all
acts, rules, regulations and orders of any legislative, administrative or
judicial body or official applicable to any part thereof or to the operation of
its business; provided, however, that the Borrower or any Subsidiary may in
good faith by appropriate proceedings and with due diligence contest any such
Indebtedness, taxes, assessments, governmental charges, acts, rules,
regulations, orders and directions that do not in the Bank's reasonable
judgment materially and adversely affect the Borrower's business and if
requested by the Bank, shall establish reserves reasonably satisfactory to the
Bank. The Borrower will, and will cause each of its Subsidiaries to, observe
and remain in compliance in all material respects with all laws, ordinances,
governmental rules and regulations to which it is subject and obtain all
licenses, permits, franchises or other governmental authorizations necessary to
the ownership of its properties or the conduct of its business, and observe and
perform all covenants and conditions of all material agreements and instruments
to which it is a party, where failure to comply would have a Material Adverse
Effect on the business of the Borrower or any Subsidiary.
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SECTION 6.05. Maintenance of Books and Records; Inspection. The
Borrower will, and will cause each of its Subsidiaries to, (i) maintain
adequate books, accounts and records, and prepare all financial statements
required under this Agreement in accordance with Generally Accepted Accounting
Principles (subject, in the case of unaudited interim statements, to normal
year-end adjustments) and in material compliance with the regulations of any
governmental regulatory body having jurisdiction over it; and (ii) permit
employees or agents of the Bank at any time during normal business hours and
upon reasonable notice to inspect the properties of the Borrower and its
Subsidiaries, and to examine or audit the books of the Borrower and its
Subsidiaries, accounts and records and make copies and memoranda of them, and
to discuss the affairs, finances and accounts of the Borrower with its
executive officers, and independent public accountants (and by this provision
the Borrower and its Subsidiaries authorize said accountants to discuss the
finances and affairs of the Borrower and its Subsidiaries), all at such
reasonable times and as often as may be reasonably requested, but in any event
at least twice during each fiscal year of the Borrower.
SECTION 6.06. Comply with ERISA. The Borrower will, and will
cause each of its Subsidiaries to, (i) at all times make prompt payment of
contributions required to meet the minimum funding standards set forth in ERISA
with respect to any Plan, except to the extent that failure to make such
payment would not have a Material Adverse Effect on the business of the
Borrower or any Subsidiary; (ii) not withdraw from participation in, permit the
termination or partial termination of, or permit the occurrence of any other
event with respect to any Plan that could result in liability to the PBGC,
except to the extent that such withdrawal, termination, partial termination or
occurrence would not have a Material Adverse Effect on the business of the
Borrower or any Subsidiary; (iii) notify the Bank as soon as practicable of any
Reportable Event and of any additional act or condition arising in connection
with any Plan which the Borrower or any of its Subsidiaries believe might
constitute grounds for the termination thereof by the PBGC or for the
appointment by the appropriate United States district court of a trustee to
administer such Plan, and (iv) furnish to the Bank upon the Bank's request,
such additional information about any Plan as may be reasonably requested.
Neither the Borrower nor any of its Subsidiaries will permit the occurrence of
any "prohibited transaction" (as defined in ERISA).
SECTION 6.07. Maintenance of Properties; Conduct of Business.
The Borrower will, and will cause each of its Subsidiaries to, conduct its
business in an orderly, efficient and customary manner, keep its properties
used in the operations of its business in good working order and condition
(normal wear and tear excepted), and from time to time make all needed repairs
to, renewals of or replacements of its properties (except where failure to make
such repairs, renewals or replacements would not have a Material Adverse Effect
on the business of the Borrower or any of its Subsidiaries or to the extent
that any of such properties is obsolete or is being replaced) so that the
efficiency of such property shall be fully maintained and preserved. The
Borrower and its Subsidiaries shall file or cause to be filed in a timely
manner all reports, applications, estimates and licenses that shall be required
by any Governmental Authority and which, if not timely filed, would have a
Material Adverse Effect on the Borrower or any of its Subsidiaries.
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SECTION 6.08. Insurance. The Borrower will, and will cause each
of its Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies against such risks and in such amounts as are customarily
maintained by similar businesses as that of the Borrower and its Subsidiaries.
SECTION 6.09. Observe all Laws. The Borrower will conform to and
duly observe all laws, regulations and other valid requirements of any
regulatory authority with respect to the conduct of its business, except to the
extent that failure to do so would not have a Material Adverse Effect on the
business of the Borrower or any of its Subsidiaries.
SECTION 6.10. Year 2000. The Borrower has taken all action
deemed reasonably necessary by Borrower to assure that the Borrower's and its
Subsidiaries' computer based systems are able to operate, and effectively
process data including dates, on and after January 1, 2000. At the request of
the Bank, the Borrower will provide the Bank with assurances acceptable to the
Bank of the Borrower's year 2000 compatibility.
