1
EXHIBIT 99.1
LOAN AND SECURITY AGREEMENT
by and among
CONGRESS FINANCIAL CORPORATION (SOUTHERN),
as Administrative Agent
BANKBOSTON, N.A.,
as Collateral Agent
and
DYERSBURG CORPORATION, DYERSBURG FABRICS LIMITED PARTNERSHIP, I,
DYERSBURG FABRICS INC., UNITED KNITTING, INC., UNITED KNITTING LIMITED
PARTNERSHIP, I, IQUE, INC., IQUE LIMITED PARTNERSHIP, I, AIH INC., AND
ALAMAC KNIT FABRICS, INC.,
as Borrowers
Dated: August 17, 1999
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS...................................................................................-2-
SECTION 2. CREDIT FACILITIES............................................................................-22-
2.1 Revolving Loans..............................................................................-22-
2.2 Letter of Credit Accommodations..............................................................-24-
2.3 Term Loan....................................................................................-27-
2.4 Availability Reserves........................................................................-28-
2.5 Borrowers' Representative....................................................................-28-
SECTION 3. INTEREST AND FEES............................................................................-28-
3.1 Interest.....................................................................................-28-
3.2 Origination Fee..............................................................................-30-
3.3 Syndication Fee. ...........................................................................-31-
3.4 Collateral Agent Fee.........................................................................-31-
3.5 Administrative Agent Fee.....................................................................-31-
3.6 Unused Line Fee..............................................................................-31-
3.7 Changes in Laws and Increased Costs of Loans.................................................-31-
3.8 Maximum Interest.............................................................................-32-
3.9 Nature and Extent of Each Borrower's Liability...............................................-34-
SECTION 4. CONDITIONS PRECEDENT.........................................................................-35-
4.1 Conditions Precedent to Initial Loans and Letter of Credit Accommodations....................-36-
4.2 Conditions Precedent to All Loans and Letter of Credit Accommodations........................-38-
SECTION 5. SECURITY INTEREST............................................................................-39-
5.1 Grant of Security Interest...................................................................-39-
5.2 Exclusion for Margin Stock...................................................................-40-
5.3 Exclusion for Certain Contracts and Leases...................................................-40-
5.4 Foreign Subsidiary Stock.....................................................................-40-
5.5 Offshore Equipment...........................................................................-40-
SECTION 6. LOAN ADMINISTRATION..........................................................................-40-
6.1. Manner of Borrowing and Funding Revolving Loans..............................................-40-
6.2. Defaulting Lenders...........................................................................-43-
6.3. Special Provisions Governing LIBOR Rate Loans................................................-44-
6.4. Loan Accounts; the Register; Account Stated..................................................-44-
6.5 Collection of Accounts.......................................................................-45-
6.6 Payments.....................................................................................-46-
6.7. Prepayments..................................................................................-46-
6.8 Telephone Authorizations.....................................................................-48-
6.9 Use of Proceeds..............................................................................-48-
6.10 Agents' Allocation of Payments and Collections...............................................-48-
6.11 Gross Up for Taxes...........................................................................-49-
6.12 Withholding Tax Exemption....................................................................-49-
(ii)
3
SECTION 7. COLLATERAL REPORTING AND COVENANTS...........................................................-49-
7.1 Collateral Reporting.........................................................................-49-
7.2 Accounts Covenants...........................................................................-50-
7.3 Inventory Covenants..........................................................................-52-
7.4 Equipment Covenants..........................................................................-52-
7.5 Power of Attorney............................................................................-53-
7.6 Right to Cure................................................................................-53-
7.7 Access to Premises...........................................................................-53-
SECTION 8. REPRESENTATIONS AND WARRANTIES...............................................................-54-
8.1 Corporate Existence, Power and Authority; Subsidiaries.......................................-54-
8.2 Financial Statements; No Material Adverse Change.............................................-54-
8.3 Chief Executive Office; Collateral Locations.................................................-54-
8.4 Priority of Liens; Title to Properties.......................................................-54-
8.5 Tax Returns..................................................................................-54-
8.6 Litigation...................................................................................-55-
8.7 Compliance with Other Agreements and Applicable Laws.........................................-55-
8.8 Employee Benefits............................................................................-55-
8.9 Environmental Compliance.....................................................................-56-
8.10 Bank Accounts................................................................................-56-
8.11 Accuracy and Completeness of Information.....................................................-56-
8.12 Survival of Warranties; Cumulative...........................................................-57-
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS...........................................................-57-
9.1 Maintenance of Existence.....................................................................-57-
9.2 New Collateral Locations.....................................................................-57-
9.3 Compliance with Laws, Regulations, Etc.......................................................-57-
9.4 Payment of Taxes and Claims..................................................................-57-
9.5 Insurance....................................................................................-58-
9.6 Financial Statements and Other Information...................................................-58-
9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc......................................-59-
9.8 Encumbrances.................................................................................-60-
9.9 Indebtedness.................................................................................-61-
9.10 Loans, Investments, Guarantees, Etc..........................................................-61-
9.11 Dividends and Redemptions....................................................................-62-
9.12 Transactions with Affiliates.................................................................-62-
9.13 Additional Bank Accounts.....................................................................-62-
9.14 Compliance with ERISA........................................................................-62-
9.15 Consolidated EBITDA..........................................................................-63-
9.16 Consolidated Adjusted Tangible Net Worth.....................................................-63-
9.17 Consolidated Fixed Charge Coverage Ratio.....................................................-63-
9.18 After Acquired Real Property.................................................................-63-
9.19 Costs and Expenses...........................................................................-64-
9.20 Excess Availability..........................................................................-64-
9.21 Obligations Constitute Senior Debt...........................................................-64-
9.22 Phase II Site Assessments and Other Environmental Matters....................................-65-
9.23 Fiscal Year..................................................................................-65-
9.24 Upstream Payments............................................................................-65-
(iii)
4
9.25 DM Apparel Joint Venture.....................................................................-65-
9.26 Further Assurances...........................................................................-65-
SECTION 10. EVENTS OF DEFAULT AND REMEDIES...............................................................-66-
10.1 Events of Default............................................................................-66-
10.2 Remedies.....................................................................................-68-
SECTION 11. AGENTS.......................................................................................-69-
11.1 Appointment, Authority and Duties of Agents..................................................-69-
11.2 Agreements Regarding Collateral..............................................................-71-
11.3 Reliance By Agents...........................................................................-71-
11.4 Action Upon Default..........................................................................-71-
11.5 Ratable Sharing..............................................................................-72-
11.6 Indemnification of Agents....................................................................-72-
11.7 Limitation on Responsibilities of Agents.....................................................-73-
11.8 Successor Agents and Co-Agents...............................................................-74-
11.9 Consents, Amendments and Waivers.............................................................-75-
11.10 Due Diligence and Non-Reliance...............................................................-76-
11.11 Representations and Warranties of Lenders....................................................-77-
11.12 The Required Lenders.........................................................................-77-
11.13 Several Obligations..........................................................................-77-
11.14 Agents in their Individual Capacities........................................................-77-
11.15 No Third Party Beneficiaries.................................................................-77-
11.16 Notice of Transfer...........................................................................-77-
11.17 Replacement of Certain Lenders...............................................................-78-
11.18 Remittance of Payments and Collections.......................................................-78-
SECTION 12. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS.........................................-79-
12.1 Successors and Assigns.......................................................................-79-
12.2 Participations...............................................................................-79-
12.3 Assignments..................................................................................-80-
12.4 Tax Treatment................................................................................-81-
12.5 Participant's Security Interest..............................................................-81-
SECTION 13. JURY TRIAL WAIVER; OTHER WAIVERS
AND CONSENTS; GOVERNING LAW ........................................................-81-
13.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver........................-81-
13.2 Waiver of Notices............................................................................-83-
13.3 Amendments and Waivers.......................................................................-83-
13.4 Waiver of Counterclaims......................................................................-83-
13.5 Indemnification..............................................................................-83-
SECTION 14. TERM OF AGREEMENT; MISCELLANEOUS.............................................................-84-
14.1 Term.........................................................................................-84-
14.2 Notices......................................................................................-85-
14.3 Partial Invalidity...........................................................................-85-
14.4 Successors...................................................................................-85-
14.5 Entire Agreement.............................................................................-86-
(iv)
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INDEX TO
EXHIBITS AND SCHEDULES
Exhibit A Form of Revolving Note
Exhibit B Form of Term Note
Exhibit C Form of Settlement Note
Exhibit D Form of Notice of Conversion/Continuation
Exhibit E Form of Notice of Borrowing
Exhibit F Compliance Certificate
Exhibit G Opinion Letter Requirements
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Notice
Exhibit J Borrowing Base Certificate
Exhibit K Information Certificates
Schedule 8.4 Existing Liens
Schedule 8.9 Environmental
Schedule 8.10 Bank Accounts
Schedule 9.7 New Subsidiaries
Schedule 9.9 Existing Indebtedness
Schedule 9.10 Existing Loans, Advances and Guarantees
(v)
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made on August 17, 1999, by and
among DYERSBURG CORPORATION, a Tennessee corporation ("Dyersburg"), DYERSBURG
FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited partnership ("DFLP"),
DYERSBURG FABRICS INC., a Tennessee corporation ("DFI"), UNITED KNITTING, INC.,
a Tennessee corporation ("UKI"), UNITED KNITTING LIMITED PARTNERSHIP, I, a
Tennessee limited partnership ("United Knitting"), IQUE, INC., a Tennessee
corporation ("IQUE, Inc."), IQUE LIMITED PARTNERSHIP, I, a Tennessee limited
partnership ("IQUE"), ALAMAC KNIT FABRICS, INC., a Delaware corporation
("Alamac"), and AIH INC., a Delaware corporation ("AIH") (each of the foregoing
individually referred to hereinafter as a "Borrower" and collectively as
"Borrowers"); the various financial institutions listed on the signature pages
hereof and their respective successors and permitted assigns which become
"Lenders" as provided herein; CONGRESS FINANCIAL CORPORATION (SOUTHERN), a
Georgia corporation, in its capacity as administrative agent for the Lenders
pursuant to SECTION 11 hereof (together with its successors in such capacity,
"Administrative Agent"); and BANKBOSTON, N.A., a national banking association,
in its capacity as collateral agent for the Lenders pursuant to Section 11
hereof (together with its successors in such capacity, "Collateral Agent";
Administrative Agent and Collateral Agent sometimes collectively referred to
hereinafter as "Agents").
RECITALS:
Each Borrower has requested that Lenders make available a term loan
facility, revolving credit facility and letter of credit facility to Borrowers,
which shall be used by Borrowers to finance their mutual and collective
enterprise of manufacturing knit fabrics for the apparel industry. In order to
utilize the financial powers of each Borrower in the most efficient and
economical manner, and in order to facilitate the financing of each Borrower's
needs, Lenders will, at the request of any Borrower, make loans to all Borrowers
under the term loan facility, revolving credit facility and letter of credit
facility on a combined basis and in accordance with the provisions hereinafter
set forth. Borrowers' business is a mutual and collective enterprise, and
Borrowers believe that the consolidation of all loans and other financial
accommodations under this Agreement will enhance the aggregate borrowing power
of each Borrower and ease the administration of their loan relationship with
Agents and Lenders, all to the mutual advantage of Borrowers. Lenders'
willingness to extend credit to Borrowers and to administer each Borrower's
collateral security therefor, on a combined basis as more fully set forth in
this Agreement, is done solely as an accommodation to Borrowers and at
Borrowers' request in furtherance of Borrowers' mutual and collective
enterprise.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
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SECTION 1. DEFINITIONS
All terms used herein which are defined in Article 1 or Article 9 of
the UCC shall have the meanings given therein unless otherwise defined in this
Agreement. All references to the plural herein shall also mean the singular and
to the singular shall also mean the plural unless the context otherwise
requires. All references to a Borrower, an Agent or a Lender pursuant to the
definitions set forth in the recitals hereto, or to any other Person herein,
shall include their respective successors and assigns. The words "hereof,"
"herein," "hereunder," "this Agreement" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not any particular
provision of this Agreement and as this Agreement now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced. All
references to any instrument or agreement, including any of the Financing
Agreements, shall include any amendment, modification, renewal, restatement or
replacement thereof or supplement thereto. All references to any statute shall
include all amendments thereto and modifications thereof and all related rules
and regulations. The word "including" when used in this Agreement shall mean
"including, without limitation." An Event of Default shall exist or continue or
be continuing until such Event of Default is waived in accordance with SECTION
11.9 or is cured in a manner satisfactory to Agents, if such Event of Default is
capable of being cured as determined by Agents. Any accounting term used herein
unless otherwise defined in this Agreement shall have the meanings customarily
given to such term in accordance with GAAP. All references to the time of day
shall mean the time of day in Atlanta, Georgia. For purposes of this Agreement,
the following terms shall have the respective meanings given to them below:
"Accounts" shall mean all present and future rights of a Borrower to
payment for goods sold or leased or for services rendered, which are not
evidenced by instruments or chattel paper, and whether or not earned by
performance.
"Accuval Appraisal" shall mean that certain appraisal dated June 18,
1999, that was prepared by Accuval Associates, Incorporated with respect to
certain Real Property and certain Equipment of Borrowers.
"Adjusted LIBOR Rate" shall mean, with respect to each Interest Period
for any LIBOR Rate Loan, the rate per annum (rounded upwards, if necessary, to
the next one-sixteenth (1/16) of one (1%) percent) determined by dividing (a)
the LIBOR Rate for such Interest Period by (b) a percentage equal to: (i) one
(1) minus (ii) the Reserve Percentage. For purposes hereof, "Reserve Percentage"
shall mean the reserve percentage, expressed as a decimal, prescribed by any
United States or foreign banking authority for determining the reserve
requirement which is or would be applicable to deposits of United States dollars
in a non-United States or an international banking office of Reference Bank used
to fund a LIBOR Rate Loan or any LIBOR Rate Loan made with the proceeds of such
deposit, whether or not the Reference Bank actually holds or has made any such
deposits or loans. The Adjusted LIBOR Rate shall be adjusted on and as of the
effective day of any change in the Reserve Percentage.
"Affiliate" shall mean a Person (other than a Subsidiary): (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, a Person; (ii) which
beneficially owns or holds 5% or more of any class of the Equity Interests of a
Person; or (iii) 5% or more of the Equity Interests of which is beneficially
owned or held by a Person or a Subsidiary of a Person.
"Agent Indemnitees" shall mean collectively, (i) Administrative Agent
in its capacity as administrative agent hereunder and under the other Financing
Agreements and all of Administrative Agent's present and future officers,
directors, employees and agents, and (ii) Collateral Agent in its capacity as
collateral agent hereunder and under the other Financing Agreements and all of
Collateral Agent's present and future officers, directors, employees and agents.
-2-
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"Alamac Enterprises" shall mean Alamac Enterprises Inc., a Delaware
corporation.
"Alamac LLC" shall mean Alamac Knit Fabrics LLC, a Delaware limited
liability company.
"Applicable Law" shall mean all laws, rules and regulations applicable
to the Person, conduct, transaction, covenant or Financing Agreement in
question, including all applicable common law and equitable principles; all
provisions of all applicable state and federal constitutions, statutes, rules,
regulations and orders of governmental bodies; and orders, judgments and decrees
of all courts and arbitrators.
"Applicable Margin" shall mean a percentage equal to 2.75% with respect
to Revolving Loans consisting of LIBOR Rate Loans; 0.75% with respect to
Revolving Loans consisting of Base Rate Loans; 3.25% with respect to any portion
of the Term Loan consisting of LIBOR Rate Loans; and 1.25% with respect to any
portion of the Term Loan consisting of Base Rate Loans; provided, that,
commencing October 1, 2000, the Applicable Margin shall be increased or
(provided no Default or Event of Default exists) decreased, based upon the ratio
of Consolidated Funded Debt to Consolidated EBITDA, as follows:
---------------------------------------------------------------------------------------
Consolidated Funded Revolving Loans Term Loan
Debt/Consolidated
EBITDA
---------------------------------------------------------------------------------------
LIBOR Rate Base Rate LIBOR Rate Base Rate
Loans Loans Loans Loans
---------------------------- ----------------------------------------------------------
Greater than or equal to 3.00% 1.00% 3.50% 1.50%
6.50 to 1.0
---------------------------- ----------------------------------------------------------
Less than 6.50 to 1.0 but 2.75% 0.75% 3.25% 1.25%
greater than or equal to
5.50 to 1.0
---------------------------- ----------------------------------------------------------
Less than 5.50 to 1.0 but 2.50% 0.50% 3.00% 1.00%
greater than or equal to
4.50 to 1.0
---------------------------- ----------------------------------------------------------
Less than 4.50 to 1.0 but 2.25% 0.25% 2.75% 0.75%
greater than or equal to
3.50 to 1.0
---------------------------- ----------------------------------------------------------
Less than 3.50 to 1.0 2.00% 0% 2.50% 0.50%
---------------------------- ----------------------------------------------------------
For purposes of this definition only and in determining the unused line fee
under SECTION 3.6 hereof, Consolidated EBITDA shall mean Borrowers' Consolidated
earnings before interest, taxes, depreciation and amortization for the previous
four (4) quarters plus up to $2,000,000 of cash restructuring charges associated
with the closing of up to one (1) business facility plus all non-cash charges in
accordance with GAAP.
The Applicable Margin shall be subject to reduction or increase, as applicable
and as set forth in the table above, on a quarterly basis according to the
performance of Borrowers as measured by the Consolidated Funded Debt to
Consolidated EBITDA ratio for the immediately preceding four (4) fiscal quarters
of Borrowers. Except as set forth in the last sentence hereof, any such increase
or reduction in the Applicable Margin provided for herein
-3-
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shall be effective three (3) Business Days after receipt by Agents of the
applicable financial statements and corresponding Compliance Certificate. If the
financial statements and the Compliance Certificate of Borrowers setting forth
the Consolidated Funded Debt to Consolidated EBITDA ratio are not received by
Agents by the date required pursuant to SECTION 9.6 of this Agreement, the
Applicable Margin shall be determined as if the Consolidated Funded Debt to
Consolidated EBITDA ratio exceeds 6.5 to 1.0 until such time as such financial
statements and Compliance Certificate are received and any Event of Default
resulting from a failure timely to deliver such financial statements or
Compliance Certificate is waived in writing by Agents and Lenders. For the final
quarter of any fiscal year of Borrowers, Borrowers may provide the unaudited
financial statements of Borrowers, subject only to year-end adjustments, for the
purpose of determining the Applicable Margin; provided, however, if, upon
delivery of the annual audited financial statements required to be submitted by
Borrowers to Agents pursuant to SECTION 9.6 of this Agreement, Borrowers have
not met the criteria for reduction of the Applicable Margin pursuant to the
terms hereinabove for the final quarter of the fiscal year of Borrowers then
ended, then (a) such Applicable Margin reduction shall be terminated and,
effective on the first day of the month following receipt by Agents of such
audited financial statements, the Applicable Margin shall be the Applicable
Margin that would have been in effect if such reduction had not been implemented
based upon the unaudited financial statements of Borrowers for the final fiscal
quarter of the fiscal year of Borrowers then ended, and (b) Borrowers shall pay
to Collateral Agent, for the Pro Rata benefit of the Lenders, on the first day
of the month following receipt by Collateral Agent of such audited financial
statements, an amount equal to the difference between the amount of interest
that would have been paid on the principal amount of the Obligations using the
Applicable Margin determined based upon such audited financial statements and
the amount of interest actually paid during the period in which the reduction of
the Applicable Margin was in effect based upon the unaudited financial
statements of Borrowers' final fiscal quarter of the fiscal year of Borrowers
then ended.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an Eligible Assignee and accepted by Agents, in the
form of EXHIBIT H attached hereto.
"Availability Reserves" shall mean, as of any date of determination,
such amounts as Agents may from time to time establish and revise reducing the
amount of Revolving Loans and Letter of Credit Accommodations which would
otherwise be available to Borrowers under the lending formula(s) provided for
herein: (a) to reflect events, conditions, contingencies or risks which, as
determined by Agents, do or may affect either (i) the Collateral or any other
Property which is security for the Obligations or its value, (ii) the assets,
business or prospects of any Borrower or any Obligor or (iii) the security
interests and other rights of Collateral Agent in the Collateral (including the
enforceability, perfection and priority thereof) or (b) to reflect either
Agent's belief that any collateral report or financial information furnished by
or on behalf of any Obligor to Agents is or may have been incomplete, inaccurate
or misleading in any material respect or (a) to reflect outstanding Letter of
Credit Accommodations as provided in SECTION 2.2 hereof or (b) in respect of any
state of facts which either Agent determines constitutes a Default or an Event
of Default.
"BankBoston" shall mean BankBoston, N.A., a national banking
association, and its successors and assigns.
"Bankruptcy Code" shall mean title 11 of the United States Code.
"BankBoston Indemnitees" shall mean BankBoston and all of its present
and future officers, directors, employees and agents.
"Base Rate" shall mean the rate from time to time publicly announced by
the Reference Bank from time to time as its base rate, whether or not such
announced rate is the best rate available at such bank; and, if such
-4-
10
base rate for commercial loans is discontinued by Reference Bank as a standard,
a comparable reference rate designated by Reference Bank as a substitute
therefor shall be the Base Rate.
"Base Rate Loan" shall mean any Loan or portion thereof on which
interest is payable based on the Base Rate in accordance with the terms hereof.
"Blocked Accounts" shall have the meaning set forth in SECTION 6.5 of
this Agreement.
"Bond Documents" shall mean collectively, (i) the Indenture of Trust
dated as of July 1, 1990, between the Bond Issuer and the Bond Trustee, (ii) the
Loan Agreement dated as of July 1, 1990, between the Bond Issuer and DFI, (iii)
the Bond Letter of Credit and (iv) any and all other documents, agreements or
instruments heretofore or hereafter executed or delivered in connection with the
Bonds.
"Bond Issuer" shall mean The Industrial Development Board of the City
of Trenton, Tennessee.
"Bond Letter of Credit" shall mean that certain irrevocable direct-pay
letter of credit to be issued by First Union for the benefit of the Bond Trustee
in the principal amount of $8,056,903.
"Bond Trustee" shall mean SunTrust Bank, Atlanta (formerly known as
Trust Company Bank), as trustee for the Bonds.
"Bonds" shall mean the $7,900,000 Industrial Development Board of the
City of Trenton, Tennessee Industrial Development Revenue Bonds (Dyersburg
Fabrics Inc. Project) Series 1990.
"Borrowing" shall mean a borrowing consisting of Loans of one Type made
on the same day by Lenders (or by BankBoston in the case of a Borrowing funded
by Settlement Loans) or a conversion of a Loan or Loans of one Type from Lenders
on the same day.
"Borrowing Agent" shall mean Dyersburg Corporation, a Tennessee
corporation.
"Borrowing Base Certificate" shall mean a certificate which is
substantially in the form of EXHIBIT J attached hereto, as such form may from
time to time be modified by Agents, is duly completed (including all schedules
thereto) and executed by the chief financial officer or other appropriate
financial officer of Borrowers acceptable to Agents and delivered to Collateral
Agent.
"Business Day" shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks are authorized or required to close under
the laws of the State of New York or the State of Georgia, and a day on which
the Reference Bank, Agents and Lenders are open for the transaction of business,
except that if a determination of a Business Day shall relate to any LIBOR Rate
Loans, the term Business Day shall also exclude any day on which banks are
closed for dealings in dollar deposits in the London interbank market or other
applicable LIBOR Rate market.
"Business Interruption Insurance Assignments" shall mean the Collateral
Assignments of Business Interruption Insurance to be executed by each Borrower
on the date hereof in favor of Collateral Agent, for the benefit of Agents and
for the Pro Rata benefit of Lenders, as security for the payment of the
Obligations
"Capital Expenditures" shall mean expenditures made or liabilities
incurred for the acquisition of any fixed assets or improvements, replacements,
substitutions or additions thereto which have a useful life of more than one
year, including the total principal portion of Capitalized Lease Obligations.
-5-
11
"Capitalized Lease Obligation" shall mean any debt represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
"Cash Collateral Account" shall mean a demand deposit, money market or
other account established by Collateral Agent at such financial institution as
Collateral Agent may select in its discretion, which account shall be in
Collateral Agent's name and subject to Collateral Agent's Lien.
"Claims" shall mean any and all claims, demands, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, awards,
remedial response costs, expenses or disbursements of any kind or nature
whatsoever (including reasonable attorneys', accountants', consultants' or
paralegals' fees and expenses), whether arising under or in connection with the
Financing Agreements, any Applicable Law (including any Environmental Law) or
otherwise, that may now or hereafter be suffered or incurred by a Person and
whether suffered or incurred in or as a result of any investigation, litigation,
arbitration or other judicial or non-judicial proceeding or any appeals related
thereto.
"Closing Date" shall mean the date on which all of the conditions
precedent in SECTION 4 of this Agreement are satisfied (or waived by Agents in
their sole and absolute discretion) and the initial Loans are made under this
Agreement.
"Code" shall mean the Internal Revenue Code of 1986.
"Collateral" shall have the meaning set forth in SECTION 5 of this
Agreement.
"Commitment" shall mean, at any date for any Lender, the aggregate
amount of such Lender's Revolving Commitment and Term Loan Commitment on such
date, and "Commitments" shall mean the aggregate amount of all Revolving
Commitments and Term Loan Commitments.
"Commitment Termination Date" shall mean the date that is the sooner to
occur of (i) the last day of the Original Term or of any Renewal Term; (ii) the
date on which Borrowers elect to terminate this Agreement pursuant to SECTION 14
of this Agreement; or (iii) the effective date of termination of the Commitments
pursuant to SECTION 10.2(B) hereof.
"Compliance Certificate" shall mean a certificate in the form of
EXHIBIT F attached hereto, duly completed.
"Congress" shall mean Congress Financial Corporation (Southern), a
Georgia corporation, and its successors and assigns.
"Congress Indemnitees" shall mean Congress and all of its present and
future officers, directors, employees and agents.
"Consolidated" shall mean the consolidation in accordance with GAAP of
the accounts or other items as to which such term applies.
"Consolidated Adjusted Tangible Net Worth" shall mean as to Borrowers,
on a Consolidated basis, on any date, an amount equal to: (a) the Consolidated
stockholder's equity of Borrowers and their Consolidated Subsidiaries (if any)
plus (b) the unpaid balance of the Senior Subordinated Notes less (c) intangible
assets of
-6-
12
Borrowers and their Consolidated Subsidiaries, including goodwill and deferred
financing and closing costs, in each case determined as of such date.
"Consolidated EBITDA" shall mean, for any fiscal period of Borrowers,
on a Consolidated basis, Borrowers' and their Consolidated Subsidiaries' (i)
income (or loss) before interest and taxes (excluding therefrom (to the extent
otherwise included therein) any gains or losses, together with any related
provisions for taxes, realized upon any sale of assets other than in the
ordinary course of business) plus (ii) to the extent deducted in determining
such income (or loss), depreciation, amortization and other non-cash charges.
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any fiscal
period of Borrowers, on a Consolidated basis, the ratio of: (i) Consolidated
EBITDA less Capital Expenditures less Borrowers' and their Consolidated
Subsidiaries' cash income tax expense for such period to (ii) Consolidated
Interest Expense plus current maturities of long-term debt for such period.
"Consolidated Funded Debt" shall mean, on a Consolidated basis, all
indebtedness which would, in accordance with GAAP, constitute long-term debt,
including (i) any indebtedness with a maturity more than one (1) year after the
creation thereof, and (ii) any indebtedness that is renewable or extendable at
the option of Borrowers for a period of more than one year from the date of
creation of such indebtedness.
"Consolidated Interest Expense" shall mean, for any fiscal period of
Borrowers, total interest expense (including that portion attributable to
Capitalized Lease Obligations in accordance with GAAP and capitalized interest)
of Borrowers and their Subsidiaries on a Consolidated basis with respect to all
outstanding indebtedness of Borrowers and their Subsidiaries.
"Consolidated Subsidiaries" shall mean, as to a Borrower, those
Subsidiaries of such Borrower whose accounts are at the time in question, in
accordance with GAAP (and, with respect to any Subsidiaries created, to the
extent permitted by this Agreement, after the date hereof, pursuant to the
written consent of Agents, which consent may be withheld in their absolute
discretion and which may be conditioned upon, inter alia, the execution and
delivery of guaranties, security agreements, mortgages and other documents
required by Agents in their absolute discretion), consolidated with those of
such Borrower.
"Default" shall mean an event or condition the occurrence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"Default Rate" shall mean, with respect to any Loan, a fluctuating rate
per annum which, on any date, is equal to two percent (2%) above the rate
otherwise in effect for such Loan on such date.
"Deposit Account Assignment" shall mean the Collateral Assignment of
Deposit Accounts to be executed by Borrowers on or before the Closing Date in
favor of Collateral Agent, for the benefit of Agents and for the Pro Rata
benefit of Lenders, as security for the Obligations.
"Deposit Accounts" shall mean all of a Person's demand, time, savings,
passbook, money market or other depository accounts, and all certificates of
deposit, maintained by such Person with any bank, savings and loan association,
credit union or other depository institution.
"DFIC" shall mean DFIC, Inc., a Delaware corporation.
"Dollars and the $" shall mean lawful money of the United States of
America.
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"Domestic Subsidiary" shall mean a Subsidiary of a Borrower (other than
a Subsidiary that is a Borrower) that is incorporated under the laws of a state
of the United States.
"Due From Factor Report" shall mean a report prepared by Borrowers that
reflects the amount of Factored Accounts on such date.
"Early Termination Fee" shall have the meaning ascribed to such term in
SECTION 14.1(C) of this Agreement.
"Eligible Accounts" shall mean Accounts created by a Borrower which are
and continue to be acceptable to Agents based on the criteria set forth below.
In general, Accounts shall be Eligible Accounts if:
(a) such Accounts arise from the actual and bona fide sale and
delivery of goods by a Borrower or rendition of services by a Borrower in the
ordinary course of its business, which transactions are completed in accordance
with the terms and provisions contained in any documents related thereto;
(b) such Accounts are not unpaid more than sixty (60) days
after the original due date thereof or more than one hundred twenty (120) days
after the date of the original invoice;
(c) such Accounts comply with the terms and conditions contained
in SECTION 7.2 of this Agreement;
(d) such Accounts do not arise from sales on consignment,
guaranteed sale, sale and return, sale on approval, or other terms under which
payment by the account debtor may be conditional or contingent;
(e) the chief executive office of the account debtor with respect
to such Accounts is located in the United States of America, or, at Agents'
option, if either: (i) the account debtor has delivered to a Borrower an
irrevocable letter of credit issued or confirmed by a bank satisfactory to
Agents and payable only in the United States of America and in U.S. dollars,
sufficient to cover such Account, in form and substance satisfactory to Agents
and, if required by Agents, the original of such letter of credit has been
delivered to Collateral Agent and the issuer thereof notified of the assignment
of the proceeds of such letter of credit to Collateral Agent, or (ii) such
Account is subject to credit insurance payable to Collateral Agent issued by an
insurer and on terms and in an amount acceptable to Agents, or (iii) such
Account is otherwise acceptable in all respects to Agents (subject to such
lending formula with respect thereto as Agents may determine);
(f) such Accounts do not consist of progress xxxxxxxx, xxxx and
hold invoices or retainage invoices, except as to xxxx and hold invoices, if
Agents shall have received an agreement in writing from the account debtor, in
form and substance satisfactory to Agents, confirming the unconditional
obligation of the account debtor to take the goods related thereto and pay such
invoice;
(g) the account debtor with respect to such Accounts has not
asserted a counterclaim, defense or dispute and does not have, and does not
engage in transactions which may give rise to, any right of setoff against such
Accounts (but the portion of the Accounts of such account debtor in excess of
the amount at any time and from time to time owed by a Borrower to such account
debtor or claimed owed by such account debtor may be deemed Eligible Accounts);
(h) there are no facts, events or occurrences which would impair
the validity, enforceability or collectibility of such Accounts or reduce the
amount payable or delay payment thereunder;
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(i) such Accounts are subject to the first priority, valid and
perfected security interest of Collateral Agent and any goods giving rise
thereto are not, and were not at the time of the sale thereof, subject to any
Liens except those permitted in this Agreement;
(j) neither the account debtor nor any officer or employee of the
account debtor with respect to such Accounts is an officer, employee or agent of
or affiliated with any Borrower or any other Obligor directly or indirectly by
virtue of family membership, ownership, control, management or otherwise;
(k) the account debtor with respect to such Accounts is not any
foreign government, the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, unless, if the
account debtor is the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, upon Agents'
request, the Federal Assignment of Claims Act of 1940, or any similar State or
local law, if applicable, has been complied with in a manner satisfactory to
Agents;
(l) there are no proceedings or actions which are threatened or
pending against the account debtors with respect to such Accounts that might
result in any material adverse change in any such account debtor's financial
condition;
(m) such Accounts of a single account debtor or its Affiliates do
not constitute more than twenty percent (20%) of all otherwise Eligible Accounts
(but the portion of the Accounts not in excess of such percentage may be deemed
Eligible Accounts);
(n) such Accounts are not owed by an account debtor who has
Accounts which constitute more than fifty percent (50%) of the total Accounts of
such account debtor;
(o) such Accounts are owed by account debtors whose total
indebtedness to a Borrower does not exceed the credit limit with respect to such
account debtors as determined by Agents from time to time (but the portion of
the Accounts not in excess of such credit limit may be deemed Eligible
Accounts); and
(p) such Accounts are owed by account debtors deemed creditworthy
at all times by Agents, as determined by Agents.
General criteria for Eligible Accounts may be established and revised from time
to time by Agents in good faith. Any Accounts which are not Eligible Accounts
shall nevertheless be part of the Collateral.
"Eligible Alamac Stock-In-Process" shall mean Inventory that (i) is
owned by Alamac, (ii) consists of categories of stock-in-process that have been
historically reflected on inventory reports prepared by Borrowers, the form of
which reports were delivered to Agents prior to the Closing Date and (iii)
otherwise constitutes Eligible Inventory.
"Eligible Assignee" shall mean a Lender or a U.S.-based Affiliate of a
Lender; a commercial bank organized under the laws of the United States or any
state and having total assets in excess of $15 billion or an asset based lending
Affiliate of any such bank; or any other financial institution that is
acceptable to Agents and Lenders, in the ordinary course of business extends
credit of the type evidenced by the Notes and has total assets in excess of $15
billion.
"Eligible Cotton Inventory" shall mean Inventory that consists of
unopened baled cotton that has not been purchased directly from a producer
(unless it has been paid for) and that otherwise constitutes Eligible Inventory.
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"Eligible Factored Amounts" shall mean, on any date of determination
thereof, an amount equal to, when the date of determination is the date of a
Factor Status Statement, the amount reflected on such Factor Status Statement as
the aggregate balance standing to the credit of Borrower from Factor, minus the
sum of any fees, commissions, reserves or other charges due from a Borrower to a
Factor on such date under its Factoring Agreement, and when the date of
determination is any other date, an amount equal to the aggregate balances
standing to the credit of Borrowers as reflected on the Due From Factor Report
delivered to Agents by Borrowers on such date, or, in the absence of the
delivery of a Due From Factor Report on any date, an amount determined by Agents
in their sole and absolute discretion.
"Eligible Finished Goods" shall mean Inventory that consists of
finished goods and held for sale in the ordinary course of business and that
otherwise constitutes Eligible Inventory.
"Eligible Finishing Department Inventory" shall mean Inventory that (i)
is owned by Alamac, (ii) consists of categories of Inventory that are located in
the finishing department at Alamac and that have been historically reflected on
inventory reports prepared by Borrowers, the form of which reports were
delivered to Agents prior to the Closing Date and (iii) otherwise constitutes
Eligible Inventory.
"Eligible Inventory" shall mean Inventory consisting of Eligible Cotton
Inventory, Eligible Finished Goods, Eligible Finishing Department Inventory,
Eligible Raw Materials, Eligible Alamac Stock-in-Process and Eligible
Work-in-Process, which, in each case, are acceptable to Agents based on the
criteria set forth below. In general, Eligible Inventory shall not include (a)
work-in-process that is not in a ready salable form (other than work-in-process
that is deemed to constitute Eligible Alamac Stock-in-Process and Eligible
Finishing Department Inventory); (b) components that are not part of finished
goods; (c) spare parts for equipment; (d) packaging and shipping materials; (e)
supplies used or consumed in a Borrower's business; (f) Inventory at premises
other than those owned and controlled by a Borrower, except if Agents shall have
received an agreement in writing from the Person in possession of such Inventory
and/or the owner or operator of such premises in form and substance satisfactory
to Agents acknowledging Collateral Agent's first priority security interest in
the Inventory, waiving security interests and claims by such Person against the
Inventory and permitting Agents access to, and the right to remain on, the
premises so as to exercise Agents' rights and remedies and otherwise deal with
the Collateral; (g) Inventory subject to a Lien in favor of any Person other
than Agents except those permitted in this Agreement; (h) xxxx and hold goods;
(i) unserviceable, obsolete or slow-moving Inventory; (j) Inventory that is not
subject to the first priority, valid and perfected security interest of
Collateral Agent; (k) returned and not first quality goods, damaged and/or
defective Inventory; and (l) Inventory purchased or sold on consignment. General
criteria for Eligible Inventory may be established and revised from time to time
by Agents. Any Inventory that is not Eligible Inventory shall nevertheless be
part of the Collateral.
"Eligible Raw Materials" shall mean Inventory that consists of raw
materials and that otherwise constitutes Eligible Inventory.
"Eligible Work-in-Process" shall mean Inventory that consists of
work-in-process and that otherwise constitutes Eligible Inventory.
"Environmental Indemnity Agreement" shall mean the Environmental
Indemnity Agreement to be executed by Borrowers on the Closing Date in favor of
Agents and Lenders.
"Environmental Laws" shall mean all foreign, Federal, State and local
laws (including common law), legislation, rules, codes, licenses, permits
(including any conditions imposed therein), authorizations, judicial or
administrative decisions, injunctions or agreements between any Borrower and any
governmental authority, (a) relating to pollution and the protection,
preservation or restoration of the environment (including air, water vapor,
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surface water, ground water, drinking water, drinking water supply, surface
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety, (b) relating to the exposure to, or the use, storage,
recycling, treatment, generation, manufacture, processing, distribution,
transportation, handling, labeling, production, release or disposal, or
threatened release, of Hazardous Materials, or (c) relating to all laws with
regard to recordkeeping, notification, disclosure and reporting requirements
respecting Hazardous Materials. The term "Environmental Laws" includes (i) the
Federal Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Federal Superfund Amendments and Reauthorization Act, the Federal
Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal
Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976
(including the Hazardous and Solid Waste Amendments thereto), the Federal Solid
Waste Disposal and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water
Act of 1974, (ii) applicable state counterparts to such laws, and (iii) any
common law or equitable doctrine that may impose liability or obligations for
injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Materials.
"Equipment" shall mean all of a Borrower's now owned and hereafter
acquired equipment, machinery, computers and computer hardware and software
(whether owned or licensed), vehicles, tools, furniture, fixtures, all
attachments, accessions and property now or hereafter affixed thereto or used in
connection therewith, and substitutions and replacements thereof, wherever
located.
"Equity Interest" shall mean the interest of (i) a shareholder in a
corporation, (ii) a partner (whether general or limited) in a partnership
(whether general, limited or limited liability), (iii) a member in a limited
liability company, or (iv) any other Person having any other form of equity
security or ownership interest.
"ERISA" shall mean the United States Employee Retirement Income
Security Act of 1974.
"ERISA Affiliate" shall mean any person required to be aggregated with
Borrowers or any of their Subsidiaries under Sections 414(b), 414(c), 414(m) or
414(o) of the Code.
"Event of Default" shall mean the occurrence or existence of any event
or condition described in SECTION 10.1 hereof.
"Excess Availability" shall mean the amount, as determined by Agents,
calculated at any time, equal to: the lesser of: (i) the amount of the Revolving
Loans available to Borrowers as of such time based on the applicable lending
formulas multiplied by the Net Amount of Eligible Accounts and the Eligible
Factored Amounts and the Value of Eligible Inventory, as determined by Agents,
and subject to the sublimits and Availability Reserves from time to time
established by Agents hereunder, and (ii) the Maximum Revolving Credit minus (1)
the sum of: (x) the amount of all then outstanding and unpaid Obligations (but
not including for this purpose the then outstanding principal amount of the Term
Loan), plus (y) the aggregate amount of all then outstanding and unpaid,
undisputed trade payables of Borrowers which are more than sixty (60) days past
due as of such time, plus (z) the amount of checks issued by Borrowers to pay
trade payables, but not yet sent and the book overdraft of Borrowers.
