$200,000,000
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of February 12, 1999
Among
GLENOIT CORPORATION
as Borrower,
and
THE RESTATEMENT LENDERS
NAMED HEREIN
and
BANQUE NATIONALE DE PARIS,
as Agent, Arranger, Issuing Bank and Swing Line Bank
and
FLEET NATIONAL BANK,
as Syndication Agent
and
LASALLE NATIONAL BANK,
as Documentation Agent
T A B L E O F C O N T E N T S
SECTION PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms..................................................2
1.02. Computation of Time Periods; Other Definitional Provisions............40
1.03. Accounting Terms......................................................40
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES AND THE
LETTERS OF CREDIT
2.01. The Advances..........................................................40
2.02. Making the Advances...................................................42
2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit....44
2.04. Repayment of Advances.................................................46
2.05. Termination or Reduction of the Commitments...........................49
2.06. Prepayments...........................................................50
2.07. Interest..............................................................52
2.08. Fees..................................................................53
2.09. Conversion of Advances................................................54
2.10. Increased Costs, Etc..................................................55
2.11. Payments and Computations.............................................57
2.12. Taxes.................................................................58
2.13. Sharing of Payments, Etc..............................................60
2.14. Use of Proceeds.......................................................61
2.15. Evidence of Debt......................................................62
ARTICLE III CONDITIONS OF LENDING
3.01. Conditions Precedent to the Third Restatement Date....................63
3.02. Conditions Precedent to Each Borrowing, Swing Line
Advance and Issuance........................................72
3.03. Determinations Under Section 3.01.....................................73
ARTICLE IV REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Loan Parties....................73
ARTICLE V COVENANTS OF THE BORROWER
5.01. Affirmative Covenants.................................................83
5.02. Negative Covenants....................................................88
5.03. Reporting Requirements................................................97
5.04. Financial Covenants..................................................101
ARTICLE VI EVENTS OF DEFAULT
6.01. Events of Default....................................................104
6.02. Actions in Respect of the Letters of Credit upon Default.............107
ARTICLE VII THE AGENT
7.01. Authorization and Action.............................................108
7.02. Agent's Reliance, Etc................................................108
7.03. BNP and Affiliates...................................................109
7.04. Lender Party Credit Decision.........................................109
7.05. Indemnification......................................................109
7.06. Successor Agents.....................................................111
7.07 Agents................................................................111
ARTICLE VIII MISCELLANEOUS
8.01. Amendments, Etc......................................................111
8.02. Notices, Etc.........................................................112
8.03. No Waiver; Remedies..................................................113
8.04. Costs and Expenses...................................................113
8.05. Right of Set-off.....................................................114
8.06. Binding Effect.......................................................115
8.07. Assignments and Participations.......................................115
8.08. Execution in Counterparts............................................118
8.09. No Liability of the Issuing Bank.....................................118
8.10. Confidentiality......................................................118
8.11. Jurisdiction, Etc....................................................119
8.12. Final Agreement......................................................119
8.13. Governing Law........................................................119
8.14. Waiver of Jury Trial.................................................119
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SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - EBITDA
Schedule 3.01(h)(i) - Existing Debt
Schedule 3.01(h)(ii) - Surviving Debt
Schedule 4.01(a) - Share Ownership and Investor Group
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and Filings
Schedule 4.01(m) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(u) - Environmental Items
Schedule 4.01(aa) - Open Years
Schedule 4.01(bb) - Tax Liabilities
Schedule 4.01(gg) - Owned Real Property
Schedule 4.01(hh) - Leased Real Property
Schedule 4.01(ii) - Investments
Schedule 4.01(jj) - Intellectual Property
Schedule 5.02(a)(iii) - Existing Liens
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EXHIBITS
Exhibit A-1 - Form of Term A Note
Exhibit A-2 - Form of Term B Note
Exhibit A-3 - Form of Working Capital Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Amended and Restated Security Agreement
Exhibit D-2 - Form of Deed of Charge
Exhibit E-1 - Form of Modification and Extension Agreement
Exhibit E-2 - Form of Deed of Trust
Exhibit F-1 - Form of Parent Guarantee
Exhibit F-2 - Form of U.S. Subsidiary Guarantee
Exhibit G - Form of Intercompany Subordination Agreement
Exhibit H - Form of Solvency Certificate
Exhibit I - Form of Borrowing Base Certificate
Exhibit J - Form of Opinion of Special Counsel to the Loan Parties
Exhibit K - Form of Third Restatement Assignment Agreement
Exhibit L - Form of Opinion of North Carolina Counsel to the Loan Parties
Exhibit M - Form of Opinion of Arkansas Counsel to the Loan Parties
Exhibit N - Form of Glenoit of Canada Consent
Exhibit O - Form of Junior Noteholders Undertaking
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of
February 12, 1999 among Glenoit Corporation, a Delaware corporation (the
"BORROWER"), the banks, financial institutions and other institutional lenders
listed on the signature pages hereof as the Restatement Lenders (the
"RESTATEMENT LENDERS"), the bank listed on the signature pages hereof as the
Issuing Bank (the "ISSUING BANK"), Banque Nationale de Paris ("BNP"), as the
swing line bank (the "SWING LINE BANK") and as administrative agent (together
with any successor appointed pursuant to Article VII, the "AGENT") for the
Lender Parties (as hereinafter defined) and arranger (the "ARRANGER"), Fleet
National Bank as syndication agent (the "SYNDICATION AGENT"), and LaSalle
National Bank, as documentation agent (the "DOCUMENTATION AGENT"; and, together
with the Agent and the Syndication Agent, the "AGENTS").
PRELIMINARY STATEMENTS:
(1) The Borrower and Glenoit Xxxxx, Inc. ("XXXXX") entered
into a Second Amended and Restated Credit Agreement dated as of April 1, 1997
with the "Restatement Lenders" (as defined therein) and the "Initial Issuing
Bank" (as defined therein; together with such "Restatement Lenders", the
"EXISTING LENDERS") named therein and the Agent, as amended by Amendment No. 1
dated as of April 27, 1997, the First Amendment and Waiver dated as of July 10,
1997, the Second Amendment and Waiver dated as of October 2, 1998 and the Third
Amendment and Waiver dated as of October 30, 1998 (as so amended, the "EXISTING
CREDIT AGREEMENT").
(2) The Existing Lenders and the Borrower have agreed further
to amend and restate the Existing Credit Agreement in order to allow the
Existing Lenders to assign their "Commitments" (as defined in the Existing
Credit Agreement) to the Restatement Lenders hereunder, and to modify such
"Commitments" (as defined in the Existing Credit Agreement) in order to (i) pay
transaction fees and expenses in connection with the transactions contemplated
hereunder, (ii) finance the acquisition of Ex-Cell Home Fashions, Inc., a New
York corporation ("EX-CELL", and, together with each of its Subsidiaries, the
"EX-CELL GROUP") by the Borrower, pursuant to the Stock Purchase Agreement (as
amended, supplemented or otherwise modified from time to time in accordance with
its terms, the "PURCHASE Agreement"; such acquisition and the transactions
related thereto and contemplated thereunder, including, without limitation, the
acquisition (the "ANSAM ASSET ACQUISITION") by Ex-Cell of the membership
interests of Ansam Realty Company, LLC, a North Carolina limited liability
company ("ANSAM") prior to the Borrower's acquisition of Ex-Cell, being the
"TRANSACTION") dated as of February 12, 1999 among the Borrower, as purchaser,
and Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx, Trust F/B/O Xxxxxx X.
Xxxxxxxx U/T/A dated November 10, 1998 and Trust F/B/O/ Xxxxxx X. Xxxx U/T/A
dated November 10, 1998, as sellers (each a "SELLER", and, collectively, the
"SELLERS"), (iii) finance the working capital of the Borrower and its
Subsidiaries and (iv) provide funds for other general corporate purposes
permitted hereunder. The Restatement Lenders have
2
indicated their willingness to agree further to amend and restate the Existing
Credit Agreement and to lend such amounts on the terms and conditions of this
Agreement.
(3) Simultaneously with the execution hereof, the Existing
Lenders have entered into an Assignment Agreement in the form of Exhibit K
attached hereto dated as of the date hereof (the "THIRD RESTATEMENT ASSIGNMENT
AGREEMENT"), with the Restatement Lenders pursuant to which such Existing
Lenders have agreed to sell and assign to the Restatement Lenders, and the
Restatement Lenders have agreed to purchase and assume, as of the Third
Restatement Date (as defined below), all of such Existing Lenders' rights and
obligations under the Existing Credit Agreement on the terms set forth in the
Third Restatement Assignment Agreement. After giving effect to such sale and
assignment as of the Third Restatement Date, the Commitments of and the amount
of Advances owing to each of the Restatement Lenders will be as set forth on
Schedule I.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree that, subject to the satisfaction of the conditions set forth in Section
3.01, the Existing Credit Agreement is amended and restated in its entirety to
read as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"ACCOUNTS RECEIVABLE MANAGEMENT AGREEMENT" means the Accounts
Receivable Management Agreement dated as of December 14, 1995 by and
between the Borrower (as the successor of Xxxxx) and BNY Financial
Corporation, as amended, supplemented or otherwise modified from time
to time in accordance with its terms.
"ADJUSTED EBITDA" means, for any Rolling Period, Consolidated
EBITDA of the Borrower and its Subsidiaries plus with respect to any
Investment which constitutes an acquisition of a Related Textile
Business, EBITDA of such Related Textile Business for such Rolling
Period or such shorter period, as appropriate, ending on the last day
of the Fiscal Month immediately preceding the date of such Related
Textile Investment if the Lender Parties shall have received financial
information of such Related Textile Business acceptable to the Agent.
3
"ADVANCE" means a Term A Advance, a Term B Advance, a Working
Capital Advance, a Swing Line Advance or a Letter of Credit Advance.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote 5% or more of the Voting Interests of such Person or to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of Voting Interests, by contract or
otherwise.
"AGENT" has the meaning specified in the recital of parties to
this Agreement.
"AGENT'S ACCOUNT" means the account of the Agent maintained by
the Agent at the Federal Reserve Bank of New York, 00 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, ABA No. 000000000, for further credit to
Account No. 750420-701-03 or such other account maintained by the Agent
and designated by the Agent in a written notice to the Lender Parties
and the Borrower.
"AGREEMENT VALUE" means, for each Hedge Agreement, on any date
of determination, an amount determined by the Agent equal to: (a) in
the case of a Hedge Agreement documented pursuant to the Master
Agreement (Multicurrency-Cross Border) published by the International
Swap and Derivatives Association, Inc. (the "MASTER AGREEMENT"), the
amount, if any, that would be payable by any Loan Party or any of its
Subsidiaries to its counterparty to such Hedge Agreement, as if (i)
such Hedge Agreement was being terminated early on such date of
determination, (ii) such Loan Party or Subsidiary was the sole
"Affected Party", and (iii) the Agent was the sole party determining
such payment amount (with the Agent making such determination pursuant
to the provisions of the form of Master Agreement); or (b) in the case
of a Hedge Agreement traded on an exchange, the xxxx-to-market value of
such Hedge Agreement, which will be the unrealized loss on such Hedge
Agreement to the Loan Party or Subsidiary of a Loan Party party to such
Hedge Agreement determined by the Agent based on the settlement price
of such Hedge Agreement on such date of determination, or (c) in all
other cases, the xxxx-to-market value of such Hedge Agreement, which
will be the unrealized loss on such Hedge Agreement to the Loan Party
or Subsidiary of a Loan Party party to such Hedge Agreement determined
by the Agent as the amount, if any, by which (i) the present value of
the future cash flows to be paid by such Loan Party or Subsidiary
exceeds (ii) the present value of the future cash flows to be received
by such Loan Party or Subsidiary pursuant to such Hedge Agreement;
capitalized terms used and not otherwise defined in this definition
shall have the respective meanings set forth in the above described
Master Agreement.