SECTION 6.11. Subsidiary Guaranties. All Subsidiaries of the
Borrower (excluding any Subsidiary operating as an insurance or banking entity)
shall, within ninety (90) days of the Closing Date, execute and deliver to the
Bank a guaranty agreement in form reasonably acceptable to Bank and Borrower,
unconditionally guaranteeing the obligations under this Agreement and the Note
and any Subsidiary created or acquired subsequent to the Closing Date
(excluding any Subsidiary operating as an insurance or banking entity) shall,
within thirty (30) days of the date of creation or acquisition, execute a
guaranty agreement supplement in form reasonably acceptable to the Bank and the
Borrower; provided that, subject to the requirements of Section 6.19 hereof,
failure to provide such guarantees shall not create or result in an Event of
Default, but shall require the Borrower to deliver to the Bank as soon as
practicable and (i) in any event within 45 days after the close of each Fiscal
Quarter of the Borrower, beginning with the close of the first Fiscal Quarter
subsequent to the deadline for delivery of the guaranty agreements or guaranty
agreement supplements required above, consolidating balance sheets and
statements of income and cash flows of the Borrower and its Subsidiaries for or
relating to the Fiscal Quarter then ended, and (ii) in any event within 90 days
after the close of each Fiscal Year of the Borrower, beginning with the close
of the first Fiscal Year subsequent to the deadline for delivery of the
guaranty agreements or guaranty agreement supplements required above,
consolidating balance sheets and statements of income and cash flows of the
Borrower and its Subsidiaries for or relating to the Fiscal Year then ended,
all prepared in the case of clause (i) and clause (ii) above in accordance with
Generally Accepted Accounting Principles (in the case of such quarterly
statements, subject to normal year-end adjustments and the absence of notes),
applied on a Consistent Basis, and certified by the chief financial officer of
the Borrower. Each Subsidiary delivering a guaranty or guaranty agreement
supplement hereunder shall at the same time deliver to the Bank all documents
which the Bank may reasonably request relating to the existence of the
Subsidiary, the authority for and the validity of the guaranty or guaranty
agreement supplement and any other matters relevant thereto, all in form and
substance satisfactory to the Bank, including without limitation a certificate
of incumbency of the Subsidiary, signed by the Secretary or an Assistant
Secretary or other appropriate representative of the Subsidiary, as applicable,
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certifying as to the names, and incumbency of the officer or other
representative of the Subsidiary authorized to execute and deliver the guaranty
or guaranty agreement supplement, and certified copies of the following items
as to the Subsidiary: (i) the certificate of incorporation or article of
organization, (ii) the bylaws or operating agreement, (iii) a certificate of
the Secretary of State (or other appropriate office) of the state of its
incorporation as to its good standing as a corporation or limited liability
company of such jurisdiction, and (iv) the action taken by the board of
directors or members authorizing the execution, delivery and performance of the
guaranty or guaranty agreement supplement to which the Subsidiary is a party.
SECTION 6.12. Merger and Dissolution; Sale of Assets. Except for
the transactions contained on Schedule 6.12, the Borrower shall not, and shall
not permit any Subsidiary to, liquidate, windup or dissolve, or enter into any
consolidation, merger, share exchange, syndicate or other combination, or sell,
lease, transfer or otherwise dispose of, in a single transaction or a series of
related transactions, all or substantially all of its business or assets or any
portion thereof if such portion of its business or assets represents ten
percent (10%) or more of the net revenues, profits or assets of the Borrower or
such Subsidiary (except for sales of inventory in the ordinary course of
business); provided, that (i) subject to the requirements of Section 6.11
hereof, any Subsidiary may be wound up and dissolved if the proceeds of the
dissolution are transferred to the Borrower or another Subsidiary of the
Borrower, and (ii) any Subsidiary may be merged into another Subsidiary or into
the Borrower.
SECTION 6.13. Acquisitions. Except for the transactions
contained on Schedule 6.13, the Borrower shall not, and shall not permit any
Subsidiary to, acquire the business or all or a substantial portion of the
assets of any Person, unless the effect of such acquisition on a pro forma
basis measured over a period commencing four (4) Fiscal Quarters prior to the
effective date of the acquisition and continuing thereafter until such
acquisition has been effective for a total period of four (4) Fiscal Quarters
would not result in an Event of Default.
SECTION 6.14. Indebtedness. The Borrower shall not, and shall
not permit any Subsidiary to, create, incur or suffer to exist any Indebtedness
or the equivalent (including any Indebtedness incurred as a general partner or
as a venturer) except for: (a) the obligations owed to the Bank under this
Agreement and the Note; (b) the obligations owed by the Borrower under any
other Loan Document; (c) current trade accounts payable or accrued by the
Borrower or any of its Subsidiaries in the ordinary course of its business,
provided that the same shall be paid when due in accordance with customary
trade terms unless contested by appropriate proceedings; (d) Indebtedness
secured by Permitted Liens; (e) unsecured Indebtedness, provided that the
effect of such unsecured Indebtedness on a pro forma basis measured over a
period commencing four (4) Fiscal Quarters prior to the date the unsecured
Indebtedness is incurred would not result in an Event of Default; (f) purchase
money Indebtedness of the Borrower and its Subsidiaries in an aggregate amount
not to exceed $5,000,000 on any date of determination; (g) Indebtedness
existing on the Closing Date and not otherwise permitted under this Section
6.14, as set forth on Schedule 6.14; and (h) any other Indebtedness
specifically permitted by the Bank.
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SECTION 6.15. Liens and Encumbrances. The Borrower shall not,
and shall not permit any Subsidiary to, create, assume or suffer to exist any
Lien except for (a) Permitted Liens and (b) Liens necessary to secure purchase
money Indebtedness, subject to the dollar limitation contained in Section
6.14(f).
SECTION 6.16. Transactions With Related Persons. Except as
otherwise permitted hereunder, the Borrower shall not, and shall not permit any
Subsidiary to, make any loan or advance to, purchase, assume or guarantee any
note to or from, or enter into any transaction with, any of its officers,
directors, shareholders or Affiliates, or any member of the immediate family of
any of its officers, directors, shareholders or Affiliates, or subcontract any
operations to any Affiliate, except (a) as otherwise permitted hereunder; (b)
for transactions with its officers, directors, shareholders or Affiliates in an
aggregate amount not to exceed $2,000,000 in any Fiscal Year; and (c) in the
ordinary course of and pursuant to the reasonable requirements of its business,
consistent with past practices and upon fair and reasonable terms that are
fully disclosed to the Bank and are no less favorable to it than would obtain
in a comparable arm's length transaction with a Person not an Affiliate of the
Borrower or such Subsidiary, as the case may be, provided, however, that the
restrictions contained in this Section 6.16 shall not prohibit the Borrower or
any Subsidiary from entering into any such transactions with another Subsidiary
of the Borrower.
SECTION 6.17. Sale and Leaseback. Subsequent to the Closing
Date, the Borrower shall not, and shall not permit any Subsidiary to, enter
into any arrangement with any Person providing for the leasing by the Borrower
or any of its Subsidiaries of any asset that has been sold or transferred by
the Borrower or any of its Subsidiaries to such Person, if the book value of
the assets of the Borrower and its Subsidiaries which have been sold and leased
back, including the transaction currently being contemplated, in the aggregate
represent more than 10% of the book value of the assets of the Borrower and its
Subsidiaries as of the Borrower's last Fiscal Quarter end.
