Exhibit 10.1
[EXECUTION COPY]
CREDIT AGREEMENT
Dated as of May 18, 1998
among
XXXXXX AMERICAN CORP.,
as Borrower,
XXXXXX AMERICAN INVESTMENT CORP.,
XXXXXX AMERICAN GROUP, INC.
AND
CERTAIN OTHER DIRECT AND INDIRECT SUBSIDIARIES OF THE PARENT
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO,
NATIONSBANK, N. A.,
as Agent,
and
GLEACHER NATWEST INC.,
as Documentation Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS.......................................................1
1.1 Definitions........................................................1
1.2 Computation of Time Periods.......................................31
1.3 Accounting Terms..................................................31
SECTION 2 CREDIT FACILITIES................................................32
2.1 Revolving Loans...................................................32
2.2 Letter of Credit Subfacility......................................34
2.3 Swingline Loan Subfacility........................................39
2.4 Tranche A Term Loan...............................................41
2.5 Tranche B Term Loan...............................................44
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES...................46
3.1 Default Rate......................................................46
3.2 Extension and Conversion..........................................46
3.3 Prepayments.......................................................47
3.4 Termination and Reduction of Commitments..........................49
3.5 Fees..............................................................49
3.6 Capital Adequacy..................................................51
3.7 Limitation on Eurodollar Loans....................................51
3.8 Illegality........................................................51
3.9 Requirements of Law...............................................52
3.10 Treatment of Affected Loans......................................53
3.11 Taxes............................................................53
3.12 Compensation.....................................................55
3.13 Pro Rata Treatment...............................................56
3.14 Sharing of Payments..............................................57
3.15 Payments, Computations, Etc......................................57
3.16 Evidence of Debt.................................................59
SECTION 4 GUARANTY.........................................................60
4.1 The Guaranty......................................................60
4.2 Obligations Unconditional.........................................60
4.3 Reinstatement.....................................................61
4.4 Certain Additional Waivers........................................61
4.5 Remedies..........................................................62
4.6 Rights of Contribution............................................62
4.7 Guarantee of Payment; Continuing Guarantee........................63
SECTION 5 CONDITIONS.......................................................63
5.1 Closing Conditions................................................63
5.2 Conditions to all Extensions of Credit............................69
SECTION 6 REPRESENTATIONS AND WARRANTIES...................................70
6.1 Financial Condition...............................................70
6.2 No Material Change................................................71
6.3 Organization and Good Standing....................................71
6.4 Power; Authorization; Enforceable Obligations.....................71
6.5 No Conflicts......................................................72
6.6 No Default........................................................72
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6.7 Ownership.........................................................73
6.8 Indebtedness......................................................73
6.9 Litigation........................................................73
6.10 Taxes............................................................73
6.11 Compliance with Law..............................................73
6.12 ERISA............................................................73
6.13 Subsidiaries.....................................................74
6.14 Governmental Regulations, Etc....................................75
6.15 Purpose of Loans and Letters of Credit...........................76
6.16 Environmental Matters............................................76
6.17 Intellectual Property............................................77
6.18 Solvency.........................................................77
6.19 Investments......................................................77
6.20 Location of Collateral...........................................77
6.21 Disclosure.......................................................78
6.22 Brokers' Fees....................................................78
6.23 Labor Matters....................................................78
6.24 Nature of Business...............................................78
6.25 Year 2000 Compliance.............................................78
SECTION 7 AFFIRMATIVE COVENANTS............................................79
7.1 Information Covenants.............................................79
7.2 Preservation of Existence and Franchises..........................82
7.3 Books and Records.................................................82
7.4 Compliance with Law...............................................82
7.5 Payment of Taxes and Other Indebtedness...........................82
7.6 Insurance.........................................................83
7.7 Maintenance of Property...........................................84
7.8 Performance of Obligations........................................84
7.9 Use of Proceeds...................................................84
7.10 Audits/Inspections...............................................84
7.11 Financial Covenants..............................................84
7.12 Additional Credit Parties........................................86
7.13 Pledged Assets...................................................86
7.14 Furtherance Assurances...........................................87
SECTION 8 NEGATIVE COVENANTS...............................................88
8.1 Indebtedness......................................................88
8.2 Liens.............................................................90
8.3 Nature of Business................................................90
8.4 Consolidation, Merger, Dissolution, etc...........................90
8.5 Asset Dispositions................................................91
8.6 Investments.......................................................91
8.7 Restricted Payments...............................................92
8.8 Prepayments of Indebtedness, etc..................................92
8.9 Transactions with Affiliates......................................93
8.10 Fiscal Year; Organizational Documents............................93
8.11 Limitation on Restricted Actions.................................93
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8.12 Ownership of Subsidiaries; Limitations on Parent and Interco.....94
8.13 Sale Leasebacks..................................................95
8.14 No Further Negative Pledges......................................95
8.15 Designated Senior Indebtedness...................................95
SECTION 9 EVENTS OF DEFAULT................................................96
9.1 Events of Default.................................................96
9.2 Acceleration; Remedies............................................98
SECTION 10 AGENCY PROVISIONS...............................................99
10.1 Appointment, Powers and Immunities...............................99
10.2 Reliance by Agent................................................99
10.3 Defaults........................................................100
10.4 Rights as a Lender..............................................100
10.5 Indemnification.................................................100
10.6 Non-Reliance on Agent and Other Lenders.........................101
10.7 Successor Agent.................................................101
10.8 Documentation Agent.............................................101
SECTION 11 MISCELLANEOUS..................................................102
11.1 Notices.........................................................102
11.2 Right of Set-Off; Adjustments...................................103
11.3 Benefit of Agreement............................................103
11.4 No Waiver; Remedies Cumulative..................................105
11.5 Expenses; Indemnification.......................................106
11.6 Amendments, Waivers and Consents................................106
11.7 Counterparts....................................................108
11.8 Headings........................................................108
11.9 Survival........................................................108
11.10 Governing Law; Submission to Jurisdiction; Venue...............108
11.11 Severability...................................................109
11.12 Entirety.......................................................109
11.13 Binding Effect; Termination....................................109
11.14 Confidentiality................................................110
11.15 Conflict.......................................................110
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SCHEDULES
Schedule 1.1A Scheduled Financial Information
Schedule 1.1B Existing Letters of Credit
Schedule 1.1C Investments
Schedule 1.1D Liens
Schedule 2.1(a) Lenders
Schedule 5.1(c)(i) Form of Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx
Schedule 5.1(c)(ii) Form of Local Counsel Legal Opinion
Schedule 5.1(c)(iii) Form of Opinion of Canadian Counsel
Schedule 6.4 Required Consents, Authorizations, Notices
and Filings
Schedule 6.9 Litigation
Schedule 6.12 ERISA
Schedule 6.13 Subsidiaries
Schedule 6.16 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Mortgaged Properties
Schedule 6.20(b) Collateral Locations
Schedule 6.20(c) Chief Executive Offices/Principal Places
of Business
Schedule 6.23 Labor Matters
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
EXHIBITS
Exhibit 1.1A Form of Pledge Agreement
Exhibit 1.1B Form of Security Agreement
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(d) Form of Swingline Note
Exhibit 2.4(f) Form of Tranche A Term Note
Exhibit 2.5(f) Form of Tranche B Term Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of May 18, 1998 (as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"), is by and
among XXXXXX AMERICAN CORP., a Delaware corporation (the "Borrower"), XXXXXX
AMERICAN INVESTMENT CORP., a Delaware corporation (the "Parent"), XXXXXX
AMERICAN GROUP, INC., a Delaware corporation ("Interco"), the Subsidiary
Guarantors (as defined herein), the Lenders (as defined herein), NATIONSBANK, N.
A., as agent for the Lenders (in such capacity, the "Agent"), and GLEACHER
NATWEST INC., as documentation agent for the Lenders (in such capacity, the
"Documentation Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$160,000,000 credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition", by any Person, means the acquisition by such Person
of the majority of the Equity Interests, all or substantially all of the
Property or a line of business or division of another Person, whether or
not involving a merger or consolidation with such other Person.
"Additional Credit Party" means each Person that becomes a
Subsidiary Guarantor after the Closing Date by execution of a Joinder
Agreement.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
1
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), when used with respect
to any Person, means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing; provided, that beneficial ownership of 10%
or more of the Voting Stock of a Person shall be deemed to be control.
"Agency Services Address" means NationsBank, N. A., NC1-001-15-04,
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attn: Agency
Services, or such other address as may be identified by written notice
from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the heading
hereof, together with any successors or assigns.
"Agent's Fee Letter" means that certain letter agreement, dated as
of March 30, 1998, between the Agent and the Sponsor, as amended,
modified, restated or supplemented from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(d).
"Applicable Lending Office" means, for each Lender, the office of
such Lender (or of an Affiliate of such Lender) as such Lender may from
time to time specify to the Agent and the Borrower by written notice as
the office by which its Eurodollar Loans are made and maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, any Tranche A
Term Loan or any Tranche B Term Loan, the applicable rate of the Unused
Fee for any day for purposes of Section 3.5(b), the applicable rate of the
Standby Letter of Credit Fee for any day for purposes of Section 3.5(c)(i)
or the applicable rate of the Trade Letter of Credit Fee for any day for
purposes of Section 3.5(c)(ii), the appropriate applicable percentage
corresponding to the Senior Leverage Ratio in effect as of the most recent
Calculation Date:
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=================================================================================================
Applicable
Percentage For
Revolving Loans Applicable
and Tranche A Term Percentage For
Loan Tranche B Term Loan
-------------------- -------------------
Applicable Applicable Applicable
Percentage Percentage Percentage
Senior For Base Base For Standby for Trade
Pricing Leverage Unused Eurodollar Rate Eurodollar Rate Letter of Letter of
Level Ratio Fee Loans Loans Loans Loans Credit Fee Credit Fee
-------------------------------------------------------------------------------------------------
I > 2.50 1/2% 2-1/4% 1-1/4% 2-1/2% 1-1/2% 2-1/4% 1-1/8%
to 1.00
-------------------------------------------------------------------------------------------------
II less than 1/2% 2% 1% 2-1/4% 1-1/4% 2% 1%
or equal
to 2.50
to
1.00
but greater
than or
equal to
2.00
to 1.00
-------------------------------------------------------------------------------------------------
III < 2.00 3/8% 1-3/4% 3/4% 2% 1% 1-3/4% 7/8%
to
1.00
but greater
than or
equal to
1.75
to 1.00
-------------------------------------------------------------------------------------------------
IV < 1.75 3/8% 1-1/2% 1/2% 2% 1% 1-1/2% 3/4%
to 1.00
=================================================================================================
The Applicable Percentages shall be determined and adjusted quarterly on
the date (each a "Calculation Date") five Business Days after the date by
which the Credit Parties are required to provide the officer's certificate
in accordance with the provisions of Section 7.1(c) for the most recently
ended fiscal quarter of the Consolidated Parties or, in the case of the
fourth fiscal quarter of any fiscal year, five Business Days after such
earlier date as the Credit Parties shall have delivered to the Agent and
the Lenders financial statements for such fiscal quarter meeting the
requirements of Section 7.1(b) together with a related officer's
certificate meeting the requirements of Section 7.1(c)); provided,
however, that (i) the initial Applicable Percentages shall be based on
Pricing Level I (as shown above) and shall remain at Pricing Level I until
the first Calculation Date occurring after the date that is 6 months
following the Closing Date and, at such Calculation Date and thereafter,
the Pricing Level shall be determined by the Senior Leverage Ratio as of
the last day of the most recently ended fiscal quarter of the Consolidated
Parties preceding the applicable Calculation Date, (ii) if the Credit
Parties fail to provide the officer's certificate to the Agency Services
Address as required by Section 7.1(c) for the last day of the most
recently ended fiscal quarter of the Consolidated Parties preceding the
applicable Calculation Date, the Applicable Percentage from such
Calculation Date shall be based on Pricing Level I until such time as an
appropriate officer's certificate is provided, whereupon the Pricing Level
shall be determined by the Senior Leverage Ratio as of the last day of the
most recently ended fiscal quarter of the Consolidated Parties preceding
such Calculation Date and (iii) if the Applicable Percentages determined
based on the audited financial statements
3
(and accompanying officer's certificate) for any fiscal year shall be at a
different Pricing Level than the Pricing Level of the Applicable
Percentages determined based on unaudited financial statements (and
accompanying officer's certificate), if any, for the fourth fiscal quarter
of any fiscal year delivered by the Credit Parties pursuant to this
definition of "Applicable Percentage", then (x) the Pricing Level
determined based on the audited financial statements (and accompanying
officer's certificate) shall control and (y) the Borrower shall promptly
pay to the Agent for the account of each affected Lender the amount of
additional interest and Fees, if any, which would have accrued hereunder
for the period that the Applicable Percentages were based on such
unaudited financial statements (and accompanying officer's certificate)
had the Applicable Percentages been based on such audited financial
statements (and accompanying officer's certificate). Each Applicable
Percentage shall be effective from one Calculation Date until the next
Calculation Date. Any adjustment in the Applicable Percentages shall be
applicable to all existing Loans and Letters of Credit as well as any new
Loans and Letters of Credit made or issued.
"Application Period", in respect of any Asset Disposition, shall
have the meaning assigned to such term in Section 8.5.
"Asset Disposition" means the disposition of any or all of the
assets (including without limitation the Equity Interests of a Subsidiary)
of the Parent or any Consolidated Party whether by sale, lease, transfer
or otherwise (including pursuant to any casualty or condemnation event).
The term "Asset Disposition" (a) shall include any "Asset Sale" under the
documents evidencing or governing the Senior Subordinated Debt and (b)
shall not include (i) the sale of inventory in the ordinary course of
business, (ii) the sale or disposition of machinery and equipment no
longer used or useful in the conduct of such Person's business or (iii)
any Equity Issuance.
"Asset Disposition Prepayment Event" means, with respect to any
Asset Disposition other than an Excluded Asset Disposition, the failure of
the Credit Parties to apply (or cause to be applied) the Net Cash Proceeds
of such Asset Disposition to Eligible Reinvestments during the Application
Period for such Asset Disposition.
"Austell Property" means the Borrower's facility located in Austell,
Georgia.
"Austell Transaction" means a collective reference to (i) the
purchase by the Borrower of the Austell Property for an aggregate purchase
price not greater than $3,000,000, (ii) the subsequent sale by the
Borrower of the Austell Property to a non-Affiliate Person for an
aggregate sale price not less than $5,000,000 and (iii) the leasing back
of the Austell Property by the Borrower, as lessee, from such
non-Affiliate Person, as lessor, pursuant to a lease providing for rent
and other conditions taken as a whole which are no less favorable to the
Borrower in any material respect than the agreement in respect of the
Borrower's leasehold interest in the Austell Property as of the Closing
Date.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time
to time.
4
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of New York.
"Bankruptcy Event" means, with respect to any Person, the occurrence
of any of the following with respect to such Person: (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or ordering the winding up or
liquidation of its affairs; or (ii) there shall be commenced against such
Person an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded for a period of sixty (60) consecutive days; or (iii) such Person
shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent to
the entry of an order for relief in an involuntary case under any such
law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
make any general assignment for the benefit of creditors; or (iv) such
Person shall be unable to, or shall admit in writing its inability to, pay
its debts generally as they become due.
"Base Rate" means, for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) and (b) the Prime Rate for such day. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or
Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" shall have the meaning assigned to such terms in the
heading hereof, together with any permitted successors or assigns.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York,
New York are authorized or required by law to close, except that, when
used in connection with a Eurodollar Loan, such day shall also be a day on
which dealings between banks are carried on in Dollar deposits in London,
England.
"Calculation Date" has the meaning set forth in the definition of
"Applicable Percentage" set forth in this Section 1.1.
5
"Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (b) U.S.
Dollar denominated time deposits and certificates of deposit of (i) any
Lender, (ii) any domestic commercial bank of recognized standing having
capital and surplus in excess of $500,000,000 or (iii) any bank whose
short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent
thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than one year from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable rate notes issued
by, or guaranteed by, any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within one year of the date of acquisition,
(d) repurchase agreements entered into by any Person with a bank or trust
company (including any of the Lenders) or recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of America
in which such Person shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the
repurchase obligations and (e) Investments, classified in accordance with
GAAP as current assets, in money market investment programs registered
under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at
least $500,000,000 and the portfolios of which are limited to Investments
of the character described in the foregoing subdivisions (a) through (d).
"Change of Control" means any of the following events: (a) the
failure of the Parent to own, directly or indirectly, all of the Voting
Stock of Interco and all of the Voting Stock of the Borrower, (b) prior to
a Qualifying IPO, (1) the failure of the Sponsor (A) to own beneficially,
directly or indirectly, at least 2/3 of the outstanding capital stock of
the Parent initially acquired by the Sponsor pursuant to the
Recapitalization or (B) to have the right, directly or indirectly, by
beneficial ownership, contract or otherwise, to elect at least a majority
in number of the members of the Parent's Board of Directors or (2) less
than a majority in number of the sitting members of the Parent's Board of
Directors shall have been elected by the Sponsor, (c) after a Qualifying
IPO, (1) the failure of the Sponsor to own beneficially, directly or
indirectly, at least 30% of the outstanding Voting Stock of the IPO Issuer
or (2) a person or any group, and any affiliate of any such person other
than the Sponsor shall beneficially own, directly or indirectly, an amount
of the outstanding Voting Stock of the IPO Issuer entitled to 20% or more
of the voting power of all the outstanding Voting Stock of the IPO Issuer,
(d) during any period of up to 24 consecutive months, commencing after the
Closing Date, individuals who at the beginning of such 24 month period
were directors of the Parent (or, after a Qualifying IPO, the IPO Issuer)
(together with any new director whose election by the Parent's (or the
6
IPO Issuer's, as applicable) Board of Directors or whose nomination for
election by the Parent's (or the IPO Issuer's, as applicable) shareholders
was approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the directors of the
Parent (or the IPO Issuer, as applicable) then in office or (e) the
occurrence of a "Change of Control" under any of the Recapitalization
Documents. As used herein, "beneficial ownership" shall have the meaning
provided in Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed also to refer to any successor
sections.
"Collateral" means a collective reference to the collateral which is
identified in, and at any time will be covered by, the Collateral
Documents.
"Collateral Documents" means a collective reference to the Security
Agreement, the Pledge Agreement, the Mortgage Instruments and such other
documents executed and delivered in connection with the attachment and
perfection of the Agent's security interests and liens
arising thereunder.
"Commitment" means (i) with respect to each Lender, the Revolving
Commitment of such Lender, the Tranche A Term Loan Commitment of such
Lender and the Tranche B Term Loan Commitment of such Lender, (ii) with
respect to the Swingline Lender, the Swingline Commitment and (iii) with
respect to the Issuing Lender, the LOC Commitment.
"Confirmation Order" means the final order of the Bankruptcy Court
dated March 31, 1998 confirming the Reorganization Plan.
"Consolidated Capital Expenditures" means, for any period, all
capital expenditures of the Consolidated Parties on a consolidated basis
for such period other than (i) any capital expenditure financed with the
proceeds of any Asset Disposition or Equity Issuance and (ii) any capital
expenditure constituting an Acquisition (or any portion thereof), all as
determined in accordance with GAAP.
"Consolidated Cash Taxes" means, for any period, the aggregate of
all taxes of the Consolidated Parties on a consolidated basis for such
period, as determined in accordance with GAAP, to the extent the same are
paid in cash during such period; provided, however, that Consolidated Cash
Taxes for the fiscal quarters ending June 30, 1998, September 30, 1998 and
December 31, 1998 shall be equal to the sum of (i) the amount determined
pursuant to the first clause of this definition for the one-quarter
period, two-quarter period or three-quarter period, respectively, then
ended plus (ii) the amount indicated for Consolidated Cash Taxes for such
date on Schedule 1.1A.
7
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense, (B) total federal, state,
local and foreign income, value added and similar taxes, (C) depreciation
and amortization expense, (D) letter of credit fees, (E) non-cash expenses
resulting from the grant of stock and stock options to employees of the
Parent, the Borrower or any of their respective Subsidiaries pursuant to a
written plan or agreement and (F) step-ups in inventory valuation as a
result of purchase accounting for Permitted Acquisitions, all as
determined in accordance with GAAP; provided, however, that Consolidated
EBITDA for the fiscal quarters ending June 30, 1998, September 30, 1998
and December 31, 1998 shall be equal to the sum of (i) the amount
determined pursuant to the first clause of this definition for the
one-quarter period, two-quarter period or three-quarter period,
respectively, then ended plus (ii) the aggregate Consolidated EBITDA
Adjustment for each fiscal quarter occurring during such period.
"Consolidated EBITDA Adjustment" means, (i) for the fiscal quarters
ending September 30, 1997, December 31, 1997 and March 28, 1998, the
amount indicated for Consolidated EBITDA for such fiscal quarters on
Schedule 1.1A and (ii) for any fiscal quarter thereafter, the amount, if
any, of reorganization charges taken during such fiscal quarter in respect
of (A) up to $3.3 million of facility closing and re-engineering costs
accrued by the Borrower and its Subsidiaries prior to the Closing Date,
(B) up to $550,000 of losses accrued by the Borrower and its Subsidiaries
prior to the Closing Date associated with (1) the Canadian retail
operations the Borrower and its Subsidiaries and (2) the Mexican and
Guatemalan operations of the Borrower and its Subsidiaries, (C) up to $4.0
million of bankruptcy reorganization costs incurred by the Borrower and
its Subsidiaries on or prior to the Closing Date and (D) the costs and
expenses of the Parent, the Borrower and its Subsidiaries incurred in
connection with the Recapitalization, in each case calculated in
accordance with GAAP.
"Consolidated Interest Expense" means, for any period, interest
expense (including the amortization of debt discount and premium, the
interest component under Capital Leases and the implied interest component
under Synthetic Leases, but excluding amortization of deferred financing
costs) of the Consolidated Parties on a consolidated basis for such
period, as determined in accordance with GAAP; provided, however, that
Consolidated Interest Expense for the fiscal quarters ending June 30,
1998, September 30, 1998 and December 31, 1998 shall be equal to the sum
of (i) the amount determined pursuant to the first clause of this
definition for the one-quarter period, two-quarter period or three-quarter
period, respectively, then ended plus (ii) the amount indicated for
Consolidated Interest Expense for such date on Schedule 1.1A.
"Consolidated Net Income" means, for any period, net income
(excluding extraordinary items) after taxes for such period of the
Consolidated Parties on a consolidated basis, as determined in accordance
with GAAP.
"Consolidated Parties" means a collective reference to the Borrower
and its Subsidiaries, and "Consolidated Party" means any one of them.
8
"Consolidated Scheduled Funded Debt Payments" means, as of the end
of each fiscal quarter of the Consolidated Parties, for the Consolidated
Parties on a consolidated basis, the sum of all scheduled payments of
principal on Funded Indebtedness for the applicable period ending on such
date (including the principal component of payments due on Capital Leases
during the applicable period ending on such date); it being understood
that Scheduled Funded Debt Payments shall not include voluntary
prepayments or the mandatory prepayments required pursuant to Section 3.3;
provided, however, that Consolidated Scheduled Funded Debt Payments for
the fiscal quarters ending June 30, 1998, September 30, 1998 and December
31, 1998 shall be equal to the sum of (i) the amount determined pursuant
to the first clause of this definition for the one-quarter period,
two-quarter period or three-quarter period, respectively, then ended plus
(ii) the amount indicated for Consolidated Scheduled Funded Debt Payments
for such date on Schedule 1.1A.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 3.2 or Sections 3.7 through 3.12, inclusive, of a Base
Rate Loan into a Eurodollar Loan.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
Agent's Fee Letter, the Collateral Documents and all other related
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto (in each case as the same may be amended,
modified, restated, supplemented, extended, renewed or replaced from time
to time), and "Credit Document" means any one of them.
"Credit Parties" means a collective reference to the Borrower and
the Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the
Issuing Lender and the Swingline Lender) and the Agent, whenever arising,
under this Credit Agreement, the Notes, the Collateral Documents or any of
the other Credit Documents (including, but not limited to, any interest
accruing after the occurrence of a Bankruptcy Event with respect to any
Credit Party, regardless of whether such interest is an allowed claim
under the Bankruptcy Code) and (ii) all liabilities and obligations,
whenever arising, owing from any Credit Party to any Lender, or any
Affiliate of a Lender, arising under any Hedging Agreement.
"Debt Issuance" means the issuance of any Indebtedness for borrowed
money by the Parent or any Consolidated Party other than Indebtedness
permitted under Section 8.1.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
9
"Defaulting Lender" means, at any time, any Lender that (a) has
failed to make a Loan or purchase a Participation Interest required
pursuant to the term of this Credit Agreement within one Business Day of
when due, (b) other than as set forth in (a) above, has failed to pay to
the Agent or any Lender an amount owed by such Lender pursuant to the
terms of this Credit Agreement within one Business Day of when due, unless
such amount is subject to a good faith dispute or (c) has been deemed
insolvent or has become subject to a bankruptcy or insolvency proceeding
or with respect to which (or with respect to any of assets of which) a
receiver, trustee or similar official has been appointed.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" means any Subsidiary of the Parent which is
incorporated or organized under the laws of any State of the United States
or the District of Columbia.
"Eligible Assets" means another business or any substantial part of
another business or any other long-term assets, in each case, in, or used
or useful in, the same or a similar line of business as the Parent or the
Consolidated Parties were engaged in on the Closing Date or any reasonable
extensions or expansions thereof.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; and (iii) any other Person approved by the Agent and the Borrower
(such approval not to be unreasonably withheld or delayed by the Borrower
and such approval to be deemed given by the Borrower if no objection is
received by the assigning Lender and the Agent from the Borrower within
three Business Days after notice of such proposed assignment has been
provided by the assigning Lender to the Borrower); provided, however, that
neither the Parent nor any of the Consolidated Parties shall qualify as an
Eligible Assignee.
"Eligible Reinvestment" means (i) an acquisition (whether or not
constituting a capital expenditure, but not constituting an Acquisition)
of Eligible Assets and (ii) a Permitted Acquisition. The term "Eligible
Reinvestment" shall not include any item which is not a permitted
application of proceeds of an "Asset Sale" under Section 1.01 of the
Indenture for the Senior Subordinated Debt.
"Employee Preferred Stock" shall have the meaning assigned to such
term in Section 5.1(h).
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions
relating to the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes into the environment including,
without limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or
wastes.
10
"Equity Interest" means (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership,
partnership interests (whether general or limited) and (iv) in the case of
a limited liability company, membership interests.
"Equity Issuance" means any issuance for cash by the Parent or any
Consolidated Party to any Person (other than the Sponsor or its Affiliates
or designated co-investors or any of the officers, directors or employees
of the Parent or a Consolidated Party) which is not a Credit Party of (a)
any of its Equity Interests, (b) any of its Equity Interests pursuant to
the exercise of options or warrants or (c) any of its Equity Interests
pursuant to the conversion of any debt securities to equity. The term
"Equity Issuance" shall not include any Asset Disposition.
"Equity Issuance Prepayment Event" means, with respect to any Equity
Issuance, the failure of the Credit Parties to apply (or cause to be
applied) the Net Cash Proceeds of such Equity Issuance to Eligible
Reinvestments within the period of 365 days following the consummation of
such Equity Issuance.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto, as interpreted by the rules
and regulations thereunder, all as the same may be in effect from time to
time. References to sections of ERISA shall be construed also to refer to
any successor sections.
"ERISA Affiliate" means an entity which is under common control with
the Parent or any Consolidated Party within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes the Parent
or any Consolidated Party and which is treated as a single employer under
Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of
a Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (ii) the withdrawal by the Parent,
any Consolidated Party or any ERISA Affiliate from a Multiple Employer
Plan during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination of a
Multiple Employer Plan; (iii) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section 4041 or
4041A of ERISA; (iv) the institution of proceedings to terminate or the
actual termination of a Plan by the PBGC under Section 4042 of ERISA; (v)
the complete or partial withdrawal of the Parent, any Consolidated Party
or any ERISA Affiliate from a Multiemployer Plan; or (vi) the adoption of
an amendment to any Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate based
upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined
11
by the Agent to be equal to the quotient obtained by dividing (a) the
Interbank Offered Rate for such Eurodollar Loan for such Interest Period
by (b) 1 minus the Eurodollar Reserve Requirement for such Eurodollar Loan
for such Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum
rate at which reserves (including, without limitation, any marginal,
special, supplemental, or emergency reserves) are required to be
maintained under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) by member banks
of the Federal Reserve System against "Eurocurrency liabilities" (as such
term is used in Regulation D of such Board). Without limiting the effect
of the foregoing, the Eurodollar Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect
to (i) any category of liabilities which includes deposits by reference to
which the Adjusted Eurodollar Rate is to be determined, or (ii) any
category of extensions of credit or other assets which include Eurodollar
Loans. The Adjusted Eurodollar Rate shall be adjusted automatically on and
as of the effective date of any change in the Eurodollar Reserve
Requirement.
"Event of Default" shall have the meaning as defined in Section 9.1.
"Excess Cash Flow" means, with respect to any fiscal year period of
the Consolidated Parties on a consolidated basis, an amount equal to (a)
Consolidated EBITDA for such period minus (b) Consolidated Capital
Expenditures for such period minus (c) Consolidated Interest Expense for
such period minus (d) Federal, state and other income taxes payable by the
Consolidated Parties on a consolidated basis in respect of such period
minus (e) Consolidated Scheduled Funded Debt Payments made during such
period minus (f) prepayments applied to the permanent reduction of Funded
Debt of any Consolidated Party; provided that in the case of any revolving
Funded Debt, such prepayment shall correspondingly permanently reduce
commitments with respect thereto, plus/minus (g) changes in non-cash
working capital for such period minus (h) without duplication of any item
included under clause (c) above, Restricted Payments made by the Parent
and the Consolidated Parties during such period to the extent permitted by
the terms of Section 8.7.
"Exchange Debentures" means subordinated exchange debentures of the
Borrower issued upon exchange of the Senior Preferred Stock.
"Excluded Asset Disposition" means (i) any Asset Disposition to any
Consolidated Party if (a) the Credit Parties shall cause to be executed
and delivered such documents, instruments and certificates as the Agent
may request so as to cause the Credit Parties to be in compliance with the
terms of Section 7.13 after giving effect to such Asset Disposition and
(b) after giving effect such Asset Disposition, no Default or Event of
Default exists, (ii) any casualty or condemnation event with respect to
which the net proceeds received by the Parent or the Consolidated Parties
are less than $1,000,000, (iii) the sale or other disposition of any
Property (other than inventory) in the ordinary course of business,
provided that the aggregate book of all Property so sold or disposed of in
any twelve consecutive months shall not exceed $2,000,000, (iv) the sale
or discount without recourse of accounts receivable only in connection
with the compromise thereof or the assignment or past-due
12
accounts for collection, and (v) the sale or disposition by the Borrower
of Austell Property in connection with the Austell Transaction.
"Executive Officer" of any Person means any of the chief executive
officer, chief operating officer, president, vice president, chief
financial officer or treasurer of such Person.
"Existing Letters of Credit" means the letters of credit described
by date of issuance, letter of credit number, undrawn amount, name of
beneficiary and date of expiry on Schedule 1.1B.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 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 (a) if such day 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 (b) if no such rate is so published
on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent (in its individual
capacity) on such day on such transactions as determined by the Agent.
"Fixed Charge Coverage Ratio" means, as of the last day of any
fiscal quarter of the Consolidated Parties for the twelve month period
ending on such date, the ratio of (a) the sum of (i) Consolidated EBITDA
for the applicable period minus (ii) Consolidated Capital Expenditures for
the applicable period minus (iii) Consolidated Cash Taxes for the
applicable period to (b) the sum of (i) Consolidated Interest Expense for
the applicable period plus (ii) Consolidated Scheduled Funded Debt
Payments for the applicable period.
"Foreign Subsidiary" means any direct or indirect Subsidiary of the
Parent which is not a Domestic Subsidiary.
"Fund" means Vestar Capital Partners III, L.P.
"Funded Indebtedness" means, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness
of the types referred to in clause (e), (f), (g), (i) and (m) of the
definition of "Indebtedness" set forth in this Section 1.1, (b) all
Indebtedness of another Person of the type referred to in clause (a) above
secured by (or for which the holder of such Funded Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds of production from, Property owned or acquired
by such Person, whether or not the obligations secured thereby have been
assumed, (c) all Guaranty Obligations of such Person with respect to
Indebtedness of the type referred to in clause (a) above of another Person
and (d) Indebtedness of the type referred to in clause (a) above of any
partnership or unincorporated
13
joint venture in which such Person is a general partner or a joint
venturer to the extent such Person is liable therefor.
"GAAP" means generally accepted accounting principles in the United
States as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board and the rules
and regulations of the Securities and Exchange Commission which are
applicable as of the date of determination, and applied on a consistent
basis and subject to the terms of Section 1.3.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantors" means a collective reference to the Parent, Interco and
each of the Subsidiary Guarantors, together with their permitted
successors and assigns, and "Guarantor " means any one of them.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any Property constituting security
therefor, (ii) to advance or provide funds or other support for the
payment or purchase of any such Indebtedness or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease
or purchase Property, securities or services primarily for the purpose of
assuring the holder of such Indebtedness, or (iv) to otherwise assure or
hold harmless the holder of such Indebtedness against loss in respect
thereof. The amount of any Guaranty Obligation hereunder shall (subject to
any limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made.
"Hedging Agreements" means any interest rate protection agreement or
foreign currency exchange agreement between the Parent or any Consolidated
Party and any Lender, or any Affiliate of a Lender.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily made,
(c) all obligations of such Person under conditional sale or other title
retention agreements relating to Property purchased by such Person (other
than customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations of such Person issued or assumed as the deferred purchase
price of Property or services purchased by such Person (other than trade
14
debt incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay
or similar arrangements or under commodities agreements, (f) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on, or payable out of the proceeds of production from,
Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Hedging
Agreements, (j) the maximum amount of all standby letters of credit issued
or bankers' acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Equity Interests issued by such Person
and which by the terms thereof could be (at the request of the holders
thereof or otherwise) subject to mandatory sinking fund payments,
mandatory redemption or other acceleration (other than as a result of a
Change of Control or an Asset Disposition that does not in fact result in
a redemption of such preferred Equity Interests) prior to the Maturity
Date, (l) the principal portion of all obligations of such Person under
Synthetic Leases and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or
a joint venturer to the extent such Person is liable therefor.
"Interbank Offered Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or
any successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period. If for any reason such rate is not available, the term
"Interbank Offered Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of all
such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
"Interco" means the Person identified as such in the heading hereof,
together with any permitted successors and assigns.
"Interest Coverage Ratio" means, as of the last day of any fiscal
quarter of the Consolidated Parties for the twelve month period ending on
such date, the ratio of (a) Consolidated EBITDA for such period to (b)
Consolidated Interest Expense for such period.
"Interest Payment Date" means (a) as to Base Rate Loans and Quoted
Rate Swingline Loans, the last day of each fiscal quarter of the Borrower
and the Maturity Date and (b) as to Eurodollar Loans, the last day of each
applicable Interest Period and the Maturity Date, and in addition where
the applicable Interest Period for a Eurodollar Loan is greater than three
months, then also the date three months from the beginning of the Interest
Period and each three months thereafter.
15
"Interest Period" means, (i) as to Eurodollar Loans, a period of
one, two, three, six or, subject to availability (as reasonably determined
by the Agent), nine or twelve months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof) and (ii) as to any Swingline Loan,
a period commencing in each case on the date of the borrowing and ending
on the date agreed to by the Borrower and the Swingline Lender in
accordance with the provisions of Section 2.3(b)(i) (such ending date in
any event to be not more than thirty (30) Business Days from the date of
borrowing); provided, however, (a) if any Interest Period would end on a
day which is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day (except that where the next succeeding
Business Day falls in the next succeeding calendar month, then on the next
preceding Business Day), (b) no Interest Period shall extend beyond the
Maturity Date, (c) with regard to the Tranche A Term Loans, no Interest
Period shall extend beyond any Principal Amortization Payment Date unless
the portion of Tranche A Term Loans comprised of Base Rate Loans together
with the portion of Tranche A Term Loans comprised of Eurodollar Loans
with Interest Periods expiring prior to the date such Principal
Amortization Payment is due, is at least equal to the amount of such
Principal Amortization Payment due on such date, (d) with regard to the
Tranche B Term Loans, no Interest Period shall extend beyond any Principal
Amortization Payment Date unless the portion of Tranche B Term Loans
comprised of Base Rate Loans together with the portion of Tranche B Term
Loans comprised of Eurodollar Loans with Interest Periods expiring prior
to the date such Principal Amortization Payment is due, is at least equal
to the amount of such Principal Amortization Payment due on such date and
(e) where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the Interest
Period is to end, such Interest Period shall end on the last Business Day
of such calendar month.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, Equity Interests, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance, loan
or other extension of credit to, such Person (other than deposits made in
connection with the purchase of equipment or other assets in the ordinary
course of business) or (c) any other capital contribution to or investment
in such Person, including, without limitation, any Guaranty Obligations
(including any support for a letter of credit issued on behalf of such
Person) incurred for the benefit of such Person, but excluding any
Restricted Payment to such Person.
"IPO Issuer" means, in respect of a Qualifying IPO, the Person (as
among the Parent, Interco or the Borrower and subject to the definition of
the term "Change of Control" set forth in this Section 1.1) that is the
issuer of the common Equity Interests offered in such Qualifying IPO.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such term
in Section 3.5(c)(ii).
16
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Exhibit 7.12 hereto, executed and delivered by an Additional
Credit Party in accordance with the provisions of Section 7.12.
"Joint Venture" means an entity which meets the following criteria:
(a) it was organized pursuant to an express joint venture,
partnership or limited liability company agreement;
(b) it is a venture among two or more Persons and, except for
purposes of the definition of "Indebtedness" set forth in this
Section 1.1, at least one of such Persons is, and one of such
Persons is not, the Borrower or a Wholly-Owned Subsidiary of the
Borrower;
(c) it operates a business for profit in which there is a
joint proprietary interest in the subject matter;
(d) the venture involves a right of mutual control of the
subject of the enterprise;
(e) each of the venturers has contributed or will contribute
capital, materials, services or knowledge;
(f) each of the venturers has a right to share in the profits
of the venture;
(g) each of the venturers has a duty to share in the losses of
the venture;
(h) the Borrower, directly or indirectly, has at least a 25%
equity ownership interest; and
(i) the Borrower, directly or indirectly has Voting Control
over the disposition of cash flow of such entity.