4
"AMPAC" means American Pacific Enterprises, Inc., an Ohio
corporation and a directly, wholly owned Subsidiary of the Borrower.
"AMPAC DEFERRED ACQUISITION EXPENSE" means the earn-out
payments, whether paid or accrued, payable by the Borrower pursuant to,
and in accordance with, Article III of the AmPac Stock Purchase
Agreement.
"AMPAC STOCK PURCHASE AGREEMENT" means the Stock Purchase
Agreement dated as of October 2, 1998 by and among the Borrower, AmPac,
Xxxxxx X. Block, Xxxxxxx X. Block, Xxxxxxx X. Block, the Xxxxxxx X. and
Xxxxx Block Revocable Trust and the Block/Xxxxxxxxxx Revocable Trust,
as amended, supplemented or otherwise modified from time to time.
"ANNUALIZATION FACTOR" means a fraction, the numerator of
which is the number 12 and the denominator of which is the number of
months elapsed since the first day of the month immediately preceding
the Third Restatement Date.
"ANSAM" has the meaning specified in the Preliminary
Statements to this Agreement.
"ANSAM ASSET ACQUISITION" has the meaning specified in the
Preliminary Statements to this Agreement.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender
Party, such Lender Party's Domestic Lending Office in the case of a
Base Rate Advance and such Lender Party's Eurodollar Lending Office in
the case of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means (a) with respect to Advances
outstanding under the Term A Facility or the Working Capital Facility,
a percentage per annum determined as set forth below:
FACILITY BASE RATE ADVANCES EURODOLLAR RATE ADVANCES
Term A Facility 1.75% 3.00%
Working Capital Facility 1.75% 3.00%
provided, however, that the Applicable Margin for the Term A Facility
and the Working Capital Facility shall be, as of any date following the
date on which the financial information for the Rolling Period ended
July 31, 1999 is required to be delivered pursuant to Section 5.03(b),
a percentage per annum determined by reference to the Total
5
Leverage Ratio for the Rolling Period ended on or most recently prior
to such date as set forth below:
Total Leverage Ratio Base Rate Eurodollar
Advances Rate Advances
----------------------------------------------------------------------------------
Level I
less than 3.5 to 1.00 1.25% 2.50%
----------------------------------------------------------------------------------
Level II
less than 4.5 to 1.00 but greater than or
equal to 3.5 to 1.00 1.50% 2.75%
----------------------------------------------------------------------------------
Level III
greater than or equal to 4.5 to 1.00 1.75% 3.00%
----------------------------------------------------------------------------------
The Applicable Margin for each Term A Advance and Working Capital
Advance shall be determined by reference to the Total Leverage Ratio in
effect from time to time; provided, however, that (i) no change in such
Applicable Margin shall be effective until three Business Days after
the date on which the Agent receives the financial information required
to be delivered pursuant to Section 5.03(b) and (ii) such Applicable
Margin shall be at Level III for so long as the Borrower has not
submitted to the Agent the information described in clause (i) of this
proviso as and when required under Section 5.03(b), and
(b) with respect to Advances outstanding under the Term B
Facility, 2.50% per annum for Base Rate Advances and 3.75% per annum
for Eurodollar Rate Advances.
"APPROPRIATE LENDER" means, at any time, with respect to (a)
any of the Term A, Term B or Working Capital Facilities, a Lender that
has a Commitment with respect to such Facility at such time, (b) the
Letter of Credit Facility, (i) the Issuing Bank and (ii) if the other
Working Capital Lenders have made Letter of Credit Advances pursuant to
Section 2.03(c) that are outstanding at such time, each such other
Working Capital Lender and (c) the Swing Line Facility, (i) the Swing
Line Bank and (ii) if the other Working Capital Lenders have made Swing
Line Advances pursuant to Section 2.02(b) that are outstanding at such
time, each such other Working Capital Lender.
6
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee, and accepted
by the Agent, in accordance with Section 8.07 and in substantially the
form of Exhibit C hereto.
"AVAILABLE AMOUNT" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time with all conditions to
drawing).
"BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly by BNP in
New York, New York, from time to time, as its prime rate (and
such term shall not be construed to be its best or most
favorable rate); and
(b) 1/2 of one percent per annum above the Federal
Funds Rate.
"BASE RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.07(a)(i).
"BNP" has the meaning specified in the recital of parties to
this Agreement.
"BORROWER" has the meaning specified in the recital of parties
to this Agreement.
"BORROWER INFORMATION" means any and all of the written
information provided by or on behalf of the Borrower to the Agent in
connection with the syndication of this Agreement (including any
written materials, financial statements and financial projections and
any amendments, supplements, schedules and exhibits thereto).
"BORROWER'S ACCOUNT" means the account of the Borrower
maintained by the Borrower with BNP at its office at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Account No. 20041000123, or such other
account as the Borrower and the Agent may from time to time designate
as the "Borrower's Account".
"BORROWING" means a Term A Borrowing, a Term B Borrowing, a
Swing Line Borrowing or a Working Capital Borrowing.
"BORROWING BASE CERTIFICATE" means a certificate in
substantially the form of Exhibit J hereto, duly certified by the chief
financial officer of the Borrower.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates
7
to any Eurodollar Rate Advances, on which dealings are carried on in
the London interbank market.
"CANADIAN SUBSIDIARY" means any Subsidiary organized under the
laws of any province of Canada or the federal laws of Canada.
"CAPITAL EXPENDITURES" means, for any Person for any period,
the sum of, without duplication, (a) all cash expenditures made,
directly or indirectly, by such Person or any of its Subsidiaries
during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or
additions thereto, that have been, in accordance with GAAP, reflected
as additions to property, plant or equipment on a Consolidated balance
sheet of such Person plus (b) the aggregate principal amount of all
Debt (including Obligations under Capitalized Leases) assumed or
incurred in connection with any such expenditures. For purposes of this
definition, the purchase price of equipment that is purchased
simultaneously with the trade-in of existing equipment or with
insurance proceeds shall be included in Capital Expenditures only to
the extent of the gross amount of such purchase price less the credit
granted by the seller of such equipment for the equipment being traded
in at such time or the amount of such proceeds, as the case may be.
"CAPITALIZED LEASES" means all leases that have been or should
be, in accordance with GAAP, recorded as capitalized leases.
"CARRY OVER AMOUNT" has the meaning specified in Section
5.04(c).
"CASH COLLATERAL ACCOUNT" has the meaning specified in Section
2.06(b)(vi).
"CASH EQUIVALENTS" means any of the following, to the extent
owned by the Borrower free and clear of all Liens other than Liens
created under the Collateral Documents and having a maturity of not
greater than 180 days from the date of acquisition thereof: (a) readily
marketable direct obligations of the Government of the United States or
any agency or instrumentality thereof or obligations unconditionally
guaranteed by the full faith and credit of the Government of the United
States, (b) insured certificates of deposit of or time deposits with
any commercial bank that is a Lender Party or a member of the Federal
Reserve System, issues (or the parent of which issues) commercial paper
rated as described in clause (c), is organized under the laws of the
United States or any State thereof and has combined capital and surplus
of at least $500,000,000, (c) commercial paper in an aggregate amount
of no more than $250,000 per issuer outstanding at any time, issued by
any corporation organized under the laws of any State of the United
States and rated at least "Prime-1" (or the then equivalent grade) by
Xxxxx'x Investors Service, Inc. or "A-1" (or the then equivalent grade)
by Standard & Poor's Ratings Group, a division of the XxXxxx-Xxxx
Companies, Inc., (d) repurchase
8
agreements with a term of not more than seven days for underlying
securities of the types described in clauses (a) and (b) above entered
into with any bank meeting the qualifications specified in clause (b)
above or with securities dealers of recognized national standing,
provided that the terms of such agreements comply with the guidelines
set forth in the Federal Financial Institutions Examination Council
Supervisory Policy Repurchase Agreements of Depositary Institutions
With Securities Dealers and Others as adopted by the comptroller of the
Currency on October 31, 1985 (the "SUPERVISORY POLICY"), and provided
further that possession or control of the underlying securities is
established as provided in the Supervisory Policy, or (e) Investments
in money market or mutual funds that invest in Cash Equivalents of the
types described in clause (a), (b) or (c) above.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"COLLATERAL" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to
be subject to any Lien in favor of the Agent for the benefit of the
Secured Parties.
"COLLATERAL DOCUMENTS" means the Third Amended and Restated
Security Agreement, the Glenoit of Canada Collateral Documents, any
Deed of Charge, and any other agreement that creates or purports to
create a Lien in favor of the Agent for the benefit of the Secured
Parties.
"COMMITMENT" means a Term A Commitment, a Term B Commitment, a
Working Capital Commitment, a Swing Line Commitment or a Letter of
Credit Commitment.
"CONFIDENTIAL INFORMATION" means information that the Loan
Parties and their Subsidiaries furnish to the Agent or any Lender Party
on a confidential basis, but does not include any such information that
is or becomes generally available to the public or that is or becomes
available to the Agent or such Lender from a source other than any Loan
Party or any of their Subsidiaries.
"CONSOLIDATED" refers, with respect to any Person, to the
consolidation of accounts of such Person and its Subsidiaries in
accordance with GAAP.
9
"CONTINGENT OBLIGATION" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations
("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in
any manner, whether directly or indirectly, including, without
limitation, (a) the direct or indirect guarantee, endorsement (other
than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such
Person of the Obligation of a primary obligor, (b) the Obligation to
make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement or (c) any
Obligation of such Person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the holder of
such primary obligation against loss in respect thereof. The amount of
any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such Person may be liable
pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is
required to perform thereunder), as determined by such Person in good
faith.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.09 or 2.10.
"CURRENT ASSETS" of any Person means all assets of such Person
that would, in accordance with GAAP, be classified as current assets of
a company conducting a business the same as or similar to that of such
Person, after deducting adequate reserves in each case in which a
reserve is proper in accordance with GAAP.
"CURRENT LIABILITIES" of any Person means (a) all Debt of such
Person that by its terms is payable on demand or matures within one
year after the date of determination excluding Funded Debt and (b) all
other items (including, without limitation, taxes accrued as estimated)
that in accordance with GAAP would be classified as current liabilities
of such Person.
"CVC" means Citicorp Venture Capital, Ltd., a New York
corporation.
10
"DEBT" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations of
such Person for the deferred purchase price of property or services
(other than trade payables not overdue by more than 60 days incurred in
the ordinary course of such Person's business), (c) all Obligations of
such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (e) all
Obligations of such Person as lessee under Capitalized Leases, (f) all
Obligations of such Person under acceptance, letter of credit or
similar facilities, (g) all Obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any
Equity Interests in such Person or any other Person or any warrants,
rights or options to acquire such capital stock, valued, in the case of
Redeemable Preferred Stock, at the greater of its voluntary or
involuntary liquidation preference PLUS accrued and unpaid dividends,
(h) all Obligations of such Person in respect of Hedge Agreements
valued at the Agreement Value thereof, (i) all Contingent Obligations
of such Person and (j) all Debt referred to in clauses (a) through (i)
above and other payment obligations of any Person secured by (or for
which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of
such Debt.
"DECLINING LENDER" has the meaning specified in Section
2.06(c).
"DEED OF CHARGE" has the meaning specified in Section
30.1(i)(xxv).