"Extraordinary Expense" shall mean all costs, expenses, fees, and
advances which either or both Agents or any Lender may suffer or incur, whether
prior to or after the occurrence of an Event of Default, on account of or in
connection with (i) the audit, inspection, repossession, storage, repair,
appraisal, insuring, completion of the manufacture of, preparing for sale,
advertising for sale, selling, collecting or otherwise preserving or realizing
upon any Collateral; (ii) the defense of Collateral Agent's Lien upon any
Collateral or the priority thereof or any adverse claim with respect to the
Loans, the Financing Agreements or the Collateral asserted by any Obligor, any
receiver or trustee for any Obligor or any creditor or representative of
creditors of any Obligor; (iii) the settlement
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or satisfaction of any Liens upon any Collateral (whether or not such Liens are
Permitted Liens); (iv) the collection of any of the Obligations; (v) the
negotiation, documentation, and closing of any restructuring or forbearance
agreement with respect to the Financing Agreements or Obligations; (vi) amounts
advanced by Collateral Agent pursuant to SECTION 7.6 of this Agreement; (vii)
the enforcement of any of the provisions of any of the Financing Agreements; or
(viii) any payment under indemnity or other payment agreement provided by either
or both Agents to any financial institution in connection with any Blocked
Account. Such costs, expenses and advances may include transfer fees, Taxes,
storage fees, insurance costs, permit fees, utility reservation and standby
fees, legal fees, appraisal fees, brokers' fees and commissions, auctioneers'
fees and commissions, accountants' fees, environmental study fees, wages and
salaries paid to employees of a Borrower or independent contractors in
liquidating any Collateral, travel expenses, all other fees and expenses payable
or reimbursable by a Borrower or any other Obligor under any of the Financing
Agreements, and all other fees and expenses associated with the enforcement of
rights or remedies under any of the Financing Agreements, but excluding
compensation paid to employees (including inside legal counsel who are
employees) of Agents.
"Facility Amount" shall mean, on any date, the (i) the Revolving
Commitments in effect on such date plus (ii) the outstanding principal balance
of the Term Loan on such date.
"Factor" shall mean a Person that executes a Factoring Agreement with a
Borrower and that is approved by Agents in writing.
"Factor Assignment Agreement" shall mean a collateral assignment of
factoring proceeds executed by a Borrower in favor of Collateral Agent in
connection with a Factoring Agreement between a Borrower and a Factor.
"Factor Eligibility Conditions" shall mean each of the following
conditions, the satisfaction of each of which in a manner acceptable in all
respects to Agents shall be a condition to any advances hereunder based upon any
Eligible Factored Amounts:
(i) no Default or Event of Default exists at such time or
would result;
(ii) Agents shall have received the applicable Factoring
Agreement and found it acceptable in all respects;
(iii) Borrowers shall have executed and delivered a Factor
Assignment Agreement, in form and substance satisfactory to Agents; and
(iv) Collateral Agent shall have entered into a Factor
Intercreditor Agreement with the Factor.
"Factor Intercreditor Agreement" shall mean an intercreditor agreement,
in form and substance satisfactory in all respects to Agents, that is executed
by a Factor in favor of Collateral Agent in connection with a Factoring
Agreement between a Borrower and a Factor.
"Factor Reserve" shall mean the amount which at any time may be charged
to a Borrower under a Factoring Agreement or withheld from amounts otherwise due
to a Borrower under a Factoring Agreement, including interest, fees,
commissions, ledger debt and other charges due a Factor under a Factoring
Agreement and the amount of any actual or anticipated disputes or claims arising
with respect to any Factored Accounts.
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"Factor Status Statement" shall mean an account current statement or
similar report issued by a Factor on a monthly basis under its Factoring
Agreement and setting forth the status of the Factored Accounts under such
Factoring Agreement.
"Factored Account" shall mean an Account factored by a Factor under a
Factoring Agreement.
"Factoring Agreement" shall mean any and all factoring agreements
executed by a Borrower in favor of a Factor.
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate per annum equal for each date 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) in
Atlanta, Georgia 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 Agent from three (3) federal funds
brokers of recognized standing selected by Collateral Agent.
"Financing Agreements" shall mean, collectively, this Agreement, the
Notes, the Mortgages, the Business Interruption Insurance Assignments, the
Deposit Account Assignments, the Environmental Indemnity Agreement, the Guaranty
Agreements, the Guarantor Security Agreements, the Trademark Security
Agreements, the Patent Security Agreements, the Stock Pledge Agreements, the
Syndication Expenses Letter, the Letter of Credit Documents, Factor Assignment
Agreements, Factor Intercreditor Agreements and all other notes, guarantees,
security agreements, interest rate protection agreements and other agreements,
documents and instruments now or at any time hereafter executed and/or delivered
by any or all Borrowers or any Obligor in connection with this Agreement, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
"First Union" shall mean First Union National Bank, a national bank.
"Foreign Subsidiary" shall mean a Subsidiary that is not a Domestic
Subsidiary.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied, except that,
for purposes of SECTIONS 9.15, 9.16 and 9.17 hereof, GAAP shall be determined on
the basis of such principles in effect on the date hereof and consistent with
those used in the preparation of the audited financial statements delivered to
Agents and Lenders prior to the date hereof.
"Guarantor Security Agreements" shall mean each General Security
Agreement that is executed by a Guarantor in favor of Collateral Agent.
"Guarantors" shall mean each Borrower, DFIC, IQUEIC, UKIC, Alamac
Enterprises, Alamac LLC and each other Person who may hereafter guarantee
payment or performance of the whole or any part of the Obligations.
"Guaranty Agreement" shall mean a guaranty that is at any time executed
by a Guarantor in favor of Agents and Lenders.
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"Hazardous Materials" shall mean any hazardous or toxic substances,
materials and wastes, including hydrocarbons (including petroleum and
hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation,
radioactive materials, biological substances, polychlorinated biphenyls,
pesticides or herbicides (including materials which include hazardous
constituents), solvents and/or any other similar substances, materials, or
wastes and including any other substances, materials or wastes that are or
become regulated as hazardous or toxic under any Environmental Law.
"Indemnified Amount" shall mean, in the case of Agent Indemnitees, the
amount of any loss, cost, expenses or damages suffered or incurred by Agent
Indemnitees and against which Lenders or any Obligor have agreed to indemnify
Agent Indemnitees pursuant to the terms of this Agreement or any of the other
Financing Agreements; in the case of Lender Indemnitees, the amount of any loss,
cost, expenses or damages suffered or incurred by Lender Indemnitees and against
which Lenders or any Obligor have agreed to indemnify Lender Indemnitees
pursuant to the terms of this Agreement or any of the other Financing
Agreements; and, in the case of Congress Indemnitees, the amount of any loss,
cost, expenses or damages suffered or incurred by Congress Indemnitees and
against which Lenders or any Obligor have agreed to indemnify Congress
Indemnitees pursuant to the terms of this Agreement or any of the other
Financing Agreements; and in the case of BankBoston Indemnitees, the amount of
any loss, cost, expenses or damages suffered or incurred by BankBoston
Indemnitees and against which Lenders or any Obligor have agreed to indemnify
BankBoston Indemnitees pursuant to the terms of this Agreement or any of the
other Financing Agreements.
"Information Certificates" shall mean the Information Certificates of
Borrowers constituting EXHIBIT K attached hereto containing material information
with respect to Borrowers, their businesses and assets provided by or on behalf
of Borrowers to Agents and Lenders in connection with the preparation of this
Agreement and the other Financing Agreements and the financing arrangements
provided for herein.
"Insolvency Proceeding" shall mean any action, case or proceeding
commenced by or against a Person, or any agreement of such Person, for (i) the
entry of an order for relief under any chapter of the Bankruptcy Code or other
insolvency or debt adjustment law (whether state, federal or foreign), (ii) the
appointment of a receiver, trustee, liquidator or other custodian for such
Person or any part of its Property, (iii) an assignment or trust mortgage for
the benefit of creditors of such Person, or (iv) the liquidation, dissolution or
winding up of the affairs of such Person.
"Interest Period" shall have the meaning set forth in SECTION 3.1(E) of
this Agreement.
"Interest Rate" shall mean,(i) as to Revolving Loans consisting of Base
Rate Loans, the Applicable Margin plus the Base Rate in effect from time to
time, (ii) as to Revolving Loans consisting of LIBOR Rate Loans, the Applicable
Margin plus the Adjusted LIBOR Rate (based on the LIBOR Rate applicable for the
Interest Period selected by Borrowers as in effect two (2) Business Days after
the date of receipt by Collateral Agent of the request of Borrowers for such
LIBOR Rate Loans in accordance with the terms hereof, whether such rate is
higher or lower than any rate previously quoted to Borrowers), (iii) as to all
or any portion of the Term Loan consisting of Base Rate Loans, the Applicable
Margin plus the Base Rate in effect from time to time; and (iv) as to all or any
portion of the Term Loan consisting of LIBOR Rate Loans, the Applicable Margin
plus the Adjusted LIBOR Rate (based on the LIBOR Rate applicable for the
Interest Period selected by Borrowers as in effect two (2) Business Days after
the date of receipt by Collateral Agent of the request of Borrowers for such
LIBOR Rate Loans in accordance with the terms hereof, whether such rate is
higher or lower than any rate previously quoted to Borrowers).
"Inventory" shall mean all of a Borrower's now owned and hereafter
existing or acquired raw materials, work in process, finished goods and all
other inventory of whatsoever kind or nature, wherever located.
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"Investment Property" shall have the meaning ascribed to it in the UCC.
"IQUEIC" shall mean IQUEIC, Inc., a Delaware corporation.
"Lender Indemnitee" shall mean a Lender in its capacity as a lender
under this Agreement and its present and future officers, directors, employees
and agents.
"Lenders" shall mean BankBoston (whether in its capacity as a provider
of Loans under SECTION 2 of this Agreement or as the provider of Settlement
Loans under SECTION 6.1(C) of this Agreement, Congress (whether in its capacity
as a provider of Loans under SECTION 2 of this Agreement or as the procurer of
Letter of Credit Accommodations under SECTION 2.2 of this Agreement), and any
other Person who may from time to time become a "Lender" under this Agreement,
and their respective successors and permitted assigns.
"Letter of Credit" shall mean any documentary letter of credit, standby
letter of credit or direct-pay letter of credit, including the Bond Letter of
Credit.
"Letter of Credit Accommodations" shall mean the Letters of Credit,
merchandise purchase or other guaranties which are from time to time either (a)
issued or opened by Congress for the account of any Borrower or any Obligor or
(b) with respect to which Congress has agreed to indemnify the issuer or
guaranteed to the issuer the performance by a Borrower of its obligations to
such issuer.
"Letter of Credit Documents" shall mean (i) each Letter of Credit, (ii)
the Letter of Credit and Reimbursement Agreement dated of even date herewith
between First Union and DFLP, (iii) the Pledge Agreement dated of even date
herewith between First Union and DFLP, and (iv) any and all other instruments,
documents or agreements executed in connection with any Letter of Credit.
"LIBOR Rate" shall mean with respect to the Interest Period for a LIBOR
Rate Loan, the interest rate per annum equal to the arithmetic average of the
rates of interest per annum (rounded upwards, if necessary, to the next
one-sixteenth (1/16) of one (1%) percent) at which Reference Bank is offered
deposits of United States dollars in the London interbank market (or other LIBOR
Rate market selected by Borrowers and approved by Agents and Lenders) on or
about 9:00 a.m. (New York time) two (2) Business Days prior to the commencement
of such Interest Period in amounts substantially equal to the principal amount
of the LIBOR Rate Loans requested by and available to Borrowers in accordance
with this Agreement, with a maturity of comparable duration to the Interest
Period selected by Borrowers.
"LIBOR Rate Loans" shall mean any Loans or portion thereof on which
interest is payable based on the Adjusted LIBOR Rate in accordance with the
terms hereof.
"Lien" shall mean any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on common law, statute or contract. The term "Lien" shall also
include reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purpose of this Agreement, a Borrower
shall be deemed to be the owner of any Property which it has acquired or holds
subject to a conditional sale agreement or other arrangement pursuant to which
title to the Property has been retained by or vested in some other Person for
security purposes.
"Loans" shall mean the Revolving Loans and the Term Loan.
"Material Adverse Effect" shall mean the effect of any event or
condition which, alone or when taken together with other events or conditions
occurring or existing concurrently therewith, (i) has a material adverse
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effect upon the business, operations, prospects, Properties or condition
(financial or otherwise) of Borrowers, taken as a whole; (ii) has or may be
reasonably expected to have any material adverse effect whatsoever upon the
validity or enforceability of this Agreement or any of the other Financing
Agreements; (iii) has any material adverse effect upon the value of the whole or
any material part of the Collateral, the Liens of Collateral Agent with respect
to the Collateral or the priority of any such Liens; (iv) materially impairs the
ability of any Obligor to perform its obligations under this Agreement or any of
the other Financing Agreement, including repayment of any of the Obligations
when due; or (v) materially impairs the ability of either or both Agents or any
Lender to enforce or collect the Obligations or realize upon any of the
Collateral in accordance with the Financing Agreements and Applicable Law.
"Maximum Credit" shall mean the amount of $110,000,000.
"Maximum Revolving Credit" shall mean the amount of $84,000,000.
"Maximum Rate" shall mean the maximum non-usurious rate of interest
under applicable Federal or State law as in effect from time to time, that may
be contracted for, taken, reserved, charged or received in respect of the
indebtedness of Borrowers to Lenders, or, to the extent that at any time such
Applicable Law may thereafter permit a higher maximum non-usurious rate of
interest, then such higher rate that Applicable Law may allow. Notwithstanding
any other provision hereof, the Maximum Rate shall be calculated on a daily
basis (computed on the actual number of days elapsed over a year of three
hundred sixty-five (365) or three hundred sixty-six (366) days, as the case may
be).
"Mortgages" shall mean, individually and collectively, each of the
following: (i) the North Carolina Deed of Trust, Security Agreement and
Assignment of Rents, dated of even date herewith, by Borrowers in favor of
Collateral Agent with respect to the Real Property and related assets of
Borrowers located in North Carolina, (ii) the Tennessee Deed of Trust, Security
Agreement and Assignment of Rents, dated of even date herewith, by Borrowers in
favor of Collateral Agent with respect to the Real Property and related assets
of Borrowers located in Tennessee, and (iii) the Tennessee Leasehold Deed of
Trust and Security Agreement, dated of even date herewith, by Borrowers in favor
of Collateral Agent with respect to Borrowers' leasehold interest in the Real
Property of Borrowers located at Xxxx Road, Dyersburg, Tennessee.
"Net Amount of Eligible Accounts" shall mean the gross amount of
Eligible Accounts less (a) sales, excise or similar taxes included in the amount
thereof and (b) returns, discounts, claims, credits and allowances of any nature
at any time issued, owing, granted, outstanding, available or claimed with
respect thereto.
"Note" shall mean each Revolving Note, each Term Note, the Settlement
Note and any other promissory note executed by Borrowers at either Agent's
request to evidence any of the Obligations.
"Notice of Borrowing" shall have the meaning set forth in SECTION
6.1(A)(I) of this Agreement.
"Notice of Conversion/Continuation" shall have the meaning set forth in
SECTION 3.1(D) of this Agreement.
"Obligations" shall mean any and all Revolving Loans, the Term Loan,
all Settlement Loans, Letter of Credit Accommodations and all other obligations,
liabilities and indebtedness of every kind, nature and description owing by any
or all Borrowers to either or both Agents, any Lender and/or any Affiliates of
either or both Agents or any Lender, including principal, interest, charges,
fees, costs and expenses, however evidenced, whether as principal, surety,
endorser, guarantor or otherwise, whether arising under this Agreement or any of
the other Financing Agreements, whether now existing or hereafter arising,
whether arising before, during or after the Original Term or any Renewal Term of
this Agreement or after the commencement of any case with respect to any
Borrower under the Bankruptcy Code or any similar statute (including the payment
of interest and other
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amounts which would accrue and become due but for the commencement of such case,
whether or not such amounts are allowed or allowable in whole or in part in such
case), whether direct or indirect, absolute or contingent, joint or several, due
or not due, primary or secondary, liquidated or unliquidated, secured or
unsecured, and however acquired by either or both Agents or any Lender.
"Obligor" shall mean any Borrower, any Guarantor, endorser, acceptor,
surety or other Person liable on or with respect to the Obligations or who is
the owner of any Property which is security for the Obligations.
"Offshore Equipment" shall mean any Equipment not listed on the Accuval
Appraisal (excluding any Equipment acquired after the date of the Accuval
Appraisal and excluding any substitutions, replacements of or additions to any
Equipment listed on the Accuval Appraisal).
"Original Term" shall have the meaning set forth in SECTION 14.1 of
this Agreement.
"Out-of-Formula Condition" shall mean a condition such that the
outstanding amount of the Revolving Loans and Letter of Credit Accommodations on
the date of determination thereof exceeds the lending formula set forth in
SECTION 2.1(A) hereof on such date.
"Out-of-Formula Loan" shall mean a Revolving Loan made when an
Out-of-Formula Condition exists or the portion of any Revolving Loan which, when
funded, results in an Out-of-Formula Condition.
"Participant" shall have the meaning set forth in SECTION 12.2(A) of
this Agreement.
"Patent Security Agreements" shall mean each Patent Security Agreement
to be executed by a Borrower in favor of Collateral Agent on or about the
Closing Date and by which such Borrower shall assign to Collateral Agent, for
the benefit of Agents and for the Pro Rata benefit of Lenders, as security for
the Obligations, all of such Borrower's right, title and interest in and to all
of its patents.
"Payment Account" shall have the meaning set forth in SECTION 6.5 of
this Agreement.
"Permitted Affiliate Investments" shall mean investments in, or Capital
Expenditures with respect to non-U.S. Affiliates, Foreign Subsidiaries or joint
ventures of Borrowers so long as (i) such investments or Capital Expenditures do
not exceed $1,000,000 in the aggregate during the period from the Closing Date
through December 31, 1999, $2,000,000 in the aggregate during the period from
January 1, 2000 through December 31, 2000, and $2,000,000 in the aggregate
during the period from January 1, 2001 through December 31, 2001, (ii) Excess
Availability is at least $5,000,000 at the time of, and after giving effect to,
any such investment or Capital Expenditure, and (iii) no Default or Event of
Default exists at such time or would result therefrom.
"Permitted Liens" shall mean those Liens permitted by SECTION 9.8
hereof.
"Permitted Property Transfers" shall mean a transfer of any Offshore
Equipment to a non-U.S. Affiliate, Foreign Subsidiary or joint venture of a
Borrower.
"Permitted Supplemental Investment" shall mean investments in or
Capital Expenditures with respect to non-U.S. Affiliates or joint ventures of
Borrowers so long as (i) such investment or Capital Expenditure is made after
January 1, 2000, (ii) the ratio of (x) Consolidated EBITDA less Capital
Expenditures and cash taxes to (y) interest expense and principal amortization
of long-term debt for the immediately preceding twelve-month period equals at
least 1.25 to 1.0 and (iii) no Default or Event of Default exists at such time
or would result therefrom.
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"Person" shall mean any individual, sole proprietorship, partnership,
corporation (including any corporation which elects subchapter S status under
the Internal Revenue Code of 1986), limited liability company, limited liability
partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.
"Property" any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.
"Pro Rata" shall mean a share of or in all Loans, participations in
Letter of Credit Accommodations or, in the case of Congress, the portion of the
Letter of Credit Accommodations in which Congress does not sell a participation
interest pursuant to SECTION 2.2(E) of this Agreement, obligations to indemnify
or reimburse Congress as the procurer of Letter of Credit Accommodations or
Collateral Agent, payments, proceeds, collections, Collateral and Extraordinary
Expenses, which share for any Lender on any date shall be a percentage arrived
at by dividing the amount of the Commitment of such Lender on such date by the
aggregate amount of the Commitments of all Lenders on such date.
"Real Property" shall mean all now owned and hereafter acquired real
property of Borrowers, including leasehold interests, together with all
buildings, structures, and other improvements located thereon and all licenses,
easements and appurtenances relating thereto, wherever located, including the
real property and related assets more particularly described in the Mortgages.
"Records" shall mean all of a Borrower's present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data relating to the Collateral or any account
debtor, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of Borrowers with respect to the
foregoing maintained with or by any other Person).
"Reference Bank" shall mean BankBoston, N.A. , or such other bank as
Agents may from time to time designate.
"Renewal Term" shall have the meaning ascribed to such term in SECTION
14.1 of this Agreement.
"Required Lenders" shall mean, at any date of determination thereof,
Lenders having Commitments representing at least 66-2/3% of the aggregate
Commitments at such time; provided, however, that if any Lender shall be in
breach of any of its obligations hereunder to Borrowers or Agents, including any
breach resulting from its failure to honor its Commitment in accordance with the
terms of this Agreement, then, for so long as such breach continues, the term
"Required Lenders" shall mean Lenders (excluding each Lender that is in breach
of its obligations under this Agreement) having Commitments representing at
least 66-2/3% of the aggregate Commitments at such time; provided, further,
however, that if this Agreement has been terminated, the term "Required Lenders"
shall mean Lenders (excluding each Lender that is in breach of its obligations
hereunder) holding Loans (including Settlement Loans) representing at least
66-2/3% of the aggregate principal amount of Loans (including Settlement Loans)
outstanding at such time.
"Revolving Commitment" shall mean, at any date for any Lender, the
obligation of such Lender to make Revolving Loans and to purchase participations
in Letter of Credit Accommodations pursuant to the terms and conditions of this
Agreement, which shall not exceed the principal amount set forth opposite such
Lender's name under the heading "Revolving Commitment" on the signature pages
hereof or the signature page of the Assignment and Acceptance by which it became
a Lender, as modified from time to time pursuant to the terms of this Agreement
or to give effect to any applicable Assignment and Acceptance; and "Revolving
Commitments"
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means the aggregate principal amount of the Revolving Commitments of all
Lenders, the maximum amount of which shall be $84,000,000, as reduced from time
to time pursuant to SECTION 2.1(E) hereof.
"Revolving Loans" shall mean the Loans now or hereafter made by Lenders
(or by BankBoston as Settlement Loans) to or for the benefit of Borrowers on a
revolving basis (involving advances, repayments and readvances) as set forth in
SECTION 2.1 hereof.
"Revolving Note" shall mean a Revolving Note to be executed by
Borrowers in favor of each Lender in the form of EXHIBIT A attached hereto,
which shall be in the face amount of such Lender's Revolving Commitment and
which shall evidence all Revolving Loans made by such Lender to Borrowers
pursuant to this Agreement.
"Senior Officer" shall mean any member of the board of directors, the
president, executive vice-president or the chief financial officer of, or
in-house legal counsel to, a Borrower.
"Senior Subordinated Note Indenture" shall mean the Indenture dated as
of August 27, 1997, between Dyersburg and State Street Bank and Trust Company,
as Trustee, pursuant to which the Senior Subordinated Notes were issued.
"Senior Subordinated Notes" shall mean the Series A and Series B
$125,000,000 9 3/4% Senior Subordinated Notes Due 2007.
"Settlement Date" shall have the meaning set forth in SECTION 6.1(C)(I)
of this Agreement.
"Settlement Loan" shall have the meaning set forth in SECTION
6.1(C)(II) of this Agreement.
"Settlement Note" shall mean the Settlement Note to be executed by
Borrowers on or before the Closing Date in favor of BankBoston, which shall be
in the form of EXHIBIT C attached hereto and which shall evidence all Settlement
Loans made by BankBoston to Borrowers pursuant to this Agreement.
"Settlement Report" shall mean a report delivered by Collateral Agent
to Lenders summarizing the amount of the outstanding Revolving Loans as of the
Settlement Date and the calculation of the Borrowing Base as of such Settlement
Date.
"Stock Pledge Agreements" shall mean each Stock Pledge Agreement
executed by a Borrower in favor of Collateral Agent and by which such Borrower
shall pledge to Collateral Agent, for the benefit of Agents and for the Pro Rata
benefit of Lenders, as security for the Obligations, 66% of the capital stock of
each Foreign Subsidiary of such Borrower and 100% of the capital stock of each
Domestic Subsidiary of such Borrower.
"Subordinated Debt" shall mean the Senior Subordinated Notes and other
debt of any or all Borrowers that is fully and absolutely subordinated in right
or payment to the Obligations in a manner satisfactory to Agents and Lenders.
"Subsidiary" shall mean any Person a majority of the Equity Interests
of which is at the time owned, directly or indirectly, by a Borrower or by one
or more other Subsidiaries or by a Borrower and one or more other Subsidiaries.
"Syndication Expenses Letter" shall mean that certain letter agreement
dated the date hereof among Borrowers, BankBoston and Congress.
"Taxes" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including income, receipts, excise, property, sales, use, transfer,
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license, payroll, withholding, social security and franchise taxes now or
hereafter imposed or levied by the United States, or any state, local or foreign
government or by any department, agency or other political subdivision or taxing
authority thereof or therein and all interest, penalties, additions to tax and
similar liabilities with respect thereto, but excluding, in the case of each
Lender, taxes imposed on or measured by the net income or overall gross receipts
of such Lender.
"Term Loan" shall mean the aggregate of the Term Loan Advances made by
Lenders to Borrowers pursuant to SECTION 2.3 of this Agreement.
"Term Loan Advance" shall mean an advance made by a Lender as part of
the Term Loan on the Closing Date and thereafter means each Lender's portion of
the Term Loan.
"Term Loan Commitment" shall mean, at any date for any Lender, the
obligation of such Lender to make Term Loan Advances pursuant to the terms and
conditions of this Agreement, which shall not exceed the principal amount set
forth opposite such Lender's name under the heading "Term Loan Commitment" on
the signature pages hereof or the signature page of any Assignment and
Acceptance by which it became a Lender, as modified from time to time pursuant
to the terms of this Agreement or to give effect to any applicable Assignment
and Acceptance; and the term "Term Loan Commitments" means the aggregate
principal amount of the Term Loan Commitments of all Lenders, the maximum amount
of which is $26,000,000.
"Term Note" shall mean, for each Lender, a Term Note dated of even date
herewith by Borrowers in favor of such Lender in the original principal amount
of such Lender's Term Loan Commitment, to be in the form annexed hereto as
EXHIBIT B.
"Trademark Security Agreement" shall mean each Trademark Security
Agreement to be executed by a Borrower in favor of Collateral Agent on or about
the Closing Date and by which such Borrower shall assign to Collateral Agent,
for the benefit of Agents and for the Pro Rata benefit of Lenders, as security
for the Obligations, all of such Borrower's right, title and interest in and to
all of its trademarks.
"Transferee" shall have the meaning set forth in SECTION 12.3(C) of
this Agreement.
"Type" shall mean any type of a Loan determined with respect to the
interest option applicable thereto, which shall be either a LIBOR Rate Loan or a
Base Rate Loan.
"UCC" shall mean the Uniform Commercial Code (or any successor statute)
as adopted and in force in the State of Georgia or, when the laws of any other
state govern the method or manner of the perfection or enforcement of any
security interest in any of the Collateral, the Uniform Commercial Code (or any
successor statute) of such state.
"UKIC" shall mean UKIC, Inc., a Delaware corporation.
"Upstream Payments" shall mean a distribution of cash or other Property
by a Subsidiary to a Borrower.
"Value" shall mean, as determined by Agents in good faith, with respect
to Inventory, the lower of (a) cost computed on a first-in-first-out basis in
accordance with GAAP or (b) market value.
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SECTION 2. CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Subject to and upon the terms and conditions herein, each
Lender agrees, severally to the extent of its Revolving Commitment and not
jointly with the other Lenders, to make Revolving Loans to Borrowers from time
to time in amounts requested by Borrowers up to the amount equal to the sum of:
(i) eighty-five percent (85%) of the Net Amount of Eligible
Accounts plus ninety percent (90%) of Eligible Factored
Amounts, plus
(ii) the lesser of:
(A) the sum of:
(I) seventy percent (70%) of the Value of
Eligible Cotton Inventory, plus
(II) sixty percent (60%) of the Value of Eligible
Raw Materials during the period from the
Closing Date to the sooner to occur of: (x)
February 15, 2000 or (y) Borrowers' receipt
of their federal tax refund claim for prior
fiscal years of Borrowers and fifty percent
(50%) of the Value of Eligible Raw Materials
at all times thereafter, plus
(III) sixty percent (60%) of the Value of Eligible
Finished Goods during the period from the
Closing Date to the sooner to occur of: (x)
February 15, 2000 or (y) Borrowers' receipt
of their federal tax refund claim for prior
fiscal years of Borrowers and fifty percent
(50%) of the Value of Eligible Finished
Goods at all times thereafter, plus
(IV) the lesser of: (x) fifty percent (50%) of
the Value of Eligible Work-In-Process
consisting of manufactured yarn, greige
cloth Inventory and dyed greige cloth at
Borrowers' Dyersburg, Tennessee location and
greige cloth Inventory at Alamac's location
plus twenty-five percent (25%) of the Value
of Eligible Alamac Stock-In-Process and
Eligible Finishing Department Inventory or
(y) $8,000,000, or
(B) $25,000,000, less
(iii) any Availability Reserves that are established by Agents.
(b) Agents may, in their discretion from time to time (and shall
at the direction of the Required Lenders) upon not less than five (5) days prior
notice to Borrowers (unless an Event of Default exists, in which event no notice
need be given), (i) reduce the lending formula with respect to Eligible Accounts
and Eligible Factored Amounts to the extent that Agents determine (or Required
Lenders determine) in good faith that: (A) the dilution with respect to the
Accounts for any period (based on the ratio of (1) the aggregate amount of
reductions in Accounts other than as a result of payments in cash to (2) the
aggregate amount of total sales) has increased in any material respect or may be
reasonably anticipated to increase in any material respect above historical
levels, or (B) the general creditworthiness of account debtors has declined or
(ii) reduce the lending formula(s) with respect to Eligible Inventory to the
extent that Agents determine that: (A) the number of days of the turnover of the
Inventory for any period has changed in any material respect from historical
levels or (B) the liquidation value of the Eligible Inventory, or any category
thereof, has decreased, or (C) the nature and quality of the Inventory has
deteriorated. In determining whether to reduce the lending formula(s), Agents
may
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consider events, conditions, contingencies or risks which are also considered in
determining Eligible Accounts, Eligible Inventory or in establishing
Availability Reserves.
(c) Except in Lenders' discretion, the aggregate amount of the
Revolving Loans and the Letter of Credit Accommodations outstanding at any time
shall not exceed the Maximum Revolving Credit. In the event that the outstanding
amount of any component of the Loans, or the aggregate amount of the outstanding
Loans and Letter of Credit Accommodations, exceed the amounts available under
the lending formulas, the sublimits for Letter of Credit Accommodations set
forth in SECTION 2.2(D) or the Maximum Revolving Credit, as applicable, such
event shall not limit, waive or otherwise affect any rights of Agents or Lenders
in that circumstance or on any future occasions and Borrowers shall, upon demand
by Collateral Agent, which may be made at any time or from time to time,
immediately repay to Collateral Agent, for the Pro Rata benefit of Lenders, the
entire amount of any such excess(es) for which payment is demanded.
(d) For purposes only of applying the sublimit on Revolving Loans
based on Eligible Inventory pursuant to SECTION 2.1(A)(II)(B), Collateral Agent
may treat the then undrawn amounts of outstanding Letter of Credit
Accommodations for the purpose of purchasing Eligible Inventory as Revolving
Loans to the extent Agents are in effect basing the issuance of the Letter of
Credit Accommodations on the Value of the Eligible Inventory being purchased
with such Letter of Credit Accommodations. In determining the actual amounts of
such Letter of Credit Accommodations to be so treated for purposes of the
sublimit, the outstanding Revolving Loans and Availability Reserves shall be
attributed first to any components of the lending formulas in SECTION 2.1(A)
that are not subject to such sublimit, before being attributed to the components
of the lending formulas subject to such sublimit.
(e) Borrowers shall have the right to elect once during the term
of this Agreement to permanently reduce the amount of the Revolving Commitments,
on a Pro Rata basis, in an amount not to exceed $10,000,000 in the aggregate,
upon written notice to Agents of such reduction, which notice shall specify the
amount of such reduction, shall be irrevocable once given, shall be given at
least five (5) Business Days prior to the end of the month and shall be
effective only upon Agents' receipt thereof. Collateral Agent shall promptly
transmit such notice to Administrative Agent and each Lender. The effective date
of any voluntary reduction of the Revolving Commitments shall be the first day
of a month following the month in which such notice is received by Collateral
Agent. If on the effective date of any such reduction in the Revolving
Commitments and after giving effect thereto an Out-of-Formula Condition exists,
then the provisions of SECTION 3.1(G) hereof shall apply, except that such
repayment shall be due immediately upon such effective date without further
notice to or demand upon Borrowers. The Revolving Commitments once reduced may
not be reinstated without the consent of all Lenders.
(f) The outstanding principal amounts with respect to the
Revolving Loans shall be repaid as follows:
(i) Any portion of the Revolving Loans consisting of the
principal amount of Base Rate Loans shall be paid by Borrowers to
Collateral Agent, for the Pro Rata benefit of Lenders (or, in the case
of Settlement Loans, for the sole benefit of BankBoston) unless timely
converted to a LIBOR Rate Loan in accordance with this Agreement,
immediately upon (a) each receipt by Agents, any Lender or Borrowers of
any proceeds of any of the Accounts or Inventory, to the extent of such
proceeds, (b) the Commitment Termination Date, and (c) in the case of
Settlement Loans, the earlier of BankBoston's demand for payment or on
each Settlement Date with respect to all Settlement Loans outstanding
on such date.
(ii) Any portion of the Revolving Loans consisting of
the principal amount of LIBOR Rate Loans shall be paid by Borrowers to
Collateral Agent, for the Pro Rata benefit of Lenders, unless converted
to a Base Rate Loan or continued as a LIBOR Rate Loan in accordance
with the terms of this Agreement, immediately upon (a) the last day of
the Interest Period applicable thereto and (b) the
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Commitment Termination Date. In no event shall Borrowers be authorized
to make a voluntary prepayment with respect to any Revolving Loan
outstanding as a LIBOR Rate Loan prior to the last day of the Interest
Period applicable thereto unless (x) otherwise agreed in writing by
Agents or Borrowers are otherwise expressly authorized or required by
any other provision of this Agreement to pay any LIBOR Rate Loan
outstanding on a date other than the last day of the Interest Period
applicable thereto, and (y) Borrowers pays to Collateral Agent, for the
Pro Rata benefit of Lenders, concurrently with any prepayment of a
LIBOR Rate Loan, any LIBOR breakage costs as a consequence of such
prepayment.
(g) Borrowers, Agents and Lenders further agree that, if either
Agent shall determine, in its sole discretion, that a material adverse change in
the financial condition of any Borrower has occurred, or if a Default or Event
of Default exists, either Agent shall have the right (exercisable at such time
or times as such Agent deems appropriate) to require that separate borrowing
base calculations (as set forth in SECTION 2.1(A) hereof) be made for each
Borrower (as set forth in SECTION 2.1(A)), as well as the right to limit the use
of proceeds of the Loans by each Borrower to an amount equal to such Borrower's
borrowing base.
2.2 LETTER OF CREDIT ACCOMMODATIONS.
(a) Subject to and upon the terms and conditions contained
herein, at the request of any Borrower, Congress agrees to procure Letter of
Credit Accommodations for the account of Borrowers containing terms and
conditions acceptable to Congress and the issuer thereof. Any payments made by
Congress to any issuer thereof and/or related parties in connection with the
Letter of Credit Accommodations shall constitute additional Revolving Loans to
Borrowers pursuant to this SECTION 2.
(b) In addition to any charges, fees or expenses charged by any
issuer in connection with the Letter of Credit Accommodations, Borrowers shall
jointly and severally pay to Congress the following letter of credit fees:
(i) for each standby or direct-pay Letter of Credit, a fee
equal to the Applicable Margin for Revolving Loans constituting LIBOR
Rate Loans on such date multiplied by the aggregate face amount of such
Letter of Credit, which fee shall be due and payable on the first
Business Day of each month, and all of which fees and charges shall be
deemed fully earned upon issuance, renewal or extension (as the case
may be) of each such Letter of Credit, and shall not be subject to
rebate or proration upon the termination of this Agreement for any
reason; and
(ii) for each documentary Letter of Credit, a fee equal to
1.50% per annum of the face amount of each such Letter of Credit,
payable upon the issuance of such Letter of Credit, which fees and
charges shall be fully earned upon issuance, renewal or extension (as
the case may be) of each such Letter of Credit, shall be due and
payable on the first Business Day of each month, and shall not be
subject to rebate or proration upon the termination of this Agreement
for any reason; and
(iii)for each Letter of Credit, a fronting fee of 0.125% of
the face amount of each Letter of Credit, payable to the issuing bank
of such Letter of Credit;
except that, Borrowers shall jointly and severally pay to Congress such letter
of credit fees, at Congress' option, without notice, at a rate equal to two
percent (2%) per annum in excess of the rates set forth above for: (A) the
period from and after the date of termination or non-renewal hereof until Agents
and Lenders have received full and final payment of all Obligations
(notwithstanding entry of a judgment against Borrowers) and (B) the period from
and after the date of the occurrence of an Event of Default for so long as such
Event of Default is continuing as determined by Agents. Such Letter of Credit
fees shall be calculated on the basis of a three hundred sixty
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(360) day year and actual days elapsed and the obligation of Borrowers to pay
such fees shall survive the termination or non-renewal of this Agreement or the
Commitments.
(c) No Letter of Credit Accommodations shall be available unless
on the date of the proposed issuance of any Letter of Credit Accommodations, the
Revolving Loans available to Borrowers (subject to the Maximum Revolving Credit
and any Availability Reserves) are equal to or greater than: (i) if the proposed
Letter of Credit Accommodation is for the purpose of purchasing Eligible
Inventory, the sum of (A) the percentage equal to one hundred (100%) percent
minus the then applicable percentage set forth in SECTION 2.1(A)(II)(A) above of
the Value of such Eligible Inventory, plus (B) freight, Taxes, duty and other
amounts which Agents estimate must be paid in connection with such Inventory
upon arrival and for delivery to one of Borrowers' locations for Eligible
Inventory within the United States of America and (ii) if the proposed Letter of
Credit Accommodation is for any other purpose, an amount equal to one hundred
(100%) percent of the face amount thereof and all other commitments and
obligations made or incurred by Lenders with respect thereto. Effective on the
issuance of each Letter of Credit Accommodation, an Availability Reserve shall
be established in the applicable amount set forth in SECTION 2.2(C)(I) or
SECTION 2.2(C)(II).
(d) Except in Lenders' discretion, the amount of all outstanding
Letter of Credit Accommodations and all other commitments and obligations made
or incurred by any Lender in connection therewith shall not at any time exceed
$16,000,000. Any payment made by Congress in connection with any Letter of
Credit Accommodation shall be repaid by Borrowers on Congress' demand. At any
time an Event of Default exists or has occurred and is continuing, upon
Collateral Agent's or Congress' request, Borrowers will either furnish cash
collateral to secure the reimbursement obligations to the issuer in connection
with any Letter of Credit Accommodations or furnish cash collateral to
Collateral Agent for the Letter of Credit Accommodations, and in either case,
the Revolving Loans otherwise available to Borrowers shall not be reduced as
provided in SECTION 2.2(C) to the extent of such cash collateral.