For purposes of this definition of "Joint Venture", "Voting Control" of
any Person means the unilateral power, directly or indirectly, on the
basis of ownership of capital stock or other capital or equity interest,
profit interest or beneficial interest in such Person or by contract, to
cause by vote the approval or the disapproval by or with respect to such
Person of such matter at issue.
"Junior Preferred Stock" shall have the meaning assigned to such
term in Section 5.1(h).
"Lender" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Eligible Assignee which may become a
Lender by way of assignment in accordance with the terms hereof, together
with their permitted successors and assigns. The
17
term Lender shall also mean a collective reference to any Revolving
Lender, Tranche A Term Lender or Tranche B Term Lender.
"Letter of Credit" means any (i) letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2 and (ii) any Existing Letter of Credit.
"Licensing Subsidiary" means any direct or indirect Subsidiary of
the Borrower whose principal asset or assets consist of intellectual
property owned or located outside of the United States.
"Lien" means, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such Property, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement
to sell or give a security interest in and any filing of or agreement to
give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction.
"Loan" or "Loans" means the Revolving Loans, the Tranche A Term
Loans, the Tranche B Term Loans (or a portion of any Revolving Loan, any
Tranche A Term Loan or Tranche B Term Loan bearing interest at the
Adjusted Base Rate or the Adjusted Eurodollar Rate) and/or the Swingline
Loans (or any Swingline Loan bearing interest at the Adjusted Base Rate or
the Quoted Rate and referred to as a Base Rate Loan or a Quoted Rate
Swingline Loan), individually or collectively, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to issue
Letters of Credit for the account of the Borrower in an aggregate face
amount at any time outstanding (together with the amounts of any
unreimbursed drawings thereon) of up to the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such term
in Section 2.2.
"LOC Documents" means, with respect to any Letter of Credit, any
application therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and
obligations of the parties concerned or at risk or (ii) any collateral
security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus
(ii) the aggregate amount of all drawings under Letters of Credit honored
by the Issuing Lender but not theretofore reimbursed by the Borrower.
18
"Material Adverse Effect" means a material adverse effect on (i) the
business, assets, operations, results of operations or financial condition
of the Parent and its Subsidiaries taken as a whole, (ii) the ability of
the Credit Parties taken as a whole to perform any material obligation
under the Credit Documents or (iii) the material rights and remedies of
the Lenders under the Credit Documents.
"Material Domestic Subsidiary" means, at any time, any direct or
indirect Subsidiary of any Credit Party which (i) is not in the process of
liquidation in accordance with the terms of this Credit Agreement and (ii)
has total assets (as determined in accordance with GAAP) of at least
$500,000 at such time and revenues (as determined in accordance with GAAP)
of at least $500,000 for the most recently ended twelve-month period;
provided, however, that at no time shall (x) the aggregate total assets
(as determined in accordance with GAAP) of all Subsidiaries of the Credit
Parties which are not Material Domestic Subsidiaries exceed $5,000,000 or
(y) the aggregate revenues (as determined in accordance with GAAP) of all
Subsidiaries of the Credit Parties which are not Material Domestic
Subsidiaries for the most recently ended twelve-month period exceed
$5,000,000.
"Material Foreign Subsidiary" means, at any time, any Foreign
Subsidiary which (i) is not in the process of liquidation and (ii) has
total assets (as determined in accordance with GAAP) of at least $500,000
at such time and revenues (as determined in accordance with GAAP) of at
least $500,000 for the most recently ended twelve-month period.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated
as such in or under any Environmental Laws, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means (i) as to the Revolving Loans, Letters of
Credit (and the related LOC Obligations), Swingline Loans and Tranche A
Term Loan, May 18, 2004 and (ii) as to the Tranche B Term Loan, May 18,
2005.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"Mortgage Instruments" shall have the meaning assigned such term in
Section 5.1(e).
"Mortgage Policies" shall have the meaning assigned such term in
Section 5.1(e).
"Mortgaged Properties" shall have the meaning assigned such term in
Section 5.1(e).
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
19
"Multiple Employer Plan" means a Plan which the Parent, any
Consolidated Party or any ERISA Affiliate and at least one employer other
than the Parent, any Consolidated Parties or any ERISA Affiliate are
contributing sponsors.
"NationsBank" means NationsBank, N. A. and its successors.
"Net Cash Proceeds" means the aggregate cash proceeds received by
the Parent or the Consolidated Parties in respect of any Asset Disposition
(other than an Excluded Asset Disposition), Equity Issuance or Debt
Issuance, net of (a) direct costs (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and (b)
taxes paid or payable as a result thereof; it being understood that "Net
Cash Proceeds" shall include, without limitation, any cash received upon
the sale or other disposition of any non-cash consideration received by
the Parent or the Consolidated Parties in any Asset Disposition, Equity
Issuance or Debt Issuance. In addition, the "Net Cash Proceeds" of any
Asset Disposition shall include any other amounts defined as "Net Cash
Proceeds" of such transaction under the documents evidencing or governing
the Senior Subordinated Debt.
"Note" or "Notes" means the Revolving Notes, the Tranche A Term
Notes, the Tranche B Term Notes and/or the Swingline Note, individually
or collectively, as appropriate.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i), Section 2.4(b) or Section 2.5(b).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Other Taxes" shall have the meaning assigned to such term in
Section 3.11.
"Parent" means the Person identified as such in the heading hereof,
together with any permitted successors and assigns.
"Parity Notes" means the senior subordinated notes in an aggregate
principal amount of approximately $13 million issued by the Borrower to
existing holders of the common stock of the Parent.
"Participation Interest" means a purchase by a Lender of a
participation (i) in Letters of Credit or LOC Obligations as provided in
Section 2.2, (ii) in Swingline Loans as provided in Section 2.3(b)(iii) or
(iii) in any Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
20
"Permitted Acquisition" means an Acquisition by the Parent or any
Consolidated Party for consideration no greater than the fair market value
of the Equity Interests or Property acquired (as reasonably determined by
the Credit Parties), provided that (i) the Equity Interests or Property
acquired in such Acquisition constitute Eligible Assets, (ii) the Agent
shall have received all items in respect of the Equity Interests or
Property acquired in such Acquisition (and/or the seller thereof) required
to be delivered by the terms of Section 7.12 and/or Section 7.13, (iii) in
the case of an Acquisition of the Equity Interests of another Person, the
board of directors (or other comparable governing body) of such other
Person shall have duly approved such Acquisition, (iv) the Credit Parties
shall have delivered to the Agent (A) a Pro Forma Compliance Certificate
demonstrating that, upon giving effect to such Acquisition on a Pro Forma
Basis, the Credit Parties shall be in compliance with the financial
covenants set forth in Section 7.11(b), (c) and (d) and (B) a certificate
of an Executive Officer of the Borrower demonstrating that upon giving
effect to such Acquisition, at least 80% of Consolidated EBITDA for four
fiscal-quarter period ending as of the most recent fiscal quarter end
preceding the date of such transaction with respect to which the Agent has
received the Required Financial Information) shall have been audited in
accordance with GAAP by independent certified public accountants of
recognized national standing reasonably acceptable to the Agent (whose
opinion shall not be limited as to the scope or qualified as to going
concern status), (v) the representations and warranties made by the Credit
Parties in any Credit Document shall be true and correct in all material
respects at and as if made as of the date of such Acquisition (after
giving effect thereto) except to the extent such representations and
warranties expressly relate to an earlier date, (vi) if such transaction
involves the purchase of an interest in a partnership between the Parent
or a Consolidated Party as a general partner and entities unaffiliated
with the Parent or such Consolidated Party as the other partners, such
transaction shall be effected by having such equity interest acquired by a
corporate holding company directly or indirectly wholly-owned by the
Parent newly formed for the sole purpose of effecting such transaction,
(vii) after giving effect to such Acquisition, the Revolving Committed
Amount shall be at least $10 million greater than the sum of the Revolving
Loans outstanding plus LOC Obligations outstanding plus the Swingline
Loans outstanding, (viii) the aggregate consideration (including cash and
non-cash consideration and any assumption of liabilities (other than
current working capital liabilities not constituting Indebtedness), but
excluding consideration consisting of any Equity Interests of the Parent
or the proceeds of any Equity Issuance by the Parent) for any single
Acquisition shall not exceed $25 million and (ix) the aggregate
consideration (including cash and non-cash consideration and any
assumption of liabilities (other than current working capital liabilities
not constituting Indebtedness), but excluding consideration consisting of
any Equity Interests of the Parent or the proceeds of any Equity Issuance
by the Parent) for all such Acquisitions occurring after the Closing Date
shall not exceed $50 million.
"Permitted Investments" means Investments which are either (i) cash
and Cash Equivalents; (ii) accounts receivable created, acquired or made
by the Parent or any Consolidated Party in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
(iii) Investments consisting of Equity Interests, obligations, securities
or other property received by the Parent or any Consolidated Party in
settlement of accounts receivable (created in the ordinary course of
business) from bankrupt
21
or insolvent obligors; (iv) existing Investments in Subsidiaries and other
Investments existing as of the Closing Date and set forth in Schedule
1.1B; (v) additional Investments in any Credit Party other than the Parent
or Interco; (vi) additional Investments in Foreign Subsidiaries not
exceeding $10,000,000 in the aggregate; (vii) Guaranty Obligations
permitted by Section 8.1; (viii) transactions permitted by Section 8.9;
(ix) advances or loans to directors, officers, employees, agents,
customers or suppliers that do not exceed $2,000,000 in the aggregate at
any time outstanding for the Parent and all of the Consolidated Parties
taken together; (x) advances or loans by the Parent to management of the
Parent and to Xxxxxxx and Marsal in conjunction with the Recapitalization
in an aggregate principal of up to $2.5 million; (xi) Investments which
constitute capital expenditures (as determined in accordance with GAAP)
otherwise permitted under this Credit Agreement; (xii) Investments in
Joint Ventures not to exceed $15,000,000; (xiii) Permitted Acquisitions;
and (xiv) the purchase by the Borrower of the Austell Property pursuant to
the Austell Transaction.
"Permitted Liens" means:
(i) Liens in favor of the Agent to secure the Credit Party
Obligations;
(ii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or Liens
for taxes being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed
by law or pursuant to customary reservations or retentions of title
arising in the ordinary course of business, provided that such Liens
secure only amounts not overdue by more than 30 days or, if more than 30
days overdue, are unfiled and no other action has been taken to enforce
the same or are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by the Parent or any Consolidated Party in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security and deposits
securing liability under insurance or self-insurance arrangements, or to
secure the performance of tenders, statutory obligations, bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money);
(v) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall,
within 30 days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall have been discharged within 30
days after the expiration of any such stay;
22
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of
the encumbered Property for its intended purposes;
(vii) Liens on Property of any Person securing purchase money
Indebtedness (including Capital Leases and Synthetic Leases) of such
Person to the extent permitted under Section 8.1(c) or Section 8.1(h),
provided that any such Lien attaches to such Property concurrently with or
within 90 days after the acquisition thereof;
(viii) leases or subleases granted to others not interfering in any
material respect with the business of the Parent or any Consolidated
Party;
(ix) any interest of title of a lessor under, and Liens arising from
UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by this
Credit Agreement;
(x) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xi) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 8.6;
(xii) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions;
(xiii) Liens existing as of the Closing Date and set forth on
Schedule 1.1C; provided that no such Lien shall at any time be extended to
or cover any Property other than the Property subject thereto on the
Closing Date;
(xiv) Liens on Property of any Foreign Subsidiary securing
Indebtedness of such Foreign Subsidiary to the extent permitted under
Section 8.1(g); and
(xv) Liens on Property of the Borrower or any other Domestic
Subsidiary not otherwise permitted hereunder securing Indebtedness of such
Person permitted under Section 8.1 not exceeding $7,500,000 in aggregate
at any time outstanding.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3)
of ERISA) which is covered by ERISA and with respect to which the Parent,
any Consolidated Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" within the meaning of Section 3(5) of ERISA.
23
"Pledge Agreement" means the pledge agreement dated as of the
Closing Date in the form of Exhibit 1.1A to be executed in favor of the
Agent by each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
"Prime Rate" means the per annum rate of interest established from
time to time by NationsBank as its prime rate, which rate may not be the
lowest rate of interest charged by NationsBank to its customers.
"Principal Amortization Payment" means a principal payment on the
Tranche A Term Loans as set forth in Section 2.4(d) or on the Tranche B
Term Loans as set forth in Section 2.5(d).
"Principal Amortization Payment Date" means the date a Principal
Amortization Payment is due.
"Pro Forma Basis" means, with respect to any transaction, that
such transaction shall be deemed to have occurred (for purposes of
calculating compliance in respect of such transaction with the financial
covenants set forth in Section 7.11(b), (c) and (d), as of the most recent
fiscal quarter end preceding the date of such transaction with respect to
which the Agent has received the Required Financial Information) as of the
first day of the four fiscal-quarter period ending as of such fiscal
quarter end. As used herein, "transaction" shall mean (i) any merger or
consolidation as referred to in Section 8.4, (ii) any Asset Disposition as
referred to in Section 8.5 or (iii) any Investment as referred to in
Section 8.6 and clause (xiii) of the definition of "Permitted Investment"
set forth in this Section 1.1. With respect to any transaction of the type
described in clause (i) above regarding Indebtedness which has a floating
or formula rate, the implied rate of interest for such Indebtedness for
the applicable period for purposes of this definition shall be determined
by utilizing the rate which is or would be in effect with respect to such
Indebtedness as at the relevant date of determination. With respect to any
transaction of the type described in clause (ii) or (iii) above, any
Indebtedness incurred by the Parent or any Consolidated Party in order to
consummate such transaction (A) shall be deemed to have been incurred on
the first day of the applicable four fiscal-quarter period and (B) if such
Indebtedness has a floating or formula rate, then the implied rate of
interest for such Indebtedness for the applicable period for purposes of
this definition shall be determined by utilizing the rate which is or
would be in effect with respect to such Indebtedness as at the relevant
date of determination. In connection with any calculation of the financial
covenants set forth in Section 7.11(b), (c) and (d) upon giving effect to
a transaction on a Pro Forma Basis for purposes of Section 8.4, Section
8.5 or Section 8.6 and clause (xiii) of the definition of "Permitted
Investment" set forth in this Section 1.1, as applicable:
(A) for purposes of any such calculation in respect of any
Asset Disposition as referred to in Section 8.5, (1) income
statement items (whether positive or negative) attributable to the
Property disposed of in such Asset Disposition shall be excluded and
(2) any Indebtedness which is retired in connection with such Asset
Disposition shall be excluded and deemed to have been retired as of
the first day of the applicable period;
24
(B) for purposes of any such calculation in respect of any
merger or consolidation as referred to in Section 8.4 or any
Investment as referred to in Section 8.6 and clause (xiii) of the
definition of "Permitted Investment" set forth in this Section 1.1,
(1) any Indebtedness incurred by the Parent or any Consolidated
Party in connection with such transaction shall be deemed to have
been incurred as of the first day of the applicable period, (2)
income statement items (whether positive or negative) attributable
to the Property acquired in such transaction or to the Investment
comprising such transaction, as applicable, shall be included to the
extent relating to the relevant period and (3) pro forma adjustments
may be included to the extent that such adjustments give effect to
events that are (x) directly attributable to such transaction, (y)
expected to have a continuing impact on the Parent and the
Consolidated Parties and (z) factually supportable; and
(C) for purposes of any such calculation, the principles set
forth in the second paragraph of Section 1.3 shall be applicable.
"Pro Forma Compliance Certificate" means a certificate of an
Executive Officer of the Borrower delivered to the Agent in connection
with (i) any merger or consolidation as referred to in Section 8.4, (ii)
any Asset Disposition as referred to in Section 8.5 or (iii) any
Investment as referred to in Section 8.6 and clause (xiii) of the
definition of "Permitted Investment" set forth in this Section 1.1, as
applicable, and containing reasonably detailed calculations, upon giving
effect to the applicable transaction on a Pro Forma Basis, of the Interest
Coverage Ratio, the Senior Leverage Ratio and the Total Leverage Ratio as
of the most recent fiscal quarter end preceding the date of the applicable
transaction with respect to which the Agent shall have received the
Required Financial Information.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Qualifying IPO" means an underwritten primary public offering of
the common Equity Interests of the Parent (or, subject to the definition
of the term "Change of Control" set forth in Section 1.1, of the common
Equity Interests of Interco or the Borrower) (i) pursuant to an effective
registration statement filed with the Securities and Exchange Commission
in accordance with the Securities Act of 1933 (whether alone or in
connection with a secondary public offering) and (ii) resulting in gross
proceeds to the Parent (or Interco or the Borrower, as applicable) of at
least $30 million.
"Quoted Rate" means, with respect to any Quoted Rate Swingline Loan,
the fixed percentage rate per annum offered by the Swingline Lender and
accepted by the Borrower with respect to such Swingline Loan as provided
in accordance with the provisions of Section 2.3.
"Quoted Rate Swingline Loan" means a Swingline Loan bearing interest
at a Quoted Rate.
25
"Recapitalization" means the recapitalization of the Parent and the
Borrower pursuant to the terms of the Reorganization Plan and the other
Recapitalization Documents.
"Recapitalization Documents" means a collective reference to the
Reorganization Plan, the Confirmation Order, the subscription agreement
dated as of March 30, 1998 among Parent (f/k/a Bidermann Industries
U.S.A., Inc.), the Fund and Xxxxxxx & Marsal, Inc., the stockholders'
agreement dated as of May 18, 1998 among Parent, the Fund, A&M Investment
Associates #7, LLC and certain other individuals and entities party
thereto, the pledge agreement dated as of May 18, 1998 by and between
Parent and A&M Investment Associates #7, LLC, the secured promissory note
dated as of May 18, 1998 executed by A&M Investment Associates #7, LLC,
each of the management common stock subscription agreements dated as of
May 18, 1998 by and between Parent and the employee of Parent, Borrower or
any of their Subsidiaries party thereto, each of the pledge agreements
dated as of May 18, 1998 by and between Parent and the employee of Parent,
Borrower or any of their Subsidiaries party thereto, each of the secured
promissory notes dated as of May 18, 1998 executed by the employee of
Parent, Borrower or any of their Subsidiaries party thereto, the advisory
agreement dated as of May 18, 1998 among Parent, Borrower and Vestar
Capital Partners, the Certificate of Designations filed with the Secretary
of State of the State of Delaware on May 18, 1998 in respect of Borrower's
12-1/2% Senior Exchangeable Preferred Stock Due 2010, the indenture
executed in connection with the issuance, if any, of the Exchange
Debentures, the Certificate of Designations filed with the Secretary of
State of the State of Delaware on May 18, 1998 in respect of Parent's
Class A Senior Preferred Stock, the Certificate of Designations filed with
the Secretary of State of the State of Delaware on May 18, 1998 in respect
of Parent's Class C Junior Preferred Stock, and all other agreements,
instruments, certificates or documents executed or delivered in connection
with the transactions contemplated under the above listed documents,
together with any renewals, extensions, amendments or modifications.
"Register" shall have the meaning given such term in Section
11.3(c).
"Regulation T, U, or X" means Regulation T, U or X, respectively, of
the Board of Governors of the Federal Reserve System as from time to time
in effect and any successor to all or a portion thereof.
"Reorganization Plan" means the Third Amended Joint Plan of
Reorganization for the Parent, dated as of March 30, 1998, and as
confirmed by the Bankruptcy Court by order entered on March 31, 1998.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Financial Information" means, with respect to the
applicable Calculation Date, (i) the financial statements of the
Consolidated Parties required to be delivered pursuant to Section 7.1(a)
or (b) for the fiscal period or quarter ending as of such Calculation
Date, and (ii) the certificate of the chief financial officer of the
Borrower required by Section 7.1(c) to be delivered with the financial
statements described in clause (i) above.
26
"Required Lenders" means, at any time, Lenders other than Defaulting
Lenders holding in the aggregate at least a majority of, without
duplication, (i) the Revolving Commitments, the outstanding Tranche A Term
Loans (and Participation Interests therein) and the outstanding Tranche B
Term Loans (and Participation Interests therein) or (ii) if the
Commitments have been terminated, the outstanding Loans and Participation
Interests (including the Participation Interests of the Issuing Lender in
any Letters of Credit and the Participation Interests of the Swingline
Lender in any Swingline Loans).
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its material property
is subject.
"Restricted Payment" means (i) subject to the terms of Section
8.12(a), any dividend or other payment or distribution, direct or
indirect, on account of any Equity Interests of the Parent or any
Consolidated Party, now or hereafter outstanding (including without
limitation any payment in connection with any merger or consolidation
involving the Parent or any Consolidated Party), or to the direct or
indirect holders of any Equity Interests of the Parent or any Consolidated
Party, now or hereafter outstanding, in their capacity as such (other than
dividends or distributions payable in the same class of Equity Interests
of the applicable Person or to any Credit Party (directly or indirectly
through Subsidiaries) or ratably to minority shareholders), (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Equity Interests of the
Parent or any Consolidated Party, now or hereafter outstanding, (iii) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire any Equity Interests of the
Parent or any Consolidated Party, now or hereafter outstanding, (iv) any
payment or prepayment of principal of, premium, if any, or interest on,
redemption, purchase, retirement, defeasance, sinking fund or similar
payment with respect to, Subordinated Indebtedness, except as permitted by
Section 8.8, and (v) any loan or advance to the Parent or Interco.
"Revolving Commitment" means, with respect to each Revolving Lender,
the commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage of the
Revolving Committed Amount, (i) to make Revolving Loans to the Borrower in
accordance with the provisions of Section 2.1(a), (ii) to purchase
Participation Interests in Letters of Credit in accordance with the
provisions of Section 2.2(c) and (iii) to purchase Participation Interests
in the Swingline Loans in accordance with the provisions of Section
2.3(b)(iii).
"Revolving Commitment Percentage" means, for any Revolving Lender,
the percentage identified as its Revolving Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
27
"Revolving Committed Amount" shall have the meaning assigned to such
term in Section 2.1(a).
"Revolving Lender" means any Lender holding a Revolving Commitment,
as identified on Schedule 2.1(a), together with their permitted successors
and assigns.
"Revolving Loans" shall have the meaning assigned to such term in
Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory notes of
the Borrower in favor of each of the Revolving Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1(e), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from time
to time.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to the Parent or any Consolidated Party of any
Property, whether owned by the Parent or such Consolidated Party as of the
Closing Date or later acquired, which has been or is to be sold or
transferred by the Parent or such Consolidated Party to such Person or to
any other Person from whom funds have been, or are to be, advanced by such
Person on the security of such Property.
"Security Agreement" means the security agreement dated as of the
Closing Date in the form of Exhibit 1.1B to be executed in favor of the
Agent by each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
"Senior Leverage Ratio" means, as of the last day of any fiscal
quarter of the Consolidated Parties for the twelve month period ending on
such date, the ratio of (a) all Funded Indebtedness other than
Subordinated Indebtedness (net of cash and Cash Equivalents) of the
Consolidated Parties on a consolidated basis on the last day of such
period to (b) Consolidated EBITDA for such period.
"Senior Preferred Stock" shall have the meaning assigned to such
term in Section 5.1(h).
"Senior Subordinated Debt" shall have the meaning assigned to such
term in Section 5.1(h).
"Single Employer Plan" means any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan or a Multiple Employer
Plan.
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal
28
course of business, (ii) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature in their ordinary
course, (iii) such Person is not engaged in a business or a transaction,
and is not about to engage in a business or a transaction, for which such
Person's Property would constitute unreasonably small capital after giving
due consideration to the prevailing practice in the industry in which such
Person is engaged or is to engage, (iv) the fair value of the Property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person and (v) the
present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the
facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"Sponsor" means Vestar Capital Partners III, L.P.
"Sponsor Common Stock" shall have the meaning assigned to such term
in Section 5.1(h).
"Standby Letter of Credit Fee" shall have the meaning assigned to
such term in Section 3.5(c)(i).
"Subordinated Indebtedness" means (i) Indebtedness of the Borrower
in respect of the Senior Subordinated Debt, together with Guaranty
Obligations, if any, of the Guarantors in respect thereof and (ii) other
Indebtedness of the Parent (a) incurred in connection with the repurchase
by the Parent of outstanding shares of Capital Stock in accordance with
the terms of Section 8.7(ii) and (b) which by its terms is subordinated to
the Credit Party Obligations in a manner and to an extent acceptable to
Agent.
"Subsidiary" means, as to any Person at any time, (a) any
corporation more than 50% of whose Equity Interests 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 such time, any class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is
at such time owned by such Person directly or indirectly through
Subsidiaries, and (b) any partnership, association, joint venture or other
entity of which such Person directly or indirectly through Subsidiaries
owns at such time more than 50% of the Equity Interests.
"Subsidiary Guarantor" means each of the Persons identified as a
"Subsidiary Guarantor" on the signature pages hereto and each Additional
Credit Party which may hereafter execute a Joinder Agreement, together
with their permitted successors and assigns, and "Subsidiary Guarantor"
means any one of them.
"Swingline Commitment" means the commitment of the Swingline Lender
to make Swingline Loans to the Borrower in an aggregate principal amount
at any time outstanding of up to the Swingline Committed Amount.
29
"Swingline Committed Amount" shall have the meaning assigned to such
term in Section 2.3(a).
"Swingline Lender" means NationsBank.
"Swingline Loan" shall have the meaning assigned to such term in
Section 2.3(a).
"Swingline Note" means the promissory note of the Borrower in favor
of the Swingline Lender evidencing the Swingline Loans provided pursuant
to Section 2.3(d), as such promissory note may be amended, modified,
restated, supplemented, extended, renewed or replaced from time to time.
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product where such transaction is considered borrowed money indebtedness
for tax purposes but is classified as an Operating Lease.
"Taxes" shall have the meaning assigned to such term in Section
3.11.
"Total Leverage Ratio" means, as of the last day of any fiscal
quarter of the Consolidated Parties for the twelve month period ending on
such date, the ratio of (a) all Funded Indebtedness (including
Subordinated Indebtedness, but net of cash and Cash Equivalents) of the
Consolidated Parties on a consolidated basis on the last day of such
period to (b) Consolidated EBITDA for such period.
"Trade Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(c)(ii).
"Tranche A Term Lender" means any Lender holding a Tranche A Term
Loan Commitment, as identified on Schedule 2.1(a), together with their
permitted successors and assigns.
"Tranche A Term Loan" shall have the meaning assigned to such term
in Section 2.4(a).
"Tranche A Term Loan Commitment" means, with respect to each Tranche
A Term Lender, the commitment of such Lender to make its portion of the
Tranche A Term Loan in a principal amount equal to such Lender's Tranche A
Term Loan Commitment Percentage of the Tranche A Term Loan Committed
Amount.
"Tranche A Term Loan Commitment Percentage" means, for any Tranche A
Term Lender, the percentage identified as its Tranche A Term Loan
Commitment Percentage on Schedule 2.1(a), as such percentage may be
modified in connection with any assignment made in accordance with the
provisions of Section 11.3.
30
"Tranche A Term Loan Committed Amount" shall have the meaning
assigned to such term in Section 2.4(a).
"Tranche A Term Note" or "Tranche A Term Notes" means the promissory
notes of the Borrower in favor of each of the Tranche A Term Lenders
evidencing the Tranche A Term Loans provided pursuant to Section 2.4(f),
individually or collectively, as appropriate, as such promissory notes may
be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time.
"Tranche B Term Lender" means any Lender holding a Tranche B Term
Loan Commitment, as identified on Schedule 2.1(a), together with their
permitted successors and assigns.
"Tranche B Term Loan" shall have the meaning assigned to such term
in Section 2.5(a).
"Tranche B Term Loan Commitment" means, with respect to each Tranche
B Term Lender, the commitment of such Lender to make its portion of the
Tranche B Term Loan in a principal amount equal to such Lender's Tranche B
Term Loan Commitment Percentage of the Tranche B Term Loan Committed
Amount.
"Tranche B Term Loan Commitment Percentage" means, for any Tranche B
Term Lender, the percentage identified as its Tranche B Term Loan
Commitment Percentage on Schedule 2.1(a), as such percentage may be
modified in connection with any assignment made in accordance with the
provisions of Section 11.3.
"Tranche B Term Loan Committed Amount" shall have the meaning
assigned to such term in Section 2.5(a).
"Tranche B Term Note" or "Tranche B Term Notes" means the promissory
notes of the Borrower in favor of each of the Tranche B Term Lenders
evidencing the Tranche B Term Loans provided pursuant to Section 2.5(f),
individually or collectively, as appropriate, as such promissory notes may
be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time.
"Unused Fee" shall have the meaning assigned to such term in Section
3.5(b).
"Unused Revolving Committed Amount" means, for any period, the
amount by which (a) the then applicable Revolving Committed Amount exceeds
(b) the daily average sum for such period of (i) the outstanding aggregate
principal amount of all Revolving Loans (but not including any Swingline
Loans) plus (ii) the outstanding aggregate principal amount of all LOC
Obligations.
"Upfront Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Voting Stock" means, with respect to any Person, Equity Interests
issued by such Person the holders of which are ordinarily, in the absence
of contingencies, entitled to vote
31
for the election of directors (or persons performing similar functions) of
such Person, even though the right so to vote has been suspended by the
happening of such a contingency.
"Wholly-Owned Subsidiary" of any Person means any Subsidiary 100% of
whose Voting Stock (other than director's qualifying shares) is at the
time owned by such Person directly or indirectly through other
Wholly-Owned Subsidiaries.
1.2 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements as at December 31, 1997); provided,
however, if (a) the Credit Parties shall object to determining such compliance
on such basis at the time of delivery of such financial statements due to any
change in GAAP or the rules promulgated with respect thereto or (b) the Agent or
the Required Lenders shall so object in writing within 60 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Credit
Parties to the Lenders as to which no such objection shall have been made.
Notwithstanding the above or the terms of any definition set forth in Section
1.1, the parties hereto acknowledge and agree that, for purposes of all
calculations made under the financial covenants set forth in Section 7.11
(including without limitation for purposes of the definitions of "Applicable
Percentage" and "Pro Forma Basis" set forth in Section 1.1), (i)(A) income
statement items (whether positive or negative) attributable to the Property
disposed of in any Asset Disposition as contemplated by Section 8.5, as
applicable, shall be excluded to the extent relating to any period occurring
prior to the date of such transaction and (B) Indebtedness which is retired in
connection with any such Asset Disposition shall be excluded and deemed to have
been retired as of the first day of the applicable period, (ii) income statement
items (whether positive or negative) attributable to any Property acquired in
any Investment transaction contemplated by Section 8.6 and clause (xiii) of the
definition of "Permitted Investment" set forth in Section 1.1 shall, to the
extent not otherwise included in such income statements items for the
Consolidated Parties in accordance with GAAP or in accordance with any defined
terms set forth in Section 1.1, be included to the extent relating to any period
applicable in such calculations and (iii) the portion of Funded Indebtedness of
the Consolidated Parties as of any date consisting of Revolving Loans shall be
deemed to be the daily average amount of Revolving Loans outstanding for the
twelve-month period ended as of such date.
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SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Commitment. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth herein,
each Revolving Lender severally agrees to make available to the Borrower
such Lender's Revolving Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("Revolving Loans") from time to time
from the Closing Date until the Maturity Date, or such earlier date as the
Revolving Commitments shall have been terminated as provided herein;
provided, however, that the sum of the aggregate principal amount of
outstanding Revolving Loans shall not exceed FIFTY MILLION DOLLARS
($50,000,000) (as such aggregate maximum amount may be reduced from time
to time as provided in Section 3.4, the "Revolving Committed Amount");
provided, further, (A) with regard to each Revolving Lender individually,
such Lender's outstanding Revolving Loans shall not exceed such Lender's
Revolving Commitment Percentage of the Revolving Committed Amount, and (B)
the aggregate principal amount of outstanding Revolving Loans plus LOC
Obligations outstanding plus the aggregate principal amount of outstanding
Swingline Loans shall not exceed the Revolving Committed Amount. Revolving
Loans may consist of Base Rate Loans or Eurodollar Loans, or a combination
thereof, as the Borrower may request; provided, however, that no more than
10 Eurodollar Loans shall be outstanding hereunder at any time (it being
understood that, for purposes hereof, Eurodollar Loans with different
Interest Periods shall be considered as separate Eurodollar Loans, even if
they begin on the same date, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined at
the end of existing Interest Periods to constitute a new Eurodollar Loan
with a single Interest Period). Revolving Loans hereunder may be repaid
and reborrowed in accordance with the provisions hereof.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing) to the Agent not later than 11:00
A.M. (Charlotte, North Carolina time) on the Business Day prior to
the date of the requested borrowing in the case of Base Rate Loans,
and on the third Business Day prior to the date of the requested
borrowing in the case of Eurodollar Loans. Each such request for
borrowing shall be irrevocable and shall specify (A) that a
Revolving Loan is requested, (B) the date of the requested borrowing
(which shall be a Business Day), (C) the aggregate principal amount
to be borrowed, and (D) whether the borrowing shall be comprised of
Base Rate Loans, Eurodollar Loans or a combination thereof, and if
Eurodollar Loans are requested, the Interest Period(s) therefor. If
the Borrower shall fail to specify in any such Notice of Borrowing
(I) an applicable Interest Period in the case of a Eurodollar Loan,
then such notice
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shall be deemed to be a request for an Interest Period of one month,
or (II) the type of Revolving Loan requested, then such notice shall
be deemed to be a request for a Base Rate Loan hereunder. The Agent
shall give notice to each Revolving Lender promptly upon receipt of
each Notice of Borrowing pursuant to this Section 2.1(b)(i), the
contents thereof and each such Lender's share of any borrowing to be
made pursuant thereto.
(ii) Minimum Amounts. Except as otherwise provided in Section
2.2(e), each Eurodollar Loan or Base Rate Loan that is a Revolving
Loan shall be in a minimum aggregate principal amount of $2,000,000
and integral multiples of $100,000 in excess thereof (or the
remaining amount of the Revolving Committed Amount, if less).
(iii) Advances. Each Revolving Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available to
the Agent for the account of the Borrower as specified in Section
3.15(a), or in such other manner as the Agent may specify in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the date
specified in the applicable Notice of Borrowing in Dollars and in
funds immediately available to the Agent. Such borrowing will then
be made available to the Borrower by the Agent by crediting the
account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Agent by the
Revolving Lenders and in like funds as received by the Agent.
(c) Repayment. The principal amount of all Revolving Loans shall be
due and payable in full on the Maturity Date, unless accelerated sooner
pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Revolving Loans
shall be comprised in whole or in part of Base Rate Loans, such Base
Rate Loans shall bear interest at a per annum rate equal to the
Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as Revolving Loans
shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to
the Adjusted Eurodollar Rate.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(e) Revolving Notes. The Revolving Loans made by each Revolving
Lender shall be evidenced by a duly executed promissory note of the
Borrower to such Lender in an original principal amount equal to such
Lender's Revolving Commitment Percentage of the Revolving Committed Amount
and in substantially the form of Exhibit 2.1(e).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the
Issuing Lender may
34
reasonably require and in reliance upon the representations and warranties
set forth herein, the Issuing Lender agrees to issue, and each Revolving
Lender severally agrees to participate in the issuance by the Issuing
Lender of, standby and trade Letters of Credit in Dollars from time to
time from the Closing Date until the date five (5) prior to the Maturity
Date as the Borrower may request, in a form acceptable to the Issuing
Lender; provided, however, that (i) the LOC Obligations outstanding shall
not at any time exceed THIRTY MILLION DOLLARS ($30,000,000) (the "LOC
Committed Amount") and (ii) the sum of the aggregate principal amount of
outstanding Revolving Loans plus LOC Obligations outstanding plus the
aggregate principal amount of outstanding Swingline Loans shall not at any
time exceed the Revolving Committed Amount. No Letter of Credit shall (x)
have an original expiry date more than one year from the date of issuance
(provided that the foregoing shall not prohibit any Letter of Credit being
subject to automatic renewals for additional periods of up to 1 year) or
(y) as originally issued or as extended, have an expiry date extending
beyond the Maturity Date. Each Letter of Credit shall comply with the
related LOC Documents. The issuance and expiry dates of each Letter of
Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted by the Borrower to the Issuing Lender at least
three (3) Business Days prior to the requested date of issuance. The
Issuing Lender will, at least quarterly and more frequently upon request,
disseminate to each of the Revolving Lenders a detailed report specifying
the Letters of Credit which are then issued and outstanding and any
activity with respect thereto which may have occurred since the date of
the prior report, and including therein, among other things, the
beneficiary, the face amount and the expiry date, as well as any payment
or expirations which may have occurred.
(c) Participation. Each Revolving Lender, upon issuance of a Letter
of Credit (or, in the case of each Existing Letter of Credit, on the
Closing Date), shall be deemed to have purchased without recourse a
Participation Interest from the Issuing Lender in such Letter of Credit
and the obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its pro rata share of the
obligations under such Letter of Credit (based on the respective Revolving
Commitment Percentages of the Revolving Lenders) and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to the
Issuing Lender and discharge when due, its pro rata share of the
obligations arising under such Letter of Credit. Without limiting the
scope and nature of each Revolving Lender's Participation Interest in any
Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit, each
such Revolving Lender shall pay to the Issuing Lender its pro rata share
of such unreimbursed drawing in same day funds on the day of notification
by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) below. The obligation of each Revolving
Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a Default, an
Event of Default or any other occurrence or event. Any such reimbursement
shall not relieve or otherwise impair the obligation of the Borrower to
reimburse the Issuing Lender under any Letter of Credit, together with
interest as hereinafter provided.