"DEED OF TRUST" has the meaning specified in Section
3.01(i)(xi).
"DEED OF TRUST POLICIES" has the meaning specified in Section
3.01(i)(x)(B).
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party,
as the case may be, or such other office of such Lender Party as such
Lender Party may from time to time specify to the Borrower and the
Agent.
"EBITDA" means, for any period, the sum (without duplication)
determined on a Consolidated basis of (a) net income (or net loss),
plus (b) the sum of (i) Interest Expense,
11
(ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, (v) extraordinary or unusual losses deducted in calculating
net income (or net loss), (vi) non-cash expenses or charges, including,
without limitation, any accrual necessary for purposes of conforming
with Financial Accounting Standards Board Statement Number 106 and 112
(as defined by generally accepted accounting principles) to the extent
that the accrued portion thereof constitutes a non-cash expense or
charge, any cost of sales arising from a step-up of inventory values as
a result of applying purchase accounting and any non-cash compensation
expense or charge for the Borrower determined in accordance with GAAP
for each such period, and (vii) AmPac Deferred Acquisition Expense,
less (c) the sum of (i) extraordinary or unusual gains added in
calculating net income (or net loss) and (ii) all dividends made
pursuant to Section 5.02(g)(iii)(B), in each case determined in
accordance with GAAP for such period; provided that, for each Fiscal
Month ended prior to the Third Restatement Date, "EBITDA" for each such
Fiscal Month shall be the amount as set forth on Schedule II.
"ELIGIBLE ASSIGNEE" means (a) with respect to any Facility
(other than the Letter of Credit Facility): (i) a Lender; (ii) an
Affiliate of a Lender; (iii) a commercial bank organized under the laws
of the United States, or any State thereof, and having a combined
capital and surplus of at least $500,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United
States, or any State thereof, and having a combined capital and surplus
of at least $500,000,000; (v) a commercial bank organized under the
laws of any other country that is a member of the OECD or has concluded
special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow or a political
subdivision of any such country, and having a combined capital and
surplus of at least $500,000,000, so long as such bank is acting
through a branch or agency located in the United States; (vi) a finance
company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that is
engaged in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business and having a combined
capital and surplus of at least $250,000,000; and (vii) any other
Person approved by the Agent, so long as no Default has occurred and is
continuing at the time any assignment is effected pursuant to Section
8.07, the Borrower and, with respect to any eligible Assignee that
becomes a Working Capital Lender, the Issuing Bank, any such approval
in either case not to be unreasonably withheld or delayed, and (b) with
respect to the Letter of Credit Facility, a Person that is an Eligible
Assignee under clause (iii), (iv) or (v) of clause (a) of this
definition and is approved by the Agent and, unless a Default has
occurred and is continuing at the time any assignment is effected
pursuant to Section 8.07, the Borrower, such approval not to be
unreasonably withheld or delayed; provided, however, that neither any
Loan Party nor any Affiliate of a Loan Party shall qualify as an
Eligible Assignee under this definition.
12
"ELIGIBLE COLLATERAL" means, collectively, Eligible Inventory
and Eligible Receivables.
"ELIGIBLE INVENTORY" means any Inventory owned by the Borrower
and its Subsidiaries free and clear of all Liens (other than Permitted
Liens and Liens in favor of the Secured Parties securing the Secured
Obligations) other than the following:
(a) Inventory located on leaseholds as to which the
lessor has not entered into a consent and agreement providing
the Agent with the right to receive notice of default, the
right to repossess such Inventory at any time and such other
rights as may be acceptable to the Agent;
(b) Inventory that is obsolete, unusable or otherwise
unavailable for sale or that consists of goods related or
giving rise to an Ex-Cell Program Receivable whether or not
such goods have been returned or rejected;
(c) Inventory with respect to which the
representations and warranties set forth Section 8 of the
Third Amended and Restated Security Agreement applicable to
Inventory are not true and correct;
(d) Inventory consisting of promotional, marketing,
packaging or shipping materials and supplies;
(e) Inventory that fails to meet all standards
imposed by any governmental agency, or department or division
thereof, having regulatory authority over such Inventory or
its use or sale;
(f) Inventory that is subject to any licensing,
patent, royalty, trademark, trade name or copyright agreement
with any third party from whom the Borrower or any of its
Subsidiaries has received written notice of a dispute in
respect of any such agreement;
(g) Inventory located outside the United States or
Canada other than Inventory in transit to the Borrower by
common carrier in the ordinary course of business and insured
under policies of insurance acceptable to the Agent;
(h) Inventory that is not in the possession of or
under the sole control of the Borrower or any of its
Subsidiaries unless the Agent shall have approved a Landlord
Consent or other arrangement acceptable to it or such
Inventory is Off-Site Inventory;
(i) Inventory consisting of work in progress; and
13
(j) Inventory in respect of which the Collateral
Documents, after giving effect to the related filings of
financing statements that have then been made, if any, does
not or has ceased to create a valid and perfected first
priority lien or security interest in favor of the Secured
Parties securing the Secured Obligations or as to which other
Liens exist, other than Permitted Liens.
The value of such Eligible Inventory shall be its book value determined
in accordance with the "first-in, first-out" method of accounting for
inventory and in accordance with GAAP unless the Agent determines, in
its reasonable discretion (taking into consideration, among other
factors, cost and liquidation value), that such Eligible Inventory
shall be valued at a lower value.
"ELIGIBLE RECEIVABLES" means any Receivables owned by the
Borrower and its Subsidiaries free and clear of all Liens (other than
Permitted Liens and Liens in favor of the Secured Parties securing the
Secured Obligations) other than the following:
(a) Receivables that do not arise out of sales of
goods or rendering of services in the ordinary course of the
Borrower's and its Subsidiaries' business (other than such
Receivables arising out of the Accounts Receivable Management
Agreement);
(b) Receivables on terms other than those in the
ordinary course of the Borrower's and its Subsidiaries'
business;
(c) Receivables owing from any Person that is an
Affiliate of the Borrower or its Subsidiaries;
(d) Receivables more than 210 days past original
invoice date or more than 60 days past the date due;
(e) Receivables owing from any Person from which an
aggregate amount of more than 25% of the Receivables owing is
more than 60 days past due;
(f) Receivables owing from any Person (i) that has
disputed liability for any Receivable owing from such Person
or (ii) that has otherwise asserted any claim, demand or
liability, whether by action, suit, counterclaim or otherwise;
provided, however, that if such disputed Receivables
constitute 25% or less of the Receivables owing from such
Person, Receivables owing from such Person shall be excluded
from the definition of "Eligible Receivables" by this clause
(f) only to the extent of such disputed Receivables;
14
(g) Receivables owing from any Person that shall take
or be the subject of any action or proceeding of a type
described in Section 6.01(g), except for Receivables due from
a Person which is a debtor-in-possession under and as defined
in Chapter 11 of the U.S. Bankruptcy Code that has received
post-petition financing pursuant to a working capital facility
which has a maturity date no earlier than 120 days following
the invoice date of such Receivable;
(h) Receivables (i) owing from any Person that is
also a supplier to or creditor of the Borrower or its
Subsidiaries unless such Person has waived any right of
set-off in a manner acceptable to the Agent or (ii)
representing any manufacturer's or supplier's credits,
discounts, incentive plans or similar arrangements entitling
the Borrower or its Subsidiaries to discounts on future
purchase therefrom;
(i) Receivables arising out of sales to account
debtors outside the United States or Canada, unless backed by
a letter of credit issued by (A) a bank organized under the
laws of the United States, or any State thereof, and having a
combined capital and surplus of at least $500,000,000 or (B) a
Lender Party or any other financial institution acceptable to
the Agent;
(j) Receivables arising out of sales on a
xxxx-and-hold, guaranteed sale, sale-or-return, sale on
approval or consignment basis or subject to any right of
return, set-off or charge-back, except for Receivables, in a
maximum amount not to exceed $2,000,000 at any time
outstanding, arising out of sales on a xxxx and hold basis
pursuant to the terms of agreements and arrangements in
existence or on substantially the same terms as those in
existence on the Third Restatement Date;
(k) Receivables owing from an account debtor that is
an agency, department or instrumentality of the United States
or any State thereof, except for such Receivables in a maximum
amount not to exceed $1,000,000 at any time outstanding;
(l) Receivables in respect of which the Third Amended
and Restated Security Agreement, after giving effect to the
related filings of financing statements that have then been
made, if any, does not or has ceased to create a valid and
perfected first priority lien or security interest in favor of
the Agent for the benefit of the Secured Parties securing the
Secured Obligations and as to which no other Liens exist,
other than Permitted Liens; and
15
(m) Receivables that are Ex-Cell Program Receivables
and not otherwise excluded pursuant to this definition.
The value of such Eligible Receivables shall be their book value
determined in accordance with GAAP unless the Agent determines, in its
reasonable discretion, that such Eligible Receivables shall be valued
at a lower value.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, any Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or
other actions or damages arising under Environmental Laws and (b) by
any governmental or regulatory authority or third party for damages,
contribution, indemnification, cost recovery, compensation or
injunctive relief arising under Environmental Laws.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, or decree or any judicial or agency interpretation, policy
or guidance having the force and effect of law, relating to pollution
or protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"EQUITY INTERESTS" means, with respect to any Person, shares
of capital stock of (or other ownership or profit interests in) such
Person, warrants, options or other rights for the purchase or other
acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, securities convertible
into or exchangeable for shares of capital stock of (or other ownership
or profit interests in) such Person or warrants, rights or options for
the purchase or other acquisition from such Person of such shares (or
such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are
authorized or otherwise existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
16
"ERISA AFFILIATE" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of any Loan Party, or
under common control with any Loan Party, within the meaning of Section
414 of the Internal Revenue Code.
"ERISA EVENT" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event
has been waived by the PBGC; or (ii) the requirements of subsection (1)
of Section 4043(b) of ERISA (without regard to subsection (2) of such
Section) are met with a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph
(9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
expected to occur with respect to such Plan within the following 30
days; (b) the application for a minimum funding waiver with respect to
a Plan; (c) the provision by the administrator of any Plan of a notice
of intent to terminate such Plan, pursuant to Section 4041(a)(2) of
ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of any Loan Party or any ERISA Affiliate in
the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by any Loan Party or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions
for imposition of a lien under Section 302(f) of ERISA shall have been
met with respect to any Plan; (g) the adoption of an amendment to a
Plan requiring the provision of security to such Plan, pursuant to
Section 307 of ERISA; or (h) the institution by the PBGC of proceedings
to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that could constitute grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party
(or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender Party as such Lender Party may from
time to time specify to the Borrower and the Agent.
"EURODOLLAR RATE" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the average of the respective rates per annum (rounded
upward to the next whole multiple of 1/16th of 1%) posted by each of
the
17
principal London offices of banks posting rates as displayed on the
Dow Xxxxx Markets screen, page 3750 or such other page as may replace
such page on such service for the purpose of displaying the London
interbank offered rate of major banks for deposits in U.S. Dollars, at
approximately 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal to
BNP's Eurodollar Rate Advance comprising part of such Borrowing to be
outstanding during such Interest Period (or, if BNP shall not have such
a Eurodollar Rate Advance, $1,000,000) and for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar
Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest
as provided in Section 2.07(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EX-CELL" has the meaning specified in the Preliminary
Statements to this Agreement.
"EX-CELL BENTONVILLE" means Ex-Cell of Bentonville, Inc., an
Arkansas corporation and a directly or indirectly wholly owned
Subsidiary of Ex-Cell.