(e) Immediately upon the creation of any Letter of Credit
Accommodation, each Lender (other than Congress) shall be deemed to have
irrevocably and unconditionally purchased and received from Congress, without
recourse or warranty, an undivided interest and participation equal to the Pro
Rata share of such Lender (a "Participating Lender") in all Letter of Credit
Accommodations and any security therefor or guaranty pertaining thereto, but in
no event greater than an amount which, when added to such Lender's Pro Rata
share of all Revolving Loans and Letter of Credit Accommodations then
outstanding, exceeds such Lender's Revolving Commitment. If Congress makes any
payment with respect to a Letter of Credit Accommodation, and Borrowers do not
repay or cause to be repay the amount of such payment ON DEMAND, Congress shall
promptly notify Collateral Agent, which shall promptly notify each Participating
Lender, of such payment and each Participating Lender shall promptly (and in any
event within one (1) Business Day after its receipt of notice from Collateral
Agent) and unconditionally pay to Collateral Agent, for the account of Congress,
in immediately available funds, the amount of such Participating Lender's Pro
Rata share of such payment, and Collateral Agent shall promptly pay such amounts
to Congress. If a Participating Lender does not make its Pro Rata share of the
amount of such payment available to Collateral Agent on a timely basis as herein
provided, such Lender agrees to pay to Collateral Agent for the account of
Congress, forthwith ON DEMAND, such amount together with interest thereon at the
Federal Funds Rate until paid. The failure of any Participating Lender to make
available to Collateral Agent for the account of Congress such Participating
Lender's Pro Rata share of the Letter of Credit Accommodations and shall not
relieve any other Participating Lender of its obligation hereunder to make
available to Collateral Agent its Pro Rata share of the Letter of Credit
Accommodations, but no Participating Lender shall be responsible for the failure
of any other Participating Lender to make available to Collateral Agent its Pro
Rata share of the Letter of Credit Accommodations on the date such payment is to
be made. Whenever Congress receives a payment on account of the Letter of Credit
Accommodations, including any interest thereon, as to which Collateral Agent has
previously received payments from any Lender for the account of Congress,
Congress shall promptly pay to each Participating Lender, which has funded its
participating interest therein, in immediately available funds, an amount equal
to such Participating Lender's Pro Rata share thereof. The
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obligation of each Participating Lender to make payments to Collateral Agent for
the account of Congress in connection with Congress' payment under or with
respect to a Letter of Credit Accommodation shall be absolute, unconditional and
irrevocable, not subject to any counterclaim, setoff, qualification or exception
whatsoever (other than for Congress' gross negligence or wilful misconduct), and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances and irrespective of whether or not Borrowers may assert
or have any claim for any lack of validity or unenforceability of this
Agreement, the existence of any Default or Event of Default, or the existence of
any setoff or defense any Obligor may have with respect to any of the
Obligations.
(f) Borrowers shall jointly and severally indemnify, defend and
hold Agents and Lenders harmless from and against any and all losses, claims,
damages, liabilities, costs and expenses which Agents or Lenders may suffer or
incur in connection with any Letter of Credit Accommodations and any documents,
drafts or acceptances relating thereto, including any losses, claims, damages,
liabilities, costs and expenses due to any action taken by any issuer or
correspondent with respect to any Letter of Credit Accommodation. Borrowers
assume all risks with respect to the acts or omissions of the drawer under or
beneficiary of any Letter of Credit Accommodation and for such purposes the
drawer or beneficiary shall be deemed Borrowers' agent. Borrowers assume all
risks for, and agree to pay, all Taxes, duties and levies relating to any goods
subject to any Letter of Credit Accommodations or any documents, drafts or
acceptances thereunder. Borrowers hereby release and hold Agents and Lenders
harmless from and against any acts, waivers, errors, delays or omissions,
whether caused by Borrowers, by any issuer or correspondent or otherwise with
respect to or relating to any Letter of Credit Accommodation. The provisions of
this SECTION 2.2(E) shall survive the payment of Obligations and the termination
or non-renewal of this Agreement.
(g) Nothing contained herein shall be deemed or construed to
grant Borrowers any right or authority to pledge the credit of either Agent or
any Lender in any manner. Congress shall have no liability of any kind with
respect to any Letter of Credit Accommodation provided by an issuer other than
Congress unless Congress has duly executed and delivered to such issuer the
application or a guarantee or indemnification in writing with respect to such
Letter of Credit Accommodation. Borrowers shall be bound by any interpretation
made in good faith by Congress, or any other issuer or correspondent under or in
connection with any Letter of Credit Accommodation or any documents, drafts or
acceptances thereunder, notwithstanding that such interpretation may be
inconsistent with any instructions of Borrowers. Congress shall have the sole
and exclusive right and authority to, and Borrowers shall not: (i) at any time
an Event of Default exists or has occurred and is continuing, (A) approve or
resolve any questions of non-compliance of documents, (B) give any instructions
as to acceptance or rejection of any documents or goods or (C) execute any and
all applications for steamship or airway guaranties, indemnities or delivery
orders, and (ii) at all times, (A) grant any extensions of the maturity of, time
of payment for, or time of presentation of, any drafts, acceptances, or
documents, and (B) agree to any amendments, renewals, extensions, modifications,
changes or cancellations of any of the terms or conditions of any of the
applications, Letter of Credit Accommodations, or documents, drafts or
acceptances thereunder or any letters of credit included in the Collateral.
Congress may take such actions either in its own name or in Borrowers' names.
(h) Any rights, remedies, duties or obligations granted or
undertaken by Borrowers to any issuer or correspondent in any application for
any Letter of Credit Accommodation, or any other agreement in favor of any
issuer or correspondent relating to any Letter of Credit Accommodation, shall be
deemed to have been granted or undertaken by Borrowers to Congress. Any duties
or obligations undertaken by Congress to any issuer or correspondent in any
application for any Letter of Credit Accommodation, or any other agreement by
Congress in favor of any issuer or correspondent relating to any Letter of
Credit Accommodation, shall be deemed to have been undertaken by Borrowers to
Congress and to apply in all respects to Borrowers.
(i) Neither Congress nor any of its officers, directors,
employees, or agents shall be liable to any Participating Lender for any action
taken or omitted to be taken under or in connection with any Letter of Credit
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Accommodations except as a result of actual gross negligence or wilful
misconduct on the part of Congress. Congress does not assume any responsibility
for any failure or delay in performance or breach by any Borrower or any other
Person of any of its obligations under any document or agreement evidencing or
relating to any of the Letter of Credit Accommodations. Congress does not make
to Participating Lenders any express or implied warranty, representation or
guaranty with respect to the Collateral, or any instruments or agreements
evidencing any of the Letter of Credit Accommodations or any Obligor. Congress
shall not be responsible to any Participating Lender for any recitals,
statements, information, representations or warranties contained in, or for the
execution, validity, genuineness, effectiveness or enforceability of any
document or agreement evidencing or relating to any of the Letter of Credit
Accommodations; the validity, genuineness, enforceability, collectability, value
or sufficiency of any of the Collateral or the perfection of Lien therein; or
the assets, liabilities, financial condition, results of operations, business,
creditworthiness or legal status of any Obligor. In connection with its
administration of and enforcement of rights or remedies under any of the
documents or agreements evidencing or relating to any of the Letter of Credit
Accommodations, Congress shall be entitled at, and shall be fully protected in
acting upon any certification, notice or other communication in whatever form
believed by Congress, in good faith, to be genuine and correct and to have been
signed or sent or made by a proper Person.
2.3 TERM LOAN. Subject to and upon the terms and conditions herein set
forth, each Lender severally agrees to make to Borrowers a Term Loan Advance in
amount not to exceed such Lender's Term Loan Commitment. The Term Loan shall be
comprised of Term Loan Advances in the aggregate principal amount of $26,000,000
and shall be funded by Lenders on the Closing Date, concurrently with Lenders'
funding of their initial Revolving Loans. Each Term Loan Advance shall be
evidenced by a Term Note in the principal amount of the Term Loan Commitment of
the holder thereof, shall be repaid, together with interest and other amounts,
in accordance with this Agreement, the Term Notes and the other Financing
Agreements and shall be secured by all of the Collateral. The Term Loan shall be
repaid in monthly installments of $425,000 each, commencing on February 1, 2000,
and continuing on the first day of each month thereafter, with a final payment
due upon the Commitment Termination Date. The Term Loan Commitment of each
Lender shall expire on the funding by such Lender of its Term Loan Advance.
Borrowers shall not be entitled to reborrow any amounts repaid with respect to
the Term Loan Advances. All of the Term Loan Advances shall initially be Base
Rate Loans. Each Lender shall make its Term Loan Advance available to Collateral
Agent in immediately available funds, to such account of Collateral Agent as
Collateral Agent may designate, not later than 12:00 noon on the Closing Date.
2.4 AVAILABILITY RESERVES. All Revolving Loans otherwise available to
Borrowers pursuant to the lending formulas and subject to the Maximum Revolving
Credit and other applicable limits hereunder shall be subject to Agents'
continuing right to establish and revise Availability Reserves.
2.5 BORROWERS' REPRESENTATIVE. Each Borrower hereby irrevocably
appoints Dyersburg, and Dyersburg agrees to act under this Agreement, as the
agent and representative of itself and each other Borrower for all purposes
under this Agreement, including requesting Borrowings, selecting whether any
Loan or portion thereof is to bear interest as a Base Rate Loan or a LIBOR Rate
Loan, and receiving account statements and other notices and communications to
Borrowers (or any of them) from Agents. Agents may rely, and shall be fully
protected in relying, on any Notice of Borrowing, Notice of
Conversion/Continuation, disbursement instructions, reports, information or any
other notice or communication made or given by Dyersburg, whether in its own
name, on behalf of any Borrower or on behalf of "the Borrowers," and neither
Agents nor Lenders shall have any obligation to make any inquiry or request any
confirmation from or on behalf of any other Borrower as to the binding effect on
such Borrower of any such request, instruction, report, information, notice or
communication, nor shall the joint and several character of Borrowers' liability
for any of the Loans or other Obligations be affected, provided that the
provisions of this SECTION 2.5 shall not be construed so as to preclude any
Borrower from directly requesting Borrowings or taking other actions permitted
to be taken by "a Borrower" hereunder.
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Lenders intend to maintain a single Loan Account in the name of "Dyersburg
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 such Borrower's liability for the Revolving Loans.
SECTION 3. INTEREST AND FEES
3.1 INTEREST.
(a) Except as otherwise provided in SECTION 3.1(G) hereof,
Borrowers shall jointly and severally pay to Lenders interest on the outstanding
principal amount of the non-contingent Obligations at the Interest Rate.
(b) Interest shall be payable by Borrowers to Collateral Agent
(for the benefit of Lenders) monthly in arrears not later than the first day of
each calendar month and shall be calculated on the basis of a three hundred
sixty (360) day year and actual days elapsed. The interest rate on
non-contingent Obligations (other than LIBOR Rate Loans) shall increase or
decrease by an amount equal to each increase or decrease in the Base Rate
effective on the first day of the month after any change in such Base Rate is
announced based on the Base Rate in effect on the last day of the month in which
any such change occurs. In no event shall charges constituting interest payable
by Borrowers to Lenders exceed the Maximum Rate. On the date hereof, the Base
Rate is eight percent (8%); therefore, the rate of interest in effect hereunder
on the date hereof for Revolving Loans consisting of Base Rate Loans outstanding
on the date of this Agreement, expressed in simple interest terms, is eight and
three-quarters percent (8.75%) per annum, and the rate of interest in effect
hereunder on the date hereof for all or any portion of the Term Loan consisting
of Base Rate Loans outstanding on the date of this Agreement, expressed in
simple interest terms, is nine and one quarter percent (9.25%) per annum.
(c) Borrowers may on any Business Day, subject to the giving of a
proper Notice of Conversion/Continuation as hereinafter described, elect (i) to
continue all or any part of a LIBOR Rate Loan by selecting a new Interest Period
therefor, to commence on the last day of the immediately preceding Interest
Period, or (ii) to convert all or any part of a Loan of one Type into a Loan of
another Type; provided, however, that no outstanding Loans may be converted into
or continued as LIBOR Rate Loans when any Default or Event of Default exists.
Any conversion of a LIBOR Rate Loan into a Base Rate Loan shall be made on the
last day of the Interest Period for such LIBOR Rate Loan. Any conversion or
continuation made with respect to less than the entire outstanding balance of
the Revolving Loans or the Term Loan Advances, must be allocated among Lenders
on a Pro Rata basis, and the Interest Period for Loans converted into or
continued as LIBOR Rate Loans shall be coterminous for each Lender.
(d) Whenever Borrowers desire to convert or continue Loans under
SECTION 3.1(C), Borrowers shall give Collateral Agent written notice (or
telephonic notice promptly confirmed in writing) substantially in the form of
EXHIBIT D, signed by an authorized officer of Borrowers or Borrowing Agent at
least two (2) Business Days before the requested conversion date, in the case of
a conversion into Base Rate Loans, and at least two (2) Business Days before the
requested conversion or continuation date, in the case of a conversion into or
continuation of LIBOR Rate Loans. Promptly after receipt of a Notice of
Conversion/Continuation, Collateral Agent shall notify each Lender in writing of
the proposed conversion or continuation. Each such Notice of
Conversion/Continuation shall be irrevocable and shall specify the aggregate
principal amount of the Loans to be converted or continued, the date of such
conversion or continuation (which shall be a Business Day) and whether the Loans
are being converted into or continued as LIBOR Rate Loans (and, if so, the
duration of the Interest Period to be applicable thereto) or Base Rate Loans.
If, upon the expiration of any Interest Period in respect of any LIBOR Rate
Loans, Borrowers shall have failed to deliver the Notice of
Conversion/Continuation, Borrowers shall be deemed to have elected to convert
such LIBOR Rate Loans to Base Rate Loans.
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(e) In connection with the making or continuation of, or
conversion into, each Borrowing of LIBOR Rate Loans, Borrowers shall select an
interest period (each an "Interest Period") to be applicable to such LIBOR Rate
Loan, which interest period shall commence on the date such LIBOR Rate Loan is
made and shall end on a numerically corresponding day in the first, second or
third month thereafter; provided, however, that:
(i) the initial Interest Period for a LIBOR Rate Loan
shall commence on the date of such Borrowing (including the date of any
conversion from a Loan of another Type) and each Interest Period
occurring thereafter in respect of such Revolving Loan shall commence
on the date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on
a day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day, provided that if any Interest Period
in respect of LIBOR Rate Loans would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(iii) any Interest Period that begins on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period shall expire on the last Business
Day of such calendar month;
(iv) no Interest Period with respect to any portion of
principal of a Loan shall extend beyond a date on which Borrowers are
required to make a scheduled payment of such portion of principal;
(v) no Interest Period shall extend beyond the last
day of the Original Term or any effective Renewal Term; and
(vi) there shall be no more than four (4) Interest
Periods in effect at any one time.
(f) If Collateral Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all parties)
that on any date for determining the Adjusted LIBOR Rate for any Interest
Period, by reason of any changes arising after the date of this Agreement
affecting the London interbank market or any Lender's or Reference Bank's
position in such market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Adjusted LIBOR Rate, then, and in any such event, Collateral Agent shall
forthwith give notice (by telephone confirmed in writing) to Borrowers of such
determination. Until Collateral Agent notifies Borrowers that the circumstances
giving rise to the suspension described herein no longer exist, the obligation
of Lenders to make LIBOR Rate Loans shall be suspended, and such affected Loans
then outstanding shall, at the end of the then applicable Interest Period or at
such earlier time as may be required by Applicable Law, bear the same interest
as Base Rate Loans.
(g) Interest shall accrue at the Default Rate (i) with respect to
the principal amount of any portion of the Obligations (and, to the extent
permitted by Applicable Law, all past due interest) that is not paid on the due
date thereof (whether due at stated maturity, ON DEMAND, upon acceleration or
otherwise) until paid in full; (ii) with respect to the principal amount of all
of the Obligations (and, to the extent permitted by Applicable Law, all past due
interest) upon the earlier to occur of (x) Borrowers' receipt of notice from
Collateral Agent of the Required Lenders' election to charge the Default Rate
based upon the existence of any Event of Default (which notice Collateral Agent
shall send only with the consent or at the direction of the Required Lenders),
whether or
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not acceleration or demand for payment of the Obligations has been made, or (y)
the commencement by or against any Borrower of an insolvency proceeding; and
(iii) with respect to the principal amount of any Out-of-Formula Loans, whether
or not demand for payment thereof has been made by Collateral Agent. To the
fullest extent permitted by Applicable Law, the Default Rate shall apply and
accrue on any judgment entered with respect to any of the Obligations and to the
unpaid principal amount of the Obligations during any insolvency proceeding of
any Borrower. Each Borrower acknowledges that the cost and expense to Agents and
each Lender attendant upon the occurrence of an Event of Default are difficult
to ascertain or estimate and that the Default Rate is a fair and reasonable
estimate to compensate Agents and Lenders for such added cost and expense.
3.2 ORIGINATION FEE. Borrowers shall pay to Collateral Agent (for the
Pro Rata benefit of Lenders) an origination fee in the amount of $825,000, which
shall be fully earned as of and payable on the date hereof. The parties
acknowledge that $750,000 of such fee has been previously paid by Borrowers to
Collateral Agent, for the Pro Rata benefit of BankBoston and Congress. Such
origination fee shall not be subject to the rebate upon any prepayment of the
Obligations except to the extent required by SECTION 3.8 of this Agreement or
Applicable Law. Such origination fee shall compensate Lenders for the costs
associated with the origination, structuring, processing, approving and closing
of the transactions contemplated in this Agreement, exclusive of any expenses
for which Borrowers has agreed to reimburse Lenders pursuant to any other
provision of this Agreement or the other Financing Agreements (such as
attorneys' fees).
3.3 SYNDICATION FEE. Borrowers shall pay to BankBoston and Congress a
syndication fee on the Closing Date in the amount set forth in the Syndication
Expenses Letter.
3.4 COLLATERAL AGENT FEE. Borrowers shall pay to Collateral Agent for
its benefit a monthly fee in an amount equal to $4,000 per month for each month
(or portion thereof) that this Agreement is in effect and for so long thereafter
as any of the Obligations are outstanding, which fee shall be fully earned as of
and payable in advance on the first day of each month.
3.5 ADMINISTRATIVE AGENT FEE. Borrowers shall pay to Administrative
Agent for its benefit a monthly fee in an amount equal to $1,500 per month in
respect of Administrative Agent's services for each month (or part thereof) this
Agreement is in effect and for so long thereafter as any of the Obligations are
outstanding, which fee shall be fully earned as of and payable in advance on the
date hereof and on the first day of each month hereafter.
3.6 UNUSED LINE FEE. Borrowers shall pay to Collateral Agent (for the
Pro Rata benefit of Lenders) each month an unused line fee equal to (i) 0.375%
multiplied by (ii) the amount by which the Revolving Commitments exceed the
average daily principal balance of the outstanding Revolving Loans and Letter of
Credit Accommodations during the immediately preceding month (or part thereof)
while this Agreement is in effect and for so long thereafter as any of the
Obligations are outstanding, which fee shall be payable on the first day of each
month, in arrears; provided, however, that commencing October 1, 2000, if there
exists no Default or Event of Default, then the unused line fee that is payable
by Borrowers shall be equal to (i) the applicable percentage set forth below
multiplied by (ii) the amount by which the Revolving Commitments exceed the
average daily principal balance of the outstanding Revolving Loans and Letter of
Credit Accommodations during the immediately preceding month (or part thereof)
while this Agreement is in effect and for so long thereafter as any of the
Obligations are outstanding, which fee shall be payable on the first day of each
month, in arrears.
(a) If the ratio of Consolidated Funded Debt to Consolidated
EBITDA is greater than or equal to 6.5 to 1.0, then the applicable
percentage shall be 0.50%.
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(b) If the ratio of Consolidated Funded Debt to Consolidated
EBITDA is less than 6.5 to 1.0, then the applicable percentage shall be
0.375%.
The foregoing ratios shall be calculated as of the last day of the
month preceding the month in which such payment is to be made for the preceding
four (4) quarters.
3.7 CHANGES IN LAWS AND INCREASED COSTS OF LOANS.
(a) Notwithstanding anything to the contrary contained herein,
all LIBOR Rate Loans shall, upon notice by Collateral Agent to Borrowers,
convert to Base Rate Loans in the event that (i) any change in Applicable Law or
regulation (or the interpretation or administration thereof) shall either (A)
make it unlawful for Lenders' Reference Bank or any Participant to make or
maintain LIBOR Rate Loans or to comply with the terms hereof in connection with
the LIBOR Rate Loans, or (B) shall result in the increase in the costs to
Lenders, Reference Bank or any Participant of making or maintaining any LIBOR
Rate Loans by an amount deemed by Lenders to be material, or (C) reduce the
amounts received or receivable by Lenders in respect thereof, by an amount
deemed by any Lender to be material or (ii) the cost to Lender, Reference Bank
or any Participant of making or maintaining any LIBOR Rate Loans shall otherwise
increase by an amount deemed by Lenders to be material. Borrowers shall pay to
Collateral Agent, upon demand by Collateral Agent (or Collateral Agent may, at
its option, charge any loan account of Borrowers) any amounts required to
compensate Lenders, the Reference Bank or any Participant for any loss
(including loss of anticipated profits), cost or expense incurred by such Person
as a result of the foregoing within one hundred twenty (120) days prior to
Borrowers' receipt of notice from Collateral Agent of such cost or expense,
including any such loss, cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Person to make or
maintain the LIBOR Rate Loans or any portion thereof. A certificate of
Collateral Agent setting forth the basis for the determination of such amount
necessary to compensate Lenders as aforesaid shall be delivered to Borrowers and
shall be conclusive, absent manifest error.
(b) If any payments or prepayments in respect of the LIBOR Rate
Loans are received by Collateral Agent other than on the last day of the
applicable Interest Period (whether pursuant to acceleration, upon maturity or
otherwise), including any payments pursuant to the application of collections
under SECTION 6.3 or any other payments made with the proceeds of Collateral,
Borrowers shall pay to Collateral Agent, for the Pro Rata benefit of Lenders,
upon demand by Collateral Agent (or Collateral Agent may, at its option, charge
any loan account of Borrowers) any amounts required to compensate Lenders, the
Reference Bank or any Participant with Lenders for any additional loss
(including loss of anticipated profits), cost or expense incurred by such Person
as a result of such prepayment or payment, including any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Person to make or maintain such LIBOR Rate Loans or any portion
thereof.
3.8 MAXIMUM INTEREST.
(a) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Financing Agreements, in no contingency or event
whatsoever shall the aggregate of all amounts that are contracted for, charged
or received pursuant to the terms of this Agreement or any of the other
Financing Agreements and that are deemed interest under Applicable Law exceed
the Maximum Rate. No agreements, conditions, provisions or stipulations
contained in this Agreement or any of the other Financing Agreements, or any
Event of Default, or the exercise by Agents or Lenders of the right to
accelerate the payment or the maturity of all or any portion of the Obligations,
or the
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exercise of any option whatsoever contained in this Agreement or any of the
other Financing Agreements, or the prepayment by Borrowers of any of the
Obligations, or the occurrence of any event or contingency whatsoever, shall
entitle Agents or Lenders to contract for, charge or receive in any event,
interest or any charges, amounts, premiums or fees deemed interest by Applicable
Law (such interest, charges, amounts, premiums and fees referred to herein
collectively as "Interest") in excess of the Maximum Rate. In no event shall
Borrowers be obligated to pay Interest in amounts which exceed the Maximum Rate.
All agreements, conditions or stipulations, if any, which may in any event or
contingency whatsoever operate to bind, obligate or compel Borrowers to pay
Interest in amounts which exceed the Maximum Rate shall be without binding force
or effect, at law or in equity, to the extent of the excess of Interest over
such Maximum Rate.
(b) Furthermore, notwithstanding anything to the contrary
contained in this Agreement or any of the other Financing Agreements, in no
contingency or event whatsoever shall the aggregate of all amounts that are
contracted for, charged or received pursuant to the terms of this Agreement or
any of the other Financing Agreements and that are deemed loan charges under
Applicable Law exceed the maximum amounts collectible under Applicable Law. No
agreements, conditions, provision or stipulations contained in this Agreement or
any of the other Financing Agreements, or any Event of Default, or the exercise
by Agents or Lenders of the right to accelerate the payment or the maturity of
all or any portion of the Obligations, or the exercise of any option whatsoever
contained in this Agreement, or any of the other Financing Agreements, or the
prepayment by Borrowers of any of the Obligations, or the occurrence of any
event or contingency whatsoever, shall entitle Agents or Lenders to contract
for, charge or receive in any event, any loan charges in excess of the maximum
amounts collectible under Applicable Law. In no event shall Borrowers be
obligated to pay loan charges in amounts which exceed the maximum amounts
collectible under Applicable Law. All agreements, conditions or stipulations, if
any, which may in any event or contingency whatsoever operate to bind, obligate
or compel Borrowers to pay loan charges in amounts which exceed the maximum
amount collectible under Applicable Law shall be without binding force or
effect, at law or in equity, to the extent of the excess of such loan charges
over the maximum amounts collectible under Applicable Law.
(c) In the event any Interest is charged or received in excess of
the Maximum Rate or any loan charges are collected or received in excess of the
maximum amounts collectible under Applicable Law (such excess(es) being referred
to herein individually and collectively as "Excess"), Borrowers acknowledge and
stipulate that any such charge or receipt shall be the result of an accident and
bona fide error, and that any Excess received by Lenders shall be applied,
first, to the payment of the then outstanding and unpaid principal hereunder;
second, to the payment of the other Obligations then outstanding and unpaid; and
third, returned to Borrowers, it being the intent of the parties hereto not to
enter into a usurious or otherwise illegal relationship. The right to accelerate
the maturity of any of the Obligations does not include the right to accelerate
any Interest or loan charges that have not otherwise accrued on the date of such
acceleration, and neither Agents nor Lenders intend to collect any unearned
Interest or loan charges in the event of any such acceleration. Borrowers
recognize that, with fluctuations in the rates of interest set forth in SECTION
3.1 of this Agreement, and the Maximum Rate, such an unintentional result could
inadvertently occur. All monies paid to Lenders hereunder or under any of the
other Financing Agreements, whether at maturity or by prepayment, shall be
subject to any rebate of unearned Interest or loan charges as and to the extent
required by applicable law.
(d) By the execution of this Agreement, Borrowers agree that (i)
the credit or return of any Excess shall constitute the acceptance by Borrowers
of such Excess, and (ii) Borrowers shall not seek or pursue any other remedy,
legal or equitable, against Agents or Lenders, based in whole or in part upon
contracting for, charging or receiving any Interest in excess of the Maximum
Rate or loan charges in excess of the maximum amount collectible under
Applicable Law. For the purpose of determining whether any Excess has been
contracted for, charged or received by Agents or Lenders, all Interest and loan
charges at any time contracted for, charged or received from Borrowers in
connection with this Agreement or any of the other Financing Agreements
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shall, to the extent permitted by Applicable Law, be amortized, prorated,
allocated and spread in equal parts throughout the entire term of this
Agreement.
(e) For purposes hereof, Borrowers, Agents and Lenders shall, to
the maximum extent permitted under Applicable Law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as Interest and
(ii) exclude voluntary prepayments and the effects thereof.
(f) The provisions of this SECTION 3.8 shall be deemed to be
incorporated into each of the other Financing Agreements (whether or not any
provision of this Section is referred to therein). Each of the Financing
Agreements and communications relating to any Interest or loan charges owed by
Borrowers and all figures set forth therein shall, for the sole purpose of
computing the extent of the Obligations, be automatically recomputed by
Borrowers, and by any court considering the same, to give effect to the
adjustments or credits required by this Section.
3.9 NATURE AND EXTENT OF EACH BORROWER'S LIABILITY.
(a) Joint and Several Liability. Each Borrower shall be liable
for, on a joint and several basis, and hereby guarantees the timely payment by
all other Borrowers of, all of the Loans and other Obligations, regardless of
which Borrower actually may have received the proceeds of any Loans or other
extensions of credit hereunder or the amount of such Loans received or the
manner in which either or both Agents or any Lender accounts for such Loans or
other extensions of credit on its books and records, it being acknowledged and
agreed that Loans to any Borrower inure to the mutual benefit of all Borrowers
and that Agents and Lenders are relying on the joint and several liability of
Borrowers in extending the Loans and other financial accommodations 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 owed on, any of the Loans or other Obligations,
such Borrower shall forthwith pay the same, without notice or demand.
(b) Unconditional Nature of Liability. Each Borrower's joint and
several liability hereunder with respect to, and guaranty of, the Loans and
other Obligations shall, to the fullest extent permitted by Applicable Law, be
unconditional irrespective of (i) the validity, enforceability, avoidance or
subordination of any of the Obligations or of any promissory note or other
document evidencing all or any part of the Obligations, (ii) the absence of any
attempt to collect any of the Obligations from any other Obligor or any
Collateral or other security therefor, or the absence of any other action to
enforce the same, (iii) the waiver, consent, extension, forbearance or granting
of any indulgence by either or both Agents or any Lender with respect to any
provision of any instrument evidencing or securing the payment of any of the
Obligations, or any other agreement now or hereafter executed by any other
Borrower and delivered to either or both Agents or any Lender, (iv) the failure
by Collateral Agent to take any steps to perfect or maintain the perfected
status of its security interest in or Lien upon, or to preserve its rights to,
any of the Collateral or other security for the payment or performance of any of
the Obligations or Agents' release of any Collateral or of Collateral Agent's
Liens upon any Collateral, (v) Agents' or Lenders' election, in any proceeding
instituted under the Bankruptcy Code, for the application of Section 1111(b)(2)
of the Bankruptcy Code, (vi) any borrowing or grant of a security interest by
any other Obligor, as debtor-in-possession under Section 364 of the Bankruptcy
Code, (vii) the release or compromise, in whole or in part, of the liability of
any other Obligor for the payment of any of the Obligations, (ix) any amendment
or modification of any of the Financing Agreements or waiver of any Default or
Event of Default thereunder, (x) any increase in the amount of the Obligations
beyond any limits imposed herein or in the amount of any interest, fees or other
charges payable in connection therewith, or any decrease in the same, (xi) the
disallowance of all or any portion of either or both Agents' or any Lender's
claims for the repayment of any of the Obligations under Section 502 of the
Bankruptcy Code, or (viii) any other circumstance that might constitute a legal
or equitable
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discharge or defense of any Borrower. After the occurrence and during the
continuance of any Event of Default, Agents may proceed directly and at once,
without notice to any other Obligor, against any or all of Obligors to collect
and recover all or any part of the Obligations, without first proceeding against
any other Obligor or against any Collateral or other security for the payment or
performance of any of the Obligations, and each Borrower waives any provision
that might otherwise require Agents or Lenders under Applicable Law to pursue or
exhaust their remedies against any Collateral or Obligor before pursuing another
Obligor. Each Borrower consents and agrees that neither Agents nor Lenders shall
be under no obligation to xxxxxxxx any assets in favor of any Obligor or against
or in payment of any or all of the Obligations.
(c) No Reduction in Liability for Obligations. No payment or
payments made by an Obligor or received or collected by Agents from an Obligor
or any other Person by virtue of any action or proceeding or any setoff or
appropriation or application at any time or from time to time in reduction of or
in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Borrower under this Agreement, each of
whom shall remain jointly and severally liable for the payment and performance
of all Loans and other Obligations until the Obligations are paid in full and
this Agreement and the Commitments are terminated.
(d) Contribution. Each Borrower is unconditionally obligated to
repay the Obligations as a joint and several obligor under this Agreement. If,
as of any date, the aggregate amount of payments made by a Borrower on account
of the Obligations and proceeds of such Borrower's Collateral that are applied
to the Obligations exceeds the aggregate amount of Loan proceeds actually used
by such Borrower in its business (such excess amount being referred to as an
"Accommodation Payment"), then each of the other Borrowers (each such Borrower
being referred to as a "Contributing Borrower") shall be obligated to make
contribution to such Borrower (the "Paying Borrower") in an amount equal to (A)
the product derived by multiplying the sum of each Accommodation Payment of each
Borrower by the Allocable Percentage of the Borrower from whom contribution is
sought less (B) the amount, if any, of the then outstanding Accommodation
Payment of such Contributing Borrower (such last mentioned amount which is to be
subtracted from the aforesaid product to be increased by any amounts theretofore
paid by such Contributing Borrower by way of contribution hereunder, and to be
decreased by any amounts theretofore received by such Contributing Borrower by
way of contribution hereunder); provided, however, that a Paying Borrower's
recovery of contribution hereunder from the other Borrowers shall be limited to
that amount paid by the Paying Borrower in excess of its Allocable Percentage of
all Accommodation Payments then outstanding of all Borrowers. As used herein,
the term "Allocable Percentage" shall mean, on any date of determination
thereof, a fraction the denominator of which shall be equal to the number of
Borrowers who are parties to this Agreement on such date and the numerator of
which shall be 1; provided, however, that such percentages shall be modified in
the event that contribution from a Borrower is not possible by reason of
insolvency, bankruptcy or otherwise by reducing such Borrower's Allocable
Percentage equitably and by adjusting the Allocable Percentage of the other
Borrowers proportionately so that the Allocable Percentages of all Borrowers at
all times equals 100%.
(e) Subordination. Each Borrower hereby subordinates any claims,
including any right of payment, subrogation, contribution and indemnity, that it
may have from or against any other Obligor, and any successor or assign of any
other Obligor, including any trustee, receiver or debtor-in-possession,
howsoever arising, due or owing or whether heretofore, now or hereafter
existing, to the payment in full of all of the Obligations.
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SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTER OF CREDIT
ACCOMMODATIONS. Each of the following is a condition precedent to Lenders making
the initial Loans and providing the initial Letter of Credit Accommodations
hereunder:
(a) Agents and Lenders shall have received, in form and substance
satisfactory to Agents and Lenders, all releases, terminations and such other
documents as Agents and Lenders may request to evidence and effectuate the
termination by the existing lender or lenders to Borrowers of their respective
financing arrangements with Borrowers and the termination and release by it or
them, as the case may be, of any interest in and to any assets and properties of
Borrowers and each Obligor, duly authorized, executed and delivered by it or
each of them, including, but not limited to, (i) UCC termination statements for
all UCC financing statements previously filed by it or any of them or their
predecessors, as secured party and Borrowers or any Obligor, as debtor and (ii)
satisfactions and discharges of any mortgages, deeds of trust or deeds to secure
debt by Borrowers or any Obligor in favor of such existing lender or lenders, in
form acceptable for recording in the appropriate government office;
(b) Agents shall have received evidence, in form and substance
satisfactory to Agents and Lenders, that Collateral Agent has a valid perfected
and first priority security interest in and Lien upon the Collateral and any
other property which is intended to be security for the Obligations or the
liability of any Obligor in respect thereof, subject only to the security
interests and Liens permitted herein or in the other Financing Agreements;
(c) all requisite corporate and partnership action and
proceedings in connection with this Agreement and the other Financing Agreements
shall be satisfactory in form and substance to Agents, and Agents shall have
received all information and copies of all documents, including records of
requisite corporate action and proceedings which Agents may have requested in
connection therewith, such documents where requested by Agents or their counsel
to be certified by appropriate corporate officers or governmental authorities;
(d) no change shall have occurred in the assets, business or
prospects of Borrowers taken as a whole since the date of Agents' latest field
examination which could have a Material Adverse Effect and no change or event
shall have occurred which would have a Material Adverse Effect;
(e) Agents shall have completed a field review of the Records and
such other information with respect to the Collateral as Agents may require to
determine the amount of Revolving Loans available to Borrowers, the results of
which shall be satisfactory to Lenders, not more than three (3) Business Days
prior to the date hereof;
(f) Agents shall have received, in form and substance
satisfactory to Agents, all consents (other than consents from any equipment
lessor to Borrowers), waivers, acknowledgments and other agreements from third
persons which Agents may deem necessary or desirable in order to permit, protect
and perfect Collateral Agent's security interests in and Liens upon the
Collateral or to effectuate the provisions or purposes of the Financing
Agreements, including acknowledgments by lessors, mortgagees and warehousemen of
Collateral Agent's security interests in the Collateral, waivers by such Persons
of any security interests, liens or other claims by such Persons to the
Collateral and agreements permitting Agents and Lenders access to, and the right
to remain on, the premises to exercise their rights and remedies and otherwise
deal with the Collateral;
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(g) Agents shall have received, in form and substance
satisfactory to Agents, valid and effective title insurance policies issued by a
company and agent acceptable to Agents (i) insuring the priority, amount and
sufficiency of the Mortgages, (ii) insuring against matters that would be
disclosed by surveys and (iii) containing any legally available endorsements,
assurances or affirmative coverage requested by Agents for protection of their
interests;
(h) Agents shall have received evidence of insurance and loss
payee endorsements required hereunder and under the other Financing Agreements,
in form and substance satisfactory to Agents, and certificates of insurance
policies and/or endorsements naming Collateral Agent as lender's loss payee and
additional insured;
(i) Agents shall have received, in form and substance
satisfactory to Agents, such opinion letters of counsel to Borrowers and
Guarantors with respect to the matters set forth on EXHIBIT H attached hereto
and such other matters as Agents may request;
(j) Agents shall have received a Borrowing Base Certificate
setting forth the Loans available to Borrowers as of the date hereof as
completed in a manner satisfactory to Agents and duly authorized, executed and
delivered on behalf of Borrowers;
(k) the other Financing Agreements, including the Mortgages, and
all instruments and documents hereunder and thereunder shall have been duly
executed and delivered to Agents, in form and substance satisfactory to Agents;
(l) the Excess Availability as determined by Agents, as of the
Closing Date, shall not be less than $10,000,000 after giving effect to the
initial Loans made or to be made and Letter of Credit Accommodations issued or
to be issued in connection with the initial transactions hereunder;
(m) Each landlord or owner of premises used by a Borrower shall
have executed in favor of Agents a landlord waiver agreement in form and
substance satisfactory to Agents and their counsels pursuant to which such
landlord shall waive or subordinate any Lien it may hold with respect to any
Collateral to Liens in favor of Collateral Agent, and Agents shall have received
copies of all leases;
(n) From July 3, 1999, to the Closing Date, Borrowers' financial
condition and results of continuing operations, taken as a whole, shall not have
deviated to a degree deemed materially adverse by Agents from that set forth in
the projections of Borrowers dated July 16, 1999 that were delivered by
Borrowers to Agents and Lenders prior to the date hereof;
(o) Agents shall have completed (and found the results thereof to
be acceptable) their customary field examinations of Borrowers, their financial
records and the Collateral, during which Agents will examine and inspect, and
conduct detailed tests of, Borrowers MIS, inventory accounting, accounts
receivable and records thereof, accounts payable and records thereof, tax
payment procedures and compliance and other matters usually covered by such
field examination;
(p) Agents shall have found satisfactory the results of their
inventory test counts and costing tests;
(q) All of the Subordinated Debt shall be expressly subordinate
in right of payment to the prior payment and satisfaction in full of all of the
Obligations, all in a manner and pursuant to such written agreements
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binding on the holders of such Subordinated Debt as shall be satisfactory to
Agents and their counsel (with the Agents' acknowledging that the subordination
terms contained in the Senior Subordinated Note Indenture with respect to the
Senior Subordinated Notes are acceptable to Agents and their counsel);
(r) Agents shall have received and reviewed environmental
reports, in form and substance satisfactory to Agents, and Agents shall have
satisfied themselves that Borrowers are in compliance with all Environmental
Laws;
(s) Agents shall have received and found satisfactory in all
respects Borrowers' financial statements for the quarter and year-to-date period
ending July 3, 1999;
(t) Borrowers shall have delivered to Agents and Lenders
acceptable title insurance, commitments and surveys with respect to all real
estate of Borrowers, which shall be in form and substance satisfactory to Agents
in all respects;
(u) Borrowers shall have certified to Agents that the Senior
Subordinated Note Indenture has not been amended or otherwise modified;
(v) There shall be no order or injunction or other pending
litigation in which there is a reasonable possibility of a decision which could
have a Material Adverse Effect;
(w) No event of default shall exist under the Bond Documents or
the Senior Subordinated Notes on or prior to the Closing Date or shall result
from consummations of any of the transactions contemplated by the Financing
Agreements; and
(x) Agents shall have reviewed and found acceptable in all
respects the Bond Documents.
4.2 CONDITIONS PRECEDENT TO ALL LOANS AND LETTER OF CREDIT
ACCOMMODATIONS. Each of the following is an additional condition precedent to
Lenders making Loans and/or providing Letter of Credit Accommodations to
Borrowers, including the initial Loans and Letter of Credit Accommodations and
any future Loans and Letter of Credit Accommodations:
(a) all representations and warranties contained herein and in
the other Financing Agreements shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of the making of each such Loan or providing
each such Letter of Credit Accommodation and after giving effect thereto, except
to the extent that such representations or warranties relate solely to an
earlier date and except to the extent of changes in facts and circumstances that
are expressly permitted by Agents and Lenders hereunder; and
(b) no Default or Event of Default shall exist or have occurred
and be continuing on and as of the date of the making of such Loan or providing
each such Letter of Credit Accommodation and after giving effect thereto.