35
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower
intends to otherwise reimburse the Issuing Lender for such drawing, the
Borrower shall be deemed to have requested that the Revolving Lenders make
a Revolving Loan in the amount of the drawing as provided in subsection
(e) below on the related Letter of Credit, the proceeds of which will be
used to satisfy the related reimbursement obligations. The Borrower
promises to reimburse the Issuing Lender on the day on which the Issuing
Lender notifies the Borrower of a drawing under any Letter of Credit
(either with the proceeds of a Revolving Loan obtained hereunder or
otherwise) in same day funds provided such notice is received by the
Borrower from the Issuing Lender on or before 2:00 P.M.(Charlotte, North
Carolina time) (otherwise such payment shall be made on or before 12:00
Noon (Charlotte, North Carolina time) on the Business Day next succeeding
the day such notice is received). The unreimbursed amount of any drawing
under a Letter of Credit shall bear interest at a per annum rate equal to
(i) for the first two (2) Business Days following the date of the related
drawing, the Adjusted Base Rate and (ii) thereafter, the Adjusted Base
Rate plus 2%. The Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any
rights of setoff, counterclaim or defense to payment the Borrower may
claim or have against the Issuing Lender, the Agent, the Revolving
Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation any defense based on any failure of
the Borrower or any other Credit Party to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the other Revolving
Lenders of the amount of any unreimbursed drawing and each Revolving
Lender shall promptly pay to the Agent for the account of the Issuing
Lender in Dollars and in immediately available funds, the amount of such
Revolving Lender's pro rata share of such unreimbursed drawing. Such
payment shall be made on the day such notice is received by such Revolving
Lender from the Issuing Lender if such notice is received at or before
2:00 P.M. (Charlotte, North Carolina time) otherwise such payment shall be
made at or before 12:00 Noon (Charlotte, North Carolina time) on the
Business Day next succeeding the day such notice is received. If such
Revolving Lender does not pay such amount to the Issuing Lender in full
upon such request, such Revolving Lender shall, on demand, pay to the
Agent for the account of the Issuing Lender interest on the unpaid amount
during the period from the date of such drawing until such Revolving
Lender pays such amount to the Issuing Lender in full at a rate per annum
equal to, if paid within two (2) Business Days of the date that such
Revolving Lender is required to make payments of such amount pursuant to
the preceding sentence, the Federal Funds Rate and thereafter at a rate
equal to the Base Rate. Each Revolving Lender's obligation to make such
payment to the Issuing Lender, and the right of the Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be
affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder, the
existence of a Default or Event of Default or the acceleration of the
obligations of the Borrower hereunder and shall be made without any
offset, abatement, withholding or reduction whatsoever. Simultaneously
with the making of each such payment by a Revolving Lender to the Issuing
Lender, such Revolving Lender shall, automatically and without any further
action on the part of the Issuing Lender or such Revolving Lender, acquire
a Participation Interest in an amount equal to such payment (excluding the
portion of such payment constituting interest owing to
36
the Issuing Lender) in the related unreimbursed drawing portion of the LOC
Obligation and in the interest thereon and in the related LOC Documents,
and shall have a claim against the Borrower with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan
advance to reimburse a drawing under a Letter of Credit, the Agent shall
give notice to the Revolving Lenders that a Revolving Loan has been
requested or deemed requested by the Borrower to be made in connection
with a drawing under a Letter of Credit, in which case a Revolving Loan
advance comprised of Base Rate Loans (or Eurodollar Loans to the extent
the Borrower has complied with the procedures of Section 2.1(b)(i) with
respect thereto) shall be immediately made to the Borrower by all
Revolving Lenders (notwithstanding any termination of the Commitments
pursuant to Section 9.2) pro rata based on the respective Revolving
Commitment Percentages of the Revolving Lenders (determined before giving
effect to any termination of the Commitments pursuant to Section 9.2) and
the proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective LOC Obligations. Each such Revolving Lender
hereby irrevocably agrees to make its pro rata share of each such
Revolving Loan immediately upon any such request or deemed request in the
amount, in the manner and on the date specified in the preceding sentence
notwithstanding (i) the amount of such borrowing may not comply with the
minimum amount for advances of Revolving Loans otherwise required
hereunder, (ii) whether any conditions specified in Section 5.2 are then
satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) failure for any such request or deemed request for Revolving Loan to
be made by the time otherwise required hereunder, (v) whether the date of
such borrowing is a date on which Revolving Loans are otherwise permitted
to be made hereunder or (vi) any termination of the Commitments
immediately prior to or contemporaneously with such borrowing. In the
event that any Revolving Loan cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code with respect to
the Borrower or any other Credit Party), then each such Revolving Lender
hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such
purchase) from the Issuing Lender such Participation Interests in the
outstanding LOC Obligations as shall be necessary to cause each such
Revolving Lender to share in such LOC Obligations ratably (based upon the
respective Revolving Commitment Percentages of the Revolving Lenders
(determined before giving effect to any termination of the Commitments
pursuant to Section 9.2)), provided that at the time any purchase of
Participation Interests pursuant to this sentence is actually made, the
purchasing Revolving Lender shall be required to pay to the Issuing
Lender, to the extent not paid to the Issuer by the Borrower in accordance
with the terms of subsection (d) above, interest on the principal amount
of Participation Interests purchased for each day from and including the
day upon which such borrowing would otherwise have occurred to but
excluding the date of payment for such Participation Interests, at the
rate equal to, if paid within two (2) Business Days of the date of the
Revolving Loan advance, the Federal Funds Rate, and thereafter at a rate
equal to the Base Rate.
37
(f) Designation of Consolidated Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.2(a), a Letter of Credit
issued hereunder may contain a statement to the effect that such Letter of
Credit is issued for the account of a Consolidated Party other than the
Borrower, provided that notwithstanding such statement, the Borrower shall
be the actual account party for all purposes of this Credit Agreement for
such Letter of Credit and such statement shall not affect the Borrower's
reimbursement obligations hereunder with respect to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as
the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP may
be incorporated therein and deemed in all respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section
2.2, the Borrower hereby agrees to pay, and protect, indemnify and
save the Issuing Lender harmless from and against, any and all
claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) that the Issuing
Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or (B) the
failure of the Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Borrower and the Revolving Lenders
(including the Issuing Lender), the Borrower shall assume all risks
of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. No Revolving Lender (including the Issuing
Lender) shall be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to
be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid
or ineffective for any reason; (C) for errors, omissions,
interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (D) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under
a Letter of Credit or of the proceeds thereof; and (E) for any
38
consequences arising from causes beyond the control of such
Revolving Lender, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the vesting
of the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by any Revolving Lender (including the Issuing Lender),
under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put such
Revolving Lender under any resulting liability to the Borrower or
any other Credit Party. It is the intention of the parties that this
Credit Agreement shall be construed and applied to protect and
indemnify each Revolving Lender (including the Issuing Lender)
against any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower (on
behalf of itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. No Revolving Lender
(including the Issuing Lender) shall, in any way, be liable for any
failure by such Revolving Lender or anyone else to pay any drawing
under any Letter of Credit as a result of any Government Acts or any
other cause beyond the control of such Revolving Lender.
(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection
(d) above. The obligations of the Borrower under this subsection (i)
shall survive the termination of this Credit Agreement. No act or
omission of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Revolving
Lenders (including the Issuing Lender) to enforce any right, power
or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (i), the Borrower shall have no obligation to indemnify
any Revolving Lender (including the Issuing Lender) in respect of
any liability incurred by such Revolving Lender (A) arising out of
the gross negligence or willful misconduct of such Revolving Lender,
or (B) caused by the Issuing Lender's failure to pay under any
Letter of Credit after presentation to it of a request strictly
complying with the terms and conditions of such Letter of Credit,
unless such payment is prohibited by any Government Act.
(j) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the
Revolving Lenders are only those expressly set forth in this Credit
Agreement and that the Issuing Lender shall be entitled to assume that the
conditions precedent set forth in Section 5.2 have been satisfied unless
it shall have acquired actual knowledge that any such condition precedent
has not been satisfied; provided, however, that nothing set forth in this
Section 2.2 shall be deemed to prejudice the right of any Revolving Lender
to recover from the Issuing Lender any amounts made available by such
Revolving Lender to the Issuing Lender pursuant to this Section 2.2 in the
event that it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit constituted gross negligence or
willful misconduct on the part of the Issuing Lender.
39
(k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any letter
of credit application), this Credit Agreement shall control.
2.3 Swingline Loan Subfacility.
(a) Swingline Commitment. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth herein,
the Swingline Lender agrees to make certain revolving credit loans in
Dollars to the Borrower (the "Swingline Loans") as requested by the
Borrower from time to time from the Closing Date until the Maturity Date,
or such earlier date as the Swingline Commitment shall have been
terminated as provided herein; provided, however, (i) the aggregate
principal amount of Swingline Loans outstanding at any time shall not
exceed FIVE MILLION DOLLARS ($5,000,000) (the "Swingline Committed
Amount"), and (ii) the aggregate principal amount of outstanding Revolving
Loans plus LOC Obligations outstanding plus the aggregate principal amount
of outstanding Swingline Loans shall not exceed the Revolving Committed
Amount. Swingline Loans hereunder shall be made as Base Rate Loans or
Quoted Rate Swingline Loans as the Borrower may request in accordance with
the provisions of this Section 2.3, and may be repaid and reborrowed in
accordance with the provisions hereof.
(b) Swingline Loan Advances.
(i) Notices; Disbursement. Whenever the Borrower desires a
Swingline Loan advance hereunder it shall give written notice (or
telephonic notice promptly confirmed in writing) to the Swingline
Lender not later than 11:00 A.M. (Charlotte, North Carolina time) on
the Business Day of the requested Swingline Loan advance. Each such
notice shall be irrevocable and shall specify (A) that a Swingline
Loan advance is requested, (B) the date of the requested Swingline
Loan advance (which shall be a Business Day) and (C) the principal
amount of the Swingline Loan advance requested. Each Swingline Loan
shall be made as a Base Rate Loan or a Quoted Rate Swingline Loan
and shall have such maturity date as the Swingline Lender and the
Borrower shall agree upon receipt by the Swingline Lender of any
such notice from the Borrower. The Swingline Lender shall initiate
the transfer of funds representing the Swingline Loan advance to the
Borrower by 3:00 P.M. (Charlotte, North Carolina time) on the
Business Day of the requested borrowing.
(ii) Minimum Amounts. Each Swingline Loan advance shall be in
a minimum principal amount of $100,000 (or the remaining amount of
the Swingline Committed Amount, if less).
(iii) Repayment of Swingline Loans. The principal amount of
all Swingline Loans shall be due and payable on the earlier of (A)
the maturity date agreed to by the Swingline Lender and the Borrower
with respect to such Loan (which maturity date shall not be a date
more than thirty (30) Business Days from the date of advance
thereof) or (B) the Maturity Date. The Swingline Lender may,
40
at any time, in its sole discretion, by written notice to the
Borrower and the Revolving Lenders, demand repayment of its
Swingline Loans by way of a Revolving Loan advance, in which case
the Borrower shall be deemed to have requested a Revolving Loan
advance comprised solely of Base Rate Loans in the amount of such
Swingline Loans; provided, however, that any such demand shall be
deemed to have been given one Business Day prior to the Maturity
Date and on the date of the occurrence of any Event of Default
described in Section 9.1 and upon acceleration of the indebtedness
hereunder and the exercise of remedies in accordance with the
provisions of Section 9.2. Each Revolving Lender hereby irrevocably
agrees to make its pro rata share of each such Revolving Loan in the
amount, in the manner and on the date specified in the preceding
sentence notwithstanding (I) the amount of such borrowing may not
comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (II) whether any conditions specified
in Section 5.2 are then satisfied, (III) whether a Default or an
Event of Default then exists, (IV) failure of any such request or
deemed request for Revolving Loan to be made by the time otherwise
required hereunder, (V) whether the date of such borrowing is a date
on which Revolving Loans are otherwise permitted to be made
hereunder or (VI) any termination of the Commitments immediately
prior to or contemporaneously with such borrowing. In the event that
any Revolving Loan cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result
of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any other Credit Party), then each
Revolving Lender hereby agrees that it shall forthwith purchase (as
of the date such borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or after
such date and prior to such purchase) from the Swingline Lender such
Participation Interests in the outstanding Swingline Loans as shall
be necessary to cause each such Revolving Lender to share in such
Swingline Loans ratably based upon its Commitment Percentage of the
Revolving Committed Amount (determined before giving effect to any
termination of the Commitments pursuant to Section 3.4), provided
that (A) all interest payable on the Swingline Loans shall be for
the account of the Swingline Lender until the date as of which the
respective Participation Interest is purchased and (B) at the time
any purchase of Participation Interests pursuant to this sentence is
actually made, the purchasing Revolving Lender shall be required to
pay to the Swingline Lender, to the extent not paid to the Swingline
Lender by the Borrower in accordance with the terms of subsection
(c)(ii) below, interest on the principal amount of Participation
Interests purchased for each day from and including the day upon
which such borrowing would otherwise have occurred to but excluding
the date of payment for such Participation Interests, at the rate
equal to the Federal Funds Rate.
(c) Interest on Swingline Loans.
(i) Rates of Interest. Subject to the provisions of Section
3.1, each Swingline Loan shall bear interest as follows:
41
(A) Base Rate Loans. If such Swingline Loan is a Base
Rate Loan, at a per annum rate (computed on the basis of the
actual number of days elapsed over a year of 365 days) equal
to the Adjusted Base Rate.
(B) Quoted Rate Swingline Loans. If such Swingline Loan
is a Quoted Rate Swingline Loan, at a per annum rate (computed
on the basis of the actual number of days elapsed over a year
of 360 days) equal to the Quoted Rate applicable thereto.
Notwithstanding any other provision to the contrary set forth in
this Credit Agreement, in the event that the principal amount of any
Quoted Rate Swingline Loan is not repaid on the last day of the
Interest Period for such Loan, then such Loan shall be automatically
converted into a Base Rate Loan at the end of such Interest Period.
(ii) Payment of Interest. Interest on Swingline Loans shall be
payable in arrears on each applicable Interest Payment Date (or at
such other times as may be specified herein), unless accelerated
sooner pursuant to Section 9.2.
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in an
original principal amount equal to the Swingline Committed Amount
substantially in the form of Exhibit 2.3(d).
2.4 Tranche A Term Loan.
(a) Tranche A Term Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein each Tranche A Term Lender severally agrees to make available to
the Borrower on the Closing Date such Lender's Tranche A Term Loan
Commitment Percentage of a term loan in Dollars (the "Tranche A Term
Loan") in the aggregate principal amount of FIFTY MILLION DOLLARS
($50,000,000) (the "Tranche A Term Loan Committed Amount") for the
purposes hereinafter set forth. The Tranche A Term Loan may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request; provided, however, that no more than 10 Eurodollar
Loans shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest
Periods shall be considered as separate Eurodollar Loans, even if they
begin on the same date, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period). Amounts repaid on the Tranche A Term Loan may not
be reborrowed.
(b) Borrowing Procedures. The Borrower shall submit an appropriate
Notice of Borrowing to the Agent not later than 11:00 A.M. (Charlotte,
North Carolina time) on the Closing Date, with respect to the portion of
the Tranche A Term Loan initially consisting of a Base Rate Loan, or on
the third Business Day prior to the Closing Date, with respect to the
portion of the Tranche A Term Loan initially consisting of one or more
Eurodollar
42
Loans, which Notice of Borrowing shall be irrevocable and shall specify
(i) that the funding of a Tranche A Term Loan is requested and (ii)
whether the funding of the Tranche A Term Loan shall be comprised of Base
Rate Loans, Eurodollar Loans or a combination thereof, and if Eurodollar
Loans are requested, the Interest Period(s) therefor. If the Borrower
shall fail to deliver such Notice of Borrowing to the Agent by 11:00 A.M.
(Charlotte, North Carolina time) on the third Business Day prior to the
Closing Date, then the full amount of the Tranche A Term Loan shall be
disbursed on the Closing Date as a Base Rate Loan. Each Tranche A Term
Lender shall make its Tranche A Term Loan Commitment Percentage of the
Tranche A Term Loan available to the Agent for the account of the Borrower
at the office of the Agent specified in Schedule 2.1(a), or at such other
office as the Agent may designate in writing, by 1:00 P.M. (Charlotte,
North Carolina time) on the Closing Date in Dollars and in funds
immediately available to the Agent.
(c) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan that is
part of the Tranche A Term Loan shall be in an aggregate principal amount
that is not less than $2,000,000 and integral multiples of $100,000 (or
the then remaining principal balance of the Tranche A Term Loan, if less).
(d) Repayment of Tranche A Term Loan. The principal amount of the
Tranche A Term Loan shall be repaid in twenty-four (24) consecutive
quarterly installments as follows, unless accelerated sooner pursuant to
Section 9.2:
43
=========================================
Tranche A Term
Principal Loan Principal
Amortization Amortization
Payment Dates Payment
-----------------------------------------
September 30, 1998, $500,000
December 31, 1998,
March 31, 1999
and
June 30, 1999
-----------------------------------------
September 30, 1999, $1,000,000
December 31, 1999,
March 31, 2000
and
June 30, 2000
-----------------------------------------
September 30, 2000, $1,500,000
December 31, 2000,
March 31, 2001
and
June 30, 2001
-----------------------------------------
September 30, 2001, $2,500,000
December 31, 2001,
March 31, 2002
and
June 30, 2002
-----------------------------------------
September 30, 2002, $3,250,000
December 31, 2002,
March 31, 2003
and
June 30, 2003
-----------------------------------------
September 30, 2003, $3,750,000
December 31, 2003,
March 31, 2004
and
the Maturity Date
=========================================
(e) Interest. Subject to the provisions of Section 3.1, the Tranche
A Term Loan shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as the Tranche A Term
Loan shall be comprised in whole or in part of Base Rate Loans, such
Base Rate Loans shall bear interest at a per annum rate equal to the
Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as the Tranche A
Term Loan shall be comprised in whole or in part of Eurodollar
Loans, such Eurodollar Loans shall bear interest at a per annum rate
equal to the Adjusted Eurodollar Rate.
44
Interest on the Tranche A Term Loan shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(f) Tranche A Term Notes. The portion of the Tranche A Term Loan
made by each Tranche A Term Lender shall be evidenced by a duly executed
promissory note of the Borrower to such Lender in an original principal
amount equal to such Lender's Tranche A Term Loan Commitment Percentage of
the Tranche A Term Loan and substantially in the form of Exhibit 2.4(f).
2.5 Tranche B Term Loan.
(a) Tranche B Term Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein, each Tranche B Term Lender severally agrees to make available to
the Borrower on the Closing Date such Lender's Tranche B Term Loan
Commitment Percentage of a term loan in Dollars (the "Tranche B Term
Loan") in the aggregate principal amount of SIXTY MILLION DOLLARS
($60,000,000) (the "Tranche B Term Loan Committed Amount") for the
purposes hereinafter set forth. The Tranche B Term Loan may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request; provided, however, that no more than 10 Eurodollar
Loans shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest
Periods shall be considered as separate Eurodollar Loans, even if they
begin on the same date, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period). Amounts repaid on the Tranche B Term Loan may not
be reborrowed.
(b) Borrowing Procedures. The Borrower shall submit an appropriate
Notice of Borrowing to the Agent not later than 11:00 A.M. (Charlotte,
North Carolina time) on the Closing Date, with respect to the portion of
the Tranche B Term Loan initially consisting of a Base Rate Loan, or on
the third Business Day prior to the Closing Date, with respect to the
portion of the Tranche B Term Loan initially consisting of one or more
Eurodollar Loans, which Notice of Borrowing shall be irrevocable and shall
specify (i) that the funding of a Tranche B Term Loan is requested and
(ii) whether the funding of the Tranche B Term Loan shall be comprised of
Base Rate Loans, Eurodollar Loans or a combination thereof, and if
Eurodollar Loans are requested, the Interest Period(s) therefor. If the
Borrower shall fail to deliver such Notice of Borrowing to the Agent by
11:00 A.M. (Charlotte, North Carolina time) on the third Business Day
prior to the Closing Date, then the full amount of the Tranche B Term Loan
shall be disbursed on the Closing Date as a Base Rate Loan. Each Tranche B
Term Lender shall make its Tranche B Term Loan Commitment Percentage of
the Tranche B Term Loan available to the Agent for the account of the
Borrower at the office of the Agent specified in Schedule 2.1(a), or at
such other office as the Agent may designate in writing, by 1:00 P.M.
(Charlotte, North Carolina time) on the Closing Date in Dollars and in
funds immediately available to the Agent.
(c) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan that is
part of the Tranche B Term Loan shall be in an aggregate principal amount
that is not less than
45
$2,000,000 and integral multiples of $100,000 (or the then remaining
principal balance of the Tranche B Term Loan, if less).
(d) Repayment of Tranche B Term Loan. The principal amount of the
Tranche B Term Loan shall be repaid in twenty-eight (28) consecutive
quarterly installments as follows, unless accelerated sooner pursuant to
Section 9.2:
=========================================
Tranche B Term
Principal Loan Principal
Amortization Amortization
Payment Dates Payment
-----------------------------------------
September 30, 1998, $150,000
December 31, 1998,
March 31, 1999,
June 30, 1999,
September 30, 1999,
December 31, 1999,
March 31, 2000,
June 30, 2000,
September 30, 2000,
December 31, 2000,
March 31, 2001,
June 30, 2001,
September 30, 2001,
December 31, 2001,
March 31, 2002,
June 30, 2002,
September 30, 2002,
December 31, 2002,
March 31, 2003,
June 30, 2003,
September 30, 2003,
December 31, 2003,
March 31, 2004
and
June 30, 2004
-----------------------------------------
September 30, 2004 $14,100,000
December 31, 2004,
March 31, 2005
and
the Maturity Date
=========================================
(e) Interest. Subject to the provisions of Section 3.1, the Tranche
B Term Loan shall bear interest at a per annum rate equal to:
46
(i) Base Rate Loans. During such periods as the Tranche B Term
Loan shall be comprised in whole or in part of Base Rate Loans, such
Base Rate Loans shall bear interest at a per annum rate equal to the
Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as the Tranche B
Term Loan shall be comprised in whole or in part of Eurodollar
Loans, such Eurodollar Loans shall bear interest at a per annum rate
equal to the Adjusted Eurodollar Rate.
Interest on the Tranche B Term Loan shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(f) Tranche B Term Notes. The portion of the Tranche B Term Loan
made by each Tranche B Term Lender shall be evidenced by a duly executed
promissory note of the Borrower to such Lender in an original principal
amount equal to such Lender's Tranche B Term Loan Commitment Percentage of
the Tranche B Term Loan and substantially in the form of Exhibit 2.5(f).
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of default in the payment
of any amount hereunder, under the Notes or under any of the other Credit
Documents, such overdue amount shall bear interest, payable on demand, at a per
annum rate 2% greater than the rate which would otherwise be applicable (or if
no rate is applicable, whether in respect of interest, fees or other amounts,
then the Adjusted Base Rate plus 2%).
3.2 Extension and Conversion.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another interest rate type; provided, however, that (i) except as
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto unless the Borrower makes payment of any
amounts payable pursuant to Section 3.12 in connection with such conversion or
extension, (ii) no Eurodollar Loan may be extended and no Base Rate Loan may be
converted into Eurodollar Loans when any Default or Event of Default is in
existence and the Agent or the Required Lenders have determined that such
conversion or extension is not appropriate, (iii) Loans extended as, or
converted into, Eurodollar Loans shall be subject to the terms of the definition
of "Interest Period" set forth in Section 1.1 and shall be in such minimum
amounts as provided in, with respect to Revolving Loans, Section 2.1(b)(ii),
with respect to the Tranche A Term Loan, Section 2.4(c), or, with respect to the
Tranche B Term Loan, Section 2.5(c), (iv) no more than 10 Eurodollar Loans shall
be outstanding hereunder at any time (it being understood that, for purposes
hereof, Eurodollar Loans with different Interest Periods shall be considered as
separate Eurodollar Loans, even if they
47
begin on the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single Interest
Period), (v) any request for extension or conversion of a Eurodollar Loan which
shall fail to specify an Interest Period shall be deemed to be a request for an
Interest Period of one month and (vi) Swingline Loans may not be extended or
converted pursuant to this Section 3.2. Each such extension or conversion shall
be effected by the Borrower by giving a Notice of Extension/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the Agent
specified in specified in Schedule 2.1(a), or at such other office as the Agent
may designate in writing, prior to 11:00 A.M. (Charlotte, North Carolina time)
on the Business Day of, in the case of the conversion of a Eurodollar Loan into
a Base Rate Loan, and on the third Business Day prior to, in the case of the
extension of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a
Eurodollar Loan, the date of the proposed extension or conversion, specifying
the date of the proposed extension or conversion, the Loans to be so extended or
converted, the types of Loans into which such Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. Each request
for extension or conversion shall be irrevocable. In the event the Borrower
fails to request extension or conversion of any Eurodollar Loan in accordance
with this Section, or any such conversion or extension is not permitted or
required by this Section, then such Eurodollar Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Agent shall give each affected Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time; provided, however,
that each partial prepayment of Loans shall be (i) in the case of
Revolving Loans, in a minimum principal amount of $2,000,000 and integral
multiples of $100,000 in excess thereof and (ii) in the case of Swingline
Loans, in a minimum principal amount of $100,000. Subject to the foregoing
terms, amounts prepaid under this Section 3.3(a) shall be applied as the
Borrower may elect. All prepayments under this Section 3.3(a) shall be
subject to Section 3.12, but otherwise without premium or penalty, and be
accompanied by interest on the principal amount prepaid through the date
of prepayment.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If, at any time, the sum of
the aggregate principal amount of outstanding Revolving Loans plus
LOC Obligations outstanding plus outstanding Swingline Loans shall
exceed the Revolving Committed Amount, the Credit Parties
immediately shall cause the Borrower to prepay the Revolving Loans
and Swingline Loans and (after all Revolving Loans and Swingline
Loans have been repaid) cash collateralize the LOC Obligations in an
amount sufficient to eliminate such excess.
(ii) Excess Cash Flow. Within 90 days after the end of each
fiscal year (commencing with the fiscal year ending December 31,
1998), the Borrower shall prepay the Loans in an amount equal to (x)
50% of the Excess Cash Flow earned during such prior fiscal year
less (y) the amount of any voluntary prepayments of
48
the Tranche A Term Loan, the Tranche B Term Loan or (to the extent
accompanied by a reduction in the Revolving Committed Amount) the
Revolving Loans during such prior fiscal year. Any payments of
Excess Cash Flow shall be applied as set forth in clause (vi) below.
(iii) Asset Dispositions. Immediately upon the occurrence of
any Asset Disposition Prepayment Event, the Borrower shall prepay
the Loans in an aggregate amount equal to 100% of the Net Cash
Proceeds of the related Asset Disposition not applied during the
related Application Period to make Eligible Reinvestments as
contemplated by the terms of Section 8.5(e) (such prepayment to be
applied as set forth in clause (vi) below).
(iv) Debt Issuances. Immediately upon receipt by the Parent or
any Consolidated Party of proceeds from any Debt Issuance, the
Borrower shall prepay the Loans in an aggregate amount equal to 100%
of the Net Cash Proceeds of such Debt Issuance to the Lenders (such
prepayment to be applied as set forth in clause (vi) below).
(v) Issuances of Equity. Immediately upon the occurrence of
any Equity Issuance Prepayment Event, the Borrower shall prepay the
Loans in an aggregate amount equal to 100% of the Net Cash Proceeds
of the related Equity Issuance not applied during the period of 365
days following the consummation of such Equity Issuance to make
Eligible Reinvestments (such prepayment to be applied as set forth
in clause (vi) below).
(vi) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 3.3(b) shall be applied
as follows: (A) with respect to all amounts prepaid pursuant to
Section 3.3(b)(i), first to Swingline Loans and then to the
Revolving Loans and (after all Revolving Loans have been repaid) to
a cash collateral account in respect of LOC Obligations, (B) with
respect to all amounts prepaid pursuant to Section 3.3(b)(ii), (iv)
or (v), pro rata to the Tranche A Term Loan and the Tranche B Term
Loan (in each case ratably to the remaining Principal Amortization
Payments thereof) and (C) with respect to all amounts prepaid
pursuant to Section 3.3(b)(iii), pro rata to (1) the Swingline
Loans, (2) the Revolving Loans and (after all Revolving Loans have
been repaid) to a cash collateral account in respect of LOC
Obligations (with a corresponding reduction in the Revolving
Committed Amount in an amount equal to all amounts applied pursuant
to this clause (2)), (3) the Tranche A Term Loan (ratably to the
remaining Principal Amortization Payments thereof) and (4) the
Tranche B Term Loan (ratably to the remaining Principal Amortization
Payments thereof). One or more holders of the Tranche B Term Loans
may decline to accept a mandatory prepayment under Sections
3.3(b)(ii), (iii), (iv) or (v) to the extent there are sufficient
Tranche A Term Loans outstanding to be paid with such prepayment, in
which case such declined prepayments shall be allocated pro rata
among the Tranche A Term Loans and the Tranche B Term Loans held by
Lenders accepting such prepayments. Within the parameters of the
applications set forth above, prepayments of Revolving Loans, the
Tranche A Term Loan or the Tranche B Term
49
Loan shall be applied first to Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period maturities. All
prepayments under this Section 3.3(b) shall be subject to Section
3.12 and be accompanied by interest on the principal amount prepaid
through the date of prepayment.
(c) Escrow Account.
If the Borrower is required to make a mandatory prepayment under
Section 3.3(b) that would result in a payment by the Borrower under
Section 3.12, the Borrower may, at its option, elect to deposit funds
constituting such prepayment with the Agent to be held by the Agent in a
cash collateral account and applied (including any income or gains earned
on amounts in the Escrow Account), upon the earliest to occur of (A) the
request of the Borrower, (B) the last day of any Interest Period, (C) the
occurrence of an Event of Default or (D) the Maturity Date, to the Credit
Party Obligations in accordance with the terms of Section 3.3(b)(vi).
3.4 Termination and Reduction of Commitments.
(a) Voluntary Reductions. The Borrower may from time to time
permanently reduce or terminate the Revolving Committed Amount in whole or
in part (in minimum aggregate amounts of $5,000,000 or in integral
multiples of $1,000,000 in excess thereof (or, if less, the full remaining
amount of the then applicable Revolving Committed Amount)) upon five
Business Days' prior written notice to the Agent; provided, however, no
such termination or reduction shall be made which would cause the
aggregate principal amount of outstanding Revolving Loans plus LOC
Obligations outstanding plus outstanding Swingline Loans to exceed the
Revolving Committed Amount unless, concurrently with such termination or
reduction, the Revolving Loans and Swingline Loans are repaid to the
extent necessary to eliminate such excess. The Agent shall promptly notify
each Revolving Lender of receipt by the Agent of any notice from the
Borrower pursuant to this Section 3.4(a).
(b) Mandatory Reductions. On any date that the Revolving Loans are
required to be prepaid pursuant to the terms of Section 3.3(b)(vi), the
Revolving Committed Amount automatically shall be permanently reduced by
the amount of such required prepayment and/or reduction.
(c) Maturity Date. The Revolving Commitments of the Revolving
Lenders, the LOC Commitment of the Issuing Lender and the Swingline
Commitment of the Swingline Lender shall automatically terminate on the
Maturity Date.
(d) General. The Borrower shall pay to the Agent for the account of
the Revolving Lenders in accordance with the terms of Section 3.5(b)(i),
on the date of each termination or reduction of the Revolving Committed
Amount, the Unused Fee accrued through the date of such termination or
reduction on the amount of the Revolving Committed Amount so terminated or
reduced.
50
3.5 Fees.
(a) Upfront Fees. The Borrower agrees to pay to the Agent for the
benefit of the Lenders in immediately available funds on or before the
Closing Date an upfront fee (the "Upfront Fee") in the amount provided in
the Agent's Fee Letter.
(b) Unused Fee. In consideration of the Revolving Commitments of the
Revolving Lenders hereunder, the Borrower agrees to pay to the Agent for
the account of each Revolving Lender a fee (the "Unused Fee") on the
Unused Revolving Committed Amount computed at a per annum rate for each
day during the applicable Unused Fee Calculation Period (hereinafter
defined) at a rate equal to the Applicable Percentage in effect from time
to time. The Unused Fee shall commence to accrue on the Closing Date and
shall be due and payable in arrears on the last business day of each
March, June, September and December (and any date that the Revolving
Committed Amount is reduced as provided in Section 3.4(a) and the Maturity
Date) for the immediately preceding quarter (or portion thereof) (each
such quarter or portion thereof for which the Unused Fee is payable
hereunder being herein referred to as an "Unused Fee Calculation Period"),
beginning with the first of such dates to occur after the Closing Date.
(c) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In consideration of
the issuance of standby Letters of Credit hereunder, the Borrower
promises to pay to the Agent for the account of each Revolving
Lender a fee (the "Standby Letter of Credit Fee") on such Revolving
Lender's Revolving Commitment Percentage of the average daily
maximum amount available to be drawn under each such standby Letter
of Credit computed at a per annum rate for each day from the date of
issuance to the date of expiration equal to the Applicable
Percentage. The Standby Letter of Credit Fee will be payable
quarterly in arrears on the last Business Day of each March, June,
September and December for the immediately preceding quarter (or a
portion thereof).
(ii) Trade Letter of Credit Drawing Fee. In consideration of
the issuance of trade Letters of Credit hereunder, the Borrower
promises to pay to the Agent for the account of each Revolving
Lender a fee (the "Trade Letter of Credit Fee") on such Revolving
Lender's Revolving Commitment Percentage of the average daily
maximum amount available to be drawn under each such trade Letter of
Credit computed at a per annum rate for each day from the date of
issuance to the date of expiration equal to the Applicable
Percentage. The Trade Letter of Credit Fee will be payable quarterly
in arrears on the last Business Day of each March, June, September
and December for the immediately preceding quarter (or a portion
thereof).
(iii) Issuing Lender Fees. In addition to the Standby Letter
of Credit Fee payable pursuant to clause (i) above and the Trade
Letter of Credit Fee payable pursuant to clause (ii) above, the
Borrower promises to pay to the Issuing Lender for its own account
without sharing by the other Revolving Lenders the letter of credit
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fronting and negotiation fees agreed to by the Borrower and the
Issuing Lender from time to time and the customary charges from time
to time of the Issuing Lender with respect to the issuance,
amendment, transfer, administration, cancellation and conversion of,
and drawings under, such Letters of Credit (collectively, the
"Issuing Lender Fees").
(d) Administrative Fees. The Borrower agrees to pay to the Agent,
for its own account and NationsBanc Xxxxxxxxxx Securities LLC, as
applicable, the fees referred to in the Agent's Fee Letter (collectively,
the "Agent's Fees").
3.6 Capital Adequacy.
If any Lender has determined, after the date hereof, that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has the effect of reducing the rate of return on such Lender's capital
or assets as a consequence of its commitments or obligations hereunder to a
level below that which such Lender could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then, upon notice from such Lender through the Agent to the
Borrower setting forth in reasonable detail the change and the calculation of
such reduced rate of return, the Borrower shall be obligated to pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent demonstrable error, be conclusive and binding on the
parties hereto.
3.7 Limitation on Eurodollar Loans.
If on or prior to the first day of any Interest Period for any Eurodollar
Loan:
(a) the Agent determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement. The Agent or the
Required Lenders, as the
52
case may be, will promptly withdraw any determination pursuant to this Section
3.7 as soon as circumstances allow.
3.8 Illegality.
Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Lender or its Applicable Lending Office to
make, maintain or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make,
Convert into, Continue or maintain Eurodollar Loans shall be suspended until
such time as such Lender may again make, maintain, and fund Eurodollar Loans (in
which case the provisions of Section 3.10 shall be applicable).
3.9 Requirements of Law.
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Loans, its Notes, or
its obligation to make Loans, or change the basis of taxation of any
amounts payable to such Lender (or its Applicable Lending Office) under
this Credit Agreement or its Notes in respect of any Loans (other than
Taxes defined in Section 3.11(a) and taxes imposed on the overall net
income of such Lender by the jurisdiction in which such Lender has its
principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Eurodollar
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such Lender
(or its Applicable Lending Office), including the Commitment of such
Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending Office)
or the London interbank market any other condition affecting this Credit
Agreement or its Notes or any of such extensions of credit or liabilities
or commitments;
and the result of any of the foregoing is to increase, by an amount deemed by
such Lender (or its Applicable Lending Office) to be material, the cost to such
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Eurodollar Loans or to reduce any sum received or
receivable by such Lender (or its Applicable Lending Office) under this Credit
Agreement or its Notes, then the Borrower shall pay to such Lender on demand
such amount or amounts as will compensate such Lender for such increased cost or
reduction. If any Lender requests compensation by the Borrower under this
Section 3.9, the Borrower may, by notice to such Lender (with a copy to the
Agent), suspend the obligation of such Lender to make, Convert into,
53
Continue or maintain the affected Loans, until the event or condition giving
rise to such request ceases to be in effect (in which case the provisions of
Section 3.10 shall be applicable); provided that such suspension shall not
affect the right of such Lender to receive the compensation so requested. Each
Lender shall promptly notify the Borrower and the Agent of any event of which it
has knowledge, occurring after the date hereof, which will entitle such Lender
to compensation pursuant to this Section 3.9 and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Lender,
be otherwise disadvantageous to it. Any Lender claiming compensation under this
Section 3.9 shall furnish to the Borrower and the Agent a statement setting
forth in reasonable detail the calculation of the additional amount or amounts
to be paid to it hereunder which shall be conclusive in the absence of
demonstrable error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
3.10 Treatment of Affected Loans.
If the obligation of any Lender to make, Convert into, Continue or
maintain Eurodollar Loans shall be suspended pursuant to Section 3.8 or 3.9
hereof, such Lender's Eurodollar Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current Interest Period(s) for
such Eurodollar Loans (or, in the case of a Conversion required by Section 3.8
hereof, on such earlier date required by law as such Lender may specify to the
Borrower with a copy to the Agent) and, unless and until such Lender gives
notice as provided below that the circumstances specified in Section 3.8 or 3.9
hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be
Converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 Taxes.
(a) Any and all payments by any Credit Party to or for the account
of any Lender or the Agent hereunder or under any other Credit Document
shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies,
54
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent,
taxes imposed on it as a result of a present or former connection between
the Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising
solely from the Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Credit Agreement or any other Credit Document) (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "Taxes"). If any Credit Party
shall be required by law to deduct any Taxes from or in respect of any sum
payable under this Credit Agreement or any other Credit Document to any
Lender or the Agent, (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions for
Taxes applicable to additional sums payable under this Section 3.11) such
Lender or the Agent receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Credit Party shall
make such deductions, (iii) such Credit Party shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) such Credit Party shall furnish
to the Agent, at its address referred to in Section 11.1, the original or
a certified copy of a receipt evidencing payment thereof. Notwithstanding
the foregoing, no additional sums shall be payable pursuant to Section
3.11(a)(i) or 3.11(c) with respect to Taxes (a) that are attributable to
such Lender's failure to comply with the requirements of Section 3.11(d),
(b) that are United States withholding taxes imposed on amounts payable to
such Lender at the time the Lender becomes a party to this Agreement or
(c) unless imposed as a result of a change in treaty, law or regulation.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under this
Credit Agreement or any other Credit Document or from the execution or
delivery of, or otherwise with respect to, this Credit Agreement or any
other Credit Document (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for
the full amount of Taxes and Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or the Agent
(as the case may be) and any liability for penalties, interest, and
expenses arising therefrom or with respect thereto.
