EXHIBIT 2.3
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of March 26, 1999
Among
SUPREME INTERNATIONAL CORPORATION
AND CERTAIN OF ITS SUBSIDIARIES
(the Borrowers)
and
NATIONSBANK, N.A., as Agent
(the Agent)
and
THE LENDERS FROM TIME TO
TIME PARTY HERETO
TABLE OF CONTENTS(1)
PAGE
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ARTICLE 1 - DEFINITIONS
Section 1.1 DEFINITIONS..................................................................................2
Section 1.2 OTHER REFERENTIAL PROVISIONS................................................................28
Section 1.3 EXHIBITS AND SCHEDULES......................................................................29
ARTICLE 2 - REVOLVING CREDIT FACILITY
Section 2.1 REVOLVING CREDIT LOANS......................................................................29
Section 2.2 MANNER OF BORROWING REVOLVING CREDIT LOANS..................................................30
Section 2.3 REPAYMENT OF REVOLVING CREDIT LOANS.........................................................32
Section 2.4 REVOLVING CREDIT NOTE.......................................................................32
Section 2.5 EXTENSION OF FACILITY.......................................................................32
ARTICLE 3 - LETTERS OF CREDIT 32
Section 3.1 AGREEMENT TO ISSUE..........................................................................32
Section 3.2 AMOUNTS.....................................................................................32
Section 3.3 CONDITIONS..................................................................................33
Section 3.4 ISSUANCE OF LETTERS OF CREDIT...............................................................33
Section 3.5 PARTICIPATIONS..............................................................................34
Section 3.6 DUTIES OF NATIONSBANK.......................................................................35
Section 3.7 PAYMENT OF REIMBURSEMENT OBLIGATIONS........................................................35
Section 3.8 INDEMNIFICATION, EXONERATION................................................................36
Section 3.9 SUPPORTING STANDBY LETTER OF CREDIT; CASH COLLATERAL........................................37
ARTICLE 4 - TERM LOAN FACILITY 38
Section 4.1 TERM LOAN...................................................................................38
Section 4.2 MANNER OF BORROWING TERM LOAN...............................................................38
Section 4.3 REPAYMENT OF TERM LOAN......................................................................38
Section 4.4 TERM NOTES..................................................................................39
ARTICLE 5 - GENERAL LOAN PROVISIONS
Section 5.1 INTEREST....................................................................................39
Section 5.2 FEES........................................................................................41
Section 5.3 MANNER OF PAYMENT...........................................................................43
Section 5.4 LOAN ACCOUNTS; STATEMENTS OF ACCOUNT........................................................43
Section 5.5 TERMINATION OF AGREEMENT....................................................................44
Section 5.6 INCREASED COSTS AND REDUCED RETURNS.........................................................44
Section 5.7. MAKING OF LOANS............................................................................45
Section 5.8. SETTLEMENT AMONG LENDERS...................................................................47
Section 5.9 MANDATORY PREPAYMENTS.......................................................................51
Section 5.10 PAYMENTS NOT AT END OF INTEREST PERIOD; FAILURE TO BORROW..................................52
(1) This Table of Contents is included for reference purposes only and does not
constitute part of the Loan and Security Agreement.
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Section 5.11 NOTICE OF CONVERSION OR CONTINUATION.......................................................53
Section 5.12 CONVERSION OR CONTINUATION.................................................................53
Section 5.13 BORROWERS'AGENT............................................................................53
Section 5.14 JOINT AND SEVERAL LIABILITY................................................................54
Section 5.15 OBLIGATIONS ABSOLUTE.......................................................................54
Section 5.16 WAIVER OF SURETYSHIP DEFENSES..............................................................55
ARTICLE 6 - CONDITIONS PRECEDENT
Section 6.1 CONDITIONS PRECEDENT TO INITIAL LOAN........................................................56
Section 6.2 ALL LOANS...................................................................................60
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
Section 7.1 REPRESENTATIONS AND WARRANTIES..............................................................61
Section 7.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.............................................69
ARTICLE 8- SECURITY INTEREST
Section 8.1 SECURITY INTEREST...........................................................................69
Section 8.2 CONTINUED PRIORITY OF SECURITY INTEREST.....................................................69
ARTICLE 9 - COLLATERAL COVENANTS
Section 9.1 COLLECTION OF RECEIVABLES...................................................................70
Section 9.2 VERIFICATION AND NOTIFICATION...............................................................71
Section 9.3 DISPUTES, RETURNS AND ADJUSTMENTS...........................................................71
Section 9.4 INVOICES....................................................................................72
Section 9.5 DELIVERY OF INSTRUMENTS.....................................................................72
Section 9.6 SALES OF INVENTORY..........................................................................72
Section 9.7 RETURNED GOODS..............................................................................72
Section 9.8 OWNERSHIP AND DEFENSE OF TITLE..............................................................72
Section 9.9 INSURANCE...................................................................................73
Section 9.10 LOCATION OF OFFICES AND COLLATERAL.........................................................74
Section 9.11 RECORDS RELATING TO COLLATERAL.............................................................74
Section 9.12 INSPECTION.................................................................................74
Section 9.13 MAINTENANCE OF EQUIPMENT...................................................................75
Section 9.14 INFORMATION AND REPORTS....................................................................75
Section 9.15 POWER OF ATTORNEY..........................................................................76
Section 9.16 CREDIT INSURANCE...........................................................................77
ARTICLE 10 - AFFIRMATIVE COVENANTS
Section 10.1 PRESERVATION OF CORPORATE EXISTENCE AND SIMILAR MATTERS....................................77
Section 10.2 COMPLIANCE WITH APPLICABLE LAW.............................................................77
Section 10.3 CONDUCT OF BUSINESS........................................................................77
Section 10.4 PAYMENT OF TAXES AND CLAIMS................................................................77
Section 10.5 ACCOUNTING METHODS AND FINANCIAL RECORDS...................................................77
Section 10.6 USE OF PROCEEDS............................................................................78
Section 10.7 HAZARDOUS WASTE AND SUBSTANCES; ENVIRONMENTAL REQUIREMENTS.................................78
Section 10.8 ACCURACY OF INFORMATION....................................................................78
Section 10.9 REVISIONS OR UPDATES TO SCHEDULES..........................................................79
Section 10.10 YEAR 2000 COMPLIANCE......................................................................79
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Section 10.11 ADDITIONAL BORROWERS......................................................................79
Section 10.12 ADDITIONAL GUARANTORS.....................................................................79
Section 10.13 INDENTURE TRUSTEE; PAYING AGENT...........................................................80
Section 10.14 CHIEF FINANCIAL OFFICER...................................................................80
Section 10.15 SYNDICATION...............................................................................80
ARTICLE 11 - INFORMATION
Section 11.1 FINANCIAL STATEMENTS.......................................................................80
Section 11.2 ACCOUNTANTS' CERTIFICATE...................................................................81
Section 11.3 OFFICER'S CERTIFICATE......................................................................81
Section 11.4 COPIES OF OTHER REPORTS....................................................................82
Section 11.5 NOTICE OF LITIGATION AND OTHER MATTERS.....................................................82
Section 11.6 ERISA......................................................................................83
Section 11.7 SUBORDINATED INDEBTEDNESS CERTIFICATE......................................................83
ARTICLE 12 - NEGATIVE COVENANTS
Section 12.1 FINANCIAL COVENANTS........................................................................84
Section 12.2 INDEBTEDNESS...............................................................................85
Section 12.3 GUARANTIES.................................................................................85
Section 12.4 INVESTMENTS................................................................................85
Section 12.5 CAPITAL EXPENDITURES.......................................................................86
Section 12.6 RESTRICTED DISTRIBUTIONS AND PAYMENTS, ETC.................................................86
Section 12.7 MERGER, CONSOLIDATION AND SALE OF ASSETS...................................................86
Section 12.8 TRANSACTIONS WITH AFFILIATES...............................................................86
Section 12.9 LIENS......................................................................................86
Section 12.10 OPERATING LEASES..........................................................................86
Section 12.11 BENEFIT PLANS.............................................................................87
Section 12.12 SALES AND LEASEBACKS......................................................................87
Section 12.13 AMENDMENTS OF OTHER AGREEMENTS............................................................87
Section 12.14 MINIMUM AVAILABILITY......................................................................87
Section 12.15 LIMITATIONS ON CERTAIN RESTRICTIONS ON SUBSIDIARIES.......................................88
Section 12.16 FISCAL YEAR...............................................................................88
ARTICLE 13 - DEFAULT
Section 13.1 EVENTS OF DEFAULT..........................................................................88
Section 13.2 REMEDIES...................................................................................91
Section 13.3 APPLICATION OF PROCEEDS....................................................................93
Section 13.4 POWER OF ATTORNEY..........................................................................94
Section 13.5 MISCELLANEOUS PROVISIONS CONCERNING REMEDIES...............................................94
Section 13.6 TRADEMARK LICENSE..........................................................................95
ARTICLE 14 - ASSIGNMENTS 96
Section 14.1 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.....................................................96
Section 14.2 REPRESENTATION OF LENDERS..................................................................98
ARTICLE 15 - AGENT
Section 15.1 APPOINTMENT OF AGENT.......................................................................99
Section 15.2 DELEGATION OF DUTIES.......................................................................99
Section 15.3 EXCULPATORY PROVISIONS.....................................................................99
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Section 15.4 RELIANCE BY AGENT..........................................................................99
Section 15.5 NOTICE OF DEFAULT.........................................................................100
Section 15.6 NON-RELIANCE ON AGENT AND OTHER LENDERS...................................................100
Section 15.7 INDEMNIFICATION...........................................................................101
Section 15.8 AGENT IN ITS INDIVIDUAL CAPACITY..........................................................101
Section 15.9 SUCCESSOR AGENT...........................................................................101
Section 15.10 NOTICES FROM AGENT TO LENDERS............................................................102
ARTICLE 16- MISCELLANEOUS
Section 16.1 NOTICES...................................................................................102
Section 16.2 EXPENSES..................................................................................103
Section 16.3 STAMP AND OTHER TAXES.....................................................................104
Section 16.4 SETOFF....................................................................................104
Section 16.5 LITIGATION................................................................................105
Section 16.6 WAIVER OF RIGHTS..........................................................................105
Section 16.7 REVERSAL OF PAYMENTS......................................................................106
Section 16.8 INJUNCTIVE RELIEF.........................................................................106
Section 16.9 ACCOUNTING MATTERS........................................................................106
Section 16.10 AMENDMENTS...............................................................................106
Section 16.11 PERFORMANCE OF BORROWERS'DUTIES..........................................................108
Section 16.12 INDEMNIFICATION..........................................................................108
Section 16.13 ALL POWERS COUPLED WITH INTEREST.........................................................108
Section 16.14 SURVIVAL.................................................................................108
Section 16.15 SEVERABILITY OF PROVISIONS...............................................................109
Section 16.16 GOVERNING LAW............................................................................109
Section 16.17 COUNTERPARTS.............................................................................109
Section 16.18 REPRODUCTION OF DOCUMENTS................................................................109
Section 16.19 CONSENT TO ADVERTISING AND PUBLICITY.....................................................109
Section 16.20 PRO-RATA PARTICIPATION...................................................................109
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ANNEX, EXHIBITS AND SCHEDULES
ANNEX I PERFORMANCE PRICING MATRIX
EXHIBIT A-1 FORM OF REVOLVING CREDIT NOTE
EXHIBIT A-2 FORM OF TERM NOTE
EXHIBIT B FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT D FORM OF SETTLEMENT REPORT
EXHIBIT E FORM OF JOINDER AGREEMENT
SCHEDULE 7.1(a) Jurisdictions in Which Borrower and Subsidiaries
are Qualified as a Foreign Corporation
SCHEDULE 7.1(b) Subsidiaries; Supreme's Capital Stock
SCHEDULE 7.1(e) Obligors' Business
SCHEDULE 7.1(f) Exceptions to Governmental Approvals
SCHEDULE 7.1(g) Title Exceptions
SCHEDULE 7.1(h) Other than Permitted Liens
SCHEDULE 7.1(i) Indebtedness for Money Borrowed and Guaranties
SCHEDULE 7.1(j) Litigation
SCHEDULE 7.1(k) Tax Returns and Payments
SCHEDULE 7.1(o) Benefit Plans
SCHEDULE 7.1(t) Chief Executive Office
SCHEDULE 7.1(u) Locations of Inventory
SCHEDULE 7.1(v) Corporate and Fictitious Names
SCHEDULE 7.1(y) Employee Relations
SCHEDULE 7.1(z) Intellectual Property
SCHEDULE 10.6 Use of Proceeds
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AMENDED AND RESTATED LOAN
AND SECURITY AGREEMENT
Dated as of March 26, 1999
SUPREME INTERNATIONAL CORPORATION, a Florida corporation ("Supreme"),
each Subsidiary of Supreme which hereafter becomes a party hereto as a borrower,
the financial institutions party to this Agreement from time to time (the
"Lenders"), and NATIONSBANK, N.A., a national banking association, as agent for
the Lenders (the "Agent"), agree as follows:
W I T N E S S E T H :
WHEREAS, Supreme, certain lenders party thereto (the "Original
Lenders"), and NationsBank, N.A., as agent for the Original Lenders (the
"Original Agent"), are party to that certain Amended and Restated Loan and
Security Agreement, dated as of March 31, 1998 (as amended, the "Original Loan
Agreement"), pursuant to which the Original Lenders agreed to make certain
revolving credit loans to Supreme; and
WHEREAS, pursuant to that certain Assignment Agreement, dated of even
date herewith (the "Assignment of Original Loan Documents"), the Original
Lenders and the Original Agent have assigned to the Lenders and the Agent all of
their right, title and interest in and to the Original Loan Agreement, each
instrument, agreement or document executed by Supreme and its Subsidiaries (as
hereafter defined) in connection with the Original Loan Agreement, and the loans
thereunder; and
WHEREAS, Supreme is the 100% owner of all of the capital stock of each
other Obligor (as hereafter defined); and
WHEREAS, the Obligors desire to obtain financing for their mutual and
collective enterprise as designers, importers and marketers of men's and women's
apparel; and
WHEREAS, in order to utilize the financial powers of each Obligor in
the most efficient and economical manner, and in order to facilitate the
financing of each Obligor's working capital needs, the Lenders will, at the
request of the Borrowers' Agent (as hereinafter defined), extend financial
accommodations to all Borrowers (as hereafter defined) on a combined basis in
accordance with the provisions set forth in this Agreement; and
WHEREAS, the Obligors' business is a mutual and collective enterprise
and the Obligors believe that the consolidation of all loans and other financial
accommodations under this Agreement will enhance the aggregate borrowing powers
of the Obligors and facilitate the administration of their loan relationship
with the Agent and the Lenders, all to the mutual advantage of the Obligors; and
WHEREAS, each Obligor will receive substantial direct and indirect
benefits by reason of the making of loans and other financial accommodations to
the other Obligors as provided in this Agreement, by virtue of the Obligors'
various inter-relationships as joint guarantors or joint obligors and the
beneficiaries thereof, as lessors and lessees, as suppliers and customers, and
as joint venturers; and
WHEREAS, the Agent's and the Lenders' willingness to extend financial
accommodations to the Obligors, and to administer each Obligor's collateral
security therefor, on a combined basis as more fully set forth in this
Agreement, is done solely as an accommodation to the Obligors and at the
Obligors' request and in furtherance of the Obligors' mutual and collective
enterprise.
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINITIONS. For the purposes of this Agreement:
"ACCOUNT DEBTOR" means a Person who is obligated on a Receivable.
"ACQUIRE" or "ACQUISITION", as applied to any Business Unit or
Investment, means the acquisition of such Business Unit or Investment by
purchase, exchange, issuance of stock or other securities, or by merger,
reorganization or any other method.
"AFFILIATE" means, with respect to a Person, (a) any officer, director,
employee or managing agent of such Person, (b) any spouse, parents, brothers,
sisters, children and grandchildren of such Person, (c) any association,
partnership, trust, entity or enterprise in which such Person is a director,
officer or general partner, (d) any other Person that, (i) directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such given Person, (ii) directly or indirectly
beneficially owns or holds 10% or more of any class of voting stock or
partnership or other interest of such Person or any Subsidiary of such Person,
or (iii) 10% or more of the voting stock or partnership or other interest of
which is directly or indirectly beneficially owned or held by such Person or a
Subsidiary of such Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities or
partnership or other interests, by contract or otherwise; and the term
"controlled" has the meaning correlative to the foregoing.
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"AGENCY ACCOUNT" means an account of a Borrower maintained by it with a
Clearing Bank pursuant to an Agency Account Agreement.
"AGENCY ACCOUNT AGREEMENT" means an agreement among a Borrower, the
Agent and a Clearing Bank concerning the collection of payments which represent
the proceeds of Receivables or of any other Collateral.
"AGENT" means NationsBank, N.A., a national banking association, and
any successor agent appointed pursuant to SECTION 15.9 hereof.
"AGENT'S OFFICE" means the office of the Agent specified in or
determined in accordance with the provisions of SECTION 16.1.
"AGREEMENT" means this Amended and Restated Loan and Security
Agreement, including the Exhibits, Annexes and Schedules hereto, and all
amendments, modifications and supplements hereto and thereto and restatements
hereof and thereof.
"AGREEMENT DATE" means the date as of which this Agreement is dated.
"ANDALUSIA EQUIPMENT" means the Equipment of Supreme located in
Andalusia, Alabama which is acquired from Xxxxxx pursuant to the Xxxxxx
Acquisition Agreement.
"APPLICABLE MARGIN" means, as to (a) Prime Rate Revolving Credit Loans,
0.50%, (b) LIBOR Revolving Credit Loans, 2.50%, (c) Prime Rate Term Loans,
0.75%, and (d) LIBOR Term Loans, 2.75%, as adjusted in accordance with the
performance pricing matrix set forth on ANNEX I attached hereto based upon the
ratio of consolidated Funded Indebtedness, as of the date of determination, to
consolidated EBITDA, for the preceding four fiscal quarters, in each case for
Supreme and its consolidated Subsidiaries. Adjustments to the Applicable Margin
shall be effective as of (i) the first day of the calendar month which begins at
least 10 days after the Agent's receipt of Supreme's audited consolidated
financial statements as of each fiscal year end (commencing with the financial
statements for the fiscal year ending on January 31, 2000) in conformance with
SECTION 11.1(A), together with the accountant's certificate described in SECTION
11.2 setting forth the calculations necessary to determine the ratio referred to
above, and (ii) the first day of the calendar month which begins at least 10
days after the Agent's receipt of Supreme's consolidated financial statements as
of the last day of each fiscal quarter (commencing with the financial statements
for the fiscal quarter ending on July 31, 1999) in conformance with SECTION
11.1(B), together with the officer's certificate described in SECTION 11.3
setting forth the calculations necessary to determine the ratio referred to
above; PROVIDED no decrease in the Applicable Margin shall be made if a Default
or Event of Default exists as of the effective date of such scheduled
adjustment. In the event the Borrowers fail to provide in a timely manner the
financial statements and certificates referred to above, and without prejudice
to any additional rights under SECTIONS 5.1(D) and 13.2, the maximum Applicable
Margin shall apply to all LIBOR Loans and Prime Rate Loans until the first day
of the calendar month which begins at least 10 days after the Agent's receipt of
such financial statements and certificates.
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"APPROVAL ORDER" has the meaning set forth in Section 14.2(b) of the
Xxxxxx Acquisition Agreement.
"ASSET DISPOSITION" means the sale, lease, transfer or other
disposition of any asset of any Borrower or any of its Subsidiaries, other than
(a) sales of Inventory in the ordinary course of business, (b) the factoring of
Receivables with the Factors in the ordinary course of business, (c) the
licensing of Intellectual Property in the ordinary course of business, (d) the
sale of the PVH Inventory in accordance with the terms of the PVH Inventory
Purchase Contract, (e) the sale of the Andalusia Equipment, and (f) any
Permitted Receivable Disposition.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance in the
form attached hereto as EXHIBIT C assigning all or a portion of a Lender's
interests, rights and obligations under this Agreement pursuant to SECTION 14.1.
"ASSIGNMENTS OF FACTORING CREDIT BALANCES" means the assignments to the
Agent, for the benefit of the Lenders, by a Borrower of the Factoring Credit
Balances with a Factor on terms and conditions satisfactory to the Agent.
"ASSIGNMENT OF ORIGINAL LOAN DOCUMENTS" has the meaning set forth in
the Recitals of this Agreement.
"AVAILABILITY" means as of the date of determination, the amount of
Revolving Credit Loans available to be borrowed by the Borrowers hereunder in
accordance with SECTION 2.1 less the sum of the outstanding principal balance of
all Revolving Credit Loans hereunder as of such date.
"BENEFIT PLAN" means an employee benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which a Person or
any Related Company is, or within the immediately preceding 6 years was, an
"employer" as defined in Section 3(5) of ERISA, including such plans as may be
established after the Agreement Date.
"BORROWER" means each of Supreme and each other Subsidiary of Supreme
that becomes a Borrower pursuant to SECTION 10.11, and "BORROWERS" means all of
such entities collectively.
"BORROWERS' AGENT" means Supreme, acting in its capacity as agent for
the other Borrowers, pursuant to SECTION 5.13.
"BORROWING BASE" means at any time THE LESSER OF (a) the Revolving
Credit Facility minus the Letter of Credit Reserve and (b) an amount equal to
the sum of:
(i) 85% (or such lesser percentage as the Agent may in its
sole and absolute discretion determine from time to time) of the face
value of Eligible Receivables due and owing at such time, PLUS
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(ii) THE LESSER OF (A) 90% (or such lesser percentage as the
Agent may in its sole and absolute discretion determine from time to
time) of the Eligible Factoring Credit Balances due and owing at such
time, and (B) $20,000,000, PLUS
(iii) THE LESSER OF (A) 60% (or such lesser percentage as the
Agent may in its sole and absolute discretion determine from time to
time) of the lesser of cost (computed on a first-in-first-out basis)
and fair market value of Eligible Inventory at such time, and (B)
$30,000,000, MINUS
(iv) the Letter of Credit Reserve and such other reserves as
the Agent may determine from time to time in the exercise of its
reasonable credit judgment.
"BORROWING BASE CERTIFICATE" means a certificate in the form of EXHIBIT
B attached hereto, which Borrowing Base Certificate shall specify which
Inventory is License Inventory and which Inventory is Private Label Inventory.
"BUSINESS DAY" means (a) any day other than a Saturday, Sunday or other
day on which banks in Atlanta, Georgia are authorized to close, and (b) in
respect of any determination with respect to a LIBOR Loan any day referred to in
CLAUSE (A) that is also a day on which tradings are conducted in the London
interbank eurodollar market
"BUSINESS UNIT" means the assets constituting the business, or a
division or operating unit thereof, of any Person.
"CAPITAL EXPENDITURES" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets (other
than assets which constitute a Business Unit) which are not, in accordance with
GAAP, treated as expense items for such Person in the year made or incurred or
as a prepaid expense applicable to a future year or years.
"CAPITALIZED LEASE" means a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATION" means Indebtedness represented by
obligations under a Capitalized Lease, and the amount of such Indebtedness shall
be the capitalized amount of such obligations determined in accordance with
GAAP.
"CASH COLLATERAL" means collateral consisting of cash or Cash
Equivalents on which the Agent, for the benefit of the Lenders, has a first
priority Lien.
"CASH EQUIVALENTS" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (b)
commercial paper maturing no more than one year from the date issued and, at the
time of acquisition thereof, having a rating of at least A-1 from Standard &
Poor's Corporation or at least P-1 from Xxxxx'x Investors Service, Inc.; (c)
certificates of deposit or
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bankers' acceptances issued in Dollar denominations and maturing within one year
from the date of issuance thereof issued by any commercial bank organized under
the laws of the United States of America or any state thereof or the District of
Columbia having combined capital and surplus of not less than $100,000,000 and,
unless issued by the Agent or a Lender, not subject to set-off or offset rights
in favor of such bank arising from any banking relationship with such bank; and
(d) repurchase agreements in form and substance and for amounts satisfactory to
the Agent.
"CLEARING BANK" means NationsBank and any other banking institution
with which an Agency Account has been established pursuant to an Agency Account
Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL" means and includes all of each Borrower's right, title and
interest in and to each of the following, wherever located and whether now or
hereafter existing or now owned or hereafter acquired or arising:
(a) all Receivables,
(b) all Inventory,
(c) all Contract Rights,
(d) all General Intangibles,
(e) all Deposit Accounts,
(f) all Factoring Credit Balances,
(g) all goods and other property, whether or not delivered, (i) the
sale or lease of which gives or purports to give rise to any Receivable,
including, but not limited to, all merchandise returned or rejected by or
repossessed from customers, or (ii) securing any Receivable, including, without
limitation, all rights as an unpaid vendor or lienor (including, without
limitation, stoppage in transit, replevin and reclamation) with respect to such
goods and other properties,
(h) all mortgages, deeds to secure debt and deeds of trust on real or
personal property, guaranties, leases, security agreements and other agreements
and property which secure or relate to any Receivable or other Collateral or are
acquired for the purpose of securing and enforcing any item thereof,
(i) all documents of title, policies and certificates of insurance,
securities, chattel paper and other documents and instruments evidencing or
pertaining to any and all items of Collateral,
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(j) all files, correspondence, computer programs, tapes, disks and
related data processing software which contain information identifying or
pertaining to any of the Collateral or any Account Debtor or showing the amounts
thereof or payments thereon or otherwise necessary or helpful in the realization
thereon or the collection thereof,
(k) all cash deposited with the Agent or any Lender or any Affiliate
thereof or which the Agent or any Lender is entitled to retain or otherwise
possess as collateral pursuant to the provisions of this Agreement or any of the
Security Documents,
(l) all investment property, including all capital stock of each
Borrower's Subsidiaries, and
(m) any and all products and cash and non-cash proceeds of the
foregoing (including, but not limited to, any claims to any items referred to in
this definition and any claims against third parties for loss of, damage to or
destruction of any or all of the Collateral or for proceeds payable under or
unearned premiums with respect to policies of insurance) in whatever form,
including, but not limited to, cash, negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements and
other documents.
"COMMITMENT" means, as to each Lender, the amount set forth opposite
such Lender's name on the signature pages hereof, representing such Lender's
obligation, upon and subject to the terms and conditions of this Agreement
(including the applicable provisions of SECTION 14.1), to make Revolving Credit
Loans and Term Loans and to purchase participations in Letters of Credit or,
from and after the date hereof, in the Register (as defined in SECTION 14.1),
representing such Lender's obligation to make Revolving Credit Loans and to
purchase participations in Letters of Credit and its corresponding interest in
Term Loans outstanding, as reduced, in the case of Revolving Credit Loans,
pursuant to SECTION 2.6.
"COMMITMENT PERCENTAGE" means, as to any Lender, the percentage of the
Total Commitment obtained by dividing such Lender's Commitment by the Total
Commitment.
"CONTRACT RIGHTS" means and includes, as to any Person, all of such
Person's then owned or existing and future acquired or arising rights under
contracts not yet earned by performance and not evidenced by an instrument or
chattel paper, to the extent that the same may lawfully be assigned.
"CONTROLLED DISBURSEMENT ACCOUNT" means the account maintained by and
in the name of the Borrowers' Agent with NationsBank for the purpose of
disbursing Revolving Credit Loan proceeds and amounts credited thereto pursuant
to SECTIONS 2.2(B) and 9.1(B)(II).
"CREDIT INSURANCE ASSIGNMENT" means an assignment of a Borrower's
rights under any credit insurance policy maintained by such Borrower, which
assignment shall be acknowledged by the credit insurer and shall be in form and
substance satisfactory to the Agent.
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"DEFAULT" means any of the events specified in SECTION 13.1 that, with
the passage of time or giving of notice or both, would constitute an Event of
Default.
"DEFAULT MARGIN" means 3%.
"DEPOSIT ACCOUNTS" means any demand, time, savings, passbook or like
account maintained with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a certificate of deposit
that is an instrument under the UCC.
"DOLLAR" and "$" means freely transferable United States dollars.
"EBITDA" means, for any period, Net Income from recurring operations,
excluding extraordinary items, before deduction of Interest Expense, taxes,
depreciation and amortization expense, in each case on a consolidated basis for
Supreme and its consolidated Subsidiaries, PROVIDED that, in the case of each
four fiscal quarter period ending on or prior to January 31, 2000, EBITDA shall
be calculated, for the purpose of determining the Applicable Margin and for the
purpose of SECTIONS 12.1(A) and (C), on a pro forma basis to include EBITDA of
the Xxxxxx Division and Xxxxx Xxxxx (to the extent the Acquisitions thereof have
been consummated) in accordance with the following:
FOUR FISCAL QUARTERS ENDING XXXXXX DIVISION EBITDA XXXXX XXXXX EBITDA
--------------------------- ---------------------- ------------------
April 30, 1999 $ 2,600,000 $ 9,000,000
July 31, 1999 $ 1,950,000 $ 6,750,000
October 31, 1999 $ 1,300,000 $ 4,500,000
January 31, 2000 $ 650,000 $ 2,250,000
"ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time, and any successor statute.
"EFFECTIVE DATE" means the later of (a) the Agreement Date, and (b) the
first date on which all of the conditions set forth in SECTION 6.1 shall have
been fulfilled or waived by the Lenders.
"EFFECTIVE INTEREST RATE" means the rate of interest per annum on the
Loans in effect from time to time pursuant to the provisions of SECTION 5.1.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank, commercial finance
company or other asset based lender, having total assets in excess of
$1,000,000,000; (ii) any Lender listed on the signature page of this Agreement,
and any of such Lender's Affiliates; and (iii) if an Event of Default exists,
any Person acceptable to the Agent; PROVIDED in each case that the
representation contained in SECTION 14.2 hereof shall be applicable with respect
to such institution or Lender.
"ELIGIBLE FACTORING CREDIT BALANCES" means such Factoring Credit
Balances that the Agent, in its sole and absolute discretion, determines to meet
all of the following requirements:
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(a) such Factoring Credit Balances have been assigned to the Agent pursuant to
an Assignment of Factoring Credit Balances and are subject to the Security
Interest, which is perfected and subject to no other Lien whatsoever other than
junior Permitted Liens, (b) such Factoring Credit Balances are not subject to
any present or contingent offset, deduction or counterclaim including any such
offset, deduction or counterclaim arising out of a Borrower's breach of any
representation, warranty, agreement or covenant under the applicable factoring
agreement, and (c) such Factoring Credit Balances are not determined by the
Agent, on behalf of the Lenders, in its sole and absolute discretion to be
ineligible for any other reason.
"ELIGIBLE INVENTORY" means items of Inventory of the Borrowers held for
sale in the ordinary course of the business of the Borrowers (but not including
packaging or shipping materials or maintenance supplies) which are deemed by the
Agent in the exercise of its sole and absolute discretion to be eligible for
inclusion in the calculation of the Borrowing Base. Unless otherwise approved in
writing by the Agent, no Inventory shall be deemed to be Eligible Inventory
unless it meets all of the following requirements: (a) such Inventory is owned
by a Borrower, is subject to the Security Interest, which is a first priority
perfected Lien as to such Inventory, and which is subject to no other Lien
whatsoever other than a Permitted Lien; (b) such Inventory consists of finished
goods and does not consist of raw materials, work-in-process, supplies or
consigned goods; (c) such Inventory is in good condition and meets all standards
applicable to such goods, their use or sale imposed by any governmental agency,
or department or division thereof, having regulatory authority over such
matters; (d) such Inventory is currently saleable, at prices approximating at
least the cost thereof, in the normal course of a Borrower's business; (e) such
Inventory is not obsolete or repossessed or used goods taken in trade, or
returned goods not suitable for sale as new Inventory; (f) such Inventory is
located at a location listed on SCHEDULE 7.1(U), attached hereto; (g) such
Inventory is in the possession and control of a Borrower and not any third party
and if located in a warehouse or other facility leased by a Borrower, the lessor
has delivered to the Agent a waiver and consent in form and substance
satisfactory to the Agent; (h) if such Inventory is Private Label Inventory, it
comprises less than 35% of Eligible Inventory; and (i) if such Inventory is
License Inventory, it comprises less than 15% of Eligible Inventory.
"ELIGIBLE RECEIVABLE" means the unpaid portion of a Receivable payable
in Dollars to a Borrower net of any returns, discounts, claims, credits, charges
or other allowances, offsets, deductions, counterclaims, disputes or other
defenses and reduced by the aggregate amount of all reserves, limits and
deductions provided for in this definition and elsewhere in this Agreement which
is deemed by the Agent in the exercise of its sole and absolute discretion to be
eligible for inclusion in the calculation of the Borrowing Base. Unless
otherwise approved in writing by the Agent, no Receivable shall be deemed an
Eligible Receivable unless it meets all of the following requirements: (a) such
Receivable is owned by a Borrower and represents a complete bona fide
transaction which requires no further act under any circumstances on the part of
any Borrower to make such Receivable payable by the Account Debtor; (b) such
Receivable is not unpaid more than 150 days after the date of the original
invoice or past due more than 90 days after its due date, which shall not be
later than 60 days after the invoice date; (c) such Receivable does not arise
out of any transaction with any Subsidiary, Affiliate, creditor, lessor or
supplier of a Borrower; (d) such Receivable is not owing by an Account Debtor
more than 50% of whose
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then-existing accounts owing to the Borrowers do not meet the requirements set
forth in CLAUSE (B) above; (e) if the Account Debtor with respect thereto is
located outside of the United States of America or Puerto Rico, the goods which
gave rise to such Receivable were shipped after receipt by the applicable
Borrower from the Account Debtor of an irrevocable letter of credit that has
been confirmed by a financial institution acceptable to the Agent and is in form
and substance acceptable to the Agent, payable in the full face amount of the
face value of the Receivable in Dollars at a place of payment located within the
United States and has been duly delivered to the Agent; (f) such Receivable is
not subject to the Assignment of Claims Act of 1940, as amended from time to
time, or any applicable law now or hereafter existing similar in effect thereto,
as determined in the sole discretion of the Agent, or to any provision
prohibiting its assignment or requiring notice of or consent to such assignment;
(g) no Borrower is in material breach of any express or implied representation
or warranty with respect to the goods the sale of which gave rise to such
Receivable; (h) the Account Debtor with respect to such Receivable is not
insolvent or the subject of any bankruptcy or insolvency proceedings of any kind
or of any other proceeding or action, threatened or pending, which might, in the
Agent's sole judgment, have a materially adverse effect on such Account Debtor;
(i) the goods the sale of which gave rise to such Receivable were shipped or
delivered to the Account Debtor on an absolute sale basis and not on a xxxx and
hold sale basis, a consignment sale basis, a guaranteed sale basis, a sale or
return basis or on the basis of any other similar understanding, and such goods
have not been returned or rejected; (j) such Receivable, to the extent that it,
when taken together with all other Receivables owing to the Borrowers by such
Account Debtor and its Affiliates, causes the total face amount of all
then-existing accounts owing to the Borrowers by such Account Debtor and its
Affiliates to exceed in face amount 20% of the Borrowers' total Eligible
Receivables; (k) such Receivable is evidenced by an invoice or other
documentation in form acceptable to the Agent containing only terms normally
offered by the Borrowers, and dated the date of shipment; (l) such Receivable is
a valid, legally enforceable obligation of an Account Debtor with respect
thereto and is not subject to any present, or contingent (and no facts exist
which are the basis for any future), offset, deduction or counterclaim, dispute
or other defense on the part of such Account Debtor; (m) such Receivable is not
evidenced by chattel paper or an instrument of any kind; (n) such Receivable
does not arise from the performance of services, including services under or
related to any warranty obligation of a Borrower or out of service charges by a
Borrower or other fees for the time value of money; and (o) such Receivable is
subject to the Security Interest, which is a first priority perfected Lien as to
such Receivable, and is subject to no other Lien whatsoever other than a
Permitted Lien, and the goods giving rise to such Receivable were not, at the
time of the sale thereof, subject to any Lien other than a Permitted Lien.
"ENVIRONMENTAL LAWS" means all federal, state, local and foreign laws
now or hereafter in effect relating to pollution or protection of the
environment, including laws relating 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, removal, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes, and
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any and all regulations, notices or demand letters issued, entered, promulgated
or approved thereunder.
"EQUIPMENT" means and includes, as to any Person, all of such Person's
then owned or existing and future acquired or arising machinery, apparatus,
equipment, motor vehicles, tractors, trailers, rolling stock, fittings, and
other tangible personal property (other than Inventory) of every kind and
description used in such Person's business operations or owned by such Person or
in which such Person has an interest and all parts, accessories and special
tools and all increases and accessions thereto and substitutions and
replacements therefor.
"EVENT OF DEFAULT" means any of the events specified in SECTION 13.1.
"FACTORS" means Congress Xxxxxxx Corporation and Republic Business
Credit Corporation or any replacement factor reasonably acceptable to the Agent
and the Required Lenders.
"FACTORING CREDIT BALANCES" means the aggregate of outstanding
Receivables factored by the Borrowers with the Factors at the Factors' credit
risk, less customer disputes, reserves and deductions.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve system arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of Atlanta, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.