SECTION 6.18. New Business. The Borrower shall not, and shall not
permit any Subsidiary to, engage in any business other than the business in
which it is currently engaged or a business reasonably related thereto.
SECTION 6.19. Subsidiaries. Unless the requirements of Section
6.11 have been satisfied and as otherwise provided on Schedule 6.19, the
Borrower shall not, and shall not permit any Subsidiary to, create any new
Subsidiary or transfer any assets to a Subsidiary if the formation of such new
Subsidiary or the transfer of assets to such Subsidiary would cause any one of
the aggregate of net revenues or profits or assets of all the Subsidiaries on a
consolidated basis to exceed five percent (5%) of any one of the net revenues or
profits or assets of the Borrower and its Subsidiaries on a consolidated basis,
unless such new Subsidiary or Subsidiary to which assets are transferred
executes and delivers a guaranty agreement supplement in form reasonably
acceptable to the Bank and the Borrower, unconditionally guaranteeing the
obligations under this Agreement and the Note.
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SECTION 6.20. Guaranties. The Borrower shall not, and shall not
permit any Subsidiary to, guarantee or otherwise, in any way, become liable
with respect to the obligations or liabilities of any Person, except for (a)
guaranties issued in favor of the Bank; (b) guaranties which do not exceed
$10,000,000 in the aggregate at any time; (c) endorsements for collection or
deposit in the ordinary course of business; (d) the guaranty by the Borrower of
certain letter of credit obligations of Belk International, Inc.; (e) the
guaranties by the Subsidiaries pursuant to Sections 6.11 and 6.19 hereof; and
(f) any guaranty by the Borrower or any Subsidiary of any Indebtedness or
obligation of the Borrower or any Subsidiary to the extent such Indebtedness or
obligation is permitted hereunder.
SECTION 6.21. Restrictive Transactions. The Borrower shall not,
and shall not permit any Subsidiary to, enter into any transaction that
materially and adversely affects the Borrower's ability to repay any
Indebtedness or the obligations hereunder.
SECTION 6.22. Hazardous Wastes. Permit, in violation of any
federal, state or local laws, regulations or orders, any hazardous or toxic
wastes, contaminants, oil, radioactive or other materials the removal of which
is required or the maintenance of which is restricted, prohibited or penalized
by any federal, state or local agency, authority or governmental unit to be
brought on to any real property owned by the Borrower or any Subsidiary, or if
so brought or found located thereon, the same shall be immediately removed, if
required by Applicable Law, with proper disposal, and all required
environmental cleanup procedures shall be diligently undertaken pursuant to all
such laws, ordinances and regulations.
SECTION 6.23. Change in Fiscal Year. The Borrower will not change
its Fiscal Year end without the consent of the Bank.
SECTION 6.24. Amendments. The Borrower shall not, and shall not
permit any Subsidiary to, amend, modify or change in any manner the Borrower's
articles of incorporation or bylaws, or any agreement entered into by the
Borrower with respect to its Capital Stock, or enter into any new agreement
with respect to its Capital Stock if such amendment or new agreement would have
an adverse effect on the enforcement of this Agreement or would otherwise have
a Material Adverse Effect on the business of the Borrower or any of its
Subsidiaries.
SECTION 6.25. Leverage-Ratio. The Borrower shall not permit the
Leverage Ratio (i) as of the last day of the first Fiscal Quarter of any Fiscal
Year to be greater than 3.25 to 1.0; (ii) as of the last day of the second
Fiscal Quarter of any Fiscal Year to be greater than 3.25 to 1.0; (iii) as of
the last day of the third Fiscal Quarter of any Fiscal Year to be greater than
3.7 to 1.0; and (iv) as of the last day of any Fiscal Year to be greater than 3
.0 to 1.0.
SECTION 6.26. Fixed Charge Coverage Ratio. The Borrower shall not
permit the Fixed Charge Coverage Ratio as of the last day of any Fiscal Quarter
to be less than 1.5 to 1.0.
SECTION 6.27. Net Worth. The Borrower shall not permit
Consolidated Tangible Net Worth as of the last day of any Fiscal Quarter to be
less than the sum of (i) $650,000,000, plus (ii)
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50% of Comprehensive Income for each Fiscal Year, beginning as of the Fiscal
Year ending on January 30, 1999, provided that Comprehensive Income for any
such Fiscal Year shall be taken into account for purposes of this calculation
only if positive, plus (iii) 100% of the increase in the stated capital and
additional paid in capital accounts of the Borrower and its Subsidiaries
resulting from the issuance or purchase of equity securities (including
pursuant to the exercise of options, rights or warrants or pursuant to the
conversion of convertible securities) or other Capital Stock, excluding any
stock issuance and stock purchase, where the proceeds of the issuance are used
to purchase stock from other shareholders or their estates, all determined as
of the end of each Fiscal Year on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
SECTION 6.28. Additional Covenants. In the event that at any
time this Agreement is in effect the Borrower or any Subsidiary shall enter
into any agreement, guarantee, indenture or other instrument (each a "Financing
Agreement") governing, relating to or guaranteeing any Financing or to amend
any terms and conditions applicable to any Financing, which Financing Agreement
includes covenants concerning or limiting the Borrower or any Subsidiary with
respect to the matters addressed in Sections 6.01, 6.11, 6.25, 6.26 or 6.27 of
this Agreement, which are more favorable to the lender or other counterparty
thereunder with respect to such matters, than Sections 6.01, 6.11, 6.25, 6.26
or 6.27 of this Agreement, the Borrower shall promptly so notify the Bank.