(d) Each that is not a United States person under Section
7701(a)(30) of the Code, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter
if requested in writing by the Borrower or the Agent (but only so long as
such Lender remains lawfully able to do so), shall provide the Borrower
and the Agent with (i) Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the
rate of withholding tax on payments of interest or certifying that the
income
55
receivable pursuant to this Credit Agreement is effectively connected with
the conduct of a trade or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (iii) any other form or
certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code),
certifying that such Lender is entitled to an exemption from or a reduced
rate of tax on payments pursuant to this Credit Agreement or any of the
other Credit Documents. In addition, each Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously
delivered by such Lender. Each Lender shall promptly notify the Borrower
at any time it determines that it is no longer in a position to provide
any previously delivered form to the Borrower (or any other form adopted
by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this Section 3.11(d), a Lender shall not be required to
deliver any form pursuant to this Section 3.11(d) that such Lender is not
legally able to deliver.
(e) If any Credit Party is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 3.11, then such
Lender will agree to use reasonable efforts to change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce any such
additional payment which may thereafter accrue if such change, in the
reasonable judgment of such Lender, is not otherwise materially
disadvantageous to such Lender.
(f) Within thirty (30) days after the date of any payment of Taxes,
the applicable Credit Party shall furnish to the Agent the original or a
certified copy of a receipt evidencing such payment.
(g) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit
Parties contained in this Section 3.11 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents
and the termination of the Commitments hereunder.
(h) If the Agent or any Lender receives a refund with respect to
Taxes paid by the Borrower, which in the good faith judgment of such
Lender is allocable to such payment, the Agent or Lender, respectively
shall promptly pay such refund, together with any other amounts paid by
the Borrower in connection with such refunded Taxes, to the Borrower, net
of all out-of-pocket expenses of such Lender incurred in obtaining such
refund, provided, however, that the Borrower agrees to promptly return
such refund to the Agent or the applicable Lender, as the case may be, if
it receives notice from the Agent or applicable Lender that such Agent or
Lender is required to repay such refund. Each of the Agent and each Lender
agrees that it will contest such Taxes or liabilities if the Agent or such
Lender determines, in its reasonable judgment, that it would not be
materially disadvantaged or prejudiced as a result of such contest.
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3.12 Compensation.
Upon the request of any Lender, the Borrower shall pay to such Lender such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (excluding loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Loan or
Quoted Rate Swingline Loan for any reason (including, without limitation,
the acceleration of the Loans pursuant to Section 9.2) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Loan
or Quoted Rate Swingline Loan on the date for such borrowing, Conversion,
Continuation, or prepayment specified in the relevant notice of borrowing,
prepayment, Continuation, or Conversion under this Credit Agreement.
Such indemnification may include an amount equal to the excess, if any, of (a)
the amount of interest which would have accrued on the amount so prepaid, or not
so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein (excluding, however, the Applicable Percentage
included therein, if any) over (b) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. Any Lender claiming compensation under
this Section 3.12 shall furnish to the Borrower and the Agent a statement
setting forth in reasonable detail the calculation of the amounts to be paid to
it hereunder which shall be conclusive in the absence of demonstrable error. The
covenants of the Borrower set forth in this Section 3.12 shall survive the
repayment of the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
3.13 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the terms of
Section 3.3) prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment of
interest on the Loans or reimbursement obligations arising from drawings
under Letters of Credit, each payment of Unused Fees, each payment of the
Standby Letter of Credit Fee, each payment of the Trade Letter of Credit
Fee, each reduction of the Revolving Committed Amount and each conversion
or extension of any Loan, shall be allocated pro rata among the Lenders in
accordance with the respective principal amounts of their outstanding
Loans and Participation Interests.
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(b) Advances. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of
its obligations hereunder. Unless the Agent shall have been notified by
any Lender prior to the date of any requested borrowing that such Lender
does not intend to make available to the Agent its ratable share of such
borrowing to be made on such date, the Agent may assume that such Lender
has made such amount available to the Agent on the date of such borrowing,
and the Agent in reliance upon such assumption, may (in its sole
discretion but without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Agent, the Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
will promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Agent. The Agent shall also be entitled
to recover from the Lender or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to
the date such corresponding amount is recovered by the Agent at a per
annum rate equal to (i) from the Borrower, at the applicable rate for the
applicable borrowing and (ii) from a Lender, at the Federal Funds Rate. A
certificate of the Agent submitted to any Lender with respect to any
amounts owing under this subsection (b) shall be conclusive in the absence
of manifest error.
3.14 Sharing of Payments.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligation or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Loans, LOC
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Lender were a holder of such Loan,
LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Agent shall fail to remit to the Agent or any other Lender an
amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this
58
Credit Agreement on the date when such amount is due, such payments shall be
made together with interest thereon for each date from the date such amount is
due until the date such amount is paid to the Agent or such other Lender at a
rate per annum equal to the Federal Funds Rate. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured claim
in lieu of a setoff to which this Section 3.14 applies, such Lender shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of the Lenders under this Section 3.14 to
share in the benefits of any recovery on such secured claim.
3.15 Payments, Computations, Etc.
(a) Place and Manner of Payments. Except as otherwise specifically
provided herein, all payments hereunder shall be made to the Agent in
immediately available funds, without setoff, deduction, counterclaim or
withholding of any kind, at the Agent's office specified in Schedule
2.1(a) not later than 2:00 P.M. (Charlotte, North Carolina time) on the
date when due. Any payment received after such time shall be deemed to
have been received on the next succeeding Business Day. The Agent may, but
shall not be obligated to, charge any ordinary deposit account of any
Credit Party at the Agent for the payment when due of all amounts payable
by the Borrower hereunder. Each Borrower shall, at the time it makes any
payment under this Credit Agreement, specify to the Agent the Credit Party
Obligations to which such payment is to be applied (and in the event that
it fails so to specify, or if such application would be inconsistent with
the terms hereof, the Agent shall distribute such payment to the Lenders
in such manner as the Agent may determine to be appropriate, subject to
the terms of Section 3.13(a)). The Agent shall promptly remit in same day
funds to each Lender such Lender's share, if any, of payments received by
the Agent for the account of such Lender. Whenever any payment hereunder
shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and Fees for the period of such
extension), except that in the case of Eurodollar Loans, if the extension
would cause the payment to be made in the next following calendar month,
then such payment shall instead be made on the next preceding Business
Day. Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days
elapsed over a year of 360 days, except with respect to computation of
interest on Base Rate Loans which (unless the Base Rate is determined by
reference to the Federal Funds Rate) shall be calculated based on a year
of 365 or 366 days, as appropriate. Interest shall accrue from and include
the date of borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding
any other provisions of this Credit Agreement, to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of the Credit
Party Obligations or any other amounts outstanding under any of the Credit
Documents or in respect of the Collateral shall be paid over or delivered
as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent in connection with enforcing the rights of the Lenders under the
Credit Documents and any protective
59
advances made by the Agent with respect to the Collateral under or
pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees payable to the Agent then due and
owing;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Credit Party Obligations
owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest then due and owing;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash collateralization
of the outstanding LOC Obligations) then due and owing;
SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH"
above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the
next succeeding category; (ii) each of the Lenders shall receive an amount
equal to its pro rata share (based on the proportion that the then
outstanding Loans and LOC Obligations held by such Lender bears to the
aggregate then outstanding Loans and LOC Obligations) of amounts available
to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH"
above; and (iii) to the extent that any amounts available for distribution
pursuant to clause "FIFTH" above are attributable to the issued but
undrawn amount of outstanding Letters of Credit, such amounts shall be
held by the Agent in a cash collateral account and applied (A) first, to
reimburse the Issuing Lender from time to time for any drawings under such
Letters of Credit and (B) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses "FIFTH"
and "SIXTH" above in the manner provided in this Section 3.15(b).
3.16 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing
each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time
under this Credit Agreement. Each Lender will make reasonable efforts to
maintain the accuracy of its account or accounts and to promptly update
its account or accounts from time to time, as necessary.
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(b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder and (iii) the amount of any sum received by the Agent
hereunder from or for the account of any Credit Party and each Lender's
share thereof. The Agent will make reasonable efforts to maintain the
accuracy of the subaccounts referred to in the preceding sentence and to
promptly update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the
Credit Parties therein recorded; provided, however, that the failure of
any Lender or the Agent to maintain any such account, such Register or
such subaccount, as applicable, or any error therein, shall not in any
manner affect the obligation of the Credit Parties to pay the Credit Party
Obligations owing to such Lender.
SECTION 4
GUARANTY
4.1 The Guaranty.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Agent as hereinafter provided, as primary obligor and not as surety, the prompt
payment of the Credit Party Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Credit Party Obligations
are not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Credit Party Obligations, the same
will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
4.2 Obligations Unconditional.
The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of
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the Credit Documents or Hedging Agreements, or any other agreement or instrument
referred to therein, or any substitution, release, impairment or exchange of any
other guarantee of or security for any of the Credit Party Obligations, and, to
the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 4.2 that the obligations of the Guarantors hereunder shall be absolute
and unconditional under any and all circumstances. Each Guarantor agrees that
such Guarantor shall have no right of subrogation, indemnity, reimbursement or
contribution against the Borrower or any other Guarantor for amounts paid under
this Section 4 until such time as the Lenders (and any Affiliates of Lenders
entering into Hedging Agreements) have been paid in full, all Commitments under
this Credit Agreement have been terminated and no Person or Governmental
Authority shall have any right to request any return or reimbursement of funds
from the Lenders in connection with monies received under the Credit Documents
or Hedging Agreements. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by law, the occurrence of any one
or more of the following shall not alter or impair the liability of any
Guarantor hereunder which shall remain absolute and unconditional as described
above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of the
Credit Party Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be waived or any other guarantee of any of the Credit Party Obligations or
any security therefor shall be released, impaired or exchanged in whole or
in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to be
void or voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims of any
Person (including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.
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4.3 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers.
Without limiting the generality of the provisions of this Section 4, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. xx.xx. 26-7
through 26-9, inclusive, to the extent applicable. Each Guarantor further agrees
that such Guarantor shall have no right of recourse to security for the Credit
Party Obligations, except through the exercise of rights of subrogation pursuant
to Section 4.2 and through the exercise of rights of contribution pursuant to
Section 4.6.
4.5 Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Security Agreements and the other
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.
4.6 Rights of Contribution.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the Agent and
the Lenders of the Guaranteed Obligations, and none of the Guarantors shall
exercise any right or remedy under this Section 4.6 against any other Guarantor
until payment and satisfaction in full of
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all of such Guaranteed Obligations. For purposes of this Section 4.6, (a)
"Guaranteed Obligations" shall mean any obligations arising under the other
provisions of this Section 4; (b) "Excess Payment" shall mean the amount paid by
any Guarantor in excess of its Pro Rata Share of any Guaranteed Obligations; (c)
"Pro Rata Share" shall mean, for any Guarantor in respect of any payment of
Guaranteed Obligations, the ratio (expressed as a percentage) as of the date of
such payment of Guaranteed Obligations of (i) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of all
of the Credit Parties exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Credit Parties hereunder) of the Credit
Parties; provided, however, that, for purposes of calculating the Pro Rata
Shares of the Guarantors in respect of any payment of Guaranteed Obligations,
any Guarantor that became a Guarantor subsequent to the date of any such payment
shall be deemed to have been a Guarantor on the date of such payment and the
financial information for such Guarantor as of the date such Guarantor became a
Guarantor shall be utilized for such Guarantor in connection with such payment;
and (d) "Contribution Share" shall mean, for any Guarantor in respect of any
Excess Payment made by any other Guarantor, the ratio (expressed as a
percentage) as of the date of such Excess Payment of (i) the amount by which the
aggregate present fair salable value of all of its assets and properties exceeds
the amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of the
Credit Parties other than the maker of such Excess Payment exceeds the amount of
all of the debts and liabilities (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of the Credit
Parties hereunder) of the Credit Parties other than the maker of such Excess
Payment; provided, however, that, for purposes of calculating the Contribution
Shares of the Guarantors in respect of any Excess Payment, any Guarantor that
became a Guarantor subsequent to the date of any such Excess Payment shall be
deemed to have been a Guarantor on the date of such Excess Payment and the
financial information for such Guarantor as of the date such Guarantor became a
Guarantor shall be utilized for such Guarantor in connection with such Excess
Payment. This Section 4.6 shall not be deemed to affect any right of
subrogation, indemnity, reimbursement or contribution that any Guarantor may
have under applicable law against the Borrower in respect of any payment of
Guaranteed Obligations. Notwithstanding the foregoing, all rights of
contribution against any Guarantor shall terminate from and after such time, if
ever, that such Guarantor shall be relieved of its obligations pursuant to
Section 8.4.
4.7 Guarantee of Payment; Continuing Guarantee.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.
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SECTION 5
CONDITIONS
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and to
make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit(s), whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Agent of duly executed
copies of (i) this Credit Agreement, (ii) the Notes and (iii) the
Collateral Documents.
(b) Corporate Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or certificates
of incorporation or other charter documents of each Credit Party
certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other
jurisdiction of its incorporation and certified by a secretary or
assistant secretary of such Credit Party to be true and correct as
of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit Party
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Closing Date.
(iii) Good Standing. Copies of (A) certificates of good
standing, existence or its equivalent with respect to each Credit
Party certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be in
good standing could reasonably be expected to have a Material
Adverse Effect and (B) to the extent available, a certificate
indicating payment of all corporate franchise taxes certified as of
a recent date by the appropriate governmental taxing authorities.
(iv) Incumbency. An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary to be true and
correct as of the Closing Date.
(c) Opinions of Counsel. The Agent shall have received, in each case
dated as of the Closing Date:
(i) a legal opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, special
counsel for the Credit Parties, substantially in the form of
Schedule 5.1(c)(i);
(ii) a legal opinion of special local counsel for the Credit
Parties for the States of Alabama, North Carolina and Pennsylvania,
substantially in the form of Schedule 5.1(c)(ii); and
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(iii) a legal opinion of special Canadian counsel for the
Credit Parties, substantially in the form of Schedule 5.1(c)(iii);
(d) Personal Property Collateral. The Agent shall have received:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit Party and
each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Agent's security
interest in the Collateral, copies of the financing statements on
file in such jurisdictions and evidence that no Liens exist other
than Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Agent's sole
discretion, to perfect the Agent's security interest in the
Collateral;
(iii) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Agent in order to perfect the Agent's
security interest in the Collateral;
(iv) all certificates evidencing the Equity Interests pledged
to the Agent pursuant to the Pledge Agreement, together with duly
executed in blank, undated stock powers attached thereto (unless,
with respect to the pledged Equity Interests of any Foreign
Subsidiary, such stock powers are deemed unnecessary by the Agent in
its reasonable discretion under the law of the jurisdiction of
incorporation of such Person);
(v) such patent/trademark/copyright filings as requested by
the Agent in order to perfect the Agent's security interest in the
Collateral;
(vi) all instruments and chattel paper in the possession of
any of the Credit Parties and having a value in excess of $250,000,
together with allonges or assignments as may be necessary or
appropriate to perfect the Agent's security interest in the
Collateral; and
(vii) in the case of any personal property Collateral located
at the premises leased by Great American Knitting Xxxxx, Inc.
located in Pottstown, Pennsylvania and at the premises leased by
Xxxxxx, Peabody & Co., Inc. located in Albertville, Alabama, such
estoppel letters, consents and waivers from the landlords on such
real property as shall be reasonably satisfactory to the Agent.
(e) Real Property Collateral. The Agent shall have received, in form
and substance reasonably satisfactory to the Agent:
(i) fully executed and notarized mortgages, deeds of trust or
deeds to secure debt (each, as the same may be amended, modified,
restated or
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supplemented from time to time, a "Mortgage Instrument" and
collectively the "Mortgage Instruments") encumbering the fee
interest and/or leasehold interest of any Credit Party in each real
property asset designated in Schedule 6.20(a) (each a "Mortgaged
Property" and collectively the "Mortgaged Properties");
(ii) a title report obtained by the Credit Parties in respect
of each of the Mortgaged Properties;
(iii) in the case of each real property leasehold interest of
any Credit Party constituting Mortgaged Property, (a) such estoppel
letters, consents and waivers from the landlords on such real
property as may be required by the Agent, which estoppel letters
shall be in the form and substance reasonably satisfactory to the
Agent and (b) evidence that the applicable lease, a memorandum of
lease with respect thereto, or other evidence of such lease in form
and substance reasonably satisfactory to the Agent, has been or will
be recorded in all places to the extent necessary or desirable, in
the reasonable judgment of the Agent, so as to enable the Mortgage
Instrument encumbering such leasehold interest to effectively create
a valid and enforceable first priority lien (subject to Permitted
Liens) on such leasehold interest in favor of the Agent (or such
other Person as may be required or desired under local law) for the
benefit of Lenders;
(iv) the Agent shall have received, and the title insurance
company issuing the policy referred to in Section 5.1(e)(v) (the
"Title Insurance Company") shall have received, maps or plats of an
as-built survey of the sites of the real property covered by the
Mortgage Instruments certified to the Agent and the Title Insurance
Company in a manner reasonably satisfactory to each of the Agent and
the Title Insurance Company, dated a date reasonably satisfactory to
each of the Agent and the Title Insurance Company by an independent
professional licensed land surveyor, which maps or plats and the
surveys on which they are based shall be made in accordance with
standards that enable the Title Insurance Company to issue the
policies referred to in Section 5.1(g)(v) below without exception
for "Survey matters", except for matters as are reasonably
acceptable to the Agent;
(v) ALTA mortgagee title insurance policies issued by Lawyers
Title Insurance Corporation (the "Mortgage Policies"), in amounts
not less than the respective amounts designated in Schedule 6.20(a)
with respect to any particular Mortgaged Property, assuring the
Agent that each of the Mortgage Instruments creates a valid and
enforceable first priority mortgage lien on the applicable Mortgaged
Property, free and clear of all defects and encumbrances except
Permitted Liens, which Mortgage Policies shall be in form and
substance reasonably satisfactory to the Agent and shall provide for
affirmative insurance and such reinsurance as the Agent may
reasonably request, all of the foregoing in form and substance
reasonably satisfactory to the Agent;
(vi) evidence, which may be in the form of a letter from an
insurance broker or a municipal engineer, as to whether (a) any
Mortgaged Property (a "Flood Hazard Property") is in an area
designated by the Federal Emergency
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Management Agency as having special flood or mud slide hazards and
(b) the community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program;
(vii) if there are any Flood Hazard Properties, a Credit
Party's written acknowledgment of receipt of written notification
from the Agent (a) as to the existence of each such Flood Hazard
Property and (b) as to whether the community in which each such
Flood Hazard Property is located is participating in the National
Flood Insurance Program;
(viii) maps or plats of an as-built survey of the sites of the
Mortgaged Properties certified to the Agent and the Title Insurance
Company in a manner reasonably satisfactory to them, dated a date
satisfactory to each of the Agent and the Title Insurance Company by
an independent professional licensed land surveyor reasonably
satisfactory to each of the Agent and the Title Insurance Company,
which maps or plats and the surveys on which they are based shall be
sufficient to delete any standard printed survey exception contained
in the applicable title policy and be made in accordance with the
Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title Association and
the American Congress on Surveying and Mapping in 1992, and, without
limiting the generality of the foregoing, there shall be surveyed
and shown on such maps, plats or surveys the following: (A) the
locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (B) the
lines of streets abutting the sites and width thereof; (C) all
access and other easements appurtenant to the sites necessary to use
the sites; (D) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances
affecting the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building structures
and improvements on the sites; and (F) if the site is described as
being on a filed map, a legend relating the survey to said map; and
(ix) evidence satisfactory to the Agent that each of the
Mortgaged Properties, and the uses of the Mortgaged Properties, are
in compliance in all material respects with all applicable laws,
regulations and ordinances including without limitation health and
environmental protection laws, erosion control ordinances, storm
drainage control laws, doing business and/or licensing laws, zoning
laws (the evidence submitted as to zoning should include the zoning
designation made for each of the Mortgaged Properties, the permitted
uses of each such Mortgaged Properties under such zoning designation
and zoning requirements as to parking, lot size, ingress, egress and
building setbacks) and laws regarding access and facilities for
disabled persons including, but not limited to, the federal
Architectural Barriers Act, the Fair Housing Amendments Act of 1988,
the Rehabilitation Act of 1973 and the Americans with Disabilities
Act of 1990.
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(f) Availability. After giving effect to the Recapitalization on the
Closing Date, there shall be at least $10 million of availability existing
under the Revolving Committed Amount.
(g) Evidence of Insurance. Receipt by the Agent of copies of
insurance policies or certificates of insurance of the Parent and the
Consolidated Parties evidencing liability and casualty insurance meeting
the requirements set forth in the Credit Documents, including, but not
limited to, naming the Agent as additional insured (in the case of
liability insurance) or sole loss payee (in the case of hazard insurance)
on behalf of the Lenders.
(h) Consummation of other External Financing Transactions. (i) The
Parent shall have received proceeds of a cash equity investment of at
least $31.5 million (at least $24.7 million of which shall be contributed
by the Sponsor, its Affiliates and other designated co-investors and up to
$2.5 million of which will be funded by loans from the Parent to
management of the Parent and to Xxxxxxx and Marsal in conjunction with the
Recapitalization) (the "Sponsor Common Stock"), (ii) the Borrower shall
have received gross proceeds (including the value attributable to any
portion of such securities issued to existing shareholders of the Parent
to the extent required by the Reorganization Plan) of at least $125
million from the issuance by the Borrower of senior subordinated notes
(the "Senior Subordinated Debt"), (iii) the Parent shall have issued to an
employee stock ownership plan approximately $2.4 million (including the
value attributable to any portion of such securities issued to existing
shareholders of the Parent to the extent required by the Reorganization
Plan) of Class A senior preferred stock (the "Employee Preferred Stock"),
(iv) the Borrower shall have received net proceeds of at least $48.1
million from the issuance of the Borrower's Class B senior preferred stock
(the "Senior Preferred Stock") and (v) the Parent shall have received
gross proceeds of at least $36.5 million from the issuance to the Sponsor,
its Affiliates or other designated co-investors of the Parent's Class C
junior preferred stock (the "Junior Preferred Stock").
(i) Recapitalization Documents. The Agent shall have received a
copy, certified by an officer of the Borrower as true and complete, of
each of the Recapitalization Documents as originally executed and
delivered, and no amendment or modification thereof shall have been
entered into on or prior to the Closing Date which shall not have been
approved by the Agent.
(j) Government Consent. Receipt by the Agent of evidence that all
governmental, shareholder and material third party consents (including
Xxxx-Xxxxx-Xxxxxx clearance) and approvals necessary or, in the reasonable
opinion of the Agent, desirable in connection with the Recapitalization
and the related financings and other transactions contemplated hereby and
expiration of all applicable waiting periods without any action being
taken by any authority that could restrain, prevent or impose any material
adverse conditions on the Parent and its Subsidiaries taken as a whole or
such other transactions or that could seek or threaten any of the
foregoing, and no law or regulation shall be applicable which in the
judgment of the Agent could have such effect.
(k) Litigation. There shall not exist any action, suit,
investigation or proceeding pending in any court or before any arbitrator
or Governmental Authority that
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would have a material adverse effect on the Parent and its Subsidiaries
taken as a whole or on any transaction contemplated hereby or on the
ability of the Borrower and the Guarantors taken as whole to perform their
respective obligations under the Credit Documents.
(l) Reorganization Plan; Confirmation Order. The Reorganization Plan
and the Confirmation Order shall not be altered, amended or otherwise
changed or supplemented in any material respect or any material condition
therein waived, without the prior written consent of the Agent (which
consent shall not be unreasonably withheld). Each of the conditions
precedent to the consummation of the Reorganization Plan (as specified
therein) shall have been satisfied or, with the consent of the Agent (not
to be unreasonably withheld), waived, and the Parent, the Borrower and
their respective Subsidiaries shall be in compliance with the terms of the
Reorganization Plan and the Confirmation Order.
(m) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date stating that (A) all governmental,
shareholder and third party consents and approvals, if any, with respect
to the Credit Documents and the transactions contemplated thereby have
been obtained, (B) no action, suit, investigation or proceeding is pending
in any court or before any arbitrator or Governmental Authority that would
have a Material Adverse Effect or a material adverse effect on any
transaction contemplated hereby or by the Reorganization Plan and the
other Recapitalization Documents, (C) the transactions contemplated by the
Reorganization Plan and the other Recapitalization Documents have been
consummated in accordance with the terms thereof and (D) immediately after
giving effect to the Recapitalization on the Closing Date, (1) each of the
Credit Parties is Solvent, (2) no Default or Event of Default exists and
(3) all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects.
(n) Fees and Expenses. Payment by the Credit Parties of all fees and
expenses owed by them to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Fee Letter.
(o) Syndication Side Letter. Receipt by the Agent of a letter
agreement executed by the Borrower and satisfactory to the Agent regarding
amendment of this Credit Agreement in connection with the primary
syndication of the credit facilities hereunder.
(p) Return of Original Letter of Credit. Receipt by the Agent of the
original copy of NationsBank letter of credit no. 970700, dated March 30,
1998, issued by NationsBank in favor of Bidermann Industries USA, Inc.
(q) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by the
Agent.
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5.2 Conditions to all Extensions of Credit.
The obligations of each Lender to make any Loan and of the Issuing Lender
to issue or extend any Letter of Credit (including the initial Loans and the
initial Letter of Credit) are subject to satisfaction of the following
conditions in addition to satisfaction on the Closing Date of the conditions set
forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of any
Revolving Loan, any portion of the Tranche A Term Loan or any portion of
the Tranche B Term Loan, an appropriate Notice of Borrowing; (ii) in the
case of any Letter of Credit, the Issuing Lender shall have received an
appropriate request for issuance in accordance with the provisions of
Section 2.2(b); and (iii) in the case of any Swingline Loan, the Swingline
Lender shall have received an appropriate request for a Swingline Loan
advance in accordance with the provisions of Section 2.3(b);
(b) The representations and warranties set forth in Section 6 shall,
subject to the limitations set forth therein, be true and correct in all
material respects as of such date (except for those which expressly relate
to an earlier date);
(c) There shall not have been commenced against the Parent or any
Consolidated Party an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or any case,
proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such
Person or for any substantial part of its Property or for the winding up
or liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded;
(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto; and
(e) Immediately after giving effect to the making of such Loan (and
the application of the proceeds thereof) or to the issuance of such Letter
of Credit, as the case may be, (i) the sum of the aggregate principal
amount of outstanding Revolving Loans plus LOC Obligations outstanding
plus the aggregate principal amount of outstanding Swingline Loans shall
not exceed the Revolving Committed Amount, (ii) the LOC Obligations shall
not exceed the LOC Committed Amount and (iii) the aggregate principal
amount of outstanding Swingline Loans shall not exceed the Swingline
Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion,
each request for a Letter of Credit pursuant to Section 2.2(b) and each request
for a Swingline Loan pursuant to Section 2.3(b) shall constitute a
representation and warranty by the Credit Parties of the correctness of the
matters specified in subsections (b), (c), (d) and (e) above.
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SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 Financial Condition.
(a) The audited combined financial statements (including the notes
thereto) of the Consolidated Parties for the fiscal year ended December
31, 1997, copies of which previously have been delivered to the Agent, (i)
have been audited by Ernst & Young LLP, (ii) have been prepared in
accordance with GAAP consistently applied throughout the period covered
thereby and (iii) present fairly in all material respects (on the basis
disclosed in the footnotes to such financial statements) the combined
financial position, results of operations and cash flows of the
Consolidated Parties as of such date and for such period. The unaudited
interim balance sheet and statements of operations and of cash flows for
the fiscal quarter ended March 28, 1998, copies of which previously have
been delivered to the Agent, (i) have been prepared in accordance with
GAAP consistently applied throughout the periods covered thereby and (ii)
present fairly in all material respects (on the basis disclosed in the
footnotes to such financial statements) the combined financial position,
results of operations and cash flows of the Consolidated Parties as of
such date and for such periods. During the period from December 31, 1997
to and including the Closing Date, there has been no sale, transfer or
other disposition by any Consolidated Party of any material part of the
business or property of the Consolidated Parties, taken as a whole, and no
purchase or other acquisition by any of them of any business or property
(including any capital stock of any other person) material in relation to
the consolidated financial position of the Consolidated Parties, taken as
a whole, in each case, which, is not reflected in the foregoing financial
statements or in the notes thereto and has not otherwise been disclosed in
writing to the Lenders on or prior to the Closing Date.
(b) The pro forma consolidated balance sheet of the Consolidated
Parties as of March 28, 1998 giving effect to the Recapitalization, a copy
of which previously has been delivered to the Agent, is based upon
reasonable assumptions made known to the Lenders and upon information not
known to be incorrect or misleading in any material respect.
(c) Each of the financial statements delivered from time to time to
the Lenders pursuant to Section 7.1(a) and (b) (i) will be prepared in
accordance with GAAP (except as may otherwise be permitted under Section
7.1(a) and (b)) and (ii) will present fairly in all material respects (on
the basis disclosed in the footnotes to such financial statements) the
consolidated financial condition, results of operations and cash flows of
the Consolidated Parties as of such date and for such periods.
6.2 No Material Change.
Since December 31, 1997, (a) there has been no development or event
relating to or affecting the Parent or a Consolidated Party which has had or
could reasonably be expected to have a Material Adverse Effect and (b) except in
connection with Recapitalization as contemplated by
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the Recapitalization Documents and except as otherwise permitted under this
Credit Agreement, no dividends or other distributions have been declared, paid
or made upon the Equity Interests of the Parent or a Consolidated Party nor has
any of the Equity Interests of the Parent or a Consolidated Party been redeemed,
retired, purchased or otherwise acquired for value.
6.3 Organization and Good Standing.
Each of the Parent and the Consolidated Parties (a) is duly organized,
validly existing and is in good standing under the laws of the jurisdiction of
its incorporation or organization, (b) has the corporate or other necessary
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged and (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing could reasonably be expected to have a Material
Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations.
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit Party is a party, except for (i) consents, authorizations, notices and
filings described in Schedule 6.4, all of which have been obtained or made or
have the status described in such Schedule 6.4, (ii) filings to perfect the
Liens created by the Collateral Documents and (iii) consents, authorizations,
filings, notices or other acts the failure to make or obtain could not
reasonably be expected to have a Material Adverse Effect.
This Credit Agreement has been, and each other Credit Document to which any
Credit Party is a party will be, duly executed and delivered on behalf of such
Credit Parties. This Credit Agreement constitutes, and each other Credit
Document to which any Credit Party is a party when executed and delivered will
constitute, a legal, valid and binding obligation of such Credit Party
enforceable against such party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents, (b)
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violate, contravene or materially conflict with any material Requirement of Law
or any other material law, regulation (including, without limitation, Regulation
U or Regulation X), order, writ, judgment, injunction, decree or permit
applicable to it, (c) violate, contravene or conflict with contractual
provisions of, or cause an event of default under, any indenture, loan
agreement, mortgage, deed of trust, contract or other agreement or instrument to
which it is a party or by which it may be bound, the violation of which could
reasonably be expected to have a Material Adverse Effect, or (d) result in or
require the creation of any Lien (other than those contemplated in or created in
connection with the Credit Documents) upon or with respect to its properties.
6.6 No Default.
Neither the Parent nor any Consolidated Party is in default in any respect
under any contract, lease, loan agreement, indenture, mortgage, security
agreement or other agreement or obligation to which it is a party or by which
any of its properties is bound which default could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred or
exists except as previously disclosed in writing to the Lenders.
6.7 Ownership.
Each of the Parent and the Consolidated Parties is the owner of, and has
good and marketable title to, all of its respective assets necessary for the
conduct of its business and none of such assets is subject to any Lien other
than Permitted Liens.
6.8 Indebtedness.
Except as otherwise permitted under Section 8.1, the Parent and the
Consolidated Parties have no Indebtedness.
6.9 Litigation.
Except as disclosed in Schedule 6.9, there are no actions, suits or legal,
equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against the Parent or any Consolidated
Party which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect.
6.10 Taxes.
Each of the Parent and the Consolidated Parties has filed, or caused to be
filed, all material tax returns (federal, state, local and foreign) required to
be filed and paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. No Credit Party is aware as of the Closing Date of any
proposed tax assessments against the Parent or any Consolidated Party that could
reasonably be expected to have a Material Adverse Effect.
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6.11 Compliance with Law.
Each of the Parent and the Consolidated Parties is in compliance with all
Requirements of Law and all other laws, rules, regulations, orders and decrees
(including without limitation Environmental Laws) applicable to it, or to its
properties, unless such failure to comply could not reasonably be expected to
have a Material Adverse Effect. No Requirement of Law could cause a Material
Adverse Effect.
6.12 ERISA.
Except as disclosed and described in Schedule 6.12 attached hereto or
except as could not reasonably be expected to result in a Material Adverse
Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition
has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) no
"accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, has occurred
with respect to any Plan; (iii) each Plan has been maintained, operated,
and funded in compliance with its own terms and in material compliance
with the provisions of ERISA, the Code, and any other applicable federal
or state laws; and (iv) no lien in favor of the PBGC or a Plan has arisen
or is reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all accumulated benefit
obligations, whether or not vested, under each Single Employer Plan, as of
the last annual valuation date prior to the date on which this
representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87,
utilizing the actuarial assumptions used in such Plan's most recent
actuarial valuation report), did not exceed as of such valuation date the
fair market value of the assets of such Plan by an amount in excess of
$1,000,000.
(c) Neither the Parent, any Consolidated Party nor any ERISA
Affiliate has incurred, or, to the best knowledge of the Credit Parties,
could be reasonably expected to incur, any withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the
Parent, any Consolidated Party nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within the
meaning of Section 4241 of ERISA), is insolvent (within the meaning of
Section 4245 of ERISA), or has been terminated (within the meaning of
Title IV of ERISA), and no Multiemployer Plan is, to the best knowledge of
the Credit Parties, reasonably expected to be in reorganization,
insolvent, or terminated.
(d) The Credit Parties shall not use the credit provided under this
Credit Agreement to loan or otherwise extend credit, directly or
indirectly, to any "employee benefit plan" (as defined in Section 3(3) of
ERISA).
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6.13 Subsidiaries.
Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each of the Parent and the Consolidated Parties as of the
Closing Date. Information on Schedule 6.13 includes jurisdiction of
incorporation, the amount and percentage of each class of Equity Interests
outstanding, the amount and percentage of outstanding Equity Interests of each
class owned (directly or indirectly) by such Person; and the number and effect,
if exercised, of all outstanding options, warrants, rights of conversion or
purchase and all other similar rights with respect thereto. The outstanding
Equity Interests of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned by each such Person, directly or indirectly, free
and clear of all Liens (other than those arising under or contemplated in
connection with the Credit Documents). Other than as set forth in Schedule 6.13,
neither the Parent nor any Consolidated Party has outstanding any securities
convertible into or exchangeable for its Equity Interests nor does any such
Person have outstanding any rights to subscribe for or to purchase or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to its Equity Interests.
6.14 Governmental Regulations, Etc.
(a) No part of the Letters of Credit or proceeds of the Loans will
be used, directly or indirectly, for the purpose of purchasing or carrying
any "margin stock" in violation of Regulation U. If requested by any
Lender or the Agent, the Borrower will furnish to the Agent and each
Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in Regulation U. No indebtedness
being reduced or retired out of the proceeds of the Loans was or will be
incurred for the purpose of purchasing or carrying any margin stock within
the meaning of Regulation U or any "margin security" within the meaning of
Regulation T. "Margin stock" within the meaning of Regulation U does not
constitute more than 25% of the value of the combined assets of the Parent
and the Consolidated Parties. None of the transactions contemplated by
this Credit Agreement (including, without limitation, the direct or
indirect use of the proceeds of the Loans) will violate or result in a
violation of the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, or regulations issued pursuant thereto,
or Regulation T, U or X.
(b) Neither the Parent nor any Consolidated Party is subject to
regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act or the Investment Company Act of 1940, each as amended.
In addition, neither the Parent nor any Consolidated Party is (i) an
"investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, and is not controlled by such
a company, or (ii) a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of the
Parent or any Consolidated Party is a director, executive officer or
principal shareholder of any Lender. For the purposes hereof the terms
"director", "executive officer" and "principal shareholder"
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(when used with reference to any Lender) have the respective meanings
assigned thereto in Regulation O issued by the Board of Governors of the
Federal Reserve System.
(d) Each of the Parent and the Consolidated Parties has obtained and
holds in full force and effect, all franchises, licenses, permits,
certificates, authorizations, qualifications, accreditations, easements,
rights of way and other rights, consents and approvals which are necessary
for the ownership of its respective Property and to the conduct of its
respective businesses as presently conducted except where the failure to
so obtain or hold could not reasonably be expected to have a Material
Adverse Effect.
(e) Neither the Parent nor any Consolidated Party is in violation of
any applicable statute, regulation or ordinance of the United States of
America, or of any state, city, town, municipality, county or any other
jurisdiction, or of any agency thereof (including without limitation,
environmental laws and regulations), which violation could reasonably be
expected to have a Material Adverse Effect.
(f) Each of the Parent and the Consolidated Parties is current with
all material reports and documents, if any, required to be filed with any
state or federal securities commission or similar agency and is in full
compliance in all material respects with all applicable rules and
regulations of such commissions.
6.15 Purpose of Loans and Letters of Credit.
The proceeds of the Loans hereunder shall be used solely by the Borrower
(i) to fund payments under the Reorganization Plan, (ii) to pay fees and
expenses incurred in connection with the Recapitalization and (iii) to provide
for the working capital and general corporate needs (including Acquisitions) of
the Borrower and its Subsidiaries. The Letters of Credit shall be used only for
or in connection with appeal bonds, reimbursement obligations arising in
connection with surety and reclamation bonds, reinsurance, disputed claims as
described in the Reorganization Plan, domestic or international trade
transactions and obligations not otherwise aforementioned relating to
transactions entered into by the applicable account party in compliance with
this Credit Agreement.
6.16 Environmental Matters.
Except as disclosed and described in Schedule 6.16 attached hereto or
except as could not reasonably be expected to result in a Material Adverse
Effect:
(a) Each of the facilities and properties owned, leased or operated
by the Parent or any of the Consolidated Parties (the "Real Properties")
and all operations at the Real Properties are in compliance with all
applicable Environmental Laws, and there is no violation of any
Environmental Law with respect to the Real Properties or the businesses
operated by the Parent and the Consolidated Parties (the "Businesses"),
and there are no conditions relating to the Businesses or Real Properties
that could give rise to liability under any applicable Environmental Laws.
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(b) None of the Real Properties contains, or has previously
contained, any Materials of Environmental Concern at, on or under the Real
Properties in amounts or concentrations that constitute or constituted a
violation of, or could give rise to liability under, Environmental Laws.