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SECTION 5. SECURITY INTEREST
5.1 GRANT OF SECURITY INTEREST. To secure payment and performance of
all Obligations, each Borrower hereby grants to Collateral Agent, for the
benefit of Agents and for the Pro Rata benefit of Lenders, a continuing security
interest in, a Lien upon, and a right of set off against, and hereby assigns to
Collateral Agent, for the benefit of Agents and for the Pro Rata benefit of
Lenders, as security, the following Property and interests in Property of such
Borrower, whether now owned or hereafter acquired or existing, and wherever
located (collectively, the "Collateral"):
(a) all Accounts;
(b) all present and future contract rights, general intangibles
(including tax and duty refunds, registered and unregistered patents,
trademarks, service marks, copyrights, trade names, applications for the
foregoing, trade secrets, goodwill, processes, drawings, blueprints, customer
lists, licenses, whether as licensor or licensee, choses in action and other
claims and existing and future leasehold interests in equipment, real estate and
fixtures, chattel paper, documents, instruments, securities, Investment
Property, letters of credit, bankers' acceptances and guaranties;
(c) all present and future monies, securities, credit balances,
deposits, deposit accounts and other property of such Borrower now or hereafter
held or received by or in transit to either or both Agents, any Lender or any of
their Affiliates or at any other depository or other institution from or for the
account of any Borrower, whether for safekeeping, pledge, custody, transmission,
collection or otherwise, and all present and future Liens, security interests,
rights, remedies, title and interest in, to and in respect of Accounts and other
Collateral, including (i) rights and remedies under or relating to guaranties,
contracts of suretyship, letters of credit, and credit and other insurance
related to the Collateral, (ii) rights of stoppage in transit, replevin,
repossession, reclamation and other rights and remedies of an unpaid vendor,
lienor or secured party, (iii) goods described in invoices, documents, contracts
or instruments with respect to, or otherwise representing or evidencing,
Accounts or other Collateral, including returned, repossessed and reclaimed
goods, and (iv) deposits by and property of account debtors or other Persons
securing the obligations of account debtors;
(d) all Inventory;
(e) all Equipment;
(f) all Deposit Accounts;
(g) all Investment Property;
(h) all Real Property;
(i) all Records; and
(j) all products and proceeds of the foregoing, in any form,
including insurance proceeds and all claims against third parties for loss or
damage to or destruction of any or all of the foregoing.
5.2 EXCLUSION FOR MARGIN STOCK. Notwithstanding anything to the
contrary in this Agreement, Borrowers do not grant to Collateral Agent a Lien
upon any "margin stock" (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), and Borrowers shall not be prohibited
by this
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Agreement or any of the other Financing Agreements from granting a Lien in
"margin stock" (as so defined) to any other Person.
5.3 EXCLUSION FOR CERTAIN CONTRACTS AND LEASES. Notwithstanding
anything to the contrary set forth in SECTION 5.1 above, the types or items of
Collateral described in such Section shall not include any rights or interests
in any contract, lease, permit, license, charter or license agreement covering
real or personal property, as such, if under the terms of such contract, lease,
permit, license, charter or license agreement, or Applicable Law with respect
thereto, the valid grant of a security interest or Lien therein to Collateral
Agent is prohibited and such prohibition has not been or is not waived or the
consent of the other party to such contract, lease, permit, license, charter or
license agreement has not been or is not otherwise obtained or under Applicable
Law such prohibition cannot be waived; provided, that, the foregoing exclusion
shall in no way be construed (a) to apply if any such prohibition is
unenforceable under Section 9-318 of the UCC or other Applicable Law or (b) so
as to limit, impair or otherwise affect Collateral Agent's unconditional
continuing security interests in and Liens upon any rights or interests of a
Borrower in or to monies due or to become due under any such contract, lease,
permit, license, charter or license agreement (including any Accounts).
5.4 FOREIGN SUBSIDIARY STOCK. Notwithstanding anything to the contrary
set forth in SECTION 5.1 above, the types or items of Collateral described in
such Section shall include only sixty-six percent (66%) of the stock of any
Foreign Subsidiary.
5.5 OFFSHORE EQUIPMENT. Collateral Agent shall release its Lien in any
Offshore Equipment upon fifteen (15) days prior written notice to Agents.
SECTION 6. LOAN ADMINISTRATION
6.1. MANNER OF BORROWING AND FUNDING REVOLVING LOANS. Borrowings under
this Agreement established pursuant to SECTION 2.1 hereof shall be made and
funded as follows:
(a) Notice of Borrowing.
(i) Whenever Borrowers desire to make a Borrowing
under SECTION 2.1 of this Agreement (other than a Borrowing resulting
from a conversion or continuation pursuant to SECTION 3.1(D)),
Borrowers shall give Collateral Agent prior written notice (or
telephonic notice promptly confirmed in writing) of such Borrowing
request (a "Notice of Borrowing"), which shall be in the form of
EXHIBIT E annexed hereto and signed by an authorized officer of
Borrowers. Such Notice of Borrowing shall be given by Borrowers no
later than 11:00 a.m. at the office of Collateral Agent designated by
Collateral Agent from time to time (a) on the Business Day of the
requested funding date of such Borrowing, in the case of Base Rate
Loans, and (b) at least two (2) Business Days prior to the requested
funding date of such Borrowing, in the case of LIBOR Rate Loans.
Notices received after 11:00 a.m. shall be deemed received on the next
Business Day. The Revolving Loans made by each Lender on the Closing
Date shall be in excess of $250,000 and shall be made as Base Rate
Loans and thereafter may be made or continued as or converted into Base
Rate Loans or LIBOR Rate Loans. Each Notice of Borrowing (or telephonic
notice thereof) shall be irrevocable and shall specify (a) the
principal amount of the Borrowing, (b) the date of Borrowing (which
shall be a Business Day), (c) whether the Borrowing is to consist of
Base Rate Loans or LIBOR Rate Loans, (d) in the case of LIBOR Rate
Loans, the duration of the Interest Period to be applicable thereto,
and (e) the account of Borrowers to which the
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proceeds of such Borrowing are to be disbursed. Borrowers may not
request any LIBOR Rate Loans if a Default or Event of Default exists.
(ii) Unless payment is otherwise timely made by
Borrowers, the becoming due of any amount required to be paid under
this Agreement or any of the other Financing Agreements with respect to
the Obligations (whether as principal, accrued interest, fees or other
charges, including the repayment of any Letter of Credit
Accommodations) shall be deemed irrevocably to be a request (without
any requirement for the submission of a Notice of Borrowing) for
Revolving Loans on the due date of, and in an aggregate amount required
to pay, such Obligations, and the proceeds of such Revolving Loans may
be disbursed by way of direct payment of the relevant Obligation and
shall bear interest as Base Rate Loans. Neither Agents nor any Lender
shall have any obligation to Borrowers to honor any deemed request for
a Revolving Loan after the Commitment Termination Date or when an
Out-of-Formula Condition exists or would result therefrom, but may do
so in their discretion and without regard to the existence of, and
without being deemed to have waived, any Default or Event of Default
and regardless of whether such Revolving Loan is funded after the
Commitment Termination Date.
(iii) As an accommodation to Borrowers, Agents and
Lenders may permit telephonic requests for Borrowings and electronic
transmittal of instructions, authorizations, agreements or reports to
Agents by Borrowers; provided, however, that Borrowers shall confirm
each such telephonic request for a Borrowing of LIBOR Rate Loans by
delivery of the required Notice of Borrowing to Collateral Agent by
facsimile transmission promptly, but in no event later than 5:00 p.m.
on the same day. Unless Borrowers specifically direct Agents and
Lenders in writing not to accept or act upon telephonic or electronic
communications from Borrowers, neither Agents nor any Lender shall have
any liability to Borrowers for any loss or damage suffered by Borrowers
as a result of an Agent's or any Lender's honoring of any requests,
execution of any instructions, authorizations or agreements or reliance
on any reports communicated to it telephonically or electronically and
purporting to have been sent to Agents or Lenders by Borrowers and
neither Agents nor any Lender shall have any duty to verify the origin
of any such communication or the identity or authority of the Person
sending it.
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(b) Fundings by Lenders. Subject to its receipt of notice from
Collateral Agent of a Notice of Borrowing as provided in SECTION 6.1(D) (except
in the case of a deemed request by Borrowers for a Revolving Loan as provided in
SECTIONS 6.1(A)(II) or 6.1(A)(III) hereof, in which event no Notice of Borrowing
need be submitted), each Lender shall timely honor its Revolving Commitment by
funding its Pro Rata share of each Borrowing of Revolving Loans that is properly
requested by Borrowers and that Borrowers is entitled to receive under the Loan
Agreement. Collateral Agent shall notify Lenders of each Notice of Borrowing by
12:00 noon on the proposed funding date (in the case of Base Rate Loans) or by
3:00 p.m. at least two (2) Business Days before the proposed funding date (in
the case of LIBOR Rate Loans). Each Lender shall deposit with Collateral Agent
an amount equal to its Pro Rata share of the Borrowing requested by Borrowers at
Collateral Agent's designated bank in immediately available funds not later than
1:00 p.m. on the date of funding of such Borrowing, unless Agent's notice to
Lenders is received after 12:00 noon on the proposed funding date of a Base Rate
Loan, in which event Lenders shall deposit with Collateral Agent their
respective Pro Rata shares of the requested Borrowing on or before 11:00 a.m. of
the next Business Day. Subject to its receipt of such amounts from Lenders,
Collateral Agent shall make the proceeds of the Revolving Loans received by it
available to Borrowers by disbursing such proceeds in accordance with Borrowers'
disbursement instructions set forth in the applicable Notice of Borrowing.
Unless Collateral Agent shall have been notified in writing by a Lender prior to
the proposed time of funding that such Lender does not intend to deposit with
Collateral Agent an amount equal such Lender's Pro Rata share of the requested
Borrowing, Collateral Agent may assume that such Lender has deposited or
promptly will deposit its share with Collateral Agent and Collateral Agent may
in its discretion disburse a corresponding amount to Borrowers on the applicable
funding date. If a Lender's Pro Rata share of such Borrowing is not in fact
deposited with Collateral Agent, then, if Collateral Agent has disbursed to
Borrowers an amount corresponding to such share, then such Lender agrees to pay,
and in addition Borrowers agree to repay, to Collateral Agent forthwith ON
DEMAND such corresponding amount, together with interest thereon, for each day
from the date such amount is disbursed by Collateral Agent to or for the benefit
of Borrowers until the date such amount is paid or repaid to Collateral Agent,
(a) in the case of Borrowers, at the interest rate applicable to such Borrowing
and (b) in the case of such Lender, at the Federal Funds Rate. If such Lender
repays to Collateral Agent such corresponding amount, such amount so repaid
shall constitute a Revolving Loan, and if both such Lender and Borrowers shall
have repaid such corresponding amount, Collateral Agent shall promptly return to
Borrowers such corresponding amount in same day funds.
(c) Settlement and Settlement Loans.
(i) In order to facilitate the administration of the
Revolving Loans under this Agreement, Lenders agree (which agreement
shall not be for the benefit of or enforceable by Borrowers) that
settlement among them with respect to the Revolving Loans may take
place on a periodic basis on dates determined from time to time by
Agents (each a "Settlement Date"), 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 4 of this
Agreement have been met. On each Settlement Date, payment shall be made
by or to each Lender in the manner provided herein and in accordance
with the Settlement Report delivered by Collateral Agent to Lenders
with respect to such Settlement Date so that, as of each Settlement
Date and after giving effect to the transaction to take place on such
Settlement Date, each Lender shall hold its Pro Rata share of all
Revolving Loans and participations in Letter of Credit Accommodations
then outstanding.
(ii) Between Settlement Dates, Collateral Agent may
request BankBoston to advance, and BankBoston may, but shall in no
event be obligated to, advance to Borrowers out of BankBoston's own
funds the entire principal amount of any Borrowing of Revolving Loans
that are Base Rate Loans requested or deemed requested pursuant to this
Agreement (any such Revolving Loan funded exclusively
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by BankBoston being referred to as a "Settlement Loan"). Each
Settlement Loan shall constitute a Revolving Loan hereunder and shall
be subject to all of the terms, conditions and security applicable to
other Revolving Loans, except that all payments thereon shall be
payable to BankBoston solely for its own account. The obligation of
Borrowers to repay such Settlement Loans to BankBoston shall be
evidenced by the Settlement Note. Collateral Agent shall not request
BankBoston to make any Settlement Loan if (A) Collateral Agent shall
have received written notice from any Lender that one or more of the
applicable conditions precedent set forth in SECTION 4 hereof will not
be satisfied on the requested funding date for the applicable Borrowing
or (B) the Excess Availability on the funding date would be less than
$5,000,000 after giving effect to such funding or would cause the then
outstanding principal balance of all Settlement Loans to exceed
$7,500,000. BankBoston shall not be required to determine whether the
applicable conditions precedent set forth in SECTION 4 hereof have been
satisfied or the requested Borrowing would exceed the amount of Excess
Availability on the funding date applicable thereto prior to making, in
its sole discretion, any Settlement Loan. On each Settlement Date, or,
if earlier, upon demand by Collateral Agent for payment thereof, the
then outstanding Settlement Loans shall be immediately due and payable.
As provided in SECTION 3.1.1(II), Borrowers shall be deemed to have
requested (without the necessity of submitting any Notice of Borrowing)
Revolving Loans to be made on each Settlement Date in the amount of all
outstanding Settlement Loans and to have Collateral Agent to cause the
proceeds of such Revolving Loans to be applied to the repayment of such
Settlement Loans and interest accrued thereon. Collateral Agent shall
notify the Lenders of the outstanding balance of Revolving Loans prior
to 11:00 a.m. on each Settlement Date and each Lender (other than
BankBoston) shall deposit with Collateral Agent (without setoff,
counterclaim or reduction of any kind) an amount equal to its Pro Rata
share of the amount of Revolving Loans deemed requested in immediately
available funds not later than 12:00 noon on such Settlement Date, and
without regard to whether any of the conditions precedent set forth in
SECTION 4 hereof are satisfied or the Commitment Termination Date has
occurred. If any Settlement Loan is not repaid on the due date thereof,
then on the second Business Day after BankBoston's request each Lender
(other than BankBoston) shall purchase a participating interest in such
Settlement Loan in an amount equal to its Pro Rata share of such
Settlement Loan by transferring to BankBoston, in immediately available
funds, the amount of such participation. The proceeds of Settlement
Loans may be used solely for purposes for which Revolving Loans
generally may be used in accordance with this Agreement. If any amounts
received by BankBoston in respect of any Settlement Loans are later
required to be returned or repaid by BankBoston to Borrowers or any
other Obligor or their respective representatives or
successors-in-interest, whether by court order, settlement or
otherwise, the other Lenders shall, upon demand by BankBoston with
notice to Collateral Agent, pay to Collateral Agent for the account of
BankBoston, an amount equal to each other Lender's Pro Rata share of
all such amounts required to be returned by BankBoston.
(d) Disbursement Authorization. Borrowers hereby irrevocably
authorize Collateral Agent to disburse the proceeds of each Revolving Loan
requested, or deemed to be requested pursuant to SECTION 6.1(A)(I) or SECTION
6.1(A)(II), as follows: (i) the proceeds of each Revolving Loan requested under
SECTION 6.1(A)(I) shall be disbursed by Collateral Agent in accordance with the
terms of the written disbursement letter from Borrowers in the case of the
initial Borrowing, and, in the case of each subsequent Borrowing, by wire
transfer to such bank account as may be agreed upon by Borrowers and Collateral
Agent from time to time or elsewhere if pursuant to a written direction from
Borrowers; and (ii) the proceeds of each Revolving Loan requested under SECTION
6.1(A)(II) shall be disbursed by Collateral Agent by way of direct payment of
the relevant interest or other Obligation.
6.2. DEFAULTING LENDERS. If any Lender shall, at any time, fail to make
any payment to either Agent, Congress or BankBoston that is required hereunder,
Collateral Agent may, but shall not be required to, retain
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payments that would otherwise be made to such defaulting Lender hereunder and
apply such payments to such defaulting Lender's defaulted obligations hereunder,
at such time, and in such order, as Collateral Agent may elect in its sole
discretion. With respect to the payment of any funds from Collateral Agent to a
Lender or from a Lender to Collateral Agent, the party failing to make the 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 Rate. The failure of any Lender to fund its portion of any Revolving Loan
shall not relieve any other Lender of its obligation, if any, to fund its
portion of the Revolving Loan on the date of Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make any Revolving Loan to be
made by such Lender on the date of any Borrowing. Solely as among the Lenders
and solely for purposes of voting or consenting to matters with respect to any
of the Financing Agreements, Collateral or any Obligations and determining a
defaulting Lender's Pro Rata share of payments and proceeds of Collateral
pending such defaulting Lender's cure of its defaults hereunder, a defaulting
Lender shall not be deemed to be a "Lender" and such Lender's Commitment shall
be deemed to be zero (0). The provisions of this SECTION 6.2 shall be solely for
the benefit of Agents and Lenders and may not be enforced by Borrowers.
6.3. SPECIAL PROVISIONS GOVERNING LIBOR RATE LOANS.
(a) Number of LIBOR Rate Loans. In no event may the number of
LIBOR Rate Loans outstanding at any time to any Lender exceed 6.
(b) Minimum Amounts. Each election of LIBOR Rate Loans pursuant
to SECTION 6.1(A), and each continuation of or conversion to LIBOR Rate Loans
pursuant to SECTION 3.1 hereof, shall be in a minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount.
(c) LIBOR Lending Office. Each Lender's initial LIBOR Lending
Office is set forth opposite its name on the signature pages hereof. Each Lender
shall have the right at any time and from time to time to designate a different
office of itself or of any Affiliate as such Lender's LIBOR Lending Office, and
to transfer any outstanding LIBOR Rate Loans to such LIBOR Lending Office. No
such designation or transfer shall result in any liability on the part of
Borrowers for increased costs or expenses resulting solely from such designation
or transfer (except any such transfer that is made by a Lender pursuant to
SECTION 3.7 hereof, or otherwise for the purpose of complying with Applicable
Law). Increased costs for expenses resulting from a change in Applicable Law
occurring subsequent to any such designation or transfer shall be deemed not to
result solely from such designation or transfer.
6.4. LOAN ACCOUNTS; THE REGISTER; ACCOUNT STATED.
(a) Each Lender shall maintain in accordance with its usual and
customary practices an account or accounts (a "Loan Account") evidencing the
debt of Borrowers to such Lender resulting from each Loan owing to such Lender
from time to time, including the amount of principal and interest payable to
such Lender from time to time hereunder and under each Note payable to such
Lender.
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(b) Collateral Agent shall maintain a register (the "Register")
which shall include a master account and a subsidiary account for each Lender
and in which accounts (taken together) shall be recorded (i) the date and amount
of each Borrowing made hereunder, the Type of each Loan comprising such
Borrowing and any Interest Period applicable thereto, (ii) the effective date
and amount of each Assignment and Acceptance delivered to and accepted by it and
the parties thereto, (iii) the amount of any principal or interest due and
payable or to become due and payable from Borrowers to each Lender hereunder or
under the Notes, and (iv) the amount of any sum received by Collateral Agent
from Borrowers or any other Obligor and each Lender's share thereof. The
Register shall be available for inspection by Borrowers or any Lender at the
offices of Collateral Agent at any reasonable time and from time to time upon
reasonable prior notice. Any failure of Collateral Agent to record in the
Register or any error in doing so shall not limit or otherwise affect the
obligation of Borrowers hereunder (or under any Note) to pay any amount owing
with respect to the Loans or provide the basis for any claim against Collateral
Agent.
(c) The entries made in the Register and each Loan Account shall
constitute rebuttably presumptive evidence of the information contained therein;
provided, however, that if a copy of information contained in the Register or
any Loan Account is provided to any Person, or any Person inspects the Register
or any Loan Account, at any time or from time to time, then the information
contained in the Register or the Loan Account, as applicable shall be conclusive
and binding on such Person for all purposes absent manifest error, unless such
Person notifies Collateral Agent in writing within thirty (30) days after such
Person's receipt of such copy or such Person's inspection of the Register or
Loan Account of its intention to dispute the information contained therein.
6.5 COLLECTION OF ACCOUNTS.
(a) Borrowers shall establish and maintain, at their expense,
blocked accounts or lockboxes and related blocked accounts (in either case,
"Blocked Accounts"), as Collateral Agent may specify, with such banks as are
acceptable to Agents, into which Borrowers shall promptly deposit and direct its
account debtors to directly remit all payments on Accounts and all payments
constituting proceeds of Inventory or other Collateral in the identical form in
which such payments are made, whether by cash, check or other manner. The banks
at which the Blocked Accounts are established shall enter into an agreement, in
form and substance satisfactory to Collateral Agent, providing that all items
received or deposited in the Blocked Accounts are the property of Collateral
Agent, that the depository bank has no Lien upon, or right to setoff against,
the Blocked Accounts, the items received for deposit therein, or the funds from
time to time on deposit therein and that the depository bank will wire, or
otherwise transfer, in immediately available funds, on a daily basis, all funds
received or deposited into the Blocked Accounts to such bank account of
Collateral Agent as Collateral Agent may from time to time designate for such
purpose ("Payment Account"). Borrowers agree that all payments made to such
Blocked Accounts or other funds received and collected by Collateral Agent,
whether on the Accounts or as proceeds of Inventory or other Collateral or
otherwise shall be the property of Collateral Agent held for the benefit of
Agents and Lenders.
(b) For purposes of calculating the amount of the Loans available
to Borrowers, such payments will be applied (conditional upon final collection)
to the Obligations on the Business Day of receipt by Collateral Agent of
immediately available funds in the Payment Account provided such payments and
notice thereof are received in accordance with Collateral Agent's usual and
customary practices as in effect from time to time and within sufficient time to
credit Borrowers' loan account on such day, and if not, then on the next
Business Day. For the purposes of calculating interest on the Obligations, such
payments or other funds received will be applied (conditional upon final
collection) to the Obligations one (1) Business Day following the date of
receipt of immediately available funds by Collateral Agent in the Payment
Account provided such payments or other funds
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and notice thereof are received in accordance with Collateral Agent's usual and
customary practices as in effect from time to time and within sufficient time to
credit Borrowers' Loan Account on such day, and if not, then on the next
Business Day.
(c) Borrowers and all of their Affiliates, Subsidiaries,
shareholders, directors, employees or agents shall, acting as trustee for
Collateral Agent, receive, as the property of Agents and Lenders, any monies,
checks, notes, drafts or any other payment relating to and/or proceeds of
Accounts or other Collateral which come into their possession or under their
control and immediately upon receipt thereof, shall deposit or cause the same to
be deposited in the Blocked Accounts, or remit the same or cause the same to be
remitted, in kind, to Collateral Agent. In no event shall the same be commingled
with Borrowers' own funds. Borrowers agree to reimburse Collateral Agent ON
DEMAND for any amounts owed or paid to any bank at which a Blocked Account is
established or any other bank or Person involved in the transfer of funds to or
from the Blocked Accounts arising out of Collateral Agent's payments to or
indemnification of such bank or person. The obligation of Borrowers to reimburse
Collateral Agent for such amounts pursuant to this SECTION 6.5 shall survive the
termination or non-renewal of this Agreement and the Commitments.
6.6 PAYMENTS. All Obligations shall be payable to the Payment Account
as provided in SECTION 6.5 or such other place as Collateral Agent may designate
from time to time. Except as otherwise expressly provided in SECTIONS 6.7 and
6.10 of this Agreement, Collateral Agent may apply payments received or
collected from Borrowers or for the account of Borrowers (including the monetary
proceeds of collections or of realization upon any Collateral) to such of the
Obligations, whether or not then due, in such order and manner as Collateral
Agent determines. At Collateral Agent's option, all principal, interest, fees,
costs, expenses and other charges provided for in this Agreement or the other
Financing Agreements may be charged directly to the loan account(s) of
Borrowers. As an administrative convenience to Borrowers and to ensure the
timely payment of interest owing by Borrowers each month hereunder or under any
of the other Financing Agreements, Borrowers hereby request and authorize
Collateral Agent, in its discretion, to make a Revolving Loan the proceeds of
which shall be applied to the payment of the interest accrued on the principal
amount of the Obligations during the immediately preceding month as and when
such interest becomes due and payable by Borrowers to Collateral Agent in
accordance with this Agreement and the other Financing Agreements. Borrowers
shall make all payments to Collateral Agent on the Obligations free and clear
of, and without deduction or withholding for or on account of, any setoff,
counterclaim, defense, Taxes, restrictions or conditions of any kind. If after
receipt of any payment of, or proceeds of Collateral applied to the payment of,
any of the Obligations, Collateral Agent is required to surrender or return such
payment or proceeds to any Person for any reason, then the Obligations intended
to be satisfied by such payment or proceeds shall be reinstated and continue and
this Agreement shall continue in full force and effect as if such payment or
proceeds had not been received by Collateral Agent. Borrowers shall be liable to
pay to Collateral Agent, and does hereby indemnify and hold Collateral Agent
harmless for, the amount of any payments or proceeds surrendered or returned.
This SECTION 6.6 shall remain effective notwithstanding any contrary action
which may be taken by Collateral Agent in reliance upon such payment or
proceeds. If an Out-of-Formula Condition exists, Borrowers shall, on either
Agent's demand, repay the amount of the Revolving Loans so as to eliminate such
Out-of-Formula Condition. This SECTION 6.6 shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement and the
Commitments.
6.7. PREPAYMENTS.
(a) Borrowers shall be jointly and severally obligated to prepay
the entire unpaid principal balance of the Term Loan Advances, and all accrued
but unpaid interest thereon, upon the Commitment Termination Date. Borrowers
shall also be jointly and severally required to prepay the Term Loan Advances
and the Revolving Loans in the amount of 100% of the net proceeds received from
the sale or disposition of all
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or any part of the assets of any Borrower or any of its Subsidiaries (other than
(i) sales of Inventory in the ordinary course of a Borrowers' business, (ii)
permitted sales with the prior written consent of Agents and Lenders, subject to
the reinvestment of the net proceeds thereof within six (6) months after such
sale(s), and (iii) other sales not in the ordinary course of business not to
exceed in any fiscal year of such Borrower $100,000 in the aggregate as to all
Borrowers); and (B) 100% of the net proceeds received from the issuance of
Subordinated Debt or equity by any Borrower. Mandatory prepayments described in
the foregoing sentence shall be applied to repay, without penalty or premium
(except for LIBOR breakage costs, if any) first, to installments of principal
with respect to the Term Loan in inverse order of maturity, then to the
Revolving Loans; provided, however, that any proceeds arising from (i) the
issuance of Subordinated Debt or equity as described above or (ii) the sale of
machinery and equipment not included in Accuval's appraisal dated June 18, 1999
and the sale of Real Estate in Trenton, Tennessee and Xxxxxxxx, North Carolina,
shall be applied first to Revolving Loans and then to principal installments due
with respect to the Term Loan in inverse order of maturity.
(b) Each mandatory prepayment pursuant to this SECTION 6.7 shall
be applied first to Base Rate Loans to the full extent thereof before
application to any LIBOR Rate Loans; provided, however, that, so long as no
Default or Event of Default exists, in lieu of application of such prepayment to
LIBOR Rate Loans prior to the expiration of the respective Interest Periods
applicable thereto and any resulting requirement to pay the charges provided for
in SECTION 6.7(A) hereof, Borrowers, at their option, may deposit with
Collateral Agent cash funds equal to such prepayments to be held by Collateral
Agent in the Cash Collateral Account for application to the Term Loan Advances
on the sooner to occur of the expiration of the Interest Period applicable
thereto or the Commitment Termination Date. Each such prepayment shall be
distributed by Collateral Agent to each Lender on a Pro Rata basis and may be
applied by Lenders to the installments of principal due under the Notes in the
inverse order of their maturities until payment thereof in full.
(c) Borrowers may, at their option, prepay any portion of the
Term Loan Advances consisting of Base Rate Loans in whole at any time or in part
from time to time, in amounts aggregating $1,000,000 or any greater integral
multiple of $100,000, by paying the principal amount to be prepaid together with
interest accrued or unpaid thereon to the date of prepayment and any applicable
prepayment premium set forth below. Any portion of the Term Loan Advances
consisting of LIBOR Rate Loans may be prepaid, at Borrowers' option, at any time
in whole or from time to time in part, in amounts aggregating $1,000,000 or any
greater integral multiple thereof, by paying the principal amount to be prepaid,
interest accrued and unpaid thereon to the date of prepayment, all charges
pursuant to SECTION 3.7(B) hereof if such prepayment is made on a date other
than the last day of an applicable Interest Period, and any applicable
prepayment premium as hereinafter set forth in this SECTION 6.7(C). Each such
optional prepayment may be applied to prepay the Term Loan Advances on a Pro
Rata basis and shall be applied against scheduled amortization payments in the
inverse order of the occurrence thereof. Borrowers shall give written notice (or
telephonic notice confirmed in writing) to Collateral Agent of any intended
prepayment (i) not less than one (1) Business Day prior to any prepayment of
Base Rate Loans and not less than two (2) Business Days prior to any prepayment
of LIBOR Rate Loans. Such notice, once given, shall be irrevocable and, upon
receipt of any such notice of optional prepayment, Collateral Agent shall
promptly notify each Lender of the contents thereof and of such Lender's share
of the prepayment. If Borrowers shall prepay any of the Term Loan Advances
pursuant to this SECTION 6.7(C) prior to the termination of this Agreement and
the Commitments, then Borrowers shall be jointly and severally obligated to pay
a prepayment premium equal to 3.0% of the principal amount prepaid if prepayment
occurs during the first 12-month period of the Original Term (August 17, 1999,
through August 16, 2000) and 1.50% of the principal amount prepaid if prepayment
occurs during the second 12-month period of the Original Term (August 17, 2000
through August 16, 2001) and 0.75% of the principal amount prepaid if prepayment
occurs during the third 12-month period of the Original Term (August 17, 2001
through August 16, 2002 or during the Renewal Term, if any).
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6.8 TELEPHONE AUTHORIZATIONS. Lenders are authorized to make the Loans
and provide the Letter of Credit Accommodations based upon telephonic or other
instructions received from anyone purporting to be an officer of Borrowers or
other authorized Person or, at the discretion of Lenders, if such Loans are
necessary to satisfy any Obligations. All requests for Loans or Letter of Credit
Accommodations hereunder shall specify the date on which the requested advance
is to be made or Letter of Credit Accommodations established (which day shall be
a business day) and the amount of the requested Loan. Requests received after
11:00 a.m., on any day shall be deemed to have been made as of the opening of
business on the immediately following business day. All Loans and Letter of
Credit Accommodations under this Agreement shall be conclusively presumed to
have been made to, and at the request of and for the benefit of, Borrowers when
deposited to the credit of any Borrower or otherwise disbursed or established in
accordance with the instructions of Borrowers (or Borrowing Agent) or in
accordance with the terms and conditions of this Agreement.
6.9 USE OF PROCEEDS. Borrowers shall use the initial proceeds of the
Loans provided by Lenders to Borrowers hereunder only for: (a) payments to each
of the Persons listed in the disbursement direction letter furnished by
Borrowers to Agents on or about the date hereof and (b) costs, expenses and fees
in connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Financing Agreements. All other Loans made or Letter of
Credit Accommodations provided by Lenders to Borrowers pursuant to the
provisions hereof shall be used by Borrowers only for general operating, working
capital and other proper corporate purposes of Borrowers not otherwise
prohibited by the terms hereof. None of the proceeds will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security or for
the purposes of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which
might cause any of the Loans to be considered a "purpose credit" within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System.
6.10 AGENTS' ALLOCATION OF PAYMENTS AND COLLECTIONS. Except to the
extent otherwise expressly provided in SECTION 6.7 of this Agreement, all monies
to be applied to the Obligations, whether such monies represent voluntary
payments by one or more Obligors or are received pursuant to demand for payment
or realized from any disposition of Collateral, shall be allocated among Agents
and such of the Lenders as are entitled thereto (and, with respect to monies
allocated to Lenders, on a Pro Rata basis unless otherwise provided herein): (i)
first, to Collateral Agent to pay principal and accrued interest on any portion
of the Revolving Loans which Collateral Agent may have advanced on behalf of any
Lender and for which Collateral Agent has not been reimbursed by such Lender or
Borrowers; (ii) second, to BankBoston to pay the principal and accrued interest
on any portion of the Settlement Loans outstanding, to be shared with Lenders
that have acquired a participating interest in such Settlement Loans; (iii)
third, to Congress to pay the principal amount of and any accrued interest on
any payment made by Congress under any Letter of Credit Accommodation to the
extent that Congress has not been reimbursed in full and has not received from
each Participating Lender a participation payment as required by SECTION 2.2
hereof; (iv) fourth, to Agents and BankBoston to pay the amount of Extraordinary
Expenses that have not been reimbursed to Agents or BankBoston by Borrowers or
Lenders, together with interest accrued thereon at the rate applicable to
Revolving Loans that are Base Rate Loans; (v) fifth, to Agents to pay any
Indemnified Amount that has not been paid to Agents by Obligors or Lenders,
together with interest accrued thereon at the rate applicable to Revolving Loans
that are Base Rate Loans; (vi) sixth, to Agents to pay any fees due and payable
to Agents; (vii) seventh, to Lenders for any Indemnified Amount that they have
paid to Agents and any Extraordinary Expenses that they have reimbursed to
Agents, to the extent that Lenders have not been reimbursed from Obligors
therefor; (viii) eighth, to Congress (for its benefit and the Pro Rata benefit
of the Participating Lenders) to pay principal and interest on their
participations in the Letter of Credit Accommodations outstanding (or, to the
extent any of the Letter of Credit Accommodations are contingent and an Event of
Default then exists, deposited in the Cash Collateral Account to provide
security for the payment of the Letter of Credit Accommodations); and (ix)
ninth, to Lenders in payment of the unpaid principal and accrued
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interest in respect of the Loans and any other Obligations then outstanding to
be shared among Lenders on a ratable basis, or on such other basis as may be
agreed upon in writing by Lenders (which agreement or agreements may be entered
into without notice to or the consent or approval of Borrowers). The allocations
set forth in this SECTION 6.10 are solely to determine the rights and priorities
of Agents and Lenders as among themselves and may be changed by Agents and
Lenders without notice to or the consent or approval of Borrowers or any other
Person.
6.11 GROSS UP FOR TAXES. If Borrowers shall be required by Applicable
Law to withhold or deduct any Taxes from or in respect of any sum payable under
this Agreement or any of the other Financing Agreements, (a) the sum payable to
Agents or such Lender shall be increased as may be necessary so that, after
making all required withholding or deductions, Agents or such Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such withholding or deductions been made, (b) Borrowers shall make such
withholding or deductions, and (c) Borrowers shall pay the full amount withheld
or deducted to the relevant taxation authority or other authority in accordance
with Applicable Law.
6.12 WITHHOLDING TAX EXEMPTION. At least five (5) Business Days prior
to the first date on which interest or fees are payable hereunder for the
account of any Lender, each Lender that is not incorporated under the laws of
the United States or any state thereof agrees that it will deliver to Borrowers
and Collateral Agent two (2) duly completed copies of United States Internal
Revenue Service Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payment under this Agreement and its Notes without deduction
or withholding of any United States federal income taxes. Each Lender which so
delivers a Form 1001 or 4224 further undertakes to deliver to Borrowers and
Collateral Agent two (2) additional copies of such form (or a successor form) on
or before the date that such form expires (currently, three (3) successive
calendar years for Form 1001 and one calendar year for Form 4224) or becomes
obsolete or after the occurrence of any event requiring a change in the most
form so delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by Borrowers or Collateral Agent, in each
case, certifying that such Lender is entitled to receive payments under this
Agreement and its Notes without deduction or withholding of any United States
federal income taxes, unless an event (including any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required that renders all such forms inapplicable or that would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender advises Borrowers and Agent that it is not capable
of receiving payments without any deduction or withholding of United States
federal income taxes.
SECTION 7. COLLATERAL REPORTING AND COVENANTS
7.1 COLLATERAL REPORTING.
(a) Borrower shall provide Agents with the following documents in a
form satisfactory to Agents and Lenders:
(i) on a weekly basis or more frequently at Borrowers' option or
as Agents may request, a Borrowing Base Certificate setting forth Borrowers'
calculation of the Revolving Loans and Letter of Credit Accommodations available
to Borrower pursuant to the terms and conditions contained herein as of the last
Business Day of the immediately preceding week as to the Accounts and as of the
last day of the preceding week as to Inventory, duly completed and executed by
the chief financial officer or other appropriate financial officer acceptable to
Agents, together with all schedules required pursuant to the terms of the
Borrowing Base Certificate duly completed; provided, that, without limiting any
other rights of Agents and Lenders, Borrowers shall provide Agents on a daily
basis with a schedule of Accounts, collections received and credits issued; and
provided,
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further, without limiting any other rights of Agents and Lenders, Borrowers
shall provide Agents on a daily basis with an inventory report in the event that
at any time either: (1) a Default or an Event of Default shall exist or have
occurred, or (2) Borrowers shall have failed to deliver any Borrowing Base
Certificate in accordance with the terms hereof, or (3) upon Agents' good faith
belief, any information contained in any Borrowing Base Certificate is
incomplete, inaccurate or misleading;
(ii) on a monthly basis or more frequently as Agents may request,
(A) perpetual inventory reports, (B) inventory reports by category and (C)
agings of accounts payable;
(iii) upon Agents' request, (A) copies of customer statements and
credit memos, remittances advices and reports, and copies of deposit slips and
bank statements, (B) copies of shipping and delivery documents, and (C) copies
of purchase orders, invoices and delivery of documents for Inventory and
Equipment acquired by Borrowers;
(iv) agings of accounts receivable on a monthly basis or more
frequently as Agents may request; and
(v) such other reports as to the Collateral as Agents shall
request from time to time.
(b) Nothing contained in any Borrowing Base Certificate shall be deemed
to limit, impair or otherwise affect the rights of Agents and Lenders contained
herein and in the event of any conflict or inconsistency between the calculation
of the Revolving Loans and Letter of Credit Accommodations available to
Borrowers as set forth in any Borrowing Base Certificate and as determined by
Agents, the determination of Agents shall govern and be conclusive and binding
upon Borrowers. Without limiting the foregoing, Borrowers shall furnish to
Agents and Lenders any information which Agents and Lenders may reasonably
request regarding the determination and calculation of any of the amounts set
forth in the Borrowing Base Certificate. If any Borrower's records or reports of
the Collateral are prepared or maintained by an accounting service, contractor,
shipper or other agent, such Borrower hereby irrevocably authorizes such
service, contractor, shipper or agent to deliver such records, reports and
related documents to Agents and to follow Agents' instructions with respect to
further services at any time that an Event of Default exists or has occurred and
is continuing.
7.2 ACCOUNTS COVENANTS.
(a) Borrowers shall notify Agents promptly of: (i) any material
delay in any Borrower's performance of any of its obligations to any account
debtor or the assertion of any claims, offsets, defenses or counterclaims by any
account debtor, or any disputes with account debtors, or any settlement,
adjustment or compromise thereof, (ii) all material adverse information relating
to the financial condition of any account debtor and (iii) any event or
circumstance which, to any Borrower's knowledge would cause Agents to consider
any then existing Accounts as no longer constituting Eligible Accounts. No
credit, discount, allowance or extension or agreement for any of the foregoing
shall be granted to any account debtor without Agents' consent, except in the
ordinary course of Borrowers' business in accordance with practices and policies
previously disclosed in writing to Agents. So long as no Event of Default exists
or has occurred and is continuing, Borrowers shall settle, adjust or compromise
any claim, offset, counterclaim or dispute with any account debtor. At any time
that an Event of Default exists or has occurred and is continuing, Agents shall,
at their option, have the exclusive right to settle, adjust or compromise any
claim, offset, counterclaim or dispute with account debtors or grant any
credits, discounts or allowances.