"FEE LETTER" means, collectively, the March 12, 1999 fee letter between
NationsBank and Supreme, and any other letter agreement between Supreme and
NationsBank with respect to fees payable by the Borrowers in connection with
this Agreement.
"FINANCIAL OFFICER" means the Chief Financial Officer, Treasurer or
Vice President of Finance of Supreme.
"FINANCING STATEMENTS" means the Uniform Commercial Code financing
statements executed and delivered by the Borrowers to the Agent, naming the
Agent, for the benefit of the Lenders, as secured party, and the Borrowers, as
debtor, in connection with this Agreement.
"FIXED CHARGES" means, for any period, (a) Interest Expense, plus (b)
any provision for income or franchise taxes included in the determination of Net
Income, plus (c) payments of principal which were made or due with respect to
Indebtedness (other than Revolving Credit Loans), including payments with
respect to Capitalized Leases.
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"FUNDED INDEBTEDNESS" means, without duplication, (a) all Indebtedness
under this Agreement, (b) the aggregate amount at any time of outstanding
reimbursement obligations with respect to letters of credit (other than the
Standby Letter of Credit, but including other Letters of Credit) and banker's
acceptances issued by Xxxxxxxx Bank, N.A. or any other financial institution
which have been drawn upon, and (c) all other Indebtedness for Money Borrowed.
"GAAP" means generally accepted accounting principles consistently
applied and maintained throughout the period indicated and consistent with the
prior financial practice of the Person referred to.
"GENERAL INTANGIBLES" means, as to any Person, all of such Person's
then owned or existing and future acquired or arising general intangibles,
choses in action and causes of action and all other intangible personal property
of such Person of every kind and nature (other than Receivables), including,
without limitation, Intellectual Property, corporate or other business records,
inventions, designs, blueprints, plans, specifications, trade secrets, goodwill,
computer software, customer lists, registrations, licenses, franchises, tax
refund claims, reversions or any rights thereto and any other amounts payable to
such Person from any Benefit Plan, Multiemployer Plan or other employee benefit
plan, rights and claims against carriers and shippers, rights to
indemnification, business interruption insurance and proceeds thereof, property,
casualty or any similar type of insurance and any proceeds thereof, proceeds of
insurance covering the lives of key employees on which such Person is
beneficiary and any letter of credit, guarantee, claims, security interest or
other security held by or granted to such Person to secure payment by an Account
Debtor of any of the Receivables.
"GOVERNMENTAL APPROVALS" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
governmental bodies, whether federal, state, local, foreign national or
provincial, and all agencies thereof.
"GOVERNMENTAL AUTHORITY" means any government or political subdivision
or any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"GUARANTOR" means each of Supreme Acquisition, Supreme International
(Delaware), Supreme International (New York), Supreme International (Mexico) and
Supreme Canada, and each other Subsidiary of Supreme that becomes a Guarantor
pursuant to SECTION 10.12, and "GUARANTORS" shall mean all of such entities
collectively.
"GUARANTY", "GUARANTEED" or to "GUARANTEE," as applied to any
obligation of another Person shall mean and include
(a) a guaranty (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), directly or indirectly, in any
manner, of any part or all of such obligation of such other Person, and
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(b) an agreement, direct or indirect, contingent or otherwise, and
whether or not constituting a guaranty, the practical effect of which is to
assure the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation of such other Person
whether by (i) the purchase of securities or obligations, (ii) the purchase,
sale or lease (as lessee or lessor) of property or the purchase or sale of
services primarily for the purpose of enabling the obligor with respect to such
obligation to make any payment or performance (or payment of damages in the
event of nonperformance) of or on account of any part or all of such obligation
or to assure the owner of such obligation against loss, (iii) the supplying of
funds to, or in any other manner investing in, the obligor with respect to such
obligation, (iv) repayment of amounts drawn down by beneficiaries of letters of
credit, or (v) the supplying of funds to or investing in a Person on account of
all or any part of such Person's obligation under a guaranty of any obligation
or indemnifying or holding harmless, in any way, such Person against any part or
all of such obligation.
"GUARANTY AGREEMENTS" means, collectively, each Guaranty, executed by a
Guarantor in favor of the Agent, for the benefit of the Lenders, as amended,
modified or supplemented from time to time.
"HIGH YIELD DEBT" means Indebtedness incurred by Supreme after the
Agreement Date on the terms set forth in the High Yield Debt Offering Memorandum
and pursuant to an indenture otherwise satisfactory to the Agent in good faith.
"HIGH YIELD DEBT OFFERING" means the offering of the High Yield Debt in
accordance with the terms of the High Yield Debt Offering Memorandum.
"HIGH YIELD DEBT OFFERING MEMORANDUM" means the Preliminary Offering
Memorandum, dated March 15, 1999, with respect to the offering of up to
$100,000,000 principal amount of Supreme's Senior Subordinated Notes due 2009.
"INDEBTEDNESS" of any Person means, without duplication, (a)
Liabilities, (b) all obligations for money borrowed or for the deferred purchase
price of property or services or in respect of reimbursement obligations under
letters of credit, (c) all obligations represented by bonds, debentures, notes
and accepted drafts that represent extensions of credit, (d) Capitalized Lease
Obligations, (e) all obligations (including, during the noncancellable term of
any lease in the nature of a title retention agreement, all future payment
obligations under such lease discounted to their present value in accordance
with GAAP) secured by any Lien to which any property or asset owned or held by
such Person is subject, whether or not the obligation secured thereby shall have
been assumed by such Person, (f) all obligations under synthetic leases,
including all obligations under the SunTrust Lease, (g) all obligations of other
Persons which such Person has Guaranteed, including, but not limited to, all
obligations of such Person consisting of recourse liability with respect to
accounts receivable sold or otherwise disposed of by such Person, and (h) in the
case of the Borrowers (without duplication) the Loans.
"INITIAL LOANS" means the Revolving Credit Loan and Term Loan made to
the Borrowers on the Effective Date pursuant to the letter referred to in
SECTION 6.1(A)(12).
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"INTELLECTUAL PROPERTY" means, as to any Person, all of such Person's
then owned existing and future acquired or arising patents, patent rights,
copyrights, works which are the subject of copyrights, trademarks, service
marks, trade names, trade styles, patent, trademark and service xxxx
applications, and all licenses and rights related to any of the foregoing and
all other rights under any of the foregoing, all extensions, renewals, reissues,
divisions, continuations and continuations-in-part of any of the foregoing and
all rights to xxx for past, present and future infringements of any of the
foregoing.
"INTERBANK OFFERED RATE" means, with respect to any LIBOR Loan for the
Interest Period applicable thereto, the per annum rate of interest determined by
the Agent (each such determination to be conclusive and binding absent manifest
error) as of two Business Days prior to the first day of such Interest Period as
the effective rate at which deposits in immediately available funds in Dollars
are being offered or quoted to major banks in the London interbank market for
deposits for a term comparable to such Interest Period and in the amount of such
LIBOR Loan, which rate shall be determined from the display designated as Page
3750 of Dow Services, Inc. In the event Page 3750 shall be unavailable for any
reason or the Agent in good faith elects to no longer use such service for
determining such rate under this Agreement, such rate may be determined by the
Agent from any other interest rate reporting service of recognized standing that
the Agent shall select.
"INTEREST EXPENSE" means the interest on Indebtedness during the period
for which computation is being made, excluding (a) the amortization of fees and
costs incurred with respect to the closing of loans which have been capitalized
as transaction costs, and (b) interest paid in kind.
"INTEREST PAYMENT DATE" means the first day of each calendar month
commencing on April 1, 1999 and continuing thereafter until the Secured
Obligations have been irrevocably paid in full.
"INTEREST PERIOD" means, in connection with any LIBOR Loan, the term of
such Loan selected by the Borrowers or otherwise determined in accordance with
this Agreement, which may have a duration of thirty (30) days, sixty (60) days,
ninety (90) days, one hundred eighty (180) days or three hundred sixty (360)
days. Notwithstanding the foregoing, however, (i) any applicable Interest Period
which would otherwise end on a day which is not a Business Day shall end on the
next succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day, (ii) any applicable Interest Period which begins on a day for
which there is no numerically corresponding day in the calendar month during
which such Interest Period is to end shall (subject to CLAUSE (I) above) end on
the last day of such calendar month, (iii) no Interest Period applicable to a
LIBOR Term Loan may end after the next scheduled principal repayment date unless
the aggregate principal amount of Prime Rate Term Loans and LIBOR Term Loans
having Interest Periods ending prior to such repayment date is at least equal to
the amount of the principal repayment due hereunder on such date, (iv) no
Interest Period shall extend beyond the Termination Date or such earlier date as
would interfere hereunder with the repayment obligations of the Borrowers,
- 14 -
and (v) all LIBOR Loans made on or before April 22, 1999 shall have a thirty
(30) day Interest Period.
"INTEREST RATE PROTECTION AGREEMENT" shall mean an interest rate swap,
cap or collar agreement or similar arrangement between an Obligor and a Lender
or an Affiliate of a Lender providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
"INVENTORY" means and includes, as to any Person, all of such Person's
then owned or existing and future acquired or arising (a) goods intended for
sale or lease or for display or demonstration, (b) work in process, (c) raw
materials and other materials and supplies of every nature and description used
or which might be used in connection with the manufacture, packing, shipping,
advertising, selling, leasing or furnishing of goods or otherwise used or
consumed in the conduct of business, and (d) documents evidencing and general
intangibles relating to any of the foregoing.
"INVESTMENT" means, with respect to any Person: (a) the direct or
indirect purchase or acquisition of any beneficial interest in, any share of
capital stock of, evidence of Indebtedness of or other security issued by any
other Person, (b) any loan, advance or extension of credit to, or contribution
to the capital of, any other Person, excluding advances to employees in the
ordinary course of business for business expenses, (c) any Guaranty of the
obligations of any other Person, or (d) any commitment or option to take any of
the actions described in CLAUSES (A), (B) or (C) above.
"LENDER" means at any time any financial institution party to this
Agreement at such time, including any such Person becoming a party hereto
pursuant to the provisions of ARTICLE 14, and its successors and assigns, and
"LENDERS" means at any time all of the financial institutions party to this
Agreement at such time, including any such Persons becoming parties hereto
pursuant to the provisions of ARTICLE 14, and their successors and assigns.
"LETTER OF CREDIT" means the Standby Letter of Credit and any other
letter of credit issued by NationsBank for the account of the Borrowers pursuant
to ARTICLE 3.
"LETTER OF CREDIT AMOUNT" means, with respect to any Letter of Credit,
the aggregate maximum amount at any time available for drawing under such Letter
of Credit.
"LETTER OF CREDIT FACILITY" means the amount of $4,000,000.
"LETTER OF CREDIT OBLIGATIONS" means, at any time, the sum of (a) all
reimbursement obligations of the Borrowers at such time with respect to Letters
of Credit, PLUS (b) the aggregate Letter of Credit Amount of Letters of Credit
outstanding at such time, PLUS (c) the aggregate Letter of Credit Amount of
Letters of Credit the issuance of which has been authorized by the Agent and
NationsBank pursuant to SECTION 3.4(B) but that have not yet been issued, in
each case as determined by the Agent.
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"LETTER OF CREDIT RESERVE" means, at any time, the aggregate Letter of
Credit Obligations at such time, other than Letter of Credit Obligations that
are fully secured by Cash Collateral.
"LIABILITIES" means all liabilities of a Person determined in
accordance with GAAP and includable on a balance sheet of such Person prepared
in accordance with GAAP.
"LIBOR" means, with respect to any LIBOR Loan for the Interest Period
applicable thereto, a simple per annum interest rate determined pursuant to the
following formula:
LIBOR = INTERBANK OFFERED RATE
----------------------------
1 - LIBOR Reserve Percentage
LIBOR shall be adjusted automatically as of the effective date of any change in
the LIBOR Reserve Percentage.
"LIBOR LOAN" means any Loan bearing interest at a rate determined by
reference to LIBOR, including any such Loans continued as or converted into a
LIBOR Loan on the same day by the Lenders for the same Interest Period, and
"LIBOR LOANS" means more than one such Loan.
"LIBOR RESERVE PERCENTAGE" means that percentage (expressed as a
decimal) which is in effect from time to time under Regulation D of the Board of
Governors of the Federal Reserve System, as such regulation may be amended from
time to time, or any successor regulation, as the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities as that
term is defined in Regulation D (or against any other category of liabilities
that includes deposits by reference to which the interest rate of LIBOR Loans is
determined), whether or not any Lender has any Eurocurrency liabilities subject
to such reserve requirement at that time. LIBOR Loans shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credits for proration, exceptions or
offsets that may be available from time to time to any Lender.
"LIBOR REVOLVING CREDIT LOAN" means a LIBOR Loan outstanding under the
Revolving Credit Facility.
"LIBOR TERM LOAN" means a LIBOR Loan outstanding under the Term Loan
Facility.
"LICENSE INVENTORY" means Inventory owned by a Borrower bearing
trademarks used pursuant to license agreements between such Borrower and the
owners of such trademarks.
"LIEN" as applied to the property of any Person means: (a) any
mortgage, deed to secure debt, deed of trust, lien, pledge, charge, lease
constituting a Capitalized Lease Obligation, conditional sale or other title
retention agreement, or other security interest, security title or encumbrance
of any kind in respect of any property of such Person or upon the income or
profits therefrom, (b) any arrangement, express or implied, under which any
property of such Person is
- 16 -
transferred, sequestered or otherwise identified for the purpose of subjecting
the same to the payment of Indebtedness or performance of any other obligation
in priority to the payment of the general, unsecured creditors of such Person,
(c) any Indebtedness which is unpaid more than 30 days after the same shall have
become due and payable and which if unpaid might by law (including, but not
limited to, bankruptcy and insolvency laws) or otherwise be given any priority
whatsoever over general unsecured creditors of such Person, and (d) the filing
of, or any agreement to give, any financing statement under the UCC or its
equivalent in any jurisdiction.
"LOAN" means any Revolving Credit Loan or Term Loan.
"LOAN ACCOUNT" and "LOAN ACCOUNTS" shall have the meanings ascribed
thereto in SECTION 5.4.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Note, the Fee
Letter, the Security Documents and each other instrument, agreement and document
executed and delivered by the Obligors in connection with this Agreement
(including any application, reimbursement agreement and other document executed
in connection with Letters of Credit) and each other instrument, agreement or
document referred to herein or contemplated hereby.
"LOCKBOX" means the U.S. Post Office Box(es) specified in, or pursuant
to, an Agency Account Agreement.
"MATERIALLY ADVERSE EFFECT" means any act, omission, event or
undertaking which would, singly or in the aggregate, have a materially adverse
effect upon (a) the business, assets, properties, liabilities, condition
(financial or otherwise), results of operations or business prospects of Supreme
and its Subsidiaries, taken as a whole, (b) upon the respective ability of any
Obligor or any of its Subsidiaries to perform any obligations under this
Agreement or any other Loan Document to which it is a party, or (c) the
legality, validity, binding effect, enforceability or admissibility into
evidence of any Loan Document or the ability of the Agent or any Lender to
enforce any rights or remedies under or in connection with any Loan Document; in
any case, whether resulting from any single act, omission, situation, status,
event, or undertaking, together with other such acts, omissions, situations,
statuses, events, or undertakings .
"MINIMUM COMMITMENT" means $10,000,000.
"MONEY BORROWED" means, as applied to Indebtedness, (a) Indebtedness
for money borrowed, (b) Indebtedness, whether or not in any such case the same
was for money borrowed, (i) represented by notes payable, and drafts accepted,
that represent extensions of credit, (ii) constituting obligations evidenced by
bonds, debentures, notes or similar instruments, or (iii) upon which interest
charges are customarily paid or that was issued or assumed as full or partial
payment for property (other than trade credit that is incurred in the ordinary
course of business), (c) Indebtedness that constitutes a Capitalized Lease
Obligation, and (d) Indebtedness that is such by virtue of CLAUSE (G) of the
definition thereof, but only to the extent that the obligations Guaranteed are
obligations that would constitute Indebtedness for Money Borrowed.
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"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which a Borrower or a Related Company is required to
contribute or has contributed within the immediately preceding 6 years.
"NATIONSBANK" means NationsBank, N.A., and its successors and assigns.
"NET INCOME" or "NET LOSS" means, as applied to any Person, the net
income (or net loss) of such Person for the period in question after giving
effect to deduction of or provision for all operating expenses, all taxes and
reserves (including reserves for deferred taxes and all other proper
deductions), all determined in accordance with GAAP, provided that there shall
be excluded: (a) the net income (or net loss) of any Person accrued prior to the
date it becomes a Subsidiary of, or is merged into or consolidated with, the
Person whose Net Income is being determined or a Subsidiary of such Person, (b)
the net income (or net loss) of any Person in which the Person whose Net Income
is being determined or any Subsidiary of such Person has an ownership interest,
except, in the case of net income, to the extent that any such income has
actually been received by such Person or such Subsidiary in the form of cash
dividends or similar distributions, (c) any restoration of any contingency
reserve, except to the extent that provision for such reserve was made out of
income during such period, (d) any net gains or losses on the sale or other
disposition, not in the ordinary course of business, of Investments, Business
Units and other capital assets, provided that there shall also be excluded any
related charges for taxes thereon, (e) any net gain arising from the collection
of the proceeds of any insurance policy (other than the proceeds of business
interruption insurance), (f) any write-up of any asset, and (g) any other
extraordinary item.
"NET OUTSTANDINGS" of any Lender means, at any time, the sum of (a) all
amounts paid by such Lender (other than pursuant to SECTION 15.7) to the Agent
in respect of Revolving Credit Loans or otherwise under this Agreement, MINUS
(b) all amounts paid by the Agent to such Lender which are received by the Agent
and which, pursuant to this Agreement, are paid over to such Lender for
application in reduction of the outstanding principal balance of the Revolving
Credit Loans.
"NET PROCEEDS" means proceeds received by any Borrower or any of its
Subsidiaries in cash from any Asset Disposition (including, without limitation,
payments under notes or other debt securities received in connection with any
Asset Disposition), net of: (a) the transaction costs of such Asset Disposition;
(b) any tax liability arising from such Asset Disposition; and (c) amounts
applied to repayment of Indebtedness (other than the Secured Obligations)
secured by a Permitted Lien on the asset or property disposed.
"NET WORTH" of any Person means the total shareholders' equity
(including capital stock, additional paid-in capital and retained earnings,
after deducting treasury stock) which would appear as such on a balance sheet of
such Person prepared in accordance with GAAP.
"NON-RATABLE LOAN" means a Revolving Credit Loan made by NationsBank in
accordance with the provisions of SECTION 5.8(C).
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"NOTE" means any of the Revolving Credit Notes or Term Notes,
individually, and "NOTES" means all of the Revolving Credit Notes and Term
Notes, collectively.
"OBLIGOR" means any Borrower, any Guarantor and any other Person liable
with respect to the Secured Obligations, whether as maker, endorser, guarantor,
pledgor or otherwise, and whether such liability is direct, indirect, primary or
secondary, and "Obligors" means all of such Persons collectively.
"OPERATING LEASE" means any lease (other than a lease constituting a
Capitalized Lease Obligation) of real or personal property, including the
SunTrust Lease.
"OPERATING LEASE EXPENSE" means the aggregate of all rent payments
under Operating Leases, including payments with respect to the SunTrust Lease.
"ORIGINAL LOAN AGREEMENT" has the meaning set forth in the Recitals of
this Agreement.
"OVERBID PROCEDURES ORDER" has the meaning set forth in Section 14.1(b)
of the Xxxxxx Acquisition Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"PERMITTED ACQUISITION DEBT" means Indebtedness of the Borrowers or
their Subsidiaries incurred or assumed in connection with Permitted Acquisitions
in accordance with the limitations set forth in the definition of Permitted
Acquisitions.
"PERMITTED ACQUISITIONS" means Acquisitions of Persons or Business
Units in the same business as the Borrowers provided (a) no Default or Event of
Default exists before or after giving effect to such Acquisition, (b) the
Borrowers are in compliance with the covenants set forth in SECTIONS 12.1, 12.2
and 12.14 on a pro forma basis after giving effect to such Acquisition, (c) the
purchase price (including without limitation cash, Indebtedness and assumed
Liabilities) for any such Acquisition shall not exceed $5,000,000 and for all
such Acquisitions consummated after the Agreement Date shall not exceed
$15,000,000, (d) the aggregate principal amount of Indebtedness assumed or
incurred in connection with any such Acquisition shall not exceed $3,000,000 and
in connection with all such Acquisitions consummated after the Agreement Date
shall not exceed $9,000,000, (e) simultaneously with the consummation of such
Acquisition, the Borrowers' Agent shall deliver to the Agent a certificate of
the Financial Officer (i) setting forth the calculations required to establish
the Borrowers' pro forma compliance with the requirements of SECTIONS 12.1, 12.2
and 12.14 as of the date of the consummation of such Acquisition, (ii) setting
forth the purchase price and Indebtedness assumed or incurred in connection with
such Acquisition and all such Acquisitions consummated after the Agreement Date,
and (iii) stating that no Default or Event of Default exists before or after
giving effect to such Acquisition, and (f) such Acquisition does not involve a
"hostile" takeover or acquisition.
"PERMITTED HOLDERS" means, as of the date of determination, (a) Xxxxx
Xxxxxxxxxxx, Xxxxxx Xxxxxxxxxxx, their spouses, their respective lineal
descendants and the spouses of such
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lineal descendants, (b) any Person controlled by any of the Persons included in
the foregoing CLAUSE (A) (as the term "controlled") is defined under the
definition of "Affiliate"), (c) trusts for the benefit of any of the Persons
included in the foregoing CLAUSE (A), and (d) any charitable foundation a
majority of whose members, trustees or directors, as the case may be, are
Persons included in the foregoing CLAUSE (A).
"PERMITTED INDEBTEDNESS" means: (a) the Loans, (b) letter of credit and
steamship guaranty facilities in the aggregate amount of up to $60,000,000 at
any time with Xxxxxxxx Bank, N.A., Ocean Bank, Bank of Tokyo-Mitsubishi, and
other financial institutions, (c) Indebtedness of up to $16,300,000 arising
under the SunTrust Lease, (d) Permitted Purchase Money Indebtedness, (e) the
High Yield Debt in an aggregate principal amount not to exceed $125,000,000, (f)
other Subordinated Indebtedness, and (g) Permitted Acquisition Debt.
"PERMITTED INVESTMENTS" means: (a) Investments in: (i) negotiable
certificates of deposit, time deposits and banker's acceptances issued by any
Lender or any Affiliate of a Lender or by any United States bank or trust
company having capital, surplus and undivided profits in excess of $250,000,000,
(ii) any direct obligation of the United States of America or any agency or
instrumentality thereof which has a remaining maturity at the time of purchase
of not more than one year and repurchase agreements relating to the same, (iii)
sales on credit in the ordinary course of business on terms customary in the
industry, and (iv) notes, accepted in the ordinary course of business,
evidencing overdue accounts receivable arising in the ordinary course of
business, (b) other Investments, the net aggregate amount of which does not at
any time exceed $250,000, (c) the Guaranty of Sunny Industries' obligations
permitted under SECTION 12.3, and (d) Permitted Acquisitions.
"PERMITTED LIENS" means: (a) Liens securing taxes, assessments and
other governmental charges or levies (excluding any Lien imposed pursuant to any
of the provisions of ERISA) or the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, but in all cases, only if payment shall not at
the time be required to be made in accordance with SECTION 10.4; (b) Liens
consisting of deposits or pledges made in the ordinary course of business in
connection with, or to secure payment of, obligations under workers'
compensation, unemployment insurance or similar legislation or under surety or
performance bonds, in each case arising in the ordinary course of business; (c)
Liens constituting encumbrances in the nature of zoning restrictions, easements
and rights or restrictions of record on the use of the Real Estate, which in the
sole judgment of the Agent do not materially detract from the value of such Real
Estate or impair the use thereof in the business of the Obligors; (d) Purchase
Money Liens securing Permitted Purchase Money Indebtedness; (e) purchase money
security interests of Xxxxxxxx Bank, N.A., Ocean Bank, Bank of Tokyo-Mitsubishi,
and other financial institutions, in Inventory acquired by the Borrowers through
letters of credit issued by Xxxxxxxx Bank, N.A., Ocean Bank, Bank of
Tokyo-Mitsubishi, or such other financial institutions but only if such Lien
shall at all times be confined solely to the tangible asset, the purchase price
of which was financed by the letter of credit and the reimbursement obligations
relating to which are secured by such Lien; (f) Liens in favor of SunTrust Bank,
Miami, N.A. as security for Supreme's obligations arising under the SunTrust
Lease, provided such Liens are subject to a lien subordination agreement
acceptable to the Agent
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and the Lenders; (g) Liens of the Agent arising under this Agreement and the
other Loan Documents; (h) Liens arising out of or resulting from any judgment or
award, the time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Obligors are fully protected by insurance or
in respect of which the Obligors shall at any time in good faith be prosecuting
an appeal or proceeding for a review and in respect of which a stay of execution
pending such appeal or proceeding for review shall have been secured, and as to
which appropriate reserves have been established on the books of the Obligors;
and (i) the interest of the Factors in factored Receivables, provided
Assignments of Factoring Credit Balances are then effective.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" means Purchase Money
Indebtedness secured only by Purchase Money Liens and Capitalized Lease
Obligations up to an aggregate amount outstanding at any time equal to
$1,500,000.
"PERMITTED RECEIVABLE DISPOSITION" means any transfer of Receivables by
a Borrower to Supreme International (New York) on or about December 30 of any
year, PROVIDED that (a) such transfer shall be expressly subject to the Security
Interest of the Agent, which shall maintain its first priority status at all
times, (b) such transfer shall expressly provide for the transfer of such
Receivables back to the applicable Borrower promptly after January 1, (c) the
Agent shall have received such assurances as it shall deem appropriate to the
effect that such transfer does not violate or conflict with any applicable law
or regulation, (d) such transfer shall be evidenced by such agreements, notes,
documents and filings as the Agent may request, including UCC-1 filings, and
shall otherwise be acceptable to the Agent, and (e) the Agent shall have
consented to such transfer in writing.
"XXXXX XXXXX" means Xxxxx Xxxxx International, Inc., a New York
corporation.
"XXXXX XXXXX ACQUISITION" means the Acquisition by Supreme from the
Xxxxx Xxxxx Sellers of all of the capital stock of Xxxxx Xxxxx.
"XXXXX XXXXX ACQUISITION AGREEMENT" means the Stock Purchase Agreement
dated as of January 28, 1999 between the Xxxxx Xxxxx Sellers and Supreme,
together with all exhibits and schedules thereto, as the same may be amended up
to and through the Xxxxx Xxxxx Acquisition Date with the consent of the Agent
and the Required Lenders to all amendments, other than any amendment solely to
extend the date by which the Xxxxx Xxxxx Acquisition is required to occur.
"XXXXX XXXXX ACQUISITION DATE" means the date on which the Xxxxx Xxxxx
Acquisition is consummated.
"XXXXX XXXXX ACQUISITION DOCUMENTS" means, collectively, the Xxxxx
Xxxxx Acquisition Agreement and all other documents, agreements and certificates
executed in connection with the consummation of the transactions contemplated by
the Xxxxx Xxxxx Acquisition Agreement.
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"XXXXX XXXXX ACQUISITION DOCUMENTS ASSIGNMENT" means the Collateral
Assignment of Purchase Documents, in form and substance satisfactory to the
Agent, dated the Xxxxx Xxxxx Acquisition Date, made by Supreme in favor of the
Agent, for the benefit of the Lenders.
"XXXXX XXXXX SELLERS" means, collectively, Xxxxxxxxxxx X. Xxxxxx,
Xxxxxxx Xxxxxxxxx and Xxxxxx Guaranty Trust Company, as trustee of the PEI Trust
created under Par. E. of Article 3 of the Agreement dated November 19, 1985, as
amended January 27, 1986.
"PERSON" means an individual, corporation, partnership, association,
trust or unincorporated organization or a government or any agency or political
subdivision thereof.
"XXXXXXXX-VAN HEUSEN" means Xxxxxxxx-Van Heusen Corporation, a Delaware
corporation.
"PLEDGE AGREEMENT" means the Stock Pledge Agreement pursuant to which
Supreme grants the Agent, for the benefit of the Lenders, a first priority
security interest in all of the outstanding capital stock of each Subsidiary of
Supreme.
"PRIME RATE" means during the period from the Effective Date through
the last day of the month in which the Effective Date falls, the per annum rate
of interest publicly announced by NationsBank at its principal office as its
"prime rate" as in effect on the Effective Date, and thereafter during each
succeeding calendar month, means such "prime rate" as in effect on the last
Business Day of the immediately preceding calendar month. Any change in an
interest rate resulting from a change in the Prime Rate shall become effective
as of 12:01 a.m. on the first day of the month following the month in which such
change was announced. The Prime Rate is a reference used by NationsBank in
determining interest rates on certain loans and is not intended to be the lowest
rate of interest charged on any extension of credit to any debtor.
"PRIME RATE LOAN" means any Prime Rate Revolving Credit Loan or Prime
Rate Term Loan, and "PRIME RATE LOANS" means more than one such Loan.
"PRIME RATE REVOLVING CREDIT LOAN" means each borrowing of Prime Rate
Loans under the Revolving Credit Facility on the same day, a specified principal
amount of Prime Rate Loans outstanding under the Revolving Credit Facility, and
any Non-Ratable Loan.
"PRIME RATE TERM LOAN" means at any time the aggregate principal amount
of Prime Rate Loans then outstanding under the Term Loan Facility.
"PRIVATE LABEL INVENTORY" means Inventory owned by a Borrower bearing
private label trademarks pursuant to agreements between such Borrower and the
owners of such private label trademarks.
"PRO FORMA" means the pro forma balance sheet of Supreme and its
consolidated Subsidiaries as at the Effective Date, giving effect to the
transactions contemplated by this
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Agreement, the High Yield Debt Offering, the Xxxxxx Acquisition Agreement, and
the Xxxxx Xxxxx Acquisition Agreement.
"PROJECTIONS" shall have the meaning set forth in SECTION 6.1(A)(15).
"PROPORTIONATE SHARE" or "RATABLE", as applied to a Lender, means such
Lender's share of an amount in Dollars or other property at the time of
determination equal to (i) the Commitment Percentage of such Lender, or (ii) if
the Commitments are terminated, the percentage of the total principal amount of
Loans (plus obligations under Letters of Credit) outstanding at such time
obtained by dividing the principal amount of the Loans (plus obligations under
Letters of Credit) then owing to such Lender by the total principal amount of
all Loans (plus obligations under Letters of Credit) then owing to all Lenders.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness created to finance the
payment of all or any part of the purchase price (not in excess of the fair
market value thereof) of any tangible asset (other than Inventory) and incurred
at the time of or within 10 days prior to or after the acquisition of such
tangible asset.
"PURCHASE MONEY LIEN" means any Lien securing Purchase Money
Indebtedness, but only if such Lien shall at all times be confined solely to the
tangible asset (other than Inventory) the purchase price of which was financed
through the incurrence of the Purchase Money Indebtedness secured by such Lien.
"PVH INVENTORY" means all of the Inventory acquired by Supreme pursuant
to the Xxxxxx Acquisition Agreement.
"PVH INVENTORY PURCHASE CONTRACT" means the Inventory Purchase
Agreement dated as of March 12, 1999 between Supreme and Xxxxxxxx-Van Heusen,
pursuant to which Xxxxxxxx-Van Heusen agrees to purchase all of the PVH
Inventory.
"PVH INVENTORY PURCHASE CONTRACT ASSIGNMENT" means the Collateral
Assignment of Contract, in form and substance satisfactory to the Agent, dated
on or about the Effective Date, made by Supreme in favor of the Agent, for the
benefit of the Lenders, and consented to by Xxxxxxxx-Van Heusen.
"REAL ESTATE" means all of the Borrowers' and their Subsidiaries now
owned or hereafter acquired estates in real property, including, without
limitation, all fees, leaseholds, future interests and easements, together with
all of the Borrowers' and their Subsidiaries now owned or hereafter acquired
interests in the improvements thereon, the fixtures attached thereto and the
easements appurtenant thereto.
"RECEIVABLES" means and includes, as to any Person, all of such
Person's then owned or existing and future acquired or arising (a) rights to the
payment of money or other forms of consideration of any kind (whether classified
under the UCC as accounts, contract rights, chattel paper, general intangibles
or otherwise) including, but not limited to, accounts receivable, letters
- 23 -
of credit and the right to receive payment thereunder, chattel paper, tax
refunds, insurance proceeds, Contract Rights, notes, drafts, instruments,
documents, acceptances and all other debts, obligations and liabilities in
whatever form from any Person and guaranties, security and Liens securing
payment thereof, (b) goods, whether now owned or hereafter acquired, and whether
sold, delivered, undelivered, in transit or returned, which may be represented
by, or the sale or lease of which may have given rise to, any such right to
payment or other debt, obligation or liability, and (c) cash and non-cash
proceeds of any of the foregoing.
"RELATED COMPANY" means, as to any Person, any (a) corporation which is
a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as such Person, (b) partnership or other trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Code) with such Person, or (c) member of the same
affiliated service group (within the meaning of Section 414(m) of the Code) as
such Person or any corporation described in CLAUSE (A) above or any partnership,
trade or business described in CLAUSE (B) above.
"REQUIRED LENDERS" means, at any time, any combination of Lenders whose
Commitment Percentages at such time aggregate in excess of 66.66%; PROVIDED,
HOWEVER, that if any Lender shall have failed to fund its Proportionate Share of
any Loan in accordance with the terms of this Agreement, then, for so long as
such failure continues, the term "Required Lenders" shall mean Lenders
(excluding such Lender whose failure to fund its Proportionate Share of any Loan
has not been cured) whose Commitment Percentages (computed after excluding the
defaulting Lender's Commitment from the Total Commitment) at such time aggregate
in excess of 66.66%; PROVIDED FURTHER, HOWEVER, that if the Commitments have
been terminated, the term "Required Lenders" shall mean Lenders (excluding each
Lender whose failure to fund its Proportionate Share of any Loan has not been
cured) holding Loans (plus obligations under Letters of Credit) representing in
excess of 66.66% of the aggregate principal amount of Loans and obligations
under Letters of Credit (excluding the Loans and obligations under Letters of
Credit owing to the defaulting Lender) outstanding at such time.
"RESTRICTED DISTRIBUTION" by any Person means (a) its retirement,
redemption, purchase, or other acquisition for value of any capital stock or
other equity securities or partnership interests issued by such Person, (b) the
declaration or payment of any dividend or distribution on or with respect to any
such securities or partnership interests, (c) any loan or advance by such Person
to, or other investment by such Person in, the holder of any of such securities
or partnership interests, and (d) any other payment by such Person in respect of
such securities or partnership interests.
"RESTRICTED PAYMENT" means (a) any redemption, repurchase or prepayment
(including any payment made to any Person to defease payment obligations under
the High Yield Debt or any other Indebtedness) or other retirement, prior to the
stated maturity thereof or prior to the due date of any regularly scheduled
installment or amortization payment with respect thereto, of any Indebtedness of
a Person (other than the Secured Obligations and trade debt), (b) any
redemption, retirement or payment with respect to the High Yield Debt or any
other Subordinated Indebtedness other than in accordance with the subordination
agreement or
- 24 -
provisions applicable thereto, and (c) the payment by any Person of the
principal amount of or interest on any Indebtedness (other than trade debt)
owing to an Affiliate of such Person.
"REVOLVING CREDIT FACILITY" means the facility for the Revolving Credit
Loans in the principal sum of up to $75,000,000, as reduced pursuant to SECTION
2.6, or such lesser or greater amount as shall be agreed upon from time to time
in writing by the Agent, the Lenders and the Borrowers.
"REVOLVING CREDIT LOANS" means loans made to the Borrowers pursuant to
SECTION 2.1.
"REVOLVING CREDIT NOTE" means each Revolving Credit Note made by the
Borrowers payable to the order of a Lender evidencing the joint and several
obligation of the Borrowers to pay the aggregate unpaid principal amount of the
Revolving Credit Loans made to them by such Lender (and any promissory note or
notes that may be issued from time to time in substitution, renewal, extension,
replacement or exchange therefor whether payable to such Lender or to a
different Lender in connection with a Person becoming a Lender after the
Effective Date or otherwise) substantially in the form of EXHIBIT A-1 hereto,
with all blanks properly completed, either as originally executed or as the same
may from time to time be supplemented, modified, amended, renewed, extended or
refinanced.
"XXXXXX" means, collectively, Xxxxxx Corporation, a Delaware
corporation, Frost Bros. Enterprises, Inc., a Texas corporation, and Maquiladora
Sur, S.A. de C.V., a Mexican corporation.
"XXXXXX ACQUISITION" means the Acquisition by Supreme of substantially
all of the assets of the Xxxxxx Division.
"XXXXXX ACQUISITION AGREEMENT" means the Purchase and Sale Agreement
dated as of December 28, 1998 between Xxxxxx and Supreme, together with all
exhibits and schedules thereto, as amended by the First Amendment thereto dated
as of February 24, 1999, as the same may be further amended up to and through
the Effective Date with the consent of the Agent and the Lenders to all such
further amendments, other than any amendment solely to extend the date by which
the Xxxxxx Acquisition is required to occur.