Thereupon, if the Bank shall request by written notice to the Borrower (after a
determination has been made by the Bank that any such Financing Agreement
contains any provisions which either individually or in the aggregate are more
favorable than one of Sections 6.01, 6.11, 6.25, 6.26 or 6.27 of this
Agreement), the Borrower and the Bank shall enter into an amendment to this
Agreement providing for substantially the same such covenants as those provided
for in such Financing Agreement, to the extent required and as may be selected
by the Bank, such amendment to remain in effect, unless otherwise specified in
writing by the Bank, for the entire duration of the stated term to maturity of
such Financing (to and including the date to which the same may be extended at
the Borrower's option), notwithstanding that such Financing might be earlier
terminated by prepayment, refinancing, acceleration or otherwise, provided that
if any such Financing Agreement shall be modified, supplemented, amended or
restated so as to modify, amend or eliminate from such Financing Agreement any
such covenant so made a part of this Agreement, then unless required by the
Bank pursuant to this Section, such modification, supplement or amendment shall
not operate to modify, amend or eliminate such covenant as so made a part of
this Agreement. As used in this Section, "Financing" means (i) any transaction
or series of transactions for the incurrence by the Borrower or any Subsidiary
of any Indebtedness or for the establishment of a commitment to make advances
which would constitute Indebtedness of the Borrower or any Subsidiary, which
Indebtedness is not by its terms subordinate and junior to other Indebtedness
of the Borrower or such Subsidiary, (ii) any obligation incurred in a
transaction or series of transactions in which assets of the Borrower or any
Subsidiary are sold and leased back, or (iii) a sale of accounts or other
receivables or any interest therein.
SECTION 6.29. Use of Proceeds. No portion of the proceeds of the
Loan will be used by the Borrower or any Subsidiary (a) in connection with,
either directly or indirectly, any tender offer for, or other acquisition of,
stock of any corporation with a view towards obtaining control of such
30
36
other corporation, (b) directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any Margin Stock,
or (c) for any purpose in violation of any Applicable Law.
SECTION 6.30. Crestar Facility. The Borrower shall permanently
reduce its Credit Facility with Crestar Bank on or before January 1, 1999 such
that no more than $5,000,000.00 is thereafter outstanding and/or available to
be drawn thereunder.
ARTICLE VII
DEFAULTS
SECTION 7.01. Events of Default. The occurrence of any one or
more of the following events shall constitute an Event of Default by the
Borrower under this Agreement:
(a) the Borrower shall fail to pay any principal of the Loans
within five days after such principal shall become due or shall fail to pay any
interest on the Loans within ten days after such interest shall become due, or
shall fail to pay any other amount payable hereunder within ten days after such
other amount becomes due; or
(b) the Borrower shall fail to observe or perform any covenant
or agreement contained in this Agreement or any Loan Document (other than those
covered by clause (a) above) for thirty days after the earlier of (i) the first
day on which a responsible officer of the Borrower has knowledge of such
failure, or (ii) written notice thereof has been given to the Borrower by the
Bank; or
(c) any representation, warranty, certification or statement
made by the Borrower in Article V or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made); or
(d) the Borrower or any Subsidiary shall fail to make any
payment in respect of Indebtedness outstanding (other than the Note) when due
or within any applicable grace period; or
(e) any event or condition shall occur which results in the
acceleration of the maturity of Indebtedness outstanding of the Borrower or any
Subsidiary or the purchase of such Indebtedness by the Borrower (or its
designee) or such Subsidiary (or its designee) prior to the scheduled maturity
thereof or would enable (or, with the giving of notice or lapse of time or
both, would enable) the holders of such Indebtedness or any Person acting on
such holders' behalf to accelerate the maturity thereof or require the purchase
thereof by the Borrower (or its designee) or such Subsidiary (or its designee)
prior to the scheduled maturity thereof, without regard to whether such holders
or other Person shall have exercised or waived their right to do so; or
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37
(f) 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, or shall admit in writing its inability, to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing; or
(g) 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; or
(h) the Borrower or any member of the Controlled Group shall
fail to pay when due any material amount which it shall have become liable to
pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans shall be filed under Title IV of ERISA by the
Borrower, 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 such Plan or Plans or a proceeding shall be instituted by a
fiduciary of any such Plan or Plans to enforce Section 515 or 4219(c)(5) of
ERISA and such proceeding shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or the Borrower or any other member of the Controlled Group shall
enter into, contribute or be obligated to contribute to, terminate or incur any
withdrawal liability with respect to, a Multiemployer Plan; or
(i) one or more judgments or orders for the payment of money in
an aggregate amount in excess of $100,000 shall be rendered against the
Borrower or any Subsidiary and such judgment or order shall continue without
discharge or stay for a period of 30 days; or
(j) a federal tax lien shall be filed against the Borrower under
Section 6323 of the Code or a lien of the PBGC shall be filed against the
Borrower or any Subsidiary under Section 4068 of ERISA and in either case such
lien shall remain undischarged for a period of 60 days after the date of
filing; or
(k) any default or event of default shall occur under any Loan
Document.
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38
SECTION 7.02. Remedies on Default. Upon the occurrence of an
Event of Default, the Bank may by notice to the Borrower, declare the Note and
the Loans (together with accrued interest thereon), and the Note and the Loans
(together with accrued interest thereon) 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 and terminate the Credit
Facility; provided, that if any Event of Default specified in clause (f) or (g)
of Section 7.01 above occurs with respect to the Borrower, without any notice
to the Borrower or any other act by the Bank, the Note and the Loans (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 and the Credit Facility shall be automatically
terminated.
SECTION 7.03. Security Interest, Offset, Sharing of Offsets.
(a) In addition to, and not in limitation of, all rights of
offset that the Bank or other holder of the Note may have under Applicable Law,
the Borrower hereby grants to the Bank, as security for the full and punctual
payment and performance of the obligations to pay to the Bank the principal of
and interest on the Loans and other amounts due hereunder, a continuing lien on
and security interest in all deposits and other sums credited by or due from
the Bank to the Borrower or subject to withdrawal by the Borrower; and
regardless of the adequacy of any collateral or other means of obtaining
repayment of the Loans, the Bank may, at any time after the occurrence of an
Event of Default and without notice to the Borrower, set off the whole or any
portion or portions of any or all such deposits and other sums against the
amounts owing under this Agreement and the Note, whether or not any other
Person or Persons could also withdraw money therefrom.