"EX-CELL (CHINA)" means Ex-Cell Home Fashions (China), Ltd., a
corporation organized under the laws of Hong Kong and an indirectly,
wholly owned Subsidiary of the Borrower.
"EX-CELL FACTORING PROGRAM" means the factoring arrangement
between Ex-Cell, as seller, and Capital Factors, Inc., as factor,
pursuant to the Factoring Agreement dated as of October 16, 1990 as
amended by the amendments dated as of February 10, 1995 and February
12, 1999 (as such agreement may be further amended, supplemented or
modified from time to time solely in accordance with the terms and
conditions hereof and upon the Agent's prior written consent, the
"EX-CELL PROGRAM AGREEMENT").
18
"EX-CELL (FAR EAST)" means Ex-Cell Home Fashions (Far East),
Ltd., a corporation organized under the laws of Hong Kong and an
indirectly, wholly owned Subsidiary of the Borrower.
"EX-CELL GROUP" has the meaning specified in the Preliminary
Statements to this Agreement.
"EX-CELL (H.K.)" means Ex-Cell Home Fashions (H.K.), Limited,
a corporation organized under the laws of Hong Kong and an indirectly,
wholly owned Subsidiary of the Borrower.
"EX-CELL PROGRAM PURCHASER" means a "Factor" as defined in the
Ex-Cell Program Agreement.
"EX-CELL PROGRAM RECEIVABLE" means any Receivable (a) owned by
Ex-Cell immediately prior to such Receivable being purchased under the
Ex-Cell Factoring Program or (b) owned by Ex-Cell and eligible to be
purchased under the Ex-Cell Factoring Program or (c) owned by Ex-Cell
and subject to a Lien in favor of an Ex-Cell Program Purchaser.
"EXCESS CASH FLOW" means, for any period, the sum of (a)
Consolidated pretax income (or pretax loss) of the Borrower and its
Subsidiaries for such period less (b) Consolidated income tax expense
of the Borrower and its Subsidiaries for such period plus (c) an amount
equal to the aggregate amount of all noncash charges and deferred taxes
deducted in arriving at Consolidated net income (or loss) for each such
period plus (d) an amount (whether positive or negative) equal to the
change in Consolidated Current Liabilities of the Borrower and its
Subsidiaries during such period less (e) an amount equal to the
aggregate amount of all noncash credits and deferred taxes included in
arriving at such Consolidated net income (or net loss) less (f) an
amount (whether positive or negative) equal to the change in
Consolidated Current Assets (excluding cash and Cash Equivalents) of
the Borrower and its Subsidiaries during such period less (g) an amount
equal to the amount of all Capital Expenditures of the Borrower and its
Subsidiaries paid in cash during such period to the extent permitted by
this Agreement less (h) an amount equal to the aggregate amount of all
regularly scheduled principal payments of Funded Debt made during such
period, together with any optional prepayments of Term Advances made
during such period in accordance with Section 2.06(a) less (i) the
amount (without duplication) of cash dividends paid by the Borrower
during such period pursuant to Section 5.02(g) less (j) an amount equal
to the change, if any, during such period in the aggregate amount of
the refundable advances and deposits referred to in Section 5.02(f)(v)
less (k) the amount of any mandatory prepayments of any Advances made
during such period pursuant to Section 2.06(b)(ii)(A) to the extent
included in pretax income for such period less (l) less the amount of
any
19
mandatory prepayment of any Advances made during such period pursuant
to Section 2.06(b)(ii)(D) to the extent such mandatory prepayment has
been included in any of clauses (a) through (k) above less (m) the
Carry Over Amount for such period plus (n) the Carry Over Amount for
the prior period not spent in such period.
"EXISTING CREDIT AGREEMENT" has the meaning specified in the
Preliminary Statements to this Agreement.
"EXISTING DEBT" means Debt of the Loan Parties outstanding
immediately before the effectiveness of the Third Amended and Restated
Credit Agreement and identified on Schedule 3.01(h)(i).
"EXISTING DEED OF TRUST" has the meaning specified in Section
3.01(i)(x).
"EXISTING LENDER" means lenders party to the Existing Credit
Agreement.
"EXTRAORDINARY RECEIPT" means any cash received by or paid to
or for the account of any Person not in the ordinary course of
business, including, without limitation, tax refunds, pension plan
reversions, proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute
compensation for lost earnings), condemnation awards (and payments in
lieu thereof), indemnity payments, judgments, payments made in
connection with the settlement of litigation or the release of any
claim, Purchase Price Adjustments (as defined in the Purchase Agreement
or comparable payments in any other purchase and sale agreement) (other
than any Purchase Price Adjustment due to changes in working capital);
provided, however, that an Extraordinary Receipt shall not include (a)
cash receipts received from proceeds of insurance to the extent that
such proceeds in respect of loss or damage to equipment, fixed assets
or real property are applied (or in respect of which expenditures were
previously incurred) to replace or repair the equipment, fixed assets
or real property in respect of which such proceeds were received or to
purchase like equipment, fixed assets or real property, as the case may
be, in each case in accordance with the terms of the Loan Documents, so
long as (i) such Person shall have entered into binding commitments for
the acquisition of such equipment, fixed assets or real property on or
prior to the 120th day after receipt of such Extraordinary Receipt and
(ii) such application is made by such Person within twelve or six
months after the occurrence of such damage or loss, in the case of real
property and any other type of property, respectively, or (b) 50% of
any tax refund for Fiscal Year 1999 and thereafter or any pension plan
reversion.
"FACILITY" means the Term A Facility, the Term B Facility, the
Working Capital Facility, the Swing Line Facility or the Letter of
Credit Facility.
20
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period (i) to
the rate published by the Dow Xxxxx Markets service on page five of its
daily report as the "ASK" as of 10:00 A.M. (New York City time) for
such day (or, if such day is not a Business Day, for the immediately
preceding Business Day) or (ii) if the Dow Xxxxx Markets service shall
cease to publish or otherwise shall not publish such rates for any day
that is a Business Day, to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate
is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by it.
"FEE LETTERS" means each agreement, as amended, amended and
restated, supplemented or otherwise modified from time to time entered
into between any Loan Party and the Agent or the Issuing Bank with
respect to the payment of fees or other amounts relating to the
Facilities.
"FISCAL MONTH" means each of the first four calendar weeks,
the next successive period of four calendar weeks and the last five
calendar weeks in each Fiscal Quarter.
"FISCAL QUARTER" means, with respect to any Person, (a) with
respect to the first Fiscal Quarter of any Fiscal Year, the first 13
calendar weeks of such Fiscal Year, (b) with respect to the second
Fiscal Quarter of any Fiscal Year, the next successive period of 13
calendar weeks in such Fiscal Year, (c) with respect to the third
Fiscal Quarter of any Fiscal Year, the next successive period of 13
calendar weeks in such Fiscal Year, and (d) with respect to the last
Fiscal Quarter of any Fiscal Year, the period of time after the first
three Fiscal Quarters of such Fiscal Year through the last day of such
Fiscal Year.
"FISCAL YEAR" means, with respect to any Person, a year of 52
or 53 weeks, as the case may be, ending on the Saturday closest to the
first day of January in any calendar year, and such Fiscal Year, when
referred to from time to time herein by reference to a calendar year
shall be the Fiscal Year which includes January 30th of such calendar
year.
"FIXED CHARGE COVERAGE RATIO" means, with respect to the
Borrower and its Subsidiaries for any period, the ratio of (a) Adjusted
EBITDA for such period less the sum of (i) Capital Expenditures of the
Borrower and its Subsidiaries for such period and (ii) income taxes of
the Borrower and its Subsidiaries that have been paid in cash during
such period to (b) the sum of (i) Consolidated Interest Expense for
such period (other than amortization of original issue discount and
paid-in-kind interest), (ii) regularly scheduled principal payments of
Consolidated Funded Debt made during such period
21
(other than any such payments of "Advances" under the Existing Credit
Agreement), (iii) the aggregate amount of cash dividends paid during
such period by the Borrower to Universal pursuant to Sections
5.02(g)(iii)(A); provided, however, that with respect to each
calculation made prior to one year following the Third Restatement
Date, amounts determined with respect to clause (b)(i) above shall be
calculated by multiplying such amount from and after the Fiscal Month
commencing in February, 1999 by the Annualization Factor; provided
further that for purposes of calculating the Fixed Charge Coverage
Ratio for each Fiscal Quarter ending in Fiscal Year 1999, the term
"Capital Expenditures" shall not include up to $1,500,000 of
expenditures made, or Debt assumed or incurred, during such period in
connection with the upgrade of management information systems of the
Borrower and its Subsidiaries or Capital Expenditures made prior to
February 2, 1999.
"FOREIGN SUBSIDIARY" means a Subsidiary organized under the
laws of a jurisdiction other than the United States or any State
thereof.
"FUNDED DEBT" of any Person means Debt of such Person (other
than Debt described in clauses (f), (h), (i) and (j) of the definition
thereof) that by its terms matures more than one year after the date of
creation or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year
after such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period
of more than one year after such date, including, without limitation,
all amounts of Funded Debt of such Person required to be paid or
prepaid within one year after the date of determination; provided,
however, that the definition of "Funded Debt" shall not include any
Debt arising pursuant to the terms of the Accounts Receivable
Management Agreement.
"GAAP" has the meaning specified in Section 1.03.
"GLENOIT ASSETS CORP." means Glenoit Assets Corp., a Delaware
corporation and a direct, wholly owned Subsidiary of the Borrower.
"GLENOIT OF CANADA" means Glenoit Corporation of Canada, Inc.,
a corporation incorporated under the federal laws of Canada and a
directly, wholly owned Subsidiary of the Borrower.
"GLENOIT OF CANADA ASSET PURCHASE AGREEMENT" means the Asset
Purchase Agreement made September 15, 1997 between Xxxxxxx & Xxxxxx
Canada Inc., as vendor, and Glenoit of Canada, as purchaser.
"GLENOIT OF CANADA COLLATERAL DOCUMENTS" means each of (i) the
Guarantee dated as of September 12, 1997 made by Glenoit of Canada in
favor of the Secured
22
Parties referred to therein and the Agent, (ii) the Assignment of
Material Agreement dated September 15 made among Glenoit of Canada,
Xxxxxxx & Xxxxxx Canada, Inc., and the Agent, (iii) the Assignment of
Insurance dated as of September 12, 1997 made by Glenoit of Canada to
and in favor of the Agent, (iv) the Demand Debenture dated as of
September 12, 1997 made by Glenoit of Canada and the Agent, as holder,
(v) the Debenture Pledge Agreement dated as of September 12, 1997 made
by Glenoit of Canada to and in favor of the Agent, (vi) the
Charge/Mortgage of Land made by Glenoit of Canada, as chargor, and the
Agent, as chargee, and (iv) the securities registrations made in
connection therewith.
"GLENOIT OF CANADA CONSENT" has the meaning specified in
Section 3.01(i)(ix).
"GRAND AVENUE" means Grand Avenue Corp., a Delaware
corporation and a directly or indirectly, wholly owned Subsidiary of
the Borrower.
"GUARANTEES" has the meaning specified in Section
3.01(i)(xii).
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other hedging
agreements.
"HEDGE BANK" means any Lender Party or any of its Affiliates
in its capacity as a party to a Secured Hedge Agreement.
"INDEMNIFIED COST" has the meaning specified in Section 7.05.
"INDEMNIFIED PARTY" has the meaning specified in Section
8.04(b).
"INTERCOMPANY SUBORDINATION AGREEMENT" has the meaning
specified in Section 5.02(b)(ii)(B).