"XXXXXX ACQUISITION DOCUMENTS" means, collectively, the Xxxxxx
Acquisition Agreement and all other documents, agreements and certificates
executed in connection with the consummation of the transactions contemplated by
the Xxxxxx Acquisition Agreement.
"XXXXXX ACQUISITION DOCUMENTS ASSIGNMENT" means the Collateral
Assignment of Purchase Documents, in form and substance satisfactory to the
Agent, dated on or about the Effective Date, made by Supreme in favor of the
Agent, for the benefit of the Lenders.
"XXXXXX DIVISION" means the portion of the division of Xxxxxx related
to the Xxxx Xxxxx, Manhattan and Lady Manhattan trademarks to be acquired by
Supreme pursuant to the Xxxxxx Acquisition Agreement.
- 25 -
"SCHEDULE OF INVENTORY" means a schedule delivered by the Borrowers'
Agent to the Agent pursuant to the provisions of SECTION 9.14(B).
"SCHEDULE OF RECEIVABLES" means a schedule delivered by the Borrowers'
Agent to the Agent pursuant to the provisions of SECTION 9.14(A).
"SECURED OBLIGATIONS" means, in each case whether now in existence or
hereafter arising, (a) the principal of, and interest and premium, if any, on,
the Loans, (b) the reimbursement obligations and all other obligations of the
Borrowers to NationsBank or any Lender arising in connection with Letters of
Credit, and (c) all indebtedness, liabilities, obligations, covenants and duties
of the Obligors to the Agent or to the Lenders of every kind, nature and
description arising under or in respect of this Agreement, the Notes or any of
the other Loan Documents, or the Banking Relationship, whether direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note, and
whether or not for the payment of money, including without limitation, fees
required to be paid pursuant to ARTICLE 5 and expenses required to be paid or
reimbursed pursuant to SECTION 16.2. As used herein, "Banking Relationship"
means obligations of the Obligors relating to or arising out of (i) checking and
operating account relationships among the Obligors and any Lender (or any
Affiliate of a Lender) in the ordinary course of business and (ii) Interest Rate
Protection Agreements.
"SECURITY DOCUMENTS" means each of (a) the Financing Statements, (b)
the Assignments of Factoring Credit Balances, (c) the Pledge Agreement, (d) the
Trademark Assignment, (e) the Xxxxxx Acquisition Documents Assignment, (f) the
PVH Inventory Purchase Contract Assignment, (g) the Xxxxx Xxxxx Acquisition
Documents Assignment, (h) each Credit Insurance Assignment, and (i) each other
writing executed and delivered by any Person securing the Secured Obligations or
evidencing such security.
"SECURITY INTEREST" means the Liens of the Agent, for the benefit of
the Lenders, on and in the Collateral effected hereby or by any of the Security
Documents or pursuant to the terms hereof or thereof.
"SETTLEMENT DATE" means each Business Day after the Effective Date
selected by the Agent in its sole discretion subject to and in accordance with
the provisions of SECTION 5.8(C) as of which a Settlement Report is delivered by
the Agent and on which settlement is to be made among the Lenders in accordance
with the provisions of SECTION 5.8.
"SETTLEMENT REPORT" means each report, substantially in the form
attached hereto as EXHIBIT D, prepared by the Agent and delivered to each Lender
and setting forth, among other things, as of the Settlement Date indicated
thereon and as of the next preceding Settlement Date, the aggregate principal
balance of all Revolving Credit Loans outstanding, each Lender's Commitment
Percentage thereof, each Lender's Net Outstandings and all Non-Ratable Loans
made, and all payments of principal, interest and fees received by the Agent
from the Borrowers during the period beginning on such next preceding Settlement
Date and ending on such Settlement Date.
- 26 -
"STANDBY LETTER OF CREDIT" means that certain standby letter of credit
no. 931326 issued by NationsBank, for the account of Supreme, in favor of
SunTrust Bank, Miami, N.A. in connection with Supreme's obligations under the
SunTrust Lease, in the face amount of $2,175,000, as amended, modified or
extended from time to time.
"SUBORDINATED INDEBTEDNESS" means (a) the High Yield Debt, (b)
Indebtedness for Money Borrowed of the Borrowers, owing to Xxxxxx Xxxxxxxxxxx,
in an aggregate principal amount not to exceed $5,000,000, which is subordinated
to the Secured Obligations on terms and conditions acceptable to the Agent, and
(c) any other Indebtedness for Money Borrowed of the Borrowers which is in an
amount, and is subordinated to the Secured Obligations on terms and conditions,
acceptable to the Agent and the Required Lenders in their sole discretion.
"SUBSIDIARY" when used to determine the relationship of a Person to
another Person, means a Person of which an aggregate of 50% or more of the stock
of any class or classes or 50% or more of other ownership interests is owned of
record or beneficially by such other Person or by one or more Subsidiaries of
such other Person or by such other Person and one or more Subsidiaries of such
Person, (i) if the holders of such stock or other ownership interests (A) are
ordinarily, in the absence of contingencies, entitled to vote for the election
of a majority of the directors (or other individuals performing similar
functions) of such Person, even though the right so to vote has been suspended
by the happening of such a contingency, or (B) are entitled, as such holders, to
vote for the election of a majority of the directors (or individuals performing
similar functions) of such Person, whether or not the right so to vote exists by
reason of the happening of a contingency, or (ii) in the case of such other
ownership interests, if such ownership interests constitute a majority voting
interest.
"SUNTRUST LEASE" means the synthetic lease provided to Supreme with
respect to its real property located at 0000 Xxxxxxxxx 000xx Xxxxxx, Xxxxx,
Xxxxxxx pursuant to that certain Master Agreement, dated as of August 28, 1997,
among Supreme, SUP Joint Venture, SouthTrust Bank, National Association,
SunTrust Bank, Miami, N.A., as agent and a lender, Atlantic Financial Managers,
Inc. and Atlantic Financial Group, Ltd.
"SUPREME" means Supreme International Corporation, a Florida
corporation.
"SUPREME ACQUISITION" means Supreme Acquisition Corporation, a Florida
corporation.
"SUPREME CANADA" means Supreme Munsingwear Canada, Inc., a Canadian
corporation.
"SUPREME INTERNATIONAL (DELAWARE)" means Supreme International
(Delaware), Inc., a Delaware corporation.
"SUPREME INTERNATIONAL (MEXICO)" means Supreme International
Corporation de Mexico, S.A. de C.V., a Mexican corporation.
- 27 -
"SUPREME INTERNATIONAL (NEW YORK)" means Supreme International (N.Y.),
Inc., a New York corporation.
"TERMINATION DATE" means October 1, 2002 or such later date as to which
the same may be extended pursuant to the provisions of SECTION 2.5, or, if
earlier, such date as the Secured Obligations shall have been accelerated
pursuant to the provisions of SECTION 13.2 or such date as all Secured
Obligations shall have been irrevocably paid in full and the Revolving Credit
Facility shall have been terminated.
"TERMINATION EVENT" means (a) a "Reportable Event" as defined in
Section 4043(b) of ERISA, but excluding any such event as to which the provision
for 30 days' notice to the PBGC is waived under applicable regulations, (b) the
filing of a notice of intent to terminate a Benefit Plan or the treatment of a
Benefit Plan amendment as a termination under Section 4041 of ERISA, or (c) the
institution of proceedings to terminate a Benefit Plan by the PBGC under Section
4042 of ERISA or the appointment of a trustee to administer any Benefit Plan.
"TERM LOAN" means each loan made to the Borrowers pursuant to SECTION
4.1, as well as all such Loans collectively, as the context requires.
"TERM LOAN FACILITY" means the facility for the Term Loan in the
principal amount of $25,000,000.
"TERM NOTE" means each Term Note made by the Borrowers payable to the
order of a Lender evidencing the joint and several obligation of the Borrowers
to pay the aggregate unpaid principal amount of the Term Loan made to them by
such Lender (and any promissory note or notes that may be issued from time to
time in substitution, renewal, extension, replacement or exchange therefor
whether payable to such Lender or to a different Lender in connection with a
Person becoming a Lender after the Effective Date or otherwise) substantially in
the form of EXHIBIT A-2 hereto, with all blanks properly completed, either as
originally executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or refinanced.
"TOTAL COMMITMENT" means the sum of the Commitments.
"TRADEMARK ASSIGNMENT" means the Amended and Restated Conditional
Assignment and Trademark Security Agreement between Supreme and the Agent, for
the benefit of the Lenders, as the same may be amended, modified or supplemented
from time to time.
"TYPE" when used in respect of any Loan, shall refer to the rate by
reference to which interest on such Loan is determined.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of Georgia or in any other state the laws of which are required by
Section 9-103 thereof to be applied in connection with the issue of perfection
of security interests.
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"UNFUNDED CAPITAL EXPENDITURES" means Capital Expenditures which are
paid for by a Person other than with the proceeds of Indebtedness for Money
Borrowed (other than the Loans) incurred to finance such Capital Expenditures
and other than those represented by Capitalized Lease Obligations.
"UNFUNDED VESTED ACCRUED BENEFITS" means, with respect to any Benefit
Plan at any time, the amount (if any) by which (a) the present value of all
vested nonforfeitable benefits under such Benefit Plan exceeds (b) the fair
market value of all Benefit Plan assets allocable to such benefits, as
determined using such reasonable actuarial assumptions and methods as are
specified in the Schedule B (Actuarial Information) to the most recent Annual
Report (Form 5500) filed with respect to such Benefit Plan.
Section 1.2 OTHER REFERENTIAL PROVISIONS.
(a) All terms in this Agreement, the Exhibits and Schedules hereto
shall have the same defined meanings when used in any other Loan Documents,
unless the context shall require otherwise.
(b) Except as otherwise expressly provided herein, all accounting terms
not specifically defined or specified herein shall have the meanings generally
attributed to such terms under GAAP including, without limitation, applicable
statements and interpretations issued by the Financial Accounting Standards
Board and bulletins, opinions, interpretations and statements issued by the
American Institute of Certified Public Accountants or its committees.
(c) All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural, and the plural shall include the singular.
(d) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provisions of this Agreement.
(e) Titles of Articles and Sections in this Agreement are for
convenience only, do not constitute part of this Agreement and neither limit nor
amplify the provisions of this Agreement, and all references in this Agreement
to Articles, Sections, Subsections, paragraphs, clauses, subclauses, Schedules,
Annexes or Exhibits shall refer to the corresponding Article, Section,
Subsection, paragraph, clause or subclause of, or Schedule, Annex or Exhibit
attached to, this Agreement, unless specific reference is made to the articles,
sections or other subdivisions or divisions of , or to schedules or exhibits to,
another document or instrument.
(f) Each definition of a document in this Agreement shall include such
document as amended, modified, supplemented or restated from time to time in
accordance with the terms of this Agreement.
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(g) Except where specifically restricted, reference to a party to a
Loan Document includes that party and its successors and assigns permitted
hereunder or under such Loan Document.
(h) Unless otherwise specifically stated, whenever a time is referred
to in this Agreement or in any other Loan Document, such time shall be the local
time in Atlanta, Georgia.
(i) Whenever the phrase "to the knowledge of the Borrowers" or words of
similar import relating to the knowledge of the Borrowers are used herein, such
phrase shall mean and refer to (i) the actual knowledge of the President or
Financial Officer or (ii) the knowledge that such officers would have obtained
if they had engaged in good faith in the diligent performance of their duties,
including the making of such reasonable specific inquiries as may be necessary
of the appropriate persons in a good faith attempt to ascertain the accuracy of
the matter to which such phrase relates.
(j) The terms accounts, chattel paper, documents, equipment,
instruments, investment property, general intangibles and inventory, as and when
used (without being capitalized) in this Agreement or the Security Documents,
shall have the meanings given those terms in the UCC.
Section 1.3 EXHIBITS AND SCHEDULES. All Exhibits and Schedules attached
hereto are by reference made a part hereof.
ARTICLE 2
REVOLVING CREDIT FACILITY
Section 2.1 REVOLVING CREDIT LOANS. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, each Lender agrees, severally, but not jointly, to make
Revolving Credit Loans to the Borrowers from time to time from the Effective
Date to but not including the Termination Date, as requested or deemed requested
by the Borrowers in accordance with the terms of SECTION 2.2, in amounts equal
to such Lender's Commitment Percentage of each such Loan requested or deemed
requested hereunder up to an aggregate amount at any one time outstanding equal
to such Lender's Commitment Percentage of the Borrowing Base; PROVIDED, HOWEVER,
that the aggregate principal amount of all outstanding Revolving Credit Loans
(after giving effect to the Loans requested) shall not at any time exceed the
Borrowing Base. It is expressly understood and agreed that the Lenders may and
at present intend to use the Borrowing Base as a maximum ceiling on Revolving
Credit Loans; PROVIDED, HOWEVER, that it is agreed that should Revolving Credit
Loans exceed the ceiling so determined or any other limitation set forth in this
Agreement, such Revolving Credit Loans shall nevertheless constitute Secured
Obligations and, as such, shall be entitled to all benefits thereof and security
therefor. The principal amount of any Revolving Credit Loan which is repaid may
be reborrowed by the Borrowers in accordance with the terms of this SECTION 2.1.
The Agent and each Lender are hereby authorized to record each repayment of
principal of the Revolving Credit Loans in their books and records, such books
and
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records constituting prima facie evidence of the accuracy of the information
contained therein, subject to the provisions of SECTION 5.4.
Section 2.2 MANNER OF BORROWING REVOLVING CREDIT LOANS. Borrowings of
the Revolving Credit Loans shall be made as follows:
(a) REQUESTS FOR BORROWING.
(i) PRIME RATE REVOLVING CREDIT LOANS. A request for a
borrowing of a Prime Rate Revolving Credit Loan shall be made, or shall
be deemed to be made, in the following manner:
(A) with respect to requests for Prime Rate Revolving
Credit Loans, the Borrowers shall give the Agent notice (which
notice shall be irrevocable) by 12:00 noon (Atlanta time) on
the proposed borrowing date of their intention to borrow,
which notice shall be in writing (including facsimile), or by
telephone followed by a confirming same-day written notice,
and shall specify the amount and date of the requested Prime
Rate Revolving Credit Loan, PROVIDED, HOWEVER, that the
failure by the Borrowers to confirm any notice by telephone
with a written notice shall not invalidate any notice so
given;
(B) whenever a presentment or request for payment is
made against the Controlled Disbursement Account in an amount
greater than the then available balance in such account, such
presentation or request shall be deemed to be a request for a
Prime Rate Revolving Credit Loan on the date of such notice in
an amount equal to the excess of such check over such
available balance;
(C) unless payment is otherwise made by the
Borrowers, the maturity of any Secured Obligation required to
be paid shall be deemed to be a request for a Prime Rate
Revolving Credit Loan on the due date in the amount required
to pay such Secured Obligation; and
(D) if a drawing is made under a Letter of Credit and
the Borrowers fail to reimburse NationsBank and the Lenders
therefor, such failure to reimburse shall be deemed to be a
request for a Prime Rate Revolving Credit Loan on the date
such notification is received in the amount so unreimbursed.
(ii) LIBOR REVOLVING CREDIT LOANS. The Borrowers may request a
LIBOR Loan under the Revolving Credit Facility by giving the Agent a
notice of borrowing (which notice shall be irrevocable) not later than
12:00 noon (Atlanta time) on the date three Business Days before the
date on which the requested LIBOR Revolving Credit Loan is to be made;
PROVIDED the Borrowers shall not be permitted to request, and the
Lenders shall not be required to make, LIBOR Revolving Credit Loans at
any time during the existence of an Event of Default. Such notice of
borrowing shall be in writing (including facsimile), or by telephone
followed by a confirming same-day written notice,
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and shall specify (A) the amount of the requested LIBOR Revolving
Credit Loan, (B) the date of the requested LIBOR Revolving Credit Loan,
and (C) the duration of the applicable Interest Period, PROVIDED,
HOWEVER, that the failure by the Borrowers to confirm any notice by
telephone with a written notice shall not invalidate any notice so
given.
(iii) NOTIFICATION OF LENDERS. Unless the Agent has elected
periodic settlements pursuant to SECTION 5.8, the Agent shall promptly
notify the Lenders of any notice of borrowing given or deemed given
pursuant to this SECTION 2.2(A) by 12:00 noon (Atlanta time) on the
proposed borrowing date with respect to a Prime Rate Revolving Credit
Loan or on the third Business Day prior to the proposed borrowing date
with respect to a LIBOR Revolving Credit Loan. The notice from the
Agent to the Lenders shall set forth the information contained in the
Borrowers' notice of borrowing. Not later than 1:30 p.m. (Atlanta time)
on the proposed borrowing date, each Lender will make available to the
Agent, for the account of the Borrowers, at the Agent's Office in funds
immediately available to the Agent, an amount equal to such Lender's
Commitment Percentage of the Revolving Credit Loans to be made on such
borrowing date.
(b) DISBURSEMENT OF LOANS. The Borrowers hereby irrevocably authorize
the Agent to disburse the proceeds of each borrowing requested, or deemed to be
requested, pursuant to this SECTION 2.2 as follows: (i) the proceeds of each
borrowing requested under SECTION 2.2(A)(I)(A) or (B) or 2.2(A)(II) shall be
disbursed by the Agent in lawful money of the United States of America in
immediately available funds, (A) in the case of the initial borrowing, in
accordance with the terms of the letter from the Borrowers' Agent to the Agent
referred to in SECTION 6.1(A)(12), and (B) in the case of each subsequent
borrowing, by credit to the Controlled Disbursement Account or to such other
account as may be agreed upon by the Borrowers' Agent and the Agent from time to
time; and (ii) the proceeds of each borrowing requested under SECTION
2.2(A)(I)(C) or (D) shall be disbursed by the Agent by way of direct payment of
the relevant principal, interest or other Secured Obligation, as the case may
be.
Section 2.3 REPAYMENT OF REVOLVING CREDIT LOANS. The Revolving Credit
Loans will be repaid as follows: (a) whether or not any Default or Event of
Default has occurred, the outstanding principal amount of all the Revolving
Credit Loans is due and payable, and shall be repaid by the Borrowers in full
together with accrued and unpaid interest on the amount repaid to the date of
repayment, on the Termination Date; (b) if at any time the aggregate unpaid
principal amount of the Revolving Credit Loans then outstanding exceeds the
Borrowing Base, the Borrowers shall repay the Revolving Credit Loans in an
amount sufficient to reduce the aggregate unpaid principal amount of such Loans
by an amount equal to such excess, together with accrued and unpaid interest on
the amount repaid to the date of repayment; and (c) the Borrowers hereby
instruct the Agent to repay the Revolving Credit Loans outstanding on any day in
an amount equal to the amount received by the Agent on such day pursuant to
SECTION 9.1(B).
Section 2.4 REVOLVING CREDIT NOTES. Each Lender's Revolving Credit
Loans and the joint and several obligation of the Borrowers to repay such Loans
shall also be evidenced by a Revolving Credit Note payable to the order of such
Lender.
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Section 2.5 EXTENSION OF FACILITY. Upon the request of the Borrowers,
the Lenders may, in their discretion, agree to extend the Revolving Credit
Facility for a period of time beyond the then effective Termination Date. Each
such extension shall be effected by the Borrowers', the Agent's and the Lenders'
execution and delivery of a written agreement evidencing such extension.
ARTICLE 3
LETTERS OF CREDIT
Section 3.1 AGREEMENT TO ISSUE. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, NationsBank agrees to issue for the account of the
Borrowers one or more Letters of Credit in accordance with this ARTICLE 3, from
time to time during the period commencing on the Effective Date and ending on
the Termination Date.
Section 3.2 AMOUNTS. NationsBank shall not have any obligation to issue
any Letter of Credit at any time:
(a) if, after giving effect to the issuance of the requested Letter of
Credit, (i) the aggregate Letter of Credit Obligations of the Borrowers would
exceed the Letter of Credit Facility then in effect or (ii) the aggregate
principal amount of the Revolving Credit Loans outstanding would exceed the
Borrowing Base (after reduction for the Letter of Credit Reserve in respect of
such Letter of Credit); or
(b) which has a term longer than one calendar year or an expiration
date after the last Business Day that is more than 15 days prior to the
Termination Date.
Section 3.3 CONDITIONS. The obligation of NationsBank to issue any
Letter of Credit is subject to the satisfaction of the conditions precedent
contained in ARTICLE 6 and the following additional conditions precedent in a
manner satisfactory to the Agent and NationsBank:
(a) the Borrowers shall have delivered to NationsBank and the Agent at
such times and in such manner as NationsBank or the Agent may prescribe an
application in form and substance satisfactory to NationsBank and the Agent for
the issuance of the Letter of Credit, a reimbursement agreement in form and
substance satisfactory to NationsBank and the Agent, and such other documents as
may be required pursuant to the terms thereof, and the form and terms of the
proposed Letter of Credit shall be satisfactory to NationsBank and the Agent;
and
(b) as of the date of issuance, no order of any court, arbitrator or
Governmental Authority having jurisdiction or authority over NationsBank shall
purport by its terms to enjoin or restrain banks generally from issuing letters
of credit of the type and in the amount of the proposed Letter of Credit, and no
law, rule or regulation applicable to banks generally and no request or
directive (whether or not having the force of law) from any Governmental
Authority
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with jurisdiction over banks generally shall prohibit, or request that
NationsBank refrain from, the issuance of letters of credit generally or the
issuance of such Letter of Credit.
Section 3.4 ISSUANCE OF LETTERS OF CREDIT.
(a) REQUEST FOR ISSUANCE. The Borrowers shall give NationsBank and the
Agent written notice of the Borrowers' request for the issuance of a Letter of
Credit no later than six Business Days prior to the proposed date of issuance of
the Letter of Credit. Such notice shall be irrevocable and shall specify the
original face amount of the Letter of Credit requested, the effective date
(which date shall be a Business Day) of issuance of such requested Letter of
Credit, whether such Letter of Credit may be drawn in a single or in multiple
draws, the date on which such requested Letter of Credit is to expire (which
date shall be a Business Day earlier than the Business Day 15 days prior to the
Termination Date), the purpose for which such Letter of Credit is to be issued
and the beneficiary of the requested Letter of Credit. The Borrowers shall
attach to such notice the form of the Letter of Credit that the Borrowers
request to be issued.
(b) RESPONSIBILITIES OF THE AGENT; ISSUANCE. The Agent shall determine,
as of the Business Day immediately preceding the requested effective date of
issuance of the Letter of Credit set forth in the notice from the Borrowers
pursuant to SECTION 3.4(a), the amount of the unused Letter of Credit Facility
and the Borrowing Base. If (i) the form of the Letter of Credit delivered by the
Borrowers to the Agent is acceptable to NationsBank and the Agent in their sole
discretion, (ii) the Agent has not received notice of a Default or an Event of
Default from the Required Lenders specifically stating that the Required Lenders
do not intend to fund their ratable portion of the Loans, (iii) the undrawn face
amount of the requested Letter of Credit is less than or equal to the lesser of
(A) the unused Letter of Credit Facility and (B) the unused Borrowing Base, and
(iv) if requested by the Agent, the Agent has received a certificate from the
Borrowers stating that the applicable conditions set forth in ARTICLE 6 have
been satisfied, then NationsBank will cause the Letter of Credit to be issued.
(c) NOTICE OF ISSUANCE. Promptly after the issuance of any Letter of
Credit, NationsBank shall give the Agent written or facsimile notice, or
telephonic notice confirmed promptly thereafter in writing, of the issuance of
such Letter of Credit, and the Agent shall give each Lender written or facsimile
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance of such Letter of Credit.
(d) NO EXTENSION OR AMENDMENT. No Letter of Credit shall be extended or
amended unless the requirements of this SECTION 3.4 are met as though a new
Letter of Credit were being requested and issued.
Section 3.5 PARTICIPATIONS.
(a) PURCHASE OF PARTICIPATIONS. Each Lender (i) is hereby deemed to
have irrevocably and unconditionally purchased and received, without recourse or
warranty, an undivided interest and participation in the Standby Letter of
Credit, and (ii) immediately upon issuance by
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NationsBank of any other Letter of Credit, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received without recourse or
warranty an undivided interest and participation in such Letter of Credit, equal
to such Lender's Commitment Percentage of the face amount thereof (including,
without limitation, all obligations of the Borrowers with respect thereto, other
than amounts owing to NationsBank under SECTION 5.2(B)(II), and any security
therefor or guaranty pertaining thereto).
(b) SHARING OF LETTER OF CREDIT PAYMENTS. In the event that NationsBank
makes a payment under any Letter of Credit and NationsBank shall not have been
repaid such amount pursuant to SECTION 3.7, then NationsBank shall be deemed to
have made a Non-Ratable Loan in the amount of such payment, and notwithstanding
the occurrence or continuance of a Default or Event of Default at the time of
such payment, such Non-Ratable Loan shall be subject to the provisions of
SECTION 5.8(B) and the absolute obligations of the Lenders to pay for their
respective participation interests therein.
(c) SHARING OF REIMBURSEMENT OBLIGATION PAYMENTS. Whenever NationsBank
receives a payment from or on behalf of the Borrowers on account of a
reimbursement obligation on any Letter of Credit as to which the Agent has
previously received for the account of NationsBank payment from a Lender
pursuant to this SECTION 3.5, NationsBank shall promptly pay to the Agent, for
the benefit of such Lender, such Lender's Commitment Percentage of the amount of
such payment from the Borrowers in Dollars. Each such payment shall be made by
NationsBank to the Agent on the Business Day on which NationsBank receives
immediately available funds pursuant to the immediately preceding sentence, if
received prior to 11:00 a.m. (Atlanta time) on such Business Day, and otherwise
on the next succeeding Business Day.
(d) DOCUMENTATION. Upon the request of any Lender, the Agent shall
furnish to such Lender copies of any Letter of Credit and the application for
any Letter of Credit, and such other documentation as may reasonably be
requested by such Lender.
(e) OBLIGATIONS IRREVOCABLE. The obligations of each Lender to make
payments to the Agent with respect to Letters of Credit and their participations
therein pursuant to the provisions of SECTION 5.8 hereof or otherwise and the
obligations of the Borrowers to make payments to NationsBank or to the Agent,
for the account of Lenders, shall be irrevocable, shall not be subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement, including, without limitation, any of
the following circumstances:
(i) Any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(ii) The existence of any claim, set-off, defense or other
right which the Borrowers may have at any time against the beneficiary
named in any Letter of Credit or any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), any Lender,
NationsBank or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated
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transactions (including any underlying transactions between the
Borrowers or any other Person and the beneficiary named in any Letter
of Credit);
(iii) Any draft, certificate or any other document presented
under any Letter of Credit upon which payment has been made in good
faith and according to its terms proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) The surrender or impairment of any Collateral or any
other security for the Secured Obligations or the performance or
observance of any of the terms of any of the Loan Documents; or
(v) The occurrence of any Default or Event of Default.
Section 3.6 DUTIES OF NATIONSBANK. Any action taken or omitted to be
taken by NationsBank under or in connection with any Letter of Credit, if taken
or omitted in the absence of gross negligence or willful misconduct, shall not
result in any liability of NationsBank to any Lender or relieve any Lender of
its obligations hereunder to NationsBank. In determining whether to pay under
any Letter of Credit, NationsBank shall have no obligation to any Lender other
than to confirm that any documents required to be delivered under such Letter of
Credit in connection with such drawing have been presented and appear on their
face to comply with the requirements of such Letter of Credit.
Section 3.7 PAYMENT OF REIMBURSEMENT OBLIGATIONS.
(a) PAYMENT TO ISSUER. Notwithstanding any provisions to the contrary
in any reimbursement agreement, the Borrowers jointly and severally agree to
reimburse NationsBank for any drawings (whether partial or full) under each
Letter of Credit and to pay to NationsBank the amount of all other reimbursement
obligations and other amounts payable to NationsBank under or in connection with
each Letter of Credit immediately when due, irrespective of any claim, set-off,
defense or other right which any Borrower may have at any time against
NationsBank or any other Person.
(b) RECOVERY OR AVOIDANCE OF PAYMENTS. In the event any payment by or
on behalf of the Borrowers with respect to any Letter of Credit (or any
reimbursement obligation relating thereto) received by NationsBank, or by the
Agent and distributed by the Agent to the Lenders on account of their respective
participations therein, is thereafter set aside, avoided or recovered from
NationsBank or the Agent in connection with any receivership, liquidation or
bankruptcy proceeding, the Lenders shall, upon demand by the Agent, pay to the
Agent, for the account of the Agent or NationsBank, their respective Commitment
Percentages of such amount set aside, avoided or recovered together with
interest at the rate required to be paid by the Agent upon the amount required
to be repaid by it.
Section 3.8 INDEMNIFICATION, EXONERATION.
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(a) INDEMNIFICATION. In addition to amounts payable as elsewhere
provided in this ARTICLE 3, the Borrowers jointly and severally agree to
protect, indemnify, pay and save the Lenders and the Agent harmless from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees) which any Lender or
the Agent may incur or be subject to as a consequence, directly or indirectly,
of
(i) the issuance of any Letter of Credit, other than as a
result of its gross negligence or willful misconduct, as determined by
a court of competent jurisdiction, or
(ii) the failure of NationsBank to honor a drawing under any
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 governmental
authority (all such acts or omissions being hereinafter referred to
collectively as "Government Acts").
(b) ASSUMPTION OF RISK BY THE BORROWERS. As among the Borrowers, the
Lenders and the Agent, the Borrowers assume all risks of the acts and omissions
of, or misuse of any Letter of Credit by, the beneficiary of any Letter of
Credit. In furtherance and not in limitation of the foregoing, subject to the
provisions of the application for the issuance of any Letter of Credit, the
Lenders and the Agent shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any Person in connection with
the application for and issuance of and presentation of drafts with
respect to any Letter of Credit, even if it should prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or
forged;
(ii) 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, which may prove to be invalid or
ineffective for any reason;
(iii) the failure of the beneficiary of any Letter of Credit
to comply duly with conditions required in order to draw upon such
Letter of Credit;
(iv) 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;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit
or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or
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(viii) any consequences arising from causes beyond the control
of the Lenders or the Agent, including, without limitation, any
Government Acts.
None of the foregoing shall affect, impair or prevent the vesting of
any of the Agent's rights or powers under this SECTION 3.8.
(c) EXONERATION. In furtherance and extension, and not in limitation,
of the specific provisions set forth above, any action taken or omitted by the
Agent, NationsBank or any Lender under or in connection with any Letter of
Credit or any related certificates, if taken or omitted in good faith, shall not
result in any liability of any Lender or the Agent to the Borrowers or relieve
the Borrowers of any of their obligations hereunder to any such Person.
Section 3.9 SUPPORTING STANDBY LETTER OF CREDIT; CASH COLLATERAL.
(a) If any Letter of Credit is outstanding on the Termination Date the
Borrowers shall, promptly on demand by the Agent, deposit with the Agent, for
the ratable benefit of the Lenders, as the Agent shall specify, either a
Supporting Standby Letter of Credit or Cash Collateral, as set forth in SECTION
3.9(B).
(b) Any Supporting Standby Letter of Credit or Cash Collateral required
pursuant to SECTION 3.9(A) shall, at the Agent's option, take the form of either
(i) a standby letter of credit (a "Supporting Standby Letter of Credit") in form
and substance satisfactory to the Agent, issued by an issuer reasonably
satisfactory to the Agent in an amount equal to 105% of the greatest amount for
which each Letter of Credit then outstanding may be drawn, under which
Supporting Standby Letter of Credit the Agent is entitled to draw amounts
necessary to reimburse the Agent and the Lenders for payments made by the Agent
and the Lenders under such Letters of Credit or under any reimbursement or
guaranty agreement with respect thereto, or (ii) Cash Collateral in 105% of the
amount necessary to reimburse the Agent and the Lenders for payments made by the
Agent and the Lenders under such Letters of Credit or under any reimbursement or
guaranty agreement with respect thereto. Such Supporting Standby Letter of
Credit or Cash Collateral shall be held by the Agent, for the benefit of the
Lenders, as security for, and to provide for the payment of, the Borrowers'
reimbursement obligations with respect to such Letters of Credit. In addition,
the Agent may at any time after the Termination Date apply any or all of such
Cash Collateral to the payment of any or all of the Secured Obligations then due
and payable. At the Borrowers' request, but subject to the Agent's reasonable
approval, the Agent shall invest any Cash Collateral consisting of cash or any
proceeds of Cash Collateral consisting of cash in Cash Equivalents, and any
commissions, expenses and penalties incurred by the Agent in connection with any
investment and redemption of such Cash Collateral shall be Secured Obligations
hereunder secured by the Collateral, shall bear interest at the rates provided
herein for the Loans and shall be charged to the Borrowers' Loan Accounts, or,
at the Agent's option, shall be paid out of the proceeds of any earnings
received by the Agent from the investment of such Cash Collateral as provided
herein or out of such cash itself. The Agent makes no representation or warranty
as to, and shall not be responsible for, the rate of return, if any, earned on
any Cash Collateral. Any earnings on Cash Collateral shall be held as additional
Cash Collateral on the terms set forth in this SECTION 3.9.
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ARTICLE 4
TERM LOAN FACILITY
Section 4.1 TERM LOAN. Upon the terms and subject to the conditions of,
and in reliance upon the representations and warranties made under, this
Agreement, each Lender agrees severally, but not jointly, to make a Prime Rate
Term Loan to the Borrowers on the Effective Date in a principal amount equal to
such Lender's Commitment Percentage of the Term Loan Facility.
Section 4.2 MANNER OF BORROWING TERM LOANS. The Borrowers shall give
the Agent a notice of borrowing at least one Business Day prior to the
occurrence of the Effective Date, which notice shall be in writing (including
facsimile), or by telephone followed by a confirming same-day written notice,
and shall specify the date of the requested Prime Rate Term Loan, PROVIDED,
however, that the failure by the Borrowers to confirm any notice by telephone
with a written notice shall not invalidate any notice so given. Upon receipt of
such notice from the Borrowers, the Agent shall promptly notify each Lender
thereof. Each Lender will make the amount equal to its Commitment Percentage of
the aggregate principal amount of the Term Loan available to the Agent, for the
account of the Borrowers, at the Agent's Office, prior to 12:00 noon (Atlanta
time) on the Effective Date in funds immediately available to the Agent. On the
Effective Date, upon satisfaction of the applicable conditions set forth in
SECTIONS 6.1 and 6.2, the Agent will disburse the Term Loan, in same day funds
in accordance with the terms of the letter from the Borrowers' Agent to the
Agent referred to in SECTION 6.1(A)(12).
Section 4.3 REPAYMENT OF TERM LOAN. The Borrowers shall repay
$10,000,000 of the Term Loan (the "Initial Term Loan Reduction") on the earlier
of (a) the date which is 120 days after the Agreement Date and (b) the date on
which the Borrowers receive the net proceeds of the High Yield Debt Offering.
The remaining principal amount of the Term Loan is due and payable, and shall be
repaid in full by the Borrowers, in twelve consecutive quarterly installments of
$1,250,000, with the first such installment due on the earlier of (i) October 1,
1999 and (ii) the date which is 90 days after the Borrowers receive the net
proceeds of the High Yield Debt Offering, and the remaining installments due on
the same day of each month falling three, six, nine and twelve months after the
month in which the first such $1,250,000 installment is due. Notwithstanding the
foregoing, the entire principal balance of the Term Loan shall be due and
payable upon any termination of the Revolving Credit Facility.
Section 4.4 TERM NOTES. The Term Loan made by each Lender and the joint
and several obligation of the Borrowers to repay such Loan shall also be
evidenced by a Term Note payable to the order of such Lender. Each such Term
Note shall be dated the Effective Date (or the later "effective date" under any
Assignment and Acceptance) and be duly and validly executed and delivered by the
Borrowers.
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ARTICLE 5
GENERAL LOAN PROVISIONS
Section 5.1 INTEREST.
(a) PRIME RATE LOANS. Subject to the provisions of SECTION 5.1(D), the
Borrowers will pay interest on the unpaid principal amount of each Prime Rate
Loan, for each day from the day such Loan is made until such Loan is paid
(whether at maturity, by reason of acceleration, or otherwise) or is converted
to a Loan of a different Type, at a rate per annum equal to the sum of (i) the
Applicable Margin and (ii) the Prime Rate, payable monthly in arrears as it
accrues on each Interest Payment Date and when such Prime Rate Loan is due
(whether at maturity, by reason of acceleration or otherwise).
(b) LIBOR LOANS. Subject to the provisions of SECTION 5.1(D), the
Borrowers will pay interest on the unpaid principal amount of each LIBOR Loan
for the applicable Interest Period at a rate per annum equal to the sum of (i)
the Applicable Margin and (ii) LIBOR, payable monthly in arrears as it accrues
on each Interest Payment Date and when such LIBOR Loan is due (whether at
maturity, by reason of acceleration or otherwise).
(c) OTHER SECURED OBLIGATIONS. The Borrowers will, to the extent
permitted by applicable law, pay interest on the unpaid principal amount of any
Secured Obligation that is due and payable, other than the Loans, in accordance
with SECTIONS 5.1(A) or (D), as applicable, as if such Secured Obligation were a
Prime Rate Revolving Credit Loan.