(b) The Borrower agrees, to the fullest extent it may
effectively do so under Applicable Law, that any holder of a participation in a
Note may exercise rights of set-off or counterclaim and 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.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party at its
address referenced below or such other address as such party may hereafter
specify for the purpose by notice to the other party:
33
39
(a) If to the Borrower:
Xxxx, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxx
Fax number: (000) 000-0000
(b) If to the Bank, to its address set forth on the signature
pages hereof.
Each such notice, request or other communication shall be effective (i) if
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (ii) if given by any
other means, when delivered at the address specified in this Section; provided,
that notices to the Bank under Article II or Article III shall not be effective
until received.
SECTION 8.02. No Waivers. No failure or delay by the Bank or
Borrower in exercising any right, power or privilege hereunder or under the
Note 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 8.03. Expenses; Documentary Taxes.
(a) The Borrower shall pay (i) all out-of-pocket expenses of the
Bank, including reasonable fees and disbursements of counsel for the Bank, in
connection with the preparation of this Agreement and the other Loan Documents,
any waiver or consent hereunder or any amendment hereof or any actual or
alleged Default hereunder; provided, that the Borrower shall not be liable for
the expenses of the Bank in connection with the preparation of this Agreement
and the other Loan Documents to the extent such expenses exceed $10,000, and
(ii) if an Event of Default occurs, all out-of-pocket expenses incurred by the
Bank, including fees and disbursements of outside counsel, in connection with
such Event of Default and collection and other enforcement proceedings
resulting therefrom, including out-of-pocket expenses incurred in enforcing
this Agreement and the other Loan Documents.
(b) 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 the
other Loan Documents.
(c) The Borrower shall indemnify the Bank and its directors,
officers, employees and agents from, and hold each of them harmless against,
any and all losses, liabilities, claims or damages to which any of them may
become subject, insofar as such losses, liabilities, claims or damages arise
out of or result from any actual or proposed use by the Borrower of the
proceeds of any extension of credit by the Bank hereunder or breach by the
Borrower of this Agreement or any
34
40
other Loan Document or from investigation, litigation (including, without
limitation, any actions taken by the Bank to enforce this Agreement or any of
the other Loan Documents) or other proceeding (including, without limitation,
any threatened investigation or proceeding) relating to the foregoing, and the
Borrower shall reimburse the Bank and its directors, officers, employees and
agents, upon demand for any expenses (including, without limitation, legal
fees) incurred in connection with any such investigation or proceeding; but
excluding any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence, willful misconduct or bad faith of the Person
to be indemnified.
SECTION 8.04. Amendments and Waivers. Any provision of this
Agreement, the Note or any other Loan Documents 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 8.05. 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; provided, that the Borrower may not assign or otherwise transfer any
of its rights under this Agreement.
(b) The Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in the Loans, the Note or any other
interest of the Bank hereunder; provided, that no participating interests in
the Loans, the Note or any other interest of the Bank may be sold pursuant to
this paragraph (b) to a Person not an Affiliate of the Bank without the prior
written consent of the Borrower. In the event of any such sale by the Bank of a
participating interest the Bank's obligations under this Agreement shall remain
unchanged, the Bank shall remain solely responsible for the performance
thereof, the Bank shall remain the holder of the Note for all purposes under
this Agreement, and the Borrower shall continue to deal solely and directly
with the Bank in connection with the Bank's rights and obligations under this
Agreement. In no event shall the Bank be obligated to the Participant to take
or refrain from taking any action hereunder except that the Bank may agree that
it will not (except as provided below), without the consent of the Participant,
agree to (i) the change of any date fixed for the payment of principal of or
interest on the Loan, (ii) the change of the amount of any principal, interest
or fees due on any date fixed for the payment thereof with respect to the Loan,
(iii) the change of the principal of the Loan, (iv) any change in the rate at
which interest is payable thereon from the rate at which the Participant is
entitled to receive interest in respect of such participation, (v) the release
or substitution of all or any substantial part of the collateral (if any) held
as security for the Loan, or (vi) the release of any guaranty given to support
payment of the Loan. The Bank shall, within ten Business Days after selling a
participating interest in the Loan, the Note or other interest under this
Agreement, provide the Borrower with written notification stating that such
sale has occurred and identifying the Participant and the interest purchased by
such Participant. The Borrower agrees that each Participant shall be entitled
to the benefits of Article III and Section 7.03 with respect to its
participation in the Loans.
(c) The Bank may at any time assign to one or more banks or
financial institutions
35
41
(each an "Assignee") all, or a proportionate part of all, of its rights and
obligations under this Agreement and the Note and the other Loan Documents, and
the Assignee shall assume all such rights and obligations, pursuant to an
Assignment and Acceptance in the form attached hereto as Exhibit E executed by
such Assignee, the Bank and the Borrower; provided, that no interest may be
sold by the Bank pursuant to this paragraph (c) to any Assignee which is not an
Affiliate of the Bank without the consent of the Borrower. Upon (i) execution
of the Assignment and Acceptance by the Bank, such Assignee, and the Borrower
(if required), (ii) delivery of an executed copy of the Assignment and
Acceptance to the Borrower, and (iii) payment by such Assignee to the Bank of
an amount equal to the purchase price agreed between Bank and such Assignee,
such Assignee shall for all purposes be a Bank party to this Agreement and
shall have all the rights and obligations of a Bank under this Agreement to the
same extent as if it were an original party hereto, and the Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by the Borrower or the Bank shall be required. Upon
the consummation of any transfer to an Assignee pursuant to this paragraph (c),
the Bank and the Borrower shall make appropriate arrangements so that, if
required, new Notes are issued to such Assignee and the Bank.