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(b) Without limiting the obligation of Borrowers to deliver any
other information to Agents, Borrowers shall promptly report to Agents any
return of Inventory by any one account debtor if the Inventory so returned in
such case has a value in excess of $250,000. At any time that Inventory is
returned, reclaimed or repossessed, the Account (or portion thereof) which arose
from the sale of such returned, reclaimed or repossessed Inventory shall not be
deemed an Eligible Account. In the event any account debtor returns Inventory
when an Event of Default exists or has occurred and is continuing, Borrowers
shall, upon Agents' request, (i) hold the returned Inventory in trust for
Agents, (ii) segregate all returned Inventory from all of its other property,
(iii) dispose of the returned Inventory solely according to Agents'
instructions, and (iv) not issue any credits, discounts or allowances with
respect thereto without Agents' prior written consent.
(c) With respect to each Account: (i) the amounts shown on any
invoice delivered to Agents or schedule thereof delivered to Agents shall be
true and complete, (ii) no payments shall be made thereon except payments
immediately delivered to Agents pursuant to the terms of this Agreement, (iii)
no credit, discount, allowance or extension or agreement for any of the
foregoing shall be granted to any account debtor except as reported to Agents in
accordance with this Agreement and except for credits, discounts, allowances or
extensions made or given in the ordinary course of Borrowers' business in
accordance with practices and policies previously disclosed to Agents, (iv)
there shall be no setoffs, deductions, contras, defenses, counterclaims or
disputes existing or asserted with respect thereto except as reported to Agents
in accordance with the terms of this Agreement, (v) none of the transactions
giving rise thereto will violate any Applicable Law, all documentation relating
thereto will be legally sufficient under all Applicable Law, and all such
documentation will be legally enforceable in accordance with its terms.
(d) Any Agent or Lender shall have the right at any time or
times, in such Agent's or Lender's name or in the name of a nominee of such
Agent or Lender, to verify the validity, amount or any other matter relating to
any Account or other Collateral, by mail, telephone, facsimile transmission or
otherwise.
(e) Borrowers shall deliver or cause to be delivered to
Collateral Agent, with appropriate endorsement and assignment, with full
recourse to Borrowers, all chattel paper and instruments which any Borrower now
owns or may at any time acquire immediately upon any Borrower's receipt thereof,
except as Agents may otherwise agree.
(f) Agents may, at any time or times that an Event of Default
exists or has occurred and is continuing, (i) notify any or all account debtors
that the Accounts have been assigned to Collateral Agent and that Collateral
Agent has a security interest therein and Agents may direct any or all accounts
debtors to make payment of Accounts directly to Collateral Agent, (ii) extend
the time of payment of, compromise, settle or adjust for cash, credit, return of
merchandise or otherwise, and upon any terms or conditions, any and all Accounts
or other obligations included in the Collateral and thereby discharge or release
the account debtor or any other party or parties in any way liable for payment
thereof without affecting any of the Obligations, (iii) demand, collect or
enforce payment of any Accounts or such other obligations, but without any duty
to do so, and neither Agents nor Lenders shall be liable for any failure to
collect or enforce the payment thereof nor for the negligence of its agents or
attorneys with respect thereto and (iv) take whatever other action Agents may
deem necessary or desirable for the protection of their interests. At any time
that an Event of Default exists or has occurred and is continuing, at Agents'
request, all invoices and statements sent to any account debtor shall state that
the Accounts and such other obligations have been assigned to Collateral Agent
and are payable directly and only to Collateral Agent and Borrowers shall
deliver to Collateral Agent such originals of documents evidencing the sale and
delivery of goods or the performance of services giving rise to any Accounts as
Agents may require.
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7.3 INVENTORY COVENANTS. With respect to the Inventory: (a) Borrowers
shall at all times maintain Inventory records reasonably satisfactory to Agents,
keeping correct and accurate records itemizing and describing the kind, type,
quality and quantity of Inventory, Borrowers' cost therefor and daily
withdrawals therefrom and additions thereto; (b) Borrowers shall conduct a
physical count of the Inventory at least once each year, but at any time or
times as Agents may request on or after an Event of Default, and promptly
following such physical inventory shall supply Agents with a report in the form
and with such specificity as may be reasonably satisfactory to Agents concerning
such physical count; (c) Borrowers shall not remove any Inventory from the
locations set forth or permitted herein, without the prior written consent of
Agents, except for sales of Inventory in the ordinary course of Borrowers'
business and except to move Inventory directly from one location set forth or
permitted herein to another such location; (d) upon either Agent's request,
Borrowers shall, at their expense, no more than once in any twelve (12) month
period, but at any time or times as either Agent may request on or after an
Event of Default, deliver or cause to be delivered to Agents written reports or
appraisals as to the Inventory in form, scope and methodology acceptable to
Agents and by an appraiser acceptable to Agent , addressed to Agents or upon
which Agents are expressly permitted to rely; (e) Borrowers shall produce, use,
store and maintain the Inventory with all reasonable care and caution and in
accordance with applicable standards of any insurance and in conformity with
Applicable Law (including the requirements of the Federal Fair Labor Standards
Act of 1938); (f) Borrowers assume all responsibility and liability arising from
or relating to the production, use, sale or other disposition of the Inventory;
(g) Borrowers shall not sell Inventory to any customer on approval, or any other
basis which entitles the customer to return or may obligate Borrowers to
repurchase such Inventory; (h) Borrowers shall keep the Inventory in good and
marketable condition; and (i) Borrowers shall not, without prior written notice
to Agents, acquire or accept any Inventory on consignment or approval.
7.4 EQUIPMENT COVENANTS. With respect to the Equipment: (a) Borrowers
shall, at their expense, at any time or times as Agents may request on or after
an Event of Default, deliver or cause to be delivered to Agents written reports
or appraisals as to the Equipment in form, scope and methodology acceptable to
Agents and by an appraiser acceptable to Agents; (b) Borrowers shall keep the
Equipment in good order, repair, running and marketable condition (ordinary wear
and tear excepted); (c) Borrowers shall use the Equipment with all reasonable
care and caution and in accordance with applicable standards of any insurance
and in conformity with all applicable laws; (d) the Equipment is and shall be
used in Borrowers' business and not for personal, family, household or farming
use; (e) Borrowers shall not remove any Equipment from the locations set forth
or permitted herein, except (i) to the extent necessary to have any Equipment
repaired or maintained in the ordinary course of the business of Borrowers, (ii)
to move Equipment directly from one location set forth or permitted herein to
another such location, (iii) for dispositions of Equipment expressly authorized
herein, and (iv) for the movement of motor vehicles used by or for the benefit
of Borrowers in the ordinary course of business; (f) the Equipment is now and
shall remain personal property and Borrowers shall not permit any of the
Equipment to be or become a part of or affixed to real property; and (g)
Borrowers assume all responsibility and liability arising from the use of the
Equipment.
7.5 POWER OF ATTORNEY. Each Borrower hereby irrevocably designates and
appoints Collateral Agent (and all persons designated by Collateral Agent) as
such Borrower's true and lawful attorney-in-fact, and authorizes Collateral
Agent , in Borrowers' or Collateral Agent 's name, to: (a) at any time a Default
or Event of Default exists or has occurred and is continuing (i) demand payment
on Accounts or other proceeds of Inventory or other Collateral, (ii) enforce
payment of Accounts by legal proceedings or otherwise, (iii) exercise all of
such Borrower's rights and remedies to collect any Account or other Collateral,
(iv) sell or assign any Account upon such terms, for such amount and at such
time or times as Agent deems advisable, (v) settle, adjust, compromise, extend
or renew an Account, (vi) discharge and release any Account, (vii) prepare, file
and sign such Borrower's name on any proof of claim in bankruptcy or other
similar document against an account debtor, and (viii) notify the post office
authorities to change the address for delivery of Borrowers' mail to an address
designated by Collateral Agent , and open and dispose of all mail addressed to
Borrowers; and (b) at any time to (i) take control
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in any manner of any item of payment or proceeds thereof, (ii) have access to
any lockbox or postal box into which any Borrower's mail is deposited, (iii)
endorse any Borrower's name upon any items of payment or proceeds thereof and
deposit the same in Collateral Agent's account for application to the
Obligations, (iv) endorse any Borrower's name upon any chattel paper, document,
instrument, invoice, or similar document or agreement relating to any Account or
any goods pertaining thereto or any other Collateral, (v) sign any Borrower's
name on any verification of Accounts and notices thereof to account debtors and
(vi) execute in any Borrower's name and file any UCC financing statements or
amendments thereto. Each Borrower hereby releases Collateral Agent and its
officers, employees and designees from any liabilities arising from any act or
acts under this power of attorney and in furtherance thereof, whether of
omission or commission, except as a result of Collateral Agent's own gross
negligence or wilful misconduct as determined pursuant to a final non-appealable
order of a court of competent jurisdiction.
7.6 RIGHT TO CURE. Each Agent may, at its option, (a) cure any default
by Borrowers under any agreement with a third party or pay or bond on appeal any
judgment entered against Borrowers, (b) discharge taxes, Liens, or other
encumbrances at any time levied on or existing with respect to the Collateral
and (c) pay any amount, incur any expense or perform any act which, in such
Agent's judgment, is necessary or appropriate to preserve, protect, insure or
maintain the Collateral and the rights of Agents and Lenders with respect
thereto. Such Agent may add any amounts so expended to the Obligations and
charge Borrowers' account therefor, such amounts to be repayable by Borrowers ON
DEMAND. Agents shall be under no obligation to effect such cure, payment or
bonding and shall not, by doing so, be deemed to have assumed any obligation or
liability of Borrowers. Any payment made or other action taken by Agents under
this Section shall be without prejudice to any right to assert an Event of
Default hereunder and to proceed accordingly.
7.7 ACCESS TO PREMISES. From time to time as requested by Agents, at
the cost and expense of Borrowers, (a) Agents and Lenders or Agents' or Lenders'
designees shall have complete access to all of Borrowers' premises during normal
business hours and after notice to Borrowers, or at any time and without notice
to Borrowers if an Event of Default exists or has occurred and is continuing,
for the purposes of inspecting, verifying and auditing the Collateral and all of
Borrowers' books and records, including the Records, and (b) Borrowers shall
promptly furnish to Agents and Lenders such copies of such books and records or
extracts therefrom as Agents and Lenders may request, and (c) Agents and Lenders
may use during normal business hours such of Borrowers' personnel, equipment,
supplies and premises as may be reasonably necessary for the foregoing and if an
Event of Default exists or has occurred and is continuing for the collection of
Accounts and realization of other Collateral. Borrowers shall reimburse Agents
and Lenders ON DEMAND for all costs and expenses reasonably incurred by Agents
and Lenders in connection with any of the foregoing.
SECTION 8. REPRESENTATIONS AND WARRANTIES
Borrowers hereby represent and warrant to Agents and Lenders the
following (which shall survive the execution and delivery of this Agreement),
the truth and accuracy of which are a continuing condition of the making of
Loans and providing Letter of Credit Accommodations by Lenders to Borrowers:
8.1 CORPORATE EXISTENCE, POWER AND AUTHORITY; SUBSIDIARIES. Each
Borrower is a corporation or limited partnership duly organized and in good
standing under the laws of its state of incorporation or organization and is
duly qualified as a foreign corporation or limited partnership and in good
standing in all states or other jurisdictions where the nature and extent of the
business transacted by it or the ownership of assets makes such qualification
necessary, except for those jurisdictions in which the failure to so qualify
would not have a Material Adverse Effect. The execution, delivery and
performance of this Agreement, the other Financing Agreements and the
transactions contemplated hereunder and thereunder are all within each
Borrower's powers,
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have been duly authorized and are not in contravention of law or the terms of
such Borrower's certificate of incorporation, by-laws, or other organizational
documentation, or any indenture, agreement or undertaking to which such Borrower
is a party or by which such Borrower or its property is bound. This Agreement
and the other Financing Agreements constitute legal, valid and binding
obligations of Borrowers enforceable in accordance with their respective terms.
No Borrower has any Subsidiaries except as set forth on the Information
Certificate.
8.2 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE. All financial
statements relating to Borrowers which have been or may hereafter be delivered
by Borrowers to Agents have been prepared in accordance with GAAP and fairly
present the financial condition and the results of operation of Borrowers as at
the dates and for the periods set forth therein. Except as disclosed in any
interim financial statements furnished by Borrowers to Agents prior to the date
of this Agreement, there has been no change in the assets, liabilities,
properties and condition, financial or otherwise, of any Borrower, since the
date of the most recent audited financial statements furnished by Borrowers to
Agents prior to the date of this Agreement that might have a Material Adverse
Effect.
8.3 CHIEF EXECUTIVE OFFICE; COLLATERAL LOCATIONS. The chief executive
office of Borrowers and Borrowers' Records concerning Accounts are located only
at the address set forth below and their only other places of business and the
only other locations of Collateral, if any, are the addresses set forth in the
Information Certificate, subject to the right of Borrowers to establish new
locations in accordance with SECTION 9.2 below. The Information Certificate
correctly identifies any of such locations that are not owned by Borrowers and
sets forth the owners and/or operators thereof and to the best of each
Borrower's knowledge, the holders of any mortgages on such locations.
8.4 PRIORITY OF LIENS; TITLE TO PROPERTIES. The security interests and
Liens granted under this Agreement and the other Financing Agreements constitute
valid and perfected first priority Liens and security interests in and upon the
Collateral subject only to the Liens indicated on Schedule 8.4 hereto and the
other Liens permitted under SECTION 9.8 hereof. Each Borrower has good and
marketable title to all of its properties and assets subject to no Liens of any
kind, except for Permitted Liens.
8.5 TAX RETURNS. Each Borrower has filed, or caused to be filed, in a
timely manner all tax returns, reports and declarations which are required to be
filed by it (without requests for extension except as previously disclosed in
writing to Lenders). All information in such tax returns, reports and
declarations is complete and accurate in all material respects. Each Borrower
has paid or caused to be paid all Taxes due and payable or claimed due and
payable in any assessment received by it, except Taxes the validity of which are
being contested in good faith by appropriate proceedings diligently pursued and
available to such Borrower and with respect to which adequate reserves have been
set aside on its books. Adequate provision has been made for the payment of all
accrued and unpaid Taxes whether or not yet due and payable and whether or not
disputed.
8.6 LITIGATION. Except as set forth on the Information Certificate,
there is no present investigation by any governmental agency pending, or to the
best of any Borrower's knowledge threatened, against or affecting any Borrower,
its assets or business and there is no action, suit, proceeding or claim by any
Person pending, or to the best of any Borrower's knowledge threatened, against
any Borrowers or its assets or goodwill, or against or affecting any
transactions contemplated by this Agreement, which if adversely determined
against such Borrower would have a Material Adverse Effect.
8.7 COMPLIANCE WITH OTHER AGREEMENTS AND APPLICABLE LAWS. No Borrower
is in default in any material respect under, or in violation in any material
respect of any of the terms of, any agreement, contract,
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instrument, lease or other commitment to which it is a party or by which it or
any of its assets are bound and each Borrower is in compliance in all material
respects with all applicable provisions of all Applicable Law.
8.8 EMPLOYEE BENEFITS.
(a) Borrowers have not engaged in any transaction in connection
with which Borrowers or any of its ERISA Affiliates could be subject to either a
civil penalty assessed pursuant to Section 4971, Section 502(i) of ERISA or a
tax imposed by Section 4975 of the Code, including any accumulated funding
deficiency described in SECTION 8.8(C) hereof and any deficiency with respect to
vested accrued benefits described in SECTION 8.8(D) hereof.
(b) No liability to the Pension Benefit Guaranty Corporation has
been or is expected by Borrowers to be incurred with respect to any employee
benefit plan of Borrowers or any of their ERISA Affiliates. There has been no
reportable event (within the meaning of Section 4043(b) of ERISA) or any other
event or condition with respect to any employee pension benefit plan of
Borrowers or any of their ERISA Affiliates which presents a material risk of
termination of any such plan by the Pension Benefit Guaranty Corporation.
(c) Full payment has been made of all amounts which any Borrower
or any of its ERISA Affiliates is required under Section 302 of ERISA and
Section 412 of the Code to have paid under the terms of each employee benefit
plan as contributions to such plan as of the last day of the most recent fiscal
year of such plan ended prior to the date hereof, and no accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, exists with respect to any employee benefit plan,
including any penalty or tax described in SECTION 8.8(A) hereof and any
deficiency with respect to vested accrued benefits described in SECTION 8.8(D)
hereof.
(d) The current value of all vested accrued benefits under all
employee benefit plans maintained by Borrowers that are subject to Title IV of
ERISA does not exceed the current value of the assets of such plans allocable to
such vested accrued benefits, including any penalty or tax described in SECTION
8.8(A) hereof and any accumulated funding deficiency described in SECTION 8.8(C)
hereof. The terms "current value" and "accrued benefit" have the meanings
specified in ERISA.
(e) No Borrower or any of its ERISA Affiliates is or has ever
been obligated to contribute to any "multiemployer plan" (as such term is
defined in Section 4001(a)(3) of ERISA) that is subject to Title IV of ERISA.
8.9 ENVIRONMENTAL COMPLIANCE.
(a) Except as set forth on Schedule 8.9 hereto, no Borrower has
generated, used, stored, treated, transported, manufactured, handled, produced
or disposed of any Hazardous Materials, on or off its premises (whether or not
owned by it) in any manner which at any time violates any applicable
Environmental Law or any license, permit, certificate, approval or similar
authorization thereunder and the operations of each Borrower complies in all
material respects with all Environmental Laws and all licenses, permits,
certificates, approvals and similar authorizations thereunder.
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(b) Except as set forth on Schedule 8.9 hereto, there has been no
investigation, proceeding, complaint, order, directive, claim, citation or
notice by any governmental authority or any other Person nor is any pending or
to the best of each Borrower's knowledge threatened, with respect to any
non-compliance with or violation of the requirements of any Environmental Law by
Borrowers or the release, spill or discharge, threatened or actual, of any
Hazardous Material or the generation, use, storage, treatment, transportation,
manufacture, handling, production or disposal of any Hazardous Materials or any
other environmental, health or safety matter, which affects Borrowers or their
business, operations or assets or, to Borrowers' knowledge, any properties at
which Borrowers have transported, stored or disposed of any Hazardous Materials.
(c) No Borrower has any material liability (contingent or
otherwise) in connection with a release, spill or discharge, threatened or
actual, of any Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials.
(d) Each Borrower has all material licenses, permits,
certificates, approvals or similar authorizations required to be obtained or
filed in connection with the operations of Borrowers under any Environmental Law
and all of such licenses, permits, certificates, approvals or similar
authorizations are valid and in full force and effect.
8.10 BANK ACCOUNTS. All of the deposit accounts, investment accounts or
other accounts in the name of or used by any Borrower maintained at any bank or
other financial institution are set forth on Schedule 8.10 hereto, subject to
the right of Borrowers to establish new accounts in accordance with SECTION 9.13
below.
8.11 ACCURACY AND COMPLETENESS OF INFORMATION. All information
furnished by or on behalf of any Borrower in writing to Lenders in connection
with this Agreement or any of the other Financing Agreements or any transaction
contemplated hereby or thereby, including all information on the Information
Certificate is true and correct in all material respects on the date as of which
such information is dated or certified and does not omit any material fact
necessary in order to make such information not misleading. No event or
circumstance has occurred which has had or could reasonably be expected to have
a Material Adverse Effect, which has not been fully and accurately disclosed to
Agents and Lenders in writing.
8.12 SURVIVAL OF WARRANTIES; CUMULATIVE. All representations and
warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement and shall be deemed
to have been made again to Lenders on the date of each additional borrowing or
other credit accommodation hereunder and shall be conclusively presumed to have
been relied on by Lenders regardless of any investigation made or information
possessed by Lenders. The representations and warranties set forth herein shall
be cumulative and in addition to any other representations or warranties which
any Borrower shall now or hereafter give, or cause to be given, to Agents or
Lenders.
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
9.1 MAINTENANCE OF EXISTENCE. Except for mergers and dissolutions
expressly permitted by SECTION 9.7(A) hereof, each Borrower shall at all times
preserve, renew and keep in full, force and effect its corporate or partnership
existence and rights and franchises with respect thereto and maintain in full
force and effect all permits, licenses, trademarks, tradenames, approvals,
authorizations, leases and contracts necessary to carry on the business as
presently or proposed to be conducted. Each Borrower shall give Agents thirty
(30) days prior written notice of any proposed change in its corporate or
partnership name, which notice shall set forth the new name and each Borrower
shall deliver to Agents a copy of the amendment to the Certificate of
Incorporation or
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Certificate of Limited Partnership of such Borrower providing for the name
change certified by the Secretary of State of the jurisdiction of incorporation
of Borrowers as soon as it is available.
9.2 NEW COLLATERAL LOCATIONS. Any Borrower may open a new location
within the continental United States provided such Borrower (a) gives Agents and
Lenders thirty (30) days prior written notice of the intended opening of any
such new location and (b) executes and delivers, or causes to be executed and
delivered, to Agents such agreements, documents, and instruments as Agents may
deem reasonably necessary or desirable to protect Agents' interests in the
Collateral at such location, including UCC financing statements.
9.3 COMPLIANCE WITH LAWS, REGULATIONS, ETC. Borrowers shall, at all
times, comply in all material respects with all laws, rules, regulations,
licenses, permits, approvals and orders applicable to it and duly observe all
requirements of any Federal, State or local governmental authority, including
the Employee Retirement Security Act of 1974, the Occupational Safety and Health
Act of 1970, the Fair Labor Standards Act of 1938, and all statutes, rules,
regulations, orders, permits and stipulations relating to environmental
pollution and employee health and safety, including all of the Environmental
Laws.
9.4 PAYMENT OF TAXES AND CLAIMS. Each Borrower shall duly pay and
discharge all Taxes, contributions and governmental charges upon or against it
or its properties or assets, except for Taxes the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to such Borrower and with respect to which adequate reserves have been
set aside on its books. Borrowers shall be liable for any Tax or penalties
imposed on Agents and Lenders as a result of the financing arrangements provided
for herein and Borrowers jointly and severally agree to indemnify and hold
Agents and Lenders harmless with respect to the foregoing, and to repay to
Agents and Lenders ON DEMAND the amount thereof, and until paid by Borrowers
such amount shall be added and deemed part of the Loans, provided, that, nothing
contained herein shall be construed to require Borrowers to pay any income,
excise or franchise Taxes attributable to the income of any Agents or Lender
from any amounts charged or paid hereunder to Agent or Lenders. The foregoing
indemnity shall survive the payment of the Obligations and the termination or
non-renewal of this Agreement and the Commitments.
9.5 INSURANCE. Borrowers shall, at all times, maintain with financially
sound and reputable insurers insurance with respect to the Collateral against
loss or damage and all other insurance of the kinds and in the amounts
customarily insured against or carried by corporations of established reputation
engaged in the same or similar businesses and similarly situated. Said policies
of insurance shall be satisfactory to Agents as to form, amount and insurer.
Borrowers shall furnish certificates, policies or endorsements to Collateral
Agent as Agents shall require as proof of such insurance, and, if Borrowers
fails to do so, Collateral Agent is authorized, but not required, to obtain such
insurance at the expense of Borrowers. All policies shall provide for at least
thirty (30) days prior written notice to Collateral Agent of any cancellation or
reduction of coverage and that Collateral Agent may act as attorney for
Borrowers in obtaining, and at any time an Event of Default exists or has
occurred and is continuing, adjusting, settling, amending and canceling such
insurance. Borrowers shall cause Collateral Agent to be named as a loss payee
and an additional insured (but without any liability for any premiums) under
such insurance policies and Borrowers shall obtain non-contributory lender's
loss payable endorsements to all insurance policies in form and substance
satisfactory to Agents. Such lender's loss payable endorsements shall specify
that the proceeds of such insurance shall be payable to Collateral Agent as its
interests may appear and further specify that Collateral Agent shall be paid
regardless of any act or omission by Borrowers or any of their affiliates. At
their option, Agents and Lenders may apply any insurance proceeds received by
Agents and Lenders at any time to the cost of repairs or replacement of
Collateral and/or to payment of the Obligations, whether or not then due, in any
order and in such manner as Agents and Lenders may determine or hold such
proceeds as cash collateral for the Obligations.
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9.6 FINANCIAL STATEMENTS AND OTHER INFORMATION.
(a) Borrowers shall keep proper books and records in which true
and complete entries shall be made of all dealings or transactions of or in
relation to the Collateral and the business of Borrowers and their Subsidiaries
(if any) in accordance with GAAP and Borrowers shall furnish or cause to be
furnished to Agents and Lenders: (i) within thirty (30) days after the end of
each fiscal month, monthly unaudited consolidated financial statements, and, if
Borrowers have any Subsidiaries, unaudited consolidating financial statements
(including in each case balance sheets, statements of income and loss,
statements of cash flow, and statements of shareholders' equity), all in
reasonable detail, fairly presenting the financial position and the results of
the operations of Borrowers and their Subsidiaries as of the end of and through
such fiscal month and (ii) within ninety (90) days after the end of each fiscal
year, audited consolidated financial statements and, if Borrowers have any
Subsidiaries, audited consolidating financial statements of Borrowers and their
Subsidiaries (including in each case balance sheets, statements of income and
loss, statements of cash flow and statements of shareholders' equity), and the
accompanying notes thereto, all in reasonable detail, fairly presenting the
financial position and the results of the operations of Borrowers and their
Subsidiaries as of the end of and for such fiscal year, together with the
unqualified opinion of independent certified public accountants, which
accountants shall be an independent accounting firm selected by Borrowers and
reasonably acceptable to Agents, that such financial statements have been
prepared in accordance with GAAP, and present fairly the results of operations
and financial condition of Borrowers and their Subsidiaries as of the end of and
for the fiscal year then ended.
(b) Borrowers shall promptly notify Agents and Lenders in writing
of the details of (i) any loss, damage, investigation, action, suit, proceeding
or claim relating to the Collateral or any other property which is security for
the Obligations or which would have a Material Adverse Effect and (ii) the
occurrence of any Default or Event of Default.
(c) Borrowers shall promptly after the sending or filing thereof
furnish or cause to be furnished to Agents and Lenders copies of all reports
which Borrowers sends to its stockholders generally and copies of all reports
and registration statements which Borrowers files with the Securities and
Exchange Commission, any national securities exchange or the National
Association of Securities Dealers, Inc.
(d) Borrowers shall furnish or cause to be furnished to Agents
and Lenders such budgets, forecasts, projections and other information
respecting the Collateral and the business of Borrowers, as Agent and Lenders
may, from time to time, reasonably request. Agents and Lenders are hereby
authorized to deliver a copy of any financial statement or any other information
relating to the business of Borrowers to any court or other government agency or
to any participant or assignee or prospective participant or assignee. Each
Borrower hereby irrevocably authorizes and directs all accountants or auditors
to deliver to Agents and Lenders, at Borrowers' expense, copies of the financial
statements of such Borrower and any reports or management letters prepared by
such accountants or auditors on behalf of Borrowers and to disclose to Agents
and Lenders such information as they may have regarding the business of
Borrowers. Any documents, schedules, invoices or other papers delivered to
Agents or Lenders may be destroyed or otherwise disposed of by Agents and
Lenders one (1) year after the same are delivered to Agent and Lenders, except
as otherwise designated by Borrowers to Agents and Lenders in writing.
(e) Borrowers shall promptly notify Agents in writing in the
event that at any time after the delivery of a Borrowing Base Certificate by
Borrowers to Agents but prior to the delivery of the next Borrowing Base
Certificate to be delivered by Borrowers to Collateral Agent in accordance with
the terms hereof: (i) the amount of Revolving Loans and Letter of Credit
Accommodations available to Borrowers pursuant to the terms
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and conditions contained herein (calculated without regard to the then
outstanding Revolving Loans and Letter of Credit Accommodations) is less than
ninety (90%) percent of the amount of Revolving Loans and Letter of Credit
Accommodations available to Borrowers pursuant to the terms and conditions
contained herein (calculated without regard to the then outstanding Revolving
Loans and Letter of Credit Accommodations) as set forth in the most recent
Borrowing Base Certificate previously delivered by Borrowers to Agents pursuant
to SECTION 7.1 hereof, (ii) the Revolving Loans and/or Letter of Credit
Accommodations outstanding at such time exceed the amount of the Revolving Loans
and Letter of Credit Accommodations then available to Borrowers under the terms
hereof as a result of any decrease in the amount of Revolving Loans and Letter
of Credit Accommodations then available and the amount of such excess, or (iii)
Excess Availability is less than $5,000,000.
9.7 SALE OF ASSETS, CONSOLIDATION, MERGER, DISSOLUTION, ETC. No
Borrower shall, directly or indirectly,
(a) merge into or with or consolidate with any other Person or permit
any other Person to merge into or with or consolidate with it, except that so
long as no Event of Default exists or would result therefrom:
(i) any Borrower may merge into any other Borrower;
(ii) any Guarantor may merge into any Borrower or any other
Guarantor; and
(iii) any Borrower or Guarantor may merge or consolidate with any
other Person provided that such Borrower or Guarantor is the surviving entity,
or
(b) sell, assign, lease, transfer, abandon or otherwise dispose of any
stock or indebtedness to any other Person or any of its assets to any other
Person, except for so long as no Event of Default exists or would result
therefrom:
(i) sales of Inventory in the ordinary course of business;
(ii) the disposition of worn-out or obsolete Equipment or
disposition of Equipment no longer economically operational to the business of
Borrowers so long as the proceeds thereof are delivered to Collateral Agent for
application to the Obligations;
(iii) the sale or disposition of Borrowers' Real Property located
in Trenton, Tennessee or Xxxxxxxx, North Carolina, and any Equipment located on
such Real Property that was not included in the Accuval appraisal dated June 18,
1999, so long as the proceeds thereof are delivered to Collateral Agent for
application to the Obligations;
(iv) sales of Accounts to a Factor pursuant to a Factoring
Agreement so long as each of the Factor Eligibility Conditions is satisfied;
(v) transfers of Properties among Borrowers and Guarantors
upon fifteen (15) days prior written notice to Agents;
(vi) Permitted Property Transfers;
(vii) transfers permitted on Schedule 9.7 attached hereto; or
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(c) except for the Subsidiaries listed on Schedule 9.7 attached hereto,
form or acquire any Subsidiaries, or
(d) wind up, liquidate or dissolve (except that a Borrower may dissolve
provided that upon such dissolution one or more remaining Borrowers succeed to
all of such dissolving Borrower's assets and assumes all of such Borrower's
obligations hereunder), or
(e) agree to do any of the foregoing.
9.8 ENCUMBRANCES. No Borrower shall create, incur, assume or suffer to
exist any security interest, Lien or other encumbrance of any nature whatsoever
on any of its assets or properties, including the Collateral, except: (a) Liens
and security interests in favor of Collateral Agent ; (b) Liens securing the
payment of Taxes, either not yet overdue or the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to such Borrower and with respect to which adequate reserves have been
set aside on its books; (c) non-consensual statutory Liens (other than Liens
securing the payment of Taxes) arising in the ordinary course of such Borrower's
business to the extent: (i) such Liens secure indebtedness which is not overdue
or (ii) such Liens secure indebtedness relating to claims or liabilities which
are fully insured and being defended at the sole cost and expense and at the
sole risk of the insurer or being contested in good faith by appropriate
proceedings diligently pursued and available to such Borrower, in each case
prior to the commencement of foreclosure or other similar proceedings and with
respect to which adequate reserves have been set aside on its books; (d) zoning
restrictions, easements, licenses, covenants and other restrictions affecting
the use of Real Property which do not interfere in any material respect with the
use of such Real Property or ordinary conduct of the business of such Borrower
as presently conducted thereon or materially impair the value of the Real
Property which may be subject thereto; (e) purchase money security interests in
Equipment (including capital leases) and purchase money mortgages on Real
Property, in each case entered into from and after the date hereof not to exceed
$1,000,000 in the aggregate at any time so long as such security interests and
mortgages do not apply to any property of such Borrower other than the Equipment
or Real Property so acquired, and the indebtedness secured thereby does not
exceed the cost of the Equipment or Real Property so acquired, as the case may
be; (f) Liens securing any Offshore Equipment that has been released by
Collateral Agent in connection with a Permitted Property Transfer, to the extent
that such Lien is limited to such released Offshore Equipment only; (g) Liens on
Equipment purchased in connection with Permitted Affiliate Investments and
Permitted Supplemental Investments; and (h) the security interests and Liens set
forth on Schedule 8.4 hereto.
9.9 INDEBTEDNESS. No Borrower shall incur, create, assume, become or be
liable in any manner with respect to, or permit to exist, any obligations or
indebtedness, except: (a) the Obligations; (b) trade obligations and normal
accruals in the ordinary course of business not yet due and payable, or with
respect to which such Borrower is contesting in good faith the amount or
validity thereof by appropriate proceedings diligently pursued and available to
such Borrower, and with respect to which adequate reserves have been set aside
on its books; (c) purchase money indebtedness (including capital leases) to the
extent not incurred or secured by Liens (including capital leases) in violation
of any other provision of this Agreement; (d) the indebtedness set forth on
Schedule 9.9 hereto; (e) indebtedness owing from a Borrower or a Guarantor to
another Borrower or a Guarantor; (f) indebtedness incurred in connection with
cotton xxxxxx in the ordinary course of such Borrower's business; (g)
indebtedness arising from interest rate swap agreements or other interest rate
protection agreements between such Borrower and any Lender; (h) indebtedness for
money borrowed that is owed by a Foreign Subsidiary, non-U.S. Affiliate or joint
venture of a Borrower so long as the indebtedness does not exceed the value of
any Offshore Equipment that has been released by Collateral Agent in connection
with a Permitted Property Transfer, such indebtedness is secured only by a Lien
on such released Offshore Equipment and the other terms of such indebtedness are
acceptable in all respects to Agents; provided, that, (i) such Borrower may only
make regularly
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scheduled payments of principal and interest in respect of such indebtedness in
accordance with the terms of the agreement or instrument evidencing or giving
rise to such indebtedness as in effect on the date hereof, (ii) such Borrower
shall not, directly or indirectly, (A) amend, modify, alter or change the terms
of such indebtedness or any agreement, document or instrument related thereto as
in effect on the date hereof without the prior written consent of Agents, or (B)
redeem, retire, defease, purchase or otherwise acquire such indebtedness, or set
aside or otherwise deposit or invest any sums for such purpose, and (iii)
Borrowers shall furnish to Agents all notices or demands in connection with such
indebtedness either received by Borrowers or on their behalf, promptly after the
receipt thereof, or sent by Borrowers or on their behalf, concurrently with the
sending thereof, as the case may be.
9.10 LOANS, INVESTMENTS, GUARANTEES, ETC. No Borrower shall, directly
or indirectly, make any loans or advance money or property to any Person, or
invest in (by capital contribution, dividend or otherwise) or purchase or
repurchase the stock or indebtedness or all or a substantial part of the assets
or property of any Person, or guarantee, assume, endorse, or otherwise become
responsible for (directly or indirectly) the indebtedness, performance,
obligations or dividends of any Person or agree to do any of the foregoing,
except, so long as no Event of Default exists or would result therefrom: (a)
Permitted Affiliate Investments and Permitted Supplemental Investments; (b) the
endorsement of instruments for collection or deposit in the ordinary course of
business; (c) investments in: (i) short-term direct obligations of the United
States Government, (ii) negotiable certificates of deposit issued by any bank
satisfactory to Agents, payable to the order of such Borrower or to bearer and
delivered to Agents, (iii) commercial paper rated A1 or P1; provided, that, as
to any of the foregoing, unless waived in writing by Agents, such Borrower shall
take such actions as are deemed necessary by Agents to perfect the security
interest of Collateral Agent in such investments; (d) employee loans or advances
for travel and moving expenses in the ordinary course of business; (e)
investments in employee benefit plans of Borrowers that are consistent with
historical investment practices of Borrowers in such plans; (f) investments in
Subsidiaries that are Borrowers or Guarantors and any loans to or investments in
or from any Borrower or any Guarantor in connection with an integrated cash
management system among Borrowers and their Consolidated Subsidiaries; and (g)
the loans, advances and guarantees set forth on Schedule 9.10 hereto; ;
provided, that, as to such loans, advances and guarantees, (i) such Borrower
shall not, directly or indirectly, (A) amend, modify, alter or change the terms
of such loans, advances or guarantees or any agreement, document or instrument
related thereto, or (B) as to such guarantees, redeem, retire, defease, purchase
or otherwise acquire the obligations arising pursuant to such guarantees, or set
aside or otherwise deposit or invest any sums for such purpose, and (ii) such
Borrower shall furnish to Agents all notices or demands in connection with such
loans, advances or guarantees or other indebtedness subject to such guarantees
either received by such Borrower or on its behalf, promptly after the receipt
thereof, or sent by such Borrower or on its behalf, concurrently with the
sending thereof, as the case may be.
9.11 DIVIDENDS AND REDEMPTIONS. No Borrower shall, directly or
indirectly, declare or pay any dividends on account of any shares of class of
capital stock of such Borrower now or hereafter outstanding, or set aside or
otherwise deposit or invest any sums for such purpose, or redeem, retire,
defease, purchase or otherwise acquire any shares of any class of capital stock
(or set aside or otherwise deposit or invest any sums for such purpose) for any
consideration other than common stock or apply or set apart any sum, or make any
other distribution (by reduction of capital or otherwise) in respect of any such
shares or agree to do any of the foregoing, except (i) pursuant to the Rights
Agreement dated June 3, 1999 among Dyersburg and SunTrust Bank, Atlanta, N.A.,
as rights agent, and (ii) so long as no Event of Default exists or would result
therefrom, (a) Upstream Payments and (b) dividends payable solely in shares of
capital stock to another Borrower or Guarantor.
9.12 TRANSACTIONS WITH AFFILIATES. No Borrower shall, directly or
indirectly, (a) purchase, acquire or lease any property from, or sell, transfer
or lease any property to, any officer, director, agent or other Person
Affiliated with such Borrower, except in the ordinary course of and pursuant to
the reasonable requirements of such Borrower's business and upon fair and
reasonable terms no less favorable to such Borrower than such Borrower would
obtain in a comparable arm's length transaction with an unaffiliated Person or
(b) make any payments of management, consulting or other fees for management or
similar services, or of any indebtedness
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owing to any officer, employee, shareholder, director or other Person Affiliated
with such Borrower except reasonable compensation to officers, employees and
directors for services rendered to such Borrower in the ordinary course of
business.
9.13 ADDITIONAL BANK ACCOUNTS. No Borrower shall, directly or
indirectly, open, establish or maintain any deposit account, investment account
or any other account with any bank or other financial institution, other than
the Blocked Accounts and the accounts set forth in Schedule 8.10 hereto, except:
(a) as to any new or additional Blocked Accounts and other such new or
additional accounts which contain any Collateral or proceeds thereof, with the
prior written consent of Agents and subject to such conditions thereto as Agents
may establish and (b) as to any accounts used by Borrowers to make payments of
payroll, taxes or other obligations to third parties, after prior written notice
to Agents.
9.14 COMPLIANCE WITH ERISA.
(a) No Borrower shall, with respect to any "employee benefit
plans" maintained by such Borrower or any of its ERISA Affiliates: (i) terminate
any of such employee benefit plans so as to incur any liability to the Pension
Benefit Guaranty Corporation established pursuant to ERISA, (ii) engage in any
prohibited transaction involving any of such employee benefit plans or any trust
created thereunder which would subject such Borrower or such ERISA Affiliate to
a Tax or penalty or other liability on prohibited transactions imposed under
Section 4975 of the Code or ERISA, (iii) fail to pay to any such employee
benefit plan any contribution which it is obligated to pay under Section 302 of
ERISA, Section 412 of the Code or the terms of such plan, (iv) allow or suffer
to exist any accumulated funding deficiency, whether or not waived, with respect
to any such employee benefit plan, (v) allow or suffer to exist any occurrence
of a reportable event or any other event or condition which presents a material
risk of termination by the Pension Benefit Guaranty Corporation of any such
employee benefit plan that is a single employer plan, which termination could
result in any liability to the Pension Benefit Guaranty Corporation or (vi)
incur any withdrawal liability with respect to any multiemployer pension plan.
(b) As used in this SECTION 9.14, the terms "employee benefit
plans", "accumulated funding deficiency" and "reportable event" shall have the
respective meanings assigned to them in ERISA, and the term "prohibited
transaction" shall have the meaning assigned to it in Section 4975 of the Code
and ERISA.