(d) DEFAULT RATE. If there shall occur and be continuing an Event of
Default, at the election of the Required Lenders, the unpaid principal amount of
the Loans and other Secured Obligations shall no longer bear interest in
accordance with the terms of SECTION 5.1(A), (B) or (C), but shall bear interest
for each day from the date of such Event of Default until such Event of Default
shall have been cured or waived at a rate per annum equal to the sum of (i) the
Default Margin and (ii) the rate otherwise applicable to such Loan or other
Secured Obligation, payable on demand. The interest rate provided for in the
preceding sentence shall, to the extent permitted by applicable law, apply to
and accrue on the amount of any judgment entered with respect to any Secured
Obligation and shall continue to accrue at such rate during any proceeding
described in SECTION 13.1(G) or (H).
(e) CALCULATION OF INTEREST. The interest rates provided for in
SECTIONS 5.1(A), (B), (C) and (D) shall be computed on the basis of a year of
360 days and the actual number of days elapsed.
(f) MAXIMUM RATE. It is not intended by the Lenders, and nothing
contained in this Agreement or the Notes shall be deemed, to establish or
require the payment of a rate of interest in excess of the maximum rate
permitted by applicable law (the "Maximum Rate"). If, in any month, the
Effective Interest Rate, absent such limitation, would have exceeded the Maximum
Rate, then the Effective Interest Rate for that month shall be the Maximum Rate,
and, if in future
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months, the Effective Interest Rate would otherwise be less than the Maximum
Rate, then the Effective Interest Rate shall remain at the Maximum Rate until
such time as the amount of interest paid hereunder equals the amount of interest
which would have been paid if the same had not been limited by the Maximum Rate.
In the event, upon payment in full of the Secured Obligations, the total amount
of interest paid or accrued under the terms of this Agreement is less than the
total amount of interest which would have been paid or accrued if the Effective
Interest Rate had at all times been in effect, then the Borrowers shall, to the
extent permitted by applicable law, pay to the Lenders an amount equal to the
excess, if any, of (i) the lesser of (A) the amount of interest which would have
been charged if the Maximum Rate had, at all times, been in effect and (B) the
amount of interest which would have accrued had the Effective Interest Rate, at
all times, been in effect, and (ii) the amount of interest actually paid or
accrued under this Agreement. In the event the Lenders receive, collect or apply
as interest any sum in excess of the Maximum Rate, such excess amount shall be
applied to the reduction of the principal balance of the Secured Obligations,
and if no such principal is then outstanding, such excess or part thereof
remaining shall be paid to the Borrowers.
(g) CERTAIN PROVISIONS APPLICABLE TO LIBOR LOANS.
(i) LIMITATION ON LIBOR LOANS. Each LIBOR Loan shall be in an
amount of at least $1,000,000 or an integral multiple thereof.
Notwithstanding anything to the contrary contained herein, no more than
ten (10) LIBOR Loans shall be outstanding under this Agreement at any
one time.
(ii) PREPAYMENT. LIBOR Loans may be prepaid prior to the
applicable maturity date, upon four (4) Business Days prior notice to
the Agent, PROVIDED that the Borrowers shall reimburse the Agent and
the Lenders, on the earlier of demand or the Termination Date, an
amount calculated in accordance with SECTION 5.10. The Agent shall
promptly notify the Lenders of any such notice of prepayment received
by the Agent. Any notice of prepayment of a LIBOR Loan shall be
irrevocable. Each prepayment of any of the LIBOR Loans shall be in an
amount not less than $1,000,000.
(iii) LIBOR DETERMINED INADEQUATE OR UNFAIR. Notwithstanding
anything contained herein which may be construed to the contrary, if
with respect to any proposed LIBOR Loan for any Interest Period, the
Agent determines that LIBOR will not adequately reflect the cost to the
Lenders of making or funding any Loan as a LIBOR Loan or that the
Interbank Offered Rate is not reasonably determinable, including from
any interest rate reporting service of recognized standing, the Agent
shall forthwith give notice thereof to the Borrowers' Agent, whereupon
until the Agent notifies the Borrowers' Agent that the circumstances
giving rise to such situation no longer exist, the obligations of the
Agent and the Lenders to make such LIBOR Loans shall be suspended.
(iv) ILLEGALITY. If any applicable law, rule or regulation, or
any change therein, or any interpretation or change in interpretation
or administration thereof by any Governmental Authority, central bank
or comparable agency charged with the interpretation or administration
thereof, or compliance by the Agent or any Lender with
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any request or directive (whether or not having the force of law) of
any such authority, central bank or comparable agency, shall make it
unlawful or impossible for the Agent or any Lender to make, maintain or
fund its LIBOR Loans, the Agent shall so notify the Borrowers' Agent.
Upon receipt of such notice, notwithstanding anything contained in
SECTION 5.1 hereof, the Borrowers shall forthwith prepay in full all
LIBOR Revolving Credit Loans then outstanding and shall convert each
LIBOR Term Loan into a Prime Rate Term Loan, and shall pay all interest
accrued thereon through the date of such prepayment or conversion,
unless the Borrowers, within three Business Days after such notice from
the Agent, request the conversion of all LIBOR Loans then outstanding
into Prime Rate Loans; PROVIDED, that if the date of such repayment or
proposed conversion is not the last day of the Interest Period
applicable to such LIBOR Loan, the Borrowers shall also pay any amount
due pursuant to SECTION 5.10.
(v) EFFECT ON OTHER LOANS. If notice has been given to the
Borrowers' Agent suspending the obligation of the Lenders to make any
LIBOR Loan, or requiring LIBOR Loans to be repaid, converted or
prepaid, then, unless and until the Agent notifies the Borrowers' Agent
that the circumstances giving rise to such repayment or conversion no
longer apply, all Loans which would otherwise be made as LIBOR Loans
shall be made instead as Prime Rate Loans.
Section 5.2 FEES.
(a) AGENT'S FEE. For administration and other services performed by the
Agent in connection with its continuing administration of this Agreement, the
Borrowers shall pay to the Agent, for its own account, and not for the account
of the Lenders, an annual fee as set forth in the Fee Letter.
(b) LETTER OF CREDIT FEES.
(i) The Borrowers agree to pay to the Agent, for the ratable
benefit of the Lenders, a fee equal to (A) 1% per annum based on the
amount of the Standby Letter of Credit, and (B) 1% per annum based on
the average daily outstanding Letter of Credit Amount of each other
Letter of Credit. Such fee shall be payable to the Agent, for the
ratable benefit of the Lenders, in accordance with their respective
Commitment Percentages (x) on the Effective Date and thereafter on
September 1 of each year, in the case of the Standby Letter of Credit,
and (y) on the first day of each month in arrears, in the case of other
Letters of Credit, and shall be calculated based on a year of 360 days
and the actual number of days elapsed, PROVIDED that NationsBank and
the other Original Lenders shall be entitled to the full amount of such
fee for all periods prior to the Effective Date.
(ii) The Borrowers agree to pay to the Agent, for the account
of NationsBank, the standard fees and charges of NationsBank for
issuing, administering, amending, renewing, paying and canceling
Letters of Credit, as and when assessed.
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(c) COMMITMENT FEE. In connection with and as consideration for the
Lenders' commitments hereunder, subject to the terms hereof, to lend to the
Borrowers under the Revolving Credit Facility, the Borrowers shall pay a fee to
the Agent, for the ratable benefit of the Lenders based on their respective
Commitment Percentages, from the Effective Date until the Termination Date, in
an amount equal to 0.375% per annum of the average daily unused portion of the
Revolving Credit Facility (it being understood that no such fee shall be due
with respect to the amount of blocked Availability under SECTION 12.14 in excess
of $1,000,000), payable monthly in arrears on the first day of each month and on
the date of any permanent reduction in the Revolving Credit Facility.
(d) ORIGINATION FEE. On the Effective Date, the Borrowers shall pay to
the Agent an origination fee as set forth in the Fee Letter (which fee shall be
shared among the Agent and the Lenders in accordance with their separate written
agreements) in connection with the establishment of the Revolving Credit
Facility and in consideration of the making of Loans under this Agreement and in
order to compensate the Lenders for the costs associated with structuring,
processing, approving and closing the Revolving Credit Facility and the Loans,
but excluding expenses for which the Borrowers agree elsewhere in this Agreement
to reimburse the Agent and the Lenders.
(e) COLLECTION FEE. During the period from and including the Effective
Date to and including the Termination Date, the Borrowers will pay to the Agent
for its own account on the first day of each month an amount of interest
computed at the Effective Interest Rate applicable to Prime Rate Revolving
Credit Loans on each remittance received by the Agent against Receivables (as
contemplated by SECTION 9.1 hereof) during the preceding month, from the close
of business on the date of receipt of each such remittance until the close of
business on the first Business Day following the receipt of the remittance, as
compensation for delays in the collection and clearance of checks and other
remittances.
(f) GENERAL. All fees shall be fully earned by the Agent and the
Lenders when due and payable and, except as otherwise set forth herein, shall
not be subject to refund or rebate. All fees are for compensation for services
and are not, and shall not be deemed to be, interest or a charge for the use of
money. All fees under Sections 5.2(B)(I) and (C) shall be calculated on the
basis of a year of 360 days and the actual number of days elapsed.
Section 5.3 MANNER OF PAYMENT.
(a) Each payment (including prepayments) by the Borrowers on account of
the principal of or interest on the Loans or of any fee or other amounts payable
to the Agent and the Lenders under this Agreement or the Notes shall be made not
later than 1:30 p.m. (Atlanta time) on the date specified for payment under this
Agreement (or if such day is not a Business Day, the next succeeding Business
Day) to the Agent at the Agent's Office, in Dollars, in immediately available
funds and shall be made without any setoff, counterclaim or deduction
whatsoever.
(b) Each Borrower hereby irrevocably authorizes each Lender and each
Affiliate of each Lender to charge any account of such Borrower maintained with
such Lender or such
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Affiliate with such amounts as may be necessary from time to time to pay any
Secured Obligations which are not paid when due.
Section 5.4 LOAN ACCOUNTS; STATEMENTS OF ACCOUNT.
(a) Each Lender shall open and maintain on its books a loan account in
the Borrowers' name (each, a "Loan Account" and collectively, the "Loan
Accounts"). Each such Loan Account shall show as debits thereto each Loan made
under this Agreement by such Lender to the Borrowers and as credits thereto all
payments received by such Lender and applied to principal of such Loan, so that
the balance of the loan account at all times reflects the principal amount due
such Lender from the Borrowers.
(b) The Agent shall maintain on its books a control account for the
Borrowers in which shall be recorded (i) the amount of each disbursement made
hereunder, (ii) the amount of any principal or interest due or to become due
from the Borrowers hereunder, and (iii) the amount of any sum received by the
Agent hereunder from the Borrowers and each Lender's ratable share therein.
(c) The entries made in the accounts pursuant to SUBSECTIONS (A) and
(B) shall be prima facie evidence, in the absence of manifest error, of the
existence and amounts of the obligations of the Borrowers therein recorded and
in case of discrepancy between such accounts, in the absence of manifest error,
the accounts maintained pursuant to SUBSECTION (B) shall be controlling.
(d) The Agent will account separately to the Borrowers' Agent within 30
days after the end of each calendar month with a statement of Loans, charges and
payments made to and by the Borrowers pursuant to this Agreement, and such
account rendered by the Agent shall be deemed final, binding and conclusive,
save for manifest error, unless the Agent is notified by the Borrowers in
writing to the contrary within 60 days after the date the account to the
Borrowers' Agent was so rendered. Such notice by the Borrowers shall be deemed
an objection to only those items specifically objected to therein. Failure of
the Agent to render such account shall in no way affect the rights of the Agent
or of the Lenders hereunder.
Section 5.5 TERMINATION OF AGREEMENT. On the Termination Date, the
Borrowers shall pay to the Agent, for the account of the Lenders, in same day
funds, an amount equal to the aggregate amount of all Loans outstanding on such
date, together with accrued interest thereon, all fees payable pursuant to
SECTION 5.2 accrued from the date last paid through the effective date of
termination, any amounts payable to the Agent or any Lender pursuant to the
other provisions of this Agreement, including, without limitation, SECTIONS
13.2, 16.2, 16.3 and 16.12, any and all other Secured Obligations then
outstanding, and an amount equal to the Letter of Credit Reserve to be held by
the Agent as Cash Collateral security for the payment of and to be applied to
the payment of any amounts which may thereafter become due with respect to
Letters of Credit, and provide the Agent and the Lenders with an indemnification
agreement in form and substance satisfactory to the Agent and the Lenders with
respect to returned and dishonored items and such other matters as the Agent and
the Lenders shall require. Upon 60 days prior written notice to
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the Agent, the Borrowers may terminate this Agreement prior to the Termination
Date in effect at such time, upon payment of all of the amounts described above
and an early termination fee of (a) $500,000 if such termination occurs on or
prior to the first anniversary of the Agreement Date, and (b) $250,000 if such
termination occurs at any time thereafter, PROVIDED that, if this Agreement is
terminated and the Secured Obligations are repaid from the proceeds of a public
offering of equity securities, such early termination fee shall be reduced to
$150,000.
Section 5.6 INCREASED COSTS AND REDUCED RETURNS. The Borrowers agree
that if any law now or hereafter in effect and whether or not presently
applicable to the Agent or any Lender or any request, guideline or directive of
any Governmental Authority (whether or not having the force of law and whether
or not failure to comply therewith would be unlawful) or the interpretation or
administration thereof by any Governmental Authority, shall either (a)(i)
impose, affect, modify or deem applicable any reserve, special deposit, capital
maintenance or similar requirement against any Loan, (ii) impose on the Agent or
any Lender any other condition regarding any Loan, this Agreement, any Note or
the facilities provided hereunder, or (iii) result in any requirement regarding
capital adequacy (including any risk-based capital guidelines) affecting the
Agent or any Lender being imposed or modified or deemed applicable to the Agent
or any Lender or (b) subject the Agent or any Lender to any taxes on the
recording, registration, notarization or other formalization of the Loans or any
Note, and the result of any event referred to in CLAUSE (A) or (B) above shall
be to increase the cost to the Agent or any Lender of making, funding or
maintaining any Loan or to reduce the amount of any sum receivable by the Agent
or any Lender or the Agent's or any Lender's rate of return on capital with
respect to any Loan to a level below that which the Agent or any Lender could
have achieved but for such imposition, modification or deemed applicability
(taking into consideration the Agent's or such Lender's policies with respect to
capital adequacy) by an amount deemed by the Agent or such Lender (in the
exercise of its discretion) to be material, then, upon demand by the Agent or
such Lender, the Borrowers shall immediately pay to the Agent or such Lender
additional amounts which shall be sufficient to compensate the Agent or any such
Lender for such increased cost, tax or reduced rate of return. A certificate of
the Agent or any such Lender to the Borrowers' Agent claiming compensation under
this SECTION 5.6 shall be final, conclusive and binding on all parties for all
purposes in the absence of manifest error. Such certificate shall set forth the
nature of the occurrence giving rise to such compensation, the additional amount
or amounts to be paid to it hereunder and the method by which such amounts were
determined. In determining such amount, the Agent or such Lender may use any
reasonable averaging and attribution methods.
Section 5.7. MAKING OF LOANS.
(a) NATURE OF OBLIGATIONS OF LENDERS TO MAKE LOANS. The obligations of
the Lenders under this Agreement to make the Loans are several and are not joint
or joint and several.
(b) ASSUMPTION BY AGENT. Subject to the provisions of SECTION 5.8 and
notwithstanding the occurrence or continuance of a Default or Event of Default
or other failure of any condition to the making of Loans hereunder subsequent to
the Loans to be made on the Effective Date, unless the Agent shall have received
notice from the Required Lenders in
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accordance with the provisions of SECTION 5.7(C) prior to a proposed borrowing
date that the Lenders will not make available to the Agent their ratable portion
of the amount to be borrowed on such date, the Agent may assume that the Lenders
will make such portion available to the Agent in accordance with SECTION 2.2(A),
and the Agent may, in reliance upon such assumption, make available to the
Borrowers on such date a corresponding amount. If and to the extent any Lender
shall not make such ratable portion available to the Agent, such Lender and the
Borrowers severally agree to repay to the Agent forthwith on demand such
corresponding amount, together with interest thereon for each day from the date
such amount is made available to the Borrowers until the date such amount is
repaid to the Agent at the Effective Interest Rate or, if lower, subject to
SECTION 5.1(F), the Maximum Rate. If such Lender shall repay to the Agent such
corresponding amount, the amount so repaid shall constitute such Lender's
Commitment Percentage of the Loan made on such borrowing date for purposes of
this Agreement. The failure of any Lender to make its Commitment Percentage of
any Loan available shall not (without regard to whether the Borrowers shall have
returned the amount thereof to the Agent in accordance with this SECTION 5.7)
relieve it or any other Lender of its obligation, if any, hereunder to make its
Commitment Percentage of such Loan available on such borrowing date, but no
Lender shall be responsible for the failure of any other Lender to make its
Commitment Percentage of such Loan available on the borrowing date.
(c) DELEGATION OF AUTHORITY TO AGENT. Without limiting the generality
of SECTION 15.1, each Lender expressly authorizes the Agent to determine on
behalf of such Lender (i) any reduction or increase of advance rates applicable
to the Borrowing Base, so long as such advance rates do not at any time exceed
the rates set forth in the Borrowing Base definition, (ii) the creation or
elimination of any reserves (other than the Letter of Credit Reserve) against
the Revolving Credit Facility and the Borrowing Base and (iii) whether or not
Inventory or Receivables shall be deemed to constitute Eligible Inventory or
Eligible Receivables. Such authorization may be withdrawn by the Required
Lenders by giving the Agent written notice of such withdrawal signed by the
Required Lenders; PROVIDED, HOWEVER, that unless otherwise agreed by the Agent
such withdrawal of authorization shall not become effective until the thirtieth
Business Day after receipt of such notice by the Agent. Thereafter, the Required
Lenders shall jointly instruct the Agent in writing regarding such matters with
such frequency as the Required Lenders shall jointly determine. Unless and until
the Agent shall have received written notice from the Required Lenders as to the
existence of a Default, an Event of Default or some other circumstance which
would relieve the Lenders of their respective obligations to make Loans
hereunder, which notice shall be in writing and shall be signed by the Required
Lenders and shall expressly state that the Lenders do not intend to make
available to the Agent their ratable share of Loans made after the effective
date of such notice, the Agent shall be entitled to continue to make the
assumptions described in SECTION 5.7(B). The notice described in the preceding
sentence shall become effective on the third Business Day after receipt of such
notice by the Agent unless otherwise agreed by the Agent. The Agent shall not be
required to make any Loan as to which it shall have received notice by a Lender
of such Lender's intention not to make its ratable portion of such Loan
available to the Agent. Any withdrawal of authorization under this SECTION
5.7(C) shall not affect the validity of any Loans made prior to the
effectiveness thereof.
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(d) OVERADVANCES. Notwithstanding anything to the contrary contained
elsewhere in this SECTION 5.7 or this Agreement or the other Loan Documents, and
whether or not a Default or Event of Default exists at the time, unless
otherwise notified by the Required Lenders in accordance with SECTION 5.7(C),
the Agent may in its discretion require all Lenders to honor requests or deemed
requests by the Borrowers for Revolving Credit Loans at a time that an
Overadvance exists or which would result in an Overadvance and each Lender shall
be obligated to continue to make its Proportionate Share of Revolving Credit
Loans, up to a maximum amount outstanding equal to its Commitment to make
Revolving Credit Loans, so long as such Overadvance is not known by the Agent to
exceed $2,000,000 and so long as such Overadvance is not outstanding for more
than 30 consecutive days. "Overadvance" shall mean, as of any date of
determination, the amount, if any, by which the outstanding principal balance of
Revolving Credit Loans exceeds the sum determined from CLAUSE (B) of the
definition of the Borrowing Base.
(e) REPLACEMENT OF CERTAIN LENDERS. If a Lender (the "Affected Lender")
shall have failed to fund its Proportionate Share of any Loan requested (or
deemed requested) by the Borrowers which such Lender is obligated to fund under
the terms of this Agreement and which failure has not been cured, then, in any
such case and in addition to any other rights and remedies that the Agent, any
other Lender or the Borrowers may have against such Affected Lender, the Agent
may make written demand on such Affected Lender (with a copy to the Borrowers'
Agent) for the Affected Lender to assign, and such Affected Lender shall assign
pursuant to one or more duly executed Assignment and Acceptances within 5
Business Days after the date of such demand, to one or more Lenders willing to
accept such assignment or assignments, or to one or more Eligible Assignees
designated by the Agent, all of such Affected Lender's rights and obligations
under this Agreement (including its Commitments and all Loans owing to it) in
accordance with ARTICLE 14. The Agent is hereby irrevocably authorized to
execute one or more Assignment and Acceptances as attorney-in-fact for any
Affected Lender which fails or refuses to execute and deliver the same within 5
Business Days after the date of such demand. The Affected Lender shall be
entitled to receive, in cash and concurrently with the execution and delivery of
each such Assignment and Acceptance, all amounts owed to the Affected Lender
hereunder or under any other Loan Document, including the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment. Upon the replacement of
any Affected Lender pursuant to this SECTION 5.7(E), such Affected Lender shall
cease to have any participation in, entitlement to, or other right to share in
the Security Interest or any other Lien of the Agent in any Collateral and such
Affected Lender shall have no further liability to the Agent, any Lender or any
other Person under any of the Loan Documents (except as provided in SECTION 15.7
and elsewhere in this Agreement as to events or transactions which occur prior
to the replacement of such Affected Lender).
Section 5.8. SETTLEMENT AMONG LENDERS.
(a) TERM LOAN. The Agent shall pay to each Lender on each Interest
Payment Date or Installment Payment Date, as the case may be, its ratable share,
based on the principal amount of the Term Loan owing to such Lender, of all
payments received by the Agent hereunder in immediately available funds in
respect of the principal of, or interest on, the Term Loan, net of any amounts
payable by such Lender to the Agent, by wire transfer of same day funds.
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(b) REVOLVING CREDIT LOANS. It is agreed that each Lender's Net
Outstandings are intended by the Lenders to be equal at all times to such
Lender's Commitment Percentage of the aggregate principal amount of all
Revolving Credit Loans outstanding. Notwithstanding such agreement, the several
and not joint obligation of each Lender to fund Revolving Credit Loans made in
accordance with the terms of this Agreement ratably in accordance with such
Lender's Commitment Percentage and each Lender's right to receive its ratable
share of principal payments on Revolving Credit Loans in accordance with its
Commitment Percentage, the Lenders agree that in order to facilitate the
administration of this Agreement and the Loan Documents that settlement among
them may take place on a periodic basis in accordance with the provisions of
this SECTION 5.8.
(c) SETTLEMENT PROCEDURES AS TO REVOLVING CREDIT LOANS. To the extent
and in the manner hereinafter provided in this SECTION 5.8, settlement among the
Lenders as to Revolving Credit Loans may occur periodically on Settlement Dates
determined from time to time by the Agent, which may occur before or after the
occurrence or during the continuance of a Default or Event of Default and
whether or not all of the conditions set forth in SECTION 6.2 have been met. On
each Settlement Date payments shall be made by or to NationsBank and the other
Lenders in the manner provided in this SECTION 5.8 in accordance with the
Settlement Report delivered by the Agent pursuant to the provisions of this
SECTION 5.8 in respect of such Settlement Date so that as of each Settlement
Date, and after giving effect to the transactions to take place on such
Settlement Date, each Lender's Net Outstandings shall equal such Lender's
Commitment Percentage of the Revolving Credit Loans outstanding.
(i) SELECTION OF SETTLEMENT DATES. If the Agent elects, in its
discretion, but subject to the consent of NationsBank, to settle
accounts among the Lenders with respect to principal amounts of
Revolving Credit Loans less frequently than each Business Day, then the
Agent shall designate periodic Settlement Dates which may occur on any
Business Day after the Effective Date; PROVIDED, HOWEVER, that the
Agent shall designate as a Settlement Date any Business Day which is an
Interest Payment Date; and PROVIDED FURTHER, that a Settlement Date
shall occur at least once during each seven-day period. The Agent shall
designate a Settlement Date by delivering to each Lender a Settlement
Report not later than 12:00 noon (Atlanta time) on the proposed
Settlement Date, which Settlement Report will be in the form of EXHIBIT
D hereto and shall be with respect to the period beginning on the next
preceding Settlement Date and ending on such designated Settlement
Date.
(ii) NON-RATABLE LOANS AND PAYMENTS. Between Settlement Dates,
the Agent shall request and NationsBank may (but shall not be obligated
to) advance to the Borrowers out of NationsBank's own funds, the entire
principal amount of any Revolving Credit Loan requested or deemed
requested pursuant to SECTION 2.2(A) (any such Revolving Credit Loan
being referred to as a "Non-Ratable Loan"). The making of each
Non-Ratable Loan by NationsBank shall be deemed to be a purchase by
NationsBank of a 100% participation in each other Lender's Commitment
Percentage of the amount of such Non-Ratable Loan. All payments of
principal, interest and any other amount with respect
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to such Non-Ratable Loan shall be payable to and received by the Agent
for the account of NationsBank. Upon demand by NationsBank, with notice
thereof to the Agent, each other Lender shall pay to NationsBank, as
the repurchase of such participation, an amount equal to 100% of such
Lender's Commitment Percentage of the principal amount of such
Non-Ratable Loan. Any payments received by the Agent between Settlement
Dates which in accordance with the terms of this Agreement are to be
applied to the reduction of the outstanding principal balance of
Revolving Credit Loans, shall be paid over to and retained by
NationsBank for such application, and such payment to and retention by
NationsBank shall be deemed, to the extent of each other Lender's
Commitment Percentage of such payment, to be a purchase by each such
other Lender of a participation in the Revolving Credit Loans
(including the repurchase of participations in Non-Ratable Loans) held
by NationsBank. Upon demand by another Lender, with notice thereof to
the Agent, NationsBank shall pay to the Agent, for the account of such
other Lender, as a repurchase of such participation, an amount equal to
such other Lender's Commitment Percentage of any such amounts (after
application thereof to the repurchase of any participations of
NationsBank in such other Lender's Commitment Percentage of any
Non-Ratable Loans) paid only to NationsBank by the Agent.
(iii) NET DECREASE IN OUTSTANDINGS. If on any Settlement Date
the increase, if any, in the dollar amount of any Lender's Net
Outstandings which is required to comply with the first sentence of
SECTION 5.8(A) is less than such Lender's Commitment Percentage of
amounts received by the Agent but paid only to NationsBank since the
next preceding Settlement Date, such Lender and the Agent, in their
respective records, shall apply such Lender's Commitment Percentage of
such amounts to the increase in such Lender's Net Outstandings, and
NationsBank shall pay to the Agent, for the account of such Lender, the
excess allocable to such Lender.
(iv) NET INCREASE IN OUTSTANDINGS. If on any Settlement Date
the increase, if any, in the dollar amount of any Lender's Net
Outstandings which is required to comply with the first sentence of
SECTION 5.8(A) exceeds such Lender's Commitment Percentage of amounts
received by the Agent but paid only to NationsBank since the next
preceding Settlement Date, such Lender and the Agent, in their
respective records, shall apply such Lender's Commitment Percentage of
such amounts to the increase in such Lender's Net Outstandings, and
such Lender shall pay to the Agent, for the account of NationsBank, any
excess.
(v) NO CHANGE IN OUTSTANDINGS. If a Settlement Report
indicates that no Revolving Credit Loans have been made during the
period since the next preceding Settlement Date, then such Lender's
Commitment Percentage of any amounts received by the Agent but paid
only to NationsBank shall be paid by NationsBank to the Agent, for the
account of such Lender. If a Settlement Report indicates that the
increase in the dollar amount of a Lender's Net Outstandings which is
required to comply with the first sentence of SECTION 5.8(A) is exactly
equal to such Lender's Commitment Percentage of amounts received by the
Agent but paid only to NationsBank since the next preceding Settlement
Date, such Lender and the Agent, in their respective records, shall
apply such
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Lender's Commitment Percentage of such amounts to the increase in such
Lender's Net Outstandings.
(vi) RETURN OF PAYMENTS. If any amounts received by
NationsBank in respect of the Secured Obligations are later required to
be returned or repaid by NationsBank to the Borrowers or their
respective representatives or successors in interest, whether by court
order, settlement or otherwise, in excess of the NationsBank's
Commitment Percentage of all such amounts required to be returned by
all Lenders, each other Lender shall, upon demand by NationsBank with
notice to the Agent, pay to the Agent for the account of NationsBank,
an amount equal to the excess of such Lender's Commitment Percentage of
all such amounts required to be returned by all Lenders over the
amount, if any, returned directly by such Lender.
(vii) PAYMENTS TO AGENT, LENDERS.
(A) Payment by any Lender to the Agent shall be made
not later than 1:00 p.m. (Atlanta time) on the Business Day
such payment is due, PROVIDED that if such payment is due on
demand by another Lender, such demand is made on the paying
Lender not later than 10:00 a.m. (Atlanta time) on such
Business Day. Payment by the Agent to any Lender shall be made
by wire transfer, promptly following the Agent's receipt of
funds for the account of such Lender and in the type of funds
received by the Agent, PROVIDED that if the Agent receives
such funds at or prior to 1:00 p.m. (Atlanta time), the Agent
shall pay such funds to such Lender by 2:00 p.m. (Atlanta
time) on such Business Day. If a demand for payment is made
after the applicable time set forth above, the payment due
shall be made by 2:00 p.m. (Atlanta time) on the first
Business Day following the date of such demand.
(B) If a Lender shall, at any time, fail to make any
payment to the Agent required hereunder, the Agent may, but
shall not be required to, retain payments that would otherwise
be made to such Lender hereunder and apply such payments to
such Lender's defaulted obligations hereunder, at such time,
and in such order, as the Agent may elect in its discretion.
(C) With respect to the payment of any funds under
this SECTION 5.8(C), whether from the Agent to a Lender or
from a Lender to the Agent, the party failing to make full
payment when due pursuant to the terms hereof shall, upon
demand by the other party, pay such amount together with
interest on such amount at the Federal Funds Effective Rate.
(d) SETTLEMENT OF OTHER SECURED OBLIGATIONS. All other amounts received
by the Agent on account of, or applied by the Agent to the payment of, any
Secured Obligation owed to the Lenders (including, without limitation, fees
payable to the Lenders pursuant to SECTION 5.2 and proceeds from the sale of, or
other realization upon, all or any part of the Collateral following an Event of
Default) that are received by the Agent on or prior to 1:00 p.m. (Atlanta
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time) on a Business Day will be paid by the Agent to each Lender on the same
Business Day, and any such amounts that are received by the Agent after 1:00
p.m. (Atlanta time) will be paid by the Agent to each Lender on the following
Business Day. Unless otherwise stated herein, the Agent shall distribute fees
payable to the Lenders pursuant to SECTION 5.2 ratably to the Lenders based on
each Lender's Commitment Percentage and shall distribute proceeds from the sale
of, or other realization upon, all or any part of the Collateral following an
Event of Default ratably to the Lenders based on the amount of the Secured
Obligations then owing to each Lender.
(e) ALLOCATION OF PAYMENTS FROM BORROWER. All monies to be applied to
the Secured Obligations, whether such monies represent voluntary payments by the
Obligors or are received pursuant to demand for payment or realized from any
disposition of Collateral, shall be allocated among the Agent and such of the
Lenders and other holders of the Secured Obligations as are entitled thereto
(and, with respect to monies allocated to the Lenders, on a ratable basis unless
otherwise provided in this SECTION 5.8(E)): (i) first, to NationsBank to pay
principal and accrued interest on any portion of any Non-Ratable Loan which
NationsBank may have advanced on behalf of any Lender (other than itself) and
for which NationsBank has not been reimbursed by such Lender or the Borrowers;
(ii) second, to the Agent to pay the amount of expenses that have not been
reimbursed to the Agent by the Borrowers or the Lenders, together with interest
accrued thereon; (iii) third, to the Agent to pay any indemnified amount that
has not been paid to the Agent by the Borrowers or the Lenders, together with
interest accrued thereon; (iv) fourth, to the Agent to pay any fees due and
payable to the Agent under this Agreement; (v) fifth, to the Lenders for any
indemnified amount that they have paid to the Agent and for any expenses that
they have reimbursed to the Agent; (vi) sixth, to the Lenders in payment of the
unpaid principal and accrued interest in respect of the Loans and any other
Secured Obligations arising under this Agreement (or the other Loan Documents)
then outstanding and held by any Lender to be shared among Lenders on a ratable
basis, or on such other basis as may be agreed upon in writing by all of the
Lenders (which agreement or agreements may be entered into without notice to or
the consent or approval of the Borrower), (vii) seventh, to the Lenders and
their Affiliates in payment of the unpaid amount of all Secured Obligations
arising under or in respect of the Banking Relationship to be shared on a pro
rata basis, and (viii) eighth, to the holders of the other Secured Obligations
who are not Lenders on a pro rata basis. The allocations set forth in this
SECTION 5.8(E) are solely to determine the rights and priorities of the Agent
and the Lenders as among themselves and may be changed by the Agent and the
Lenders without notice or the consent of approval of the Borrowers or any other
Person. Whenever allocation is made pursuant to this SECTION 5.8(E) to the
holder of Secured Obligations in which another Lender acquires a participation,
the monies received by such holder shall be shared as between such holder and
such participants on a Ratable basis.
Section 5.9 MANDATORY PREPAYMENTS.
(a) PREPAYMENTS FROM ASSET DISPOSITIONS. Immediately upon receipt by a
Borrower or any of its Subsidiaries of the Net Proceeds of any Asset
Disposition, the Borrowers shall apply such Net Proceeds in prepayment of the
Loans as provided in SECTION 5.9(D); PROVIDED, HOWEVER, that the Borrowers shall
not be required to make such prepayment to the extent that (i) the Net Proceeds
from Asset Dispositions of Intellectual Property during any fiscal year of the
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Borrowers do not exceed, in the aggregate, $1,000,000 and (ii) the Net Proceeds
from all Asset Dispositions during any fiscal year of the Borrowers do not
exceed, in the aggregate, $3,000,000. Concurrently with the making of any such
payment, the Borrowers' Agent shall deliver to the Agent a certificate of the
Financial Officer demonstrating the calculations of the amount required to be
paid.
(b) PREPAYMENTS FROM EQUITY OFFERINGS. In the event that, at any time
after the Effective Date, any Borrower or any of its Subsidiaries issues capital
stock or other securities or receives an additional capital contribution in
respect of existing capital stock or other securities (excluding any such
issuance to, or receipt from, another Borrower or a consolidated Subsidiary of a
Borrower), no later than the third Business Day following the date of receipt of
the proceeds from such issuance, the Borrowers shall notify the Agent in writing
whether they intend to apply such proceeds, net of underwriting discounts and
commissions and other reasonable costs associated therewith to the redemption or
repurchase of outstanding High Yield Debt or in prepayment of the Loans as
provided in SECTION 5.9(D); PROVIDED any such redemption or repurchase of
outstanding High Yield Debt may be made only to the extent permitted under
SECTION 12.6. In the event the Borrowers fail to apply such net proceeds to the
redemption or repurchase of outstanding High Yield Debt within 60 days after the
Borrowers' receipt thereof, the Borrowers shall immediately apply such net
proceeds as provided in SECTION 5.9(D).
(c) PREPAYMENTS FROM ACQUISITION AGREEMENT PROCEEDS. Immediately upon
receipt by Supreme of any amounts payable under or pursuant to the Xxxxxx
Acquisition Agreement or the Xxxxx Xxxxx Acquisition Agreement after the
Effective Date (including amounts payable as a result of a claim by Supreme for
indemnification, but excluding amounts payable as a result of a claim by Supreme
for indemnification to the extent that the amounts so recovered are applied by
the Borrowers for the purpose of replacing, repairing or restoring any assets or
properties of the Borrowers, or satisfying claims made against the Borrowers, or
otherwise remedying or correcting the condition giving rise to the claim for
indemnification or otherwise covering any fees or expenses incurred by the
Borrowers in obtaining such indemnification) in an aggregate amount in excess of
$1,000,000, the Borrowers shall apply such amounts (net of any tax liability
attributable thereto) in payment of the Loans as provided in SECTION 5.9(D).
Concurrently with the making of any such payment, the Borrowers' Agent shall
deliver to the Agent a certificate of the Financial Officer demonstrating the
calculation of the amount required to be paid.