(d) Subject to the provisions of Section 8.06, the Borrower
authorizes the Bank to disclose to any Participant, Assignee or other
transferee (each a "Transferee") and any prospective Transferee any and all
financial information in the Bank's possession concerning the Borrower which
has been delivered to the Bank by the Borrower pursuant to this Agreement or
which has been delivered to the Bank by the Borrower in connection with the
Bank's credit evaluation prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater
payment under Section 3.03 than the Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent.
(f) Anything in this Section to the contrary notwithstanding,
the Bank may assign and pledge all or any portion of the Loan and/or
obligations owing to it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and Operating Circular issued by such
Federal Reserve Bank; provided, that any payment in respect of such assigned
Loan and/or obligations made by the Borrower to the Bank in accordance with the
terms of this Agreement shall satisfy the Borrower's obligations hereunder in
respect of such assigned Loans and/or obligations to the extent of such
payment. No such assignment shall release the Bank from its obligations
hereunder.
SECTION 8.06. Confidentiality. The Bank agrees to exercise its
best efforts to keep any information delivered or made available by the
Borrower to it which is clearly indicated to be confidential information,
confidential from any one other than persons employed or retained by the Bank
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loan; provided, however, that nothing herein shall prevent
the Bank from disclosing such information (a) upon the order of any court or
administrative agency, (b) upon the request or demand of any regulatory agency
or authority having jurisdiction over the Bank, (c) which
36
42
has been publicly disclosed, (d) to the extent reasonably required in
connection with any litigation to which the Bank or its respective Affiliates
may be a party, (e) to the extent reasonably required in connection with the
exercise of any remedy hereunder, (f) to the Bank's affiliates, legal counsel
and independent auditors and (g) to any actual or proposed Participant,
Assignee or other Transferee of all or part of its rights hereunder which has
agreed in writing to be bound by the provisions of this Section.
SECTION 8.07. Governing Law. This Agreement, the Note and the
other Loan Documents shall be construed in accordance, with and governed by the
law of the State of North Carolina. This Agreement, the Note and the other Loan
Documents are intended to be effective as instruments executed under seal.
SECTION 8.08. Counterparts. 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.
SECTION 8.09. Severability. If any provisions of this Agreement
shall be held invalid under any Applicable Law, such invalidity shall not
affect any other provision of this Agreement that can be given effect without
the invalid provision, and, to this end, the provisions hereof are severable.
SECTION 8.10. Captions. Captions in this Agreement are for the
convenience of reference only and shall not affect the meaning or interpretation
of the provisions hereof.
[Remainder of this page intentionally left blank]
37
43
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the year and day first above written.
BORROWER:
XXXX, INC.
[CORPORATE SEAL]
By:
-----------------------------
Title:
38
44
BANK:
Lending Office WACHOVIA BANK, N.A.
Wachovia Bank, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 By:
---------------------------------------
Title:
------------------------------------
ADDRESS:
Wachovia Bank, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
39
45
Exhibit A
to Credit Agreement
dated as of September 11, 1998
by and among Xxxx, Inc.
and
Wachovia Bank, N.A.
PROMISSORY NOTE
$150,000,000.00 September 11, 1998
FOR VALUE RECEIVED, the undersigned XXXX, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of WACHOVIA
BANK, N.A. (together with its endorsees, successors and assigns, the "Bank"),
the principal sum of One Hundred Fifty Million and No/100 Dollars
($150,000,000.00) on the dates provided for in the Credit Agreement. The
Borrower promises to pay interest on the unpaid principal amount of this Note
on the dates and at the rate or rates provided for in the Credit Agreement.
Interest on any overdue principal of and, to the extent permitted by law,
overdue interest on the principal amount hereof shall bear interest at the rate
or rates as provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other funds immediately available at the Bank's office set forth in
the Credit Agreement.
This Note evidences the Loans made by the Bank under, is the
Note referred to in and issued pursuant to, and is subject to the terms and
provisions of, the Credit Agreement, dated as of September 11, 1998, between
the Borrower and the Bank (as the same may be modified, amended, supplemented
or restated, the "Credit Agreement") to which Agreement reference is hereby
made for a statement of said terms and provisions. This Note is entitled to the
benefits of the Credit Agreement. Any term used herein that is defined in the
Credit Agreement shall have the meaning afforded it in the Credit Agreement
when used herein.
The Bank may, but shall not be obligated to, record on the
schedule attached to and made a part hereof, or on a continuation of such
schedule, Loans extended by the Bank to the Borrower, the effective interest
rates for the Loans evidenced hereby, and the principal payments and
prepayments of this Note; provided, that the failure of the Bank to make any
such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Credit Agreement.
Upon the occurrence and during the continuation of any Event of
Default, the Bank may declare the entire unpaid principal balance hereof and
all accrued interest hereon to be immediately due and payable in the manner and
with the effect provided in the Credit Agreement, and may thereafter exercise
any of the remedies referred to in the Credit Agreement or existing under
Applicable Law.
A-1
46
This Note may be prepaid in whole or in part only on the terms
and conditions set forth in the Credit Agreement.
TIME IS OF THE ESSENCE OF THIS CONTRACT. In addition and not in
limitation of the foregoing and the provisions of the Credit Agreement, the
Borrower further agrees to pay all expenses of collection, including reasonable
attorneys' fees, if this Note shall be collected by law or through an attorney
at law, or in bankruptcy, receivership or other court proceedings.
This Note shall be governed by and construed under the internal
laws of the State of North Carolina, without giving effect to principles of
conflicts of laws. This Note is intended to be effective as an instrument
executed under seat.
PRESENTMENT, DEMAND, PROTEST AND NOTICE OF DISHONOR ARE HEREBY
WAIVED BY THE BORROWER.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed under seal by a duly authorized officer as of the day and year first
above written.
XXXX, INC.
ATTEST:
By:
---------------------------- -------------------------------
Assistant Secretary Title:
----------------------------
[CORPORATE SEAL]
A-2
47
Note (continued)
PAYMENTS OF PRINCIPAL
=======================
Amount
of Unpaid
Type of Interest Principal Principal Notation
Date Loan* Rate Repaid Amount Made by
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
-----------------
* I.e., a Base Rate Loan or LIBOR Rate Loan.