9.15 CONSOLIDATED EBITDA. Borrowers shall maintain Consolidated EBITDA
of at least the amounts set forth below for the periods applicable thereto:
Period Amount
------ ------
October 3, 1999 through January 1, 2000 $7,600,000
October 3, 1999 through April 1, 2000 $15,775,000
October 3, 1999 through April 29, 2000 $17,725,000
October 3, 1999 through May 27, 2000 $20,000,000
October 3, 1999 through July 1, 2000 $23,000,000
October 3, 1999 through July 29, 2000 $26,000,000
October 3, 1999 through August 26, 2000 $29,000,000
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9.16 CONSOLIDATED ADJUSTED TANGIBLE NET WORTH. Borrowers shall, at all
times, maintain Consolidated Adjusted Tangible Net Worth of at least
$115,000,000 (the "Target Covenant"), tested on a monthly basis commencing
August 31, 1999. If Borrowers, with the prior written consent of Agents, reduce
the outstanding principal amount of the Senior Subordinated Notes below
$125,000,000 then the Target Covenant shall be reduced in an amount equal to
such reduction.
9.17 CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Borrowers shall maintain
a Consolidated Fixed Charge Coverage Ratio of not less than the ratio 1.1:1.0
for the immediately preceding four (4) fiscal quarters, commencing September 30,
2000.
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9.18 AFTER ACQUIRED REAL PROPERTY. If any Borrower hereafter acquires
any Real Property, fixtures or any other property that is of the kind or nature
described in the Mortgages and such Real Property, fixtures or other property at
any one location has a fair market value in an amount equal to or greater than
$100,000 (or if a Default or Event of Default exists, then regardless of the
fair market value of such assets), without limiting any other rights of Agents
or Lenders, or duties or obligations of Borrowers, upon either Agent's request,
Borrowers shall execute and deliver to Collateral Agent a mortgage, deed of
trust or deed to secure debt, as Agents may determine, in form and substance
substantially similar to the Mortgages and as to any provisions relating to
specific state laws satisfactory to Agents and in form appropriate for recording
in the real estate records of the jurisdiction in which such Real Property or
other property is located granting to Collateral Agent a first and only lien and
mortgage on and security interest in such Real Property, fixtures or other
property (except as Borrowers would otherwise be permitted to incur hereunder or
under the Mortgages or as otherwise consented to in writing by Agents) and such
other agreements, documents and instruments as Agents may require in connection
therewith.
9.19 COSTS AND EXPENSES. Borrowers shall jointly and severally pay to
Agents and Lenders ON DEMAND all costs, expenses, filing fees and Taxes paid or
payable in connection with the preparation, negotiation, execution, delivery,
recording, administration, collection, liquidation, enforcement and defense of
the Obligations, Agents' and Lenders' rights in the Collateral, this Agreement,
the other Financing Agreements and all other documents related hereto or
thereto, including any amendments, supplements or consents which may hereafter
be contemplated (whether or not executed) or entered into in respect hereof and
thereof, including: (a) all costs and expenses of filing or recording (including
UCC financing statement filing taxes and fees, documentary Taxes, intangibles
Taxes and mortgage recording Taxes and fees, if applicable); (b) costs and
expenses and fees for insurance premiums, environmental audits, surveys,
assessments, engineering reports and inspections, appraisal fees and search
fees; (c) costs and expenses of remitting loan proceeds, collecting checks and
other items of payment, and establishing and maintaining the Blocked Accounts,
together with Agents' and Lenders' customary charges and fees with respect
thereto; (d) charges, fees or expenses charged by any bank or issuer in
connection with the Letter of Credit Accommodations; (e) costs and expenses of
preserving and protecting the Collateral; (f) costs and expenses paid or
incurred in connection with obtaining payment of the Obligations, enforcing the
security interests and Liens of Collateral Agent, selling or otherwise realizing
upon the Collateral, and otherwise enforcing the provisions of this Agreement
and the other Financing Agreements or defending any claims made or threatened
against any Agent or Lender arising out of the transactions contemplated hereby
and thereby (including preparations for and consultations concerning any such
matters); (g) all out-of-pocket expenses and costs heretofore and from time to
time hereafter incurred by any Agent or Lender during the course of periodic
field examinations of the Collateral and Borrowers' operations, plus a per diem
charge at the rate of $650 per person per day for Agents' and Lenders' examiners
in the field and office; and (h) the fees and disbursements of counsel
(including legal assistants) to Agents and Lenders and any Participant in
connection with any of the foregoing.
9.20 EXCESS AVAILABILITY. Borrowers shall maintain Excess Availability
at all times after the Closing Date of at least $5,000,000.
9.21 OBLIGATIONS CONSTITUTE SENIOR DEBT. Borrowers acknowledge and
agree that it is the intent of the parties hereto that the Obligations
constitute "Designated Senior Debt" and "Senior Debt" under (and as defined in)
the Senior Subordinated Note Indenture.
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9.22 PHASE II SITE ASSESSMENTS.
(i) Phase IIs. Borrowers shall cause to be delivered to Agents
within forty-five (45) days after the Closing Date a Phase II environmental site
assessment (a "Phase II") for each of the Clinton, North Carolina Real Property
of Borrowers (the "Clinton Property"), and for the Dyersburg, Tennessee
(Xxxxxxxx Street) Real Property of Borrowers (the "Dyersburg Property"). Each
Phase II shall be in form and substance satisfactory to Agents. The purpose of
the Phase IIs shall be to investigate the areas of potential environmental
concerns as set forth in the Dames & Xxxxx engagement letters dated August 16,
1999, with respect to the Dyersburg Property and the Clinton Property, to
determine whether constituants are present in excess of those allowed by
Environmental Laws, and if present, the nature and extent of any noncompliance,
the abatement and/or remediation measures required to be taken or recommended by
the environmental engineer to comply with Environmental Laws, the estimated cost
of such abatement and/or remediation, and the estimated time to complete such
abatement and/or remediation. Agents shall have the right, in their sole and
absolute discretion, to require a more extensive review by the environmental
engineer of the Clinton Property and the Dyersburg Property if Agents determine
after the delivery by the engineer of the Phase IIs, that a further review by
the engineer is necessary or appropriate.
(ii) Within sixty (60) days after Borrowers' delivery to Agents
of each Phase II, Borrowers shall prepare and deliver to Agents a remediation
plan for the applicable Real Property covered by such Phase II (a "Remediation
Plan") in which Borrowers shall detail their proposal for abating and/or
remediating any problems identified in such Phase II and taking such other
measures as may be necessary or appropriate to bring such Real Property, and
Borrowers' ownership and use thereof, into compliance with all Environmental
Laws. Borrowers shall cause any and all abatement and/or remediation measures
for the Clinton Property and the Dyersburg Property to be commenced on or before
December 31, 1999, and to be expeditiously completed by a date mutually
agreeable to Borrowers and Agents.
(iii) Agents shall have the right, in their sole and absolute
discretion, to establish any Availability Reserves deemed necessary by either or
both Agents based upon their review of the Phase II or the Remediation Plans.
9.23 FISCAL YEAR. Borrowers shall not establish a fiscal year different
from the fiscal year in effect on the Closing Date.
9.24 UPSTREAM PAYMENTS. Borrowers shall not create or suffer to exist
any encumbrance or restriction on the ability of a Subsidiary to make any
Upstream Payment, except for encumbrances or restrictions (i) pursuant to the
Financing Agreements and (ii) existing under Applicable Law.
9.25 DM APPAREL JOINT VENTURE. Borrowers shall execute and deliver to
Agents within thirty (30) days after the Closing Date, a Collateral Assignment
of Rights under Joint Venture Agreement with respect to the DM Apparel joint
venture and any and all other pledge agreements, security agreements or other
instruments, agreement or documents required by Agents with respect to the DM
Apparel joint venture.
9.26 FURTHER ASSURANCES. At the request of either Agent at any time and
from time to time, Borrowers shall, at its expense, duly execute and deliver, or
cause to be duly executed and delivered, such further agreements, documents and
instruments, and do or cause to be done such further acts as may be necessary or
proper to evidence, perfect, maintain and enforce the Liens and the priority
thereof in the Collateral and to otherwise effectuate the provisions or purposes
of this Agreement or any of the other Financing Agreements. Agents may at any
time and from time to time request a certificate from an officer of Borrowers
representing that all
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conditions precedent to the making of Loans and providing Letter of Credit
Accommodations contained herein are satisfied. In the event of such request by
Agents, Lenders may, at their option, cease to make any further Loans or provide
any further Letter of Credit Accommodations until Agents have received such
certificate and, in addition, Agents have determined that such conditions are
satisfied. Where permitted by law, Borrowers hereby authorize Collateral Agent
to execute and file one or more UCC financing statements signed only by
Collateral Agent.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
10.1 EVENTS OF DEFAULT. The occurrence or existence of any one or more
of the following events are referred to herein individually as an "Event of
Default," and collectively as "Events of Default":
(a) Borrowers shall fail to pay any of the Obligations as and
when due and payable (whether due at stated maturity, ON DEMAND, upon
acceleration or otherwise);
(b) Borrowers shall fail or neglect to perform, keep or observe
any covenant contained in SECTIONS 6.5, 6.9, 7.1, 7.2, 7.3, 7.4, 7.7, 8.9, 9.2,
9.3, 9.4, 9.5, 9.6 through 9.14, 9.15 through 9.18, 9.20 or 9.22 hereof on the
date that Borrowers are required to perform, keep or observe such covenant;
(c) Borrowers shall fail or neglect to perform, keep or observe
any covenant contained in this Agreement or in any of the other Financing
Agreements (other than a covenant which is dealt with specifically elsewhere in
SECTION 10.1 hereof) and the breach of such other covenant is not cured to
Agents' satisfaction within 15 days after the sooner to occur of any Senior
Officer's receipt of notice of such breach from either Agent or the date on
which such failure or neglect first becomes known to any Senior Officer;
provided, however, that such notice and opportunity to cure shall not apply in
the case of any failure to perform, keep or observe any covenant which is not
capable of being cured at all or within such 15-day period (or to the extent
provided above, 15-day period) or which is a willful and knowing breach by
Borrowers;
(d) any representation, warranty or statement of fact made by
Borrowers to either or both Agents or any Lender in this Agreement, the other
Financing Agreements or any other agreement, schedule, confirmatory assignment
or otherwise shall when made or deemed made be false or misleading in any
material respect;
(e) any Obligor revokes, terminates or fails to perform any of
the terms, covenants, conditions or provisions of any Guaranty Agreement,
endorsement or other agreement of such party in favor of either or both Agents
or any Lender;
(f) any judgment for the payment of money is rendered against any
Borrower or other Obligor in excess of $250,000 in any one case or in excess of
$1,000,000 in the aggregate and shall remain undischarged or unvacated for a
period in excess of thirty (30) days or execution shall at any time not be
effectively stayed, or any judgment other than for the payment of money, or
injunction, attachment, garnishment or execution is rendered against any
Borrower or other Obligor or any of their assets;
(g) any Borrower or other Obligor, which is a partnership,
limited liability company, limited liability partnership or a corporation,
dissolves or suspends or discontinues doing business, except as otherwise
permitted herein;
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(h) any Borrower or other Obligor becomes insolvent (however
defined or evidenced), makes an assignment for the benefit of creditors, makes
or sends notice of a bulk transfer or calls a meeting of its creditors or
principal creditors;
(i) a case or proceeding under the Bankruptcy Code or under any
insolvency, reorganization, receivership, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction now or hereafter in effect
(whether at law or in equity) is filed against any Borrower or other Obligor or
all or any part of its properties and such petition or application is not
dismissed within thirty (30) days after the date of its filing or any Borrower
or other Obligor shall file any answer admitting or not contesting such petition
or application or indicates its consent to, acquiescence in or approval of, any
such action or proceeding or the relief requested is granted sooner;
(j) a case or proceeding under the Bankruptcy Code or under any
insolvency, reorganization, receivership, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction now or hereafter in effect
(whether at a law or equity) is filed by any Borrower or other Obligor or for
all or any part of its property; or
(k) any default by any Borrower or other Obligor under any
agreement, document or instrument relating to any indebtedness for borrowed
money owing to any Person other than Agents or Lenders, or any Capitalized Lease
Obligations, contingent indebtedness in connection with any guarantee, letter of
credit, indemnity or similar type of instrument in favor of any Person other
than Agents or Lenders, in any case in an amount in excess of $100,000, which
default continues for more than the applicable cure period, if any, with respect
thereto, or any default by any Borrower or other Obligor under any material
contract, lease, license or other obligation to any Person other than Agents or
Lenders, which default continues for more than the applicable cure period, if
any, with respect thereto;
(l) any change in the controlling ownership of any Borrower
(other than a change in the controlling ownership of Dyersburg or a change in
ownership resulting from a merger or consolidation permitted by SECTION 9.7(A)
hereof);
(m) the indictment or threatened indictment of any Borrower or
other Obligor under any criminal statute, or commencement or threatened
commencement of criminal or civil proceedings against any Borrower or other
Obligor, pursuant to which statute or proceedings the penalties or remedies
sought or available include forfeiture of any of the property of such Borrower
or other Obligor;
(n) there shall be a material adverse change in the business or
assets or prospects of Borrowers taken as a whole or other Obligor after the
date hereof;
(o) there shall occur or exist an event of default under any of
the other Financing Agreements;
(p) there shall occur or exist an event of default under any of
the Bond Documents; or
(q) there shall occur or exist an event of default under the
Senior Subordinated Notes or under the Senior Subordinated Notes Indenture.
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10.2 REMEDIES.
(a) At any time an Event of Default exists or has occurred and is
continuing, Agents and Lenders shall have all rights and remedies provided in
this Agreement, the other Financing Agreements, the UCC and other Applicable
Law, all of which rights and remedies may be exercised without notice to or
consent by any Borrower or other Obligor, except as such notice or consent is
expressly provided for hereunder or required by Applicable Law. All rights,
remedies and powers granted to Agents and Lenders hereunder, under any of the
other Financing Agreements, the UCC or other Applicable Law, are cumulative, not
exclusive and enforceable, in Agents' and Lenders' discretion, alternatively,
successively, or concurrently on any one or more occasions, and shall include
the right to apply to a court of equity for an injunction to restrain a breach
or threatened breach by Borrowers of this Agreement or any of the other
Financing Agreements. Agents and Lenders may, at any time or times, proceed
directly against any or all Borrowers or other Obligor to collect the principal
balance of the Obligations and all interest accrued thereon without prior
recourse to any Collateral.
(b) Without limiting the foregoing, at any time an Event of
Default exists or has occurred and is continuing, either or both of Agents may,
in their discretion (and shall if requested to do so by Required Lenders) and
without limitation, (i) terminate this Agreement pursuant to SECTION 14(A)
hereof and the Commitments, (ii) accelerate the payment of the principal balance
of the Obligations and all interest accrued thereon and demand immediate payment
thereof to Collateral Agent for the Pro Rata benefit of Lenders (provided, that,
upon the occurrence of any Event of Default described in SECTIONS 10.1(I) or
10.1(J), the principal balance of the Obligations and all interest accrued
thereon shall automatically become immediately due and payable and this
Agreement and the Commitments shall automatically terminate), (ii) with or
without judicial process or the aid or assistance of others, enter upon any
premises on or in which any of the Collateral may be located and take possession
of the Collateral or complete processing, manufacturing and repair of all or any
portion of the Collateral, (iii) require Borrowers, at Borrowers' expense, to
assemble and make available to Collateral Agent any part or all of the
Collateral at any place and time designated by Collateral Agent, (iv) collect,
foreclose, receive, appropriate, setoff and realize upon any and all Collateral,
(v) remove any or all of the Collateral from any premises on or in which the
same may be located for the purpose of effecting the sale, foreclosure or other
disposition thereof or for any other purpose, (vi) sell, lease, transfer,
assign, deliver or otherwise dispose of any and all Collateral (including
entering into contracts with respect thereto, public or private sales at any
exchange, broker's board, at any office of Collateral Agent or elsewhere) at
such prices or terms as Agents may deem reasonable, for cash, upon credit or for
future delivery, with Collateral Agent having the right to purchase the whole or
any part of the Collateral at any such public sale, all of the foregoing being
free from any right or equity of redemption of Borrowers, which right or equity
of redemption is hereby expressly waived and released by Borrowers and/or (vii)
terminate this Agreement. If any of the Collateral is sold or leased by
Collateral Agent upon credit terms or for future delivery, the Obligations shall
not be reduced as a result thereof until payment therefor is finally collected
by Collateral Agent. If notice of disposition of Collateral is required by law,
five (5) days prior notice by Collateral Agent to Borrowers designating the time
and place of any public sale or the time after which any private sale or other
intended disposition of Collateral is to be made, shall be deemed to be
reasonable notice thereof and Borrowers waive any other notice. In the event
Collateral Agent institutes an action to recover any Collateral or seeks
recovery of any Collateral by way of prejudgment remedy, Borrowers waive the
posting of any bond which might otherwise be required.
(c) Collateral Agent may apply the cash proceeds of Collateral
actually received by Collateral Agent from any sale, lease, foreclosure or other
disposition of the Collateral to payment of the Obligations, in whole or in part
and in such order as Agents and Lenders may elect, whether or not then due.
Borrowers shall remain liable to Agents and Lenders for the payment of any
deficiency with interest at the highest rate provided
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for herein and all costs and expenses of collection or enforcement, including
reasonable attorneys' fees and legal expenses.
(d) Without limiting the foregoing, upon the occurrence of a
Default or Event of Default, Agents and Lenders may, at their option, without
notice, (i) cease making Loans or arranging for Letter of Credit Accommodations
or reduce the lending formulas or amounts of Revolving Loans and Letter of
Credit Accommodations available to Borrowers and/or (ii) terminate any provision
of this Agreement providing for any future Loans or Letter of Credit
Accommodations to be made by Agents and Lenders to Borrowers.
SECTION 11. AGENTS
11.1 APPOINTMENT, AUTHORITY AND DUTIES OF AGENTS.
(a) Each Lender hereby irrevocably appoints and designates
Congress to serve as Administrative Agent on the terms and subject to the
conditions set forth herein and hereby appoints and designates BankBoston to
serve as Collateral Agent on the terms and subject to the conditions set forth
herein. Each Agent may, and each Lender by its acceptance of a Note shall be
deemed irrevocably to have authorized each Agent to, enter into all Financing
Agreements to which such Agent is to be a party on the Closing Date and all
amendments thereto and all other Financing Agreements thereafter executed by any
Obligor, and to exercise such rights and powers under this Agreement and the
other Financing Agreements as are specifically delegated to such Agent by the
terms hereof and thereof, together with such other rights and powers as are
reasonably incidental thereto. Each Lender agrees that any action taken by
either or both Agents or the Required Lenders in accordance with the provisions
of this Agreement or the other Financing Agreements, and the exercise by either
or both Agents or the Required Lenders of any of the powers set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all Lenders.
(b) Collateral Agent shall have the sole and exclusive right and
authority (subject to the direction of the Required Lenders) to (i) act as the
disbursing and collecting agent for Lenders with respect to all payments and
collections arising in connection with this Agreement and the other Financing
Agreements; (ii) execute and deliver as Collateral Agent each Financing
Agreement to which it is a party and accept delivery of each such agreement
delivered by Borrowers or any other Obligor; (iii) act as collateral agent for
Lenders for purposes of the perfection of all security interests and Liens
created by this Agreement or the other Financing Agreements with respect to all
material items of the Collateral and, subject to the direction of the Required
Lenders, for all other purposes stated therein, provided, that Collateral Agent
hereby appoints, authorizes and directs each Lender to act as a collateral
sub-agent for Collateral Agent and the other Lenders for purposes of the
perfection of all security interests and Liens with respect to Borrowers'
Deposit Accounts maintained with, and all cash and cash equivalents held by,
such Lender; (iv) subject to the direction of the Required Lenders, manage,
supervise or otherwise deal with the Collateral; and (v) except as may be
otherwise specifically restricted by the terms of this Agreement and subject to
the direction of the Required Lenders, exercise all remedies given to Collateral
Agent with respect to any of the Collateral under the Financing Agreements
relating thereto, Applicable Law or otherwise.
(c) The duties of each Agent shall be ministerial and
administrative in nature, and neither Agent shall have by reason of this
Agreement or any other Financing Agreement a fiduciary relationship with any
Lender (or any Lender's Participants). Unless and until its authority to do so
is revoked in writing by the Required Lenders, Agents alone shall be authorized
to determine whether any Accounts or Inventory constitute Eligible Accounts or
Eligible Inventory (basing such determination in each case upon the meanings set
forth herein), or whether to impose, release, increase or decrease any reserve,
and to exercise its own credit judgment in connection
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therewith, which determinations and judgments, if exercised in good faith, shall
exonerate each Agent from any liability to Lenders or any other Person for any
errors in judgment.
(d) Neither Agent (which term, as used in this sentence, shall
include reference to each Agent's Affiliates and to the officers, directors,
employees and agents of each Agent's Affiliates) shall: (a) have any duties or
responsibilities except those expressly set forth in this Agreement and the
other Financing Agreements or (b) be required to take, initiate or conduct any
litigation, foreclosure or collection proceedings hereunder or under any of the
other Financing Agreements except to the extent directed to do so by the
Required Lenders during the continuance of any Event of Default. The conferral
upon Agents of any right hereunder shall not imply a duty on such Agent's part
to exercise any such right unless instructed to do so by the Required Lenders in
accordance with this Agreement.
(e) Each Agent may perform any of its duties by or through its
agents and employees and may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Borrowers shall promptly
(and in any event, ON DEMAND) reimburse each Agent for all reasonable expenses
(including all Extraordinary Expenses) incurred by such Agent pursuant to any of
the provisions hereof or of any of the other Financing Agreements or in the
execution of any of such Agent's duties hereby or thereby created or in the
exercise of any right or power herein or therein imposed or conferred upon it or
Lenders (excluding, however, general overhead expenses), and each Lender agrees
promptly to pay to such Agent, ON DEMAND, such Lender's Pro Rata share of any
such reimbursement for expenses (including Extraordinary Expenses) that is not
timely made by Borrowers to such Agent.
(f) The rights, remedies, powers and privileges conferred upon
Agents hereunder and under the other Financing Agreements may be exercised by
Agents without the necessity of the joinder of any other parties unless
otherwise required by Applicable Law. If Agents shall request instructions from
the Required Lenders with respect to any act or action (including the failure to
act) in connection with this Agreement or any of the other Financing Agreements,
Agents shall be entitled to refrain from such act or taking such action unless
and until Agents shall have received instructions from the Required Lenders; and
Agents shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against an Agent as a result of such Agent acting or refraining from
acting hereunder or under any of the Financing Agreements pursuant to or in
accordance with the instructions of the Required Lenders except for such Agent's
own gross negligence or willful misconduct in connection with any action taken
by it. Notwithstanding anything to the contrary contained in this Agreement,
neither Agent shall be required to take any action that is in its opinion
contrary to Applicable Law or the terms of any of the Financing Agreements or
that would in its reasonable opinion subject it or any of its officers,
employees or directors to personal liability; provided, however, that if an
Agent shall fail or refuse to take action that is not contrary to Applicable Law
or to any of the terms of any of the Financing Agreements even if such action in
such Agent's opinion would subject it to potential liability, the Required
Lenders may remove such Agent and appoint a successor Agent in the same manner
and with the same effects as is provided in this Agreement with respect to such
Agent's resignation.
(g) Each Agent shall promptly, upon receipt thereof, forward to
each Lender (i) copies of any significant written notices, reports, certificates
and other information received by such Agent from any Obligor (but only if and
to the extent such Obligor is not required by the terms of the Financing
Agreements to supply such information directly to Lenders) and (ii) copies of
the results of any field audits by such Agent with respect to Borrowers. No
Agent shall have any liability to any Lender for any errors in or omissions from
any field audit or other examination of Borrowers or the Collateral, unless such
error or omission was the direct result of such Agent's willful misconduct.
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11.2 AGREEMENTS REGARDING COLLATERAL. Lenders hereby irrevocably
authorize Collateral Agent, at its option and in its discretion, to release any
Lien upon any Collateral (i) upon the termination of this Agreement and payment
or satisfaction of all of the Obligations or (ii) constituting Equipment sold or
disposed of in accordance with the terms of this Agreement if Borrowers
certifies to Agents that the disposition is made in compliance with the terms of
this Agreement (and Collateral Agent may rely conclusively on any such
certificate, without further inquiry). Except as expressly authorized or
required by this Agreement or Applicable Law, Collateral Agent shall not execute
any release or termination of any Lien upon any of the Collateral without the
prior written authorization of all Lenders. Neither Agent shall have any
obligation whatsoever to any of the Lenders to assure that any of the Collateral
exists or is owned by Borrowers or is cared for, protected or insured or has
been encumbered, or that Collateral Agent's Liens have been properly or
sufficiently or lawfully created, perfected, protected or enforced or entitled
to any particular priority or to exercise at any duty of care with respect to
any of the Collateral.
11.3 RELIANCE BY AGENTS. Each Agent shall be entitled to rely, and
shall be fully protected in so relying, upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram, telecopier
message or cable) believed by it to be genuine and correct and to have been
signed, sent or made by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by such Agent. As to any matters not expressly provided for by
this Agreement or any of the other Financing Agreements, such Agent shall in all
cases be fully protected in acting or refraining from acting hereunder and
thereunder in accordance with the instructions of the Required Lenders, and such
instructions of the Required Lenders and any action taken or failure to act
pursuant thereto shall be binding upon Lenders.
11.4 ACTION UPON DEFAULT. Neither Agent shall be deemed to have
knowledge of the occurrence of a Default or an Event of Default unless it has
received written notice from a Lender or Borrowers specifying the occurrence and
nature of such Default or Event of Default. If an Agent shall receive such a
notice of a Default or an Event of Default or shall otherwise acquire actual
knowledge of any Default or Event of Default, such Agent shall promptly notify
Lenders in writing and such Agent shall take such action and assert such rights
under this Agreement and the other Financing Agreements, or shall refrain from
taking such action and asserting such rights, as the Required Lenders shall
direct from time to time. If any Lender shall receive a notice of a Default or
an Event of Default or shall otherwise acquire actual knowledge of any Default
or Event of Default, such Lender shall promptly notify Agents and the other
Lenders in writing. As provided in SECTION 11.3 hereof, neither Agent shall be
subject to any liability by reason of acting or refraining to act pursuant to
any request of the Required Lenders except for its own willful misconduct or
gross negligence in connection with any action taken by it. Before directing an
Agent to take or refrain from taking any action or asserting any rights or
remedies under this Agreement and the other Financing Agreements on account of
any Event of Default, the Required Lenders shall consult with and seek the
advice of (but without having to obtain the consent of) each other Lender, and
promptly after directing such Agent to take or refrain from taking any such
action or asserting any such rights, the Required Lenders will so advise each
other Lender of the action taken or refrained from being taken and, upon request
of any Lender, will supply information concerning actions taken or not taken. In
no event shall the Required Lenders, without the prior written consent of each
Lender, direct either Agent to accelerate and demand payment of the Loans held
by one Lender without accelerating and demanding payment of all other Loans or
to terminate the Commitments of one or more Lenders without terminating the
Commitments of all Lenders. Each Lender agrees that, except as otherwise
provided in any of the Financing Agreements, it will not take any legal action
or institute any action or proceeding against any Obligor with respect to any of
the Obligations or Collateral or accelerate or otherwise enforce its portion of
the Obligations unless consented to in writing by Agents and the Required
Lenders. Without limiting the generality of the foregoing, none of Lenders may
exercise any right that it might otherwise have under Applicable Law to credit
bid at foreclosure sales, UCC sales or other similar sales
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or dispositions of any of the Collateral except as authorized by the Required
Lenders. Notwithstanding anything to the contrary set forth in this SECTION 11.4
or elsewhere in this Agreement, each Lender shall be authorized to take such
action to preserve or enforce its rights against any Obligor where a deadline or
limitation period is otherwise applicable and would, absent the taken of
specified action, bar the enforcement of Obligations held by such Lender against
such Obligor, including the filing of proofs of claim in any case under the
Bankruptcy Code or in any other insolvency proceeding. Notwithstanding anything
to the contrary contained in this SECTION 11.4 or elsewhere in this Agreement,
each Lender shall be authorized to take such action to preserve or enforce its
rights against any Obligor where a deadline or limitation period is otherwise
applicable and would, absent the taking of specified action, bar the enforcement
of Obligations held by such Lender against such Obligor, including the filing of
proofs of claim in any insolvency proceeding.
11.5 RATABLE SHARING. If any Lender shall obtain any payment or
reduction (including any amounts received as adequate protection of a bank
account deposit treated as cash collateral under the Bankruptcy Code) of any
Obligation of Borrowers hereunder (whether voluntary, involuntary, through the
exercise of any right of set-off or otherwise) in excess of its Pro Rata share
of payments or reductions on account of such Obligations obtained by all of the
Lenders, such Lender shall forthwith (i) notify the other Lenders and Agents of
such receipt and (ii) purchase from the other Lenders such participations in the
affected Obligations as shall be necessary to cause such purchasing Lenders to
share the excess payment or reduction, net of costs incurred in connection
therewith, on a Pro Rata basis, provided that if all or any portion of such
excess payment or reduction is thereafter recovered from such purchasing Lenders
or additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery or such additional costs,
but without interest. Borrowers agree that any Lender so purchasing a
participation from another Lender pursuant to this SECTION 11.5 may, to the
fullest extent permitted by Applicable Law, exercise all of its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of Borrowers in the amount of
such participation.
11.6 INDEMNIFICATION OF AGENTS.
(a) Each Lender agrees to indemnify and defend the Agent
Indemnitees (to the extent not reimbursed by Borrowers under this Agreement, but
without limiting the indemnification obligation of Borrowers under this
Agreement), on a Pro Rata basis, and to hold each of the Agent Indemnitees
harmless from and against, any and all Claims which may be imposed on, incurred
by or asserted against any of the Agent Indemnitees in any way related to or
arising out of this Agreement or any of the other Financing Agreements or any
other document contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including the costs and expenses
which Borrowers are obligated to pay under SECTION 13.5 hereof or amounts Agent
may be called upon to pay in connection with any lockbox or Blocked Account
arrangement contemplated hereby) or the enforcement of any of the terms hereof
or thereof or of any such other documents, provided that no Lender shall be
liable to any Agent Indemnitee for any of the foregoing to the extent that they
result solely from the willful misconduct or gross negligence of such Agent
Indemnitee.
(b) Without limiting the generality of the foregoing provisions
of this SECTION 11.6, if an Agent should be sued by any receiver, trustee in
bankruptcy, debtor-in-possession or other Person on account of any alleged
preference or fraudulent transfer received or alleged to have been received from
Borrowers or any other Obligor as the result of any transaction under the
Financing Agreements, then in such event any monies paid by such Agent in
settlement or satisfaction of such suit, together with all Extraordinary
Expenses incurred by such Agent in the defense of same, shall be promptly
reimbursed to such Agent by Lenders to the extent of each Lender's Pro Rata
share.
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(c) Without limiting the generality of the foregoing provisions
of this SECTION 11.6, if at any time (whether prior to or after the Commitment
Termination Date) any action or proceeding shall be brought against any of the
Agent Indemnitees by an Obligor or by any other Person claiming by, through or
under an Obligor, to recover damages for any act taken or omitted by an Agent
under any of the Financing Agreements or in the performance of any rights,
powers or remedies of such Agent against any Obligor, any account debtor, the
Collateral or with respect to any Loans, or to obtain any other relief of any
kind on account of any transaction involving any Agent Indemnitees under or in
relation to any of the Financing Agreements, each Lender agrees to indemnify,
defend and hold the Agent Indemnitees harmless with respect thereto and to pay
to the Agent Indemnitees such Lender's Pro Rata share of such amount as any of
the Agent Indemnitees shall be required to pay by reason of a judgment, decree,
or other order entered in such action or proceeding or by reason of any
compromise or settlement agreed to by the Agent Indemnitees, including all
interest and costs assessed against any of the Agent Indemnitees in defending or
compromising such action, together with attorneys' fees and other legal expenses
paid or incurred by the Agent Indemnitees in connection therewith; provided,
however, that no Lender shall be liable to any Agent Indemnitee for any of the
foregoing to the extent that they arise solely from the willful misconduct or
gross negligence of such Agent Indemnitee. In Agents' discretion, Agents may
also reserve for or satisfy any such judgment, decree or order from proceeds of
Collateral prior to any distributions therefrom to or for the account of
Lenders.
11.7 LIMITATION ON RESPONSIBILITIES OF AGENTS. Each Agent shall in all
cases be fully justified in failing or refusing to act hereunder unless it shall
have received further assurances to its satisfaction from Lenders of their
indemnification obligations under SECTION 11.6 hereof against any and all Claims
which may be incurred by such Agent by reason of taking or continuing to take
any such action. Neither Agent shall be liable to Lenders (or any Lender's
Participants) for any action taken or omitted to be taken under or in connection
with this Agreement or the other Financing Agreements except as a result of
actual gross negligence or willful misconduct on the part of such Agent. Neither
Agent assumes any responsibility for any failure or delay in performance or
breach by any Obligor or any Lender of its obligations under this Agreement or
any of the other Financing Agreements. Neither Agent makes to Lenders, and no
Lender makes to either or both Agents or the other Lenders, any express or
implied warranty, representation or guarantee with respect to the Loans, the
Collateral, the Financing Agreements or any Obligor. Neither Agent nor any of
their respective agents, attorneys or employees shall be responsible to Lenders,
and no Lender nor any of its agents, attorneys or employees shall be responsible
to Agents or the other Lenders, for: (i) any recitals, statements, information,
representations or warranties contained in any of the Financing Agreements or in
any certificate or other document furnished pursuant to the terms hereof; (ii)
the execution, validity, genuineness, effectiveness or enforceability of any of
the Financing Agreements; (iii) the validity, genuineness, enforceability,
collectibility, value, sufficiency or existence of any Collateral, or the
perfection or priority of any Lien therein; or (iv) the assets, liabilities,
financial condition, results of operations, business, creditworthiness or legal
status of any Obligor or any account debtor. Neither Agent shall have any
obligation to any Lender to ascertain or inquire into the existence of any
Default or Event of Default, the observance or performance by any Obligor of any
of the duties or agreements of such Obligor under any of the Financing
Agreements or the satisfaction of any conditions precedent contained in any of
the Financing Agreements. Agents may consult with and employ legal counsel,
accountants and other experts and shall be entitled to act upon, and shall be
fully protected in any action taken in good faith reliance upon, any advice
given by such experts.
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11.8 SUCCESSOR AGENTS AND CO-AGENTS.
(a) Subject to the appointment and acceptance of a successor
agent as provided below, an Agent may resign at any time by giving at least 30
days written notice thereof to the other Agent, each Lender and Borrowers. Upon
receipt of any notice such resignation, the Required Lenders, after prior
consultation with (but without having to obtain consent of) each Lender, shall
have the right to appoint a successor Agent which shall be (i) a Lender, (ii) a
United States based Affiliate of a Lender, or (iii) a commercial bank that is
organized under the laws of the United States or of any State thereof and has a
combined capital surplus of at least $100,000,000 (or an asset based lending
affiliate of any such bank) and is reasonably acceptable to Borrowers (and for
purposes hereof, any successor to Congress or BankBoston shall be deemed
acceptable to Borrowers). Upon the acceptance by a successor Agent of an
appointment as an Agent hereunder, such successor Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent without further act, deed or conveyance, and the retiring Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this SECTION
11 (including the provisions of SECTION 11.6 hereof) shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Agent. Notwithstanding anything to the contrary contained
in this Agreement, any successor by merger or acquisition of the stock or assets
of Congress or BankBoston shall continue to be Administrative Agent or
Collateral Agent, respectively, hereunder unless such successor shall resign in
accordance with the provisions hereof.
(b) It is the purpose of this Agreement that there shall be no
violation of any Applicable Law denying or restricting the right of financial
institutions to transact business as agent or otherwise in any jurisdiction. It
is recognized that, in case of litigation under any of the Financing Agreements,
or in case an Agent deems that by reason of present or future laws of any
jurisdiction such Agent might be prohibited from exercising any of the powers,
rights or remedies granted to such Agent or Lenders hereunder or under any of
the Financing Agreements or from holding title to or a Lien upon any Collateral
or from taking any other action which may be necessary hereunder or under any of
the Financing Agreements, such Agent may appoint an additional Person as a
separate collateral agent or co-collateral agent which is not so prohibited from
taking any of such actions or exercising any of such powers, rights or remedies.
If an Agent shall appoint an additional Person as a separate collateral agent or
co-collateral agent as provided above, each and every remedy, power, right,
claim, demand or cause of action intended by any of the Financing Agreements to
be exercised by or vested in or conveyed to such Agent with respect thereto
shall be exercisable by and vested in such separate collateral agent or
co-collateral agent, but only to the extent necessary to enable such separate
collateral agent or co-collateral agent to exercise such powers, rights and
remedies, and every covenant and obligation necessary to the exercise thereof by
such separate collateral agent or co-collateral agent shall run to and be
enforceable by either of them. Should any instrument from Lenders be required by
the separate collateral agent or co-collateral agent so appointed by an Agent in
order more fully and certainly to vest in and confirm to him or it such rights,
powers, duties and obligations, any and all of such instruments shall, on
request, be executed, acknowledged and delivered by Lenders whether or not a
Default or Event of Default then exists. In case any separate collateral agent
or co-collateral agent, or a successor to either, shall die, become incapable of
acting, resign or be removed, all the estates, properties, rights, powers,
duties and obligations of such separate collateral agent or co-collateral agent,
so far as permitted by Applicable Law, shall vest in and be exercised by the
Collateral Agent until the appointment of a new collateral agent or successor to
such separate collateral agent or co-collateral agent.
11.9 CONSENTS, AMENDMENTS AND WAIVERS.
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(a) No amendment or modification of any provision of this
Agreement shall be effective without the prior written agreement of the Required
Lenders and Borrowers, and no waiver of any Default or Event of Default shall be
effective without the prior written consent of the Required Lenders; provided,
however, that, without the prior consent of all Lenders, no waiver of any
Default or Event of Default shall be effective if the Default or Event of
Default relates to Borrowers' failure to observe or perform any covenant that
may not be amended without the unanimous written consent of Lenders as
hereinafter set forth in this SECTION 11.9. Notwithstanding the immediately
preceding sentence, the written agreement of all Lenders (except defaulting
Lenders as provided in Section 6.2 of this Agreement) shall be required to
effectuate any amendment, modification or waiver that would (i) alter the
provisions of SECTIONS 2.1(A), 3.1(F), 6.9, 10, 11 or 14, the definitions of
"Availability Reserve," and the other defined terms used in such definitions,
"Pro Rata," "Required Lenders" or any provision of this Agreement obligating
Agents to take certain actions at the direction of the Required Lenders, or any
provision of any of the Financing Agreements regarding the Pro Rata treatment or
obligations of Lenders; (ii) increase or otherwise modify any provision of this
Agreement (other than to reduce proportionately each Lender's Commitment in
connection with any overall reduction in the amount of this Agreement); (iii)
alter or amend the rate of interest payable in respect of the Loans (except as
may be expressly authorized by the Financing Agreements or as may be necessary,
in Collateral Agent's judgement, to comply with Applicable Law); (iv) waive or
agree to defer collection of any fee, termination charge or other charge
provided for under any of the Financing Agreements (except to the extent that
the Required Lenders agree after and during the continuance of any Event of
Default to a waiver or deferral of any termination charge provided for in
SECTION 14.1 hereof) or the unused line fee in SECTION 3 hereof; (v) subordinate
the payment of any of the Obligations to any other debt or the priority of any
Liens granted to Collateral Agent under any of the Financing Agreements to Liens
granted to any other Person, except as currently provided in or contemplated by
the Financing Agreements in connection with Borrowers' incurrence of permitted
purchase money debt, and except for Liens granted by an Obligor to financial
institutions with respect to amounts on deposit with such financial institutions
to cover returned items, processing and analysis charges and other charges in
the ordinary course of business that relate to deposit accounts with such
financial institutions; (vi) alter the time or amount of repayment of any of the
Loans or waive any Event of Default resulting from nonpayment of the Loans on
the due date thereof (or within any applicable period of grace); (vii) forgive
any of the Obligations, except any portion of the Obligations held by a Lender
who consents in writing to such forgiveness; or (viii) release any Obligor from
liability for any of the Obligations. In no event shall any amendment to the
provisions of SECTION 2.2 be effective without the prior written consent of
Congress. In no event shall any amendment to the provisions of SECTION 6.1(C) be
effective without the prior written consent of BankBoston. No Lender shall be
authorized to amend or modify any Note held by it, unless such amendment or
modification is consented to in writing by all Lenders; provided, however, that
the foregoing shall not be construed to prohibit an amendment or modification to
any provision of this Agreement that may be effected pursuant to this SECTION
11.9 by agreement of Borrowers and the Required Lenders even though such an
amendment or modification results in an amendment or modification of the Notes
by virtue of the incorporation by reference in each of the Notes of this
Agreement. The making of any Loans hereunder by any Lender 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. Any waiver or consent granted by Lenders
hereunder shall be effective only if in writing and then only in the specific
instance and for the specific purpose for which it was given.