(c) Neither the Parent nor any Consolidated Party has received any
written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Real Properties or the
Businesses, nor does any Credit Party have knowledge or reason to believe
that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Real Properties, or generated, treated, stored or
disposed of at, on or under any of the Real Properties or any other
location, in each case by or on behalf of the Parent or any Consolidated
Party in violation of, or in a manner that could give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the best knowledge of any Credit Party, threatened,
under any Environmental Law to which the Parent or any Consolidated Party
is or will be named as a party, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to the Parent and the Consolidated Parties,
the Real Properties or the Businesses.
(f) There has been no release, or threat of release, of Materials of
Environmental Concern at or from the Real Properties, or arising from or
related to the operations (including, without limitation, disposal) of the
Parent or any Consolidated Party in connection with the Real Properties or
otherwise in connection with the Businesses, in violation of or in amounts
or in a manner that could give rise to liability under Environmental Laws.
6.17 Intellectual Property.
Each of the Parent and the Consolidated Parties owns, or has the legal
right to use, all trademarks, tradenames, copyrights, technology, know-how and
processes (the "Intellectual Property") necessary for each of them to conduct
its business as currently conducted except for those the failure to own or have
such legal right to use could not reasonably be expected to have a Material
Adverse Effect. Set forth on Schedule 6.17 is a list of all material
Intellectual Property owned by the Parent or any Consolidated Party or that the
Parent or any Consolidated Party has the right to use, in each case as of the
Closing Date. Except as provided on Schedule 6.17, no claim has been asserted
and is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Credit Party know of any such claim, and to the Credit
Parties' knowledge the use of such Intellectual Property by the Parent or any
Consolidated Party does not infringe on the rights of any
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Person, except for such claims and infringements that, in the aggregate, could
not have a Material Adverse Effect.
6.18 Solvency.
Each Credit Party is and, after consummation of the Recapitalization, will
be Solvent.
6.19 Investments.
All Investments of each of the Parent and the Consolidated Parties are
Permitted Investments.
6.20 Location of Collateral.
Set forth on Schedule 6.20(a) is a list of all Mortgaged Properties as of
the Closing Date with street address, county and state where located. Set forth
on Schedule 6.20(b) is a list of all locations where any tangible personal
property of a Credit Party is located as of the Closing Date, including county
and state where located. Set forth on Schedule 6.20(c) is the chief executive
office and principal place of business of each of the Credit Parties as of the
Closing Date.
6.21 Disclosure.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of the Parent or any Consolidated Party in connection
with the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein or herein not misleading.
6.22 Brokers' Fees.
Neither the Parent nor any Consolidated Party has any obligation to any
Person in respect of any finder's, broker's, investment banking or other similar
fee in connection with any of the transactions contemplated under the Credit
Documents.
6.23 Labor Matters.
Except as set forth on Schedule 6.23, there are no collective bargaining
agreements or Multiemployer Plans covering the employees of the Parent or a
Consolidated Party as of the Closing Date and neither the Parent nor any
Consolidated Party has suffered any material strikes, walkouts, work stoppages
or other material labor difficulty within the five years immediately preceding
the Closing Date.
6.24 Nature of Business.
As of the Closing Date, the Parent and the Consolidated Parties are
engaged in the business of designing, manufacturing and marketing socks, dress
shirts and sportswear.
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6.25 Year 2000 Compliance.
Each of the Credit Parties has conducted a review and assessment of its
computer applications with respect to the "year 2000 problem" (that is, the risk
that computer applications may not be able to properly perform date-sensitive
functions after December 31, 1999) and, based on that review and inquiry, the
Credit Parties believe that, except to the extent that non-Affiliate Persons
fail to address adequately their respective year 2000 problem, the year 2000
problem will not result in a material adverse change in the business, condition
(financial or otherwise), operations, business, assets or liabilities of the
Credit Parties taken as a whole, or on the ability of any Credit Party to
perform any material obligation under the Credit Documents to which it is a
party.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 Information Covenants.
The Credit Parties will furnish, or cause to be furnished, to the Agent
and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 90 days after the close of each fiscal year of the
Consolidated Parties, a consolidated balance sheet and income statement of
the Consolidated Parties, as of the end of such fiscal year, together with
related consolidated statements of operations and retained earnings and of
cash flows for such fiscal year, in each case setting forth in comparative
form consolidated figures for the preceding fiscal year and including
footnotes setting forth related consolidating information, all in
reasonable form and detail and, in the case of consolidated financial
information only, audited by independent certified public accountants of
recognized national standing reasonably acceptable to the Agent and whose
opinion shall be to the effect that such financial statements have been
prepared in accordance with GAAP (except for changes with which such
accountants concur) and shall not be limited as to the scope of the audit
or qualified as to the status of the Consolidated Parties as a going
concern.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days (or 60 days in the case of the fiscal quarter ending
June 30, 1998) after the close of each of the first three fiscal quarters
of each fiscal year of the Consolidated Parties a consolidated balance
sheet and income statement of the Consolidated Parties, as of the end of
such fiscal quarter, together with related consolidated statements of
operations and retained earnings and of cash flows for such fiscal
quarter, in each case setting forth in comparative form consolidated
figures for the corresponding period of the preceding fiscal
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year and including footnotes setting forth related consolidating
information, all in reasonable form and detail and reasonably acceptable
to the Agent, and accompanied by a certificate of the chief financial
officer of the Borrower to the effect that such quarterly financial
statements fairly present in all material respects the financial position
of the Consolidated Parties and have been prepared in accordance with
GAAP, subject to changes resulting from audit and normal year-end
adjustments.
(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of the chief financial officer of the Borrower substantially in the form
of Exhibit 7.1(c), (i) demonstrating compliance with the financial
covenants contained in Section 7.11 by calculation thereof as of the end
of each such fiscal period and (ii) stating that no Default or Event of
Default exists, or if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Credit
Parties propose to take with respect thereto.
(d) Annual Business Plan and Budgets. Prior to the end of each
fiscal year of the Credit Parties, beginning with the fiscal year ending
December 31, 1998, an annual business plan and budget of the Consolidated
Parties containing, among other things, pro forma financial statements for
the next fiscal year.
(e) Compliance With Certain Provisions of the Credit Agreement.
Within 90 days after the end of each fiscal year of the Credit Parties, a
certificate containing information regarding (i) the calculation of Excess
Cash Flow and (ii) the amount of all Asset Dispositions, Debt Issuances
and Equity Issuances that were made during the prior fiscal year.
(f) Accountant's Certificate. Within the period for delivery of the
annual financial statements provided in Section 7.1(a), a certificate of
the accountants conducting the annual audit stating that they have
reviewed this Credit Agreement and stating further whether, in the course
of their audit, they have become aware of any Default or Event of Default
and, if any such Default or Event of Default exists, specifying the nature
and extent thereof.
(g) Reports. Promptly upon transmission or receipt thereof, (i)
copies of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as the
Parent shall send to its shareholders generally or as the Parent or the
Borrower shall send to a holder of any Indebtedness owed by the Parent or
the Borrower, as applicable, in its capacity as such a holder and (ii)
upon the request of the Agent, all reports and written information to and
from the United States Environmental Protection Agency, or any state or
local agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.
(h) Notices. Upon obtaining knowledge thereof, the Credit Parties
will give written notice to the Agent immediately of (i) the occurrence of
an event or condition
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consisting of a Default or Event of Default, specifying the nature and
existence thereof and what action the Credit Parties propose to take with
respect thereto, and (ii) the occurrence of any of the following with
respect to the Parent or any Consolidated Party (A) the pendency or
commencement of any litigation, arbitral or governmental proceeding
against such Person which if adversely determined is reasonably likely to
have a Material Adverse Effect, (B) the institution of any proceedings
against such Person with respect to, or the receipt of notice by such
Person of potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, the violation of which
could reasonably be expected to have a Material Adverse Effect, or (C) any
notice or determination concerning the imposition of any withdrawal
liability by a Multiemployer Plan against such Person or any ERISA
Affiliate, the determination that a Multiemployer Plan is, or is expected
to be, in reorganization within the meaning of Title IV of ERISA or the
termination of any Plan.
(i) ERISA. Upon obtaining knowledge thereof, the Credit Parties will
give written notice to the Agent promptly (and in any event within thirty
business days) of any of any of the following which could reasonably be
expected to result in a Material Adverse Effect: (i) of any event or
condition, including, but not limited to, any Reportable Event, that
constitutes, or might reasonably lead to, an ERISA Event; (ii) with
respect to any Multiemployer Plan, the receipt of notice as prescribed in
ERISA or otherwise of any withdrawal liability assessed against the Credit
Parties or any ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment on
or before the due date (including extensions) thereof of all amounts which
the Parent, any Consolidated Party or any ERISA Affiliate is required to
contribute to each Plan pursuant to its terms or as required to comply
with ERISA and the Code with respect thereto; or (iv) any change in the
funding status of any Plan as of the end of the applicable Plan Year that
could have a Material Adverse Effect, together with a description of any
such event or condition or a copy of any such notice and a statement by
the chief financial officer of the Borrower briefly setting forth the
details regarding such event, condition, or notice, and the action, if
any, which has been or is being taken or is proposed to be taken by the
Credit Parties with respect thereto. Promptly upon request, the Credit
Parties shall furnish the Agent and the Lenders with such additional
information concerning any Plan as may be reasonably requested, including,
but not limited to, copies of each annual report/return (Form 5500
series), as well as all schedules and attachments thereto required to be
filed with the Department of Labor and/or the Internal Revenue Service
pursuant to ERISA and the Code, respectively, for each "plan year" (within
the meaning of Section 3(39) of ERISA).
(j) Environmental.
(i) Upon the written request of the Agent following the
occurrence of any event or the discovery of any condition which the
Agent or the Required Lenders reasonably believe has caused (or
could cause) the representations and warranties set forth in Section
6.16 to be untrue in any material respect, the Credit Parties will
furnish or cause to be furnished to the Agent, at the Credit
Parties' expense, a report of an environmental assessment of
reasonable scope, form and depth, (including, where appropriate,
invasive soil or groundwater sampling) by a
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consultant reasonably acceptable to the Agent as to the nature and
extent of the presence of any Materials of Environmental Concern on
any Real Properties (as defined in Section 6.16) and as to the
compliance by the Parent and the Consolidated Parties with
Environmental Laws at such Real Properties. If the Credit Parties
fail to deliver such an environmental report within seventy-five
(75) days after receipt of such written request then the Agent may
arrange for same, and the Credit Parties hereby grant to the Agent
and their representatives access to the Real Properties to
reasonably undertake such an assessment (including, where
appropriate, invasive soil or groundwater sampling). The reasonable
cost of any assessment arranged for by the Agent pursuant to this
provision will be payable by the Credit Parties on demand and added
to the obligations secured by the Collateral Documents.
(ii) The Credit Parties will cause each of the Parent and the
Consolidated Parties to conduct and complete all investigations,
studies, sampling, and testing and all remedial, removal, and other
actions necessary to address all Materials of Environmental Concern
on , from or affecting any of the Real Properties to the extent
necessary to be in compliance with all Environmental Laws and with
the validly issued orders and directives of all Governmental
Authorities with jurisdiction over such Real Properties to the
extent any failure could reasonably be expected to have a Material
Adverse Effect.
(j) Additional Patents and Trademarks. At the time of delivery of
the financial statements and reports provided for in Section 7.1(a), a
report signed by the chief financial officer or treasurer of the Borrower
setting forth (i) a list of registration numbers for all patents,
trademarks, service marks, tradenames and copyrights awarded to the Parent
or any Consolidated Party since the last day of the immediately preceding
fiscal year and (ii) a list of all patent applications, trademark
applications, service xxxx applications, trade name applications and
copyright applications submitted by the Parent or any Consolidated Party
since the last day of the immediately preceding fiscal year and the status
of each such application, all in such form as shall be reasonably
satisfactory to the Agent.
(l) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of the Parent or any Consolidated Party as the Agent
or the Required Lenders may reasonably request.
7.2 Preservation of Existence and Franchises.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority.
7.3 Books and Records.
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Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.4 Compliance with Law.
Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all material taxes, assessments and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) except as prohibited
hereunder, all of its other material Indebtedness as it shall become due;
provided, however, that neither the Parent nor any Consolidated Party shall be
required to pay any such tax, assessment, charge, levy, claim or Indebtedness
which is being contested in good faith by appropriate proceedings and as to
which adequate reserves therefor have been established in accordance with GAAP,
unless the failure to make any such payment (i) could give rise to an immediate
right to foreclose on a Lien securing such amounts or (ii) could reasonably be
expected to have a Material Adverse Effect.
7.6 Insurance.
(a) Each Credit Party will, and will cause each of its Subsidiaries
to, at all times maintain in full force and effect insurance (including
worker's compensation insurance, liability insurance, casualty insurance
and business interruption insurance) in such amounts, covering such risks
and liabilities and with such deductibles or self-insurance retentions as
are in accordance with normal industry practice (or as otherwise required
by the Collateral Documents). The Agent shall be named as loss payee or
mortgagee, as its interest may appear, and/or additional insured with
respect to any such insurance providing coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Agent, that it will give the Agent thirty
(30) days prior written notice before any such policy or policies shall be
altered or canceled, and that no act or default of the Parent or any
Consolidated Party or any other Person shall affect the rights of the
Agent or the Lenders under such policy or policies. The present insurance
coverage of the Parent and the Consolidated Parties is outlined as to
carrier, policy number, expiration date, type and amount on Schedule 7.6.
(b) In case of any material loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party
shall promptly give written notice thereof to the Agent generally
describing the nature and extent of such damage or destruction. In case of
any loss, damage to or destruction of the Collateral of any Credit
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Party or any part thereof, such Credit Party, whether or not the insurance
proceeds, if any, received on account of such damage or destruction shall
be sufficient for that purpose, at such Credit Party's cost and expense,
will promptly repair or replace the Collateral of such Credit Party so
lost, damaged or destroyed; provided, however, that such Credit Party need
not repair or replace the Collateral of such Credit Party so lost, damaged
or destroyed to the extent the failure to make such repair or replacement
(i) is desirable to the proper conduct of the business of such Credit
Party and otherwise in the best interest of such Credit Party; and (ii)
would not materially impair the rights and benefits of the Agent or the
Lenders under the Collateral Documents, any other Credit Document or any
Hedging Agreement. Notwithstanding any provision to the contrary contained
in this Credit Agreement (including without limitation Section 3.3(b)(v)
and Section 8.5), none of the Credit Parties shall undertake replacement
or restoration of any lost, damaged or destroyed Collateral of such Credit
Party with insurance proceeds in respect thereof unless (A) the Agent has
received evidence reasonably satisfactory to it that the Collateral lost,
damaged or destroyed has been or will be replaced or restored to its
condition immediately prior to the loss, destruction or other event giving
rise to the payment of such insurance proceeds and (B) no violation of
Section 7.11(b), (c) or (d) would have occurred as of the most recent
fiscal quarter end preceding the date of determination with respect to
which the Agent has received the Required Financial Information upon
giving pro forma effect to any Indebtedness to be incurred in connection
with such replacement or restoration (assuming, for purposes hereof, that
such Indebtedness was incurred as of the first day of the four
fiscal-quarter period ending as of such fiscal quarter end).
7.7 Maintenance of Property.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 Performance of Obligations.
Each Credit Party will, and will cause each of its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound.
7.9 Use of Proceeds.
The Borrower will use the proceeds of the Loans and will use the Letters
of Credit solely for the purposes set forth in Section 6.15.
7.10 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit Party
will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without
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limitation, independent accountants, agents, attorneys, and appraisers to visit
and inspect its property, including its books and records, its accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of such Person.
7.11 Financial Covenants.
The Credit Parties shall cause:
(a) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio, as
of the last day of each fiscal quarter of the Consolidated Parties, to be
at least 1.00 to 1.00.
(b) Interest Coverage Ratio. The Interest Coverage Ratio, as of the
last day of each fiscal quarter of the Consolidated Parties, to be greater
than or equal to:
(i) for the period from the Closing Date to and including
December 30, 1999, 1.65 to 1.00;
(ii) for the period from December 31, 1999 to and including
December 30, 2000, 1.85 to 1.00;
(iii) for the period from December 31, 2000 to and including
December 30, 2001, 2.00 to 1.00;
(iv) for the period from December 31, 2001 to and including
December 30, 2002, 2.25 to 1.00; and
(v) for the period from December 31, 2002 and at all times
thereafter, 2.50 to 1.00.
(c) Senior Leverage Ratio. The Senior Leverage Ratio, as of the last
day of each fiscal quarter of the Consolidated Parties, to be less than or
equal to:
(i) for the period from the Closing Date to and including
December 30, 1998, 3.50 to 1.00;
(ii) for the period from December 31, 1998 to and including
December 30, 1999, 3.25 to 1.00;
(iii) for the period from December 31, 1999 to and including
December 30, 2000, 2.75 to 1.00;
(iv) for the period from December 31, 2000 to and including
December 30, 2001, 2.25 to 1.00; and
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(v) for the period from December 31, 2001 and at all times
thereafter, 2.00 to 1.00.
(d) Total Leverage Ratio. The Total Leverage Ratio, as of the last
day of each fiscal quarter of the Consolidated Parties, to be less than or
equal to:
(i) for the period from the Closing Date to and including
December 30, 1998, 6.50 to 1.00;
(ii) for the period from December 31, 1998 to and including
December 30, 1999, 6.25 to 1.00;
(iii) for the period from December 31, 1999 to and including
December 30, 2000, 5.50 to 1.00;
(iv) for the period from December 31, 2000 to and including
December 30, 2001, 4.75 to 1.00; and
(v) for the period from December 31, 2001 and at all times
thereafter, 4.00 to 1.00.
7.12 Additional Credit Parties.
As soon as practicable and in any event within 30 days after any Person
becomes a Material Domestic Subsidiary or a Material Foreign Subsidiary, the
Credit Parties shall provide the Agent with written notice thereof setting forth
information in reasonable detail describing all of the assets of such Person and
shall (a) if such Person is a Material Domestic Subsidiary, cause such Person to
execute a Joinder Agreement in substantially the same form as Exhibit 7.12, (b)
cause 100% (if such Person is a Material Domestic Subsidiary) or 65% (if such
Person is a Material Foreign Subsidiary directly owned by the Parent or any
Domestic Subsidiary) of the Equity Interests of such Person to be delivered to
the Agent (together with undated stock powers signed in blank (unless, with
respect to a Material Foreign Subsidiary, such stock powers are deemed
unnecessary by the Agent in its reasonable discretion under the law of the
jurisdiction of incorporation of such Person)) and pledged to the Agent pursuant
to an appropriate pledge agreement(s) in substantially the form of the Pledge
Agreement and otherwise in form acceptable to the Agent and (c) if such Person
is a Material Domestic Subsidiary which (i) owns any real property located in
the United States or (ii) leases any real property located in the United States
and deemed to be material by the Agent or the Required Lenders in its or their
sole reasonable discretion, cause such Person to (A) deliver to the Agent with
respect to such real property documents, instruments and other items of the
types required to be delivered pursuant to Section 5.1(g) all in form, content
and scope reasonably satisfactory to the Agent and (B) deliver such other
documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, real estate title insurance policies, environmental reports,
landlord's waivers, certified resolutions and other organizational and
authorizing documents of such Person, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Agent's liens thereunder) and other
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items of the types required to be delivered pursuant to Section 5.1(b), (d), (e)
and (f), all in form, content and scope reasonably satisfactory to the Agent.
7.13 Pledged Assets.
Each Credit Party will, and will cause each of the Material Domestic
Subsidiaries to, cause (i) all of its owned real and personal property located
in the United States and (ii) all of its leased real property located in the
United States and deemed to be material by the Agent or the Required Lenders in
its or their sole reasonable discretion to be subject at all times to first
priority, perfected and, in the case of real property (whether leased or owned),
title insured Liens in favor of the Agent to secure the Credit Party Obligations
pursuant to the terms and conditions of the Collateral Documents or, with
respect to any such property acquired subsequent to the Closing Date, such other
additional security documents as the Agent shall reasonably request, subject in
any case to Permitted Liens. With respect to any real property (whether leased
or owned) located in the United States acquired by the Parent, the Borrower or
any Material Domestic Subsidiary subsequent to the Closing Date, such Person
will cause to be delivered to the Agent with respect to such real property
documents, instruments and other items of the types required to be delivered
pursuant to Section 5.1(e) in form acceptable to the Agent. Without limiting the
generality of the above, the Credit Parties will cause 100% of the Equity
Interests of the Borrower and each of the other Material Domestic Subsidiaries
and 65% of the Equity Interests of each of the Material Foreign Subsidiaries
directly owned by the Parent or any Domestic Subsidiary to be subject at all
times to a first priority, perfected Lien in favor of the Agent pursuant to the
terms and conditions of the Collateral Documents or such other security
documents as the Agent shall reasonably request.
If, subsequent to the Closing Date, any Credit Party shall (a) acquire any
intellectual property, securities, instruments, chattel paper or other personal
property required to be pledged to the Agent as Collateral hereunder or under
any of the Collateral Documents or (b) acquire or lease any real property, the
Credit Parties shall promptly (and in any event within three (3) Business Days)
after any Executive Officer of a Credit Party acquires knowledge of same notify
the Agent of same. Each of the Credit Parties shall take such action (including
but not limited to the actions set forth in Sections 5.1(d) and (e)) at its own
expense as requested by the Agent to ensure that, subject in any case to
Permitted Liens, the Agent has a first priority perfected Lien to secure the
Credit Party Obligations in (i) all owned real property and personal property of
any Credit Party located in the United States and subject to a Permitted Lien
arising under documents prohibiting the creation or assumption of any other Lien
upon such property, (ii) to the extent deemed to be material by the Agent or the
Required Lenders in its or their sole reasonable discretion, all other owned
real and personal property of any Credit Party and (iii) all leased real
property located in the United States and deemed to be material by the Agent or
the Required Lenders in its or their sole reasonable discretion, subject in each
case only to Permitted Liens. Each Credit Party shall, and shall cause each of
its Subsidiaries to, adhere to the covenants regarding the location of personal
property as set forth in the Security Agreements.
7.14 Furtherance Assurances.
(a) The Credit Parties shall cause Xxxxxx Xxxxxxx XX and Arrow
Mexico SA de CV to be dissolved within one year after the Closing Date.
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(b) The Borrower shall use its reasonable best efforts to deliver to
the Agent within 180 days after the Closing Date with respect to the
leasehold or other ownership interest of the Borrower in the Austell
Property at such time, such real property documents, instruments and other
items of the types required to be delivered pursuant to Section 5.1(e), in
each case in form and substance reasonably acceptable to the Agent.
(c) If the Borrower shall not have disposed of the real property of
the Borrower located in Cedartown, Georgia within 180 days after the
Closing Date, then the Borrower shall deliver to the Agent with respect to
such real property such documents, instruments and other items of the
types required to be delivered pursuant to Section 5.1(e), in each case in
form and substance reasonably acceptable to the Agent.
(d) If the Borrower shall not have disposed of the real property of
the Borrower located in Henderson, North Carolina within 180 days after
the Closing Date, then the Borrower shall deliver to the Agent with
respect to such real property such documents, instruments and other items
of the types required to be delivered pursuant to subsections (ii), (iv),
(v), (vi), (vii), (viii) and (ix) of Section 5.1(e), in each case in form
and substance reasonably acceptable to the Agent.
(e) Within 15 days after the Closing Date, the Borrower shall
deliver to the Agent, to the extent not previously delivered to the Agent
pursuant to Section 5.1(e), (i) maps or plats of an as-built survey of
each of the Mortgaged Property certified to the Agent and the Title
Insurance Company in a manner reasonably satisfactory to each of the Agent
and the Title Insurance Company, dated a date reasonably satisfactory to
the Agent and the Title Insurance Company by an independent professional
land surveyor licensed by the state in which the applicable Mortgaged
Property is located, which maps or plats and the surveys on which they are
based shall be made in accordance with standards that enable the Title
Insurance Company to issue an endorsement to the applicable Mortgage
Policies removing any exception for "survey matters", except for matters
as are reasonably acceptable to the Agent, (ii) such amendments or
modifications to the Mortgage Instruments delivered pursuant to Section
5.1(e) as shall be required by the Title Insurance Company in order for
the applicable Mortgage Policy to be endorsed by the Title Insurance
Company in order to insure the legal description of the related Mortgaged
Property determined from the survey of such Mortgaged Property described
in clause (i) above (together with corresponding amendments to any related
Uniform Commercial Code fixture filings) and (iii) such endorsements, if
any, to the Mortgage Policies as the Agent may reasonably request, all in
form and substance reasonably satisfactory to the Agent.
(f) Within 15 days after the Closing Date, the Credit Parties shall
deliver to the Agent in respect of any personal property Collateral
located at the premises leased by Great American Knitting Xxxxx, Inc. in
Mebane, North Carolina, such estoppel letters, consents and waivers from
the landlord of such real property as shall be reasonably satisfactory to
the Agent.
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SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 Indebtedness.
The Credit Parties will not permit the Parent or any Consolidated Party to
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness of the Parent and the Consolidated Parties set
forth in Schedule 8.1 (and renewals, refinancings and extensions thereof
on terms and conditions no less favorable to such Person than such
existing Indebtedness);
(c) purchase money Indebtedness (including Capital Leases or
Synthetic Leases) hereafter incurred by any of the Parent or the
Consolidated Parties to finance the purchase of fixed assets provided that
(i) the total of all such Indebtedness for all such Persons taken together
(including any such Indebtedness referred to in subsection (b) above, but
excluding the Indebtedness referred to in clause (h) below) shall not
exceed an aggregate principal amount of $5,000,000 at any one time
outstanding; (ii) unless such Indebtedness is non-recourse to the Parent
and the Consolidated Parties, such Indebtedness when incurred shall not
exceed the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing;
(d) obligations of the Consolidated Parties in respect of Hedging
Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;
(e) intercompany Indebtedness arising out of loans and advances
permitted under Section 8.6;
(f) Subordinated Indebtedness;
(g) Indebtedness of Foreign Subsidiaries not exceeding $10,000,000
in aggregate principal amount at any one time outstanding for all such
Persons taken together;
(h) Capital Lease obligations of the Borrower in respect of the
Austell Transaction;
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(i) Indebtedness representing deferred compensation to employees of
the Parent or any Consolidated Party not exceeding $2,000,000 in aggregate
principal amount at any one time outstanding for all such Persons taken
together;
(j) Guaranty Obligations of any Credit Party with respect to any
Indebtedness permitted under this Section 8.1;
(k) the Employee Preferred Stock; and
(l) in addition to the Indebtedness otherwise permitted by this
Section 8.1, other Indebtedness hereafter incurred by the Borrower not
exceeding $15,000,000 in aggregate principal amount at any one time
outstanding.
8.2 Liens.
The Credit Parties will not permit the Parent or any Consolidated Party to
contract, create, incur, assume or permit to exist any Lien with respect to any
of its Property, whether now owned or after acquired, except for Permitted
Liens.
8.3 Nature of Business.
The Credit Parties will not permit the Parent and the Consolidated Parties
taken as a whole to fail to be primarily in the business of manufacturing,
licensing and selling articles of clothing.
8.4 Consolidation, Merger, Dissolution, etc.
Except in connection with an Asset Disposition permitted by the terms of
Section 8.5, the Credit Parties will not permit the Parent or any Consolidated
Party to enter into any transaction of merger or consolidation or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution); provided
that, notwithstanding the foregoing provisions of this Section 8.4, (a) the
Parent may merge or consolidate with Interco provided that the Credit Parties
shall cause to be executed and delivered such documents, instruments and
certificates as the Agent may request so as to cause the Credit Parties to be in
compliance with the terms of Section 7.13 after giving effect to such
transaction, (b) the Borrower may merge or consolidate with any of its
Subsidiaries provided that (i) the Borrower shall be the continuing or surviving
corporation, (ii) the Credit Parties shall cause to be executed and delivered
such documents, instruments and certificates as the Agent may request so as to
cause the Credit Parties to be in compliance with the terms of Section 7.13
after giving effect to such transaction and (iii) the Borrower shall have
delivered to the Agent a Pro Forma Compliance Certificate demonstrating that,
upon giving effect on a Pro Forma Basis to such transaction, no Default or Event
of Default would exist and be continuing, (c) any Credit Party other than the
Parent, Interco or the Borrower may merge or consolidate with any other Credit
Party other than the Parent, Interco or the Borrower provided that (i) the
Credit Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Agent may request so as to cause the Credit
Parties to be in compliance with the terms of Section 7.13 after giving effect
to such transaction and (ii) the Borrower shall have delivered to the Agent a
Pro Forma Compliance Certificate demonstrating that, upon giving effect on a Pro
Forma Basis to such transaction, no Default or Event of Default would exist and
be continuing, (d) any Consolidated Party which is not
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a Credit Party may be merged or consolidated with or into any Credit Party other
than the Parent or Interco provided that (i) such Credit Party shall be the
continuing or surviving corporation, (ii) the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as the Agent
may request so as to cause the Credit Parties to be in compliance with the terms
of Section 7.13 after giving effect to such transaction and (iii) the Borrower
shall have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
no Default or Event of Default would exist and be continuing, (e) any
Consolidated Party which is not a Credit Party may be merged or consolidated
with or into any other Consolidated Party which is not a Credit Party provided
the Borrower shall have delivered to the Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect on a Pro Forma Basis to such
transaction, no Default or Event of Default would exist and be continuing, (f)
the Borrower or any Subsidiary of the Borrower may merge with any Person other
than the Parent or a Consolidated Party in connection with a Permitted
Acquisition if (i) if such merger involves the Borrower, the Borrower shall be
the continuing or surviving corporation, (ii) the Credit Parties shall cause to
be executed and delivered such documents, instruments and certificates as the
Agent may request so as to cause the Credit Parties to be in compliance with the
terms of Section 7.13 after giving effect to such transaction and (iii) the
Borrower shall have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
no Default or Event of Default would exist and be continuing and (g) any
Subsidiary of the Borrower may dissolve, liquidate or wind up its affairs at any
time.
8.5 Asset Dispositions.
The Credit Parties will not permit the Parent or any Consolidated Party to
make any Asset Disposition (including, without limitation, any Sale and
Leaseback Transaction) other than Excluded Asset Dispositions unless (a) the
consideration paid in connection therewith is at least 75% cash or Cash
Equivalents, (b) if such transaction is a Sale and Leaseback Transaction, such
transaction is permitted by the terms of Section 8.13, (c) the aggregate net
book value of all of the assets sold or otherwise disposed of in all such Asset
Dispositions after the Closing Date (other than pursuant to any casualty or
condemnation event) shall not exceed $5,000,000, (d) the Borrower shall have
delivered to the Agent a Pro Forma Compliance Certificate demonstrating that,
upon giving effect on a Pro Forma Basis to such transaction, no Default or Event
of Default would exist hereunder and (e) no later than 15 days prior to such
Asset Disposition, the Agent and the Lenders shall have received a certificate
of an officer of the Borrower specifying the anticipated or actual date of such
Asset Disposition, briefly describing the assets to be sold or otherwise
disposed of and setting forth the net book value of such assets, the aggregate
consideration and the Net Cash Proceeds to be received for such assets in
connection with such Asset Disposition, and thereafter the Credit Parties shall,
within the period of 365 days (or such earlier date as is provided for
reinvestment of such proceeds under the documents evidencing or governing the
Senior Subordinated Debt) following the consummation of such Asset Disposition
(with respect to any such Asset Disposition, the "Application Period"), apply
(or cause to be applied) an amount equal to the Net Cash Proceeds of such Asset
Disposition to (i) make Eligible Reinvestments or (ii) prepay the Loans (and
cash collateralize LOC Obligations) in accordance with the terms of Section
3.3(b)(iii). Pending final application of the Net Cash Proceeds of any Asset
Disposition, such Net Cash Proceeds may be applied to temporarily reduce the
Revolving Loans or to make Permitted Investments.
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Upon a sale of Property or the sale of Equity Interests of a Consolidated
Party permitted by this Section 8.5, the Agent shall (to the extent applicable
and provided that such Person is also released from any and all of its
obligations, if any, in respect of all other Indebtedness of the Credit Parties)
deliver to the Credit Parties, upon the Credit Parties' request and at the
Credit Parties' expense, such documentation as is reasonably necessary to
evidence the release of the Agent's security interest, if any, in such Property
or Equity Interests, including, without limitation, amendments or terminations
of UCC financing statements, if any, the return of stock certificates, if any,
and the release of such Consolidated Party from all of its obligations, if any,
under the Credit Documents.
8.6 Investments.
The Credit Parties will not permit the Parent or any Consolidated Party to
make Investments in or to any Person, except for Permitted Investments.
8.7 Restricted Payments.
The Credit Parties will not permit the Parent or any Consolidated Party
to, directly or indirectly, declare, order, make or set apart any sum for or pay
any Restricted Payment, except (i) payments and distributions to consummate the
Recapitalization pursuant to the Recapitalization Documents (a) on the Closing
Date or (b) to the extent consisting of the distribution of the Parity Notes
(and interest thereon) and cash in lieu of fractional amounts thereof, (ii) the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests in the Parent held by any member of the executive management of
the Parent and its Subsidiaries, provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Capital Stock shall not exceed
$1,000,000 in any fiscal year, (iii) any payment by the Parent in connection
with the repurchase of outstanding shares of Employee Preferred Stock (or any
class of Equity Interests into which such shares of Employee Preferred Stock are
converted) following the death, termination, disability, retirement or
termination or other separation of employment of any employee that is the
beneficial holder thereof, (iv) payments by any Consolidated Parties to the
Parent pursuant to a tax sharing agreement under which each such Consolidated
Party is allocated its proportionate share of the tax liability of the
affiliated group of corporations that file consolidated federal income tax
returns (or that file state or local income tax returns on a consolidated basis)
and (v) provided that no Default or Event of Default exists either before or
after giving effect thereto, (A) loans, advances, dividends or distributions by
any Consolidated Party to the Parent not to exceed an amount necessary to permit
the Parent to pay its costs (including all professional fees and expenses)
incurred to comply with its reporting obligations under federal or state laws or
in connection with reporting or other obligations under this Credit Agreement
and the Credit Documents, (B) loans or advances by any Consolidated Party to the
Parent not to exceed an amount necessary to permit the Parent to pay its interim
expenses incurred in connection with any public offering of equity securities
the net proceeds of which are specifically intended to be received by or
contributed or loaned to the Borrower, which, unless such offering shall have
been terminated by the board of directors of the Parent, shall be repaid to the
Borrower promptly out of the proceeds of such offering and (C) loans, advances,
dividends or distributions by any Consolidated Party to the Parent to pay for
corporate, administrative and operating expenses in the ordinary course of
business.
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8.8 Prepayments of Indebtedness, etc.
The Credit Parties will not permit the Parent or any Consolidated Party to
(a) if any Default or Event of Default has occurred and is continuing or would
be directly or indirectly caused as a result thereof, (i) after the issuance
thereof, amend or modify (or permit the amendment or modification of) any of the
terms of any Indebtedness if such amendment or modification would add or change
any terms in a manner adverse to the issuer of such Indebtedness, or shorten the
final maturity or average life to maturity or require any payment to be made
sooner than originally scheduled or increase the interest rate applicable
thereto or change any subordination provision thereof or (ii) except for the
exchange of the notes evidencing the Senior Subordinated Debt for notes with
identical terms registered pursuant to the registration rights agreement set
forth in the indenture for the Senior Subordinated Debt, make (or give any
notice with respect thereto) any voluntary or optional payment or prepayment or
redemption or acquisition for value of (including without limitation, by way of
depositing money or securities with the trustee with respect thereto before due
for the purpose of paying when due), refund, refinance or exchange of any other
Indebtedness (including without limitation Subordinated Indebtedness), (b) make
interest payments in respect of Subordinated Indebtedness in violation of the
subordination provisions of the documents evidencing or governing such
Subordinated Indebtedness or (c) make (or give any notice with respect thereto)
any voluntary or optional payment or prepayment, redemption, acquisition for
value or defeasance of (including without limitation, by way of depositing money
or securities with the trustee with respect thereto before due for the purpose
of paying when due), refund, refinance or exchange of Subordinated Indebtedness
(including any payment of accrued interest and premium, if any, payable in
connection therewith).
8.9 Transactions with Affiliates.
The Credit Parties will not permit the Parent or any Consolidated Party to
enter into or permit to exist any transaction or series of transactions with any
officer, director, shareholder, Foreign Subsidiary or Affiliate of such Person
other than (a) advances of working capital to any Credit Party other than the
Parent or Interco, (b) transfers of cash and assets to any Credit Party other
than the Parent or Interco, (c) transactions permitted by Section 8.1, Section
8.4, Section 8.5, Section 8.6 or Section 8.7, (d) normal compensation and
reimbursement of expenses of employees, officers and directors, (e) provided
that no Default or Event of Default exists either before or after giving effect
thereto, payment on the Closing Date to the Sponsor of an investment banking fee
in an amount, together with transaction fees and out-of-pocket expenses of the
Sponsor, including those previously paid, not to exceed $4,500,000, (f) payments
to the Sponsor or its Affiliate designee of a annual management fee, together
with out-of-pocket expenses of all such Persons for the applicable year, not to
exceed $600,000 and (g) except as otherwise specifically limited in this Credit
Agreement, other transactions which are entered into in the ordinary course of
such Person's business on terms and conditions substantially as favorable to
such Person as would be obtainable by it in a comparable arms-length transaction
with a Person other than an officer, director, shareholder, Subsidiary or
Affiliate.
8.10 Fiscal Year; Organizational Documents.
The Credit Parties will not permit the Parent or any Consolidated Party to
change its fiscal year or amend, modify or change its articles of incorporation
in any manner adverse to the Lenders
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(or corporate charter or other similar organizational document) or bylaws (or
other similar document) without the prior written consent of the Required
Lenders.