(d) APPLICATION OF PROCEEDS OF PREPAYMENTS. All prepayments pursuant to
this SECTION 5.9 shall be applied first to the outstanding principal of the Term
Loan, to the extent thereof, and then to the outstanding Revolving Credit Loans
and other Secured Obligations to the extent thereof, PROVIDED that payments
shall be first applied to Prime Rate Loans to the extent thereof and then to
LIBOR Loans and any payments received which would otherwise result in the
prepayment of LIBOR Loans prior to the end of the Interest Period applicable
thereto may, upon the request of the Borrowers' Agent, in the absence of an
Event of Default, be deposited with the Agent to be held as Cash Collateral for
the Secured Obligations and applied by the Agent from time to time to the
repayment of such LIBOR Loans at the end of the Interest Period applicable
thereto, to outstanding Revolving Credit Loans promptly upon the making of such
Revolving Credit Loans or, after the Termination Date, to any of the Secured
Obligations in such manner as
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the Agent shall determine in its sole discretion. All prepayments of the Term
Loan shall be applied to the principal installments payable thereon in inverse
order of maturity. All proceeds of the sale of the PVH Inventory pursuant to the
PVH Inventory Purchase Contract, and all proceeds of the sale of the Andalusia
Equipment, shall be applied to outstanding Revolving Credit Loans to the extent
thereof.
Section 5.10 PAYMENTS NOT AT END OF INTEREST PERIOD; FAILURE TO BORROW.
If for any reason any payment of principal with respect to any LIBOR Loan is
made on any day prior to the last day of the Interest Period applicable to such
LIBOR Loan or, after having given a notice of borrowing or notice of conversion
or continuation with respect to any LIBOR Loan, such Loan is not made as a LIBOR
Loan due to the Borrowers' failure to borrow or to fulfill the applicable
conditions set forth in ARTICLE 6, the Borrowers shall pay to each Lender upon
the request of the Agent or such Lender, in addition to any amounts that may be
due under SECTION 5.5, an amount (if a positive number) computed pursuant to the
following formula:
L = (R - T) x P x D
360
L = amount payable
R = interest rate applicable to the LIBOR Loan
not borrowed, continued or converted or
prepaid
T = effective interest rate per annum at which
any readily marketable bonds or other
obligations of the United States, selected
at the Agent's sole discretion, maturing on
or near the last day of the then applicable
or requested Interest Period for such LIBOR
Loan and in approximately the same amount as
such LIBOR Loan, can be purchased by such
Lender on the day of such payment of
principal or failure to borrow, continue or
convert
P = the amount of principal paid or the amount
of the LIBOR Loan requested or to have been
continued or converted
D = the number of days remaining in the Interest
Period as of the date of such payment or the
number of days in the requested Interest
Period
The Borrowers shall pay such amount upon presentation by the Agent (or as to any
Lender, by such Lender) of a statement setting forth the amount and the Agent's
(or such Lender's) calculation thereof pursuant hereto, which statement shall be
deemed true and correct absent manifest error.
Section 5.11 NOTICE OF CONVERSION OR CONTINUATION. Whenever the
Borrowers desire, subject to the provisions of SECTION 5.12, to convert an
outstanding Loan into a Loan or Loans of a different Type or to continue all or
a portion of an outstanding LIBOR Loan for a subsequent Interest Period, the
Borrowers shall notify the Agent by telephone or in writing by facsimile
transmission (which notice shall be irrevocable) not later than 12:00 noon
(Atlanta time) on the date three Business Days before the day on which such
proposed conversion or continuation is to be effective (and such effective date
of any continuation shall be the last day of the Interest Period for the
applicable LIBOR Loan), PROVIDED the Borrowers shall not be permitted to convert
Loans into
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(or continue Loans as) LIBOR Loans at any time during the existence of an Event
of Default. Each such notice shall (a) identify the Loan to be converted or
continued, the aggregate outstanding principal balance thereof and, if a LIBOR
Loan, the last day of the Interest Period applicable to such Loan, (b) specify
the effective date of such conversion or continuation, (c) specify the principal
amount of such Loan to be converted or continued and, if converted, the Type or
Types into which the same is to be converted, and (d) specify the Interest
Period to be applicable to the LIBOR Loan as converted or continued, and shall,
if notice thereof was originally given by telephone, be immediately followed by
a signed, written confirmation thereof by the Borrowers in a form acceptable to
the Agent, PROVIDED that if such written confirmation differs in any respect
from the action taken by the Lenders (or if such written confirmation is not
given), the records of the Agent shall control absent manifest error.
Section 5.12 CONVERSION OR CONTINUATION. Provided that no Event of
Default shall have occurred and be continuing (but subject to the provisions of
SECTIONS 5.1(G) and 5.11), the Borrowers may request that all or any part of any
outstanding Loan be converted into a Loan or Loans of a different Type or be
continued as a Loan or Loans of the same Type, in the same aggregate principal
amount, on any Business Day (which, in the case of continuation of a LIBOR Loan,
shall be the last day of the Interest Period applicable to such Loan), upon
notice (which notice shall be irrevocable) given in accordance with SECTION
5.11, PROVIDED that nothing in this ARTICLE 5 shall be construed to permit the
conversion of a Revolving Credit Loan to a Term Loan or vice versa.
Section 5.13 BORROWERS' AGENT. Each of the Borrowers other than Supreme
hereby appoints Supreme as, and Supreme shall act under this Agreement as, the
agent, attorney-in-fact and legal representative of such other Borrowers for all
purposes, including requesting Loans and receiving account statements and other
notices and communications to the Borrowers (or any of them) from the Agent or
any Lender. The Agent and the Lenders may rely, and shall be fully protected in
relying, on any notice of borrowing, notice of conversion or continuation,
disbursement instruction, report, information or any other notice or
communication made or given by Supreme, whether in its own name, on behalf of
any other Borrower or on behalf of "the Borrowers", and neither the Agent nor
any Lender shall have any obligation to make any inquiry or request any
confirmation from or on behalf of any other Borrowers as to the binding effect
on it of any such notice, request, instruction, report, information, other
notice or communications, nor shall the joint and several character of the
Borrowers' liability for the Secured Obligations be affected, PROVIDED that the
provisions of this SECTION 5.13 shall not be construed so as to preclude any
Borrower from directly requesting Loans or taking other actions permitted to be
taken by "a Borrower" hereunder. The Agent and each Lender intend to maintain a
single Loan Account in the name of "Supreme International Corporation" hereunder
and each Borrower expressly agrees to such arrangement and confirms that such
arrangement shall have no effect on the joint and several character of its
liability for the Secured Obligations.
Section 5.14 JOINT AND SEVERAL LIABILITY.
(a) JOINT AND SEVERAL LIABILITY. The Secured Obligations shall
constitute one joint and several direct and general obligation of all
of the Borrowers. Notwithstanding
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anything to the contrary contained herein, each of the Borrowers shall
be jointly and severally, with each other Borrower, directly and
unconditionally liable to the Agent and the Lenders for all Secured
Obligations and shall have the obligations of co-maker with respect to
the Loans, the Notes and the Secured Obligations, it being agreed that
the advances to each Borrower inure to the benefit of all Borrowers,
and that the Agent and the Lenders are relying on the joint and several
liability of the Borrowers as co-makers in extending the Loans
hereunder. Each Borrower hereby unconditionally and irrevocably agrees
that upon default in the payment when due (whether at stated maturity,
by acceleration or otherwise) of any principal of, or interest on, any
Loan or other Secured Obligation payable to the Agent or any Lender, it
will forthwith pay the same, without notice or demand.
(b) NO REDUCTION IN OBLIGATIONS. No payment or payments made
by any of the Borrowers or any other Person or received or collected by
the Agent or any Lender from any of the Borrowers or any other Person
by virtue of any action or proceeding or any set-off or appropriation
or application at any time or from time to time in reduction of or in
payment of the Secured Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of each Borrower under this
Agreement, which shall remain liable for the Secured Obligations until
the Secured Obligations are paid in full and the Revolving Credit
Facility is terminated.
Section 5.15 OBLIGATIONS ABSOLUTE. Each Borrower agrees that the
Secured Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Agent or any Lender with respect thereto. All Secured Obligations shall be
conclusively presumed to have been created in reliance hereon. The liabilities
under this Agreement shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any Loan
Documents or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payments of, or
in any other term of, all or any part of the Secured Obligations, or
any other amendment or waiver thereof or any consent to departure
therefrom, including, but not limited to, any increase in the Secured
Obligations resulting from the extension of additional credit to any
Borrower or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty for all or any of the Secured Obligations;
(d) any change, restructuring or termination of the corporate
structure or existence of any Obligor; or
(e) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Borrower or a Guarantor.
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This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of any Borrower or otherwise, all as though such
payment had not been made.
Section 5.16 WAIVER OF SURETYSHIP DEFENSES. Each Borrower agrees that
the joint and several liability of the Borrowers provided for in SECTION 5.14
shall not be impaired or affected by any modification, supplement, extension or
amendment or any contract or agreement to which the other Borrowers may
hereafter agree (other than an agreement signed by the Agent and the Lenders
specifically releasing such liability), nor by any delay, extension of time,
renewal, compromise or other indulgence granted by the Agent or any Lender with
respect to any of the Secured Obligations, nor by any other agreements or
arrangements whatever with the other Borrowers or with anyone else, each
Borrower hereby waiving all notice of such delay, extension, release,
substitution, renewal, compromise or other indulgence, and hereby consenting to
be bound thereby as fully and effectually as if it had expressly agreed thereto
in advance. The liability of each Borrower is direct and unconditional as to all
of the Secured Obligations, and may be enforced without requiring the Agent or
any Lender first to resort to any other right, remedy or security. Each Borrower
hereby expressly waives promptness, diligence, notice of acceptance and any
other notice (except to the extent expressly provided for herein or in another
Loan Document) with respect to any of the Secured Obligations, the Notes, this
Agreement or any other Loan Document and any requirement that the Agent or any
Lender protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against any Borrower or any
other Person or any collateral, including any rights any Borrower may otherwise
have under O.C.G.A. ss. 10-7-24 or any successor statute or any analogous
statute in any jurisdiction under the laws of which any Borrower is incorporated
or in which any Borrower conducts business.
ARTICLE 6
CONDITIONS PRECEDENT
Section 6.1 CONDITIONS PRECEDENT TO INITIAL LOAN. Notwithstanding any
other provision of this Agreement, the Lenders' obligation to make the Initial
Loan is subject to the fulfillment of each of the following conditions prior to
or contemporaneously with the making of such Loan:
(a) CLOSING DOCUMENTS. The Agent shall have received each of the
following documents, all of which shall be satisfactory in form and substance to
the Agent and its counsel and to the Lenders:
(1) this Agreement;
(2) the Notes;
(3) the Guaranty Agreements;
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(4) certified copies of the articles of incorporation and
by-laws of each Obligor as in effect on the Effective Date;
(5) certified copies of all corporate action, including
stockholder approval, if necessary, taken by the Obligors to authorize
the execution, delivery and performance of this Agreement and the other
Loan Documents and the borrowings under this Agreement;
(6) certificates of incumbency and specimen signatures with
respect to each of the officers of each Obligor who is authorized to
execute and deliver this Agreement or any other Loan Document on behalf
of such Obligor or any document, certificate or instrument to be
delivered in connection with this Agreement or the other Loan Documents
and to request borrowings under this Agreement;
(7) a certificate evidencing the good standing of each Obligor
in the jurisdiction of its incorporation and in each other jurisdiction
in which it is qualified as a foreign corporation to transact business;
(8) the Financing Statements duly executed and delivered by
the Borrowers, and evidence satisfactory to the Agent that the
Financing Statements have been filed in each jurisdiction where such
filing may be necessary or appropriate to perfect the Security
Interest;
(9) a Schedule of Receivables and a Schedule of Inventory,
both prepared as of a recent date;
(10) such Agency Account Agreements as shall be required by
the Agent and the Lenders duly executed by the applicable Clearing Bank
and the Borrowers;
(11) a Borrowing Base Certificate prepared as of the Effective
Date duly executed and delivered by the Financial Officer;
(12) a letter from Supreme to the Agent requesting the Initial
Loan and specifying the method of disbursement;
(13) copies of all the financial statements referred to in
SECTION 7.1(M) and meeting the requirements thereof;
(14) certificates or binders of insurance relating to the
insurance policies required under SECTION 9.9;
(15) the Pro Forma, and forecasted consolidated financial
statements (the "Projections") consisting of balance sheets, cash flow
statements and income statements of Supreme and its consolidated
Subsidiaries, giving effect to the transactions contemplated by this
Agreement (including the Xxxxxx Acquisition, the consummation of the
closing of the High Yield Debt Offering, and the consummation of the
closing of the
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Xxxxx Xxxxx Acquisition), and reflecting projected borrowings hereunder
and setting forth the assumptions on which such Projections were
prepared, covering the 5-year period commencing on January 31, 1999,
and prepared on a quarterly basis for the first fiscal year and an
annual basis thereafter; and such other evidence as the Lenders shall
require supporting the representation and warranty of the Borrowers set
forth in SECTION 7.1(R);
(16) a certificate of the President or Financial Officer of
Supreme stating that, to the best of his knowledge and based on an
examination sufficient to enable him to make an informed statement, (a)
all of the representations and warranties made or deemed to be made
under this Agreement are true and correct in all material respects as
of the Effective Date, both with and without giving effect to the Loans
to be made at such time and the application of the proceeds thereof,
and (b) no Default or Event of Default exists;
(17) a signed opinion of counsel for the Obligors, and such
local counsel as the Agent shall deem necessary or desirable, opining
as to such matters in connection with this Agreement as the Agent or
its counsel may reasonably request;
(18) acknowledgments of the existing intercreditor agreements
with Xxxxxxxx Bank, N.A. and SunTrust Bank, Miami, N.A., duly executed
by Xxxxxxxx Bank, N.A. and SunTrust Bank, Miami, N.A.;
(19) the Trademark Assignment, in proper form for recording in
the United States Patent & Trademark Office;
(20) acknowledgments of the Factors with respect to the
existing Assignments of Factoring Credit Balances;
(21) the Assignment of Original Loan Documents;
(22) the Pledge Agreement, together with the corresponding
stock certificates and blank stock powers;
(23) a Credit Insurance Assignment with respect to Supreme's
existing credit insurance policy; and
(24) copies of each of the other Loan Documents duly executed
by the parties thereto with evidence satisfactory to the Agent and its
counsel of the due authorization, binding effect and enforceability of
each such Loan Document on each such party and such other documents and
instruments as the Agent may reasonably request.
(b) AVAILABILITY. The Agent shall be provided with evidence
satisfactory to it that, as of the Effective Date, after giving effect to the
Initial Loan, Availability will be not less than $1,000,000.
(c) FEES. Supreme shall have paid all of the fees payable on the
Effective Date.
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(d) XXXXXX ACQUISITION. On the Effective Date, (i) the Agent shall have
received true and complete executed or conformed copies of the Xxxxxx
Acquisition Documents and any amendments thereto; (ii) the Xxxxxx Acquisition
Documents shall be in full force and effect and no material term or condition
thereof shall have been amended, modified or waived after the execution thereof
(other than solely to extend the date by which the Xxxxxx Acquisition is
required to occur) except with the prior written consent of the Agent; (iii)
none of the parties to any of the Xxxxxx Acquisition Documents shall have failed
to perform any material obligation or covenant required by such Xxxxxx
Acquisition Document to be performed or complied with by it on or before the
Effective Date; (iv) all material representations and warranties of Xxxxxx
contained in the Xxxxxx Acquisition Agreement and the other Xxxxxx Acquisition
Documents shall be true and correct in all material respects with the same
effect as though made on and as of the Effective Date; (v) all requisite
approvals by Governmental Authorities and regulatory bodies having jurisdiction
over the parties to the Xxxxxx Acquisition Agreement in respect of the Xxxxxx
Acquisition shall have been obtained by such parties (including without
limitation the Approval Order, the Overbid Procedures Order, and any other
orders of the U.S. Bankruptcy Court for the Southern District of New York as the
Agent may deem necessary or appropriate), and no such approvals shall impose any
unsatisfied conditions to the consummation of the Xxxxxx Acquisition; (vi) the
Xxxxxx Acquisition shall have been consummated in accordance with the terms and
provisions of the Xxxxxx Acquisition Agreement, the other Xxxxxx Acquisition
Documents and the approvals described in CLAUSE (V) above, without any amendment
or waiver of any material provision thereof; and (vii) the Agent shall have
received a certificate from Supreme's chief executive officer (or such other
officer as may be acceptable to the Agent), together with such other evidence
satisfactory to it, that each of the conditions set forth in CLAUSES (I) through
(VI) above shall have been satisfied. In addition, the Agent shall have received
the duly executed Xxxxxx Acquisition Documents Assignment.
(e) PVH INVENTORY PURCHASE CONTRACT. On the Effective Date, (i) the
Agent shall have received true and complete executed or conformed copies of the
PVH Inventory Purchase Contract and any amendments thereto; (ii) the PVH
Inventory Purchase Contract shall be in full force and effect and no material
term or condition thereof shall have been amended, modified or waived after the
execution thereof except with the prior written consent of the Agent; (iii) none
of the parties to the PVH Inventory Purchase Contract shall have failed to
perform any material obligation or covenant required by the PVH Inventory
Purchase Contract to be performed or complied with by it on or before the
Effective Date; (iv) all material representations and warranties of Xxxxxxxx-Van
Heusen contained in the PVH Inventory Purchase Contract shall be true and
correct in all material respects with the same effect as though made on and as
of the Effective Date; and (v) the Agent shall have received a certificate from
Supreme's chief executive officer (or such other officer as may be acceptable to
the Agent), together with such other evidence satisfactory to it, that each of
the conditions set forth in CLAUSES (I) through (IV) above shall have been
satisfied. In addition, the Agent shall have received the duly executed and
acknowledged PVH Inventory Purchase Contract Assignment.
(f) XXXXX XXXXX ACQUISITION. On the Effective Date, (i) the Agent shall
have received true and complete executed or conformed copies of the Xxxxx Xxxxx
Acquisition Documents then
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in effect and any amendments thereto; (ii) such Xxxxx Xxxxx Acquisition
Documents shall be in full force and effect and no material term or condition
thereof shall have been amended, modified or waived after the execution thereof
(other than solely to extend the date by which the Xxxxx Xxxxx Acquisition is
required to occur) except with the prior written consent of the Agent; (iii)
none of the parties to any of such Xxxxx Xxxxx Acquisition Documents shall have
failed to perform any material obligation or covenant required by such Xxxxx
Xxxxx Acquisition Document to be performed or complied with by it on or before
the Effective Date; (iv) all material representations and warranties of the
Xxxxx Xxxxx Sellers contained in the Xxxxx Xxxxx Acquisition Agreement and such
other Xxxxx Xxxxx Acquisition Documents shall be true and correct in all
material respects with the same effect as though made on and as of the Effective
Date; and (v) the Agent shall have received a certificate from Supreme's chief
executive officer (or such other officer as may be acceptable to the Agent),
together with such other evidence satisfactory to it, that each of the
conditions set forth in CLAUSES (I) through (IV) above shall have been
satisfied. In addition, the Agent shall have received the duly executed Xxxxx
Xxxxx Acquisition Documents Assignment.
(g) HIGH YIELD DEBT OFFERING. On or prior to the Effective Date,
Supreme shall have issued the High Yield Debt Offering Memorandum and, on the
Effective Date, (i) the Agent shall have received true and complete copies of
the High Yield Debt Offering Memorandum; and (ii) the High Yield Debt Offering
Memorandum shall not have been withdrawn and no material term or condition
thereof shall have been amended or modified after the issuance thereof in any
manner that adversely affects the Agent or the Lenders except with the prior
written consent of the Agent.
(h) NO INJUNCTIONS, ETC. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain or
prohibit or to obtain substantial damages in respect of or which is related to
or arises out of this Agreement or the consummation of the transactions
contemplated hereby (including without limitation the Xxxxxx Acquisition, the
High Yield Debt Offering and the Xxxxx Xxxxx Acquisition) or which, in the
Lenders' sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement.
(i) MATERIAL ADVERSE CHANGE. As of the Effective Date, there shall not
have occurred any change (other than the consummation of the Xxxxxx Acquisition
and the proposed consummation of the High Yield Debt Offering and Xxxxx Xxxxx
Acquisition) which, in the Lenders' sole discretion, has had or may have a
Materially Adverse Effect as compared to the condition of Supreme and its
consolidated Subsidiaries presented by the most recent unaudited financial
statements of Supreme and its consolidated Subsidiaries described in SECTION
7.1(M).
(j) SOLVENCY. The Lenders shall have received evidence satisfactory to
them that, after giving effect to the Initial Loans and the consummation of the
Xxxxxx Acquisition (i) each Obligor has assets (excluding goodwill and other
intangible assets not capable of valuation) having value, both at fair value and
at present fair saleable value, greater than the amount of its liabilities, and
(ii) each Obligor's assets are sufficient in value to provide such Obligor with
sufficient working capital to enable it profitably to operate its business and
to meet its obligations
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as they become due, and (iii) each Obligor has adequate capital to conduct the
business in which it is and proposes to be engaged.
(k) RELEASE OF SECURITY INTERESTS. The Lenders shall have received
evidence satisfactory to them of the release and termination of all Liens on the
Collateral other than Permitted Liens.
Section 6.2 ALL LOANS. At the time of the making of each Loan,
including the Initial Loan:
(a) all of the representations and warranties made or deemed to be made
under this Agreement shall be true and correct at such time both with and
without giving effect to the Loans to be made at such time and the application
of the proceeds thereof, except that representations and warranties which, by
their terms, are applicable only to the Effective Date shall be required to be
true and correct only as of the Effective Date,
(b) the corporate actions of the Obligors referred to in SECTION
6.1(A)(5) shall remain in full force and effect and the incumbency of officers
shall be as stated in the certificates of incumbency delivered pursuant to
SECTION 6.1(A)(6) or as subsequently modified and reflected in a certificate of
incumbency delivered to the Agent, and
(c) the Agent and the Lenders may, without waiving either condition,
consider the conditions specified in Sections 6.2(a) and (B) fulfilled and a
representation by the Borrowers to such effect made if no written notice to the
contrary is received by the Agent from the Borrowers prior to the making of the
Loans then to be made.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
Section 7.1 REPRESENTATIONS AND WARRANTIES. Each Borrower represents
and warrants to the Agent and the Lenders as follows:
(a) ORGANIZATION; POWER; QUALIFICATION. Each Borrower and each of its
Subsidiaries is a corporation, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its properties and to carry on its business
as now being and hereafter proposed to be conducted and is duly qualified and
authorized to do business in each jurisdiction in which failure to be so
qualified and authorized would have a Materially Adverse Effect. The
jurisdictions in which each Borrower and each of its Subsidiaries is qualified
to do business as a foreign corporation are listed on SCHEDULE 7.1(A).
(b) SUBSIDIARIES AND OWNERSHIP OF THE BORROWERS. The Subsidiaries of
the Borrowers are listed on SCHEDULE 7.1(B). The outstanding stock of each
Borrower and its Subsidiaries has been duly and validly issued and is fully paid
and nonassessable by such Borrower or Subsidiary
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and the number and owners of such shares of capital stock of each Borrower and
its Subsidiaries are set forth on SCHEDULE 7.1(B).
(c) AUTHORIZATION OF AGREEMENT, NOTE, LOAN DOCUMENTS AND BORROWING.
Each Borrower and other Obligor has the right and power and has taken all
necessary action to authorize it to execute, deliver and perform this Agreement
and each of the other Loan Documents to which it is a party in accordance with
their respective terms and, in the case of the Borrowers, to borrow hereunder.
This Agreement and each of the other Loan Documents to which it is a party have
been duly executed and delivered by the duly authorized officers of the Obligors
and each is, or when executed and delivered in accordance with this Agreement
will be, a legal, valid and binding obligation of each Obligor, enforceable in
accordance with its terms, subject to general principles of equity and
insolvency laws applicable to creditors generally.
(d) COMPLIANCE OF AGREEMENT, NOTE, LOAN DOCUMENTS AND BORROWING WITH
LAWS, ETC. The execution, delivery and performance of this Agreement and each of
the other Loan Documents to which the Obligors are a party in accordance with
their respective terms and the borrowings hereunder do not and will not, by the
passage of time, the giving of notice or otherwise,
(i) require any Governmental Approval or violate any
applicable law relating to any Obligor or any of its Affiliates,
(ii) conflict with, result in a breach of or constitute a
default under (A) the articles or certificate of incorporation or
by-laws of the any Obligor, (B) any indenture, agreement or other
instrument to which any Obligor is a party or by which any of its
property may be bound which would have a Materially Adverse Effect, or
(C) any Governmental Approval relating to any Obligor, or,
(iii) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter
acquired by any Obligor other than the Security Interest.
(e) BUSINESS. The Obligors are engaged principally in the business
described on SCHEDULE 7.1(E).
(f) COMPLIANCE WITH LAW; GOVERNMENTAL APPROVALS. Except as set forth on
SCHEDULE 7.1(F), each Borrower and its Subsidiaries (i) has all material
Governmental Approvals, including permits relating to federal, state and local
Environmental Laws, ordinances and regulations required by any applicable law
for it to conduct its business, each of which is in full force and effect, is
final and not subject to review on appeal and is not the subject of any pending
or, to the knowledge of the Borrowers, threatened attack by direct or collateral
proceeding, and (ii) is in compliance with each material Governmental Approval
applicable to it and in compliance with all other applicable laws relating to
it, including, without being limited to, all Environmental Laws and all
occupational health and safety laws applicable to such Borrower or its
Subsidiaries or their respective properties, except for instances of
noncompliance which
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would not, singly or in the aggregate, cause a Default or Event of Default or
have a Materially Adverse Effect and in respect of which adequate reserves have
been established on the books of such Borrower or its Subsidiaries.
(g) TITLES TO PROPERTIES. Except as set forth on SCHEDULE 7.1(G), each
Borrower and each of its Subsidiaries has good and marketable title to or a
valid leasehold interest in all its Real Estate and valid and legal title to or
a valid leasehold interest in all personal property and assets used in or
necessary to the conduct of such Borrower's or Subsidiary's business, including,
but not limited to, those reflected on the consolidated balance sheet of Supreme
delivered pursuant to SECTION 7.1(M)(I).
(h) LIENS. Except as set forth on SCHEDULE 7.1(H), none of the
properties and assets of any Borrower or its Subsidiaries is subject to any
Lien, except Permitted Liens. Other than the Financing Statements, no financing
statement under the Uniform Commercial Code of any state which names any
Borrower or any of its Subsidiaries as debtor and which has not been terminated
has been filed in any state or other jurisdiction, and no Borrower nor any of
its Subsidiaries has signed any such financing statement or any security
agreement authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens listed on SCHEDULE 7.1(H) and Permitted
Liens.
(i) INDEBTEDNESS AND GUARANTIES. Set forth on SCHEDULE 7.1(I) is a
complete and correct listing of all of each Borrower's and its Subsidiaries' (i)
Indebtedness and (ii) Guaranties. No Borrower nor any of its Subsidiaries is in
default of any material provision of any agreement evidencing or relating to
such any such Indebtedness or Guaranty.
(j) LITIGATION. Except as set forth on SCHEDULE 7.1(J), there are no
actions, suits or proceedings pending (nor, to the knowledge of any Borrower,
are there any actions, suits or proceedings threatened, nor is there any basis
therefor) against or in any other way relating adversely to or affecting any
Borrower or any of its Subsidiaries or any of their respective property in any
court or before any arbitrator of any kind or before or by any governmental body
that would have a Materially Adverse Effect.
(k) TAX RETURNS AND PAYMENTS. Except as set forth on SCHEDULE 7.1(K),
all United States federal, state and local and foreign national, provincial and
local and all other tax returns of each Borrower and its Subsidiaries required
by applicable law to be filed have been duly filed, and all United States
federal, state and local and foreign national, provincial and local and all
other taxes, assessments and other governmental charges or levies upon each
Borrower and its Subsidiaries and their respective property, income, profits and
assets which are due and payable have been paid, except any such nonpayment
which is at the time permitted under SECTION 10.4. The charges, accruals and
reserves on the books of each Borrower and its Subsidiaries in respect of United
States federal, state and local taxes and foreign national, provincial and local
taxes for all fiscal years and portions thereof since the organization of each
Borrower and its Subsidiaries are in the judgment of each Borrower adequate, and
no Borrower knows of any reason to anticipate any additional assessments for any
of such years which, singly or in the aggregate, might have a Materially Adverse
Effect.
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(l) BURDENSOME PROVISIONS. No Borrower nor any of its Subsidiaries is a
party to any indenture, agreement, lease or other instrument, or subject to any
charter or corporate restriction, Governmental Approval or applicable law,
compliance with the terms of which could reasonably be expected to have a
Materially Adverse Effect.
(m) FINANCIAL STATEMENTS.
(i) Supreme has furnished to the Agent and the Lenders a copy
of its audited consolidated balance sheet as at January 31, 1999, and
the related consolidated statements of income, cash flow and retained
earnings for the twelve-month period then ended. Such financial
statements are complete and correct and present fairly and in all
material respects in accordance with GAAP, the financial position of
Supreme and its consolidated Subsidiaries as at the dates thereof and
the results of operations of Supreme and its consolidated Subsidiaries
for the periods then ended. Except as disclosed or reflected in such
financial statements, no Borrower nor any of its Subsidiaries had any
material liabilities, contingent or otherwise, and there were no
material unrealized or anticipated losses of any Borrower or any of its
Subsidiaries.
(ii) Supreme has furnished to the Agent and the Lenders copies
of the Pro Forma. The Pro Forma is complete and correct and presents
fairly, on a pro forma basis, the financial position of Supreme and its
consolidated Subsidiaries as at the Effective Date.
(iii) Supreme has furnished to the Agent and the Lenders
copies of the Projections. Such Projections have been prepared by
Supreme in light of the past operations of the business of Supreme and
its consolidated Subsidiaries and represent as of the respective dates
thereof the good faith opinion of Supreme and its senior management
concerning the most probable course of business of Supreme and its
consolidated Subsidiaries.
(iv) Supreme has furnished to the Agent and the Lenders copies
of the audited balance sheet of Xxxxx Xxxxx as at December 31, 1997 and
December 31, 1998 and the related audited statements of operations,
cash flows and shareholder's equity for the fiscal years ended on such
dates, reported on by Xxxx X. Xxxx & Co., P.C. Such financial
statements present fairly, in all material respects, as of their
respective dates and in accordance with GAAP the financial condition of
Xxxxx Xxxxx as of such dates and the results of operations of Xxxxx
Xxxxx for the periods ended on such date.
(v) The unaudited financial information relating to the Xxxxxx
Division delivered to the Agent and the Lenders, and with respect to
which the "Xxxxxx Division EBITDA" adjustment to EBITDA has been
calculated, is complete and correct in all material respects.
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(n) ADVERSE CHANGE. Since the date of the financial statements
described in CLAUSE (I) of SECTION 7.1(M), (i) no change in the business,
assets, liabilities, condition (financial or otherwise), results of operations
or business prospects of Supreme or its consolidated Subsidiaries has occurred
that has had, or may have, a Materially Adverse Effect, and (ii) no event has
occurred or failed to occur which has had, or may have, a Materially Adverse
Effect.
(o) ERISA. Neither any Borrower nor any Related Company maintains or
contributes to any Benefit Plan other than those listed on SCHEDULE 7.1(O). Each
Benefit Plan is in substantial compliance with ERISA, and neither any Borrower
nor any Related Company has received any notice asserting that a Benefit Plan is
not in compliance with ERISA. No material liability to the PBGC or to a
Multiemployer Plan has been, or is expected by any Borrower to be, incurred by
any Borrower or any Related Company.
(p) ABSENCE OF DEFAULTS. No Borrower nor any of its Subsidiaries is in
default under its articles or certificate of incorporation or by-laws, and no
event has occurred which has not been remedied, cured or waived (i) that
constitutes a Default or an Event of Default or (ii) that constitutes or that,
with the passage of time or giving of notice, or both, would constitute a
default or event of default by such Borrower or Subsidiary under any material
agreement or judgment, decree or order to which such Borrower or Subsidiary is a
party or by which such Borrower or Subsidiary or any of its properties may be
bound or which would require such Borrower or Subsidiary to make any payment
thereunder prior to the scheduled maturity date therefor.
(q) ACCURACY AND COMPLETENESS OF INFORMATION. All written information,
reports and other papers and data produced by or on behalf of any Borrower and
furnished to the Agent or any Lender were, at the time the same were so
furnished, complete and correct in all material respects to the extent necessary
to give the recipient a true and accurate knowledge of the subject matter. No
fact is known to any Borrower which has had, or may in the future have (so far
as any Borrower can foresee), a Materially Adverse Effect which has not been set
forth in the financial statements or disclosure delivered prior to the Effective
Date, in each case referred to in SECTION 7.1(M), or in such written
information, reports or other papers or data or otherwise disclosed in writing
to the Agent and the Lenders prior to the Effective Date. No document furnished
or written statement made to the Agent or any Lender by any Borrower in
connection with the negotiation, preparation or execution of this Agreement or
any of the Loan Documents contains or will contain any untrue statement of a
fact material to the creditworthiness of any Borrower or any of its Subsidiaries
or omits or will omit to state a material fact necessary in order to make the
statements contained therein not misleading.
(r) SOLVENCY. In each case after giving effect to the Indebtedness
represented by the Loans outstanding and to be incurred and the transactions
contemplated by this Agreement, each Borrower and other Obligor is solvent,
having assets of a fair value which exceeds the amount required to pay its debts
(including contingent, subordinated, unmatured and unliquidated liabilities) as
they become absolute and matured, and each Borrower and other Obligor is able to
and anticipates that it will be able to meet its debts as they mature and has
adequate capital to conduct the business in which it is or proposes to be
engaged.
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(s) STATUS OF RECEIVABLES. Each Receivable reflected in the
computations included in any Borrowing Base Certificate meets the criteria
enumerated in the definition of Eligible Receivables, except as disclosed in
such Borrowing Base Certificate or as disclosed in a timely manner in a
subsequent Borrowing Base Certificate or otherwise in writing to the Agent.
(t) CHIEF EXECUTIVE OFFICE. The chief executive office of each Borrower
and the books and records relating to the Receivables are located at the address
or addresses set forth on SCHEDULE 7.1(T); except as set forth on SCHEDULE
7.1(T), no Borrower has maintained its chief executive office or the books and
records relating to any Receivables at any other address at any time during the
five years immediately preceding the Agreement Date.
(u) STATUS OF INVENTORY. All Inventory included in any Borrowing Base
Certificate delivered to the Agent pursuant to SECTION 9.14(C) meets the
criteria enumerated in the definition of Eligible Inventory, except as disclosed
in such Borrowing Base Certificate or in a subsequent Borrowing Base Certificate
or as otherwise specifically disclosed in writing to the Agent. All Inventory is
in good condition, meets all standards imposed by any governmental agency or
department or division thereof having regulatory authority over such goods,
their use or sale, and is currently either usable or saleable in the normal
course of the Borrowers' business, except to the extent reserved against in the
financial statements delivered pursuant to ARTICLE 11 or as disclosed on a
Schedule of Inventory delivered to the Agent pursuant to SECTION 9.14(B). Set
forth on SCHEDULE 7.1(U) is the (i) address (including street, city, county and
state) of each facility at which Inventory is located, (ii) the approximate
quantity in Dollars of the Inventory customarily located at each such facility,
and (iii) if the facility is leased or is a third party warehouse or processor
location, the name of the landlord or such third party warehouseman or
processor. All Inventory is located on the premises set forth on SCHEDULE 7.1(U)
or is in transit to one of such locations, except as otherwise disclosed in
writing to the Agent. No Borrower has located Inventory at premises other than
those set forth on SCHEDULE 7.1(U) at any time during the four month period
immediately preceding the Agreement Date.
(v) CORPORATE AND FICTITIOUS NAMES; TRADE NAMES. Except as otherwise
disclosed on SCHEDULE 7.1(V), during the preceding one-year period, no Borrower
has been known as or used any corporate or fictitious name other than the
corporate name of such Borrower on the Effective Date or the date on which such
Borrower becomes a party hereto. All trade names or styles under which any
Borrower sells Inventory or creates Receivables, or to which instruments in
payment of Receivables are made payable, are listed on SCHEDULE 7.1(V).
(w) FEDERAL REGULATIONS. No Borrower nor any of its Subsidiaries is
engaged, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" (as each of the quoted terms is defined or used in Regulation U of the
Board of Governors of the Federal Reserve System).
(x) INVESTMENT COMPANY ACT. No Borrower nor any of its Subsidiaries is
an "investment company" or a company "controlled" by an "investment company" (as
each of the quoted terms is defined or used in the Investment Company Act of
1940, as amended).
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(y) EMPLOYEE RELATIONS. No Borrower nor any of its Subsidiaries is,
except as set forth on SCHEDULE 7.1(Y), party to any collective bargaining
agreement nor has any labor union been recognized as the representative of any
Borrower's or its Subsidiaries' employees. No Borrower knows of any pending,
threatened or contemplated strikes, work stoppage or other labor disputes
involving its employees or those of its Subsidiaries.
(z) INTELLECTUAL PROPERTY. Each Borrower and each of its Subsidiaries
owns or possesses all Intellectual Property required to conduct its business as
now and presently planned to be conducted without, to its knowledge, conflict
with the rights of others, and SCHEDULE 7.1(Z) lists all Intellectual Property
owned by each Borrower and its Subsidiaries.