(b) In connection with any proposed amendment to any of the
Financing Agreements or waiver of any of the terms thereof or any Default or
Event of Default thereunder, Borrowers shall not solicit, request or negotiate
for or with respect to any such proposed amendment or waiver of any of the
provisions of this Agreement or any of the other Financing Agreements unless
each Lender shall be informed thereof by Borrowers and shall be afforded an
opportunity of considering the same and supplied by Borrowers with sufficient
information to enable it to make an informed decision with respect thereto.
Borrowers will not, directly or
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indirectly, pay or cause to be paid any remuneration or other thing of value,
whether by way of supplemental or additional interest, fee or otherwise, to any
Lender (in its capacity as a Lender hereunder) as consideration for or as an
inducement to the consent to or agreement by such Lender with any waiver or
amendment of any of the terms and provisions of this Agreement or any of the
other Financing Agreements unless such remuneration or thing of value is
concurrently paid, on the same terms, on a Pro Rata basis to all Lenders.
11.10 DUE DILIGENCE AND NON-RELIANCE. Each Lender hereby acknowledges
and represents that it has, independently and without reliance upon Agents or
the other Lenders, and based upon such documents, information and analysis as it
has deemed appropriate, made its own credit analysis of each Obligor and its own
decision to enter into this Agreement and to fund the Loans to be made by it
hereunder and to purchase participations in the Letter of Credit Accommodations
pursuant to SECTION 2.2 hereof, and each Lender has made such inquiries
concerning the Financing Agreements, the Collateral and each Obligor as such
Lender feels necessary and appropriate, and has taken such care on its own
behalf as would have been the case had it entered into the other Financing
Agreements without the intervention or participation of the other Lenders or
Agents. Each Lender hereby further acknowledges and represents that the other
Lenders and Agents have not made any representations or warranties to it
concerning any Obligor, any of the Collateral or the legality, validity,
sufficiency or enforceability of any of the Financing Agreements. Each Lender
also hereby acknowledges that it will, independently and without reliance upon
the other Lenders or Agents, and based upon such financial statements, documents
and information as it deems appropriate at the time, continue to make and rely
upon its own credit decisions in making Loans and in taking or refraining to
take any other action under this Agreement or any of the other Financing
Agreements. Except for notices, reports and other information expressly required
to be furnished to Lenders by Collateral Agent hereunder, neither Agent shall
have any duty or responsibility to provide any Lender with any notices, reports
or certificates furnished to such Agent by any Obligor or any credit or other
information concerning the affairs, financial condition, business or Properties
of any Obligor (or any of its Affiliates) which may come into possession of such
Agent or any of such Agent's Affiliates.
11.11 REPRESENTATIONS AND WARRANTIES OF LENDERS. By its execution of
this Agreement, each Lender hereby represents and warrants to Borrowers, Agents
and the other Lenders that it has the power to enter into and perform its
obligations under this Agreement and the other Financing Agreements, and that it
has taken all necessary and appropriate action to authorize its execution and
performance of this Agreement and the other Financing Agreements to which it is
a party, each of which will be binding upon it and the obligations imposed upon
it herein or therein will be enforceable against it in accordance with the
respective terms of such documents.
11.12 THE REQUIRED LENDERS. As to any provisions of this Agreement or
the other Financing Agreements under which action may or is required to be taken
upon direction or approval of the Required Lenders, the direction or approval of
the Required Lenders shall be binding upon each Lender to the same extent and
with the same effect as if each Lender had joined therein. Notwithstanding
anything to the contrary contained in this Agreement, Borrowers shall not be
deemed to be a beneficiary of, or be entitled to enforce, xxx upon or assert as
a defense to any of the Obligations, any provisions of this Agreement that
requires either or both Agents or any Lender to act, or conditions their
authority to act, upon the direction or consent of the Required Lenders; and any
action taken by an Agent or any Lender that requires the consent or direction of
the Required Lenders as a condition to taking such action shall, insofar as
Borrowers are concerned, be presumed to have been taken with the requisite
consent or direction of the Required Lenders.
11.13 SEVERAL OBLIGATIONS. The obligations and commitments of each
Lender under this Agreement and the other Financing Agreements are several and
neither Agents nor any Lender shall be responsible for the performance by the
other Lenders of its obligations or commitments hereunder or thereunder.
Notwithstanding
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any liability of Lenders stated to be joint and several to third Persons under
any of the Financing Agreements, such liability shall be shared, as among
Lenders, Pro Rata according to the respective Commitments of Lenders.
11.14 AGENTS IN THEIR INDIVIDUAL CAPACITIES. With respect to its
obligation to lend under this Agreement, the Loans made by it and each Note
issued to it, each Agent shall have the same rights and powers hereunder and
under the other Financing Agreements as any other Lender or holder of a Note and
may exercise the same as though it were not performing the duties specified
herein; and the terms "Lenders," "Required Lenders," or any similar term shall,
unless the context clearly otherwise indicates, include each Agent in its
capacity as a Lender. Agents and their respective Affiliates may each accept
deposits, maintain deposits or credit balances for, invest in, lend money to,
act as trustee under indentures of, serve as financial advisor to, and generally
engage in any kind of business with Borrowers or any other Obligor, or any
Affiliate of Borrowers or any other Obligor, as if it were any other bank and
without any duty to account therefor to the other Lenders.
11.15 NO THIRD PARTY BENEFICIARIES. Except as expressly provided in
SECTION 11.17 hereof, this Section 11 is not intended to confer any rights or
benefits upon Borrowers or any other Person except Lenders and Agents, and no
Person (including Borrowers) other than Lenders and Agents shall have any right
to enforce any of the provisions of this Section 11. As between Borrowers and
Agents, any action that Agents may take or purport to take on behalf of Lenders
under any of the Financing Agreements shall be conclusively presumed to have
been authorized and approved by Lenders as herein provided.
11.16 NOTICE OF TRANSFER. Agents may deem and treat a Lender party to
this Agreement as the owner of such Lender's portion of the Revolving Loans for
all purposes, unless and until a written notice of the assignment or transfer
thereof executed by such Lender has been received by Agents.
11.17 REPLACEMENT OF CERTAIN LENDERS. If a Lender ("Affected Lender")
shall have (i) failed to fund its Pro Rata share of any Revolving Loan requested
by Borrowers which such Lender is obligated to fund under the terms of this
Agreement and which such failure has not been cured, (ii) requested compensation
from Borrowers under SECTION 3.6 and 6.11 to recover increased costs or Taxes
incurred by such Lender (or its parent or holding company) which are not being
incurred generally by the other Lenders (or their respective parents or holding
companies), or (iii) delivered a notice hereunder claiming that such Lender is
unable to extend LIBOR Rate Loans to Borrowers for reasons not generally
applicable to the other Lenders, then, in any such case and in addition to any
other rights and remedies that Agents, any other Lender or Borrowers may have
against such Affected Lender, Borrowers or either Agent may make written demand
on such Affected Lender (with a copy to Agents in the case of a demand by
Borrowers and a copy to Borrowers in the case of a demand by Agents) for the
Affected Lender to assign, and such Affected Lender shall assign pursuant to one
or more duly executed Assignment and Acceptances within five (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
either 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 SECTION 12 hereof. Collateral 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
five (5) Business Days after the date of such demand. The Affected Lender shall
be entitled to receive, in cash and concurrently with execution and delivery of
each such Assignment and Acceptance, all amounts owed to the Affected Lender
hereunder or under any other Financing Agreement, including the aggregate
outstanding principal amount of the Revolving 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 11.17, such
Affected Lender shall cease to have any participation in, entitlement to, or
other right to share in the Liens of Collateral Agent in any Collateral and such
Affected Lender shall have no further liability to Collateral Agent, any Lender
or any other Person under any of the Financing Agreements
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(except as provided in SECTION 11.6 hereof as to events or transactions which
occur prior to the replacement of such Affected Lender), including any
commitment to make Loans or purchase participations in Letter of Credit
Accommodations.
11.18 REMITTANCE OF PAYMENTS AND COLLECTIONS.
(a) All payments by any Lender to an Agent shall be made not
later than the time set forth elsewhere in this Agreement on the Business Day
such payment is due; provided, however, that if such payment is due ON DEMAND by
such Agent and such demand is made on the paying Lender after 11:00 a.m. on such
Business Day, then payment shall be made by 11:00 a.m. on the next Business Day.
Payment by an Agent to any Lender shall be made by wire transfer, promptly
following such Agent's receipt of funds for the account of such Lender and in
the type of funds received by such Agent; provided, however, that if Collateral
Agent receives such funds at or prior to 1:00 p.m., such Agent shall pay such
funds to such Lender by 2:00 p.m. on such Business Day, but if such Agent
receives such funds after 1:00 p.m., such Agent shall pay such funds to such
Lender by 2:00 p.m. on the next Business Day.
(b) With respect to the payment of any funds from an Agent to a
Lender or from a Lender to an Agent, the party failing to make full payment when
due pursuant to the terms hereof shall, ON DEMAND by the other party, pay such
amount together with interest thereon at the Federal Funds Rate. In no event
shall Borrowers be entitled to receive any credit for any interest paid by an
Agent to any Lender, or by any Lender to an Agent, at the Federal Funds Rate as
provided herein.
(c) If an Agent pays any amount to a Lender in the belief or
expectation that a related payment has been or will be received by such Agent
from an Obligor and such related payment is not received by such Agent, then
such Agent shall be entitled to recover such amount from each Lender that
receives such amount. If an Agent determines at any time that any amount
received by it under this Agreement or any of the other Financing Agreements
must be returned to an Obligor or paid to any other Person pursuant to any
Applicable Law, court order or otherwise, then, notwithstanding any other term
or condition of this Agreement or any of the other Financing Agreements, such
Agent shall not be required to distribute such amount to any Lender.
SECTION 12. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
12.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of Borrowers, Agents and Lenders and their respective
successors and assigns (which, in the case of an Agent, shall include any
successor Agent appointed pursuant to SECTION 11 hereof), except that (i)
Borrowers shall not have the right to assign their rights or delegate
performance of any of their obligations under any of the Financing Agreements
and (ii) any assignment by any Lender must be made in compliance with SECTION 12
hereof. Collateral Agent may treat the payee of any Note as the owner thereof
for all purposes hereof unless and until such payee complies with SECTION 12 in
the case of an assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with Collateral Agent. Any assignee or
transferee of a Note agrees by acceptance thereof to be bound by all the terms
and provisions of the Financing Agreements. Any request, authority or consent of
any Person, who at the time of making such request or giving such authority or
consent is the holder of a Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
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12.2 PARTICIPATIONS.
(a) Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with Applicable Law, at any
time sell to one or more banks or other financial institutions (each a
"Participant") participating interest in any of the Obligations owing to such
Lender, any Commitment of such Lender or any other interest of such Lender under
any of the Financing Agreements. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Financing Agreements shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the holder of any Note for all purposes under the
Financing Agreements, all amounts payable by Borrowers under this Agreement and
any of the Notes shall be determined as if such Lender had not sold such
participating interests, and Borrowers and Agents shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under the Financing Agreements. If a Lender sells a participation to
a Person other than an Affiliate of such Lender, then such Lender shall give
prompt written notice thereof to Borrowers, the Agents and the other Lenders.
(b) Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Financing Agreements other than an amendment,
modification or waiver with respect to any Loans or Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the stated interest rate or the stated rates at which fees are payable
with respect to any such Loan or Commitment, postpones the Commitment
Termination Date, or any date fixed for any regularly scheduled payment of
interest or fees on such Revolving Loan or Commitment, or releases from
liability or any Obligor or releases any substantial portion of the Collateral
other than as authorized by this Agreement.
(c) Benefit of Set-Off. Borrowers agree that each Participant
shall be deemed to have the right of set-off provided in SECTION 11.4 hereof in
respect of its participating interest in amounts owing under the Financing
Agreements to the same extent and subject to the same requirements under this
Agreement (including SECTION 12.5) as if the amount of its participating
interest were owing directly to it as a Lender under the Financing Agreements,
provided that each Lender shall retain the right of set-off provided in SECTION
11.4 hereof with respect to the amount of participating interests sold to each
Participant. Lenders agree to share with each Participant, and each Participant
by exercising the right of set-off provided in SECTION 11.4 agrees to share with
each Lender, any amount received pursuant to the exercise of its right of
set-off, such amounts to be shared in accordance with SECTION 12.5 hereof as if
each Participant were a Lender.
12.3 ASSIGNMENTS.
(a) Permitted Assignments. Any Lender may, in the ordinary course
of its business and in accordance with Applicable Law, at any time assign to any
Eligible Assignee all or any part of its rights and obligations under the
Financing Agreements, so long as (i) each assignment is of a constant, and not a
varying, ratable percentage of all of the transferor Lender's rights and
obligations under the Financing Agreements with respect to the Loans and the
Letter of Credit Accommodations and, in the case of a partial assignment, is in
a minimum principal amount of $3,000,000 and integral multiples of $100,000 in
excess of that amount; (ii) except in the case of an assignment in whole of a
Lender's rights and obligations under the Financing Agreements or an assignment
by one original signatory to this Agreement to another such signatory,
immediately after giving effect to any assignment, the aggregate amount of this
Agreement retained by the transferor Lender shall in no event be less than
$10,000,000; and (iii) the parties to each such assignment shall execute and
deliver to Collateral Agent, for its acceptance and recording, an Assignment and
Acceptance. The consent of Agents and, provided no Default or Event of Default
exists, Borrowers (which shall not be unreasonably withheld or delayed)
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shall be required prior to an assignment becoming effective with respect to an
Eligible Assignee which is not a Lender or an Affiliate of a Lender, and such
assignment shall not become effective until such time as notice thereof is given
to Borrowers and Agents in substantially the form of EXHIBIT I attached hereto.
Nothing contained herein shall limit in any way the right of Lenders to assign
(i) to any Eligible Assignee all of their rights and obligations under the
Financing Agreements or (ii) all or any portion of the Loans owing to it to any
Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors and any Operating Circular
issued by such Federal Reserve Bank, provided that in the case of this clause
(ii) any payment in respect of such assigned Loans made by Borrowers to the
assigning Lender in accordance with the terms of this Agreement shall satisfy
Borrowers' obligations hereunder in respect of such assigned Loans to the extent
of such payment, but no such assignment shall release the assigning Lender from
its obligations hereunder.
(b) Effect; Effective Date. Upon (i) delivery to Collateral Agent
of a notice of assignment substantially in the form attached as EXHIBIT I
hereto, together with any consents required by SECTION 12.3(A), and (ii) payment
of a $5,000 fee to the Collateral Agent for processing any assignment to an
Eligible Assignee that is not an Affiliate of the transferor Lender, such
assignment shall become effective on the effective date specified in such notice
of assignment. On and after the effective date of such assignment, such Eligible
Assignee shall for all purposes be a Lender party to this Agreement and any
other Financing Agreement executed by the Lenders and shall have all the rights
and obligations of the Lenders under the Financing Agreements to the same extent
as if it were an original party thereto, and no further consent or action by
Borrowers, Lenders or Agents shall be required to release the transferor Lender
with respect to the Commitment (or portion thereof) of such Lender and
Obligations assigned to such Eligible Assignee. Upon the consummation of any
assignment to an Eligible Assignee pursuant to this SECTION 12.3, the transferor
Lender, Agents and Borrowers shall make appropriate arrangements so that
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Eligible Assignee, in each
case in principal amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment.
(c) Dissemination of Information. Borrowers authorize each Lender
and each Agent to disclose to any Participant, any Eligible Assignee or any
other Person acquiring an interest in the Financing Agreements by operation of
law (each a "Transferee"), and any prospective Transferee, any and all
information in such Agent's or such Lender's possession concerning Borrowers,
the Subsidiaries or the Collateral, subject to appropriate confidentiality
undertakings on the part of such Transferee.
12.4 TAX TREATMENT. If any interest in any Financing Agreement is
transferred to any Transferee that is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of SECTION 6.12 hereof.
12.5 PARTICIPANT'S SECURITY INTEREST. If a Participant shall at any
time participate with Lenders in the Loans, Letter of Credit Accommodations or
other Obligations, each Borrower hereby grants to such Participant and such
Participant shall have and is hereby given, a continuing Lien on and security
interest in any money, securities and other property of Borrowers in the custody
or possession of the Participant, including the right of setoff, to the extent
of the Participant's participation in the Obligations, and such Participant
shall be deemed to have the same right of setoff to the extent of its
participation in the Obligations, as it would have if it were a direct lender.
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SECTION 13. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
13.1 GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS; JURY TRIAL
WAIVER.
(a) The validity, interpretation and enforcement of this
Agreement and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of Georgia
(without giving effect to principles of conflicts of law); provided, however,
that if any of the Collateral shall be located in any jurisdiction other than
Georgia, the laws of such jurisdiction shall govern the method, manner and
procedure for foreclosure of Collateral Agent's Lien upon such Collateral and
the enforcement of Collateral Agent's other remedies of such Collateral to the
extent that the laws of such jurisdiction are different from or inconsistent
with the laws of the State of Georgia. Notwithstanding the foregoing provision
for the notice and sale of Collateral under the law of the situs, it is the
parties' intention that Georgia law control the obligations of Borrowers under
the Financing Agreements and the enforcement of the same such that, for example,
each Borrower agrees and acknowledges that pursuant to Georgia law it shall be
liable for a deficiency judgment notwithstanding the sale of Real Property
collateral under a power of sale and further that Lenders or Agents may, at
their election, seek a money judgment under the Financing Agreements without
first exhausting all Collateral securing the Obligations thereunder.
(b) Borrowers, Agents and Lenders irrevocably consent and submit
to the non-exclusive jurisdiction of the Superior Court of Xxxx County, Georgia
and the United States District Court for the Northern District of Georgia,
Atlanta Division, and waive any objection based on venue or forum non conveniens
with respect to any action instituted therein arising under this Agreement or
any of the other Financing Agreements or in any way connected with or related or
incidental to the dealings of the parties hereto in respect of this Agreement or
any of the other Financing Agreements or the transactions related hereto or
thereto, in each case whether now existing or hereafter arising, and whether in
contract, tort, equity or otherwise, and agree that any dispute with respect to
any such matters shall be heard only in the courts described above (except that
Lenders shall have the right to bring any action or proceeding against Borrowers
or their property in the courts of any other jurisdiction which Lenders deem
necessary or appropriate in order to realize on the Collateral or to otherwise
enforce their rights against Borrowers or their property).
(c) Each Borrower hereby waives personal service of any and all
process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth on
the signature pages hereof and service so made shall be deemed to be completed
five (5) days after the same shall have been so deposited in the U.S. mails, or,
at Collateral Agent's option, by service upon Borrowers in any other manner
provided under the rules of any such courts. Within thirty (30) days after such
service, Borrowers shall appear in answer to such process, failing which
Borrowers shall be deemed in default and judgment may be entered by Collateral
Agent against Borrowers for the amount of the claim and other relief requested.
(D) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWERS,
AGENTS AND LENDERS EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR ANY OF THE
OTHER FINANCING AGREEMENTS OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR
ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWERS, AGENTS AND LENDERS EACH HEREBY
AGREES
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AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT BORROWERS, AGENTS OR LENDERS MAY
FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
(e) Neither Agents nor any Lender shall have any liability to
Borrowers (whether in tort, contract, equity or otherwise) for losses suffered
by Borrowers in connection with, arising out of, or in any way related to the
transactions or relationships contemplated by this Agreement, or any act,
omission or event occurring in connection herewith, unless it is determined by a
final and non-appealable judgment or court order binding on Agents and Lenders,
that the losses were the result of acts or omissions constituting gross
negligence or willful misconduct. In any such litigation, Agents and Lenders
shall be entitled to the benefit of the rebuttable presumption that it acted in
good faith and with the exercise of ordinary care in the performance by it of
the terms of this Agreement.
13.2 WAIVER OF NOTICES. Each Borrower hereby expressly waives demand,
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the Obligations or the Collateral, and any and all other demands and notices
of any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement, except such as are expressly provided for herein. No notice
to or demand on Borrowers which Agents or Lenders may elect to give shall
entitle Borrowers to any other or further notice or demand in the same, similar
or other circumstances. Without limiting the generality of the foregoing, each
Borrower waives (a) notice prior to Agents' or Lenders' taking possession or
control of any of the Collateral or any bond or security which might be required
by any court prior to allowing Agents or Lenders to exercise any of Agents' or
Lenders' remedies, including the issuance of an immediate writ of possession,
and (b) the benefit of all valuation, appraisement and exemption laws.
13.3 AMENDMENTS AND WAIVERS. Neither this Agreement nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of
Agent and Lenders (or, where otherwise expressly allowed by SECTION 11 hereof,
the Required Lenders in lieu of Agents and Lenders), and as to amendments, as
also signed by an authorized officer of Borrowers. Agents and Lenders shall not,
by any act, delay, omission or otherwise be deemed to have expressly or
impliedly waived any of its rights, powers and/or remedies unless such waiver
shall be in writing and signed by an authorized officer of Agents and Lenders.
Any such waiver shall be enforceable only to the extent specifically set forth
therein. A waiver by Agents and Lenders of any right, power and/or remedy on any
one occasion shall not be construed as a bar to or waiver of any such right,
power and/or remedy which Agents and Lenders would otherwise have on any future
occasion, whether similar in kind or otherwise. Notwithstanding the foregoing,
no consent, written or otherwise, of Borrowers shall be necessary or required in
connection with any amendment of any of the provisions of SECTION 11 (other than
SECTIONS 11.17, 11.1(E) and 11.9) or any other provision of this Agreement that
effects only the rights, duties and responsibilities of Lenders and Agents as
among themselves so long as no such amendment imposes any additional obligations
on Borrowers.
13.4 WAIVER OF COUNTERCLAIMS. Each Borrower waives all rights to
interpose any claims, deductions, setoffs or counterclaims of any nature (other
than compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto.
13.5 INDEMNIFICATION. Borrowers shall jointly and severally indemnify,
defend and hold Agents and Lenders, and their respective directors, agents,
employees and counsel, harmless from and against any and all
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86
losses, claims, damages, liabilities, costs or expenses imposed on, incurred by
or asserted against any of them in connection with any litigation,
investigation, claim or proceeding commenced or threatened related to the
negotiation, preparation, execution, delivery, enforcement, performance or
administration of this Agreement, any other Financing Agreements, or any
undertaking or proceeding related to any of the transactions contemplated hereby
or any act, omission, event or transaction related or attendant thereto,
including amounts paid in settlement, court costs, and the fees and expenses of
counsel. To the extent that the undertaking to indemnify, defend, pay and hold
harmless set forth in this Section may be unenforceable because it violates any
Applicable Law or public policy, Borrowers shall pay the maximum portion which
it is permitted to pay under Applicable Law to Agents and Lenders in
satisfaction of indemnified matters under this Section. The foregoing indemnity
shall survive the payment of the Obligations and the termination or non-renewal
of this Agreement and is in addition to all other indemnities set forth herein
and in any of the other Financing Agreements.
SECTION 14. TERM OF AGREEMENT; MISCELLANEOUS
14.1 TERM.
(a) This Agreement and the other Financing Agreements shall
become effective as of the date set forth on the first page hereof and shall
continue in full force and effect for a term ending on the date three (3) years
from the date hereof (the "Original Term"); provided, that, the Original Term
may be extended for an additional one (1) year period to August 17, 2003 (the
"Renewal Term"), with the written consent of Borrowers, Agents and Lenders.
Notwithstanding the foregoing, this Agreement (i) may be terminated by Agents
and Lenders immediately, without notice, upon or after the occurrence of an
Event of Default (and shall automatically terminate in accordance with SECTION
10.2(B) hereof upon the occurrence of an Event of Default under SECTIONS 10.1(i)
or 10.1(J) hereof) and (ii) may be terminated by Borrowers upon ninety (90) days
prior written notice to Agents and the payment to Agents and Lenders, on the
effective date of such termination, of all of the Obligations, and the Early
Termination Fee set forth in SECTION 14.1(C) below. Upon the effective date of
termination or non-renewal of the Financing Agreements, the Commitments shall
terminate and Borrowers shall jointly and severally pay to Agents and Lenders,
in full, all outstanding and unpaid Obligations and shall furnish cash
collateral to Agents and Lenders in such amounts as Agents and Lenders determine
are reasonably necessary to secure Agents and Lenders from loss, cost, damage or
expense, including attorneys' fees and legal expenses, in connection with any
contingent Obligations, including issued and outstanding Letter of Credit
Accommodations and checks or other payments provisionally credited to the
Obligations and/or as to which Lenders have not yet received final and
indefeasible payment. Such payments in respect of the Obligations and cash
collateral shall be remitted by wire transfer in Federal funds to such bank
account of Agents and Lenders, as Agents and Lenders may, in its discretion,
designate in writing to Borrowers for such purpose. Interest shall be due until
and including the next Business Day, if the amounts so paid by Borrowers to the
bank account designated by Agents and Lenders are received in such bank account
later than 12:00 noon.
(b) No termination of this Agreement or the other Financing
Agreements shall relieve or discharge Borrowers of their respective duties,
obligations and covenants under this Agreement or the other Financing Agreements
until all Obligations have been fully and finally discharged and paid, and
Collateral Agent's continuing security interest in the Collateral and the rights
and remedies of Lenders hereunder, under the other Financing Agreements and
Applicable Law, shall remain in effect until all such Obligations have been
fully and finally discharged and paid.
(c) If for any reason this Agreement is terminated prior to the
end of the Original Term or any Renewal Term, in view of the impracticality and
extreme difficulty of ascertaining actual damages and by mutual agreement of the
parties as to a reasonable calculation of Lenders' lost profits as a result
thereof, Borrowers
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jointly and severally agree to pay to Collateral Agent, for the Pro Rata benefit
of Lenders, upon the effective date of such termination, an early termination
fee in the amount set forth below if such termination is effective in the period
indicated (an "Early Termination Fee"):
----------------------------------------------------------------------------------------------------------
Amount Period
----------------------------------------------------------------------------------------------------------
(i) 3.0% of the Facility Amount From the date hereof to and including August 16,
2000
----------------------------------------------------------------------------------------------------------
(ii) 1.50% of the Facility Amount From August 17, 2000 to and including August 16,
2001
----------------------------------------------------------------------------------------------------------
(iii) 0.75% of the Facility Amount From August 17, 2001 to and including August 16,
2002 or if the term of this Agreement is
extended for an additional year as provided
above, then to and including August 16, 2003
----------------------------------------------------------------------------------------------------------
Such Early Termination Fee shall be presumed to be the amount of damages
sustained by Lenders as a result of such early termination and Borrowers agree
that it is reasonable under the circumstances currently existing. The Early
Termination Fee provided for in this SECTION 14.1 shall be deemed included in
the Obligations and shall be in addition to any prepayment premium payable
pursuant to SECTION 6.7 of this Agreement.
Notwithstanding anything to the contrary contained in this SECTION
14.1(C), Borrowers shall not be required to pay any Early Termination Fee if (i)
a case under any chapter of the Bankruptcy Code is commenced by or against any
or all Borrowers, (ii) Lenders agree, in their sole and absolute discretion, to
provide debtor-in-possession financing to Borrowers during such bankruptcy case
and (iii) such financing is accepted by Borrowers, approved by the bankruptcy
court and consummated by the parties.
14.2 NOTICES. All notices, requests and demands hereunder shall be in
writing and (a) made to Agents and Lenders at their addresses set forth below
and to Borrowers at their chief executive office set forth below, or to such
other address as either party may designate by written notice to the other in
accordance with this provision, and (b) deemed to have been given or made: if
delivered in person, immediately upon delivery; if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of
receipt; if by nationally recognized overnight courier service with instructions
to deliver the next Business Day, one (1) Business Day after sending; and if by
certified mail, return receipt requested, five (5) days after mailing.
14.3 PARTIAL INVALIDITY. If any provision of this Agreement is held to
be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by Applicable Law.
14.4 SUCCESSORS. This Agreement, the other Financing Agreements and any
other document referred to herein or therein shall be binding upon and inure to
the benefit of and be enforceable by Agents, Lenders, Borrowers and their
respective successors and assigns, except that Borrowers may not assign their
rights under this Agreement, the other Financing Agreements and any other
document referred to herein or therein without the prior written consent of
Agents and Lenders.
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14.5 ENTIRE AGREEMENT. This Agreement, the other Financing Agreements,
any supplements hereto or thereto, and any instruments or documents delivered or
to be delivered in connection herewith or therewith represents the entire
agreement and understanding concerning the subject matter hereof and thereof
between the parties hereto, and supersede all other prior agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter
hereof, whether oral or written. In the event of any inconsistency between the
terms of this Agreement and any schedule or exhibit hereto, the terms of this
Agreement shall govern.
IN WITNESS WHEREOF, Agents, Lenders and Borrowers have caused these
presents to be duly executed on the day and year first above written.
BORROWERS:
ATTEST: DYERSBURG CORPORATION
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
------------------- ----------------------------------
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
Address:
15720 Xxxx X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: President
Telecopier No.: (000) 000-0000
DYERSBURG FABRICS LIMITED
ATTEST: PARTNERSHIP, I
By: DYERSBURG FABRICS INC., its sole General
Partner
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
------------------- ----------------------------------
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
Address:
15720 Xxxx X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: President
Telecopier No.: (000) 000-0000
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ATTEST: DYERSBURG FABRICS INC.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
------------------- ----------------------------------
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
Address:
15720 Xxxx X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: President
Telecopier No.: (000) 000-0000
ATTEST: UNITED KNITTING, INC.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
------------------- ----------------------------------
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
Address:
15720 Xxxx X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: President
Telecopier No.: (000) 000-0000
ATTEST: IQUE, INC.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
------------------- ----------------------------------
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
Address:
15720 Xxxx X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: President
Telecopier No.: (000) 000-0000
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ATTEST: UNITED KNITTING LIMITED PARTNERSHIP, I
By: UNITED KNITTING, INC., its sole General
Partner
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
------------------- ----------------------------------
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
Address:
15720 Xxxx X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: President
Telecopier No.: (000) 000-0000
ATTEST: IQUE LIMITED PARTNERSHIP, I
By: IQUE, INC., its sole General Partner
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
------------------- ----------------------------------
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
Address:
15720 Xxxx X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: President
Telecopier No.: (000) 000-0000
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91
ATTEST: ALAMAC KNIT FABRICS, INC.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
------------------- ----------------------------------
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
Address:
15720 Xxxx X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: President
Telecopier No.: (000) 000-0000
ATTEST: AIH INC.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
------------------- ----------------------------------
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
Address:
15720 Xxxx X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: President
Telecopier No.: (000) 000-0000
ADMINISTRATIVE AGENT:
CONGRESS FINANCIAL CORPORATION
(SOUTHERN), as Administrative Agent
By: /s/ Xxxxxxxx Xxxxxxxxx
-----------------------------------
Title: Vice President
--------------------------
Address:
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Office Head
Telecopier No.: (000) 000-0000
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COLLATERAL AGENT:
BANKBOSTON, N.A.,
as Collateral Agent
By: /s/ Xxxxx Xxxx
-----------------------------------
Title: Vice President
-------------------------
Address:
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Mr. Xxxxx Xxxx
Telecopier No.: (000) 000-0000
LENDERS:
CONGRESS FINANCIAL CORPORATION
(SOUTHERN), a Lender
Revolving Commitment: $42,000,000 By: /s/ Xxxxxxxx Xxxxxxxxx
-----------------------------------
Term Loan Commitment: $13,000,000 Title: Vice President
-------------------------
LIBOR Lending Office:
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Office Head
Telecopier No.: (000) 000-0000
BANKBOSTON, N.A.,
a Lender
Revolving Commitment: $42,000,000 By: /s/ Xxxxx Xxxx
-----------------------------------
Term Loan Commitment: $13,000,000 Title: Vice President
---------------------------
LIBOR Lending Office:
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Mr. Xxxxx Xxxx
Telecopier No.: (000) 000-0000
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93
EXHIBIT A
FORM OF REVOLVING NOTE
August __, 1999
U.S. $__________.__ Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, DYERSBURG CORPORATION, a Tennessee
corporation, DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited
partnership, DYERSBURG FABRICS INC., a Tennessee corporation, UNITED KNITTING,
INC., a Tennessee corporation, UNITED KNITTING LIMITED PARTNERSHIP, I, a
Tennessee limited partnership, IQUE, INC., a Tennessee corporation, IQUE LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, ALAMAC KNIT FABRICS, INC., a
Delaware corporation, and AIH INC., a Delaware corporation (the foregoing
individually referred to hereinafter as a "Borrower" and collectively as
"Borrowers"), hereby unconditionally jointly and severally promise to pay to the
order of ________________ (herein, together with any subsequent holder hereof,
called the "Holder") the principal sum of $_______________ or such lesser sum as
may constitute Holder's Pro Rata share of the outstanding principal amount of
all Revolving Loans pursuant to the terms of the Loan Agreement (as defined
below) on the date on which such outstanding principal amounts become due and
payable pursuant to SECTION 2.1 of the Loan Agreement, in strict accordance with
the terms thereof. Borrowers likewise unconditionally jointly and severally
promise to pay to Holder interest from and after the date hereof on Holder's Pro
Rata share of the outstanding principal amount of Revolving Loans at such
interest rates, payable at such times, and computed in such manner as are
specified in SECTION 3.1 of the Loan Agreement, in strict accordance with the
terms thereof.
This Revolving Note ("Note") is issued pursuant to, and is one of the
"Revolving Notes" referred to in, the Loan and Security Agreement dated August
17, 1999 (as the same may be amended from time to time, the "Loan Agreement"),
among Borrowers, Congress Financial Corporation (Southern), as administrative
agent for the financial institutions from time to time parties thereto as
lenders ("Lenders"), BankBoston, N.A. ("Collateral Agent"), as collateral agent
for Lenders and such Lenders, and Holder is and shall be entitled to all
benefits thereof and of all Financing Agreements executed and delivered in
connection therewith. All capitalized terms used herein, unless otherwise
defined herein, shall have the meanings ascribed to such terms in the Loan
Agreement.
The repayment of the principal balance of this Note is subject to the
provisions of SECTION 2.1 of the Loan Agreement. The entire unpaid principal
balance and all accrued interest on this Note shall be due and payable
immediately upon the termination of the Commitments and the Loan Agreement as
set forth in the Loan Agreement.
All payments of principal and interest shall be made in Dollars in
immediately available funds as specified in the Loan Agreement.
Upon or after the occurrence of an Event of Default and for so long as
such Event of Default exists, the principal balance and all accrued interest of
this Note may be declared due and payable in the manner and with the effect
provided in the Loan Agreement, and the unpaid principal balance hereof shall
bear interest at the Default Rate as and when provided in the Loan Agreement.
Borrowers jointly and severally agree to pay, and save Holder harmless against
any liability for the payment of, all costs and expenses, including, but not
limited to, reasonable attorneys' fees, if this Note is collected by or through
an attorney-at-law.
94
All principal amounts of Revolving Loans made by Holder to Borrowers
pursuant to the Loan Agreement, and all accrued and unpaid interest thereon,
shall be deemed outstanding under this Note and shall continue to be owing by
Borrowers until paid in accordance with the terms of this Note and the Loan
Agreement.
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
to Holder for the use, forbearance or detention of money advanced hereunder
exceed the highest lawful rate permissible under any law which a court of
competent jurisdiction may deem applicable hereto; and, in the event of any such
payment inadvertently paid by Borrowers or inadvertently received by Holder,
such excess sum shall be, at Borrowers' option, returned to Borrowers forthwith
or credited as a payment of principal, but shall not be applied to the payment
of interest. It is the intent hereof that Borrowers not pay or contract to pay,
and that Holder not receive or contract to receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may be paid by Borrowers
under Applicable Law.
Time is of the essence of this Note. To the fullest extent permitted by
Applicable Law, each Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under Applicable Law, but if any
provision of this Note shall be prohibited or invalid under Applicable Law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Holder in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Holder
of any right or remedy preclude any other right or remedy. Agents, at their
option, may enforce their rights against any Collateral securing this Note
without Agents or Holder enforcing their rights against any Borrower, any
Guarantor of the indebtedness evidenced hereby or any other property or
indebtedness due or to become due to any Borrower. Each Borrower agrees that,
without releasing or impairing such Borrower's liability hereunder, Holder or
Agents may at any time release, surrender, substitute or exchange any Collateral
securing this Note and may at any time release any party primarily or
secondarily liable for the indebtedness evidenced by this Note.
The rights of Holder and obligations of Borrowers hereunder shall be
construed in accordance with and governed by the laws (without giving effect to
the conflict of law principles thereof) of the State of Georgia. This Note is
intended to take effect as an instrument under seal under Georgia law.
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95
IN WITNESS WHEREOF, Borrowers have caused this Note to be executed
under seal and delivered by their duly authorized officers on the date first
above written.
ATTEST: DYERSBURG CORPORATION
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
DYERSBURG FABRICS LIMITED
ATTEST: PARTNERSHIP, I
By: DYERSBURG FABRICS INC., its sole General
Partner
_____________________________ By:_____________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: DYERSBURG FABRICS INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: UNITED KNITTING, INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
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96
ATTEST: IQUE, INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: UNITED KNITTING LIMITED PARTNERSHIP, I
By: UNITED KNITTING, INC., its sole General
Partner
_____________________________ By:_____________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: IQUE LIMITED PARTNERSHIP, I
By: IQUE, INC., its sole General Partner
_____________________________ By:_____________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
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97
ATTEST: ALAMAC KNIT FABRICS, INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: AIH INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
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98
EXHIBIT B
FORM OF TERM NOTE
U.S. $______________ August ___, 0000
Xxxxxxx, Xxxxxxx
FOR VALUE RECEIVED, the undersigned, DYERSBURG CORPORATION, a Tennessee
corporation, DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited
partnership, DYERSBURG FABRICS INC., a Tennessee corporation, UNITED KNITTING,
INC., a Tennessee corporation, UNITED KNITTING LIMITED PARTNERSHIP, I, a
Tennessee limited partnership, IQUE, INC., a Tennessee corporation, IQUE LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, ALAMAC KNIT FABRICS, INC., a
Delaware corporation, and AIH INC., a Delaware corporation (the foregoing
individually referred to hereinafter as a "Borrower" and collectively as
"Borrowers"), hereby promise to jointly and severally pay to the order of
_______________________________ (herein, together with any subsequent holder
hereof, called the "Holder"), the principal sum of $_________, or so much
thereof as represents Holder's Pro Rata share of the outstanding principal
amount of all Term Loan Advances pursuant to the terms of the Loan Agreement (as
defined below), on the dates on which such outstanding principal amounts become
due and payable pursuant to SECTION 2.3 of the Loan Agreement, in strict
accordance with the terms thereof. Borrowers likewise unconditionally jointly
and severally promise to pay to Holder interest from and after the date hereof
on the unpaid principal balance hereof at such interest rates, payable at such
times and computed in such manner as are specified in SECTION 3.1 of the Loan
Agreement, in strict accordance with the terms thereof.
This Term Note ("Note") is issued pursuant to, and is one of the "Term
Notes" referred to in, the Loan and Security Agreement, dated August 17, 1999
(as at any time amended, the "Loan Agreement"), among Borrowers, Congress
Financial Corporation (Southern), as administrative agent for itself and the
other financial institutions from time to time parties thereto ("Lenders"),
BankBoston, N.A. ("Collateral Agent"), as collateral agent for the Lenders and
such Lenders, and Holder is and shall be entitled to all benefits thereof and of
all Financing Agreements executed and delivered in connection therewith. All
capitalized terms used herein, unless otherwise defined herein, shall have the
meanings ascribed to such terms in the Loan Agreement.