"INTEREST COVERAGE RATIO" means, with respect to the Borrower
and its Subsidiaries for any period, the ratio of (a) Adjusted EBITDA
for such period to (b) the sum of (i) Consolidated Interest Expense for
such period (other than amortization of original issue discount and
paid-in-kind interest) and (ii) the aggregate amount of cash dividends
paid during such period by the Borrower to Universal pursuant to
Section 5.02(g)(ii); provided, however, that with respect to each
calculation made prior to one year following the Third Restatement
Date, Consolidated Interest Expense shall be
23
calculated by multiplying Interest Expense from and after February 2,
1999 by the Annualization Factor.
"INTEREST EXPENSE" means, with respect to any Person for any
period, the amount by which (i) interest expense (including the
interest component on obligations under Capitalized Leases), whether
paid or accrued, on all Debt of such Person and its Subsidiaries for
such period, including, without limitation and without duplication, (a)
interest expense in respect of Debt resulting from Advances, (b)
commissions, discounts and other fees and charges payable in connection
with letters of credit (including, without limitation, any Letters of
Credit) and (c) any net payment payable in connection with Hedge
Agreements less any net credits received in connection with Hedge
Agreements exceeds (ii) interest income, whether paid or accrued, of
such Person for such period.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance, and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be
one, two, three or six months, as the Borrower may, upon notice
received by the Agent not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the first day of such Interest Period,
select; provided, however, that:
(a) the Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance under a Facility
that ends after any principal repayment installment date for
such Facility unless, after giving effect to such selection,
the aggregate principal amount of Base Rate Advances and of
Eurodollar Rate Advances having Interest Periods that end on
or prior to such principal repayment installment date for such
Facility shall be at least equal to the aggregate principal
amount of Advances under such Facility due and payable on or
prior to such date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, however, that, if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the immediately
preceding Business Day; and
24
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"INVENTORY" means all Inventory referred to in Section 1(b) of
the Third Amended and Restated Security Agreement.
"INVESTMENT" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any Equity Interests or
Debt or the assets comprising a division or business unit or a
substantial part or all of the business of such Person, any capital
contribution to such Person or any other direct or indirect investment
in such Person, including, without limitation, any acquisition by way
of a merger or consolidation and arrangement pursuant to which the
investor incurs Debt of the types referred to in clause (i) or (j) of
the definition of "Debt" in respect of such Person and any transfer or
redeployment of equipment from any other Person to such Person.
"INVESTOR GROUP" means CVC, the employees of CVC, CCT Partners
II, L.P., a Delaware limited partnership, Xx. Xxxx X. X'Xxxx, an
individual residing in Darien, Connecticut, Soannes and Xx. Xxxxxx
X'Xxxxxx, an individual residing in New York, New York.
"IRIS" means Iris Holdings, Inc., a Delaware corporation.
"ISSUING BANK" means BNP and each Eligible Assignee to which a
Letter of Credit Commitment hereunder has been assigned pursuant to
Section 8.07.
"JUNIOR NOTEHOLDERS UNDERTAKING" has the meaning specified in
Section 3.01(i)(xxiv).
"JUNIOR NOTES" means (i) the Junior PIK Subordinated Note due
December 14, 2005, issued by Universal to CVC in an aggregate principal
amount of $12,000,000, (ii) the Junior PIK Subordinated Note due
December 14, 2005, issued by Universal to Soannes in an aggregate
principal amount of $800,000, (iii) the Junior PIK Subordinated Note
due December 14, 2005, issued by Universal to Soannes in an aggregate
principal amount of $800,000 and assigned by Soannes to Xx. Xxxxxx
X'Xxxxxx, an individual residing in New York, New York, and (iv) notes
evidencing paid-in-kind interest issued pursuant to the foregoing.
25
"KEY EMPLOYEE EMPLOYMENT AGREEMENT" means each of (i) the
employment agreement dated as of December 14, 1995 between Universal
and Xx. Xxxxxx X'Xxxxxx, an individual residing in New York, New York,
(ii) the employment agreement dated as of February 12, 1999 between
Ex-Cell and Xx. Xxxxxx Xxxxxxxx, an individual residing in New York,
New York, and (iii) the employment agreements between AmPac and each of
Mr. Xxxxxx Xxxxx, an individual residing in San Francisco, California,
Mr. Xxxxxxx Xxxxx, an individual residing in San Francisco, California,
and Xx. Xxxxxxx Block, an individual residing in San Francisco,
California, each dated as of October 2, 1998, in each case as in effect
on the Third Restatement Date and as amended, supplemented or otherwise
modified from time to time in accordance with their terms,
respectively.
"LANDLORD CONSENT" has the meaning specified in the Security
Agreement.
"L/C CASH COLLATERAL ACCOUNT" has the meaning specified in the
Third Amended and Restated Security Agreement.
"L/C RELATED DOCUMENTS" has the meaning specified in Section
2.04(c)(ii).
"LENDER PARTY" means any Lender, the Swing Line Bank or the
Issuing Bank and "LENDER PARTIES" means, collectively, the Lenders, the
Swing Line Bank and the Issuing Bank.
"LENDERS" means the Restatement Lenders and each Person that
shall become a Lender hereunder pursuant to Section 8.07 for so long as
such Restatement Lender or Person shall be a party to this Agreement.
"LETTER OF CREDIT ADVANCE" means an advance made by the
Issuing Bank or any Working Capital Lender pursuant to Section 2.03(c).
"LETTER OF CREDIT AGREEMENT" has the meaning specified in
Section 2.03(a).
"LETTER OF CREDIT COMMITMENT" means, with respect to the
Issuing Bank at any time, the amount set forth opposite the Issuing
Bank's name on Schedule I hereto under the caption "Letter of Credit
Commitment" or, if the Issuing Bank has entered into an Assignment and
Acceptance, the amount set forth for such Issuing Bank in the Register
maintained by the Agent pursuant to Section 8.07(e) as such Issuing
Bank's "Letter of Credit Commitment", as such amount may be reduced at
or prior to such time pursuant to Section 2.05.
"LETTER OF CREDIT FACILITY" means, at any time, the amount of
the Issuing Bank's Letter of Credit Commitment at such time.
26
"LETTERS OF CREDIT" has the meaning specified in Section
2.01(c).
"LEVERAGE RATIOS" means the Total Leverage Ratio and the
Senior Leverage Ratio.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
"LINDE" means Ex-Cell Linde of Carolina, Inc., a North
Carolina corporation and a directly or indirectly, wholly owned
Subsidiary of Ex-Cell.
"LOAN DOCUMENTS" means (i) for the purposes of this Agreement
and the Notes and any amendment, supplement or modification hereof or
thereof, (a) this Agreement, (b) the Notes, (c) the Collateral
Documents, (d) each Letter of Credit Agreement, (e) the Guarantees, and
(f) the Fee Letters, and (ii) for purposes of the Guarantees and the
Collateral Documents and for all other purposes other than for purposes
of this Agreement and the Notes, (a) this Agreement, (b) the Notes, (c)
the Collateral Documents, (d) each Letter of Credit, (e) the
Guarantees, (f) each Secured Hedge Agreement, (g) the Fee Letters and
(h) any other agreement, document or instrument issued pursuant to or
in connection with any of the foregoing, and in each case as amended,
amended and restated, supplemented or otherwise modified from time to
time.
"LOAN PARTIES" means the Borrower, Universal, Glenoit of
Canada and each Subsidiary Guarantor.
"LOAN VALUE" means an amount equal to the sum of the
percentage of the value of each item of Eligible Collateral of up to
the following amounts, in each case as determined by reference to the
Borrowing Base Certificate most recently delivered by the Borrower
pursuant to Section 5.03(p):
(a) with respect to Eligible Inventory; up to
50% of the value of such Inventory, and
(b) with respect to Eligible Receivables, up to
85% of the value of such Receivables;
provided, however, that the Agent may, in its reasonable discretion,
following an audit field examination and based on its analysis of
changes in the Borrower's or any of its Subsidiaries' operations or
credit and collection experience arising after the Third
27
Restatement Date that may dilute the value of Eligible Collateral,
revise from time to time the percentage of the value of any individual
item of Eligible Collateral that shall be used in determining Loan
Value.
"MANAGEMENT STOCK OPTION PLAN AGREEMENT" means the Glenoit
Universal, Ltd. Stock Option Plan dated as of April 1, 1997.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its
Subsidiaries taken as a whole or the Loan Parties and their
Subsidiaries, taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its
Subsidiaries taken as a whole or the Loan Parties and their
Subsidiaries, taken as a whole, (b) the rights and remedies of the
Agent or any Lender Party under any Loan Document or Related Document
or (c) the ability of any Loan Party to perform its Obligations under
any Loan Document or Related Document to which it is or is to be a
party.
"XXXXX" has the meaning specified in the Preliminary
Statements to this Agreement.
"MODIFICATION AND EXTENSION AGREEMENT" has the meaning
specified in Section 3.01(i)(x).
"MONTHLY AVERAGE WORKING CAPITAL ADVANCES" means, for any
period, the sum of (a) outstanding Working Capital Advances as of the
end of each Fiscal Month in such Rolling Period, including the current
Fiscal Month, divided by (b) the number 12; provided, however, that for
each such Rolling Period ended prior to the first anniversary of the
Third Restatement Date, "MONTHLY AVERAGE WORKING CAPITAL ADVANCES"
shall mean (i) the sum of outstanding Working Capital Advances as of
the end of each Fiscal Month elapsed since the Third Restatement Date
including the last such Fiscal Month, divided by (ii) the number of
Fiscal Months elapsed since the Third Restatement Date.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
28
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and at least one
Person other than the Loan Parties and the ERISA Affiliates or (b) was
so maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"NET CASH PROCEEDS" means, with respect to any sale, lease,
transfer or other disposition of any asset or the incurrence or
issuance of any Debt or capital stock or other ownership or profit
interest, any securities convertible into or exchangeable for capital
stock or other ownership or profit interest or any warrants, rights,
options or other securities to acquire capital stock or other ownership
or profit interest by any Person, or any Extraordinary Receipt received
by or paid to or for the account of any Person, the aggregate amount of
cash received from time to time (whether as initial consideration or
through payment or disposition of deferred consideration) by or on
behalf of such Person in connection with such transaction after
deducting therefrom only (without duplication) (a) brokerage
commissions, underwriting fees and discounts, legal fees, finder's fees
and other similar fees and commissions, (b) the amount of taxes payable
in connection with or as a result of such transaction and (c) the
amount of any Debt secured by a Lien on such asset that, by the terms
of the agreement or instrument governing such Debt, is required to be
repaid upon such disposition, in each case to the extent, but only to
the extent, that the amounts so deducted are properly attributable to
such transaction or to the asset that is the subject thereof and are,
in the case of clauses (a) and (c), at the time of receipt of such
cash, actually paid to a Person that is not an Affiliate of such Person
or any Loan Party or any Affiliate of any Loan Party and, in the case
of clause (b), on the earlier of the dates on which the tax return
covering such taxes is filed or required to be filed, or actually paid
to a Person that is not an Affiliate of such Person or any Loan Party
or any Affiliate of any Loan Party, provided that if the amount
deducted pursuant to clause (b) above is greater than the amount
actually so paid, the amount of such excess shall constitute "Net Cash
Proceeds" as of the time the applicable tax return is filed or required
to be filed.
"NOTE" means a Term A Note, Term B Note or a Working Capital
Note, in each case to the extent required to be issued pursuant to
Section 2.15.
"NOTICE OF BORROWING" has the meaning specified in Section
2.02(a).
"NOTICE OF ISSUANCE" has the meaning specified in Section
2.03(a).