(aa) YEAR 2000 COMPLIANCE. Each Borrower has (a) initiated a review and
assessment of all areas within its and each of its Subsidiaries' business and
operations (including those affected by suppliers, vendors and customers) that
could be adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications used by such Borrower or any of its Subsidiaries (or
suppliers, vendors and customers) may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), (b) developed a plan and timeline for addressing the
Year 2000 Problem applicable to the systems and operations of such Borrower and
its Subsidiaries on a timely basis, (c) to date, implemented that plan in
accordance with that timetable, and (d) determined that there is no material
business risk to such Borrower and its Subsidiaries with respect to any Year
2000 Problem applicable to the systems and operations of such Borrower's or
Subsidiaries' suppliers, vendors and customers. Based on the foregoing, each
Borrower believes that all computer applications (including those of its
suppliers, vendors and customers) that are material to its or any of its
Subsidiaries' business and operations are reasonably expected on a timely basis
to be able to perform properly date-sensitive functions for all dates before and
after January 1, 2000 (that is, be "Year 2000 compliant").
(bb) SUBORDINATED INDEBTEDNESS. The Secured Obligations constitute
Senior Indebtedness and Designated Senior Indebtedness as defined in the
Description of Notes set forth in the High Yield Debt Offering Memorandum and
will constitute Senior Indebtedness and Designated Senior Indebtedness under any
indenture issued in connection therewith. All obligations of the Guarantors
constitute Guarantor Senior Indebtedness as defined in the Description of Notes
set forth in the High Yield Debt Offering Memorandum and will constitute
Guarantor Senior Indebtedness under any indenture issued in connection
therewith.
(cc) XXXXXX ACQUISITION DOCUMENTS. The Borrowers have heretofore
furnished to the Agent true, complete and correct copies of the Xxxxxx
Acquisition Agreement (including any schedules, exhibits and annexes thereto)
and each Xxxxxx Acquisition Document, each of which is in full force and effect.
The Xxxxxx Acquisition Agreement has not been amended, supplemented or modified
except as previously disclosed in writing to the Agent and, together with the
other Xxxxxx Acquisition Documents, copies of which have been delivered to the
Agent, constitutes the complete understanding between Supreme and Xxxxxx in
respect of the Xxxxxx Acquisition and the other matters and transactions covered
thereby. To the Borrowers' knowledge, the Xxxxxx
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Acquisition Agreement has been duly executed and delivered by Xxxxxx and is a
valid, legal and binding obligation of Xxxxxx. The representations and
warranties of Supreme contained in the Xxxxxx Acquisition Agreement are (or will
be) true and correct in all material respects on the Effective Date as if made
on and as of such date, and the Agent and the Lenders are entitled to rely on
such representations and warranties with the same force and effect as though
they were incorporated in this Agreement and made to the Agent and the Lenders
directly. On and as of the Effective Date, no Borrower shall know of any reason
to believe that the representations and warranties of Xxxxxx contained in the
Xxxxxx Acquisition Agreement are not true and correct in all material respects.
(dd) CONSUMMATION OF XXXXXX ACQUISITION. Upon the Effective Date, the
transactions contemplated by the Xxxxxx Acquisition Agreement and the other
Xxxxxx Acquisition Documents will have been consummated in accordance with
applicable law, all approvals by Governmental Authorities and regulatory bodies
having jurisdiction over the parties to the Xxxxxx Acquisition Agreement in
respect of the Xxxxxx Acquisition (including without limitation the Approval
Order and the Overbid Procedures Order) and, except as previously disclosed in
writing to the Agent, in the manner provided therein in accordance with the
terms thereof without any material waivers or amendments thereto, and each of
the material conditions to such consummation set forth in the Xxxxxx Acquisition
Agreement and the other Xxxxxx Acquisition Documents shall have been fulfilled
without any waiver of any thereof.
(ee) PVH INVENTORY PURCHASE CONTRACT. The Borrowers have heretofore
furnished to the Agent true, complete and correct copies of the PVH Inventory
Purchase Contract (including any schedules, exhibits and annexes thereto), which
is in full force and effect. The PVH Inventory Purchase Contract has not been
amended, supplemented or modified except as previously disclosed in writing to
the Agent and constitutes the complete understanding between Supreme and
Xxxxxxxx-Van Heusen in respect of the matters and transactions covered thereby.
To the Borrowers' knowledge, the PVH Inventory Purchase Contract has been duly
executed and delivered by Xxxxxxxx-Van Heusen and is a valid, legal and binding
obligation of Xxxxxxx-Van Heusen. The representations and warranties of Supreme
contained in the PVH Inventory Purchase Shirt Contract are (or will be) true and
correct in all material respects on the Effective Date as if made on and as of
such date, and the Agent and the Lenders are entitled to rely on such
representations and warranties with the same force and effect as though they
were incorporated in this Agreement and made to the Agent and the Lenders
directly. On and as of the Effective Date, no Borrower shall know of any reason
to believe that the representations and warranties of Xxxxxxxx-Van Heusen
contained in the PVH Inventory Purchase Contract are not true and correct in all
material respects.
(ff) XXXXX XXXXX ACQUISITION DOCUMENTS. The Borrowers have heretofore
furnished to the Agent true, complete and correct copies of the Xxxxx Xxxxx
Acquisition Agreement (including any schedules, exhibits and annexes thereto)
and shall furnish, when available, each Xxxxx Xxxxx Acquisition Document, each
of which is or shall be, upon and after its execution and delivery, in full
force and effect. The Xxxxx Xxxxx Acquisition Agreement has not been amended,
supplemented or modified except as previously disclosed in writing to the Agent
and, together with the other Xxxxx Xxxxx Acquisition Documents, copies of which
have been (or will be upon
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execution) delivered to the Agent, constitutes the complete understanding
between Supreme and the Xxxxx Xxxxx Sellers in respect of the matters and
transactions covered thereby. To the Borrowers' knowledge, the Xxxxx Xxxxx
Acquisition Agreement has been duly executed and delivered by the Xxxxx Xxxxx
Sellers and is a valid, legal and binding obligation of the Xxxxx Xxxxx Sellers.
The representations and warranties of Supreme contained in the Xxxxx Xxxxx
Acquisition Agreement are (or will be) true and correct in all material respects
on the Effective Date and the Xxxxx Xxxxx Acquisition Date as if made on and as
of such dates, and the Agent and the Lenders are entitled to rely on such
representations and warranties with the same force and effect as though they
were incorporated in this Agreement and made to the Agent and the Lenders
directly. On and as of the Effective Date and the Xxxxx Xxxxx Acquisition Date,
no Borrower shall know of any reason to believe that the representations and
warranties of the Xxxxx Xxxxx Sellers contained in the Xxxxx Xxxxx Acquisition
Agreement are not true and correct in all material respects.
(gg) CONSUMMATION OF XXXXX XXXXX ACQUISITION. Upon the Xxxxx Xxxxx
Acquisition Date, the transactions contemplated by the Xxxxx Xxxxx Acquisition
Agreement and the other Xxxxx Xxxxx Acquisition Documents will have been
consummated in accordance with applicable law, all approvals by Governmental
Authorities and regulatory bodies having jurisdiction over the parties to the
Xxxxx Xxxxx Acquisition Agreement in respect of the Xxxxx Xxxxx Acquisition and,
except as previously disclosed in writing to the Agent, in the manner provided
therein in accordance with the terms thereof without any material waivers or
amendments thereto, and each of the material conditions to such consummation set
forth in the Xxxxx Xxxxx Acquisition Agreement and the other Xxxxx Xxxxx
Acquisition Documents shall have been fulfilled without any waiver of any
thereof.
(hh) HIGH YIELD DEBT. Supreme has issued the High Yield Debt Offering
Memorandum, the Agent has received true and complete copies of the High Yield
Debt Offering Memorandum, the High Yield Debt Offering has not been withdrawn,
and no material term or condition thereof has been amended or modified after the
issuance thereof in any manner that adversely affects the Agent or the Lenders,
except with the prior written consent of the Agent. Supreme has the corporate
power and authority to incur the High Yield Debt and to issue the High Yield
Debt Offering Memorandum and the other agreements, indentures and documents
contemplated thereby. The issuance and sale of the High Yield Debt have been
registered or qualified under applicable federal and state securities laws or
are exempt therefrom. All agreements, indentures and documents executed by
Supreme and its Subsidiaries in connection with the High Yield Debt shall be the
legally valid and binding obligations of Supreme and its Subsidiaries
enforceable against Supreme in accordance with their terms (including those
pertaining to subordination).
Section 7.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties set forth in this ARTICLE 7 and all statements
contained in any certificate, financial statement or other instrument delivered
by or on behalf of any Borrower pursuant to or in connection with this Agreement
or any of the Loan Documents (including, but not limited to, any such
representation, warranty or statement made in or in connection with any
amendment thereto) shall constitute representations and warranties made under
this Agreement. All
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representations and warranties made under this Agreement shall be made or deemed
to be made at and as of the Agreement Date, at and as of the Effective Date and
at and as of the date of each Loan, except that representations and warranties
which, by their terms are applicable only to one such date shall be deemed to be
made only at and as of such date. All representations and warranties made or
deemed to be made under this Agreement shall survive and not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Agent or any Lender, or any borrowing hereunder.
ARTICLE 8
SECURITY INTEREST
Section 8.1 SECURITY INTEREST.
(a) To secure the payment, observance and performance of the Secured
Obligations, each Borrower hereby mortgages, pledges and assigns all of the
Collateral to the Agent for itself and as agent for the Lenders and any
Affiliate of the Lenders, and grants to the Agent, for itself and as agent for
the Lenders and any Affiliate of the Lenders, a continuing security interest in,
and a continuing Lien upon, all of the Collateral.
(b) As additional security for all of the Secured Obligations, each
Borrower grants to the Agent, for itself and as agent for the Lenders and any
Affiliate of the Lenders, a security interest in, and assigns to the Agent, for
itself and as agent for the Lenders and any Affiliate of the Lenders, all of
such Borrower's right, title and interest in and to, any deposits or other sums
at any time credited by or due from each Lender and each Affiliate of the
Lenders to such Borrower, with the same rights therein as if the deposits or
other sums were credited by or due from such Lender or Affiliate.
Section 8.2 CONTINUED PRIORITY OF SECURITY INTEREST.
(a) The Security Interest granted by each Borrower shall at all times
be valid, perfected and enforceable against such Borrower and all third parties
in accordance with the terms of this Agreement, as security for the Secured
Obligations, and the Collateral shall not at any time be subject to any Liens
that are prior to, on a parity with or junior to the Security Interest, other
than Permitted Liens.
(b) Each Borrower shall, at its sole cost and expense, take all action
that may be necessary or desirable, or that the Agent may request, so as at all
times to maintain the validity, perfection, enforceability and rank of the
Security Interest in the Collateral in conformity with the requirements of
SECTION 8.2(A) or to enable the Agent and the Lenders to exercise or enforce
their rights hereunder, including, but not limited to: (i) paying all taxes,
assessments and other claims lawfully levied or assessed on any of the
Collateral, except to the extent that such taxes, assessments and other claims
constitute Permitted Liens, (ii) diligently seeking to obtain, after the
Agreement Date, landlords', mortgagees' or mechanics' releases, subordinations
or waivers, (iii) delivering to the Agent, endorsed or accompanied by such
instruments of assignment as the
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Agent may specify, and stamping or marking in such manner as the Agent may
specify, any and all chattel paper, instruments, letters and advices of guaranty
and documents evidencing or forming a part of the Collateral, and (iv) executing
and delivering financing statements, pledges, designations, hypothecations,
notices and assignments, in each case in form and substance satisfactory to the
Agent, relating to the creation, validity, perfection, maintenance or
continuation of the Security Interest under the UCC or other applicable law.
(c) The Agent is hereby authorized to file one or more financing or
continuation statements or amendments thereto without the signature of or in the
name of the Borrowers for any purpose described in SECTION 8.2(B). A carbon,
photographic or other reproduction of this Agreement or of any of the Security
Documents or of any financing statement filed in connection with this Agreement
is sufficient as a financing statement, to the extent permitted by applicable
law.
(d) Each Borrower shall xxxx its books and records as may be necessary
or appropriate to evidence, protect and perfect the Security Interest and shall
cause its financial statements to reflect the Security Interest.
ARTICLE 9
COLLATERAL COVENANTS
Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been indefeasibly paid in full, unless the Required
Lenders shall otherwise consent in the manner provided in SECTION 16.10:
Section 9.1 COLLECTION OF RECEIVABLES.
(a) Each Borrower will cause all moneys, checks, notes, drafts and
other payments relating to or constituting proceeds of Receivables, or of any
other Collateral, to be forwarded to a Lockbox for deposit in an Agency Account
in accordance with the procedures set out in the corresponding Agency Account
Agreement, and in particular each Borrower will (i) advise each Account Debtor
to address all remittances with respect to amounts payable on account of any
Receivables to a specified Lockbox, and (ii) stamp all invoices relating to any
such amounts with a legend satisfactory to the Agent indicating that payment is
to be made to such Borrower via a specified Lockbox.
(b) Each Borrower and the Agent shall cause all collected balances in
each Agency Account to be transmitted daily by wire transfer or depository
transfer check or Automated Clearing House transfer in accordance with the
procedures set forth in the corresponding Agency Account Agreement to the Agent
at the Agent's Office (i) for application, on account of the Secured
Obligations, as provided in SECTION 2.3(C), 13.2 and 13.3, such credits to be
entered on the day of receipt and to be conditioned upon final payment in cash
or solvent credits of the items giving rise to them, and (ii) with respect to
any balance remaining after such application, so long as no Default or Event of
Default has occurred and is continuing, for transfer to the Controlled
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Disbursement Account or such other account of a Borrower as the Borrowers' Agent
and the Agent may agree.
(c) Any moneys, checks, notes, drafts or other payments referred to in
CLAUSE (A) of this SECTION 9.1 which are received by or on behalf of a Borrower
will be held in trust for the Agent and will be delivered to the Agent at the
Agent's Office as promptly as possible in the exact form received, together with
any necessary endorsements.
Section 9.2 VERIFICATION AND NOTIFICATION. The Agent shall have the
right (a) at any time and from time to time, in the name of the Agent or in the
name of any Borrower, to verify the validity, amount or any other matter
relating to any Receivables by mail, telephone, telegraph or otherwise, and (b)
after an Event of Default, to notify the Account Debtors or obligors under any
Receivables of the assignment of such Receivables to the Agent and to direct
such Account Debtor or obligors to make payment of all amounts due or to become
due thereunder directly to the Agent and, upon such notification and at the
expense of the Borrowers, to enforce collection of any such Receivables and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as any Borrower might have done.
Section 9.3 DISPUTES, RETURNS AND ADJUSTMENTS.
(a) In the event amounts due and owing under any Receivable in excess
of $100,000 are in dispute between the Account Debtor and a Borrower, the
Borrowers' Agent shall provide the Agent with prompt written notice thereof.
(b) The Borrowers' Agent shall notify the Agent promptly of all
material returns and credits in excess of $150,000 in respect of any Receivable,
which notice shall specify the Receivables affected.
(c) The Borrowers may, in the ordinary course of business and prior to
a Default or an Event of Default, grant any extension of time for payment of any
Receivable or compromise, compound or settle the same for less than the full
amount thereof or release wholly or partly any Person liable for the payment
thereof or allow any credit or discount whatsoever thereon; PROVIDED that (i) no
such action results in the reduction of more than $100,000 in the amount payable
with respect to any Receivable or of more than $1,000,000 with respect to all
Receivables in any fiscal year of the Borrowers, and (ii) the Agent is promptly
notified of the amount of such adjustments and the Receivable(s) affected
thereby.
Section 9.4 INVOICES.
(a) No Borrower will use any invoices except invoices in the forms
delivered to the Agent prior to the Agreement Date, unless the Borrowers' Agent
shall have given the Agent 45 days' prior notice of the intended use of a
different form of invoice together with a copy of such different form.
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(b) Upon the request of the Agent, the Borrowers shall deliver to the
Agent, at the Borrowers' expense, copies of customers' invoices or the
equivalent, original shipping and delivery receipts or other proof of delivery,
customers' statements, the original copy of all documents, including, without
limitation, repayment histories and present status reports, relating to
Receivables and such other documents and information relating to the Receivables
as the Agent shall specify.
Section 9.5 DELIVERY OF INSTRUMENTS. In the event any Receivable in an
amount in excess of $50,000 is, or Receivables in excess of $150,000 in the
aggregate are, at any time evidenced by a promissory note or notes, trade
acceptance or any other instrument for the payment of money, the Borrowers will
immediately thereafter deliver such instruments to the Agent, appropriately
endorsed to the Agent.
Section 9.6 SALES OF INVENTORY. All sales of Inventory will be made in
compliance with all requirements of applicable law.
Section 9.7 RETURNED GOODS. The Security Interest in the Inventory
shall, without further act, attach to the cash and non-cash proceeds resulting
from the sale or other disposition thereof and to all Inventory which is
returned to any Borrower by customers or is otherwise recovered.
Section 9.8 OWNERSHIP AND DEFENSE OF TITLE.
(a) Except for Permitted Liens, the Borrowers shall at all times be the
sole owner of each and every item of Collateral and shall not create any Lien
on, or sell, lease, exchange, assign, transfer, pledge, hypothecate, grant a
security interest or security title in or otherwise dispose of, any of the
Collateral or any interest therein, except for (i) sales of Inventory in the
ordinary course of business, for cash or on open account or on terms of payment
ordinarily extended to its customers, (ii) the factoring of Receivables with the
Factors in the ordinary course of business, (iii) the licensing of Intellectual
Property in the ordinary course of business, (iv) the sale of the PVH Inventory
in accordance with the PVH Inventory Purchase Contract, and (v) any Permitted
Receivable Disposition. The inclusion of "proceeds" of the Collateral under the
Security Interest shall not be deemed a consent by the Agent to any other sale
or other disposition of any part or all of the Collateral.
(b) Each Borrower shall defend its title in and to the Collateral and
shall defend the Security Interest in the Collateral against the claims and
demands of all Persons.
(c) In addition to, and not in derogation of, the foregoing and the
requirements of any of the Security Documents, each Borrower shall (i) protect
and preserve all properties material to its business, including Intellectual
Property and maintain all tangible property in good and workable condition in
all material respects, with reasonable allowance for wear and tear, and (ii)
from time to time make or cause to be made all needed and appropriate repairs,
renewals, replacements and additions to such properties necessary for the
conduct of its business, so that
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the business carried on in connection therewith may be properly and
advantageously conducted at all times.
Section 9.9 INSURANCE.
(a) Each Borrower shall at all times maintain insurance on the
Inventory and Equipment against loss or damage by fire, theft, burglary,
pilferage, loss in transit and such other hazards as the Agent shall reasonably
specify, in amounts and under policies issued by insurers acceptable to the
Agent. All premiums on such insurance shall be paid by the Borrowers and copies
of the policies delivered to the Agent. No Borrower will use or permit the
Inventory or Equipment to be used in violation of any applicable law or in any
manner which might render inapplicable any insurance coverage.
(b) All insurance policies required under SECTION 9.9(A) shall name the
Agent, for the benefit of the Lenders, as an additional named insured and shall
contain "New York standard" loss payable clauses in the form submitted to the
Borrowers' Agent by the Agent, or otherwise in form and substance satisfactory
to the Agent, naming the Agent, for the benefit of the Lenders, as loss payee as
its interests may appear, and providing that (i) all proceeds thereunder shall
be payable to the Agent, for the benefit of the Lenders, (ii) no such insurance
shall be affected by any act or neglect of the insured or owner of the property
described in such policy, and (iii) such policy and loss payable clauses may not
be cancelled, amended or terminated unless at least ten days' prior written
notice is given to the Agent.
(c) Any proceeds of insurance referred to in this SECTION 9.9 which are
paid to the Agent, for the account of the Lenders, shall be, at the option of
the Required Lenders in their sole discretion, either (i) applied to rebuild,
restore or replace the damaged or destroyed property, or (ii) applied to the
payment or prepayment of the Secured Obligations.
(d) Each Borrower shall at all times maintain, in addition to the
insurance required by SECTION 9.9(A) or any of the Security Documents, insurance
with responsible insurance companies against such risks and in such amounts as
is customarily maintained by similar businesses or as may be required by
applicable law, including such public liability, products liability, third party
property damage and business interruption insurance as is consistent with
reasonable business practices, and from time to time deliver to the Agent upon
its request a detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
Section 9.10 LOCATION OF OFFICES AND COLLATERAL.
(a) No Borrower will change the location of its chief executive office
or the place where it keeps its books and records relating to the Collateral or
change its name, identity or corporate structure without giving the Agent 30
days' prior written notice thereof.
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(b) All Inventory, other than Inventory in transit to any such
location, will at all times be kept by the Borrowers at one of the locations set
forth in SCHEDULE 7.1(U) and shall not, without the prior written consent of the
Agent, which consent shall not be unreasonably withheld or delayed, be removed
therefrom except, so long as no Event of Default shall have occurred and be
continuing, for sales of Inventory permitted under SECTION 9.8.
(c) If any Inventory is in the possession or control of any of a
Borrower's agents or processors, such Borrower shall notify such agents or
processors of the Security Interest and, upon the occurrence of an Event of
Default, shall instruct them (and cause them to acknowledge such instruction) to
hold all such Inventory for the account of the Agent, for the benefit of the
Lenders, subject to the instructions of the Agent.
Section 9.11 RECORDS RELATING TO COLLATERAL.
(a) Each Borrower will at all times (i) keep complete and accurate
records of Inventory on a basis consistent with past practices of such Borrower,
itemizing and describing the kind, type and quantity of Inventory and such
Borrower's cost therefor and a current price list for such Inventory, and
specifying which Inventory is License Inventory and which Inventory is Private
Label Inventory, and (ii) keep complete and accurate records of all other
Collateral.
(b) Each Borrower will take a physical listing of all material
Inventory, wherever located, at least annually.
Section 9.12 INSPECTION. The Agent and each Lender (by any of their
officers, employees or agents) shall have the right, to the extent that the
exercise of such right shall be within the control of a Borrower, at any time or
times to (a) visit the properties of each Borrower, inspect the Collateral and
the other assets of each Borrower and its Subsidiaries and inspect and make
extracts from the books and records of each Borrower and its Subsidiaries,
including, but not limited to, management letters prepared by independent
accountants, all during customary business hours at such premises, (b) discuss
each Borrower's business, assets, liabilities, financial condition, results of
operations and business prospects, insofar as the same are reasonably related to
the rights of the Agent and the Lenders hereunder or under any of the Loan
Documents, with such Borrower's and its Subsidiaries' (i) principal officers,
(ii) independent accountants and other professionals providing services to such
Borrower, and (iii) any other Person (except that any such discussion with any
third parties shall be conducted only in accordance with the Agent's or such
Lender's standard operating procedures relating to the maintenance of
confidentiality of confidential information of borrowers), and (c) verify the
amount, quantity, value and condition of, or any other matter relating to, any
of the Collateral and in this connection to review, audit and make extracts from
all records and files related to any of the Collateral. Each Borrower will
deliver to the Agent, for the benefit of the Lenders, any instrument necessary
to authorize an independent accountant or other professional to have discussions
of the type outlined above with the Agent or any Lender or for the Agent or any
Lender to obtain records from any service bureau maintaining records on behalf
of such Borrower.
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Section 9.13 MAINTENANCE OF EQUIPMENT. Each Borrower shall maintain all
physical property that constitutes Equipment in good and workable condition in
all material respects, with reasonable allowance for wear and tear, and shall
exercise proper custody over all such property.
Section 9.14 INFORMATION AND REPORTS.
(a) SCHEDULE OF RECEIVABLES. The Borrowers shall deliver to the Agent
(i) on or before the Effective Date, a Schedule of Receivables as of a date not
more than three Business Days prior to the Effective Date setting forth a
detailed aged trial balance of all of their then existing Receivables,
specifying the name of and the balance due from (and any rebate due to) each
Account Debtor obligated on a Receivable so listed, and (ii) no later than 15
days after the end of each accounting month of the Borrowers, a Schedule of
Receivables as of the last Business Day of the Borrowers' immediately preceding
accounting month setting forth (A) a detailed aged trial balance of all the
Borrowers' then existing Receivables, specifying the name of and the balance due
from (and any rebate due to) each Account Debtor obligated on a Receivable so
listed and (B) a reconciliation to the Schedule of Receivables delivered in
respect of the next preceding accounting month.
(b) SCHEDULE OF INVENTORY. The Borrowers shall deliver to the Agent (i)
on or before the Effective Date and no later than the 15th day of each
accounting month of the Borrowers thereafter a Schedule of Inventory as of the
last Business Day of the immediately preceding accounting month of the
Borrowers, itemizing and describing the kind, type, quantity and location of
finished goods Inventory not in transit and not located at contractor's
locations and the cost thereof and specifying which Inventory is License
Inventory and which is Private Label Inventory, and (ii) at the Agent's request,
within 35 days of the end of each quarter, a Schedule of Inventory as of the
last Business Day of the immediately preceding quarter of the Borrowers,
itemizing and describing the kind, type, quantity and location of all Inventory,
including finished goods Inventory, in-transit Inventory, and Inventory located
at contractor's facilities, and the cost thereof.
(c) BORROWING BASE CERTIFICATE. The Borrowers shall deliver to the
Agent and the Lenders (i) until the closing of the High Yield Debt Offering, not
later than Wednesday of each week, a Borrowing Base Certificate prepared as of
the close of business on Friday of the immediately preceding week, and (ii)
thereafter, not later than the 15th day of each accounting month of the
Borrowers, a Borrowing Base Certificate prepared as of the close of business on
the last Business Day of the immediately preceding accounting month.
(d) LETTER OF CREDIT/BANKER'S ACCEPTANCES REPORTS. The Borrowers shall
deliver to the Agent (i) on or before the Effective Date, a report listing all
letters of credit and banker's acceptances outstanding under its credit facility
with Xxxxxxxx Bank, N.A., and the face amount, maturity date and beneficiary
with respect to such letters of credit and banker's acceptances, and (ii) no
later than 15 days after the end of each accounting month of the Borrowers, a
report listing all letters of credit and banker's acceptances outstanding under
its credit facility with Xxxxxxxx Bank, N.A. as of the last Business Day of the
immediately preceding accounting month of the
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Borrowers, and the face amount, maturity date and beneficiary with respect to
such letters of credit and banker's acceptances.
(e) FACTORING REPORTS. The Borrowers shall deliver to the Agent upon
the Agent's request copies of all reports of the Factors relating to their
factoring arrangement with the Borrowers.
(f) NOTICE OF DIMINUTION OF VALUE. The Borrowers shall give prompt
notice to the Agent of any matter or event which has resulted in, or may result
in, the actual or potential diminution in excess of $150,000 in the value of any
of their Collateral, except for any diminution in the value of any Receivables
or Inventory in the ordinary course of business which has been appropriately
reserved against, as reflected in the financial statements previously delivered
to the Lenders pursuant to ARTICLE 11.
(g) CERTIFICATION. Each of the schedules delivered to the Agent and/or
the Lenders pursuant to this SECTION 9.14 shall be certified by the Financial
Officer to be true, correct and complete as of the date indicated thereon.
(h) OTHER INFORMATION. The Agent may, in its discretion, from time to
time require the Borrowers to deliver the schedules described in SECTION
9.14(A), (B), (C) and (D) more or less often and on different schedules than
specified in such Section, and the Borrowers will comply with such requests. The
Borrowers shall also furnish to the Agent and each Lender such other information
with respect to the Collateral as the Agent and each Lender may from time to
time reasonably request, including, without limitation, listings of all
outstanding steamship guaranties and letters of credit, specifically identifying
those for which the issuer is not the consignee.
Section 9.15 POWER OF ATTORNEY. Each Borrower hereby appoints the Agent
as its attorney, upon the occurrence of an Event of Default, with power (a) to
endorse the name of such Borrower on any checks, notes, acceptances, money
orders, drafts or other forms of payment or security that may come into the
Agent's or any Lender's possession, and (b) to sign the name of such Borrower on
any invoice or xxxx of lading relating to any Receivables, Inventory or other
Collateral, on any drafts against customers related to letters of credit, on
schedules and assignments of Receivables furnished to the Agent by such
Borrower, on notices of assignment, financing statements and other public
records relating to the perfection or priority of the Security Interest or
verifications of account and on notices to or from customers.
Section 9.16 CREDIT INSURANCE. The Borrowers shall deliver to the Agent
a duly executed and acknowledged Credit Insurance Assignment with respect to
each credit insurance policy maintained by a Borrower.
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ARTICLE 10
AFFIRMATIVE COVENANTS
Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been indefeasibly paid in full, unless the Required
Lenders shall otherwise consent in the manner provided for in SECTION 16.10,
each Borrower will, and will cause each of its Subsidiaries to:
Section 10.1 PRESERVATION OF CORPORATE EXISTENCE AND SIMILAR MATTERS.
Preserve and maintain its corporate existence, rights, franchises, licenses and
privileges in the jurisdiction of its incorporation and qualify and remain
qualified as a foreign corporation and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization.
Section 10.2 COMPLIANCE WITH APPLICABLE LAW. Comply with all applicable
laws relating to it.
Section 10.3 CONDUCT OF BUSINESS. Engage only in businesses in
substantially the same fields as the businesses conducted on the Effective Date.
Section 10.4 PAYMENT OF TAXES AND CLAIMS. Pay or discharge when due (a)
all taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits or upon any properties belonging to it, and (b) all
lawful claims of materialmen, mechanics, carriers, warehousemen and landlords
for labor, materials, supplies and rentals which, if unpaid, might become a Lien
on any properties of such Borrower or such Subsidiary, EXCEPT that this SECTION
10.4 shall not require the payment or discharge of any such tax, assessment,
charge, levy or claim which is being contested in good faith by appropriate
proceedings and for which adequate reserves have been established on the
appropriate books.
Section 10.5 ACCOUNTING METHODS AND FINANCIAL RECORDS. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete), as may be required or as may be necessary to permit the
preparation of financial statements in accordance with GAAP consistently
applied.
Section 10.6 USE OF PROCEEDS.
(a) Use the proceeds of (i) the Initial Loans to pay the amounts
indicated in SCHEDULE 10.6 to the Persons indicated therein, and (ii) all
subsequent Revolving Credit Loans only for working capital and general business
purposes, and Permitted Acquisitions; and
(b) not use any part of such proceeds to purchase or carry, or to
reduce or retire or refinance any credit incurred to purchase or carry, any
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System) or for any other purpose which would involve a
violation of such Regulation or Regulation T or X of such Board of
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Governors or for any other purpose prohibited by law or by the terms and
conditions of this Agreement.
Section 10.7 HAZARDOUS WASTE AND SUBSTANCES; ENVIRONMENTAL
REQUIREMENTS.
(a) In addition to, and not in derogation of, the requirements of
SECTION 10.2 and of the Security Documents, comply with all laws, governmental
standards and regulations applicable to such Borrower or such Subsidiary or to
any of their respective assets in respect of occupational health and safety
laws, rules and regulations and Environmental Laws, promptly notify the Agent of
its receipt of any notice of a violation of any such law, rule, standard or
regulation and indemnify and hold the Agent and each Lender harmless from all
loss, cost, damage, liability, claim and expense incurred by or imposed upon the
Agent or any Lender on account of such Borrower's or Subsidiary's failure to
perform its obligations under this SECTION 10.7.
(b) Whenever a Borrower gives notice to the Agent pursuant to this
SECTION 10.7 with respect to a matter that reasonably could be expected to
result in liability to such Borrower or any of its Subsidiaries in excess of
$25,000 in the aggregate, such Borrower shall, at the Agent's request and such
Borrower's expense, (i) cause an independent environmental engineer acceptable
to the Agent to conduct such tests of the site where the noncompliance or
alleged noncompliance with Environmental Laws has occurred and prepare and
deliver to the Agent and the Lenders a report setting forth the results of such
tests, a proposed plan to bring such Borrower or Subsidiary into compliance with
such Environmental Laws and an estimate of the costs thereof, and (ii) provide
to the Agent and the Lenders a supplemental report of such engineer whenever the
scope of the noncompliance or the response thereto or the estimated costs
thereof shall materially change.
Section 10.8 ACCURACY OF INFORMATION. All written information, reports,
statements and other papers and data furnished to the Agent or any Lender,
whether pursuant to ARTICLE 11 or any other provision of this Agreement or any
of the other Loan Documents, shall be, at the time the same is so furnished,
complete and correct in all material respects to the extent necessary to give
the Agent and the Lenders true and accurate knowledge of the subject matter.
Section 10.9 REVISIONS OR UPDATES TO SCHEDULES. Should any of the
information or disclosures provided on any of the Schedules originally attached
hereto become outdated or incorrect in any material respect, the Borrowers'
Agent shall provide promptly to the Agent and the Lenders such revisions or
updates to such Schedule(s) as may be necessary or appropriate to update or
correct such Schedule(s); PROVIDED that no such revisions or updates to any
Schedule(s) shall be deemed to have cured any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule(s) unless and until the Required Lenders, in their sole discretion,
shall have accepted in writing such revisions or updates to such Schedule(s).
Section 10.10 YEAR 2000 COMPLIANCE. The Borrowers will promptly (a)
notify the Agent in the event any Borrower discovers or determines that any
computer application (including
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those of its suppliers, vendors and customers) that is material to its or any of
its Subsidiaries' business and operations will not be Year 2000 compliant (as
defined in SECTION 7.1(AA)), and (b) establish a plan and timeline for
addressing any material noncompliance discovered or determined by the Borrowers.
Section 10.11 ADDITIONAL BORROWERS. Upon Supreme's request and the
approval of the Agent (such approval to be granted or denied in the Agent's
discretion), cause any wholly-owned United States Subsidiary of Supreme to
become a party to this Agreement as a Borrower by, at the Borrowers' expense,
(a) causing such Subsidiary to execute a Joinder Agreement in substantially the
same form as EXHIBIT E hereto, (b) at the request of any Lender, causing such
Subsidiary to execute a Note or Notes in favor of such Lender, and (c)
delivering such other documentation as the Agent may request in connection with
the foregoing, including appropriate UCC-1 financing statements (and lien
searches), security agreements, trademark assignments, landlord waivers, an
amendment to the Pledge Agreement so as to grant the Agent a first priority
security interest in the capital stock of such Subsidiary owned by Supreme,
certified resolutions and other organizational and authorizing documents of
Supreme and such Subsidiary, and favorable opinions of counsel to Supreme and
such Subsidiary (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to above), all
in form, content and scope satisfactory to the Agent. The provisions of this
Section shall not in any manner limit the restrictions on the formation or
acquisition of Subsidiaries set forth in SECTION 12.4.
Section 10.12 ADDITIONAL GUARANTORS. Upon the formation or acquisition
of any new direct or indirect Subsidiary by Supreme, if such Subsidiary is not
made a Borrower pursuant to SECTION 10.11, then, within 10 days after such
formation or acquisition, at the Borrowers' expense, the Borrowers shall (a)
cause such Subsidiary to execute a Guaranty Agreement in form acceptable to the
Agent, and (b) deliver such other documentation as the Agent may request in
connection with the foregoing, including an amendment to the Pledge Agreement so
as to grant the Agent a first priority security interest in the capital stock of
such Subsidiary owned by Supreme, an acknowledgment that such Subsidiary has
become a party to any contribution agreement executed by the Guarantors,
appropriate certified resolutions and other organizational and authorizing
documents of Supreme and such Subsidiary, and favorable opinions of counsel to
Supreme and such Subsidiary (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above), all in form, content and scope satisfactory to the Agent.
The provisions of this Section shall not in any manner limit the restrictions on
the formation or acquisition of Subsidiaries set forth in SECTION 12.4.
Section 10.13 INDENTURE TRUSTEE; PAYING AGENT. The Borrowers will
immediately notify the Agent of (a) the appointment of any Person as paying
agent under any indenture issued in connection with the High Yield Debt, and (b)
any change in (i) the Person serving as trustee or paying agent under any
indenture issued in connection with the High Yield Debt, or (ii) the address of
such Person for notice purposes under any such indenture.
Section 10.14 CHIEF FINANCIAL OFFICER. Within 270 days after the
Agreement Date, Supreme shall have hired a chief financial officer reasonably
acceptable to the Required Lenders.
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Section 10.15 SYNDICATION. Cooperate fully with the Agent (a) through
meetings with and providing requested information to prospective assignees of
the Commitments, and in such other matters as the Agent may reasonably request,
in connection with the syndication of the Commitments, and (b) in considering in
good faith any amendment to this Agreement or any other Loan Document as the
Agent may reasonably request in order to assure a satisfactory syndication of
the Commitments, PROVIDED the Agent shall use its good faith efforts to
syndicate the Commitments on the terms set forth herein.
ARTICLE 11
INFORMATION
Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been indefeasibly paid in full, unless the Required
Lenders shall otherwise consent in the manner set forth in SECTION 16.10, the
Borrowers will furnish to the Agent and each Lender at the offices designated
for such purpose pursuant to SECTION 16.1:
Section 11.1 FINANCIAL STATEMENTS.