This Note is subject to mandatory prepayment in accordance with the
provisions of SECTION 6.7 of the Loan Agreement and to prepayment premiums in
accordance with the provisions of SECTION 6.7 of the Loan Agreement.
Notwithstanding anything to the contrary contained herein, the entire unpaid
principal balance of and accrued interest on this Note shall be due and payable
immediately upon the termination of this Agreement as set forth in SECTION 14 of
the Loan Agreement.
All payments of principal and interest shall be made in Dollars and in
immediately available funds to Collateral Agent for Holder's benefit as
specified in the Loan Agreement.
Upon or after the occurrence of an Event of Default, the principal
balance and all accrued interest of this Note may be declared (or shall become)
due and payable in the manner and with the effect provided in the Loan
Agreement. If this Note is collected by or through an attorney at law, then
Borrowers shall be obligated to pay, in addition the principal balance and
accrued interest hereof, reasonable attorneys' fees, expenses and court costs.
From and after the occurrence of an Event of Default, the outstanding principal
amount hereof shall bear interest at the Default Rate.
99
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
to Holder for the use, forbearance or detention of money advanced hereunder
exceed the highest lawful rate permissible under any law which a court of
competent jurisdiction may deem applicable hereto; and, in the event of any such
payment inadvertently paid by Borrowers or inadvertently received by Holder,
such excess sum shall be, at Borrowers' option, returned to Borrowers forthwith
or credited as a payment of principal, but shall not be applied to the payment
of interest. It is the intent hereof that Borrowers not pay or contract to pay,
and that Holder not receive or contract to receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may be paid by Borrowers
under Applicable Law.
Time is of the essence of this Note. To the fullest extent permitted by
Applicable Law, each Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under Applicable Law, but if any
provision of this Note shall be prohibited or invalid under Applicable Law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Holder in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Holder
of any right or remedy preclude any other right or remedy. Holder, at its
option, may enforce its rights against any collateral securing this Note without
enforcing its rights against any Borrower, any Guarantor of the indebtedness
evidenced hereby or any other property or indebtedness due or to become due to
Borrowers. Each Borrower agree that, without releasing or impairing such
Borrower's liability hereunder, Holder may at any time release, surrender,
substitute or exchange any collateral securing this Note and may at any time
release any party primarily or secondarily liable for the indebtedness evidenced
by this Note.
The rights and obligations of Holder and Borrowers hereunder shall be
construed in accordance with and governed by the laws (without giving effect to
the conflict of law principles thereof) of the State of Georgia. This Note is
intended to take effect as an instrument under seal under Georgia law.
-2-
100
IN WITNESS WHEREOF, Borrowers have caused this Note to be executed
under seal and delivered by their duly authorized officers, on the date first
above written.
BORROWERS:
ATTEST: DYERSBURG CORPORATION
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
DYERSBURG FABRICS LIMITED
ATTEST: PARTNERSHIP, I
By: DYERSBURG FABRICS INC., its sole General
Partner
_____________________________ By:_____________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: DYERSBURG FABRICS INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: UNITED KNITTING, INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
-3-
101
ATTEST: IQUE, INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: UNITED KNITTING LIMITED PARTNERSHIP, I
By: UNITED KNITTING, INC., its sole General
Partner
_____________________________ By:_____________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: IQUE LIMITED PARTNERSHIP, I
By: IQUE, INC., its sole General Partner
_____________________________ By:_____________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: ALAMAC KNIT FABRICS, INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
-4-
102
ATTEST: AIH INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
-5-
103
EXHIBIT C
FORM OF SETTLEMENT NOTE
August ___, 1999
U.S. $__________.__ Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, DYERSBURG CORPORATION, a Tennessee
corporation, DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited
partnership, DYERSBURG FABRICS INC., a Tennessee corporation, UNITED KNITTING,
INC., a Tennessee corporation, UNITED KNITTING LIMITED PARTNERSHIP, I, a
Tennessee limited partnership, IQUE, INC., a Tennessee corporation, IQUE LIMITED
PARTNERSHIP, I, a Tennessee limited partnership, ALAMAC KNIT FABRICS, INC., a
Delaware corporation, and AIH INC., a Delaware corporation (the foregoing
individually referred to hereinafter as a "Borrower" and collectively as
"Borrowers"), hereby unconditionally jointly and severally promise to pay to the
order of ______________________________ (herein, together with any subsequent
holder hereof, called "Holder") the principal sum of $_______________ or such
lesser sum as may constitute the outstanding principal amount of all Settlement
Loans pursuant to the terms of the Loan Agreement (as defined below) on the date
on which such outstanding principal amounts become due and payable pursuant to
the Loan Agreement, in strict accordance with the terms thereof. Borrowers
likewise unconditionally jointly and severally promise to pay to Holder interest
from and after the date hereof on the outstanding principal amount of Settlement
Loans at such interest rates, payable at such times, and computed in such manner
as are specified in SECTION 3.1 of the Loan Agreement, in strict accordance with
the terms thereof.
This Settlement Note ("Note") is issued pursuant to, and is the
"Settlement Note" referred to in, the Loan and Security Agreement dated August
17, 1999 (as the same may be amended from time to time, the "Loan Agreement"),
among Borrower, Congress Financial Corporation (Southern), as administrative
agent for the financial institutions from time to time parties thereto as
lenders ("Lenders"), BankBoston, N.A. ("Collateral Agent"), as collateral agent
for Lenders and such Lenders, and Holder is and shall be entitled to all
benefits thereof and of all Financing Agreements executed and delivered in
connection therewith. All capitalized terms used herein, unless otherwise
defined herein, shall have the meanings ascribed to such terms in the Loan
Agreement.
The repayment of the principal balance of this Note shall be made in
the manner and to the extent stated in SECTION 6.1 of the Loan Agreement. The
entire unpaid principal balance and all accrued interest on this Note shall be
due and payable immediately upon the Commitment Termination Date.
All payments of principal and interest shall be made in Dollars in
immediately available funds as specified in the Loan Agreement.
Upon or after the occurrence of an Event of Default and for so long as
such Event of Default exists, the principal balance and all accrued interest of
this Note may be declared due and payable in the manner and with the effect
provided in the Loan Agreement, and the unpaid principal balance hereof shall
bear interest at the Default Rate as and when provided in SECTION 3.1 of the
Loan Agreement. Borrowers jointly and severally agree to pay, and save Holder
harmless against any liability for the payment of, all costs and expenses,
including, but not limited to, reasonable attorneys' fees, if this Note is
collected by or through an attorney-at-law.
104
All principal amounts of Settlement Loans made by Holder to Borrowers
pursuant to the Loan Agreement, and all accrued and unpaid interest thereon,
shall be deemed outstanding under this Note and shall continue to be owing by
Borrowers until paid in accordance with the terms of this Note and the Loan
Agreement.
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
to Holder for the use, forbearance or detention of money advanced hereunder
exceed the highest lawful rate permissible under any law which a court of
competent jurisdiction may deem applicable hereto; and, in the event of any such
payment inadvertently paid by Borrowers or inadvertently received by Holder,
such excess sum shall be, at Borrowers' option, returned to Borrowers forthwith
or credited as a payment of principal, but shall not be applied to the payment
of interest. It is the intent hereof that Borrowers not pay or contract to pay,
and that Holder not receive or contract to receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may be paid by Borrowers
under Applicable Law.
Time is of the essence of this Note. To the fullest extent permitted by
Applicable Law, Borrowers, for themselves and their legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under Applicable Law, but if any
provision of this Note shall be prohibited or invalid under Applicable Law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Holder in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Holder
of any right or remedy preclude any other right or remedy. Agents may, at their
option, enforce their rights against any Collateral securing this Note without
enforcing its rights against Borrowers, any Guarantor of the indebtedness
evidenced hereby or any other property or indebtedness due or to become due to
Borrowers. Borrowers agree that, without releasing or impairing Borrowers'
liability hereunder, Agents or Holder may at any time release, surrender,
substitute or exchange any Collateral securing this Note and may at any time
release any party primarily or secondarily liable for the indebtedness evidenced
by this Note.
The rights of Holder and obligations of Borrowers hereunder shall be
construed in accordance with and governed by the laws (without giving effect to
the conflict of law principles thereof) of the State of Georgia. This Note is
intended to take effect as an instrument under seal under Georgia law.
-2-
105
IN WITNESS WHEREOF, Borrowers have caused this Note to be executed
under seal and delivered by their duly authorized officers on the date first
above written.
BORROWERS:
ATTEST: DYERSBURG CORPORATION
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
DYERSBURG FABRICS LIMITED
ATTEST: PARTNERSHIP, I
By: DYERSBURG FABRICS INC., its sole General
Partner
_____________________________ By:_____________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: DYERSBURG FABRICS INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: UNITED KNITTING, INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
-3-
106
ATTEST: IQUE, INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: UNITED KNITTING LIMITED PARTNERSHIP, I
By: UNITED KNITTING, INC., its sole General
Partner
_____________________________ By:_____________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: IQUE LIMITED PARTNERSHIP, I
By: IQUE, INC., its sole General Partner
_____________________________ By:_____________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
ATTEST: ALAMAC KNIT FABRICS, INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
-4-
107
ATTEST: AIH INC.
_____________________________ By:_______________________________________
XXXX X. XXXXXXX, XXXXXXX X. XXXXXXXXXX, XX.,
Vice President-Finance Executive Vice President,
and Assistant Secretary Chief Financial Officer, Secretary
and Treasurer
[CORPORATE SEAL]
-5-
108
EXHIBIT D
FORM OF NOTICE OF CONVERSION/CONTINUATION
Date ______________,______
Congress Financial Corporation (Southern), as Administrative Agent
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Office Head
BankBoston, N.A., as Collateral Agent
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Mr. Xxxxx Xxxx
Re: Loan and Security Agreement dated August 17, 1999, by and among
Dyersburg Corporation, Dyersburg Fabrics Limited Partnership, I,
Dyersburg Fabrics Inc., United Knitting, Inc., United Knitting
Limited Partnership, I, IQUE, Inc., IQUE Limited Partnership, I,
Alamac Knit Fabrics, Inc., AIH Inc., Congress Financial
Corporation (Southern), as administrative agent for certain
Lenders from time to time parties thereto, BankBoston, N.A., as
collateral agent for the Lenders, and such Lenders (as at any
time amended, the "Loan Agreement")
Gentlemen:
This Notice of Conversion/Continuation is delivered to you pursuant to
SECTION 3.1(C) of the Loan Agreement. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings attributable thereto in
the Loan Agreement.
Borrowers hereby give notice of their request as follows:
Check as applicable:
[ ] A conversion of Loans from one Type to another, as follows:
(i) The requested date of the proposed conversion is
______________, 19__ (the "Conversion Date");
(ii) The Type of Loans to be converted pursuant hereto are
presently __________________ [select either LIBOR
Rate Loans or Base Rate Loans] in the principal
amount of $_____________ outstanding as of the
Conversion Date;
(iii) The portion of the aforesaid Loans to be converted on
the Conversion Date is $_____________ (the
"Conversion Amount");
109
(iv) The Conversion Amount is to be converted into a
____________ [select either a LIBOR Rate Loan or a
Base Rate Loan] (the "Converted Loan") on the
Conversion Date.
(v) [In the event Borrowers selects a LIBOR Rate Loan:]
Borrowers hereby request that the Interest Period for
such Converted Loan be for a duration of _____
[insert length of Interest Period].
[ ] A continuation of LIBOR Rate Loans for new Interest Period, as
follows:
(i) The requested date of the proposed continuation is
_______________, 19__ (the "Continuation Date");
(ii) The aggregate amount of the LIBOR Rate Loans subject
to such continuation is $__________________;
(iii) The duration of the selected Interest Period for the
LIBOR Rate Loans which are the subject of such
continuation is: _____________ [select duration of
applicable Interest Period];
Borrowers hereby ratify and reaffirm all of their respective
liabilities and obligations under the Financing Agreements and certify that no
Default or Event of Default exists on the date hereof.
Borrowers have caused this Notice of Conversion/Continuation to be
executed and delivered by their duly authorized officer, this _______ day of
______________, 19__.
DYERSBURG CORPORATION, as Borrowing Agent
By:__________________________________________
Title:____________________________________
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110
EXHIBIT E
FORM OF NOTICE OF BORROWING
Date ______________, ______
Congress Financial Corporation (Southern), as Administrative Agent
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Office Head
BankBoston, N.A., as Collateral Agent 000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Mr. Xxxxx Xxxx
Re: Loan and Security Agreement dated August 17, 1999, by and among
Dyersburg Corporation, Dyersburg Fabrics Inc., United Knitting,
Inc., IQUE, Inc., Alamac Knit Fabrics, Inc., AIH Inc., Congress
Financial Corporation (Southern), as administrative agent for
certain Lenders from time to time parties thereto, BankBoston,
N.A., as collateral agent for the Lenders, and such Lenders (as
at any time amended, the "Loan Agreement")
This Notice of Borrowing is delivered to you pursuant to SECTION 6.1(A)
of the Loan Agreement. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings attributable thereto in the Loan Agreement.
Borrowers hereby request a Revolving Loan in the aggregate principal amount of
$______________ to be made on _____________, _____, and to consist of:
Check as applicable: [ ] Base Rate Loans in the aggregate principal
amount of $_____________
[ ] LIBOR Rate Loans in the aggregate principal
amount of $___________, with Interest Periods as
follows:
(i) As to $_____________, an Interest
Period of ______ month(s);
(ii) As to $_____________, an Interest
Period of ______ months;
(iii) As to $_____________, an Interest
Period of ______ months.
Borrowers hereby ratify and reaffirm all of their respective
liabilities and obligations under the Financing Agreements, and Borrowers hereby
certify that no Default or Event of Default exists on the date hereof.
111
Borrowers have caused this Notice of Borrowing to be executed and
delivered by their duly authorized officer, this ______ day of _____________,
_____.
DYERSBURG CORPORATION, as Borrowing Agent
By:__________________________________________
Title:____________________________________
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112
EXHIBIT F
COMPLIANCE CERTIFICATE
[Letterhead of Borrowers]
__________________, 19__
Congress Financial Corporation (Southern), as Administrative Agent
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Office Head
BankBoston, N.A., as Collateral Agent 000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Mr. Xxxxx Xxxx
The undersigned, the chief financial officer of Dyersburg
Corporation, Dyersburg Fabrics Limited Partnership, I, Dyersburg Fabrics Inc.,
United Knitting, Inc., United Knitting Limited Partnership, I, IQUE, Inc., IQUE
Limited Partnership, I, Alamac Knit Fabrics, Inc. and AIH Inc. ("Borrowers"),
gives this certificate to Agents in accordance with the requirements of SECTION
9.6 of that certain Loan and Security Agreement dated August 17, 1999, among
Borrowers, Agents and the Lenders referenced therein ("Loan Agreement").
Capitalized terms used in this Certificate, unless otherwise defined herein,
shall have the meanings ascribed to them in the Loan Agreement.
1. Based upon my review of the balance sheets and statements
of income of Borrowers and their Subsidiaries for the [Fiscal Year] [quarterly
period] ending __________________, 19__, copies of which are attached hereto, I
hereby certify that:
(a) Consolidated Minimum Adjusted Tangible Net
Worth is $____________;
(b) Consolidated Minimum EBITDA is $___________;
(c) Consolidated Fixed Charge Coverage Ratio is
____ to 1;
(d) Excess Availability is $____________;
(f) Capital Expenditures during the period and
for the Fiscal Year to date total $_________
for Borrowers.
113
2. No Default exists on the date hereof, other than:
__________________ ________________________________________________ [if none, so
state]; and
3. No Event of Default exists on the date hereof, other than
__________ ____________________________________________________ [if none, so
state].
4. As of the date hereof, Borrowers are current in their
payment of all accrued rent and other charges to Persons who own or lease any
premises where any of the Collateral is located, and there are no pending
disputes or claims regarding any Borrower's failure to pay or delay in payment
of any such rent or other charges.
Very truly yours,
------------------------------------
Chief Financial Officer
-2-
114
EXHIBIT G
OPINION LETTER REQUIREMENTS
With respect to each Borrower, Borrowers' counsel's opinion letter
should address the following in a manner satisfactory to Agents:
Agents and Lenders shall have received from Borrowers' legal counsel in
the State of Tennessee and the State of North Carolina, written
opinions satisfactory to Agents in which such counsel opine that, among
other things: (i) each Borrower is duly incorporated or organized,
validly existing and in good standing under the laws of the State of
its organization and is duly qualified to transact business in certain
other states; (ii) each Borrower has taken all necessary corporate or
partnership actions to authorize the execution, delivery and
performance of the Financing Agreements and any other documents
required to be executed on the closing date pursuant thereto; (iii) the
execution and delivery of each Financing Agreement does not, and the
consummation of the financing transactions evidenced thereby will not,
violate, result in the breach of, be in conflict with or constitute a
default under any provision of any law, rule, order, judgment or decree
applicable to Borrowers or any agreement (including any agreement
evidencing any of the subordinated debt of any Borrower) known to
counsel to be applicable to Borrowers or binding on Borrowers'
properties; (iv) the Financing Agreements are legal, valid and binding
obligations of each Borrower enforceable against each Borrower party
thereto in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy and other similar laws of
general application relating to or affecting the enforcement of
creditor's rights generally and by general principles of equity and
other customary limitations on enforceability typically included in
such opinions; (v) such attorney knows of no litigation, proceeding or
investigation, pending or threatened against any Borrower other than
that disclosed in the Loan Agreement; (vi) no registration or
declaration with any governmental authority is required by or on behalf
of Borrowers in connection with the execution and delivery of the
Financing Agreements or any other documents contemplated thereby
delivered on the closing date; (vii) the Financing Agreements do not
violate any applicable law relating to interest or usury and a
Tennessee and a North Carolina court would give effect to the choice of
Georgia law (including laws regulating interest) under the Financing
Agreements (except as to matters of procedure and enforcement of
remedies in the States of North Carolina and Tennessee); (viii) the
liens granted and conveyed to Collateral Agent with respect to all of
the Collateral are legal and valid under Tennessee and North Carolina
law and are duly perfected pursuant to applicable provisions of
Tennessee and North Carolina law; (x) all documentary stamps,
intangibles taxes and fees required to be paid by Lenders in connection
with any of the Financing Agreements have been duly paid and no
additional stamps, taxes or fees are required to be paid other than
recording fees in a nominal amount and franchise and excise taxes, if
applicable; (xi) the number of issued and outstanding shares of stock
or partnership interests of each Borrower; (xii) absence of violation
of Section 7 of the Securities Exchange Act of 1934, as amended, any
regulations issued pursuant thereto, or Regulations T, U and X of the
Board of Governors of the Federal Reserve System, by the transactions
contemplated by the Financing Agreements; (xiii) absence of requirement
under the laws of applicable states for either or both Agents or any
Lender to register or qualify in such states to do business as a
prerequisite to their entering into, performing or enforcing the
provisions of the Financing Agreements; and (xiv) such other matters as
may be reasonably requested by legal counsel to Agents.
115
EXHIBIT H
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated as of ______, 19__
Reference is made to the Loan and Security Agreement dated August 17,
1999 (at any time amended, the "Loan Agreement"), among DYERSBURG CORPORATION, a
Tennessee corporation , DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee
limited partnership, DYERSBURG FABRICS INC., a Tennessee corporation, UNITED
KNITTING, INC., a Tennessee corporation, UNITED KNITTING LIMITED PARTNERSHIP, I,
a Tennessee limited partnership, IQUE, INC., a Tennessee corporation, IQUE
LIMITED PARTNERSHIP, I, a Tennessee limited partnership, ALAMAC KNIT FABRICS,
INC., a Delaware corporation, and AIH INC., a Delaware corporation (the
foregoing individually referred to hereinafter as "Borrower" and collectively
referred to hereinafter as "Borrowers"), CONGRESS FINANCIAL CORPORATION
(SOUTHERN), in its capacity as administrative agent ("Administrative Agent") for
the financial institutions from time to time party to the Loan Agreement
("Lenders"), BankBoston, N.A., in its capacity as collateral agent ("Collateral
Agent") for the Lenders and __________. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Loan
Agreement.
______________________________________ (the "Assignor") and
______________________________________ (the "Assignee") agree as follows:
1. (A) Assignor hereby assigns to Assignee and Assignee hereby
purchases and assumes from Assignor (i) a principal amount of $________ of the
outstanding Revolving Loans held by Assignor [and $___________ of participations
of Assignor in Letter of Credit Accommodations] (which amounts, according to the
records of Agent, represent _______% of the total principal amount of
outstanding Revolving Loans [and Letter of Credit Accommodations]) and (ii) a
principal amount of $__________ of Assignor's Revolving Commitment (which amount
includes Assignor's outstanding Revolving Loans being assigned to Assignee
pursuant to clause (i) above and which, according to the records of Agent,
represents (____%) of the total Revolving Commitments of Lenders under the Loan
Agreement); (B) Assignor hereby assigns to Assignee and Assignee hereby
purchases and assumes from Assignor (i) a principal amount of $________ of the
outstanding Term Loan and (ii) a principal amount of $_________ of Assignor's
Term Loan Commitment (which amount includes Assignor's outstanding Term Loan
Advance being assigned to Assignee pursuant to clause (i) above and which,
according to the records of Agent, represents ________% of the total Term Loan
Commitments of the Lenders under the Loan Agreement) (the items described in (A)
and (B) above being herein collectively referred to as the "Assigned
Interests"), together with an interest in the Financing Agreements corresponding
to the Assigned Interest. This Agreement shall be effective from the date (the
"Assignment Effective Date") on which Assignor receives both (x) the principal
amount of the Assigned Interest in the Loans on the Assignment Effective Date,
if any, and (y) a copy of this Agreement duly executed by Assignee. From and
after the Assignment Effective Date, Assignee hereby expressly assumes, and
undertakes to perform, all of Assignor's obligations in respect of Assignor's
Commitments to the extent, and only to the extent, of Assignee's Assigned
Interest, and all principal, interest, fees and other amounts which would
otherwise be payable to or for Assignor's account in respect of the Assigned
Interest shall be payable to or for Assignee's account, to the extent such
amounts have accrued subsequent to the Assignment Effective Date.
116
2. Assignor (i) represents that as of the date hereof, the aggregate of
its Commitments under the Loan Agreement (without giving effect to assignments
thereof, which have not yet become effective) is $__________, and the
outstanding balance of its Loans [and participations in Letter of Credit
Accommodations] (unreduced by any assignments thereof, which have not yet become
effective) is $__________; (ii) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or any other instrument or document furnished pursuant thereto, other
than that Assignor is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse
claim; (iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of Borrowers, the performance or
observance by Borrowers of any of their obligations under the Loan Agreement or
any of the Financing Agreements[; and (iv) attaches the Notes held by it and
requests that Collateral Agent exchange such Notes for new Notes payable to
Assignee and the Assignor in the principal amounts set forth on Schedule A
hereto].
3. Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Loan Agreement, together with copies of the most recent financial
statements delivered pursuant to SECTION 9.6 thereof, and copies of such other
Financing Agreements and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(iii) agrees that it shall, independently and without reliance upon the Assignor
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Agreement; (iv) confirms that it is eligible to become an
Assignee; (v) appoints and authorizes Collateral Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Agreement as are
delegated to Collateral Agent by the terms thereof, together with such powers as
are incidental thereto; (vi) agrees that it will strictly observe and perform
all the obligations that are required to be performed by it as a "Lender" under
the terms of the Loan Agreement and the other Financing Agreements; and (vii)
agrees that it will keep confidential all information with respect to Borrowers
furnished to them by Borrowers or the Assignor to the extent provided in the
Loan Agreement.
4. Assignor acknowledges and agrees that it will not sell or otherwise
dispose of the Assigned Interest or any portion thereof, or grant any
participation therein, in a manner which, or take any action in connection
therewith which, would violate the terms of any of the Financing Agreements.
5. This Agreement and all rights and obligations shall be interpreted
in accordance with and governed by the laws of the State of Georgia. If any
provision hereof would be invalid under Applicable Law, then such provision
shall be deemed to be modified to the extent necessary to render it valid while
most nearly preserving its original intent; no provision hereof shall be
affected by another provision's being held invalid.
6. Each notice or other communication hereunder shall be in writing,
shall be sent by messenger, by telescope or facsimile transmission or by
first-class mail, shall be deemed given when sent and shall be sent as follows:
If to Assignee, to the following address (or to such other address as
Assignee may designate from time to time):
--------------------------
--------------------------
--------------------------
If to Assignor, to the following address (or to such other address as
Assignor may designate from time to time):
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--------------------------
--------------------------
--------------------------
Payments hereunder shall be made by wire transfer of immediately
available Dollars as follows:
If to Assignee, to the following account (or to such other account as
Assignee may designate from time to time):
---------------------------
ABA No.
--------------------
---------------------------
Account No.
----------------
Reference:
----------------
If to Assignor, to the following account (or to such other account as
Assignor may designate from time to time):
---------------------------
---------------------------
---------------------------
ABA No.
--------------------
For Account No.
------------
Reference:
----------------
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IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed and delivered by their respective duly authorized
officers, as of the date first above written.
---------------------------------------
("Assignor")
By:
----------------------------------
Title:
----------------------
---------------------------------------
("Assignee")
By:
----------------------------------
Title:
----------------------
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119
EXHIBIT I
FORM OF NOTICE
Reference is made to (i) the Loan and Security Agreement dated August
17, 1999 (as at any time amended, the "Loan Agreement") among DYERSBURG
CORPORATION, a Tennessee corporation, DYERSBURG FABRICS LIMITED PARTNERSHIP, I,
a Tennessee limited partnership, DYERSBURG FABRICS INC., a Tennessee
corporation, UNITED KNITTING, INC., a Tennessee corporation, UNITED KNITTING
LIMITED PARTNERSHIP, I, a Tennessee limited partnership, IQUE, INC., a Tennessee
corporation, IQUE LIMITED PARTNERSHIP, I, a Tennessee limited partnership,
ALAMAC KNIT FABRICS, INC., a Delaware corporation, and AIH INC., a Delaware
corporation (the foregoing individually referred to hereinafter as "Borrower"
and collectively referred to hereinafter as "Borrowers"), CONGRESS FINANCIAL
CORPORATION (SOUTHERN) in its capacity as administrative agent ("Administrative
Agent") for the financial institutions from time to time party to the Loan
Agreement ("Lenders"), BankBoston, N.A., in its capacity as collateral agent
("Collateral Agent") for the Lenders and ___________, and (ii) the Assignment
and Acceptance dated as of ____________, 19__ (the "Assignment Agreement")
between __________________ (the "Assignor") and ____________________ (the
"Assignee"). Except as otherwise defined herein, capitalized terms used herein
which are defined in the Loan Agreement are used herein with the respective
meanings specified therein.
The Assignor hereby notifies Borrowers and Collateral Agent of
Assignor's intent to assign to Assignee pursuant to the Assignment Agreement a
principal amount of (i) $________ of the outstanding Revolving Loans [and
participations in Letter of Credit Accommodations] held by Assignor, (ii)
$___________ of Assignor's Revolving Commitment (which amount includes the
Assignor's outstanding Revolving Loans being assigned to Assignee pursuant to
clause (i) above), (iii) $_______________ of the outstanding Term Loan Advance
held by Assignor, and (iv) $_____________ of Assignor's Term Loan Commitment
(which amount includes Assignor's outstanding portion of the Term Loan Advance
being assigned to Assignee pursuant to clause (iii) above), together with an
interest in the Financing Agreements corresponding to the interest in the Loans
and Commitments so assigned. Pursuant to the Assignment Agreement, Assignee has
expressly assumed all of Assignor's obligations under the Loan Agreement to the
extent of the Assigned Interest (as defined in the Assignment Agreement).
For purposes of the Loan Agreement, Agent shall deem Assignor's share
of the Revolving Commitment and Term Loan Commitment to be reduced by $_________
and $__________, respectively, and Assignee's share of the Revolving Commitment
and Term Loan Commitment to be increased by $_________ and $___________,
respectively.
The address of the Assignee to which notices, information and payments
are to be sent under the terms of the Loan Agreement is:
-------------------------
-------------------------
-------------------------
-------------------------
120
Assignees LIBOR Lending Office address is as follows:
-------------------------
-------------------------
-------------------------
-------------------------
This Notice is being delivered to the Borrowers and Collateral Agent
pursuant to SECTION 13.3 of the Loan Agreement. Please acknowledge your receipt
of this Notice by executing and returning to Assignee and Assignor a copy of
this Notice.
IN WITNESS WHEREOF, the undersigned have caused the execution of this
Notice, as of _________________, 19__.
-----------------------------------
("Assignor")
By:
--------------------------------
Title:
------------------------
-----------------------------------
("Assignee")
By:
--------------------------------
Title:
------------------------
ACKNOWLEDGED AND AGREED TO
AS OF THE DATE SET FORTH ABOVE:
[BORROWERS]
By:
--------------------------------
Title:
------------------------
CONGRESS FINANCIAL
CORPORATION (SOUTHERN),
as Administrative Agent
By:
--------------------------------
Title:
------------------------
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BANKBOSTON, N.A.,
as Collateral Agent
By:
--------------------------------
Title:
------------------------
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EXHIBIT J
BORROWING BASE CERTIFICATE
DYERSBURG CORPORATION
DAILY BORROWING BASE CERTIFICATE
(to be submitted daily and at month-end)
1. Accounts Receivable Balance as of ______________(date)
a. Receivable Balance from previous certificate $___________________
b. Plus: Gross Sales $_________________
Other Debits * $_________________
c. Total Additions $___________________
d. Less Collections $_________________
Credit Memos $_________________
Other Credits * $_________________
e. Total Reductions $___________________
2. New Accounts Receivable as of this certificate $___________________
3. Less: Ineligible Accounts Receivable per Aging dated __________ $___________________
(per attached exclusion form)
4. Eligible Accounts Receivable (Line 2 - Line 3) $___________________
5. Advance Rate X 85%
6. Accounts Receivable Availability (Line 4 x Line 5) $___________________
7. Inventory Availability (From Inventory Designation) $___________________
(Inventory Availability not to Exceed $25 Million)
8. Total Collateral Availability (Line 6 + Line 7) $___________________
Less:
9. Minimum Availability Reserve $___________________
10. Total Availability (Line 8 - Line 9) $ ___________________
11A. Outstanding Revolving Loan Balance $___________________
B. Outstanding Letters of Credit $___________________
(Not to Exceed $16 Million)
C. Total Outstanding (Not to Exceed $84 Million) $___________________
123
12. Net Availability (Line 10 - Line 11C) $___________________
LOAN RECONCILIATION
13. Current Balance Forward $___________________
Increases to Loan:
14. Loan Advances Requested $___________________
15. Other: explain $___________________
16. Total Loan Increases (Line 14 + Line 15) $___________________
Decreases to Loan:
17. Payments Initiated via Lockbox $___________________
18. Other Payments Reducing Accounts Receivable $___________________
19. Total A/R Effecting Payments (Line 17 + 18) $___________________
(Must Agree With Line 1D [Collections] - If Not, Please Provide
Detailed Explanation)
19. Other: explain $___________________
20. Total Loan Outstanding $___________________
* If In Excess of $5 Thousand Explain
For value received the undersigned hereby pledges, sells, assigns and transfers
to BankBoston N.A. (herein called 'Lenders') the claims or accounts receivable
described and set forth on this statement or in the statements attached hereto,
together with all monies now due or to become due thereon, all guaranties and
security therefor, and all right, title and interest of the undersigned in the
merchandise giving rise thereto, including the right of stoppage in transit,
with full power to collect and/or compromise the same or otherwise deal with the
same in its own name or otherwise as though it were absolute owner thereof for
all purposes. Said claims, accounts, money, merchandise and security are
assigned as collateral security for INDEBTEDNESS and liabilities of the
undersigned to its Lender as more fully provided and pursuant to a plan set
forth in a loan agreement dated _________ between the undersigned and its lender
and with and subject to all the covenants, terms and provisions thereof.
Client # ________ By:______________________________________
Authorized Official
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124
DYERSBURG CORPORATION
MONTH END EXCLUSIONS TO ACCOUNTS RECEIVABLE
AS OF :____________________(DATE) AGING
ACCOUNTS RECEIVABLE OVER 60 DAYS FROM DUE DATE BUT IN NO EVENT GREATER THAN
120 DAYS PAST INVOICE DATE: $____________
RE-AGED CREDITS: $____________
AFFILIATES (A), SUBSIDIARIES (S), INTERCOMPANY (I) OR OFFICER/EMPLOYEE ACCOUNTS (O), IF ANY:
Name: A/R Balance (within 60 days of due date )
____________________( ) $______________
____________________( ) $______________
____________________( ) $______________
____________________( ) $______________
TOTAL AFFILIATES, SUBSIDIARIES, INTERCOMPANY OR OFFICER/EMPLOYEE ACCOUNTS: $____________
CONTRA ACCOUNTS: A/R Balance (Amt. Amount of Exclusion
Vendor/Manufacturer Rep. A/P Balance within 60 days past due) (Lessor of A/P or A/R)
_____________________ $_____________ $______________ $________________
_____________________ $_____________ $______________ $________________
_____________________ $_____________ $______________ $________________
TOTAL AMOUNT OF CONTRA ACCOUNTS: $___________
ACCOUNTS SUBJECT TO "CROSS AGING RULE" (IF BALANCE OF OVER 60 DAYS FROM DUE DATE
IS 50% OR GREATER OF TOTAL BALANCE OF ACCOUNT, THEN DEDUCT AMOUNT WITHIN 60 DAYS
OF DUE DATE): Name Amount within 60 days from due date
________________________ $_____________
________________________ $_____________
________________________ $_____________
TOTAL AMOUNT OF ACCOUNTS SUBJECT TO "CROSS AGING RULE": $___________
ACCOUNTS SUBJECT TO "CONCENTRATION RULE" (IF AGGREGATE BALANCE OF ANY ACCOUNT DEBTOR EXCEEDS
20% OF "ACCEPTABLE ACCOUNTS", THEN DEDUCT AMOUNT OVER 20%):
Name Amount
________________________ $_____________
________________________ $_____________
TOTAL AMOUNT OF ACCOUNTS SUBJECT TO "CONCENTRATION RULE": $___________
CHARGEBACKS LESS THAN 60 DAYS PAST DUE: $___________
SAMPLES LESS THAN 60 DAYS PAST DUE: $___________
RETURNS LESS THAN 60 DAYS PAST DUE: $___________
FOREIGN ACCOUNTS NOT BACKED BY LETTERS OF CREDIT:
________________________ $_____________
________________________ $_____________
TOTAL FOREIGN ACCOUNTS NOT BACKED BY LETTERS OF CREDIT : $___________
FEDERAL GOVERNMENT
________________________ $_____________
________________________ $_____________
TOTAL FEDERAL GOVERNMENT : $___________
125
OTHER EXCLUSIONS AS PER LOAN AGREEMENT:
________________________ $_____________
________________________ $_____________
TOTAL OTHER EXCLUSIONS: $__________
TOTAL EXCLUSIONS (INELIGIBLE ACCOUNTS RECEIVABLE): $__________
BY:______________________________________
Authorized Official
CLIENT #________
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126
DESIGNATION OF MERCHANDISE
(to be submitted on a weekly basis)
_______________________ 19_____
The undersigned hereby designates and pledges all merchandise, supplies,
materials, and goods in process, including any of such described below or in
Exhibit A attached hereto as Merchandise of the undersigned to be subject to a
lien of BankBoston N.A., 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, pursuant to
the loan agreement with the undersigned dated ______________________________ and
pursuant to applicable provisions of law.
ADVANCE
DYERSBURG ALAMAC UNITED TOTAL RATE AVAILABILITY
--------- ------ ------ ----- ------- ------------
RAW MATERIAL
------------
RAW COTTON $_________ $_________ $_________ $_________
LESS:
VALUATION RESERVE $_________ $_________ $_________ $_________
SUBTOTAL: COTTON $_________ $_________ $_________ $_________ 70% $_________
OTHER RAW MATERIAL $_________ $_________ $_________ $_________
LESS INELIGIBLES:
DYES & CHEMICALS $_________ $_________ $_________ $_________
SUPPLIES $_________ $_________ $_________ $_________
OBSOLESCENCE RESERVE $_________ $_________ $_________ $_________
SUBTOTAL OTHER RAW $_________ $_________ $_________ $_________ 60% $_________
(SYNTHETICS AND YARN)
WORK IN PROCESS $_________ $_________ $_________ $_________
---------------
LESS INELIGIBLES:
REVALUATION RESERVE $_________ $_________ $_________ $_________
OUTSIDE PROCESSORS $_________ $_________ $_________ $_________
IN PROCESS ABSORPTION $_________ $_________ $_________ $_________
OBSOLETE GREIGE $_________ $_________ $_________ $_________
SUBTOTAL OTHER WIP $_________ $_________ $_________ 50% $_________
SUBTOTAL ALAMAC WIP $_________ $_________ 25% $_________
LOWER OF TOTAL AVAIL.
WIP OR $8MILLION $_________
FINISHED GOODS $_________ $_________ $_________ $_________
--------------
LESS INELIGIBLES:
REVALUATION RESERVE $_________ $_________ $_________ $_________
OBSOLESCENCE RESERVE $_________ $_________ $_________ $_________
SECONDS INVENTORY $_________ $_________ $_________ $_________
IRREGULAR INVENTORY $_________ $_________ $_________ $_________
OBSOLETE INVENTORY $_________ $_________ $_________ $_________
FINISHED GOODS
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127
ABSORPTION $_________ $_________ $_________ $_________
SUBTOTAL FINISHED GOODS
$_________ $_________ $_________ $_________ 60% $_________
TOTAL $_________ $_________ $_________ $_________ $_________
NAME OF BORROWER: DYERSBURG CORPORATION CLIENT #_____________________
BY:________________________________
Authorized Official
This Designation is designed for use by each of the lenders named above and
relates to transactions under the loan agreement between the within named
borrower and the particular lender.
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128
MONTHLY RECONCILIATION REPORT
ACCOUNTS RECEIVABLE RECONCILIATION AS OF __________________ (DATE)
ACCOUNTS RECEIVABLE BALANCE AS OF PREVIOUS MONTHS AGING REPORTS: $____________
PLUS: Gross Sales for the month or period $_______________
Other Debits to Accounts Receivable * $_______________
TOTAL ADDITIONS TO ACCOUNTS RECEIVABLE: $____________
LESS: Cash Collections for the month or period $______________
Credit Memos $______________
Other Credits to Accounts Receivable * $______________
TOTAL REDUCTIONS TO ACCOUNTS RECEIVABLE: $____________
TOTAL BALANCE OF THIS AGING REPORT AS OF _______________ (DATE): $____________
ACCOUNTS RECEIVABLE BALANCE AS PER LENDERS MONTH END STATEMENT: $____________
DIFFERENCE (EXPLAIN ON ATTACHED RECONCILIATION REPORT IN DETAIL): $____________
* IF IN EXCESS OF $5,000.00 EXPLAIN
COMPANY: DYERSBURG CORPORATION
BY:________________________________
Authorized Official
CLIENT #
129
RECONCILIATION OF LENDERS MONTH END STATEMENT TO AGING REPORT
ACCOUNTS RECEIVABLE BALANCE PER LENDERS MONTH END STATEMENT $_____________
IN TRANSIT ITEMS:
Sales: $_______________ $_______________
$_______________ $_______________
$_______________ $_______________
$_______________ $_______________
$_______________ $_______________
TOTAL SALES: + $_____________
Other Debits: $_______________ $_______________
$_______________ $_______________
$_______________ $_______________
TOTAL OTHER DEBITS: + $_____________
Cash Collections: $_______________ $_______________
$_______________ $_______________
$_______________ $_______________
$_______________ $_______________
$_______________ $_______________
TOTAL CASH COLLECTIONS: - $_____________
Credit Memos: $______________ $_______________
$_______________ $_______________
$_______________ $_______________
TOTAL CREDIT MEMOS: - $_____________
Other Credits: $______________ $_______________
$_______________ $_______________
$_______________ $_______________
TOTAL OTHER CREDITS: - $_____________
CORRECTIONS & ADJUSTMENTS TO LENDERS MONTH END STATEMENT: ______________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
BALANCE MUST AGREE WITH BALANCE OF AGING REPORT BEING SUBMITTED: $_____________
COMPANY: DYERSBURG CORPORATION
BY:_______________________________________
Authorized Official
CLIENT #
130
EXHIBIT K
Information Certificates