A-3
48
Exhibit B
to Credit Agreement
dated as of September 11, 1998
by and among
Xxxx, Inc.
and
Wachovia Bank, N.A.
NOTICE OF BORROWING
Wachovia Bank, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Ladies and Gentlemen:
This irrevocable Notice of Borrowing is delivered to you under
Section 2.02 (a) of the Credit Agreement dated as of September 11, 1998 (as
amended, restated or otherwise modified, the "Credit Agreement"), by and among
Xxxx, Inc. ("the Borrower") and Wachovia Bank, N.A.
1. The Borrower hereby requests that the Bank make a Loan in the
aggregate principal amount of $___________ (the "Loan").(1)
2. The Borrower hereby requests that the Loan be made on the
following Business Day: _______________________.(2)
3. The Borrower hereby requests that the Loan bear interest at
the following interest rate, as set forth below:
Principal Component
of Interest
Loan Rate
------------------- --------
--------
(1) Complete with an amount in accordance with Section 2.02 of the Credit
Agreement.
(2) Complete with a Business Day in accordance with Section 2.02 of the Credit
Agreement.
X-0
00
Xxxxxxxx Xxxx, N.A.
Page 2
4. The principal amount of all Loans outstanding as of the date
hereof (including the requested Loan) does not exceed the maximum amount
permitted to be outstanding pursuant to the terms of the Credit Agreement.
5. All of the conditions applicable to the Loan requested herein
as set forth in the Credit Agreement have been satisfied as of the date hereof
and will remain satisfied to the date of such Loan.
6. All capitalized undefined terms used herein has the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Borrowing this _____day of _________, ___.
XXXX, INC.
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
B-2
50
Exhibit C
to Credit Agreement
dated as of September 11, 1998
by and among
Xxxx, Inc.
and
Wachovia Bank, N.A.
NOTICE OF CONVERSION/CONTINUATION
Wachovia Bank, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Continuation (the
"Notice") is delivered to you under Section 2.08 of the Credit Agreement dated
as of September 11, 1998 (as amended, restated or otherwise modified, the
"Credit Agreement"), by and among Xxxx, Inc. ("the Borrower") and Wachovia
Bank, N.A.
1. This Notice of Conversion/Continuation is submitted for the
purpose of: (Complete applicable information.)
(a) [Converting] [continuing] a Loan [into] [as] a
Loan.(1)
(b) The aggregate outstanding principal balance of
such Loan is $____________.
(c) The principal amount of such Loan to be
[converted] [continued] is $_________.(2)
(d) The requested effective date of the [conversion]
[continuation] of such Loan is __________.
2. No Default or Event of Default exists, and none will exist
upon the conversion or continuation of the Loan requested herein.
3. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
C-1
51
Wachovia Bank, N.A.
Page 2
IN WITNESS WHEREOF, the undersigned have executed this Notice of
Conversion/Continuation this ______ day of ____________, 19__.
XXXX, INC.
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
1. Delete the bracketed language and insert "Base Rate" or "LIBOR
Rate", as applicable, in each blank.
2. Complete with an amount in compliance with Section 2.08 of the
Credit Agreement.
C-2
52
Exhibit D
to Credit Agreement
dated as of September 11, 1998
by and among
Xxxx, Inc.
and
Wachovia Bank, N.A.
OFFICER'S COMPLIANCE CERTIFICATE
The undersigned, on behalf of Xxxx, Inc. (the "Borrower"), hereby
certifies to Wachovia Bank, N.A. (the "Bank"), as follows:
1. This Certificate is delivered to you pursuant to Section 6.01
of the Credit Agreement dated as of September 11, 1998 (as amended, restated or
otherwise modified, the "Credit Agreement"), by and among the Borrower and the
Bank. Capitalized terms used herein and not defined herein shall have the
meanings assigned thereto in the Credit Agreement.
2. I have reviewed the financial statements of the Borrower and
its Subsidiaries dated as of and for the period[s] then ended and such
statements fairly present the financial condition of the Borrower and its
Subsidiaries as of the dates indicated and the results of its operations and
cash flows for the period[s] indicated.
3. I have reviewed the terms of the Credit Agreement, the Note
and the related Loan Documents and have made, or caused to be made under my
supervision, a review in reasonable detail of the transactions and the
condition of the Borrower and its Subsidiaries during the accounting period
covered by the financial statements referred to in Paragraph 2 above. Such
review has not disclosed the existence during or at the end of such accounting
period of any condition or event that constitutes a Default or an Event of
Default, nor do I have any knowledge of the existence of any such condition or
event as at the date of this Certificate [except, [if such condition or event
existed or exists, describe the nature and period of existence thereof and what
action the Borrower has taken, is taking and proposes to take with respect
thereto]].
4. The Borrower and its Subsidiaries are in compliance within
the covenants and restrictions contained in Article VI of the Credit Agreement.
D-1
53
WITNESS the following signatures as of the ____ day of
_____________, ____.
XXXX, INC.
By:
----------------------------
Name:
-----------------------
Title:
----------------------
X-0
00
Xxxxxxx X
to Credit Agreement
dated as of September 11, 1998
by and among Xxxx, Inc.
and
Wachovia Bank, N.A.
ASSIGNMENT AND ACCEPTANCE
Dated ___________, ____
Reference is made to the Credit Agreement dated as of September
11, 1998 (the "Credit Agreement") between, Xxxx, Inc. (the "Borrower") and
Wachovia Bank, N.A. (the "Bank"). Terms defined in the Credit Agreement are
used herein with the same meaning.
Wachovia Bank, N.A. (the "Assignor") and ________________ (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, a _________%
interest in and to all of the Assignor's rights and obligations under the
Credit Agreement as of the Effective Date (as defined below) (including,
without limitation, a _________% interest (which on the Effective Date hereof
is $____________) in the Loans owing to the Assignor and a ______% interest in
the Note held by the Assignor (which on the Effective Date hereof is
$____________).