8.11 Limitation on Restricted Actions.
The Credit Parties will not permit the Parent or any Consolidated Party
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any such
Person to (a) pay dividends or make any other distributions to any Credit Party
on its Equity Interests or with respect to any other interest or participation
in, or measured by, its profits, (b) pay any Indebtedness or other obligation
owed to any Credit Party, (c) make loans or advances to any Credit Party, (d)
sell, lease or transfer any of its properties or assets to any Credit Party or
(e) act as a Guarantor and pledge its assets pursuant to the Credit Documents or
any renewals, refinancings, exchanges, refundings or extension thereof, except
(in respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents, (ii) the Recapitalization Documents,
in each case as in effect as of the Closing Date, (iii) applicable law, (iv) any
document or instrument governing Indebtedness permitted under Section 8.1,
provided that the encumbrances and restrictions relating to the Parent or any
Consolidated Party in such document or instrument are no more restrictive than
the corresponding encumbrances and restrictions contained in the Credit
Documents, (v) the agreement for any lease by a Consolidated Party permitted
hereunder, provided that any such restriction contained therein relates only to
the asset or assets subject to such lease, (vi) any agreement relating to a sale
of Property by the Parent or a Consolidated Party permitted under this Credit
Agreement, provided that any such restriction contained therein relates only to
the asset or assets subject to such agreement or (vii) any Permitted Lien or any
document or instrument governing any Permitted Lien, provided that any such
restriction contained therein relates only to the Property subject to such
Permitted Lien.
8.12 Ownership of Subsidiaries; Limitations on Parent and Interco.
Notwithstanding any other provisions of this Credit Agreement to the
contrary:
(a) The Credit Parties will not permit the Borrower to own, directly
or indirectly, less than 90% of the Voting Stock of any of Subsidiary of
the Borrower other than a Licensing Subsidiary, (ii) permit any Subsidiary
of the Borrower to issue Equity Interests (except to the Borrower or to a
Wholly-Owned Subsidiary of the Borrower), (iii) permit, create, incur,
assume or suffer to exist any Lien thereon, in each case except (A) to
qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Equity
Interests of Foreign Subsidiaries, (B) as a result of or in connection
with a dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4 or Section 8.5 or (C) for Permitted Liens and (iv)
notwithstanding anything to the contrary contained in clause (ii) above,
permit any Subsidiary of the Borrower to issue any preferred Equity
Interests.
(b) The Parent shall not (i) hold any assets other than the Equity
Interests of Interco and its other Subsidiaries, (ii) have any liabilities
other than (A) the liabilities under the Credit Documents, (B) tax
liabilities in the ordinary course of business, (C) loans and
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advances permitted under Section 8.9, (D) the liabilities referred to in
clause (iii)(C) below and (E) corporate, administrative and operating
expenses in the ordinary course of business and (iii) engage in any
business other than (A) owning the Equity Interests of Interco and its
other Subsidiaries and activities incidental or related thereto, (B)
acting as a Guarantor hereunder and pledging its assets to the Agent, for
the benefit of the Lenders, pursuant to the Collateral Documents to which
it is a party and (C) acting as a guarantor in respect of the Senior
Subordinated Debt.
(c) Interco shall not (i) hold any assets other than the Equity
Interests of the Borrower and its other Subsidiaries, (ii) have any
liabilities other than (A) the liabilities under the Credit Documents, (B)
tax liabilities in the ordinary course of business, (C) loans and advances
permitted under Section 8.9, (D) the liabilities referred to in clause
(iii)(C) below and (E) corporate, administrative and operating expenses in
the ordinary course of business and (iii) engage in any business other
than (A) owning the Equity Interests of the Borrower and its other
Subsidiaries and activities incidental or related thereto, (B) acting as a
Guarantor hereunder and pledging its assets to the Agent, for the benefit
of the Lenders, pursuant to the Collateral Documents to which it is a
party and (C) acting as a guarantor in respect of the Senior Subordinated
Debt.
8.13 Sale Leasebacks.
Except in connection with the Austell Transaction, the Credit Parties will
not permit the Parent or any Consolidated Party to, directly or indirectly,
become or remain liable as lessee or as guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease, of any Property
(whether real, personal or mixed), whether now owned or hereafter acquired, (a)
which the Parent or such Consolidated Party has sold or transferred or is to
sell or transfer to a Person other than the Parent or a Consolidated Party or
(b) which the Parent or such Consolidated Party intends to use for substantially
the same purpose as any other Property which has been sold or is to be sold or
transferred by such Consolidated Party to another Person other than the Parent
or a Consolidated Party in connection with such lease.
8.14 No Further Negative Pledges.
The Credit Parties will not permit the Parent or any Consolidated Party to
enter into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon any of its Property,
whether now owned or hereafter acquired, or requiring the grant of any security
for such obligation if security is given for some other obligation, except (a)
pursuant to this Credit Agreement and the other Credit Documents, (b) pursuant
to the Recapitalization Documents, in each case as in effect as of the Closing
Date, (c) any document or instrument governing Indebtedness permitted under
Section 8.1, provided that the encumbrances and restrictions relating to the
Parent or any Consolidated Party in such document or instrument (i) permit the
Liens arising under the Collateral Documents and/or contemplated by the terms of
Section 7.12 and Section 7.13 and (ii) are no more restrictive than the
corresponding encumbrances and restrictions contained in the Credit Documents,
(d) the agreement for any lease by the Parent or a Consolidated Party permitted
hereunder, provided that any such restriction contained therein relates only to
the asset or assets subject to such lease, (e) any agreement relating to a sale
of Property by the Parent or a Consolidated Party permitted under this Credit
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Agreement, provided that any such restriction contained therein relates only to
the Property subject to such agreement or (f) any Permitted Lien or any document
or instrument governing any Permitted Lien, provided that any such restriction
contained therein relates only to the asset or assets subject to such Permitted
Lien.
8.15 Designated Senior Indebtedness.
Notwithstanding any other provision of this Credit Agreement to contrary
(including without limitation the terms of Section 8.1), the Credit Parties will
not permit the Parent or any Consolidated Party to contract, create, incur,
assume or permit to exist any Indebtedness which would constitute "Designated
Senior Indebtedness" under and as defined in the documents evidencing or
governing the Senior Subordinated Debt, except for the Indebtedness arising
under this Credit Agreement and the other Credit Documents.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence and continuation of
any of the following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of any of
the Loans or of any reimbursement obligations arising from drawings
under Letters of Credit, or
(ii) default, and such default shall continue for five (5) or
more Business Days, in the payment when due of any interest on the
Loans or on any reimbursement obligations arising from drawings
under Letters of Credit, or of any Fees or other amounts owing
hereunder, under any of the other Credit Documents or in connection
herewith or therewith; or
(b) Representations. Any representation, warranty or statement made
or deemed to be made by any Credit Party herein, in any of the other
Credit Documents, or in any statement or certificate delivered or required
to be delivered pursuant hereto or thereto shall prove untrue in any
material respect on the date as of which it was made or deemed to have
been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.9, 7.11 or 8.1 through
8.15, inclusive; or
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(ii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in
subsections (a), (b) or (c)(i) of this Section 9.1) contained in
this Credit Agreement and such default shall continue unremedied for
a period of at least 30 days after the earlier of a responsible
officer of a Credit Party becoming aware of such default or notice
thereof by the Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in
the due performance or observance of any term, covenant or agreement in
any of the other Credit Documents (subject to applicable grace or cure
periods, if any), or (ii) except as a result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section
8.4 or Section 8.5, any Credit Document shall fail to be in full force and
effect or to give the Agent and/or the Lenders the Liens, rights, powers
and privileges purported to be created thereby, or any Credit Party shall
so state in writing; or
(e) Guaranties. Except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section
8.4 or Section 8.5, the guaranty given by any Guarantor hereunder
(including any Additional Credit Party) or any provision thereof shall
cease to be in full force and effect, or any Guarantor (including any
Additional Credit Party) hereunder or any Person acting by or on behalf of
such Guarantor shall deny or disaffirm such Guarantor's obligations under
such guaranty, or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed
or observed pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect
to the Parent or any Consolidated Party; or
(g) Revocation of Confirmation Order. The Confirmation Order shall
be revoked by the Bankruptcy Court or any other court of competent
jurisdiction; or
(h) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) in excess of $2,500,000 in the aggregate for the Parent and the
Consolidated Parties taken as a whole, (i) the Parent or any Consolidated
Party shall (A) default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such Indebtedness, or
(B) the occurrence and continuance of a default in the observance or
performance relating to such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or holders
of such Indebtedness (or trustee or agent on behalf of such holders) to
cause (determined without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its stated
maturity; or (ii) any such Indebtedness shall be declared due and payable,
or required to be prepaid other than by a regularly scheduled required
prepayment, prior to the stated maturity thereof; or
(i) Judgments. One or more judgments or decrees shall be entered
against one or more of the Parent and the Consolidated Parties involving a
liability of $2,500,000 or
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more in the aggregate (to the extent not paid or fully covered by
insurance provided by a carrier who has acknowledged coverage and has the
ability to perform) and any such judgments or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within 30 days from
the entry thereof; or
(j) ERISA. Any of the following events or conditions, if such event
or condition could reasonably be expected to result in liability that
would have a Material Adverse Effect: (i) an ERISA Event shall occur with
respect to a Single Employer Plan, which is, in the reasonable opinion of
the Agent, likely to result in the termination of such Plan for purposes
of Title IV of ERISA; (ii) an ERISA Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable
opinion of the Agent, likely to result in (A) the termination of such Plan
for purposes of Title IV of ERISA, or (B) the Parent, any Consolidated
Party or any ERISA Affiliate incurring liability in connection with a
withdrawal from, reorganization of (within the meaning of Section 4241 of
ERISA), or insolvency or (within the meaning of Section 4245 of ERISA)
such Plan; or (iii) any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject the Parent, any Consolidated
Party or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which the Parent, any
Consolidated Party or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability; or
(k) Recapitalization Documents. (i) There shall occur and be
continuing any Event of Default under and as defined in any of the
Recapitalization Documents or (ii) any of the Credit Party Obligations for
any reason shall cease to be "Designated Senior Indebtedness" under and as
defined in the documents evidencing or governing the Senior Subordinated
Debt; or
(l) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness
or obligations of any and every kind owing by the Credit Parties to the
Agent and/or any of the Lenders hereunder to be due whereupon the
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same shall be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Credit Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and the
Credit Parties agree that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), they will
immediately pay) to the Agent additional cash, to be held by the Agent,
for the benefit of the Lenders, in a cash collateral account as additional
security for the LOC Obligations in respect of subsequent drawings under
all then outstanding Letters of Credit in an amount equal to the maximum
aggregate amount which may be drawn under all Letters of Credits then
outstanding.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur with respect to the Borrower, then the Commitments shall
automatically terminate and all Loans, all reimbursement obligations arising
from drawings under Letters of Credit, all accrued interest in respect thereof,
all accrued and unpaid Fees and other indebtedness or obligations owing to the
Agent and/or any of the Lenders hereunder automatically shall immediately become
due and payable without the giving of any notice or other action by the Agent or
the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment, Powers and Immunities.
Each Lender hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Credit Agreement and the other Credit Documents with such
powers and discretion as are specifically delegated to the Agent by the terms of
this Credit Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Agent (which term as used in
this sentence and in Section 10.5 and the first sentence of Section 10.6 hereof
shall include its Affiliates and its own and its Affiliates' officers,
directors, employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible
to the Lenders for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the property
(including the books and records) of any Credit Party or any
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of its Subsidiaries or Affiliates; (d) shall not be required to initiate or
conduct any litigation or collection proceedings under any Credit Document; and
(e) shall not be responsible for any action taken or omitted to be taken by it
under or in connection with any Credit Document, except for its own gross
negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
10.2 Reliance by Agent.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. As
to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding on all of the Lenders; provided, however,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Credit Document or applicable
law or unless it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking any such action.
10.3 Defaults.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received
written notice from a Lender or a Credit Party specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall (subject to Section 10.2 hereof) take such action with respect to such
Default or Event of Default as shall reasonably be directed by the Required
Lenders, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.
10.4 Rights as a Lender.
With respect to its Commitment and the Loans made by it, NationsBank (and
any successor acting as Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as the Agent, and the terms "Lender",
"Lenders", "Lender" and "Lenders" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. NationsBank (and any successor
acting as Agent) and its Affiliates may (without having to account therefor to
any
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Lender) accept deposits from, lend money to, make investments in, provide
services to, and generally engage in any kind of lending, trust, or other
business with any Credit Party or any of its Subsidiaries or Affiliates as if it
were not acting as Agent, and NationsBank (and any successor acting as Agent)
and its Affiliates may accept fees and other consideration from any Credit Party
or any of its Subsidiaries or Affiliates for services in connection with this
Credit Agreement or otherwise without having to account for the same to the
Lenders.
10.5 Indemnification.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Credit
Parties under such Section) ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including attorneys'
fees), or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Agent (including by any Lender) in any
way relating to or arising out of any Credit Document or the transactions
contemplated thereby or any action taken or omitted by the Agent under any
Credit Document; provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse the Agent promptly upon demand for its ratable
share of any costs or expenses payable by the Credit Parties under Section 11.5,
to the extent that the Agent is not promptly reimbursed for such costs and
expenses by the Credit Parties. The agreements in this Section 10.5 shall
survive the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder.
10.6 Non-Reliance on Agent and Other Lenders.
Each Lender agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Credit Parties and their
Subsidiaries and decision to enter into this Credit Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under the Credit Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition, or business of any Credit Party or any of its Subsidiaries or
Affiliates that may come into the possession of the Agent or any of its
Affiliates.
10.7 Successor Agent.
The Agent may resign at any time by giving 30 day's prior notice thereof
to the Lenders and the Credit Parties. Upon any such resignation, the Required
Lenders shall have the right with the consent of the Borrower (not be
unreasonably withheld) to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent
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which shall be a commercial bank organized under the laws of the United States
having combined capital and surplus of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor, such successor
shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges, and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Section
10 shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
10.8 Documentation Agent.
The Documentation Agent, in its capacity as such, shall have no rights,
powers, duties or obligations under this Credit Agreement or any of the other
Credit Documents.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Credit Parties and the
Agent, set forth below, and, in the case of the Lenders, set forth on Schedule
2.1(a), or at such other address as such party may specify by written notice to
the other parties hereto:
if to any Credit Party:
Xxxxxx American Corp.
00 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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with a copy to:
Vestar Capital Partners III, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
Xxxxx X. Xxxxxx
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Agent:
NationsBank, N. A.
Independence Center, 15th Floor
NC1-001-15-04
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
NationsBank, N.A.
NationsBank Corporate Center, 8th Floor
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: X. Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
11.2 Right of Set-Off; Adjustments.
Upon the occurrence and during the continuance of any Event of Default
under Section 9.1(a), each Lender (and each of its Affiliates) is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender (or any of its Affiliates) to or for the credit or the
account of any Credit Party against any and all of the obligations of such
Person now or hereafter existing under this
104
Credit Agreement, under the Notes, under any other Credit Document or otherwise,
irrespective of whether such Lender shall have made any demand under hereunder
or thereunder and although such obligations may be unmatured. Each Lender agrees
promptly to notify any affected Credit Party after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 11.2 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Lender may have.
11.3 Benefit of Agreement.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that none of the Credit Parties may assign or
transfer any of its interests and obligations without prior written
consent of the Lenders; provided further that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3.
(b) Each Lender may assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its Notes,
and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this
Credit Agreement, any such partial assignment shall be in an amount
at least equal to $5,000,000 (or, if less, the remaining amount of
the Commitment being assigned by such Lender) or an integral
multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations
under this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance in the
form of Exhibit 11.3(b) hereto, together with any Note subject to
such assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits of a
Lender hereunder and the assigning Lender shall, to the extent of such
assignment, relinquish its rights and be released from its obligations
under this Credit Agreement. Upon the consummation of any assignment
pursuant to this Section 11.3(b), the assignor, the Agent and the Credit
Parties shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is not
a United States person under Section 7701(a)(30) of the Code, it
105
shall deliver to the Credit Parties and the Agent certification as to
exemption from deduction or withholding of Taxes in accordance with
Section 3.11.
(c) The Agent shall maintain at its address referred to in Section
11.1 a copy of each Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Credit Parties, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for
all purposes of this Credit Agreement. The Register shall be available for
inspection by the Credit Parties or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit
11.3(b) hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations
under this Credit Agreement (including all or a portion of its Commitment
or its Loans); provided, however, that (i) such Lender's obligations under
this Credit Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) the participant shall be entitled to the
benefit of the yield protection provisions contained in Sections 3.7
through 3.12, inclusive (but only to the extent its selling Lender is so
entitled), and the right of set-off contained in Section 11.2 (provided
that, in the case of Section 3.11, such participant shall have complied
with the provisions of said Section (except that any forms required to be
delivered pursuant to Section 3.11 will be delivered to the Lender from
whom the participation was purchased) and, provided, further, that no
participant shall be entitled to receive any greater amount pursuant to
Sections 3.9, 3.11 or 3.12 than the Lender from whom the participation was
purchased would have been entitled to receive in respect of the amount of
the participation transferred by such Lender to such participant had no
such transfer occurred) and (iv) the Credit Parties shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Credit Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Credit Parties
relating to the Credit Party Obligations owing to such Lender and to
approve any amendment, modification, or waiver of any provision of this
Credit Agreement (other than amendments, modifications, or waivers
decreasing the amount of principal of or the rate at which interest is
payable on such Loans or Notes, extending any scheduled principal payment
date or date fixed for the payment of interest on such Loans or Notes, or
extending its Commitment).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any portion
of its Loans and its
106
Notes to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve
Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.
(g) Any Lender may furnish any information concerning the Parent and
the Consolidated Parties in the possession of such Lender from time to
time to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.14
hereof.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Agent or any Lender and any of the Credit
Parties shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle the Credit Parties to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
11.5 Expenses; Indemnification.
(a) The Credit Parties jointly and severally agree to pay on demand all
costs and expenses of the Agent in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this Credit
Agreement, the other Credit Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and expenses of
counsel for the Agent (including the cost of internal counsel) with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under the Credit Documents. The Credit Parties further jointly
and severally agree to pay on demand all costs and expenses of the Agent and one
counsel to all of the Lenders, if any, in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of the Credit
Documents and the other documents to be delivered hereunder.
(b) The Credit Parties jointly and severally agree to indemnify and hold
harmless the Agent and each Lender and each of their Affiliates and their
respective officers, directors, employees, agents, and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' fees and excluding taxes) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation, or proceeding or preparation of defense in
connection therewith) the Credit Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans, except to the
extent such claim, damage, loss, liability, cost, or expense results from any
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
Section 11.5 applies, such indemnity shall be effective whether or not such
107
investigation, litigation or proceeding is brought by any of the Credit Parties,
their respective directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The Credit
Parties agree not to assert any claim against the Agent, any Lender, any of
their Affiliates, or any of their respective directors, officers, employees,
attorneys, agents, and advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or otherwise
relating to the Credit Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the Credit
Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 11.5 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
(i) without the consent of each Lender affected thereby, neither
this Credit Agreement nor any other Credit Document may be amended to
(a) extend the final maturity of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit, or extend or waive any Principal
Amortization Payment of any Loan, or any portion thereof,
(b) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or Fees hereunder,
(c) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(d) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of
any Default or Event of Default or mandatory reduction in the
Commitments shall not constitute a change in the terms of any
Commitment of any Lender),
(e) except as the result of or in connection with an Asset
Disposition permitted by Section 8.5, release all or substantially
all of the Collateral,
(f) except as the result of or in connection with a
dissolution, merger or disposition of a Consolidated Party permitted
under Section 8.4, release the
108
Borrower or substantially all of the other Credit Parties from its
or their obligations under the Credit Documents,
(g) amend, modify or waive any provision of this Section 11.6
or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15,
9.1(a), 11.2, 11.3, 11.5 or 11.9,
(h) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(i) consent to the assignment or transfer by the Borrower or
all or substantially all of the other Credit Parties of any of its
or their rights and obligations under (or in respect of) the Credit
Documents except as permitted thereby;
(ii) without the consent of Lenders holding in the aggregate more
than 50% of the outstanding Tranche A Term Loans and more than 50% of the
outstanding Tranche B Term Loans, extend the time for or the amount or the
manner of application of proceeds of any mandatory prepayment required by
Section 3.3(b)(ii), (iii), (iv) or (v) hereof;
(iii) without the consent of the Agent, no provision of Section 10
may be amended;
(iv) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended; and
(v) without the consent of the Swingline Lender, no provision of
Section 2.3 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled
to vote as such Lender sees fit on any bankruptcy reorganization plan that
affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to
allow a Credit Party to use cash collateral in the context of a bankruptcy
or insolvency proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
109
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Survival.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any
legal action or proceeding with respect to this Credit Agreement or any
other Credit Document may be brought in the courts of the State of New
York in New York County, or of the United States for the Southern District
of New York, and, by execution and delivery of this Credit Agreement, each
of the Credit Parties hereby irrevocably accepts for itself and in respect
of its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the Credit Parties further
irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to it at
the address set out for notices pursuant to Section 11.1, such service to
become effective three (3) days after such mailing. Nothing herein shall
affect the right of the Agent or any Lender to serve process in any other
manner permitted by law or to commence legal proceedings or to otherwise
proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any
of the aforesaid actions or proceedings arising out of or in connection
with this Credit Agreement or any other Credit Document brought in the
courts referred to in subsection (a) above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such
action or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS,
EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING
TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
110
11.11 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 Entirety.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.13 Binding Effect; Termination.
(a) This Credit Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by each Credit
Party and the Agent, and the Agent shall have received copies hereof
(telecopied or otherwise) which, when taken together, bear the signatures
of each Lender, and thereafter this Credit Agreement shall be binding upon
and inure to the benefit of each Credit Party, the Agent and each Lender
and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts then payable hereunder or under any of
the other Credit Documents shall remain outstanding, no Letters of Credit
shall be outstanding, all of the Credit Party Obligations then outstanding
have been irrevocably satisfied in full and all of the Commitments
hereunder shall have expired or been terminated.
11.14 Confidentiality.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential any non-public information furnished or made available to it by the
Credit Parties pursuant to this Credit Agreement; provided that nothing herein
shall prevent any Lending Party from disclosing such information (a) to any
other Lending Party or any Affiliate of any Lending Party, or any officer,
director, employee, agent, or advisor of any Lending Party or Affiliate of any
Lending Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required by any
law, rule, or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority
having jurisdiction over such Lending Party, (f) that is or becomes available to
the public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Credit Agreement,
(g) in connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Credit Agreement or any other Credit Document,
and (i) subject to provisions substantially similar to those contained in this
Section 11.14, to any actual or proposed participant or assignee.
111
11.15 Conflict.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Pages to Follow]
112
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: XXXXXX AMERICAN CORP.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Director, President and
------------------------------
Chief Executive Officer
------------------------------
PARENT: XXXXXX AMERICAN INVESTMENT CORP.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
INTERCO: XXXXXX AMERICAN GROUP, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
SUBSIDIARY
GUARANTORS: CONSUMER DIRECT CORPORATION,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Director, President and
------------------------------
Chief Executive Officer
------------------------------
ARROW FACTORY STORES, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Chairman and Chief
------------------------------
Executive Officer
------------------------------
(Signatures Continued)
GAKM RESOURCES CORPORATION,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
XXXXXX PEABODY RESOURCES CORPORATION,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
XXXXXX XXXXXXX HOLDING CORP.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
XXXXXX, PEABODY & CO., INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Chairman and
------------------------------
Chief Executive Officer
------------------------------
BIDERTEX SERVICES INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
(Signatures Continued)
GREAT AMERICAN KNITTING XXXXX, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Chairman and
------------------------------
Chief Executive Officer
------------------------------
XXXXXX DESIGNER GROUP, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Chairman and
------------------------------
Chief Executive Officer
------------------------------
(Signatures Continued)
AGENT: NATIONSBANK, N. A.
By: /s/ Xxxx X. Xxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxx
------------------------------
Title: Attorney-in-fact
------------------------------
DOCUMENTATION
AGENT: GLEACHER NATWEST INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
------------------------------
Title: Vice President
------------------------------
LENDERS: NATIONSBANK, N. A.
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
------------------------------
Title: Managing Director
------------------------------
NATIONAL WESTMINSTER BANK PLC
By: /s/ Xxxxxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxxxxx X. Xxxxxxxx
------------------------------
Title: Vice President
------------------------------
SCHEDULE 1.1A
FINANCIAL INFORMATION
For the Fiscal For the Fiscal For the Fiscal
Quarter Ended Quarter Ended Quarter Ended
September 30, 1997 December 31, 1997 March 28, 1998
Consolidated
EBITDA $9.2 million $15.6 million $10.9 million
Consolidated
Interest Expense $5.9 million $5.9 million $5.9 million
Consolidated
Cash Taxes $0.0 million $0.0 million $0.0 million
Consolidated
Scheduled Funded
Debt Payment $0.65 million $0.65 million $0.65 million
Schedule 1.1B
EXISTING LETTERS OF CREDIT
Schedule 1.1C
INVESTMENTS
Schedule 1.1D
LIENS
Schedule 2.1(a)
LENDER ADDRESSES AND COMMITMENTS
Schedule 5.1(c)(i)
FORM OF OPINION OF XXXXXXX XXXXXXX & XXXXXXXX
Schedule 5.1(c)(ii)
FORM OF LEGAL LOCAL COUNSEL OPINION
Schedule 5.1(c)(iii)
FORM OF OPINION CANADIAN COUNSEL
Schedule 6.4
REQUIRED CONSENTS, AUTHORIZATIONS, NOTICES AND FILINGS
Schedule 6.9
LITIGATION
Schedule 6.12
ERISA
Schedule 6.13
SUBSIDIARIES
Schedule 6.16
ENVIRONMENTAL DISCLOSURES
Schedule 6.17
INTELLECTUAL PROPERTY
Schedule 6.20(a)
MORTGAGED PROPERTIES
Schedule 6.20(b)
COLLATERAL LOCATIONS
Schedule 6.20(c)
CHIEF EXECUTIVE OFFICES/
PRINCIPAL PLACES OF BUSINESS
Schedule 6.23
LABOR MATTERS
Schedule 7.6
INSURANCE
Schedule 8.1
INDEBTEDNESS
Exhibit 1.1A
FORM OF PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is entered into as of May
18, 1998 among XXXXXX AMERICAN CORP., a Delaware corporation (the "Borrower"),
XXXXXX AMERICAN INVESTMENT CORP., a Delaware corporation (the "Parent"), XXXXXX
AMERICAN GROUP, INC., a Delaware corporation ("Interco"), and certain other
direct and indirect Subsidiaries of the Parent (together with the Parent and
Interco, individually a "Guarantor", and collectively the "Guarantors"; together
with the Borrower, individually a "Pledgor", and collectively the "Pledgors")
and NATIONSBANK, N.A., in its capacity as agent (in such capacity, the "Agent")
for the Lenders from time to time party to the Credit Agreement described below
(the "Lenders").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, modified, extended, renewed or replaced from time to time,
the "Credit Agreement") among the Borrower, the Guarantors, the Lenders, the
Agent and Gleacher Natwest Inc., in its capacity as documentation agent, the
Lenders have agreed to make Loans and issue or participate in Letters of Credit
upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue or participate in Letters of Credit under the Credit Agreement that the
Pledgors shall have executed and delivered this Pledge Agreement to the Agent
for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Credit Agreement.
For purposes of this Pledge Agreement, the term "Lender" shall include any
Affiliate of any Lender which has entered into a Hedging Agreement with any
Credit Party.
2. Pledge and Grant of Security Interest. To secure the prompt payment and
performance in full when due, whether by lapse of time or otherwise, of the
Pledgor Obligations (as defined in Section 3 hereof), each Pledgor hereby
pledges and assigns to the Agent, for the benefit of the Lenders, and grants to
the Agent, for the benefit of the Lenders, a continuing security interest in any
and all right, title and interest of such Pledgor in and to the following,
whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the "Pledged Collateral"):
(a) Pledged Shares. (i) 100% (or, if less, the full amount owned by
such Pledgor) of the issued and outstanding Equity Interests owned by such
Pledgor of each Domestic Subsidiary set forth on Schedule 2(a) attached
hereto and (ii) 65% (or, if less, the full amount owned by such Pledgor)
of each class of the issued and outstanding Equity Interests entitled to
vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) ("Voting
Equity") and 100% (or, if less, the full amount owned by such Pledgor of
each class of the issued and outstanding Equity Interests not entitled to
vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
("Non-Voting Equity") owned by such Pledgor of each Material Foreign
Subsidiary set forth on Schedule 2(a) attached hereto, in each case
together with the certificates (or other agreements or instruments), if
any, representing such Equity Interests, and all options and other rights,
contractual or otherwise, with respect thereto (collectively, together
with the Equity Interests described in Section 2(b) and 2(c) below, the
"Pledged Shares"), including, but not limited to, the following:
(y) all shares or securities representing a dividend on any of
the Pledged Shares, or representing a distribution or return of
capital upon or in respect of the Pledged Shares, or resulting from
a stock split, revision, reclassification or other exchange
therefor, and any subscriptions, warrants, rights or options issued
to the holder of, or otherwise in respect of, the Pledged Shares;
and
(z) without affecting the obligations of the Pledgors under
any provision prohibiting such action hereunder or under the Credit
Agreement, in the event of any consolidation or merger involving the
issuer of any Pledged Shares and in which such issuer is not the
surviving corporation, all securities of each class of the Equity
Interests of the successor resulting from such consolidation or
merger payable to or received by such Pledgor as consideration for
such merger (subject to the 65% limitation on Voting Equity of
Material Foreign Subsidiaries).
(b) Additional Shares. 100% (or, if less, the full amount owned by
such Pledgor) of the issued and outstanding Equity Interests owned by such
Pledgor of any Person which hereafter becomes a Domestic Subsidiary and
65% (or, if less, the full amount owned by such Pledgor) of the Voting
Equity and 100% (or, if less, the full amount owned by such Pledgor) of
the Non-Voting Equity owned by such Pledgor of any Person which hereafter
becomes a Material Foreign Subsidiary, including, without limitation, the
certificates representing such Equity Interests.
(c) Proceeds. All proceeds and products of the foregoing, however
and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional Equity Interests to the Agent as collateral
security for the Pledgor Obligations. Upon delivery to the Agent, such
2
additional Equity Interests shall be deemed to be part of the Pledged Collateral
of such Pledgor and shall be subject to the terms of this Pledge Agreement
whether or not Schedule 2(a) is amended to refer to such additional Equity
Interests.
3. Security for Pledgor Obligations. The security interest created hereby
in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the Credit Party Obligations, now existing
or hereafter arising pursuant to the Credit Documents, owing from the
Borrower or any other Credit Party to any Lender or the Agent, howsoever
evidenced, created, incurred or acquired, whether primary, secondary,
direct, contingent, or joint and several, including, without limitation,
all liabilities arising under Hedging Agreements and all obligations and
liabilities incurred in connection with collecting and enforcing the
foregoing (collectively, the "Pledgor Obligations").
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees that:
(a) Each Pledgor shall deliver to the Agent (i) simultaneously with
or prior to the execution and delivery of this Pledge Agreement, all
certificates representing the Pledged Shares of such Pledgor and (ii)
promptly upon the receipt thereof by or on behalf of a Pledgor, all other
certificates and instruments constituting Pledged Collateral of a Pledgor.
Prior to delivery to the Agent, all such certificates and instruments
constituting Pledged Collateral of a Pledgor shall be held in trust by
such Pledgor for the benefit of the Agent pursuant hereto. All such
certificates shall be delivered in suitable form for transfer by delivery
or shall be accompanied by duly executed instruments of transfer or
assignment in blank, substantially in the form provided in Exhibit 4(a)
attached hereto.
(b) Additional Securities. If such Pledgor shall receive by virtue
of its being or having been the owner of any Pledged Collateral, any (i)
stock certificate, including without limitation, any certificate
representing a stock dividend or distribution in connection with any
increase or reduction of capital, reclassification, merger, consolidation,
sale of assets, combination of equity interests, stock splits, spin-off or
split-off, promissory notes or other instrument; (ii) option or right,
whether as an addition to, substitution for, or an exchange for, any
Pledged Collateral or otherwise; (iii) dividends payable in securities; or
(iv) distributions of securities in connection with a partial or total
liquidation, dissolution or reduction of capital, capital surplus or
paid-in surplus, then such Pledgor shall receive such stock certificate,
instrument, option, right or distribution in trust for the benefit of the
Agent, shall segregate it from such Pledgor's other property and shall
deliver it forthwith to the Agent in the exact form received together with
any necessary endorsement and/or appropriate stock power duly executed in
blank, substantially in the form provided in Exhibit 4(a), to be held by
the Agent as Pledged Collateral and as further collateral security for the
Pledgor Obligations.
(c) Financing Statements. Each Pledgor shall execute and deliver to
the Agent such UCC or other applicable financing statements as may be
reasonably requested
3
by the Agent in order to perfect and protect the security interest created
hereby in the Pledged Collateral of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that so long as any of
the Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated:
(a) Authorization of Pledged Shares. The Pledged Shares are duly
authorized and validly issued, are fully paid and nonassessable and are
not subject to the preemptive rights of any Person. All other equity
interests constituting Pledged Collateral will be duly authorized and
validly issued, fully paid and nonassessable and not subject to the
preemptive rights of any Person.
(b) Title. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal and
beneficial owner of such Pledged Collateral free and clear of any Lien,
other than Permitted Liens. There exists no "adverse claim" within the
meaning of Section 8-302 of the Uniform Commercial Code as in effect in
the State of New York (the "UCC") with respect to the Pledged Shares of
such Pledgor.
(c) Pledgor's Authority. With respect to the Pledged Stock of
Domestic Subsidiaries and Xxxxxx, Xxxxxxx Canada, Inc., no authorization,
approval or action by, and no notice or filing with any Governmental
Authority or with the issuer of such Pledged Stock (which has not already
been obtained) is required either (i) for the pledge made by a Pledgor or
for the granting of the security interest by a Pledgor pursuant to this
Pledge Agreement or (ii) for the exercise by the Agent or the Lenders of
their non-judicial foreclosure rights and remedies hereunder (except as
may be required by laws affecting the offering and sale of securities).
(d) Security Interest/Priority. This Pledge Agreement creates a
valid security interest in favor of the Agent for the benefit of the
Lenders, in the Pledged Collateral of each Domestic Subsidiary and Xxxxxx,
Peabody Canada, Inc. The taking possession by the Agent of the
certificates representing the Pledged Shares of each Domestic Subsidiary
and Xxxxxx, Xxxxxxx Canada, Inc. and all other certificates and
instruments constituting Pledged Collateral will perfect and establish the
first priority of the Agent's security interest in such Pledged Shares
and, when properly perfected by filing or registration, in all other
Pledged Collateral represented by such Pledged Shares and instruments
securing the Pledgor Obligations. Except as set forth in this Section
5(e), no action is necessary to perfect or otherwise protect such security
interest.
(e) No Other Shares. No Pledgor owns any Equity Interests required
to be pledged hereunder other than as set forth on Schedule 2(a) attached
hereto.
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6. Covenants. Each Pledgor hereby covenants, that so long as any of the
Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated, such Pledgor shall:
(a) Books and Records. Xxxx its books and records (and shall cause
the issuer of the Pledged Shares of such Pledgor to xxxx its books and
records) to reflect the security interest granted to the Agent, for the
benefit of the Lenders, pursuant to this Pledge Agreement.
(b) Defense of Title. Warrant and defend title to and ownership of
the Pledged Collateral of such Pledgor at its own expense against the
claims and demands of all other parties claiming an interest therein, keep
the Pledged Collateral free from all Liens, except for Permitted Liens,
and not sell, exchange, transfer, assign, lease or otherwise dispose of
Pledged Collateral of such Pledgor or any interest therein, except as
permitted under the Credit Agreement and the other Credit Documents.
(c) Further Assurances. Promptly execute and deliver at its expense
all further instruments and documents and take all further action that may
be necessary and desirable or that the Agent may reasonably request in
order to (i) perfect and protect the security interest created hereby in
the Pledged Collateral of such Pledgor (including without limitation any
and all action reasonably necessary to satisfy the Agent that the Agent
has obtained a first priority perfected security interest in any capital
stock); (ii) enable the Agent to exercise and enforce its rights and
remedies hereunder in respect of the Pledged Collateral of such Pledgor;
and (iii) otherwise effect the purposes of this Pledge Agreement,
including, without limitation and if requested by the Agent, delivering to
the Agent irrevocable proxies in respect of the Pledged Collateral of such
Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any restriction
with respect to any of the Pledged Collateral of such Pledgor other than
pursuant hereto or as may be permitted under the Credit Agreement.
(e) Compliance with Securities Laws. File all reports and other
information now or hereafter required to be filed by such Pledgor with the
United States Securities and Exchange Commission and any other state,
federal or foreign agency in connection with the ownership of the Pledged
Collateral of such Pledgor.
7. Advances by Lenders. On failure of any Pledgor to perform any of the
covenants and agreements contained herein, the Agent may, at its sole option and
in its sole discretion, perform the same and in so doing may expend such sums as
the Agent may reasonably deem advisable in the performance thereof, including,
without limitation, the payment of any insurance premiums, the payment of any
taxes, a payment to obtain a release of a Lien or potential Lien,
5
expenditures made in defending against any adverse claim and all other
expenditures which the Agent or the Lenders may make for the protection of the
security hereof or which may be compelled to make by operation of law. All such
sums and amounts so expended shall be repayable by the Pledgors on a joint and
several basis promptly upon timely notice thereof and demand therefor, shall
constitute additional Pledgor Obligations and shall bear interest from the date
said amounts are expended at the default rate specified in Section 3.1 of the
Credit Agreement for Revolving Loans that are Base Rate Loans. No such
performance of any covenant or agreement by the Agent or the Lenders on behalf
of any Pledgor, and no such advance or expenditure therefor, shall relieve the
Pledgors of any default under the terms of this Pledge Agreement, the other
Credit Documents or any Hedging Agreement. The Lenders may make any payment
hereby authorized in accordance with any xxxx, statement or estimate procured
from the appropriate public office or holder of the claim to be discharged
without inquiry into the accuracy of such xxxx, statement or estimate or into
the validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by a Pledgor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
8. Events of Default. The occurrence and continuance of an event which
under the Credit Agreement would constitute an Event of Default shall be an
Event of Default hereunder (an "Event of Default").
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and
during the continuation thereof, the Agent and the Lenders shall have, in
respect of the Pledged Collateral of any Pledgor, in addition to the
rights and remedies provided herein, in the Credit Documents, in the
Hedging Agreements or by law, the rights and remedies of a secured party
under the UCC or any other applicable law.