"NPL" means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of
29
such Person on any claim, whether or not the right of any creditor to
payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to
in Section 6.01(g). Without limiting the generality of the foregoing,
the Obligations of the Loan Parties under the Loan Documents include
(a) the obligation to pay principal, interest, Letter of Credit
commissions, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by such Loan Party
under any Loan Document and (b) the obligation of such Loan Party to
reimburse any amount in respect of any of the foregoing that any Lender
Party, in its sole discretion, may elect to pay or advance on behalf of
such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"OFF-SITE INVENTORY" means Inventory purchased by a Loan Party
on a xxxx and hold basis or sold by a Loan Party on a consignment basis
in an aggregate amount not to exceed $1,000,000.
"OPEN YEAR" has the meaning specified in Section 4.01(aa).
"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PARENT GUARANTEE" has the meaning specified in Section
3.01(i)(xii) of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PERMITTED ENCUMBRANCES" has the meaning, in respect of any
property subject to an Existing Deed of Trust or a Deed of Trust,
specified in such Existing Deed of Trust or such Deed of Trust.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and
governmental charges or levies to the extent not required to be paid
under Section 5.01(b) hereof; (b) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course of business
securing obligations that (i) are not overdue for a period of more than
30 days or being contested in good faith and (ii) either individually
or when aggregated with all other Permitted Liens outstanding on any
date of determination, do not materially affect the use or value of the
property to which they relate; (c) pledges or deposits to secure
obligations under workers' compensation laws or
30
similar legislation or to secure public or statutory obligations; and
(d) zoning restrictions, easements, rights of way and other
encumbrances on title to real property that do not render title to the
property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes.
"PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"PIK INTEREST NOTE" means any payment-in-kind subordinated
note of Universal (substantially in the form of Exhibit I to Exhibit
A-2 of the Redemption Agreement) issued pursuant to Section 2 of the
PIK Note, or any note which could be issued in substitution for any
such PIK Interest Note.
"PIK NOTE" means the PIK Subordinated Note due December 14,
2004, issued by Universal to Stirling pursuant to the Redemption
Agreement in an aggregate principal amount of $1,008,884.01.
"PLAN" means a Single Employer Plan or a Multiple Employer
Plan.
"PREFERRED INTERESTS" means, with respect to any Person,
Equity Interests issued by such Person that are entitled to a
preference or priority over any other Equity Interests issued by such
Person upon any distribution of such Person's property and assets,
whether by dividend or upon liquidation.
"PREPAYMENT AMOUNT" has the meaning specified in Section
5.03(a).
"PREPAYMENT DATE" has the meaning specified in Section
5.03(a).
"PREPAYMENT NOTICE" has the meaning specified in Section
5.03(a).
"PRO RATA SHARE" of any amount means, with respect to any
Working Capital Lender at any time, the product of such amount times a
fraction the numerator of which is the amount of such Lender's Working
Capital Commitment at such time (or, if the Commitments shall have been
terminated, the Working Capital Commitments as in effect immediately
prior to such termination) and the denominator of which is the Working
Capital Facility at such time (or, if the Commitments shall have been
terminated, the Working Capital Facility as in effect immediately prior
to such termination).
"PURCHASE AGREEMENT" has the meaning specified in the
Preliminary Statements to this Agreement.
31
"RECEIVABLES" means all Receivables referred to in Section
1(c) of the Third Amended and Restated Security Agreement.
"REDEEMABLE" means, with respect to any Equity Interest, any
Debt or any other right or Obligation, any such Equity Interest, Debt,
right or Obligation that (a) the issuer has undertaken to redeem at a
fixed or determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not solely
within the control of the issuer or (b) is redeemable at the option of
the holder.
"REDEMPTION AGREEMENT" means the Redemption Agreement dated
October 23, 1995, between Universal and Stirling as in effect on the
Third Restatement Date.
"REDUCTION AMOUNT" has the meaning specified in Section
2.06(b)(v).
"REGISTER" has the meaning specified in Section 8.07(e).
"REGULATION U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means the Transaction Documents, the
Subordinated Debt Documents, the Junior Notes, the Stockholders
Agreement, the Tax Sharing Agreement, the Royalty Agreement, the AmPac
Stock Purchase Agreement, the Glenoit of Canada Asset Purchase
Agreement and the Ex-Cell Program Agreement.
"RELATED TEXTILE BUSINESS" means any business engaged in the
manufacturing of home textiles and specialty textiles and other
activities incidental thereto.
"REQUIRED LENDERS" means, at any time, Lenders owed or holding
at least 51% of the sum of (a) the aggregate principal amount of the
Advances outstanding at such time, (b) the aggregate Available Amount
of all Letters of Credit outstanding at such time, (c) the aggregate
unused Commitments under the Term A and Term B Facilities at such time
and (d) the aggregate Unused Working Capital Commitments at such time.
For purposes of this definition, the aggregate principal amount of
Swing Line Advances owing to the Swing Line Bank and of Letter of
Credit Advances owing to the Issuing Bank and the Available Amount of
each Letter of Credit shall be considered to be owed to the Working
Capital Lenders ratably in accordance with their respective Working
Capital Commitments.
"RESPONSIBLE OFFICER" means any executive officer of any Loan
Party or any of its Subsidiaries.
"RESTATEMENT LENDERS" has the meaning specified in the recital
of the parties to this Agreement.
32
"ROLLING PERIOD" means, with respect to any Fiscal Month, the
consecutive twelve-Fiscal Month period ending on the last day of such
Fiscal Month.
"ROYALTY AGREEMENT" means the License Royalty Agreement dated
as of November 21, 1988, as amended as of January 1, 1992, between the
Borrower (as the successor of Xxxxx) and Xxxxx & Xxxxxxxx of
California, Inc., a California corporation, as amended, supplemented or
otherwise modified in accordance with its terms and the terms hereof.
"SECURED HEDGE AGREEMENT" means any Hedge Agreement required
or permitted under Article V that is entered into by and between any
Loan Party and any Hedge Bank.
"SECURED OBLIGATIONS" has the meaning specified in the Third
Amended and Restated Security Agreement.
"SECURED PARTIES" means the Agent, the Lender Parties, the
Hedge Banks and the other Persons the Obligations owing to whom are or
are purported to be secured by the Collateral under the terms of the
Collateral Documents.
"SELLER" and "SELLERS" each has the meaning specified in
respect thereto in the Preliminary Statements to this Agreement.
"SENIOR LEVERAGE RATIO" means, with respect to the Borrower
and its Subsidiaries for any period, the ratio of (a) the sum of (i)
Consolidated Funded Debt (other than the aggregate amount of Working
Capital Advances and the Subordinated Notes) as of the end of such
period and (ii) the Monthly Average Working Capital Advances as of the
end of such period to (b) Consolidated Adjusted EBITDA for such period.
"SINGLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and no Person other
than the Loan Parties and the ERISA Affiliates or (b) was so maintained
and in respect of which any Loan Party or any ERISA Affiliate could
have liability under Section 4069 of ERISA in the event such plan has
been or were to be terminated.
"SOANNES" means Soannes Investment Corp., a corporation
organized under the laws of the British Virgin Islands.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
33
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
such debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"SPLIT-PAY NOTES" means (i) the Split-Pay Subordinated Note
due December 14, 2004, issued by Universal to Stirling pursuant to the
Redemption Agreement, in an aggregate principal amount of
$2,888,930.82, and (ii) the Split-Pay Subordinated Note due December
14, 2004, issued by Holding to Iris pursuant to the Redemption
Agreement, in an aggregate principal amount of $5,682,497.75.
"STANDBY LETTER OF CREDIT" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Trade Letter of
Credit.
"STIRLING" means Stirling Investment Holdings, Inc., a British
Virgin Islands corporation.
"STIRLING NOTES" means the Split-Pay Notes, the PIK Note and
the PIK Interest Notes.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement
dated as of December 14, 1995 by and among Universal, CVC, Stirling,
and the other parties thereto, as amended, supplemented or otherwise
modified from time to time in accordance with its terms and the terms
hereof.
"SUBORDINATED DEBT" means the Subordinated Notes, the Junior
Notes, the Stirling Notes and the Debt of the Borrower to its
Subsidiaries permitted by Section 5.02(b)(ii)(B).
"SUBORDINATED DEBT DOCUMENTS" means the Indenture dated as of
April 1, 1997 among the Borrower, certain of its Subsidiaries signatory
thereto and the United States Trust Company of New York, the
Subordinated Notes, all agreements, indentures and instruments pursuant
to which the Subordinated Debt is issued and any agreements, indentures
and instruments pursuant to which Subordinated Debt permitted by
Section 5.02(b)(ii)(B) is issued from time to time.
34
"SUBORDINATED NOTES" means the 11% Senior Subordinated Notes
due 2007 issued by the Borrower in the aggregate amount of $95,000,000.
"SUBSIDIARY" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such limited liability
company, partnership or joint venture or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"SUBSIDIARY GUARANTOR" means each of AmPac, Ex-Cell, Ex-Cell
Bentonville, Glenoit Assets Corp., Grand Avenue and Linde and each
other Subsidiary of the Borrower that shall be required to execute and
deliver a guarantee pursuant to Section 5.01(o).
"SUBSIDIARY GUARANTEE" has the meaning specified in Section
3.01(g)(xi) of this Agreement.
"SURVIVING DEBT" has the meaning specified in Section 3.01(h).
"SWING LINE ADVANCE" means an advance made by (a) the Swing
Line Bank pursuant to Section 2.01(d) or 2.02(b) or (b) any Working
Capital Lender pursuant to Section 2.02(c).
"SWING LINE BANK" means BNP.
"SWING LINE BORROWING" means a borrowing consisting of a Swing
Line Advance made by the Swing Line Bank pursuant to Section 2.01(d) or
the Working Capital Lenders pursuant to Section 2.06(b).
"SWING LINE COMMITMENT" means, with respect to the Swing Line
Bank at any time, the amount set forth opposite the Swing Line Bank's
name on Schedule I hereto under the caption "Swing Line Commitment" or,
if the Swing Line Bank has entered into an Assignment and Acceptance,
set forth for the Swing Line Bank in the Register maintained by the
Agent pursuant to Section 9.07(d) as the Swing Line Bank's "Swing Line
Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
35
"SWING LINE FACILITY" has the meaning specified in Section
2.01(d).
"TAX SHARING AGREEMENT" means the Tax Sharing Agreement dated
as of December 14, 1995 by and among the Borrower, Universal and all of
their Subsidiaries, as amended, supplemented or otherwise modified from
time to time in accordance with its terms and the terms hereof.
"TAXES" has the definition specified in Section 2.12(a).
"TERM A ADVANCE" has the meaning specified in Section 2.01(a).
"TERM A BORROWING" means a borrowing consisting of
simultaneous Term A Advances of the same Type made by the Term A
Lenders.
"TERM A COMMITMENT" means, with respect to any Term A Lender
at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Term A Commitment" or, if such
Lender has entered into one or more Assignment and Acceptances, the
aggregate amount set forth for such Lender in the Register maintained
by the Agent pursuant to Section 9.07(d) as such Lender's "Term A
Commitment".
"TERM A FACILITY" means, at any time, the aggregate amount of
the Term A Lenders' Term A Commitments at such time.
"TERM A LENDER" means any Lender that has a Term A Commitment.
"TERM A NOTE" means a promissory note of the Borrower payable
to the order of any Term A Lender, in substantially the form of Exhibit
A-1 hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Term A Advances made by such Lender to the extent
required to be issued pursuant to Section 2.15.
"TERM ADVANCE" means a Term A Advance or a Term B Advance.
"TERM B ADVANCE" has the meaning specified in Section 2.01(b).