(a) AUDITED YEAR-END STATEMENTS. As soon as available, but in any event
within 95 days after the end of each fiscal year of Supreme, copies of the
consolidated balance sheet of Supreme and its consolidated Subsidiaries as at
the end of such fiscal year and the related consolidated statements of income,
shareholders' equity and cash flow for such fiscal year, along with Supreme's
annual 10K, in each case setting forth in comparative form the figures for the
previous year of Supreme and its consolidated Subsidiaries and reported on,
without qualification, by Deloitte & Touche or other independent certified
public accountants selected by Supreme and reasonably acceptable to the Agent.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but in any
event within 50 days after the end of each fiscal quarter, copies of the
unaudited consolidated balance sheet of Supreme and its consolidated
Subsidiaries as at the end of such fiscal quarter and the related consolidated
unaudited income statement for Supreme and its consolidated Subsidiaries for
such fiscal quarter and for the portion of the fiscal year of Supreme and its
consolidated Subsidiaries through such fiscal quarter, along with Supreme's
quarterly 10Q, all of which shall be certified by the Financial Officer to the
best of his knowledge as presenting fairly the financial condition and results
of operations of Supreme and its consolidated Subsidiaries as at the date
thereof and for the periods ended on such date, subject to normal year end
adjustments.
(c) MONTHLY FINANCIAL STATEMENTS. As soon as available, but in any
event within 30 days after the end of each fiscal month (other than any fiscal
month end which is also a fiscal quarter end), copies of the unaudited
consolidated balance sheet of Supreme and its consolidated Subsidiaries as at
the end of such fiscal month and the related consolidated unaudited income
statement for Supreme and its consolidated Subsidiaries for such fiscal month
and for the portion of the fiscal year of Supreme and its consolidated
Subsidiaries through such fiscal month, all of which shall be certified by the
Financial Officer to the best of his knowledge as presenting fairly
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the financial condition and results of operations of Supreme and its
consolidated Subsidiaries as at the date thereof and for the periods ended on
such date, subject to normal year end adjustments.
All such financial statements shall be complete and correct in all material
respects and prepared in accordance with GAAP (except, with respect to interim
financial statements, for the omission of footnotes) applied consistently
throughout the periods reflected therein.
Section 11.2 ACCOUNTANTS' CERTIFICATE. Together with each delivery of
financial statements required by SECTION 11.1(A), a certificate of the
accountants who performed the audit in connection with such statements stating
that they have reviewed this Agreement and that, in making the audit necessary
to the issuance of a report on such financial statements, they have obtained no
knowledge of any Default or Event of Default or, if such accountants have
obtained knowledge of a Default or Event of Default, specifying the nature and
period of existence thereof.
Each Borrower authorizes the Agent and each Lender to discuss the financial
condition of such Borrower and its Subsidiaries with such Borrower's independent
certified public accountants and agrees that such discussion or communication
shall be without liability to either the Agent or any Lender or such Borrower's
independent certified public accountants. The Borrowers shall deliver a letter
addressed to such accountants authorizing them to comply with the provisions of
this SECTION 11.2.
Section 11.3 OFFICER'S CERTIFICATE. Together with each delivery of
financial statements required by SECTION 11.1(A) and (B), a certificate of
Supreme's President or Financial Officer (a) stating that, based on an
examination sufficient to enable him to make an informed statement, no Default
or Event of Default exists or, if such is not the case, specifying such Default
or Event of Default and its nature, when it occurred, whether it is continuing
and the steps being taken by the Borrowers with respect to such Default or Event
of Default, and (b) setting forth the calculations necessary to establish
whether or not the Borrowers were in compliance with the covenants contained in
SECTIONS 12.1, 12.2, and 12.5 as of the date of such statements.
Section 11.4 COPIES OF OTHER REPORTS.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to any Borrower or its Board of Directors by its independent public
accountants, including, without limitation, all management reports and
management letters.
(b) Within 60 days prior to the end of each fiscal year, a projected
balance sheet, income statement and financial covenant compliance of Supreme and
its consolidated Subsidiaries for the upcoming fiscal year.
(c) From time to time and promptly upon each request, such forecasts,
data, certificates, reports, statements, opinions of counsel, documents or
further information regarding the business, assets, liabilities, financial
condition, results of operations or business prospects of
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Supreme and its consolidated Subsidiaries as the Agent or any Lender may
reasonably request. The rights of the Agent and each Lender under this SECTION
11.4(C) are in addition to and not in derogation of its rights under any other
provision of this Agreement or any Loan Document.
(d) If requested by the Agent or any Lender, statements in conformity
with the requirements of Federal Reserve Form U-1 referred to in Regulations U
of the Board of Governors of the Federal Reserve System.
(e) As soon as practicable, copies of all financial statements and
reports that any Borrower or any of its Subsidiaries shall send to its
shareholders generally and of all registration statements and all regular or
periodic reports which any Borrower or any of its Subsidiaries shall file with
the Securities and Exchange Commission or any successor commission.
Section 11.5 NOTICE OF LITIGATION AND OTHER MATTERS. Prompt notice of:
(a) the commencement, to the extent any Borrower is aware of the same,
of all proceedings and investigations by or before any governmental or
nongovernmental body and all actions and proceedings in any court or before any
arbitrator against or in any other way relating adversely to, or adversely
affecting, any Borrower or any Affiliate of any Borrower or any of their
respective property, assets or businesses which might, singly or in the
aggregate, cause a Default or an Event of Default or have a Materially Adverse
Effect,
(b) any amendment of the articles of incorporation or by-laws of any
Borrower or other Obligor or any of their Subsidiaries,
(c) any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of any Borrower or any
Affiliate of any Borrower which has had or may have any Materially Adverse
Effect and any change in the executive officers of any Borrower or other Obligor
or any of their Subsidiaries, and
(d) any (i) Default or Event of Default, or (ii) event that constitutes
or that, with the passage of time or giving of notice or both, would constitute
a default or event of default by any Borrower or any of its Subsidiaries under
any material agreement (other than this Agreement) to which such Borrower or
Subsidiary is a party or by which such Borrower or Subsidiary or any of their
respective property may be bound (including without limitation any agreement
relating to the High Yield Debt, the SunTrust Lease, the factoring arrangements
with the Factors, and the letter of credit facility with Xxxxxxxx Bank, N.A.) if
the exercise of remedies thereunder by the other party to such agreement would
have, either individually or in the aggregate, a Materially Adverse Effect.
Section 11.6 ERISA. As soon as possible and in any event within 30 days
after any Borrower knows, or has reason to know, that:
(a) any Termination Event with respect to a Benefit Plan has occurred
or will occur,
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(b) the aggregate present value of the Unfunded Vested Accrued Benefits
under all Plans has increased to an amount in excess of $0, or
(c) any Borrower is in "default" (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan required by reason of
its complete or partial withdrawal (as described in Section 4203 or 4205 of
ERISA) from such Multiemployer Plan, a certificate of the President or Financial
Officer of the Borrowers' Agent setting forth the details of such of the events
described in CLAUSES (A) through (C) as applicable and the action which is
proposed to be taken with respect thereto and, simultaneously with the filing
thereof, copies of any notice or filing which may be required by the PBGC or
other agency of the United States government with respect to such of the events
described in CLAUSES (A) through (C) as applicable.
Section 11.7 SUBORDINATED INDEBTEDNESS CERTIFICATE. Not less than five
Business Days prior to any scheduled payment of any principal of, or interest or
other amounts on, any Subordinated Indebtedness, and as a condition precedent to
making such payment, the Borrowers' Agent shall furnish a certificate of the
Financial Officer stating: (a) that no Default or Event of Default is in
existence as of the date of the certificate or will be in existence as of the
date of such payment, both with and without giving effect to the making of such
payment, and (b) the amount of principal and interest to be paid.
ARTICLE 12
NEGATIVE COVENANTS
Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been indefeasibly paid in full, unless the Required
Lenders shall otherwise consent in the manner set forth in SECTION 16.10, the
Borrowers will not directly or indirectly and will not permit any of their
Subsidiaries to:
Section 12.1 FINANCIAL COVENANTS.
(a) MAXIMUM FUNDED INDEBTEDNESS TO EBITDA RATIO. Permit the ratio of
Funded Indebtedness to its EBITDA (measured for the preceding four fiscal
quarters), in each case measured on a consolidated basis for Supreme and its
consolidated Subsidiaries, to be greater than (i) 5.5 to 1 as of any fiscal
quarter end on or prior to January 30, 2000, (ii) 5.0 to 1 as of any fiscal
quarter end on or after January 31, 2000 but on or prior to January 30, 2001,
(iii) 4.5 to 1 as of any fiscal quarter end on or after January 31, 2001 but on
or prior to January 30, 2002, or (iv) 3.5 to 1 as of any fiscal quarter end
thereafter.
(b) MINIMUM CURRENT RATIO. Permit the ratio of current assets to
current Liabilities (in each case determined in accordance with GAAP, but
including in current Liabilities the outstanding Revolving Credit Loans),
measured on a consolidated basis for Supreme and its consolidated Subsidiaries,
to be less than 1.2 to 1 at the end of any fiscal quarter.
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(c) MAXIMUM SENIOR FUNDED INDEBTEDNESS TO EBITDA RATIO. In the event
the High Yield Debt Offering does not close, permit the ratio of (i) Funded
Indebtedness minus Subordinated Indebtedness to (ii) EBITDA (measured for the
preceding four fiscal quarters), in each case measured on a consolidated basis
for Supreme and its consolidated Subsidiaries, to be greater than (A) 3.5 to 1
at any time to and including January 30, 2001, (B) 3.25 from and including
January 31, 2001 to and including January 30, 2002, or (C) 3.0 to 1 from and
after January 31, 2002. In the event the High Yield Debt Offering closes, permit
the ratio of (i) Funded Indebtedness minus Subordinated Indebtedness to (ii)
EBITDA (measured for the preceding four fiscal quarters), in each case measured
on a consolidated basis for Supreme and its consolidated Subsidiaries, to be
greater than (A) 2.5 to 1 at any time to and including January 30, 2001, (B)
2.25 from and including January 31, 2001 to and including January 30, 2002, or
(C) 2.0 to 1 from and after January 31, 2002.
(d) MINIMUM FIXED CHARGE COVERAGE RATIO. Permit the ratio of (i) EBITDA
less Unfunded Capital Expenditures less taxes actually paid in cash, divided by
(ii) Fixed Charges, all as of the end of each fiscal quarter, measured for the
immediately preceding four fiscal quarters on a consolidated basis for Supreme
and its consolidated Subsidiaries, to be less than 1.2 to 1.
(e) MINIMUM NET WORTH. Permit Net Worth of Supreme and its consolidated
Subsidiaries to be less than (i) $64,000,000 at any time on or prior to January
30, 2000, or (ii) from and including each January 31 thereafter to and including
the succeeding January 30, the minimum Net Worth requirement as of the preceding
January 30 plus $5,000,000.
Section 12.2 INDEBTEDNESS. Create, assume, or otherwise become or
remain obligated in respect of, or permit or suffer to exist or to be created,
assumed or incurred or to be outstanding any Indebtedness, except for Permitted
Indebtedness for Money Borrowed.
Section 12.3 GUARANTIES. Become or remain liable with respect to any
Guaranty of any obligation of any other Person, excluding (a) the Guaranty by
Supreme of Sunny Industries' obligations for $600,000, (b) the Guaranty
Agreements, and (c) the Guarantees by the Guarantors of the High Yield Debt.
Section 12.4 INVESTMENTS. Acquire, after the Agreement Date, any
Business Unit or Investment or, after such date, permit any Investment to be
outstanding, other than Permitted Investments; PROVIDED that Supreme may
consummate the Xxxxx Xxxxx Acquisition as long as each of the following
conditions precedent are met to the Agent's satisfaction: (a) no Default or
Event of Default exists after giving effect to the consummation of the Xxxxx
Xxxxx Acquisition; (b) the High Yield Debt Offering shall have been consummated
in accordance with the terms of the High Yield Debt Offering Memorandum pursuant
to an indenture in form satisfactory to the Agent; (c) after giving pro forma
effect to the consummation of the Xxxxx Xxxxx Acquisition (and the consummation
of the High Yield Debt Offering), the Borrowers are in compliance with each of
the financial covenants set forth in SECTION 12.1, and the Agent shall have
received a certificate and supporting calculations from the Financial Officer
evidencing such compliance; (d) on the Xxxxx Xxxxx Acquisition Date, (i) the
Agent shall have received true and complete executed or conformed copies of the
Xxxxx Xxxxx Acquisition Documents and any amendments
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thereto; (ii) the Xxxxx Xxxxx Acquisition Documents shall be in full force and
effect and no material term or condition thereof shall have been amended,
modified or waived after the execution thereof (other than solely to extend the
date by which the Xxxxx Xxxxx Acquisition is required to occur) except with the
prior written consent of the Agent; (iii) none of the parties to any of the
Xxxxx Xxxxx Acquisition Documents shall have failed to perform any material
obligation or covenant required by such Xxxxx Xxxxx Acquisition Document to be
performed or complied with by it on or before the Effective Date; (iv) all
material representations and warranties of the Xxxxx Xxxxx Sellers contained in
the Xxxxx Xxxxx Acquisition Agreement and the other Xxxxx Xxxxx Acquisition
Documents shall be true and correct in all material respects with the same
effect as though made on and as of the Xxxxx Xxxxx Acquisition Date; (v) all
requisite approvals by Governmental Authorities and regulatory bodies having
jurisdiction over the parties to the Xxxxx Xxxxx Acquisition Agreement in
respect of the Xxxxx Xxxxx Acquisition shall have been obtained by such parties,
and no such approvals shall impose any unsatisfied conditions to the
consummation of the Xxxxx Xxxxx Acquisition; (vi) the Xxxxx Xxxxx Acquisition
shall have been consummated in accordance with the terms and provisions of the
Xxxxx Xxxxx Acquisition Agreement and the other Xxxxx Xxxxx Acquisition
Documents, without any amendment or waiver of any material provision thereof;
(vii) all opinion letters delivered in connection with the Xxxxx Xxxxx
Acquisition Documents and the transactions contemplated thereby shall be
addressed to the Agent, for the benefit of the Lenders, or accompanied by a
written authorization from the firm delivering such opinion letter stating that
the Agent, for the benefit of the Lenders, may rely on such opinion letter as
though it were addressed to it; provided that the Borrowers shall not be
required to deliver such opinion letter or written authorization with respect to
the opinion of counsel to the Xxxxx Xxxxx Sellers to the extent that the
Borrowers, after reasonable efforts, are unable to obtain the agreement of the
Xxxxx Xxxxx Sellers to deliver such opinion or written authorization to the
Agent and Lenders; and (viii) the Agent shall have received the consent and
acknowledgment of the Xxxxx Xxxxx Sellers with respect to the Xxxxx Xxxxx
Acquisition Documents Assignment; (e) the Agent shall have received a
certificate from Supreme's President or Financial Officer, together with such
other evidence satisfactory to it, that each of the conditions set forth in
CLAUSES (A) through (D) above shall have been satisfied; and (f) Xxxxx Xxxxx
shall have become a Borrower hereunder in accordance with the terms of SECTION
10.11.
Section 12.5 CAPITAL EXPENDITURES. Make or incur any Capital
Expenditures, except that the Borrowers and their Subsidiaries may make or incur
Capital Expenditures during any fiscal year in an amount not to exceed, in the
aggregate, $4,000,000 ($5,000,000 in the case of the fiscal year ending on
January 31, 2000).
Section 12.6 RESTRICTED DISTRIBUTIONS AND PAYMENTS, ETC. Declare or
make any Restricted Distribution or Restricted Payment, PROVIDED that, if the
Initial Term Loan Reduction has been made pursuant to SECTION 4.3, the Borrowers
shall be permitted to redeem or repurchase outstanding High Yield Debt from the
proceeds of an equity offering made in accordance with SECTION 5.9(B) provided
(a) no Default or Event of Default exists before or after giving effect to such
redemption or repurchase, (b) the Borrowers are in compliance with the covenants
set forth in SECTION 12.1 on a pro forma basis after giving effect to such
redemption or repurchase, and (c) prior to such redemption or repurchase the
Borrowers' Agent shall deliver to the Agent a certificate of the Financial
Officer (i) setting forth the calculations required to establish the
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Borrowers' pro forma compliance with the requirements of SECTION 12.1 after
giving effect to such redemption or repurchase, and (ii) stating that no Default
or Event of Default exists before or after giving effect to such redemption or
repurchase.
Section 12.7 MERGER, CONSOLIDATION AND SALE OF ASSETS. Merge or
consolidate with any other Person or sell, lease or transfer or otherwise
dispose of all or a substantial portion of its assets to any Person.
Section 12.8 TRANSACTIONS WITH AFFILIATES. Effect any transaction with
any Affiliate on a basis less favorable to any Borrower or any of the other
Obligors than would be the case if such transaction had been effected with a
Person not an Affiliate.
Section 12.9 LIENS. Create, assume or permit or suffer to exist or to
be created or assumed any Lien on any of the property or assets of any Borrower
or any of its Subsidiaries, real, personal or mixed, tangible or intangible,
except for Permitted Liens.
Section 12.10 OPERATING LEASES. Enter into any lease other than a
Capitalized Lease which would cause the annual payment obligations of the
Borrowers and their Subsidiaries under all leases (other than leases of real
property, Capitalized Leases and the SunTrust Lease) to exceed $250,000 in the
aggregate.
Section 12.11 BENEFIT PLANS. Permit, or take any action which would
result in, the aggregate present value of the Unfunded Vested Accrued Benefits
under all Benefit Plans of the Borrowers and their Subsidiaries to exceed $0.
Section 12.12 SALES AND LEASEBACKS. Enter into any arrangement with any
Person providing for the leasing from such Person of real or personal property
which has been or is to be sold or transferred, directly or indirectly, by any
Borrower or any of its Subsidiaries to such Person.
Section 12.13 AMENDMENTS OF OTHER AGREEMENTS. Amend in any way (a) the
interest rate or principal amount or schedule of payments of principal and
interest with respect to any Indebtedness (other than the Secured Obligations)
other than to reduce the interest rate or extend the schedule of payments with
respect thereto, (b) the subordination provisions applicable to the High Yield
Debt or any other Subordinated Indebtedness, or (c) any of the other terms and
conditions applicable to the High Yield Debt.
Section 12.14 MINIMUM AVAILABILITY. Prior to the earlier of (a) the
date of the Initial Term Loan Reduction or (b) Borrowers' receipt of the net
proceeds of the High Yield Debt Offering, permit Availability to be less than
$1,000,000 at any time. Upon Borrowers' receipt of the net proceeds of the High
Yield Debt Offering, permit Availability to be less than the following amounts
during the following periods:
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PERIOD AMOUNT
------ ------
From 1/1 - 3/31, 6/1 - 9/30 and 12/1 - $ 7,500,000
12/31 of each year
From 4/1 - 5/31 of each year and from $ 15,000,000
10/1 - 11/30 of each year
In the event the consummation of the High Yield Debt Offering does not occur,
permit Availability to be less than the following amounts during the following
periods, beginning after the Initial Term Loan Reduction:
PERIOD AMOUNT
------ ------
From 1/1 - 3/31, 6/1 - 9/30 and 12/1 - $ 3,000,000
12/31 of each year
From 4/1 - 5/31 of each year and from $ 7,000,000
10/1 - 11/30 of each year
Section 12.15 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES.
Create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any Subsidiary to (a) pay dividends or make any
other distributions on its capital stock or any other interest or participation
in its profits owned by a Borrower or any Subsidiary of a Borrower, or pay any
Indebtedness owed to a Borrower or a Subsidiary of a Borrower, (b) make loans or
advances to a Borrower or any of a Borrower's Subsidiaries, or (c) transfer any
of its properties or assets to a Borrower, except for such encumbrances or
restrictions existing under or by reason of (i) applicable laws, (ii) the
indenture and other agreements applicable to the High Yield Debt, and (iii) this
Agreement and the other Loan Documents.
Section 12.16 FISCAL YEAR. Change the end of its fiscal year from
January 31.
ARTICLE 13
DEFAULT
Section 13.1 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body:
(a) DEFAULT IN PAYMENT OF LOANS. The Borrowers shall default in any
payment of principal of, or interest on, any Loan or Note when and as due
(whether at maturity, by reason of acceleration or otherwise).
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(b) OTHER PAYMENT DEFAULT. The Borrowers shall default in the payment,
as and when due, of principal of or interest on, any other Secured Obligation,
and such default shall continue for 10 days after written notice thereof has
been given to the Borrowers' Agent by the Agent or any Lender.
(c) MISREPRESENTATION. Any representation or warranty made or deemed to
be made by a Borrower or any other Obligor under this Agreement or any other
Loan Document or any amendment hereto or thereto shall at any time prove to have
been incorrect or misleading in any material respect when made.
(d) DEFAULT IN PERFORMANCE. The Borrowers shall default in the
performance or observance of any term, covenant, condition or agreement
contained in (i) ARTICLES 8, 9, 10, 11 or 12; or (ii) this Agreement (other than
as specifically provided for otherwise in this SECTION 13.1) and such default
shall continue for a period of 14 days after written notice thereof has been
given to the Borrowers' Agent by the Agent or any Lender.
(e) INDEBTEDNESS CROSS-DEFAULT. (i) Any Obligor shall fail to pay when
due and payable, after the expiration of any applicable grace period, the
principal of or interest on any Indebtedness (other than the Loans or Note)
where the principal amount of such Indebtedness is in excess of $150,000, or
(ii) the maturity of any such Indebtedness shall have (A) been accelerated in
accordance with the provisions of any indenture, contract or instrument
providing for the creation of or concerning such Indebtedness, or (B) been
required to be prepaid prior to the stated maturity thereof, or (iii) any event
shall have occurred and be continuing which, with or without the passage of time
or the giving of notice, or both, would permit any holder or holders of such
Indebtedness, any trustee or agent acting on behalf of such holder or holders or
any other Person so to accelerate such maturity.
(f) OTHER CROSS-DEFAULTS. Any Obligor shall default in the payment when
due or in the performance or observance of any material obligation or condition
of any agreement, contract or lease (other than the Security Documents or any
such agreement, contract or lease relating to Indebtedness), if the exercise of
remedies thereunder by the other party to such agreement could have a Materially
Adverse Effect.
(g) VOLUNTARY BANKRUPTCY PROCEEDING. Any Obligor shall (i) commence a
voluntary case under the federal bankruptcy laws (as now or hereafter in
effect), (ii) commence a proceeding seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition for adjustment of debts, (iii) consent to or fail to contest
in a timely and appropriate manner any petition filed against it in an
involuntary case under such bankruptcy laws or other laws, (iv) apply for or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of a substantial part of its property, domestic or
foreign, (v) admit in writing its inability to pay its debts as they become due,
(vi) make a general assignment for the benefit of creditors, or (vii) take any
corporate action for the purpose of authorizing any of the foregoing.
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(h) INVOLUNTARY BANKRUPTCY PROCEEDING. A case or other proceeding shall
be commenced against an Obligor in any court of competent jurisdiction seeking
(i) relief under the federal bankruptcy laws (as now or hereafter in effect) or
under any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts, or (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of an Obligor or of all or
any substantial part of the assets, domestic or foreign, of an Obligor, and such
case or proceeding shall continue undismissed or unstayed for a period of 60
consecutive calendar days, or an order granting the relief requested in such
case or proceeding against an Obligor (including, but not limited to, an order
for relief under such federal bankruptcy laws) shall be entered.
(i) LOAN DOCUMENTS. Any event of default or Event of Default under any
other Loan Document shall occur or an Obligor shall default in the performance
or observance of any material term, covenant, condition or agreement contained
in, or the payment of any other sum covenanted to be paid by an Obligor under,
any such Loan Document or any provision of this Agreement, or of any other Loan
Document after delivery thereof hereunder, shall for any reason cease to be
valid and binding, other than a nonmaterial provision rendered unenforceable by
operation of law, or an Obligor or other party thereto (other than the Agent or
any Lender) shall so state in writing, or this Agreement or any other Loan
Document, after delivery thereof hereunder, shall for any reason (other than any
action taken independently by the Agent or any Lender and except to the extent
permitted by the terms thereof) cease to create a valid, perfected and, except
as otherwise expressly permitted herein, first priority Lien on, or security
interest in, any of the Collateral purported to be covered thereby.
(j) JUDGMENT. A judgment or order for the payment of money which
exceeds $100,000 in amount shall be entered against an Obligor by any court and
such judgment or order shall continue undischarged or unstayed for 30 days.
(k) ATTACHMENT. A warrant or writ of attachment or execution or similar
process which exceeds $100,000 in value shall be issued against any property of
an Obligor and such warrant or process shall continue undischarged or unstayed
for 30 days.
(l) ERISA. (i) Any Termination Event with respect to a Benefit Plan
shall occur that, after taking into account the excess, if any, of (A) the fair
market value of the assets of any other Benefit Plan with respect to which a
Termination Event occurs on the same day (but only to the extent that such
excess is the property of an Obligor) over (B) the present value on such day of
all vested nonforfeitable benefits under such other Benefit Plan, results in an
Unfunded Vested Accrued Benefit in excess of $0, (ii) any Benefit Plan shall
incur an "accumulated funding deficiency" (as defined in Section 412 of the Code
or Section 302 of ERISA) for which a waiver has not been obtained in accordance
with the applicable provisions of the Code and ERISA, or (iii) an Obligor is in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan resulting from an Obligor's complete or partial
withdrawal (as described in Section 4203 or 4205 of ERISA) from such
Multiemployer Plan.
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(m) QUALIFIED AUDITS. The independent certified public accountants
retained by Supreme shall refuse to deliver an opinion in accordance with
SECTION 11.2 with respect to the annual financial statements of Supreme and its
consolidated Subsidiaries.
(n) CHANGE IN MANAGEMENT. Xxxxxx Xxxxxxxxxxx and Xxxxx Xxxxxxxxxxx
shall for any reason cease to be active officers of Supreme.
(o) CHANGE IN CONTROL. At any time after the Agreement Date, (i) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder (collectively, the "Exchange Act")), other than Permitted Holders, is
or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 35% of the total voting power of all
outstanding capital voting stock of Supreme, and either (A) the Permitted
Holders beneficially own, directly or indirectly, in the aggregate capital
voting stock of Supreme that represents a lesser percentage of the aggregate
ordinary voting power of all classes of the capital voting stock of Supreme,
voting together as a single class, than such other person or group and are not
entitled (by voting power, contract or otherwise) to elect directors of Supreme
having a majority of the total voting power of the Board of Directors of
Supreme, or (B) such other person or group is entitled to elect directors of
Supreme having a majority of the total voting power of the Board of Directors of
Supreme; or (ii) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of Supreme (together
with any new directors whose election by the Board of Directors of Supreme, or
whose nomination for election by the shareholders of Supreme, as the case may
be, was approved by a vote of 66 2/3% 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 Supreme then in office; or (iii)
Supreme ceases to own, directly or indirectly, 100% of the capital stock of each
other Obligor, or such ownership shall cease to vest in Supreme voting control
over any such Obligor; or (iv) a "Change of Control" as defined in the Notes
Description of the High Yield Debt Offering Memorandum, or any indenture issued
in connection therewith, occurs.
(p) MATERIAL ADVERSE CHANGE. There occurs any act, omission, event,
undertaking or circumstance or series of acts, omissions, events, undertakings
or circumstances which have, or in the sole judgment of the Required Lenders
exercised in good faith would have, either individually or in the aggregate, a
Materially Adverse Effect.
Section 13.2 REMEDIES.
(a) AUTOMATIC ACCELERATION AND TERMINATION OF FACILITIES. Upon the
occurrence of an Event of Default specified in SECTION 13.1(G) or (H), (i) the
principal of and the interest on the Loans and the Notes at the time
outstanding, and all other amounts owed to the Agent and the Lenders under this
Agreement or any of the Loan Documents and all other Secured Obligations, shall
thereupon become due and payable without presentment, demand, protest or other
notice of
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any kind, all of which are expressly waived, anything in this Agreement or any
of the Loan Documents to the contrary notwithstanding, and (ii) the Revolving
Credit Facility and the commitment of the Lenders to make advances thereunder or
under this Agreement shall immediately terminate.
(b) OTHER REMEDIES. If any Event of Default shall have occurred and be
continuing, the Agent may, and at the direction of the Required Lenders shall,
do any of the following:
(i) declare the principal of and interest on the Loans and the
Notes at the time outstanding, and all other amounts owed to the Agent
and the Lenders under this Agreement or any of the Loan Documents and
all other Secured Obligations, to be forthwith due and payable,
whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which
are expressly waived, anything in this Agreement or the Loan Documents
to the contrary notwithstanding;
(ii) terminate the Revolving Credit Facility and any
commitment of the Lenders to make advances hereunder;
(iii) notify, or request the Borrowers to notify, in writing
or otherwise, any Account Debtor or obligor with respect to any one or
more of the Receivables to make payment to the Agent or any agent or
designee of the Agent, at such address as may be specified by the
Agent, and, if, notwithstanding the giving of any notice, any Account
Debtor or other such obligor shall make payments to any Borrower, such
Borrower shall hold all such payments it receives in trust for the
Agent, without commingling the same with other funds or property of, or
held by, such Borrower and shall deliver the same to the Agent or any
such agent or designee immediately upon receipt by such Borrower in the
identical form received, together with any necessary endorsements;
(iv) settle or adjust disputes and claims directly with
Account Debtors and other obligors on Receivables for amounts and on
terms which the Agent considers advisable and in all such cases only
the net amounts received by the Agent in payment of such amounts, after
deductions of costs and attorneys' fees, shall constitute Collateral,
and the Borrowers shall have no further right to make any such
settlements or adjustments or to accept any returns of merchandise;
(v) enter upon any premises on which Inventory may be located
and, without resistance or interference by any Borrower, take physical
possession of any or all thereof and maintain such possession on such
premises or move the same or any part thereof to such other place or
places as the Agent shall choose, without being liable to any Borrower
on account of any loss, damage or depreciation that may occur as a
result thereof, so long as the Agent shall act reasonably and in good
faith;
(vi) require each Borrower to and each Borrower shall, without
charge to the Agent or any Lender, assemble the Inventory and maintain
or deliver it into the
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possession of the Agent or any agent or representative of the Agent at
such place or places as the Agent may designate;
(vii) at the expense of the Borrowers, cause any of the
Inventory to be placed in a public or field warehouse, and neither the
Agent nor any Lender shall be liable to any Borrower on account of any
loss, damage or depreciation that may occur as a result thereof, so
long as the Agent shall act reasonably and in good faith;
(viii) without notice, demand or other process, and without
payment of any rent or any other charge, enter any of the Borrowers'
premises and, without breach of the peace, until the Agent completes
the enforcement of its rights in the Collateral, take possession of
such premises or place custodians in exclusive control thereof, remain
on such premises and use the same and any of the Borrowers' equipment,
for the purpose of (A) completing any work in process, preparing any
Inventory for disposition and disposing thereof, and (B) collecting any
Receivable, and the Agent is hereby granted a license or sublicense and
all other rights as may be necessary, appropriate or desirable to use
the Intellectual Property in connection with the foregoing, and the
rights of the Borrowers under all licenses and franchise agreements
shall inure to the Agent's benefit (provided, however, that any use of
any federally registered trademarks as to any goods shall be subject to
the control as to the quality of such goods of the owner of such
trademarks and the goodwill of the business symbolized thereby);
(ix) exercise any and all of its rights under any and all of
the Security Documents;
(x) apply any cash Collateral to the payment of the Secured
Obligations in any order in which the Agent, on behalf of the Lenders
may elect or use such cash in connection with the exercise of any of
its other rights hereunder or under any of the Security Documents;
(xi) establish or cause to be established one or more
Lockboxes or other arrangement for the deposit of proceeds of
Receivables, and, in such case, the Borrowers shall cause to be
forwarded to the Agent at the Agent's Office, on a daily basis, copies
of all checks and other items of payment and deposit slips related
thereto deposited in such Lockboxes, together with collection reports
in form and substance satisfactory to the Agent; and
(xii) exercise all of the rights and remedies of a secured
party under the UCC (whether or not the UCC is applicable) and under
any other applicable law, including, without limitation, the right,
without notice except as specified below and with or without taking the
possession thereof, to sell the Collateral or any part thereof in one
or more parcels at public or private sale, at any location chosen by
the Agent, for cash, on credit or for future delivery and at such price
or prices and upon such other terms as the Agent may deem commercially
reasonable. Each Borrower agrees that, to the extent notice of sale
shall be required by law, at least 10 days' notice to the Borrowers'
Agent of the time
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and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notice, but notice given in
any other reasonable manner or at any other reasonable time shall also
constitute reasonable notification. The Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been
given. The Agent may adjourn any public or 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.
Section 13.3 APPLICATION OF PROCEEDS. All proceeds from each sale of,
or other realization upon, all or any part of the Collateral following an Event
of Default shall be applied or paid over as follows:
(a) FIRST: to the payment of all costs and expenses incurred in
connection with such sale or other realization, including attorneys' fees,
(b) SECOND: to the payment of the Secured Obligations (with the
Borrowers remaining jointly and severally liable for any deficiency) in
accordance with SECTION 5.8(E),
(d) THIRD: the balance (if any) of such proceeds shall be paid to the
Borrowers or, subject to any duty imposed by law or otherwise, to whomsoever is
entitled thereto.
THE BORROWERS SHALL REMAIN JOINTLY AND SEVERALLY LIABLE AND WILL PAY, ON DEMAND,
ANY DEFICIENCY REMAINING IN RESPECT OF THE SECURED OBLIGATIONS, TOGETHER WITH
INTEREST THEREON AT A RATE PER ANNUM EQUAL TO THE HIGHEST RATE THEN PAYABLE
HEREUNDER ON SUCH SECURED OBLIGATIONS, WHICH INTEREST SHALL CONSTITUTE PART OF
THE SECURED OBLIGATIONS.
Section 13.4 POWER OF ATTORNEY. In addition to the authorizations
granted to the Agent under SECTION 9.15 or under any other provision of this
Agreement or any of the Loan Documents, upon and after an Event of Default, each
Borrower hereby irrevocably designates, makes, constitutes and appoints the
Agent (and all Persons designated by the Agent from time to time) as such
Borrower's true and lawful attorney and agent in fact, and the Agent or any
agent of the Agent may, without notice to such Borrower, and at such time or
times as the Agent or any such agent in its sole discretion may determine, in
the name of such Borrower or the Agent,
(a) demand payment of the Receivables, enforce payment thereof by legal
proceedings or otherwise, settle, adjust, compromise, extend or renew any or all
of the Receivables or any legal proceedings brought to collect the Receivables,
discharge and release the Receivables or any of them and exercise all of such
Borrower's rights and remedies with respect to the collection of Receivables,
(b) prepare, file and sign the name of such Borrower on any proof of
claim in bankruptcy or any similar document against any Account Debtor or any
notice of Lien, assignment or satisfaction of Lien or similar document in
connection with any of the Collateral,
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(c) endorse the name of such Borrower upon any chattel paper, document,
instrument, notice, freight xxxx, xxxx of lading or similar document or
agreement relating to the Receivables or any other Collateral,
(d) use the stationery of such Borrower, open such Borrower's mail,
notify the post office authorities to change the address for delivery of such
Borrower's mail to an address designated by the Agent and sign the name of such
Borrower to verifications of the Receivables and on any notice to the Account
Debtors,
(e) use the information recorded on or contained in any data processing
equipment and computer hardware and software relating to the Receivables,
Inventory, or other Collateral to which such Borrower or any Subsidiary of such
Borrower has access.
Section 13.5 MISCELLANEOUS PROVISIONS CONCERNING REMEDIES .
(a) RIGHTS CUMULATIVE. The rights and remedies of the Agent and the
Lenders under this Agreement, the Notes and each of the Loan Documents shall be
cumulative and not exclusive of any rights or remedies which it or they would
otherwise have. In exercising such rights and remedies, the Agent and the
Lenders may be selective and no failure or delay by the Agent or any Lender in
exercising any right shall operate as a waiver of such right nor shall any
single or partial exercise of any power or right preclude its other or further
exercise or the exercise of any other power or right.
(b) WAIVER OF MARSHALLING. Each Borrower hereby waives any right to
require any marshalling of assets and any similar right.
(c) LIMITATION OF LIABILITY. Nothing contained in this ARTICLE 13 or
elsewhere in this Agreement or in any of the Loan Documents shall be construed
as requiring or obligating the Agent or any Lender or any agent or designee of
the Agent or any Lender to make any demand or to make any inquiry as to the
nature or sufficiency of any payment received by it or to present or file any
claim or notice or take any action with respect to any Receivable or any other
Collateral or the moneys due or to become due thereunder or in connection
therewith or to take any steps necessary to preserve any rights against prior
parties, and neither the Agent nor any Lender nor any of their agents or
designees shall have any liability to any Borrower for actions taken pursuant to
this ARTICLE 13, any other provision of this Agreement or any of the Loan
Documents, so long as the Agent, such Lender or such agent or designee shall act
reasonably and in good faith.
(d) APPOINTMENT OF RECEIVER. In any action under this ARTICLE 13, the
Agent and the Lenders shall be entitled to the appointment of a receiver,
without notice of any kind whatsoever, to take possession of all or any portion
of the Collateral and to exercise such power as the court shall confer upon such
receiver.