(b) Sale of Pledged Collateral. Upon the occurrence of an Event of
Default and during the continuation thereof, without limiting the
generality of this Section and without notice, the Agent may, in its sole
discretion, sell or otherwise dispose of or realize upon the Pledged
Collateral, or any part thereof, in one or more parcels, at public or
private sale, at any exchange or broker's board or elsewhere, at such
price or prices and on such other terms as the Agent may deem commercially
reasonable, for cash, credit or for future delivery or otherwise in
accordance with applicable law. To the extent permitted by law, any Lender
may in such event, bid for the purchase of such securities. Each Pledgor
agrees that, to the extent notice of sale shall be required by law and has
not been waived by such Pledgor, any requirement of reasonable notice
shall be met if notice, specifying the place of any public sale or the
time after which any private sale is to be made, is personally served on
or mailed, postage prepaid, to such Pledgor, in accordance with the notice
provisions of Section 11.1 of the Credit Agreement at least 10 days before
the time of such sale (or such longer period as may be required under
applicable law). The Agent shall not be obligated to make any sale of
Pledged Collateral of such Pledgor regardless of notice of sale having
been given. The Agent may adjourn any public or
6
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(c) Private Sale. Upon the occurrence of an Event of Default and
during the continuation thereof, the Pledgors recognize that the Agent may
deem it impracticable to effect a public sale of all or any part of the
Pledged Shares or any of the securities constituting Pledged Collateral
and that the Agent may, therefore, determine to make one or more private
sales of any such securities to a restricted group of purchasers who will
be obligated to agree, among other things, to acquire such securities for
their own account, for investment and not with a view to the distribution
or resale thereof. Each Pledgor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than the prices
and other terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sale shall be
deemed to have been made in a commercially reasonable manner and that the
Agent shall have no obligation to delay sale of any such securities for
the period of time necessary to permit the issuer of such securities to
register such securities for public sale under the Securities Act of 1933.
Each Pledgor further acknowledges and agrees that any offer to sell such
securities which has been (i) publicly advertised on a bona fide basis in
a newspaper or other publication of general circulation in the financial
community of New York, New York (to the extent that such offer may be
advertised without prior registration under the Securities Act of 1933),
or (ii) made privately in the manner described above shall be deemed to
involve a "public sale" under the UCC, notwithstanding that such sale may
not constitute a "public offering" under the Securities Act of 1933, and
the Agent may, in such event, bid for the purchase of such securities.
(d) Retention of Pledged Collateral. In addition to the rights and
remedies hereunder, upon the occurrence of an Event of Default, the Agent
may, after providing the notices required by Section 9-505(2) of the UCC
or otherwise complying with the requirements of applicable law of the
relevant jurisdiction, retain all or any portion of the Pledged Collateral
in satisfaction of the Pledgor Obligations. Unless and until the Agent
shall have provided such notices, however, the Agent shall not be deemed
to have retained any Pledged Collateral in satisfaction of any Pledgor
Obligations for any reason.
(e) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which the
Agent or the Lenders are legally entitled, the Pledgors shall be jointly
and severally liable for the deficiency, together with interest thereon at
the default rate specified in Section 3.1 of the Credit Agreement for
Revolving Loans that are Base Rate Loans, together with the costs of
collection and the reasonable fees of any attorneys employed by the Agent
to collect such deficiency. Any surplus remaining after the full payment
and satisfaction of the Pledgor Obligations shall be returned to the
Pledgors or to whomsoever a court of competent jurisdiction shall
determine to be entitled thereto.
7
10. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the Agent,
on behalf of the Lenders, and each of its designees or agents as
attorney-in-fact of such Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following actions
upon the occurrence and during the continuance of an Event of Default:
(i) to demand, collect, settle, compromise, adjust and give
discharges and releases concerning the Pledged Collateral of such
Pledgor, all as the Agent may reasonably determine;
(ii) to commence and prosecute any actions at any court for
the purposes of collecting any of the Pledged Collateral of such
Pledgor and enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action brought and,
in connection therewith, give such discharge or release as the Agent
may deem reasonably appropriate;
(iv) to pay or discharge taxes, liens, security interests,
or other encumbrances levied or placed on or threatened against the
Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any payment under any
of the Pledged Collateral to make payment of any and all monies due
and to become due thereunder directly to the Agent or as the Agent
shall direct;
(vi) to receive payment of and receipt for any and all
monies, claims, and other amounts due and to become due at any time
in respect of or arising out of any Pledged Collateral of such
Pledgor;
(vii) to sign and endorse any drafts, assignments, proxies,
stock powers, verifications, notices and other documents relating to
the Pledged Collateral of such Pledgor;
(viii) to settle, compromise or adjust any suit, action or
proceeding described above and, in connection therewith, to give
such discharges or releases as the Agent may deem reasonably
appropriate;
8
(ix) execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements,
pledge agreements, affidavits, notices and other agreements,
instruments and documents that the Agent may determine necessary in
order to perfect and maintain the security interests and liens
granted in this Pledge Agreement and in order to fully consummate
all of the transactions contemplated therein;
(x) to exchange any of the Pledged Collateral of such
Pledgor or other property upon any merger, consolidation,
reorganization, recapitalization or other readjustment of the issuer
thereof and, in connection therewith, deposit any of the Pledged
Collateral of such Pledgor with any committee, depository, transfer
agent, registrar or other designated agency upon such terms as the
Agent may determine;
(xi) to vote for a shareholder resolution, or to sign an
instrument in writing, sanctioning the transfer of any or all of the
Pledged Shares of such Pledgor into the name of the Agent or one or
more of the Lenders or into the name of any transferee to whom the
Pledged Shares of such Pledgor or any part thereof may be sold
pursuant to Section 10 hereof; and
(xii) to do and perform all such other acts and things as the
Agent may reasonably deem to be necessary, proper or convenient in
connection with the Pledged Collateral of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Pledgor Obligations remain
outstanding, any Credit Document or any Hedging Agreement is in effect or
any Letter of Credit shall remain outstanding and (ii) until all of the
Commitments shall have been terminated. The Agent shall be under no duty
to exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the Agent in
this Pledge Agreement, and shall not be liable for any failure to do so or
any delay in doing so. The Agent shall not be liable for any act or
omission or for any error of judgment or any mistake of fact or law in its
individual capacity or its capacity as attorney-in-fact except acts or
omissions resulting from its gross negligence or willful misconduct. This
power of attorney is conferred on the Agent solely to protect, preserve
and realize upon its security interest in Pledged Collateral.
(b) Performance by the Agent of Pledgor's Obligations. If any
Pledgor fails to perform any agreement or obligation contained herein, the
Agent itself may perform, or cause performance of, such agreement or
obligation, and the expenses of the Agent incurred in connection therewith
shall be payable by the Pledgors on a joint and several basis pursuant to
Section 13 hereof.
9
(c) Assignment by the Agent. In connection with the succession of
the Agent pursuant to Section 10.7 of the Credit Agreement, the Agent may
from time to time assign the Pledgor Obligations and any portion thereof
and/or the Pledged Collateral and any portion thereof, and the assignee
shall be entitled to all of the rights and remedies of the Agent under
this Pledge Agreement in relation thereto.
(d) The Agent's Duty of Care. Other than the exercise of reasonable
care to assure the safe custody of the Pledged Collateral while being held
by the Agent hereunder, the Agent shall have no duty or liability to
preserve rights pertaining thereto, it being understood and agreed that
Pledgors shall be responsible for preservation of all rights in the
Pledged Collateral of such Pledgor, and the Agent shall be relieved of all
responsibility for Pledged Collateral upon surrendering it or tendering
the surrender of it to the Pledgors. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equal to that which the Agent accords its own
property, which shall be no less than the treatment employed by a
reasonable and prudent agent in the industry, it being understood that the
Agent shall not have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Pledged Collateral, whether or not the Agent
has or is deemed to have knowledge of such matters; or (ii) taking any
necessary steps to preserve rights against any parties with respect to any
Pledged Collateral.
(e) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred and
be continuing, to the extent permitted by law, each Pledgor may
exercise any and all voting and other consensual rights pertaining
to the Pledged Collateral of such Pledgor or any part thereof for
any purpose not inconsistent with the terms of this Pledge Agreement
or the Credit Agreement; and
(ii) Upon the occurrence and during the continuance of an
Event of Default, all rights of a Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to paragraph (i) of this Section upon written
notice to the Borrower shall cease and all such rights shall
thereupon become vested in the Agent which shall then have the sole
right to exercise such voting and other consensual rights.
(f) Dividend Rights in Respect of the Pledged Collateral.
(i) Each Pledgor may receive and retain any and all
dividends (other than stock dividends and other dividends
constituting Pledged Collateral which are addressed hereinabove) or
interest paid in respect of the Pledged Collateral to the extent
they are allowed under the Credit Agreement.
10
(ii) Upon the occurrence and during the continuance of an
Event of Default:
(A) all rights of a Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to
receive and retain pursuant to paragraph (i) of this Section
upon written notice to the Borrower shall cease and all such
rights shall thereupon be vested in the Agent which shall then
have the sole right to receive and hold as Pledged Collateral
such dividends and interest payments; and
(B) all dividends and interest payments which are
received by a Pledgor contrary to the provisions of paragraph
(A) of this Section shall be received in trust for the benefit
of the Agent, shall be segregated from other property or funds
of such Pledgor, and shall be forthwith paid over to the Agent
as Pledged Collateral in the exact form received, to be held
by the Agent as Pledged Collateral and as further collateral
security for the Pledgor Obligations.
(g) Release of Pledged Collateral. The Agent may release any of the
Pledged Collateral from this Pledge Agreement or may substitute any of the
Pledged Collateral for other Pledged Collateral without altering, varying
or diminishing in any way the force, effect, lien, pledge or security
interest of this Pledge Agreement as to any Pledged Collateral not
expressly released or substituted, and this Pledge Agreement shall
continue as a first priority lien on all Pledged Collateral not expressly
released or substituted.
11. Rights of Required Lenders. All rights of the Agent hereunder, if not
exercised by the Agent, may be exercised by the Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Pledgor Obligations in the order set forth in Section 3.15(b)
of the Credit Agreement, and each Pledgor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
the Agent shall have the continuing and exclusive right to apply and reapply any
and all such payments and proceeds in the Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.
13. Costs of Counsel. At all times hereafter, the Pledgors agree to
promptly pay upon demand any and all reasonable costs and expenses (a) of the
Agent or the Lenders as required under Section 11.5 of the Credit Agreement and
(b) of the Agent as necessary to protect the Pledged Collateral or to exercise
any rights or remedies under this Pledge Agreement or with
11
respect to any Pledged Collateral. All of the foregoing costs and expenses shall
constitute Pledgor Obligations hereunder.
14. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in every
respect and shall remain in full force and effect so long as any of the
Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding,
and until all of the Commitments thereunder shall have terminated (other
than any obligations with respect to the indemnities and the
representations and warranties set forth in the Credit Documents). Upon
such payment and termination, this Pledge Agreement shall be automatically
terminated and the Agent and the Lenders shall, upon the request and at
the expense of the Pledgors, forthwith release all of its liens and
security interests hereunder and shall executed and deliver all UCC
termination statements and/or other documents reasonably requested by the
Pledgors evidencing such termination. Notwithstanding the foregoing all
releases and indemnities provided hereunder shall survive termination of
this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in
whole or in part, of any of the Pledgor Obligations is rescinded or must
otherwise be restored or returned by the Agent or any Lender as a
preference, fraudulent conveyance or otherwise under any bankruptcy,
insolvency or similar law, all as though such payment had not been made;
provided that in the event payment of all or any part of the Pledgor
Obligations is rescinded or must be restored or returned, all reasonable
costs and expenses (including without limitation any reasonable legal fees
and disbursements) incurred by the Agent or any Lender in defending and
enforcing such reinstatement shall be deemed to be included as a part of
the Pledgor Obligations.
15. Amendments; Waivers; Modifications. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.6 of the Credit Agreement.
16. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders and their permitted successors and assigns; provided, however,
that none of the Pledgors may assign its rights or delegate its duties hereunder
without the prior written consent of each Lender or the Required Lenders, as
required by the Credit Agreement. To the fullest extent permitted by law, each
Pledgor hereby releases the Agent and each Lender, and its successors and
assigns, from any liability for any act or omission relating to this Pledge
Agreement or the Collateral, except for any liability arising from the gross
negligence or willful misconduct of the Agent, or such Lender, or its officers,
employees or agents.
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17. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
18. Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
19. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
20. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Security Agreement may be brought in the
courts of the State of New York, or of the United States for the Southern
District of New York, and, by execution and delivery of this Security
Agreement, each Pledgor hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction
of such courts. Each Pledgor further irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address for notices pursuant to
Section 11.1 of the Credit Agreement, such service to become effective 30
days after such mailing. Nothing herein shall affect the right of the
Agent to serve process in any other manner permitted by law or to commence
legal proceedings or to otherwise proceed against any Pledgor in any other
jurisdiction.
(b) Each Pledgor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Pledge
Agreement brought in the courts referred to in subsection (a) hereof and
hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum.
21. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
13
22. Severability. If any provision of any of the Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
23. Entirety. This Pledge Agreement, the other Credit Documents and the
Hedging Agreements represent the entire agreement of the parties hereto and
thereto, and supersede all prior agreements and understandings, oral or written,
if any, including any commitment letters or correspondence relating to the
Credit Documents, the Hedging Agreements or the transactions contemplated herein
and therein.
24. Survival. All representations and warranties of the Pledgors hereunder
shall survive the execution and delivery of this Pledge Agreement, the other
Credit Documents and the Hedging Agreements, the delivery of the Notes and the
making of the Loans and the issuance of the Letters of Credit under the Credit
Agreement.
25. Other Security. To the extent that any of the Pledgor Obligations are
now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Agent and the Lenders shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence and continuance of any
Event of Default, and the Agent and the Lenders have the right, in their sole
discretion, to determine which rights, security, liens, security interests or
remedies the Agent and the Lenders shall at any time pursue, relinquish,
subordinate, modify or take with respect thereto, without in any way modifying
or affecting any of them or any of the Agent's and the Lenders' rights or the
Pledgor Obligations under this Pledge Agreement, under any other of the Credit
Documents or under any Hedging Agreement.
26. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided
by the Lenders under the Credit Agreement, for the mutual benefit,
directly and indirectly, of each of the Pledgors and in consideration of
the undertakings of each of the Pledgors to accept joint and several
liability for the obligations of each of them.
(b) Each of the Pledgors jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Pledgors with
respect to the payment and performance of all of the Pledgor Obligations
arising under this Pledge Agreement, the other Credit Documents and the
Hedging Agreements, it being the intention of the parties hereto that all
the Pledgor Obligations shall be the joint and several obligations of each
of the Pledgors without preferences or distinction among them.
14
(c) Notwithstanding any provision to the contrary contained herein
or in any other of the Credit Documents, to the extent the obligations of
a Pledgor shall be adjudicated to be invalid or unenforceable for any
reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers) then the
obligations of such Pledgor hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal or state
and including, without limitation, the Bankruptcy Code).
[remainder of page intentionally left blank]
15
Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: XXXXXX AMERICAN CORP.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
GUARANTORS: XXXXXX AMERICAN INVESTMENT CORP.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
XXXXXX AMERICAN GROUP, INC.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
CONSUMER DIRECT CORPORATION,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
(Signatures Continued)
16
ARROW FACTORY STORES, INC.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
GAKM RESOURCES CORPORATION,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
XXXXXX XXXXXXX RESOURCES CORPORATION,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
XXXXXX PEABODY HOLDING CORP.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
(Signatures Continued)
17
XXXXXX, XXXXXXX & CO., INC.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
BIDERTEX SERVICES INC.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
GREAT AMERICAN KNITTING XXXXX, INC.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
XXXXXX DESIGNER GROUP, INC.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
Accepted and agreed to as of the date first above written.
NATIONSBANK, N.A., as Agent
By:______________________________
Name:____________________________
Title:___________________________
18
Schedule 2(a)
to
Pledge Agreement
dated as of May 18, 1998
in favor of NationsBank, N.A.
as Agent
PLEDGED STOCK
Pledgor: XXXXXX AMERICAN CORP.
Number of Percentage
Name of Subsidiary Shares Certificate Number Ownership
------------------ ------ ------------------ ---------
Subsidiaries
Pledgor:
Number of Percentage
Name of Subsidiary Shares Certificate Number Ownership
------------------ ------ ------------------ ---------
Subsidiaries
19
Exhibit 4(a)
to
Pledge Agreement
dated as of May 18, 1998
in favor of NationsBank, N.A.
as Agent
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
to
the following equity interests of _____________________, a ____________:
No. of Shares Certificate No.
------------- ---------------
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
The effectiveness of a transfer pursuant to this stock power shall be subject to
any and all transfer restrictions referenced on the face of the certificates
evidencing such interest or in the certificate of incorporation or bylaws of the
subject corporation, to the extent they may from time to time exist.
________________________________
By:_____________________________
Name:___________________________
Title:__________________________
20
Exhibit 1.1B
FORM OF SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is entered into as of
May 18, 1998 among XXXXXX AMERICAN CORP., a Delaware corporation (the
"Borrower"), XXXXXX AMERICAN INVESTMENT CORP., a Delaware corporation (the
"Parent"), XXXXXX AMERICAN GROUP, INC., a Delaware corporation ("Interco"), and
certain other direct and indirect Subsidiaries of the Parent (together with the
Parent and Interco, individually a "Guarantor", and collectively the
"Guarantors"; together with the Borrower, individually an "Obligor", and
collectively the "Obligors") and NATIONSBANK, N.A., in its capacity as agent (in
such capacity, the "Agent") for the Lenders from time to time party to the
Credit Agreement described below (the "Lenders").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement, dated as of the date
hereof (as amended, modified, extended, renewed or replaced from time to time,
the "Credit Agreement"), among the Borrower, the Guarantors, the Lenders, the
Agent and Gleacher Natwest Inc., in its capacity as documentation agent, the
Lenders have agreed to make Loans and issue or participate in Letters of Credit
upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue and participate in Letters of Credit under the Credit Agreement that
the Obligors shall have executed and delivered this Security Agreement to the
Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
(a) Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to such terms in the Credit Agreement,
and the following terms which are defined in the Uniform Commercial Code
in effect in the State of New York on the date hereof are used herein as
so defined: Accounts, Chattel Paper, Deposit Accounts, Documents,
Equipment, Farm Products, Fixtures, General Intangibles, Instruments,
Inventory, Investment Property and Proceeds. For purposes of this Security
Agreement, the term "Lender" shall include any Affiliate of any Lender
which has entered into a Hedging Agreement with any Credit Party.
(b) In addition, the following terms shall have the following
meanings:
"Copyright Licenses": any written agreement, naming any Obligor as
licensor, granting any right under any Copyright including, without
limitation, any thereof referred to in Schedule 1(b) hereto.
"Copyrights": (a) all registered United States copyrights in all
Works, now existing or hereafter created or acquired, all registrations
and recordings thereof, and all applications in connection therewith,
including, without limitation, registrations, recordings and applications
in the United States Copyright office including, without limitation, any
thereof referred to in Schedule 1(b) hereto, and (b) all renewals thereof
including, without limitation, any thereof referred to in Schedule 1(b)
hereto.
"Patent License": all agreements, whether written or oral, providing
for the grant by or to an Obligor of any right to manufacture, use or sell
any invention covered by a Patent, including, without limitation, any
thereof referred to in Schedule 1(b) hereto.
"Patents": (a) all letters patent of the United States or any other
country and all reissues and extensions thereof, including, without
limitation, any thereof referred to in Schedule 1(b) hereto, and (b) all
applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof,
including, without limitation, any thereof referred to in Schedule 1(b)
hereto.
"Secured Obligations": the collective reference to all of the Credit
Party Obligations, now existing or hereafter arising pursuant to the
Credit Documents, owing from the Borrower or any other Credit Party to any
Lender or the Agent, howsoever evidenced, created, incurred or acquired,
whether primary, secondary, direct, contingent, or joint and several,
including, without limitation, all liabilities arising under Hedging
Agreements and all obligations and liabilities incurred in connection with
collecting and enforcing the foregoing.
"Trademark License": means any agreement, written or oral, providing
for the grant by or to an Obligor of any right to use any Trademark,
including, without limitation, any thereof referred to in Schedule 1(b)
hereto.
"Trademarks": (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and the
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications
in connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, including, without limitation, any thereof referred to in
Schedule 1(b) hereto, and (b) all renewals thereof.
"Work": any work which is subject to copyright protection pursuant
to Title 17 of the United States Code.
2
2. Grant of Security Interest in the Collateral. To secure the prompt
payment and performance in full when due, whether by lapse of time, acceleration
or otherwise, of the Secured Obligations, each Obligor hereby grants to the
Agent, for the benefit of the Lenders, a continuing security interest in, and a
right to set off against, any and all right, title and interest of such Obligor
in and to the following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Copyrights;
(d) all Copyright Licenses (provided the Agent shall not
have a Lien on any Copyright License that prohibits such
Obligor from granting a Lien or security interest in its
rights thereunder unless the consent of the licensor has been
obtained);
(e) all Deposit Accounts;
(f) all Documents;
(g) all Equipment (provided the Agent shall not have a
Lien on any Equipment subject to a Permitted Lien to the
extent such Permitted Lien prohibits such Obligor from
granting a Lien or security interest in its rights
thereunder);
(h) all Fixtures (provided the Agent shall not have a
Lien on any Fixture subject to a Permitted Lien to the extent
such Permitted Lien prohibits such Obligor from granting a
Lien or security interest in its rights thereunder);
(i) all General Intangibles (provided the Agent shall
not have a Lien on any General Intangible that prohibits such
Obligor from granting a Lien or security interest in its
rights thereunder to the extent prohibited by such General
Intangible);
(j) all Instruments;
(k) all Inventory;
(l) all Investment Property;
3
(m) all Patents;
(n) all Patent Licenses (provided the Agent shall not
have a Lien on any Patent License that prohibits such Obligor
from granting a Lien or security interest in its rights
thereunder unless the consent of the licensor has been
obtained);
(o) all Trademarks;
(p) all Trademark Licenses (provided the Agent shall not
have a Lien on any Trademark License that prohibits such
Obligor from granting a Lien or security interest in its
rights thereunder unless the consent of the licensor has been
obtained);
(q) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks, and related
data processing software (owned by such Obligor or in which it
has an interest) that at any time evidence or contain
information relating to any Collateral or are otherwise
necessary or helpful in the collection thereof or realization
thereupon; and
(r) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing.
The Obligors and the Agent, on behalf of the Lenders, hereby acknowledge
and agree that the security interest created hereby in the Collateral (i)
constitutes continuing collateral security for all of the Secured Obligations,
whether now existing or hereafter arising and (ii) is not to be construed as an
assignment of any Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks or Trademark Licenses.
3. Provisions Relating to Accounts.
(a) Anything herein to the contrary notwithstanding, each of the
Obligors shall remain liable under each of the Accounts to observe and
perform all the conditions and obligations to be observed and performed by
it thereunder, all in accordance with the terms of any agreement giving
rise to each such Account. Neither the Agent nor any Lender shall have any
obligation or liability under any Account (or any agreement giving rise
thereto) by reason of or arising out of this Security Agreement or the
receipt by the Agent or any Lender of any payment relating to such Account
pursuant hereto, nor shall the Agent or any Lender be obligated in any
manner to perform any of the obligations of an Obligor under or pursuant
to any Account (or any agreement giving rise thereto), to make any
payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any
party under any Account (or any agreement giving rise thereto), to present
or file any claim, to take any action to enforce any
4
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
(b) At any time after the occurrence and during the continuation of
an Event of Default, (i) the Agent shall have the right, but not the
obligation, to make test verifications of the Accounts in any manner and
through any medium that it reasonably considers advisable, and the
Obligors shall furnish all such assistance and information as the Agent
may reasonably require in connection with such test verifications, (ii)
upon the Agent's reasonable request and at the expense of the Obligors,
the Obligors shall cause independent public accountants or others
satisfactory to the Agent to furnish to the Agent reports showing
reconciliations, aging and test verifications of, and trial balances for,
the Accounts. and (iii) the Agent in its own name or in the name of others
may communicate with account debtors on the Accounts to verify with them
to the Agent's satisfaction the existence, amount and terms of any
Accounts.
4. Representations and Warranties. Each Obligor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that so long as any of
the Secured Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated:
(a) Chief Executive Office; Books & Records. As of the date hereof,
each Obligor's chief executive office and chief place of business is (and
for the prior four months have been) located at the locations set forth on
Schedule 4(a) hereto, and each Obligor keeps its books and records at such
locations.
(b) Location of Collateral. As of the date hereof, the location of
all Collateral owned by each Obligor is as shown on Schedule 4(b) hereto.
(c) Ownership. Each Obligor is the legal and beneficial owner of its
Collateral and has the right to pledge, sell, assign or transfer the same.
Each Obligor's legal name is as shown in this Security Agreement and no
Obligor has in the past four months changed its name, been party to a
merger, consolidation or other change in structure or used any tradename
except as set forth in Schedule 4(c) attached hereto.
(d) Security Interest/Priority. This Security Agreement creates a
valid security interest in favor of the Agent, for the benefit of the
Lenders, in the Collateral of such Obligor and, when properly perfected by
filing, shall constitute a valid perfected security interest in such
Collateral, to the extent such security can be perfected by filing under
the UCC, free and clear of all Liens except for Permitted Liens.
(e) Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
5
(f) Accounts. (i) Each Account of the Obligors and the papers and
documents relating thereto are genuine and in all material respects what
they purport to be and (ii) no Account in excess of $250,000 of an Obligor
is evidenced by any Instrument or Chattel Paper unless such Instrument or
Chattel Paper has been theretofore endorsed over and delivered to the
Agent.
(g) Copyrights, Patents and Trademarks.
(i) Schedule 1(b) hereto includes all Copyrights,
Copyright Licenses, Patents, Patent Licenses, Trademarks and
Trademark Licenses owned by the Obligors in their own names as of
the date hereof.
(ii) To the best of each Obligor's knowledge, each
material Copyright, Patent and Trademark of such Obligor is valid,
subsisting, unexpired, enforceable and has not been abandoned.
(iii) Except as set forth in Schedule 1(b) hereto, none
of such Copyrights, Patents and Trademarks is the subject of any
licensing or franchise agreement.
(iv) No holding, decision or judgment has been rendered
by any Governmental Authority which would limit, cancel or question
the validity of any material Copyright, Patent or Trademark.
(v) To the best of each Obligor's knowledge, no action
or proceeding is pending seeking to limit, cancel or question the
validity of any material Copyright, Patent or Trademark, or which,
if adversely determined, would have a material adverse effect on the
value of any such Copyright, Patent or Trademark.
(vi) All applications pertaining to the material
Copyrights, Patents and Trademarks of each Obligor have been duly
and properly filed, and all registrations or letters pertaining to
such Copyrights, Patents and Trademarks have been duly and properly
filed and issued, and all of such Copyrights, Patents and Trademarks
are valid and enforceable.
(vii) No Obligor has made any assignment or agreement in
conflict with the security interest in the Copyrights, Patents or
Trademarks of each Obligor hereunder.
5. Covenants. Each Obligor covenants that, so long as any of the Secured
Obligations remain outstanding or any Credit Document or Hedging Agreement is in
effect or any Letter of Credit shall remain outstanding, and until all of the
Commitments shall have been terminated, such Obligor shall:
6
(a) Other Liens. Defend the Collateral against the claims and
demands of all other parties claiming an interest therein, keep the
Collateral free from all Liens, except for Permitted Liens, and not sell,
exchange, transfer, assign, lease or otherwise dispose of the Collateral
or any interest therein, except as permitted under the Credit Agreement.
(b) Instruments/Chattel Paper. If any amount payable in excess of
$250,000 under or in connection with any of the Collateral shall be or
become evidenced by any Instrument or Chattel Paper, immediately deliver
such Instrument or Chattel Paper to the Agent, duly endorsed in a manner
satisfactory to the Agent, to be held as Collateral pursuant to this
Security Agreement.
(c) Change in Location. Not, without providing 30 days prior written
notice to the Agent and without filing such amendments to any previously
filed financing statements as the Agent may require, (a) change the
location of its chief executive office and chief place of business (as
well as its books and records) from the locations set forth on Schedule
4(a) hereto, (b) change the location of its Collateral from the locations
set forth for such Obligor on Schedule 4(b) hereto, or (c) change its
name, be party to a merger, consolidation or other change in structure or
use any tradename other than as set forth on Schedule 4(c) attached
hereto.
(d) Perfection of Security Interest. Execute and deliver to the
Agent such agreements, assignments or instruments (including affidavits,
notices, reaffirmations and amendments and restatements of existing
documents, as the Agent may reasonably request) and do all such other
things as the Agent may reasonably deem necessary or appropriate (i) to
assure to the Agent its security interests hereunder, including (A) such
financing statements (including renewal statements) or amendments thereof
or supplements thereto or other instruments as the Agent may from time to
time reasonably request in order to perfect and maintain the security
interests granted hereunder in accordance with the UCC, (B) with regard to
Copyrights, a Notice of Grant of Security Interest in Copyrights in the
form of Schedule 5(d)(i), (C) with regard to Patents, a Notice of Grant of
Security Interest in Patents for filing with the United States Patent and
Trademark Office in the form of Schedule 5(d)(ii) attached hereto and (D)
with regard to Trademarks, a Notice of Grant of Security Interest in
Trademarks for filing with the United States Patent and Trademark Office
in the form of Schedule 5(d)(iii) attached hereto, (ii) to consummate the
transactions contemplated hereby and (iii) to otherwise protect and assure
the Agent of its rights and interests hereunder. To that end, each Obligor
agrees that the Agent may file one or more financing statements disclosing
the Agent's security interest in any or all of the Collateral of such
Obligor without, to the extent permitted by law, such Obligor's signature
thereon, and further each Obligor also hereby irrevocably makes,
constitutes and appoints the Agent as such Obligor's attorney in fact with
full power and for the limited purpose to sign in the name of such Obligor
any such financing statements, or amendments and supplements to financing
statements, renewal financing statements, notices or any similar documents
which in the Agent's reasonable discretion would be necessary or
appropriate in order to perfect
7
and maintain perfection of the security interests granted hereunder, such
power, being coupled with an interest, being and remaining irrevocable so
long as the Credit Agreement is in effect or any amounts payable
thereunder or under any other Credit Document, any Letter of Credit or any
Hedging Agreement shall remain outstanding, and until all of the
Commitments thereunder shall have terminated. Each Obligor hereby agrees
that a carbon, photographic or other reproduction of this Security
Agreement or any such financing statement is sufficient for filing as a
financing statement by the Agent without notice thereof to such Obligor
wherever the Agent may in its sole discretion desire to file the same. In
the event for any reason the law of any jurisdiction other than New York
becomes or is applicable to the Collateral of any Obligor or any part
thereof, or to any of the Secured Obligations, such Obligor agrees to
execute and deliver all such instruments and to do all such other things
as the Agent in its sole discretion reasonably deems necessary or
appropriate to preserve, protect and enforce the security interests of the
Agent under the law of such other jurisdiction (and, if an Obligor shall
fail to do so promptly upon the request of the Agent, then the Agent may
execute any and all such requested documents on behalf of such Obligor
pursuant to the power of attorney granted hereinabove). If any Collateral
is in the possession or control of an Obligor's agents and the Agent so
requests, such Obligor agrees to notify such agents in writing of the
Agent's security interest therein and, upon the Agent's request, instruct
them to hold all such Collateral for the Lenders' account and subject to
the Agent's instructions. Each Obligor agrees to xxxx its books and
records to reflect the security interest of the Agent in the Collateral.
(e) Covenants Relating to Copyrights.
(i) Employ the Copyright for each Work with such notice
of copyright as may be required by law to secure copyright
protection.
(ii) Not do any act or knowingly omit to do any act
whereby any material Copyright would or would reasonably be expected
to become invalidated and (A) not do any act, or knowingly omit to
do any act, whereby any material Copyright would or would reasonably
be expected to become injected into the public domain; (B) notify
the Agent promptly after if it has knowledge that any material
Copyright may become injected into the public domain or of any
adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any
court or tribunal in the United States or any other country)
regarding an Obligor's ownership of any such Copyright or its
validity; (C) take all necessary steps as it shall reasonably deem
appropriate under the circumstances, to maintain and pursue each
application (and to obtain the relevant registration) and to
maintain each registration of each material Copyright owned by an
Obligor including, without limitation, filing of applications for
renewal where necessary; and (D) promptly notify the Agent of any
material infringement of any material Copyright of an Obligor of
which it becomes aware and take such actions as it shall reasonably
deem appropriate under the circumstances to protect such Copyright,
including, where appropriate, the bringing of suit for infringement,
8
seeking injunctive relief and seeking to recover any and all damages
for such infringement.
(iii) Not make any assignment or agreement in conflict
with the security interest in the Copyrights of each Obligor
hereunder.
(f) Covenants Relating to Patents and Trademarks.
(i) (A) Continue to use each Trademark on each and every
trademark class of goods applicable to its current line as reflected
in its current catalogs, brochures and price lists in order to
maintain such Trademark in full force free from any claim of
abandonment for non-use, (B) maintain as in the past the quality of
products and services offered under such Trademark, (C) employ such
Trademark with the appropriate notice of registration, (D) not adopt
or use any xxxx which is confusingly similar or a colorable
imitation of such Trademark unless the Agent, for the ratable
benefit of the Lenders, shall obtain a perfected security interest
in such xxxx pursuant to this Security Agreement, and (E) not (and
not knowingly permit any licensee or sublicensee thereof to) do any
act or knowingly omit to do any act whereby any Trademark would or
would reasonably be expected to become invalidated.
(ii) Not do any act, or knowingly omit to do any act,
whereby any Patent would or would reasonably be expected to become
abandoned or dedicated.
(iii) Notify the Agent and the Lenders promptly after it
has knowledge that any application or registration relating to any
material Patent or Trademark may become abandoned or dedicated, or
of any adverse determination or development (including, without
limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office or any court or tribunal in any country) regarding
an Obligor's ownership of any material Patent or Trademark or its
right to register the same or to keep and maintain the same.
(iv) Whenever an Obligor, either by itself or through an
agent, employee, licensee or designee, shall file an application for
the registration of any Patent or Trademark with the United States
Patent and Trademark Office or any similar office or agency in any
other country or any political subdivision thereof, an Obligor shall
report such filing to the Agent and the Lenders within five Business
Days after the last day of the fiscal quarter in which such filing
occurs. Upon request of the Agent, an Obligor shall execute and
deliver any and all agreements, instruments, documents and papers as
the Agent may request to evidence the Agent's and the Lenders'
security interest in any Patent or Trademark and the
9
goodwill and general intangibles of an Obligor relating thereto or
represented thereby.
(v) Take all reasonable and necessary steps, including,
without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency in any
other country or any political subdivision thereof, to maintain and
pursue each material application (and to obtain the relevant
registration) and to maintain each registration of the material
Patents and Trademarks, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability.
(vi) Promptly notify the Agent and the Lenders after it
learns that any Patent or Trademark included in the Collateral is
infringed, misappropriated or diluted by a third party and promptly
xxx for infringement, misappropriation or dilution, to seek
injunctive relief where appropriate and to recover any and all
damages for such infringement, misappropriation or dilution, or take
such other actions as it shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark.
(vii) Not make any assignment or agreement in conflict
with the security interest in the Patents or Trademarks of each
Obligor hereunder.
(g) New Patents, Copyrights and Trademarks. Promptly provide the
Agent with (i) a listing of all applications, if any, for new Copyrights,
Patents or Trademarks (together with a listing of the issuance of
registrations or letters on present applications), which new applications
and issued registrations or letters shall be subject to the terms and
conditions hereunder, and (ii) (A) with respect to Copyrights, a duly
executed Notice of Security Interest in Copyrights, (B) with respect to
Patents, a duly executed Notice of Security Interest in Patents, (C) with
respect to Trademarks, a duly executed Notice of Security Interest in
Trademarks or (D) such other duly executed documents as the Agent may
request in a form acceptable to counsel for the Agent and suitable for
recording to evidence the security interest in the Copyright, Patent or
Trademark which is the subject of such new application.
(h) Insurance. Insure, repair and replace the Collateral of such
Obligor as set forth in the Credit Agreement. All insurance proceeds shall
be subject to the security interest of the Agent hereunder.
6. Advances by Lenders. On failure of any Obligor to perform any of the
covenants and agreements contained herein, the Agent may, at its sole option and
in its sole discretion, perform the same and in so doing may expend such sums as
the Agent may reasonably deem advisable in the performance thereof, including,
without limitation, the payment of any insurance premiums, the payment of any
taxes, a payment to obtain a release of a Lien or potential Lien, expenditures
made in defending against any adverse claim and all other expenditures which the
10
Agent or the Lenders may make for the protection of the security hereof or which
may be compelled to make by operation of law. All such sums and amounts so
expended shall be repayable by the Obligors on a joint and several basis
promptly upon timely notice thereof and demand therefor, shall constitute
additional Secured Obligations and shall bear interest from the date said
amounts are expended at the default rate specified in Section 3.1 of the Credit
Agreement for Revolving Loans that are Base Rate Loans. No such performance of
any covenant or agreement by the Agent or the Lenders on behalf of any Obligor,
and no such advance or expenditure therefor, shall relieve the Obligors of any
default under the terms of this Security Agreement, the other Credit Documents
or any Hedging Agreement. The Lenders may make any payment hereby authorized in
accordance with any xxxx, statement or estimate procured from the appropriate
public office or holder of the claim to be discharged without inquiry into the
accuracy of such xxxx, statement or estimate or into the validity of any tax
assessment, sale, forfeiture, tax lien, title or claim except to the extent such
payment is being contested in good faith by an Obligor in appropriate
proceedings and against which adequate reserves are being maintained in
accordance with GAAP.
7. Events of Default.
The occurrence and continuance of an event which under the Credit
Agreement would constitute an Event of Default shall be an Event of Default
hereunder (an "Event of Default").
8. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and
during continuation thereof, the Lenders shall have, in addition to the
rights and remedies provided herein, in the Credit Documents, in the
Hedging Agreements or by law (including, but not limited to, the rights
and remedies set forth in the Uniform Commercial Code of the jurisdiction
applicable to the affected Collateral), the rights and remedies of a
secured party under the UCC (regardless of whether the UCC is the law of
the jurisdiction where the rights and remedies are asserted and regardless
of whether the UCC applies to the affected Collateral), and further, the
Agent may, with or without judicial process or the aid and assistance of
others, (i) enter on any premises on which any of the Collateral may be
located and, without resistance or interference by the Obligors, take
possession of the Collateral, (ii) dispose of any Collateral on any such
premises, (iii) require the Obligors to assemble and make available to the
Agent at the expense of the Obligors any Collateral at any place and time
designated by the Agent which is reasonably convenient to both parties,
(iv) remove any Collateral from any such premises for the purpose of
effecting sale or other disposition thereof, and/or (v) without demand and
without advertisement, notice, hearing or process of law, all of which
each of the Obligors hereby waives to the fullest extent permitted by law,
at any place and time or times, sell and deliver any or all Collateral
held by or for it at public or private sale, by one or more contracts, in
one or more parcels, for cash, upon credit or otherwise, at such prices
and upon such terms as the Agent deems advisable, in its sole discretion
(subject to any and all mandatory legal requirements). In addition to all
other sums due the Agent and the Lenders with respect to the Secured
Obligations, the Obligors
11
shall pay the Agent and each of the Lenders all reasonable documented
costs and expenses incurred by the Agent or any such Lender, including,
but not limited to, reasonable attorneys' fees and court costs, in
obtaining or liquidating the Collateral, in enforcing payment of the
Secured Obligations, or in the prosecution or defense of any action or
proceeding by or against the Agent or the Lenders or the Obligors
concerning any matter arising out of or connected with this Security
Agreement, any Collateral or the Secured Obligations, including, without
limitation, any of the foregoing arising in, arising under or related to a
case under the Bankruptcy Code. To the extent the rights of notice cannot
be legally waived hereunder, each Obligor agrees that any requirement of
reasonable notice shall be met if such notice is personally served on or
mailed, postage prepaid, to the Credit Parties in accordance with the
notice provisions of Section 11.1 of the Credit Agreement at least 10 days
before the time of sale or other event giving rise to the requirement of
such notice. The Agent and the Lenders shall not be obligated to make any
sale or other disposition of the Collateral regardless of notice having
been given. To the extent permitted by law, any Lender may be a purchaser
at any such sale. To the extent permitted by applicable law, each of the
Obligors hereby waives all of its rights of redemption with respect to any
such sale. Subject to the provisions of applicable law, the Agent and the
Lenders may postpone or cause the postponement of the sale of all or any
portion of the Collateral by announcement at the time and place of such
sale, and such sale may, without further notice, to the extent permitted
by law, be made at the time and place to which the sale was postponed, or
the Agent and the Lenders may further postpone such sale by announcement
made at such time and place.
(b) Remedies Relating to Accounts. Upon the occurrence of an Event
of Default and during the continuation thereof, whether or not the Agent
has exercised any or all of its rights and remedies hereunder, each
Obligor will promptly upon request of the Agent instruct all account
debtors to remit all payments in respect of Accounts to a mailing location
selected by the Agent. In addition, the Agent or its designee may notify
any Obligor's customers and account debtors that the Accounts of such
Obligor have been assigned to the Agent or of the Agent's security
interest therein, and may (either in its own name or in the name of an
Obligor or both) demand, collect (including without limitation by way of a
lockbox arrangement), receive, take receipt for, sell, xxx for, compound,
settle, compromise and give acquittance for any and all amounts due or to
become due on any Account, and, in the Agent's discretion, file any claim
or take any other action or proceeding to protect and realize upon the
security interest of the Lenders in the Accounts. Each Obligor
acknowledges and agrees that the Proceeds of its Accounts remitted to or
on behalf of the Agent in accordance with the provisions hereof shall be
solely for the Agent's own convenience and that such Obligor shall not
have any right, title or interest in such Accounts or in any such other
amounts except as expressly provided herein. The Agent and the Lenders
shall have no liability or responsibility to any Obligor for acceptance of
a check, draft or other order for payment of money bearing the legend
"payment in full" or words of similar import or any other restrictive
legend or endorsement or be responsible for determining the correctness of
any remittance. Each Obligor hereby agrees to indemnify the Agent and the
Lenders from and against all liabilities, damages, losses, actions,
claims,
12
judgments, costs, expenses, charges and reasonable attorneys' fees
suffered or incurred by the Agent or the Lenders (each, an "Indemnified
Party") because of the maintenance of the foregoing arrangements except as
relating to or arising out of the gross negligence or willful misconduct
of an Indemnified Party or its officers, employees or agents. In the case
of any investigation, litigation or other proceeding, the foregoing
indemnity shall be effective whether or not such investigation, litigation
or proceeding is brought by an Obligor, its directors, shareholders or
creditors or an Indemnified Party or any other Person or any other
Indemnified Party is otherwise a party thereto.
(c) Access. In addition to the rights and remedies hereunder, upon
the occurrence of an Event of Default and during the continuance thereof,
the Agent shall have the right to enter and remain upon the various
premises of the Obligors without cost or charge to the Agent, and use the
same, together with materials, supplies, books and records of the Obligors
for the purpose of collecting and liquidating the Collateral, or for
preparing for sale and conducting the sale of the Collateral, whether by
foreclosure, auction or otherwise. In addition, the Agent may remove
Collateral, or any part thereof, from such premises and/or any records
with respect thereto, in order to effectively collect or liquidate such
Collateral.
(d) Nonexclusive Nature of Remedies. Failure by the Agent or the
Lenders to exercise any right, remedy or option under this Security
Agreement, any other Credit Document, any Hedging Agreement or as provided
by law, or any delay by the Agent or the Lenders in exercising the same,
shall not operate as a waiver of any such right, remedy or option. No
waiver hereunder shall be effective unless it is in writing, signed by the
party against whom such waiver is sought to be enforced and then only to
the extent specifically stated, which in the case of the Agent or the
Lenders shall only be granted as provided herein. To the extent permitted
by law, neither the Agent, the Lenders, nor any party acting as attorney
for the Agent or the Lenders, shall be liable hereunder for any acts or
omissions or for any error of judgment or mistake of fact or law other
than their gross negligence or willful misconduct hereunder. The rights
and remedies of the Agents and the Lenders under this Security Agreement
shall be cumulative and not exclusive of any other right or remedy which
the Agent or the Lenders may have.
(e) Retention of Collateral. The Agent may, after providing the
notices required by Section 9-505(2) of the UCC or otherwise complying
with the requirements of applicable law of the relevant jurisdiction, to
the extent the Agent is in possession of any of the Collateral, retain the
Collateral in satisfaction of the Secured Obligations. Unless and until
the Agent shall have provided such notices, however, the Agent shall not
be deemed to have retained any Collateral in satisfaction of any Secured
Obligations for any reason.
(f) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which the
Agent or the Lenders are legally entitled, the Obligors shall be jointly
and severally liable for the deficiency, together with interest thereon at
the default rate specified in Section 3.1 of the Credit Agreement for
13
Revolving Loans that are Base Rate Loans, together with the costs of
collection and the reasonable fees of any attorneys employed by the Agent
to collect such deficiency. Any surplus remaining after the full payment
and satisfaction of the Secured Obligations shall be returned to the
Obligors or to whomsoever a court of competent jurisdiction shall
determine to be entitled thereto.
9. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Obligor hereby designates and appoints the Agent,
on behalf of the Lenders, and each of its designees or agents, as
attorney-in-fact of such Obligor, irrevocably and with power of
substitution, with authority to take any or all of the following actions
upon the occurrence and during the continuance of an Event of Default:
(i) to demand, collect, settle, compromise, adjust, give
discharges and releases, all as the Agent may reasonably determine;
(ii) to commence and prosecute any actions at any court for
the purposes of collecting any Collateral and enforcing any other
right in respect thereof;
(iii) to defend, settle or compromise any action brought and,
in connection therewith, give such discharge or release as the Agent
may deem reasonably appropriate;
(iv) receive, open and dispose of mail addressed to an Obligor
and endorse checks, notes, drafts, acceptances, money orders, bills
of lading, warehouse receipts or other instruments or documents
evidencing payment, shipment or storage of the goods giving rise to
the Collateral of such Obligor on behalf of and in the name of such
Obligor, or securing, or relating to such Collateral;
(v) sell, assign, transfer, make any agreement in respect of,
or otherwise deal with or exercise rights in respect of, any
Collateral or the goods or services which have given rise thereto,
as fully and completely as though the Agent were the absolute owner
thereof for all purposes;
(vi) adjust and settle claims under any insurance policy
relating thereto;
(vii) execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements,
security agreements, affidavits, notices and other agreements,
instruments and documents that the Agent may determine necessary in
order to perfect and
14
maintain the security interests and liens granted in this Security
Agreement and in order to fully consummate all of the transactions
contemplated therein;
(viii) institute any foreclosure proceedings that the Agent
may deem appropriate; and
(ix) do and perform all such other acts and things as the
Agent may reasonably deem to be necessary, proper or convenient in
connection with the Collateral.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Secured Obligations remain
outstanding, any Credit Document or any Hedging Agreement is in effect or
any Letter of Credit shall remain outstanding and (ii) until all of the
Commitments shall have been terminated. The Agent shall be under no duty
to exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the Agent in
this Security Agreement, and shall not be liable for any failure to do so
or any delay in doing so. The Agent shall not be liable for any act or
omission or for any error of judgment or any mistake of fact or law in its
individual capacity or its capacity as attorney-in-fact except acts or
omissions resulting from its gross negligence or willful misconduct. This
power of attorney is conferred on the Agent solely to protect, preserve
and realize upon its security interest in the Collateral.
(b) Performance by the Agent of Obligations. If any Obligor fails to
perform any agreement or obligation contained herein, the Agent itself may
perform, or cause performance of, such agreement or obligation, and the
expenses of the Agent incurred in connection therewith shall be payable by
the Obligors on a joint and several basis pursuant to Section 11 hereof.
(c) Assignment by the Agent. In connection with the succession of
the Agent pursuant to Section 10.7 of the Credit Agreement, the Agent may
from time to time assign the Secured Obligations and any portion thereof
and/or the Collateral and any portion thereof, and the assignee shall be
entitled to all of the rights and remedies of the Agent under this
Security Agreement in relation thereto.
(d) The Agent's Duty of Care. Other than the exercise of reasonable
care to assure the safe custody of the Collateral while being held by the
Agent hereunder, the Agent shall have no duty or liability to preserve
rights pertaining thereto, it being understood and agreed that the
Obligors shall be responsible for preservation of all rights in the
Collateral, and the Agent shall be relieved of all responsibility for the
Collateral upon surrendering it or tendering the surrender of it to the
Obligors. The Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the
Agent accords its own property, which shall be no less than the treatment
employed by a reasonable and prudent
15
agent in the industry, it being understood that the Agent shall not have
responsibility for taking any necessary steps to preserve rights against
any parties with respect to any of the Collateral.
10. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by the Agent or
any of the Lenders in cash or its equivalent, will be applied in reduction of
the Secured Obligations in the order set forth in Section 3.15(b) of the Credit
Agreement, and each Obligor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Agent shall have the continuing and exclusive right to apply and reapply any and
all such payments and proceeds in the Agent's sole discretion, notwithstanding
any entry to the contrary upon any of its books and records.
11. Costs of Counsel. If at any time hereafter, whether upon the
occurrence of an Event of Default or not, the Agent employs counsel to prepare
or consider amendments, waivers or consents with respect to this Security
Agreement, or to take action or make a response in or with respect to any legal
or arbitral proceeding relating to this Security Agreement or relating to the
Collateral, or to protect the Collateral or exercise any rights or remedies
under this Security Agreement or with respect to the Collateral, then the
Obligors agree to promptly pay upon demand any and all such reasonable
documented costs and expenses of the Agent or the Lenders, all of which costs
and expenses shall constitute Secured Obligations hereunder.
12. Continuing Agreement.
(a) This Security Agreement shall be a continuing agreement in every
respect and shall remain in full force and effect so long as any of the
Secured Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding,
and until all of the Commitments thereunder shall have terminated (other
than any obligations with respect to the indemnities and the
representations and warranties set forth in the Credit Documents). Upon
such payment and termination, this Security Agreement shall be
automatically terminated and the Agent and the Lenders shall, upon the
request and at the expense of the Obligors, forthwith release all of its
liens and security interests hereunder and shall execute and deliver all
UCC termination statements and/or other documents reasonably requested by
the Obligors evidencing such termination. Notwithstanding the foregoing
all releases and indemnities provided hereunder shall survive termination
of this Security Agreement.
(b) This Security Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in
whole or in part, of any of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Agent or any Lender as a
preference, fraudulent conveyance or otherwise under any bankruptcy,
insolvency or similar law, all as though such payment had not been made;
provided that in the event payment of all or any part of the Secured
Obligations is rescinded or must be restored or returned, all reasonable
costs and expenses (including without limitation any
16
reasonable legal fees and disbursements) incurred by the Agent or any
Lender in defending and enforcing such reinstatement shall be deemed to be
included as a part of the Secured Obligations.
13. Amendments; Waivers; Modifications. This Security Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.6 of the Credit Agreement.
14. Successors in Interest. This Security Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Obligor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders and their permitted successors and assigns; provided, however,
that none of the Obligors may assign its rights or delegate its duties hereunder
without the prior written consent of each Lender or the Required Lenders, as
required by the Credit Agreement. To the fullest extent permitted by law, each
Obligor hereby releases the Agent and each Lender, and its successors and
assigns, from any liability for any act or omission relating to this Security
Agreement or the Collateral, except for any liability arising from the gross
negligence or willful misconduct of the Agent, or such Lender, or its officers,
employees or agents.
15. Notices. All notices required or permitted to be given under this
Security Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
16. Counterparts. This Security Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart.
17. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Security Agreement.
18. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Security Agreement may be brought in the
courts of the State of New York, or of the United States for the Southern
District of New York, and, by execution and delivery of this Security
Agreement, each Obligor hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction
of such courts. Each Obligor further irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it
17
at the address for notices pursuant to Section 11.1 of the Credit
Agreement, such service to become effective 30 days after such mailing.
Nothing herein shall affect the right of the Agent to serve process in any
other manner permitted by law or to commence legal proceedings or to
otherwise proceed against any Obligor in any other jurisdiction.
(b) Each Obligor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Security
Agreement brought in the courts referred to in subsection (a) hereof and
hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum.
19. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF THE PARTIES TO THIS SECURITY AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
20. Severability. If any provision of any of the Security Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
21. Entirety. This Security Agreement, the other Credit Documents and the
Hedging Agreements represent the entire agreement of the parties hereto and
thereto, and supersede all prior agreements and understandings, oral or written,
if any, including any commitment letters or correspondence relating to the
Credit Documents, the Hedging Agreements or the transactions contemplated herein
and therein.
22. Survival. All representations and warranties of the Obligors hereunder
shall survive the execution and delivery of this Security Agreement, the other
Credit Documents and the Hedging Agreements, the delivery of the Notes and the
making of the Loans and the issuance of the Letters of Credit under the Credit
Agreement.
23. Other Security. To the extent that any of the Secured Obligations are
now or hereafter secured by property other than the Collateral (including,
without limitation, real property and securities owned by an Obligor), or by a
guarantee, endorsement or property of any other Person, then the Agent and the
Lenders shall have the right to proceed against such other property, guarantee
or endorsement upon the occurrence of any Event of Default, and the Agent and
the Lenders have the right, in their sole discretion, to determine which rights,
security, liens, security interests or remedies the Agent and the Lenders shall
at any time pursue, relinquish, subordinate, modify or take with respect
thereto, without in any way modifying or affecting any of them or any
18
of the Agent's and the Lenders' rights or the Secured Obligations under this
Security Agreement, under any other of the Credit Documents or under any Hedging
Agreement.
24. Joint and Several Obligations of Obligors.
(a) Each of the Obligors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided
by the Lenders under the Credit Agreement, for the mutual benefit,
directly and indirectly, of each of the Obligors and in consideration of
the undertakings of each of the Obligors to accept joint and several
liability for the obligations of each of them.
(b) Each of the Obligors jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Obligors with
respect to the payment and performance of all of the Secured Obligations
arising under this Security Agreement, the other Credit Documents and the
Hedging Agreements, it being the intention of the parties hereto that all
the Obligations shall be the joint and several obligations of each of the
Obligors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained herein
or in any other of the Credit Documents, to the extent the obligations of
an Obligor shall be adjudicated to be invalid or unenforceable for any
reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers) then the
obligations of such Obligor hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal or state
and including, without limitation, the Bankruptcy Code).
25. Rights of Required Lenders. All rights of the Agent hereunder, if not
exercised by the Agent, may be exercised by the Required Lenders.
[remainder of page intentionally left blank]
19
Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: XXXXXX AMERICAN CORP.,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
GUARANTORS: XXXXXX AMERICAN INVESTMENT CORP.,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
XXXXXX AMERICAN GROUP, INC.,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
CONSUMER DIRECT CORPORATION,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
(Signatures Continued)
20
ARROW FACTORY STORES, INC.,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
GAKM RESOURCES CORPORATION,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
XXXXXX PEABODY RESOURCES CORPORATION,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
XXXXXX XXXXXXX HOLDING CORP.,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
(Signatures Continued)
21
XXXXXX, PEABODY & CO., INC.,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
BIDERTEX SERVICES INC.,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
GREAT AMERICAN KNITTING XXXXX, INC.,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
XXXXXX DESIGNER GROUP, INC.,
a Delaware corporation
By:___________________________
Name:_________________________
Title:________________________
Accepted and agreed to as of the date first above written.
NATIONSBANK, N.A., as Agent
By:___________________________
Name:_________________________
Title:________________________
22
SCHEDULE 1(b)
INTELLECTUAL PROPERTY
1
SCHEDULE 4(a)
CHIEF EXECUTIVE OFFICE
2
SCHEDULE 4(b)
LOCATIONS OF COLLATERAL
3
SCHEDULE 4(c)
MERGERS, CONSOLIDATIONS, CHANGE IN STRUCTURE OR USE OF TRADENAMES
4
SCHEDULE 5(d)(i)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
COPYRIGHTS
United States Copyright Office
Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of May
18, 1998 (as the same may be amended, modified, extended or restated from time
to time, the "Security Agreement") by and among the Obligors party thereto (each
an "Obligor" and collectively, the "Obligors") and NationsBank, N.A., as Agent
(the "Agent") for the Lenders referenced therein (the "Lenders"), the
undersigned Obligor has granted a continuing security interest in and continuing
lien upon, the copyrights and copyright applications shown below to the Agent
for the ratable benefit of the Lenders:
COPYRIGHTS
Date of
Copyright No. Description of Copyright Copyright
------------- ------------------------ ---------
Copyright Applications
Copyright Description of Copyright Date of Copyright
Applications No. Applied For Applications
---------------- ----------- ------------
5
The Obligors and the Agent, on behalf of the Lenders, hereby acknowledge
and agree that the security interest in the foregoing copyrights and copyright
applications (i) may only be terminated in accordance with the terms of the
Security Agreement and (ii) is not to be construed as an assignment of any
copyright or copyright application.
Very truly yours,
________________________________
[Obligor]
By:_____________________________
Name:___________________________
Title:__________________________
Acknowledged and Accepted:
NATIONSBANK, N.A., as Agent
By:_________________________
Name:_______________________
Title:______________________
6
SCHEDULE 5(d)(ii)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
PATENTS
United States Patent and Trademark Office
Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of May
18, 1998 (the "Security Agreement") by and among the Obligors party thereto
(each an "Obligor" and collectively, the "Obligors") and NationsBank, N.A., as
Agent (the "Agent") for the Lenders referenced therein (the "Lenders"), the
undersigned Obligor has granted a continuing security interest in and continuing
lien upon, the patents and patent applications shown below to the Agent for the
ratable benefit of the Lenders:
PATENTS
Date of
Patent No. Description of Patent Patent
---------- --------------------- ------
Patent Applications
Patent Description of Patent Date of Patent
Applications No. Applied For Applications
---------------- ----------- ------------
7
The Obligors and the Agent, on behalf of the Lenders, hereby acknowledge
and agree that the security interest in the foregoing patents and patent
applications (i) may only be terminated in accordance with the terms of the
Security Agreement and (ii) is not to be construed as an assignment of any
patent or patent application.
Very truly yours,
_____________________________
[Obligor]
By:__________________________
Name:________________________
Title:_______________________
Acknowledged and Accepted:
NATIONSBANK, N.A., as Agent
By:________________________
Name:______________________
Title:_____________________
8
SCHEDULE 5(d)(iii)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
TRADEMARKS
United States Patent and Trademark Office
Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of May
18, 1998 (the "Security Agreement") by and among the Obligors party thereto
(each an "Obligor" and collectively, the "Obligors") and NationsBank, N.A., as
Agent (the "Agent") for the Lenders referenced therein (the "Lenders"), the
undersigned Obligor has granted a continuing security interest in and continuing
lien upon, the trademarks and trademark applications shown below to the Agent
for the ratable benefit of the Lenders:
TRADEMARKS
Date of
Trademark No. Description of Trademark Trademark
------------- ------------------------ ---------
Trademark Applications
Trademark Description of Trademark Date of Trademark
Applications No. Applied For Applications
---------------- ----------- ------------
9
The Obligors and the Agent, on behalf of the Lenders, hereby acknowledge
and agree that the security interest in the foregoing trademarks and trademark
applications (i) may only be terminated in accordance with the terms of the
Security Agreement and (ii) is not to be construed as an assignment of any
trademark or trademark application.
Very truly yours,
_____________________________
[Obligor]
By:__________________________
Name:________________________
Title:_______________________
Acknowledged and Accepted:
NATIONSBANK, N.A., as Agent
By:________________________
Name:______________________
Title:_____________________
10
Exhibit 2.1(b)(i)
FORM OF NOTICE OF BORROWING
NationsBank, N. A.,
as Agent for the Lenders
000 Xxxxx Xxxxx Xxxxxx
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, Xxxxxx American Corp. (the "Borrower"), refers to the
Credit Agreement dated as of May 18, 1998 (as amended, modified, restated or
supplemented from time to time, the "Credit Agreement"), among the Borrower, the
Guarantors, the Lenders, NationsBank, N. A., as Agent and Gleacher Natwest Inc.,
as Documentation Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
[The Borrower hereby gives notice pursuant to Section 2.1 of the Credit
Agreement that it requests a Revolving Loan advance under the Credit Agreement,
and in connection therewith sets forth below the terms on which such Loan
advance is requested to be made:]* [The Borrower hereby gives notice pursuant to
Section 2.4 of the Credit Agreement that it requests the Tranche A Term Loan
under the Credit Agreement on the Closing Date, and in connection therewith sets
forth below the terms on which such Loan advance is requested to be made:]**
[The Borrower hereby gives notice pursuant to Section 2.5 of the Credit
Agreement that it requests the Tranche B Term Loan under the Credit Agreement on
the Closing Date, and in connection therewith sets forth below the terms on
which such Loan advance is requested to be made:]***
[(A) Date of Borrowing (which is a Business Day) _______________________]*
[(B) Principal Amount of Borrowing _______________________]*
(C) Interest rate basis _______________________
(D) Interest Period and the last day thereof _______________________
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d) and (e) of such Section, are true and
correct.
11
XXXXXX AMERICAN CORP.
By:_________________________
Name:_______________________
Title:______________________
*For all Revolving Loans
**For the initial advance of the Tranche A Term Loan on the Closing Date
***For the initial advance of the Tranche B Term Loan on the Closing Date
12
Exhibit 2.1(e)
FORM OF REVOLVING NOTE
$_________________ May 18, 1998
FOR VALUE RECEIVED, XXXXXX AMERICAN CORP., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of __________________________,
its successors and assigns (the "Lender"), at the office of NationsBank, N. A.,
as Agent (the "Agent"), at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx Center,
NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (or at such other place or places
as the holder hereof may designate), at the times set forth in the Credit
Agreement dated as of the date hereof among the Borrower, the Guarantors, the
Lenders, the Agent and Gleacher Natwest Inc. (as it may be as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Credit Agreement), but in no event later than the Maturity Date, in
Dollars and in immediately available funds, the principal amount of
________________________ DOLLARS ($____________) or, if less than such principal
amount, the aggregate unpaid principal amount of all Revolving Loans made by the
Lender to the Borrower pursuant to the Credit Agreement, and to pay interest
from the date hereof on the unpaid principal amount hereof, in like money, at
said office, on the dates and at the rates selected in accordance with Section
2.1(d) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note
shall become immediately due and payable, without presentment, demand, protest
or notice of any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
13
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
XXXXXX AMERICAN CORP.
By:_________________________
Name:_______________________
Title:______________________
14
Exhibit 2.3(d)
FORM OF SWINGLINE NOTE
$5,000,000 May 18, 1998
FOR VALUE RECEIVED, XXXXXX AMERICAN CORP., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of NATIONSBANK, N.A., its
successors and assigns (the "Swingline Lender"), at the office of NationsBank,
N.A., as Agent (the "Agent"), at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx Center,
NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (or at such other place or places
as the holder hereof may designate), at the times set forth in the Credit
Agreement dated as of the date hereof among the Borrower, the Guarantors, the
Lenders, the Agent and Gleacher Natwest Inc. (as it may be as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Credit Agreement), but in no event later than the Maturity Date, in
Dollars and in immediately available funds, the principal amount of FIVE MILLION
DOLLARS ($5,000,000) or, if less than such principal amount, the aggregate
unpaid principal amount of all Swingline Loans made by the Swingline Lender to
the Borrower pursuant to the Credit Agreement, and to pay interest from the date
hereof on the unpaid principal amount hereof, in like money, at said office, on
the dates and at the rates selected in accordance with Section 2.3(c) of the
Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note
shall become immediately due and payable, without presentment, demand, protest
or notice of any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
XXXXXX AMERICAN CORP.
By:_________________________
Name:_______________________
Title:______________________
Exhibit 2.4(f)
FORM OF TRANCHE A TERM NOTE
$_________________ May 18, 1998
FOR VALUE RECEIVED, XXXXXX AMERICAN CORP., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N. A., as Agent (the "Agent"), at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx Center, NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (or at such
other place or places as the holder hereof may designate), at the times set
forth in the Credit Agreement dated as of the date hereof among the Borrower,
the Guarantors, the Lenders, the Agent and Gleacher Natwest Inc. (as it may be
as amended, modified, restated or supplemented from time to time, the "Credit
Agreement"; all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement), but in no event later than the
Maturity Date, in Dollars and in immediately available funds, the principal
amount of ________________________ DOLLARS ($____________), and to pay interest
from the date hereof on the unpaid principal amount hereof, in like money, at
said office, on the dates and at the rates selected in accordance with Section
2.4(e) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note
shall become immediately due and payable, without presentment, demand, protest
or notice of any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
XXXXXX AMERICAN CORP.
By:_________________________
Name:_______________________
Title:______________________
Exhibit 2.5(f)
FORM OF TRANCHE B TERM NOTE
$_________________ May 18, 1998
FOR VALUE RECEIVED, XXXXXX AMERICAN CORP., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N. A., as Agent (the "Agent"), at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx Center, NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (or at such
other place or places as the holder hereof may designate), at the times set
forth in the Credit Agreement dated as of the date hereof among the Borrower,
the Guarantors, the Lenders, the Agent and Gleacher Natwest Inc. (as it may be
as amended, modified, restated or supplemented from time to time, the "Credit
Agreement"; all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement), but in no event later than the
Maturity Date, in Dollars and in immediately available funds, the principal
amount of ________________________ DOLLARS ($____________), and to pay interest
from the date hereof on the unpaid principal amount hereof, in like money, at
said office, on the dates and at the rates selected in accordance with Section
2.5(e) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Lender shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
XXXXXX AMERICAN CORP.
By:_________________________
Name:_______________________
Title:______________________
Exhibit 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
NationsBank, N. A.,
as Agent for the Lenders
000 Xxxxx Xxxxx Xxxxxx
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, Xxxxxx American Corp. (the "Borrower"), refers to the
Credit Agreement dated as of May 18, 1998 (as amended, modified, restated or
supplemented from time to time, the "Credit Agreement"), among the Borrower, the
Guarantors, the Lenders, NationsBank, N. A., as Agent, and Gleacher Natwest
Inc., as Documentation Agent. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The Borrower hereby gives notice pursuant to Section 3.2 of the
Credit Agreement that it requests an extension or conversion of a [Revolving
Loan] [Tranche A Term Loan] [Tranche B Term Loan] outstanding under the Credit
Agreement, and in connection therewith sets forth below the terms on which such
extension or conversion is requested to be made:
(A) Loan Tranche __________________________
(B) Date of Extension or Conversion
(which is the last day of the the
applicable Interest Period) __________________________
(C) Principal Amount of Extension or
Conversion __________________________
(D) Interest rate basis __________________________
(E) Interest Period and the last day
thereof __________________________
XXXXXX AMERICAN CORP.
By:_________________________
Name:_______________________
Title:______________________
Exhibit 7.1(c)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ______________________, [Title] of Xxxxxx American Corp. (the
"Borrower") hereby certify that, to the best of my knowledge and belief, with
respect to that certain Credit Agreement dated as of May 18, 1998 (as amended,
modified, restated or supplemented from time to time, the "Credit Agreement";
all of the defined terms in the Credit Agreement are incorporated herein by
reference) among the Borrower, the Guarantors, the Lenders, NationsBank, N. A.,
as Agent, and Gleacher Natwest Inc., as Documentation Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and have
been prepared in accordance with GAAP applied on a consistent basis,
subject to changes resulting from normal year-end audit adjustments.
b. Since ___________ (the date of the last similar certification, or,
if none, the Closing Date) no Default or Event of Default has
occurred under the Credit Agreement, except as set forth on Schedule
1 attached hereto; and
Delivered herewith are calculations in reasonable detail demonstrating
compliance by the Consolidated Parties with the financial covenants contained in
Section 7.11 of the Credit Agreement as of the end of the fiscal period referred
to above.
This ______ day of ___________, 19__.
XXXXXX AMERICAN CORP.
By:_________________________
Name:_______________________
Title:______________________
Attachment to Officer's Certificate
Computation of Financial Covenants
Exhibit 7.12
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________, 19__,
is by and between _____________________, a ___________________ (the
"Subsidiary"), and NATIONSBANK, N. A., in its capacity as Agent under that
certain Credit Agreement (as it may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement"), dated as of May 18,
1998, by and among Xxxxxx American Corp., a Delaware corporation (the
"Borrower"), the Guarantors from time to time party thereto, the Lenders from
time to time party thereto, NationsBank, N. A., as Agent, and Gleacher Natwest
Inc., as Documentation Agent. All of the defined terms in the Credit Agreement
are incorporated herein by reference.
The Subsidiary is has become a Material Domestic Subsidiary and,
consequently, the Credit Parties are required by Section 7.12 of the Credit
Agreement to cause the Subsidiary to become a "Guarantor".
Accordingly, the Subsidiary hereby agrees as follows with the Agent, for
the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Credit Agreement and a "Guarantor" for all purposes of the Credit Agreement, and
shall have all of the obligations of a Guarantor thereunder as if it had
executed the Credit Agreement. The Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Guarantors contained in the Credit Agreement. Without limiting
the generality of the foregoing terms of this paragraph 1, the Subsidiary hereby
(i) jointly and severally together with the other Guarantors, guarantees to each
Lender and the Agent, as provided in Section 4 of the Credit Agreement, the
prompt payment and performance of the Credit Party Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise) strictly in accordance with the terms thereof.
2. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Security Agreement, and shall have all the obligations of an "Obligor" (as such
term is defined in the Security Agreement) thereunder as if it had executed the
Security Agreement. The Subsidiary hereby ratifies, as of the date hereof, and
agrees to be bound by, all of the terms, provisions and conditions contained in
the Security Agreement. Without limiting generality of the foregoing terms of
this paragraph 2, the Subsidiary hereby grants to the Agent, for the benefit of
the Lenders, a continuing security interest in, and a right of set off against
any and all right, title and interest of the Subsidiary in and to the Collateral
(as such term is defined in Section 2 of the Security Agreement) of the
Subsidiary. The Subsidiary hereby represents and warrants to the Agent that:
(i) The Subsidiary's chief executive office and chief place of
business are (and for the prior four months have been) located at the
locations set forth on Schedule 1 attached hereto and the Subsidiary keeps
its books and records at such locations.
(ii) The location of all Collateral owned by the Subsidiary is as
shown on Schedule 2 attached hereto.
(iii) The Subsidiary's legal name is as shown in this Agreement and
the Subsidiary has not in the past four months changed its name, been
party to a merger, consolidation or other change in structure or used any
tradename except as set forth in Schedule 3 attached hereto.
(iv) The patents and trademarks listed on Schedule 4 attached hereto
constitute all of the registrations and applications for the patents and
trademarks owned by the Subsidiary.
3. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Pledge Agreement, and shall have all the obligations of a "Pledgor" thereunder
as if it had executed the Pledge Agreement. The Subsidiary hereby ratifies, as
of the date hereof, and agrees to be bound by, all the terms, provisions and
conditions contained in the Pledge Agreement. Without limiting the generality of
the foregoing terms of this paragraph 3, the Subsidiary hereby pledges and
assigns to the Agent, for the benefit of the Lenders, and grants to the Agent,
for the benefit of the Lenders, a continuing security interest in any and all
right, title and interest of the Subsidiary in and to Pledged Shares (as such
term is defined in Section 2 of the Pledge Agreement) listed on Schedule 5
attached hereto and the other Pledged Collateral (as such term is defined in
Section 2 of the Pledge Agreement).
4. The address of the Subsidiary for purposes of all notices and other
communications is ____________________, ____________________________, Attention
of ______________ (Facsimile No. ____________).
5. The Subsidiary hereby waives acceptance by the Agent and the Lenders of
the guaranty by the Subsidiary under Section 4 of the Credit Agreement upon the
execution of this Agreement by the Subsidiary.
6. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
7. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to be
duly executed by its authorized officers, and the Agent, for the benefit of the
Lenders, has caused the same to be accepted by its authorized officer, as of the
day and year first above written.
[SUBSIDIARY]
By:________________________
Name:______________________
Title:_____________________
Acknowledged and accepted:
NATIONSBANK, N. A., as Agent
By:________________________
Name:______________________
Title:_____________________
Schedule 1
TO FORM OF JOINDER AGREEMENT
[Chief Executive Office and
Chief Place of Business of Subsidiary]
Schedule 2
TO FORM OF JOINDER AGREEMENT
[Locations of Collateral]
Schedule 3
TO FORM OF JOINDER AGREEMENT
[Tradenames]
Schedule 4
TO FORM OF JOINDER AGREEMENT
[Patents and Trademarks]
Schedule 5
TO FORM OF JOINDER AGREEMENT
[Pledged Shares]
Exhibit 11.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of May 18, 1998, as
amended and modified from time to time thereafter (the "Credit Agreement") among
Xxxxxx American Corp., the Guarantors from time to time party thereto, the
Lenders from time to time party thereto, NationsBank, N.A., as Agent, and
Gleacher Natwest Inc., as Documentation Agent. Terms defined in the Credit
Agreement are used herein with the same meanings.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse
and without representation or warranty except as expressly set forth herein, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement and the
other Credit Documents as of the date hereof equal to the percentage interest
specified on Schedule 1 of all outstanding rights and obligations under the
Credit Agreement and the other Credit Documents. After giving effect to such
sale and assignment, the Assignee's Commitment and the amount of the Loans owing
to the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) 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 Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Credit Documents or any other instrument or document furnished
pursuant thereto; and (iv) attaches the Notes held by the Assignor and requests
that the Agent exchange such Notes for new Notes payable to the order of the
Assignee in an amount equal to the Commitment assumed by the Assignee pursuant
hereto and to the Assignor in an amount equal to the Commitment retained by the
Assignor, if any, as specified on Schedule 1.
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 7.1 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 Agent, the Assignor or any other Lender 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 an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 3.11.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the "Effective Date") shall be the date
of acceptance hereof by the Agent, unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date hereof.
____________________, as Assignor
By:______________________________
Name:____________________________
Title:___________________________
_____________________, as Assignee
By:______________________________
Name:____________________________
Title:___________________________
Notice address of Assignee:
[Assignee]
_________________________________
_________________________________
_________________________________
Attn: _____________________
Telephone:(___) ___________
Telecopy: (___) ___________
CONSENTED TO:
NATIONSBANK, N.A., *
as Agent
By:______________________________
Name:____________________________
Title:___________________________
XXXXXX AMERICAN CORP.*
By:______________________________
Name:____________________________
Title:___________________________
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* Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee."
* Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee."
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment*:
(e) Revolving Commitment Percentage Assigned
(expressed as a percentage set forth to at least
8 decimals) %
(f) Revolving Commitment Percentage of Assignee
after giving effect to this Assignment and
Acceptance as of the Effective Date (set forth
to at least 8 decimals) %
(g) Revolving Commitment Percentage of Assignor
after giving effect to this Assignment and
Acceptance as of the Effective Date (set forth
to at least 8 decimals) %
(h) Revolving Committed Amount as of Effective Date $_____________
(i) Amount of Assignor's Revolving Commitment
Percentage as of the Effective Date (the amount
set forth in (h) multiplied by the percentage
set forth in (g)) $_____________
(j) Amount of Assignee's Revolving Commitment
Percentage as of the Effective Date (the amount
set forth in (h) multiplied by the percentage
set forth in (f)) $_____________
(k) Tranche A Term Loan Commitment Percentage
Assigned (expressed as a percentage set forth to
at least 8 decimals) %
(l) Tranche A Term Loan Commitment Percentage of
Assignee after giving effect to this Assignment
and Acceptance on the Effective Date (set forth
to at least 8 decimals) %
(m) Tranche A Term Loan Commitment Percentage of
Assignor after giving effect to this Assignment
and Acceptance on the Effective Date (set forth
to at least 8 decimals) %
(n) Outstanding Balance of Tranche A Term Loan as of
Effective Date $_____________
(o) Principal Amount of Assignor's portion of the
Tranche A Term Loan after giving effect to this
Assignment and
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* This date should be no earlier than five Business Days after delivery of
this Assignment and Acceptance to the Agent.
Acceptance on Effective Date (the amount set
forth in (n) multiplied by the percentage set
forth in (m)) $_____________
(p) Principal Amount of Assignee's portion of the
Tranche A Term Loan after giving effect to this
Assignment and Acceptance on Effective Date (the
amount set forth in (n) multiplied by the
percentage set forth in (l)) $_____________
(q) Tranche B Term Loan Commitment Percentage
Assigned (expressed as a percentage set forth to
at least 8 decimals) %
(r) Tranche B Term Loan Commitment Percentage of
Assignee after giving effect to this Assignment
and Acceptance on the Effective Date (set forth
to at least 8 decimals) %
(s) Tranche B Term Loan Commitment Percentage of
Assignor after giving effect to this Assignment
and Acceptance on the Effective Date (set forth
to at least 8 decimals) %
(t) Outstanding Balance of Tranche B Term Loan as of
Effective Date $_____________
(u) Principal Amount of Assignor's portion of the
Tranche B Term Loan after giving effect to this
Assignment and Acceptance on Effective Date (the
amount set forth in (t) multiplied by the
percentage set forth in (s)) $_____________
(v) Principal Amount of Assignee's portion of the
Tranche B Term Loan after giving effect to this
Assignment and Acceptance on Effective Date (the
amount set forth in (t) multiplied by the
percentage set forth in (q)) $_____________