"TERM B BORROWING" means a borrowing consisting of
simultaneous Term B Advances of the same Type made by the Term B
Lenders.
"TERM B COMMITMENT" means, with respect to any Term B Lender,
the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term B Commitment" or, if such Lender has entered
into one or more Assignment and Acceptances, the aggregate amount set
forth for such Lender in the Register maintained by the Agent pursuant
to Section 9.07(d) as such Lender's "Term B Commitment".
36
"TERM B FACILITY" means, at any time, the aggregate amount of
the Term B Lenders' Term B Commitments at such time.
"TERM B LENDER" means any Lender that has a Term B Commitment.
"TERM B NOTE" means a promissory note of the Borrower payable
to the order of any Term B Lender, in substantially the form of Exhibit
A-2 hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Term B Advances made by such Lender to the extent
required to be issued pursuant to Section 2.15.
"TERM BORROWING" means a Term A Borrowing or a Term B
Borrowing.
"TERM COMMITMENT" means a Term A Commitment or a Term B
Commitment.
"TERM LENDER" means a Term A Lender or a Term B Lender.
"TERMINATION DATE" means (a) for purposes of the Working
Capital Facility, the Swing Line Facility and the Letter of Credit
Facility, the earlier of (x) December 31, 2003 and (y) the date of
termination in whole of the Term Commitments, the Swing Line
Commitment, the Letter of Credit Commitment and the Working Capital
Commitments pursuant to Section 2.05 or 6.01 (the "COMMITMENT
TERMINATION DATE"), and (b) for purposes of the Term A Facility, the
earlier of (x) December 31, 2003 and (y) the Commitment Termination
Date, and (c) for purposes of the Term B Facility, the earlier of (x)
June 30, 2004, and (y) the Commitment Termination Date.
"THIRD AMENDED AND RESTATED SECURITY AGREEMENT" has the
meaning specified in Section 3.01(i)(viii).
"THIRD RESTATEMENT ASSIGNMENT AGREEMENT" has the meaning
specified in the Preliminary Statements to this Agreement.
"THIRD RESTATEMENT DATE" has the meaning specified in Section
3.01.
"TOTAL LEVERAGE RATIO" means, with respect to the Borrower and
its Subsidiaries for any period, the ratio of (a) the sum of (i)
Consolidated Funded Debt (other than the aggregate amount of Working
Capital Advances) as of the end of such period and (ii) the Monthly
Average Working Capital Advances as of the end of such period to (b)
Consolidated Adjusted EBITDA for such period.
37
"TRADE LETTER OF CREDIT" means any Letter of Credit that is
issued under the Letter of Credit Facility for the benefit of a
supplier of Inventory to the Borrower or any of its Subsidiaries to
effect payment for such Inventory.
"TRANSACTION" has the meaning specified in the Preliminary
Statements to this Agreement.
"TRANSACTION DOCUMENTS" means the Purchase Agreement, the
Escrow Agreement, and any other agreement or document executed pursuant
to or in connection with the Purchase Agreement.
"TYPE" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"UNIVERSAL" means Glenoit Universal, Ltd., a Delaware
corporation.
"UNUSED WORKING CAPITAL COMMITMENT" means, with respect to any
Working Capital Lender at any time, (a) such Lender's Working Capital
Commitment at such time minus (b) the sum of (i) the aggregate
principal amount of all Working Capital Advances, Swing Line Advances
and Letter of Credit Advances made by such Lender (in its capacity as a
Lender) and outstanding at such time, plus (ii) such Lender's Pro Rata
Share of (A) the aggregate Available Amount of all Letters of Credit
outstanding at such time, (B) the aggregate principal amount of all
Letter of Credit Advances made by the Issuing Bank pursuant to Section
2.03(c) and outstanding at such time and (C) the aggregate principal
amount of all Swing Line Advances made by the Swing Line Bank pursuant
to Section 2.01(d) and outstanding at such time.
"U.S. SUBSIDIARY" means any Subsidiary organized under the
laws of any State of the United States.
"U.S. SUBSIDIARY GUARANTOR" means Glenoit Assets, AmPac, Grand
Avenue, Ex-Cell, Ex-Cell Bentonville, Linde and each other U.S.
Subsidiary that may become a guarantor or a collateral guarantor
pursuant to Section 5.01(m) or Section 5.01(o).
"VOTING INTERESTS" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons performing
similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.
38
"WELFARE PLAN" means a welfare plan, as defined in Section
3(1) of ERISA, that is maintained for employees of any Loan Party or in
respect of which any Loan Party could have a liability.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"WORKING CAPITAL ADVANCE" has the meaning specified in Section
2.01(c).
"WORKING CAPITAL BORROWING" means a borrowing consisting of
simultaneous Working Capital Advances of the same Type made by the
Working Capital Lenders.
"WORKING CAPITAL COMMITMENT" means, with respect to any
Working Capital Lender at any time, the amount set forth opposite such
Lender's name on Schedule I hereto under the caption "Working Capital
Commitment" or, if such Lender has entered into one or more Assignment
and Acceptances, set forth for such Lender in the Register maintained
by the Agent pursuant to Section 9.07(d) as such Lender's "Working
Capital Commitment", as such amount may be reduced at or prior to such
time pursuant to Section 2.05.
"WORKING CAPITAL FACILITY" means, at any time, the aggregate
amount of the Working Capital Lenders' Working Capital Commitments at
such time.
"WORKING CAPITAL LENDER" means any Lender that has a Working
Capital Commitment.
"WORKING CAPITAL NOTE" means a promissory note of the Borrower
payable to the order of any Working Capital Lender, in substantially
the form of Exhibit A-3 hereto, evidencing the aggregate indebtedness
of the Borrower to such Lender resulting from the Working Capital
Advances made by such Lender to the extent required to be issued
pursuant to Section 2.15.
SECTION 1.02. Computation of Time Periods; Other Definitional
Provisions. In this Agreement and the other Loan Documents in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding". References in the Loan Documents to any agreement or contract "as
amended" shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles
39
consistent with those applied in the preparation of the financial statements
referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Term A Advances. Each Term
A Lender severally agrees, on the terms and conditions hereinafter set forth, to
make a single advance (a "TERM A ADVANCE") to the Borrower on any Business Day
during the period from the date hereof until February 12, 1999 in an amount not
to exceed such Lender's Term A Commitment at such time. The Term A Borrowing
shall consist of Term A Advances made simultaneously by the Term A Lenders
ratably according to their Term A Commitments. Amounts borrowed under this
Section 2.01(a) and repaid or prepaid may not be reborrowed.
(b) The Term B Advances. Each Term B Lender severally agrees,
on the terms and conditions hereinafter set forth, to make a single advance (a
"TERM B ADVANCE") to the Borrower on any Business Day that the Term A Advances
shall be made in an amount not to exceed such Lender's Term B Commitment at such
time. The Term B Borrowing shall consist of Term B Advances made simultaneously
by the Term B Lenders ratably according to their Term B Commitments. Amounts
borrowed under this Section 2.01(b) and repaid or prepaid may not be reborrowed.
(c) The Working Capital Advances. Each Working Capital Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each, a "WORKING CAPITAL ADVANCE") to the Borrower from time to time
on any Business Day during the period from the date hereof until the Termination
Date in an amount for each such Advance not to exceed such Lender's Unused
Working Capital Commitment at such time. Each Working Capital Borrowing shall be
in an aggregate amount of $1,000,000 or an integral multiple of $250,000 in
excess thereof (other than a Borrowing the proceeds of which shall be used
solely to repay or prepay in full outstanding Letter of Credit Advances made by
the Issuing Bank) and shall consist of Working Capital Advances made
simultaneously by the Working Capital Lenders ratably according to their Working
Capital Commitments. Within the limits of each Working Capital Lender's Unused
Working Capital Commitment in effect from time to time, the Borrower may borrow
under this Section 2.01(c), prepay pursuant to Section 2.06(a) and reborrow
under this Section 2.01(c).
(d) The Swing Line Advances. The Borrower may request the
Swing Line Bank to make, and the Swing Line Bank agrees, on the terms and
conditions hereinafter set forth, to make advances to the Borrower (each, a
"SWING LINE ADVANCE") from time to time on any
40
Business Day during the period from the date hereof until the Termination Date
(i) in an aggregate amount not to exceed at any time outstanding $2,500,000 (the
"SWING LINE Facility") and (ii) in an amount for each such Swing Line Borrowing
not to exceed the aggregate of the Unused Working Capital Commitments of the
Working Capital Lenders at such time. No Swing Line Advance shall be used for
the purpose of funding the payment of principal of any other Swing Line Advance.
Each Swing Line Borrowing shall be in an amount of $250,000 or an integral
multiple of $100,000 in excess thereof and shall be made as a Base Rate Advance.
Within the limits of the Swing Line Facility and within the limits referred to
in clause (ii) above, so long as the Swing Line Bank makes Swing Line Advances,
the Borrower may borrow under this Section 2.01(d), repay pursuant to Section
2.04(d) or prepay pursuant to Section 2.06(a) and reborrow under this Section
2.01(d).
(e) Letters of Credit. The Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to issue letters of credit (the "LETTERS
OF CREDIT") for the account of the Borrower from time to time on any Business
Day during the period from the Third Restatement Date until 30 days before the
Termination Date in an aggregate Available Amount (i) for all Letters of Credit
not to exceed at any time the lesser of (x) the Letter of Credit Facility at
such time and (y) the Issuing Bank's Letter of Credit Commitment at such time
and (ii) for each such Letter of Credit not to exceed Unused Working Capital
Commitments of the Working Capital Lenders at such time. No Letter of Credit
shall have an expiration date (including all rights of the Borrower or the
beneficiary to require renewal) later than the earlier of 30 days before the
Termination Date and (A) in the case of a Standby Letter of Credit, one year
after the date of issuance thereof and (B) in the case of a Trade Letter of
Credit, 180 days after the date of issuance thereof. Within the limits of the
Letter of Credit Facility, and subject to the limits referred to above, the
Borrower may request the issuance of Letters of Credit under this Section
2.01(e), repay any Letter of Credit Advances resulting from drawings thereunder
pursuant to Section 2.03(c) and request the issuance of additional Letters of
Credit under this Section 2.01(e).
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Sections 2.02(b) and 2.03, each Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the third Business Day
prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Eurodollar Rate Advances, or the first Business Day prior to the
date of the proposed Borrowing in the case of a Borrowing consisting of Base
Rate Advances, by the Borrower to the Agent, which shall give to each
Appropriate Lender prompt notice thereof by telex or telecopier. Each such
notice of a Borrowing (a "NOTICE OF BORROWING") shall be in writing, or telex or
telecopier, in substantially the form of Exhibit B hereto, specifying therein
the requested (i) date of such Borrowing, (ii) Facility under which such
Borrowing is to be made, (iii) Type of Advances comprising such Borrowing, (iv)
aggregate amount of such Borrowing and (v) in the case of a Borrowing consisting
of Eurodollar Rate Advances, initial Interest Period for each such Advance. Each
Appropriate Lender shall, before 11:00 A.M. (New York City time) on the date of
such Borrowing, make available for the account
41
of its Applicable Lending Office to the Agent at the Agent's Account, in same
day funds, such Lender's ratable portion of such Borrowing in accordance with
the respective Commitments under the applicable Facility of such Lender and the
other Appropriate Lenders. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the Agent
will make such funds available to the Borrower by crediting the Borrower's
Account; provided, however, that, in the case of any Working Capital Borrowing,
the Agent shall first make a portion of such funds equal to the aggregate
principal amount of any Swing Line Advances and Letter of Credit Advances made
by the Swing Line Bank or the Issuing Bank, as the case may be, and by any other
Working Capital Lender and outstanding on the date of such Working Capital
Borrowing, plus interest accrued and unpaid thereon to and as of such date,
available to the Swing Line Bank and the Issuing Bank and such other Working
Capital Lenders for repayment of such Swing Line Advances and Letter of Credit
Advances.