Section 13.6 TRADEMARK LICENSE. Each Borrower hereby grants to the
Agent the nonexclusive right and license to use any trademark then used by each
Borrower for the purposes
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set forth in SECTION 13.2(B)(VIII) and for the purpose of enabling the Agent to
realize on the Collateral and to permit any purchaser of any portion of the
Collateral through a foreclosure sale or any other exercise of the Agent's
rights and remedies under the Loan Documents to use, sell or otherwise dispose
of the Collateral bearing any such trademark. Such right and license is granted
free of charge, without the requirement that any monetary payment whatsoever be
made to such Borrower or any other Person by the Agent or any Lender. Each
Borrower hereby represents, warrants, covenants and agrees that it presently
has, and shall continue to have, the right, without the approval or consent of
others, to grant the license set forth in this SECTION 13.6.
ARTICLE 14
ASSIGNMENTS
Section 14.1 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrowers, the Lenders, the Agent, all future holders of the Notes, and
their respective successors and assigns, except that no Borrower may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Each Lender may, with the consent of the Agent (such consent not to
be unreasonably withheld), assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Loans at the time owing
to it and the Notes held by it); PROVIDED, HOWEVER, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Lender's rights and obligations under this Agreement, (ii) the amount
of the Commitment of the assigning Lender that is subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Agent) shall in no event be less than the
Minimum Commitment, (iii) in the case of a partial assignment, the amount of the
Commitment that is retained by the assigning Lender (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Agent) shall in no event be less than the Minimum Commitment, (iv) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register (as hereinafter defined) an Assignment
and Acceptance, together with any Notes subject to such assignment, (v) such
assignment shall not, without the consent of the Borrowers' Agent, require the
Borrowers to file a registration statement with the Securities and Exchange
Commission or apply to or qualify the Loans or the Notes under the blue sky laws
of any state, (vi) the representation contained in SECTION 14.2 hereof shall be
true with respect to any such proposed assignee, and (vii) the parties to such
assignment shall deliver to the Agent a processing fee of $5,000. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five Business Days after the execution thereof, (x) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder, and (y) the Lender assignor thereunder shall, to the extent provided
in such assignment, be released from its obligations under this Agreement.
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(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; (ii) such Lender assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrowers or any other Obligor or the
performance or observance by the Borrowers or any other Obligor of any of their
obligations under this Agreement or any other Loan Document; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in SECTION 7.1(M) and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such Lender 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 this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Agent shall maintain a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Lenders and the Commitment Percentage 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, in the absence of manifest error, and the
Borrowers, 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
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Eligible Assignee together with any Notes subject to
such assignment, the fee described in CLAUSE (VII) of SECTION 14.1(B), and the
written consent to such assignment, the Agent shall, if such Assignment and
Acceptance has been completed and is in the form of EXHIBIT C, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register, (iii) give prompt notice thereof to the Lenders and the Borrowers'
Agent, and (iv) promptly deliver a copy of such Assignment and Acceptance to the
Borrowers' Agent. Within five Business Days after receipt of notice, the
Borrowers shall execute and deliver to the Agent, in exchange for the
surrendered Notes, new Notes to the order of such Eligible Assignee in amounts
equal to the Commitment Percentage assumed by such Eligible Assignee pursuant to
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such Assignment and Acceptance and new Notes to the order of the assigning
Lender in an amount equal to the Commitment retained by it hereunder. Such new
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
the assigned Notes delivered to the assignor Lender. Each surrendered Note shall
be cancelled and returned to the Borrowers' Agent.
(f) Each Lender may, without the consent of the Borrowers, sell
participations to one or more banks or other entities in all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its commitments hereunder and the Loans owing to it and the
Notes held by it); PROVIDED, HOWEVER, that (i) each such participation shall be
in an amount not less than the Minimum Commitment, (ii) such Lender's
obligations under this Agreement (including, without limitation, its commitments
hereunder) shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iv) such Lender shall remain the holder of the Notes held by it for all
purposes of this Agreement, (v) the Borrowers, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement; PROVIDED, that such
Lender may agree with any participant that such Lender will not, without such
participant's consent, agree to or approve any waivers or amendments which would
reduce the principal of or the interest rate on any Loans, extend the term or
increase the amount of the commitments of such participant, reduce the amount of
any fees to which such participant is entitled, extend any scheduled payment
date for principal or release Collateral securing the Loans (other than
Collateral disposed of in accordance with the terms of this Agreement or the
Security Documents), and (vi) any such disposition shall not, without the
consent of the Borrowers' Agent, require the Borrowers to file a registration
statement with the Securities and Exchange Commission to apply to qualify the
Loans or the Notes under the blue sky law of any state. Any Lender selling a
participation to any bank or other entity that is not an Affiliate of such
Lender shall give prompt notice thereof to the Borrowers' Agent.
(g) Any Lender may, in connection with any assignment, proposed
assignment, participation or proposed participation pursuant to this SECTION
14.1, disclose to the assignee, participant, proposed assignee or proposed
participant, any information relating to the Borrowers and their Subsidiaries
furnished to such Lender by or on behalf of the Borrowers; PROVIDED that, prior
to any such disclosure, each such assignee, proposed assignee, participant or
proposed participant shall agree with the Borrowers' Agent or such Lender (which
in the case of an agreement with only such Lender, the Borrowers shall be
recognized as a third party beneficiary thereof) to preserve the confidentiality
of any confidential information relating to the Borrowers and their Subsidiaries
received from such Lender.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Loans and
its 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.
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Section 14.2 REPRESENTATION OF LENDERS. Each Lender hereby represents
that it will make each Loan hereunder as a commercial loan for its own account
in the ordinary course of its business; PROVIDED, HOWEVER, that subject to
SECTION 14.1 hereof, the disposition of the Notes or other evidence of the
Secured Obligations held by any Lender shall at all times be within its
exclusive control.
ARTICLE 15
AGENT
Section 15.1 APPOINTMENT OF AGENT. Each of the Lenders hereby
irrevocably designates and appoints NationsBank, N.A. as the Agent of such
Lender under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Agent, as the agent for such Lender to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and such other Loan
Documents, including, without limitation, to make determinations as to the
eligibility of Inventory and Receivables and to adjust the advance rates
contained in the definition of "Borrowing Base" (so long as such advance rates,
as adjusted, do not exceed those set forth in the definition of "Borrowing
Base"), together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or
such other Loan Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the Agent.
Section 15.2 DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 15.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
trustees, officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable to any Lender (or any Lender's participants) for
any action lawfully taken or omitted to be taken by it or such Person under or
in connection with this Agreement or the other Loan Documents (except for its or
such Person's own gross negligence or willful misconduct), or (ii) responsible
in any manner to any Lender (or any Lender's participants) for any recitals,
statements, representations or warranties made by any Borrower or any of its
Subsidiaries or any officer thereof contained in this Agreement or the other
Loan Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or the other Loan Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the other Loan Documents or for any failure of any Borrower or any of its
Subsidiaries to perform its obligations hereunder or
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thereunder. The Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of any Borrower or any of its Subsidiaries.
Section 15.4 RELIANCE BY AGENT. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to any Borrower or any of its
Subsidiaries), independent accountants and other experts selected by the Agent.
The Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless such Note shall have been transferred in accordance with SECTION
15.1. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement and the other Loan Documents unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or 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 or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the Notes in accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.
Section 15.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrowers'
Agent referring to this Agreement, describing 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, the Agent shall promptly give notice thereof to
the Lenders. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably 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) continue making Revolving Credit
Loans to the Borrowers on behalf of the Lenders in reliance on the provisions of
SECTION 5.7 and take such other action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
Section 15.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrowers and their
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrowers and their
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Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents 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 credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers and their Subsidiaries. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent
hereunder or by the other Loan Documents, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrowers and their Subsidiaries which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
Section 15.7 INDEMNIFICATION. The Lenders agree to indemnify the Agent
in its capacity as such (to the extent not reimbursed by the Borrowers and
without limiting the obligation of the Borrowers to do so), ratably according to
their respective Commitment Percentages, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement or the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; PROVIDED that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct or
resulting solely from transactions or occurrences that occur at a time after
such Lender has assigned all of its interests, rights and obligations under this
Agreement pursuant to SECTION 14.1 or, in the case of a Lender to which an
assignment is made hereunder pursuant to SECTION 14.1, at a time before such
assignment. The agreements in this subsection shall survive the payment of the
Notes, the Secured Obligations and all other amounts payable hereunder and the
termination of this Agreement.
Section 15.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrowers and their Subsidiaries (including the
extension to the Borrowers and their Subsidiaries of any credit facility
designed to refinance the Loans and other Secured Obligations hereunder) as if
the Agent were not the Agent hereunder. With respect to its Commitment, the
Loans made or renewed by it and any Note issued to it and any Letter of Credit
issued by it, the Agent shall have and may exercise the same rights and powers
under this Agreement and the other Loan Documents and is subject to the same
obligations and liabilities as and to the extent set forth herein and in the
other Loan Documents for any other Lender. The terms "Lenders" or "Required
Lenders" or any other term shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity as a Lender or one of
the Required Lenders.
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Section 15.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 5 days
written notice to the Lenders and the Borrowers' Agent; PROVIDED, HOWEVER, that
such resignation shall not take effect until a successor agent has been
appointed. If the Agent shall resign as Agent under this Agreement, then the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders which successor agent shall be approved by the Borrowers' Agent (which
approval shall not be unreasonably withheld), whereupon such successor agent
shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall mean such successor agent effective upon its appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. If the Required Lenders
have failed to appoint a successor agent within 30 days after the resignation
notice given by the Agent as provided above, then the Agent shall be entitled to
appoint a successor agent from among the Lenders. After any Agent's resignation
hereunder as Agent, the provisions of ARTICLE 15 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Agent under this
Agreement.
Section 15.10 NOTICES FROM AGENT TO LENDERS. The Agent shall forward to
each Lender, promptly after request therefor, copies of any material written
notices, reports or other information supplied to it by the Borrowers (but which
the Borrowers are not required to supply directly to the Lenders).
ARTICLE 16
MISCELLANEOUS
Section 16.1 NOTICES.
(a) METHOD OF COMMUNICATION. Except as specifically provided in this
Agreement or in any of the Loan Documents, all notices and the communications
hereunder and thereunder shall be in writing or by telephone subsequently
confirmed in writing. Notices in writing shall be delivered personally or sent
by overnight courier service, by certified or registered mail, postage pre-paid,
or by facsimile transmission and shall be deemed received, in the case of
personal delivery, when delivered, in the case of overnight courier service, on
the next Business Day after delivery to such service, in the case of mailing, on
the third day after mailing (or, if such day is a day on which deliveries of
mail are not made, on the next succeeding day on which deliveries of mail are
made) and, in the case of facsimile transmission, upon transmittal; provided
that in the case of notices to the Agent, the Agent shall be charged with
knowledge of the contents thereof only when such notice is actually received by
the Agent. A telephonic notice to the Agent as understood by the Agent will be
deemed to be the controlling and proper notice in the event of a discrepancy
with or failure to receive a confirming written notice.
(b) ADDRESSES FOR NOTICES. Notices to any party shall be sent to it at
the following addresses, or any other address of which all the other parties are
notified in writing.
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If to any Borrower: Supreme International Corporation
0000 X.X. 000xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Vice-President - Finance
Facsimile No.: (000) 000-0000
With a copy to: Broad and Xxxxxx
000 Xx. Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
If to the Agent: NationsBank N.A.
c/o NationsBank Business Credit
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxx, Vice-President
Facsimile No.: (000) 000-0000
If to a Lender: At the address of such Lender set
forth on the signature page hereof or in the
Assignment and Acceptance under which such
Lender becomes a party hereto
(c) AGENT'S OFFICE. The Agent hereby designates its office located at
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxx 00000, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrowers' Agent and the Lenders, as the office to which payments due are to be
made and at which Loans will be disbursed.
Section 16.2 EXPENSES. The Borrowers jointly and severally agree to pay
or reimburse on demand all costs and expenses incurred by the Agent, including,
without limitation, the reasonable fees and disbursements of counsel, in
connection with
(a) the negotiation, preparation, execution, delivery, administration,
syndication, enforcement and termination of this Agreement and each of the other
Loan Documents, whenever the same shall be executed and delivered, including,
without limitation (i) the out-of-pocket costs and expenses incurred in
connection with the administration and interpretation of this Agreement and the
other Loan Documents; (ii) the costs and expenses of appraisals of the
Collateral; (iii) the costs and expenses of lien searches; and (iv) taxes, fees
and other charges for filing the Financing Statements and continuations and the
costs and expenses of taking other actions to perfect, protect, and continue the
Security Interests;
(b) the preparation, execution and delivery of any waiver, amendment,
supplement or consent by the Agent and the Lenders relating to this Agreement or
any of the Loan Documents;
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(c) sums paid or incurred to pay any amount or take any action required
of the Borrowers under the Loan Documents that the Borrowers fail to pay or
take;
(d) costs of inspections and verifications of the Collateral,
including, without limitation, standard per diem fees charged by the Agent for
travel, lodging, and meals for inspections of the Collateral and the Borrowers'
operations and books and records by the Agent's employees or agents up to four
times per year and whenever an Event of Default exists;
(e) costs and expenses of forwarding loan proceeds, collecting checks
and other items of payment, and establishing and maintaining each Controlled
Disbursement Account, Agency Account and Lockbox;
(f) costs and expenses of preserving and protecting the Collateral; and
(g) consulting, after the occurrence of a Default, with one or more
Persons, including appraisers, accountants and lawyers, concerning the value of
any Collateral for the Secured Obligations or related to the nature, scope or
value of any right or remedy of the Agent or any Lender hereunder or under any
of the Loan Documents, including any review of factual matters in connection
therewith, which expenses shall include the fees and disbursements of such
Persons.
The Borrowers jointly and severally agree to pay or reimburse on demand all
costs and expenses incurred by the Agent and the Lenders, including, without
limitation, the reasonable fees and disbursements of counsel, experts and other
consultants to the Agent and any Lender, in connection with actions taken with
respect to any Default or Event of Default hereunder or any "workout" of the
Loans made hereunder, to obtain payment of the Secured Obligations, to enforce
the Security Interests, to sell or otherwise realize upon the Collateral, and
otherwise to enforce the provisions of the Loan Documents, or to prosecute or
defend any claim in any way arising out of, related to or connected with, this
Agreement or any of the Loan Documents.
The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrowers. Each
Borrower hereby authorizes the Agent and each Lender to debit the Borrowers'
Loan Accounts (by increasing the principal amount of the Revolving Credit Loan)
in the amount of any such costs and expenses owed by the Borrowers when due.
Section 16.3 STAMP AND OTHER TAXES. The Borrowers will pay any and all
stamp, registration, recordation, intangibles, documentary and similar taxes,
fees or charges and shall indemnify the Agent and each Lender against any and
all liabilities with respect to or resulting from any delay in the payment or
omission to pay any such taxes, fees or charges, which may be payable or
determined to be payable in connection with the execution, delivery, performance
or enforcement of this Agreement and any of the Loan Documents or the perfection
of any rights or security interest thereunder.
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Section 16.4 SETOFF. In addition to any rights now or hereafter granted
under applicable law, and not by way of limitation of any such rights, upon and
after the occurrence of any Default or Event of Default, each Lender, each
Affiliate of the Lenders, and any participant with any Lender in the Loans are
hereby authorized by the Borrowers at any time or from time to time, without
notice to the Borrowers or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, time or demand, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness at any time held or owing by such Lender, Affiliate
or participant to or for the credit or the account of any Borrower against and
on account of the Secured Obligations irrespective or whether or not (a) the
Agent or any Lender shall have made any demand under this Agreement or any of
the Loan Documents, or (b) the Agent or any Lender shall have declared any or
all of the Secured Obligations to be due and payable as permitted by SECTION
13.2 and although such Secured Obligations shall be contingent or unmatured.
Section 16.5 LITIGATION. EACH OF THE AGENT, EACH LENDER AND EACH
BORROWER HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN
ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN WHICH AN ACTION
MAY BE COMMENCED BY OR AGAINST SUCH BORROWER, THE AGENT OR ANY LENDER ARISING
OUT OF THIS AGREEMENT, THE COLLATERAL OR ANY ASSIGNMENT THEREOF OR BY REASON OF
ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN SUCH BORROWER, THE AGENT OR ANY
LENDER OF ANY KIND OR NATURE. EACH BORROWER, THE AGENT AND EACH LENDER HEREBY
AGREE THAT THE FEDERAL COURT OF THE NORTHERN DISTRICT OF GEORGIA OR, AT THE
OPTION OF THE AGENT OR ANY LENDER, ANY COURT IN WHICH THE AGENT OR ANY LENDER
SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY AND WHICH SITS IN A JURISDICTION IN
WHICH ANY BORROWER TRANSACTS BUSINESS SHALL HAVE NON-EXCLUSIVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY BORROWER, THE AGENT OR ANY
LENDER, PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR THE LOAN
DOCUMENTS OR TO ANY MATTER ARISING THEREFROM. EACH BORROWER EXPRESSLY SUBMITS
AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS, HEREBY WAIVING PERSONAL SERVICE OF THE SUMMONS AND
COMPLAINT OR OTHER PROCESS OR PAPERS ISSUED THEREIN AND AGREEING THAT SERVICE OF
SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO THE BORROWERS' AGENT AND ITS COUNSEL AT THE
RESPECTIVE ADDRESSES SET FORTH IN SECTION 16.1(B), WHICH SERVICE SHALL BE DEEMED
MADE UPON RECEIPT THEREOF. THE NON-EXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS
SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED
IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE THE
SAME IN ANY APPROPRIATE JURISDICTION.
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Section 16.6 WAIVER OF RIGHTS. EACH BORROWER HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY WAIVES ALL RIGHTS WHICH SUCH BORROWER HAS UNDER
CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANY SIMILAR
PROVISION OF APPLICABLE LAW TO NOTCE AND TO A JUDICIAL HEARING PRIOR TO THE
ISSUANCE OF A WRIT OF POSSESSION ENTITLING THE AGENT, ITS SUCCESSORS AND ASSIGNS
TO POSSESSION OF THE COLLATERAL UPON DEFAULT OR EVENT OF DEFAULT. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING AND WITHOUT LIMITING ANY OTHER RIGHT
WHICH THE AGENT OR ANY LENDER MAY HAVE, SUCH BORROWER CONSENTS THAT, IF THE
AGENT FILES A PETITION FOR AN IMMEDIATE WRIT OF POSSESSION IN COMPLIANCE WITH
SECTIONS 00-00-000 AND 00-00-000 OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANY
SIMILAR PROVISION OF APPLICABLE LAW AND THIS WAIVER OR A COPY HEREOF IS ALLEGED
IN SUCH PETITION AND ATTACHED THERETO, THE COURT BEFORE WHICH SUCH PETITION IS
FILED MAY DISPENSE WITH ALL RIGHTS AND PROCEDURES HEREIN WAIVED AND MAY ISSUE
FORTHWITH AN IMMEDIATE WRIT OF POSSESSION IN ACCORDANCE WITH CHAPTER 14 OF TITLE
44 OF THE OFFICIAL CODE OF GEORGIA OR IN ACCORDANCE WITH ANY SIMILAR PROVISION
OF APPLICABLE LAW, WITHOUT THE NECESSITY OF AN ACCOMPANYING BOND AS OTHERWISE
REQUIRED BY SECTION 00-00-000 OF THE OFFICIAL CODE OF GEORGIA OR IN ACCORDANCE
WITH ANY SIMILAR PROVISION OF APPLICABLE LAW. THE BORROWER HEREBY ACKNOWLEDGES
THAT IT HAS READ AND FULLY UNDERSTANDS THE TERMS OF THIS WAIVER AND THE EFFECT
HEREOF.
Section 16.7 REVERSAL OF PAYMENTS. To the extent any Borrower makes a
payment or payments to the Agent or any Lender or the Agent or any Lender
receives any payment or proceeds of the Collateral for the Borrowers' benefit,
which payment(s) or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then, the Agent and such Lender
shall have the continuing and exclusive right to apply, reverse and re-apply any
and all payments to any portion of the Secured Obligations, and, to the extent
of such payment or proceeds received, the Secured Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and
effect, as if such payment or proceeds had not been received by the Agent or
such Lender.
Section 16.8 INJUNCTIVE RELIEF. The Borrowers recognize that, in the
event the Borrowers fail to perform, observe or discharge any of their
obligations or liabilities under this Agreement, any remedy of law may prove to
be inadequate relief to the Agent and the Lenders; therefore, each Borrower
agrees that the Agent and the Lenders, at their option, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.
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Section 16.9 ACCOUNTING MATTERS. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrowers to determine whether they are in compliance with any covenant
contained herein, shall, unless there is an express written direction or consent
by the Required Lenders to the contrary, be performed in accordance with GAAP.
Section 16.10 AMENDMENTS; WAIVERS.
(a) Except as set forth in SUBSECTION (B) below, any term, covenant,
agreement or condition of this Agreement or any of the Loan Documents may be
amended or waived, and any departure therefrom may be consented to by the
Required Lenders, if, but only if, such amendment, waiver or consent is in
writing signed by the Required Lenders and, in the case of an amendment (other
than an amendment described in SECTION 16.10(D)), by the Borrowers' Agent, and
in any such event, the failure to observe, perform or discharge any such term,
covenant, agreement or condition (whether such amendment is executed or such
waiver or consent is given before or after such failure) shall not be construed
as a breach of such term, covenant, agreement or condition or as a Default or an
Event of Default. Unless otherwise specified in such waiver or consent, a waiver
or consent given hereunder shall be effective only in the specific instance and
for the specific purpose for which given. In the event that any such waiver or
amendment is requested by the Borrowers, the Agent and the Lenders may require
and charge a fee in connection therewith and consideration thereof in such
amount as shall be determined by the Agent and the Required Lenders in their
discretion.
(b) Except as otherwise set forth in this Agreement, without the prior
unanimous written consent of the Lenders,
(i) no amendment, consent or waiver shall affect the amount or
extend the time of the obligation of the Lenders to make Loans or
extend the originally scheduled time or times of payment of the
principal of any Loan or alter the time or times of payment of interest
on any Loan or the amount of the principal thereof or the rate of
interest thereon or the amount of any commitment fee payable hereunder
or permit any subordination of the principal or interest on such Loan,
permit the subordination of the Security Interests in any material
Collateral or amend the provisions of ARTICLE 13 or of this SECTION
16.10(B),
(ii) no material Collateral shall be released by the Agent
other than as specifically permitted in this Agreement,
(iii) no amendment shall be made to the definitions of
"Commitment", "Commitment Percentage", "Eligible Assignee" or "Secured
Obligations", or, except to the extent expressly provided herein, the
definition of "Borrowing Base" shall not be amended, and,
(iv) neither the Agent nor any Lender shall consent to any
amendment to or waiver of the amortization, deferral or subordination
provisions of any instrument or
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agreement evidencing or relating to obligations of the Borrowers that
are expressly subordinate to any of the Secured Obligations if such
amendment or waiver would be adverse to the Lenders in their capacities
as Lenders hereunder;
PROVIDED, HOWEVER, that anything herein to the contrary notwithstanding, the
Required Lenders shall have the right to waive any Default or Event of Default
and the consequences hereunder of such Default or Event of Default and shall
have the right to enter into an agreement with the Borrowers providing for the
forbearance from the exercise of any remedies provided hereunder or under the
other Loan Documents without waiving any Default or Event of Default.
(c) The making of Loans hereunder by the Lenders during the existence
of a Default or Event of Default shall not be deemed to constitute a waiver of
such Default or Event of Default.
(d) Notwithstanding any provision of this Agreement or any other Loan
Document to the contrary, no consent, written or otherwise, of the Borrowers
shall be necessary or required in connection with any amendment to ARTICLE 15 or
SECTION 5.7, and any amendment to such provisions shall be effected solely by
and among the Agent and the Lenders, PROVIDED that no such amendment shall
impose any obligation on the Borrowers.
Section 16.11 PERFORMANCE OF BORROWERS' DUTIES. The Borrowers'
obligations under this Agreement and each of the Loan Documents shall be
performed by the Borrowers at their sole cost and expense. If the Borrowers
shall fail to do any act or thing which they have covenanted to do under this
Agreement or any of the Loan Documents, the Agent may (but shall not be
obligated to) do the same or cause it to be done either in the name of the Agent
or in the name and on behalf of the Borrowers, and the Borrowers hereby
irrevocably authorize the Agent so to act.
Section 16.12 INDEMNIFICATION. The Borrowers jointly and severally
agree to reimburse the Agent and each Lender for all reasonable costs and
expenses, including counsel fees and disbursements, incurred and to indemnify
and hold the Agent and each Lender harmless from and against all losses suffered
by the Agent or any Lender, other than losses resulting from the Agent's or such
Lender's gross negligence or willful misconduct, in connection with (a) the
exercise by the Agent or any Lender of any right or remedy granted to it under
this Agreement or any of the Loan Documents, (b) any claim, and the prosecution
or defense thereof, arising out of or in any way connected with this Agreement
or any of the Loan Documents, except in the case of a dispute between the
Borrowers and the Agent or such Lender in which the Borrowers prevail in a final
unappealed or unappealable judgment, and (c) the collection or enforcement of
the Secured Obligations or any of them.
Section 16.13 ALL POWERS COUPLED WITH INTEREST. All powers of attorney
and other authorizations granted to the Agent or any Lender and any Persons
designated by the Agent or any Lender pursuant to any provisions of this
Agreement or any of the Loan Documents shall be deemed coupled with an interest
and shall be irrevocable so long as any of the Secured
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Obligations remain unpaid or unsatisfied or the Revolving Credit Facility has
not been terminated.
Section 16.14 SURVIVAL. Notwithstanding any termination of this
Agreement, (a) until all Secured Obligations have been paid in full and the
Revolving Credit Facility terminated, the Agent for the benefit of the Lenders
shall retain its Security Interest and the Agent and the Lenders shall retain
all rights under this Agreement and each of the Security Documents with respect
to the Collateral as fully as though this Agreement had not been terminated, and
(b) the indemnities to which the Agent and each Lender is entitled under the
provisions of this ARTICLE 16 and any other provision of this Agreement and the
Loan Documents shall continue in full force and effect and shall protect the
Agent and each Lender against events arising after such termination as well as
before.
Section 16.15 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 16.16 GOVERNING LAW. This Agreement, the Notes and the other
Loan Documents shall be construed in accordance with and governed by the law of
the State of Georgia.
Section 16.17 COUNTERPARTS. This Agreement 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 shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
Section 16.18 REPRODUCTION OF DOCUMENTS. This Agreement, each of the
Loan Documents and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by the Agent or any Lender, and (c) financial
statements, certificates and other information previously or hereafter furnished
to the Agent or any Lender, may be reproduced by the Agent or any Lender by any
photographic, photostat, microcard, microfilm, miniature photographic or other
similar process, and the Agent or any Lender may destroy any original document
so reproduced. Each party hereto stipulates that, to the extent permitted by
applicable laws any such reproduction shall be as admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original shall be in existence and whether or not such reproduction was made by
the Agent or any Lender in the regular course of business), and any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
Section 16.19 CONSENT TO ADVERTISING AND PUBLICITY. With the prior
written consent of the Borrowers' Agent, which consent shall not be unreasonably
withheld, the Agent, on behalf of the Lenders, may issue and disseminate to the
public information describing the credit
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accommodation entered into pursuant to this Agreement, including the name and
address of the Borrowers, the amount, interest rate, maturity, collateral and a
general description of the Borrowers' business.
Section 16.20 PRO-RATA PARTICIPATION.
(a) Each Lender agrees that if, as a result of the exercise of
a right of setoff, banker's lien or counterclaim or other similar right or the
receipt of a secured claim it receives any payment in respect of the Secured
Obligations, it shall promptly notify the Agent thereof (and the Agent shall
promptly notify the other Lenders). If, as a result of such payment, such Lender
receives a greater percentage of the Secured Obligations owed to it under this
Agreement than the percentage received by any other Lender, such Lender shall
purchase a participation (which it shall be deemed to have purchased
simultaneously upon the receipt of such payment) in the Secured Obligations then
held by such other Lenders so that all such recoveries of principal and interest
with respect to all Secured Obligations owed to each Lender shall be pro rata on
the basis of its respective amount of the Secured Obligations owed to all
Lenders, PROVIDED that if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered by or on behalf of
the Borrowers from such Lender, such purchase shall be rescinded and the
purchase price paid for such participation shall be returned to such Lender to
the extent of such recovery, but without interest.
(b) Each Lender which receives such a secured claim shall
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this SECTION 16.20 to share in the
benefits of any recovery on such secured claim.
(c) The Borrowers expressly consent to the foregoing
arrangements and agree that any holder of a participation in any Secured
Obligation so purchased or otherwise acquired may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by the Borrowers to such holder as fully as if such holder were a holder of such
Secured Obligation in the amount of the participation held by such holder.
Section 16.21 AGENCY FOR PERFECTION. Each Lender hereby appoints each
other Lender as its agent for the purpose of perfecting the Lenders' security
interest in assets which, in accordance with Article 9 of the UCC can be
perfected only by possession. Should any Lender (other than the Agent) obtain
possession of any such Collateral, such Lender shall notify the Agent thereof,
and, promptly upon the Agent's request therefor shall deliver such Collateral to
the Agent or in accordance with the Agent's instructions.
Section 16.22 TAXES. Except as otherwise required by applicable law,
each payment by the Borrowers under this Agreement or the other Loan Documents
shall be made without setoff or counterclaim and without withholding for or on
account of any present or future taxes imposed by or within the jurisdiction in
which any Borrower is domiciled, any jurisdiction from which the Borrowers make
any payment hereunder, or (in each case) any political subdivision or taxing
authority thereof or therein (excluding any such tax imposed on the overall net
income of the Agent or the Lenders). If any such withholding is so required, the
Borrowers shall make the withholding,
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pay the amount withheld to the appropriate governmental authority before
penalties attach thereto or interest accrues thereon, and forthwith pay such
additional amount as may be necessary to ensure that the net amount actually
received free and clear of such taxes (including such taxes on such additional
amount) is equal to the amount which Agent or the Lenders would have received
had such withholding not been made. If the Agent or the Lenders pay any amount
in respect of any such taxes, penalties or interest, the Borrowers shall
reimburse the Agent or the Lenders (as appropriate) for that payment on demand
in the currency in which such payment was made. If an Borrower pays any such
taxes, penalties or interest, it shall deliver official tax receipts evidencing
that payment or certified copies thereof to the Agent on or before the thirtieth
day after payment.
Section 16.23 FINAL AGREEMENT. This Agreement and the other Loan
Documents are intended by the parties hereto as the final, complete and
exclusive expression of the agreement among them with respect to the subject
matter hereof and thereof. This Agreement and the other Loan Documents supersede
any and all prior oral or written agreements between the parties hereto relating
to the subject matter hereof and thereof, it being understood that the Fee
Letter shall survive the execution, delivery and closing of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers in several counterparts all as of the
day and year first written above.
BORROWER:
SUPREME INTERNATIONAL
CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: VP Finance
LENDERS:
Revolving Credit NATIONSBANK, N.A.
Commitment: $63,750,000
Term Loan By: /s/ Xxxxxx X. Xxxx
------------------------------
Commitment: $21,250,000 Name: Xxxxxx X. Xxxx
Title: Vice President
Address: 000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: Business Credit
Facsimile No.: 000-000-0000
Revolving Credit XXXXXXXX BANK, N.A.
Commitment: $11,250,000
Term Loan By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Commitment: $3,750,000 Name: Xxxxxxx Xxxxxx
Title: Vice President
Address: 0000 XX 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxx, VP
Facsimile No.: (000) 000-0000
AGENT:
NATIONSBANK, N.A.
By: /s/ Xxxxxx X. Xxxx
-----------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
Address: 000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: Business Credit
Facsimile No.: 000-000-0000
NOTARY JURAT FOR EXECUTION OF
NOTES AND OTHER
WRITTEN OBLIGATIONS TO PAY MONEY
BY FLORIDA BORROWERS
On this the 26th day of March, 1999, before me, the undersigned, a
Notary Public in and for the State of Georgia, County of Xxxx, Xxxxxxxx Xxxxxxx
personally appeared, personally known to me or proved to me on the basis of
satisfactory evidence to be the Vice President, Finance of SUPREME INTERNATIONAL
CORPORATION, who executed the foregoing Amended and Restated Loan and Security
Agreement on behalf of such corporation and acknowledged to me that such
corporation executed the foregoing pursuant to its by-laws or a resolution of
its board of directors, said execution taking place in the State of Georgia,
County of Xxxxxx.
[ILLEGIBLE]
----------------------------------
Notary Signature
My Commission Expires:
NOTARY PUBLIC, XXXX COUNTY, GEORGIA.
MY COMMISSION EXPIRES JANUARY 28, 2001.
---------------------------------
[Affix Notarial Seal]
AFFIDAVIT REGARDING DELIVERY
I, Xxxxxx X. Xxxx, hereby certify that I am a Vice President of
NationsBank, N.A., as Agent for the Lenders, and that the foregoing was
delivered to me as a representative of NationsBank, N.A. , as Agent for the
Lenders, in the State of Georgia, County of Xxxxxx.
/s/ Xxxxxx X. Xxxx
------------------------------------------
Signature of Officer of Agent or Lender
On this the 26th day of March, 1999, before me, the undersigned, a
Notary Public in and for the State of Georgia, County of Xxxx, Xxxxxx X. Xxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be a Vice President of NationsBank, N.A., a national banking association, as
Agent for the Lenders, who executed the foregoing affidavit on behalf of such
national banking association and acknowledged to me that such national banking
association executed the foregoing pursuant to its by-laws or a resolution of
its board of directors, said execution taking place in the State of Georgia,
County of Xxxxxx.
[ILLEGIBLE]
----------------------------------
Notary Signature
NOTARY PUBLIC, XXXX COUNTY, GEORGIA.
MY COMMISSION EXPIRES JANUARY 28, 2001.
[Affix Notarial Seal]
ANNEX I
PERFORMANCE PRICING MATRIX
-------------------------------------------------------------------------------------------------------------------
CONSOLIDATED FUNDED LIBOR APPLICABLE MARGIN PRIME RATE APPLICABLE MARGIN
INDEBTEDNESS TO
EBITDA RATIO
-------------------------------------------------------------------------------------------------------------------
REVOLVER TERM REVOLVER TERM
-------------------------------------------------------------------------------------------------------------------
Less than 3.00 1.75% 2.00% 0.0% 0.25%
-------------------------------------------------------------------------------------------------------------------
Less than 3.50 but greater than or
equal to 3.00 2.0% 2.25% 0.0% 0.25%
-------------------------------------------------------------------------------------------------------------------
Less than 4.00 but greater than or
equal to 3.50 2.25% 2.5% 0.25% 0.5%
-------------------------------------------------------------------------------------------------------------------
Greater than or equal to 4.00 2.5% 2.75% 0.5% 0.75%
-------------------------------------------------------------------------------------------------------------------
EXHIBIT A-1
REVOLVING CREDIT NOTE
EXHIBIT A-2
TERM NOTE
EXHIBIT B
BORROWING BASE CERTIFICATE
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
EXHIBIT D
FORM OF
SETTLEMENT REPORT
Pursuant to SECTION 5.8 of the Amended and Restated Loan and Security
Agreement dated as of March __, 1999, as amended, restated, supplemented or
otherwise modified through and including the date hereof (the "Loan Agreement",
terms defined in the Loan Agreement and not otherwise defined herein being used
herein as therein defined), among SUPREME INTERNATIONAL CORPORATION, a Florida
corporation, certain of its Subsidiaries, the financial institutions party to
the Loan Agreement from time to time (the "Lenders"), and NationsBank, N.A., a
national banking association, as agent for the Lenders (the "Agent"), the Agent
hereby delivers this report to the Lenders for the ____________ ____,
[199___/20___] Settlement Date.
1. Principal amount of Revolving Credit
Loans outstanding as of Settlement
Date (before settlement) $______________________
(a) NationsBank, N.A. $______________________
(b) [Lender] $______________________
(c) [Lender] $______________________
(d) Total $______________________
2. Principal amount of Revolving
Credit Loans outstanding as of
next preceding Settlement Date
(after settlement on such date)
(a) NationsBank, N.A. $______________________
(b) [Lender] $______________________
(c) [Lender] $______________________
(d) Total $______________________
3. Commitment Amount
of each Lender (line 1(d) x
Commitment Percentage)
(a) NationsBank, N.A. $______________________
(b) [Lender] $______________________
(c) [Lender] $______________________
4. Excess (shortfall) of each
Lender's Commitment
Amount over its outstandings
(a) NationsBank, N.A. (line
3(a) minus line 1(a) $______________________
(b) [Lender] (line
3(b) minus line 1(b))] $______________________
(c) [Lender (line 3(c)
minus line 1(c))] $______________________
5. Each Lender for which an excess (a positive dollar amount) is shown in item 4
shall pay an amount equal to such excess to the Agent, for payment by the Agent
to each Lender for which a shortfall (a negative dollar amount) is shown in item
4 to the extent of such shortfall.
NationsBank, N.A., as Agent
By:
------------------------------
Name:
----------------------------
Title:
--------------------------
EXHIBIT E
JOINDER AGREEMENT