2. The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other instrument or document furnished
pursuant thereto, other than that it is the legal and beneficial owner of the
interest being assigned by it hereunder, that such interest is free and clear
of any adverse claim and that as of the date hereof the aggregate outstanding
principal amount of the Loans owing to it (without giving effect to assignments
thereof which have not yet become effective) is $___________; (ii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iii) attaches the Note
referred to in paragraph 1 above and requests that the Borrower exchange such
Note for [a new Note dated ____________________, _____ in the principal amount
of ________________ payable to the order of the Assignee] [new Notes as
follows: a Note dated __________, ____ in the principal amount of
$_______________ payable to the order of the Assignee and a Note dated
___________, ____ in the principal amount of $______________ payable to the
order of such Assignor].
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3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 5.04(a) thereof (or any more recent financial statements of the
Borrower delivered pursuant to Section 6.01 (a) or (b) thereof) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii) agrees
that it will, independently and without reliance upon the Assignor and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is a bank or financial
institution; (iv) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Agreement are required
to be performed by it as a Bank; (v) specifies as its Lending Office (and
address for notices) the office set forth beneath its name on the signature
pages hereof, (vi) represents and warrants that the execution, delivery and
performance of this Assignment and Acceptance are within its corporate powers
and have been duly authorized by all necessary corporate action [, and (vii)
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement and the Notes or such other
documents as are necessary to indicate that all such payments are subject to
such taxes at a rate reduced by an applicable tax treaty].(1)
4. The Effective Date for this Assignment and Acceptance shall
be ______________ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Borrower for execution by
the Borrower (if required by the Credit Agreement).
5. Upon such execution and acceptance by the Borrower (if
required), from and after the Effective Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent rights and obligations have been
transferred to it by this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (ii) the Assignor shall, to the extent its
rights and obligations have been transferred to the Assignee by this Assignment
and Acceptance, relinquish its rights (other than under Section 3.03 of the
Credit Agreement) and be released from its obligations under the Credit
Agreement.
6. Upon such execution by the Borrower (if required), from and
after the Effective Date, the Borrower shall make all payments in respect of
the interest assigned hereby to the Assignee. The Assignor and Assignee shall
make all appropriate adjustments in payments for periods prior to such
execution by the Borrower directly between themselves.
--------
(1) If the Assignee is organized under the laws of a jurisdiction
outside the United States.
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0. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of North Carolina.
WACHOVIA BANK, N.A.
By:
------------------------------
Title:
---------------------------
[NAME OF ASSIGNEE]
By:
------------------------------
Title:
---------------------------
Lending Office:
[Address]
XXXX, INC.
By:
------------------------------
Title:
---------------------------
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Xxxxxxx X
to Credit Agreement
dated as of September 11, 1998
by and among
Xxxx, Inc.
and
Wachovia Bank, N.A.
NOTICE OF ACCOUNT DESIGNATION
Dated
Wachovia Bank, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Ladies and Gentlemen:
This Notice of Account Designation is delivered to you by Xxxx,
Inc. (the "Borrower") under Section 2.02(b) of the Credit Agreement dated as of
September 11, 1998 (as amended, restated or otherwise modified, the "Credit
Agreement") by and among the Borrower and Wachovia Bank, N.A.
(the "Bank").
The Bank is hereby authorized to disburse all Loan proceeds into
the following account(s):
[Insert name of bank/ ABA Routing Number/ and Account Number]
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Account Designation this ____ day of _______________, 199_.
[CORPORATE SEAL] XXXX, INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
58
Exhibit G
to Credit Agreement
dated as of September 11, 1998
by and among
Xxxx, Inc.
and Wachovia Bank, N.A.
OPINION OF BORROWER'S COUNSEL
[Letterhead of Borrower's Counsel]
[Date]
Wachovia Bank, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Gentlemen:
We have acted as counsel to XXXX, INC., a Delaware corporation
(the "Borrower"), in connection with that certain Credit Agreement, dated as of
September 11, 1998 (the "Credit Agreement"), between the Borrower and Wachovia
Bank, N.A. (the "Bank"). Terms defined in the Credit Agreement are used herein
as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion. We have assumed for purposes of our opinions set
forth below that the execution and delivery of the Credit Agreement by the Bank
have been duly authorized by the Bank. As to questions of fact relating to the
Borrower material to such opinions, we have relied upon representations of
appropriate officers of the Borrower, as appropriate.
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware and has all corporate
powers required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of
the Credit Agreement, the Note and the other Loan Documents (i) are within the
Borrower's corporate powers, (ii) have
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Xxxxxxxx Xxxx, N.A.
Page 2
been duly authorized by all necessary corporate action, (iii) require no action
by or in respect of, or filing with, any governmental body, agency or official,
(iv) do not contravene, or constitute a default under, any provision of
Applicable Law or of the certificate of incorporation or bylaws of the Borrower
or of any agreement, judgment, injunction, order, decree or other instrument
which is binding upon the Borrower and (v) except as provided in the Credit
Agreement and the other Loan Documents, do not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
3. The Credit Agreement, the Note and the other Loan Documents
constitute valid and binding agreements of the Borrower, enforceable against
the Borrower in accordance with their respective terms, except as such
enforceability may be limited by: (i) bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity.
4. There is no action, suit or proceeding pending, or
threatened, against or affecting the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole, or which in any manner questions the validity or
enforceability of the Credit Agreement, the Note or any other Loan Documents.
5. Neither the Borrower nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
I am qualified to practice in the State of North Carolina and do
not purport to be expert on any laws other than the laws of the United States
and the State of North Carolina, and this opinion is rendered only with respect
to such laws. I have made no independent investigation of the laws of any other
jurisdiction.
We express no opinion as to the laws of any jurisdiction wherein
the Bank may be located which limits rates of interest which may be charged or
collected by the Bank other than in paragraph 4 with respect to the State of
North Carolina.
This opinion is delivered to you in connection with the
transaction referenced above and may only be relied upon by you or any
Assignee, Participant or other Transferee under the Credit Agreement, without
our prior written consent.
Very truly yours,
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