(b) Each Swing Line Borrowing shall be made on notice, given
not later than 11:00 A.M. (New York City time) on the date of the proposed Swing
Line Borrowing, by the Borrower to the Swing Line Bank and the Agent. Each such
notice, which shall be delivered by a Notice of Borrowing, shall be in writing,
by telex or telecopier, in substantially the form of Exhibit B hereto,
specifying therein the requested (i) date of such Borrowing (which shall be a
Business Day), (ii) amount of such Borrowing and (iii) maturity of such
Borrowing (which maturity shall be no later than the seventh day after the
requested date of such Borrowing). The Swing Line Bank will make the amount
thereof available to the Agent at the Agent's Account, in same day funds. After
the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Agent will make such funds available to
the Borrower by crediting the Borrower's Account. Upon written demand by the
Swing Line Bank with a copy of such demand to the Agent, each other Working
Capital Lender shall purchase from the Swing Line Bank, and the Swing Line Bank
shall sell and assign to each such other Working Capital Lender, such other
Lender's Pro Rata Share of such outstanding Swing Line Advance as of the date of
such demand, by making available for the account of its Applicable Lending
Office to the Agent for the account of the Swing Line Bank, by deposit to the
Agent's Account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such Swing Line Advance to be purchased by such
Lender. The Borrower hereby agrees to each such sale and assignment. Each
Working Capital Lender agrees to purchase its Pro Rata Share of an outstanding
Swing Line Advance on (i) the Business Day on which demand therefor is made by
the Swing Line Bank, provided that notice of such demand is given not later than
11:00 (New York City time) on such Business Day or (ii) the first Business Day
next succeeding such demand if notice of such demand is given after such time.
Upon any such assignment by the Swing Line Bank to any other Working Capital
Lender of a portion of a Swing Line Advance, the Swing Line Bank represents and
warrants to such other Lender that the Swing Line Bank is the legal and
beneficial owner of such interest being assigned by it, but makes no other
representation or warranty and assumes no responsibility with respect to such
Swing Line Advance, the Loan Documents or any Loan Party. If and to the extent
that any Working Capital Lender shall not have so made the amount of such Swing
Line Advance available to the Agent,
42
such Working Capital Lender agrees to pay to the Agent forthwith on demand such
amount together with interest thereon, for each day from the date of demand by
the Swing Line Bank until the date such amount is paid to the Agent, at the
Federal Funds Rate. If such Lender shall pay to the Agent such amount for the
account of the Swing Line Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Swing Line Advance made by such Lender
on such Business Day for purposes of this Agreement, and the outstanding
principal amount of the Swing Line Advance made by the Swing Line Bank shall be
reduced by such amount on such Business Day.
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances (other
than for interest periods of one month commenced prior to the date on which the
Agent completes syndication of the Facilities, subject to the provisions of
Section 8.04) for the initial Borrowing hereunder and for the period from the
date of such initial Borrowing to the earlier of (x) three months from such date
and (y) the completion of syndication of the Facilities (as shall be specified
by the Agent in a written notice to the Borrower) or for any Borrowing if the
aggregate amount of such Borrowing is less than $1,000,000 or if the obligation
of the Appropriate Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.07(d)(ii), 2.09 or 2.10 and (ii) with respect to
Borrowings consisting of Eurodollar Rate Advances, the Term A Advances, the Term
B Advances and the Working Capital Advances may not be outstanding as part of
more than six separate Borrowings in the aggregate.
(d) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower. In the case of any Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower
shall indemnify each Appropriate Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on or before the
date specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing
when such Advance, as a result of such failure, is not made on such date.
(e) Unless the Agent shall have received notice from an
Appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Agent such Lender's ratable portion of such Borrowing, the Agent may assume
that such Lender has made such portion available to the Agent on the date of
such Borrowing in accordance with subsection (a) or (b) of this Section 2.02 and
the Agent may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable portion available to the Agent, such Lender and
the Borrower severally agree to repay or pay to the Agent forthwith on demand
such corresponding amount and to pay interest thereon, for each
43
day from the date such amount is made available to the Borrower until the date
such amount is repaid or paid to the Agent, at (i) in the case of the Borrower,
the interest rate applicable at such time under Section 2.07 to Advances
comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds
Rate. If such Lender shall pay to the Agent such corresponding amount, such
amount so paid in respect of principal shall constitute such Lender's Advance as
part of such Borrowing for all purposes.
(f) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Issuing Bank, which shall give to the Agent
prompt notice thereof by telex or telecopier. Each such notice of issuance of a
Letter of Credit (a "NOTICE OF ISSUANCE") shall be by telex or telecopier,
specifying therein the requested (A) date of such issuance (which shall be a
Business Day), (B) Available Amount of such Letter of Credit, (C) expiration
date of such Letter of Credit, (D) name and address of the beneficiary of such
Letter of Credit and (E) form of such Letter of Credit, and shall be accompanied
by such application and agreement for letter of credit as the Issuing Bank may
specify to the Borrower for use in connection with such requested Letter of
Credit (a "LETTER OF CREDIT AGREEMENT"). If the requested form of such Letter of
Credit is acceptable to the Issuing Bank in its sole discretion, the Issuing
Bank will, upon fulfillment of the applicable conditions set forth in Article
III, make such Letter of Credit available to the Borrower at its office referred
to in Section 9.02 or as otherwise agreed with the Borrower in connection with
such issuance. In the event and to the extent that the provisions of any Letter
of Credit Agreement shall conflict with this Agreement, the provisions of this
Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish
(A) to the Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (B) to
each Working Capital Lender on the first Business Day of each calendar quarter a
written report summarizing issuance and expiration dates of Letters of Credit
issued during the preceding calendar quarter and drawings during such calendar
quarter under all Letters of Credit and (C) to the Agent and each Working
Capital Lender on the first Business Day of each calendar quarter a written
report setting forth the average daily aggregate Available Amount during the
preceding calendar quarter of all Letters of Credit.
44
(c) Drawing and Reimbursement. The payment by the Issuing Bank
of a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Letter of Credit Advance,
which shall be a Base Rate Advance, in the amount of such draft. In the event of
any drawing under a Letter of Credit, the Issuing Bank shall promptly notify the
Agent, and the Agent shall promptly notify each Working Capital Lender and each
Working Capital Lender shall purchase from the Issuing Bank, and the Issuing
Bank shall sell and assign to each such Working Capital Lender, such Lender's
Pro Rata Share of such outstanding Letter of Credit Advance as of the date of
such purchase, by making available for the account of its Applicable Lending
Office to the Agent for the account of the Issuing Bank, by deposit to the
Agent's Account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such Letter of Credit Advance to be purchased by
such Lender. Promptly after receipt thereof, the Agent shall transfer such funds
to the Issuing Bank. The Borrower hereby agrees to each such sale and
assignment. Each Working Capital Lender agrees to purchase its Pro Rata Share of
an outstanding Letter of Credit Advance on (i) the Business Day on which notice
of the drawing under the related Letter of Credit is given by the Issuing Bank,
provided such notice is given not later than 1:00 P.M. (New York City time) on
such Business Day or (ii) the first Business Day next succeeding such demand if
such notice is given after such time. Upon any such assignment by the Issuing
Bank to any other Working Capital Lender of a portion of a Letter of Credit
Advance, the Issuing Bank represents and warrants to such other Lender that the
Issuing Bank is the legal and beneficial owner of such interest being assigned
by it, free and clear of any liens, but makes no other representation or
warranty and assumes no responsibility with respect to such Letter of Credit
Advance, the Loan Documents or any Loan Party. If and to the extent that any
Working Capital Lender shall not have so made the amount of such Letter of
Credit Advance available to the Agent, such Working Capital Lender agrees to pay
to the Agent forthwith on demand such amount together with interest thereon, for
each day from the date of demand by the Issuing Bank until the date such amount
is paid to the Agent, at the Federal Funds Rate for its account or the account
of the Issuing Bank, as applicable. If such Lender shall pay to the Agent such
amount for the account of the Issuing Bank on any Business Day, such amount so
paid in respect of principal shall constitute a Letter of Credit Advance made by
such Lender on such Business Day for purposes of this Agreement, and the
outstanding principal amount of the Letter of Credit Advance made by the Issuing
Bank shall be reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of
any Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Term Advances. The
Borrower shall repay to the Agent for the ratable account of the Term A Lenders
and Term B Lenders the aggregate outstanding principal amount of the Term A
Advances and Term B Advances,
45
respectively, on the following dates in the amounts indicated (which amounts
shall be reduced as a result of the application of prepayments in accordance
with the order of priority set forth in Section 2.06):
Amount
------------------------------------------
Fiscal Quarter
Ending on or About Term A Facility Term B Facility
------------------ --------------- ---------------
September 30, 1999 $1,500,000 $175,000
December 31,1999 $1,500,000 $175,000
March 31, 2000 $1,500,000 $175,000
June 30, 2000 $1,500,000 $175,000
September 30, 2000 $1,500,000 $175,000
December 31, 2000 $1,500,000 $175,000
March 31, 2001 $1,750,000 $175,000
June 30, 2001 $1,750,000 $175,000
September 30, 2001 $1,750,000 $175,000
December 31, 2001 $1,750,000 $175,000
March 31, 2002 $2,250,000 $175,000
June 30, 2002 $2,250,000 $175,000
September 30, 2002 $2,250,000 $175,000
December 31, 2002 $2,250,000 $175,000
March 31, 2003 $3,750,000 $175,000
June 30, 2003 $3,750,000 $175,000
September 30, 2003 $3,750,000 $175,000
December 31, 2003 $3,750,000 $175,000
March 31, 2004 ----- $3,750,000
June 30, 2004 ----- $63,100,000
provided, however, that the final principal installment of the Term A Facility
and the Term B Facility, respectively, shall in any event and in each case be in
an amount equal to the aggregate principal amount of the Term A Advances and
Term B Advances, respectively then outstanding.
46
(b) Working Capital Advances. The Borrower shall repay to the
Agent for the ratable account of the Working Capital Lenders on the Termination
Date the aggregate outstanding principal amount of the Working Capital Advances
then outstanding.
(c) Swing Line Advances. The Borrower shall repay to the Agent
for the account of the Swing Line Bank and each other Working Capital Lender
that has made a Swing Line Advance the outstanding principal amount of each
Swing Line Advance made by each of them on the earlier of the maturity date
specified in the applicable Notice of Swing Line Borrowing (which maturity shall
be no later than the seventh day after the requested date of such Borrowing) and
the Termination Date.
(d) Letter of Credit Advances. (i) The Borrower shall repay to
the Agent for the account of the Issuing Bank and each other Working Capital
Lender that has made a Letter of Credit Advance on the earlier of demand by the
Agent and the Termination Date the outstanding principal amount of each Letter
of Credit Advance made by each of them.
(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating thereto (all of the foregoing
being, collectively, the "L/C RELATED DOCUMENTS");
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower in
respect of any L/C Related Document or any other amendment or waiver of
or any consent to departure from all or any of the L/C Related
Documents;
(C) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or
any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
47
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or
consent to departure from any guarantee, for all or any of the
Obligations of the Borrower in respect of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including, without limitation, any
other circumstance that might otherwise constitute a defense available
to, or a discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least three Business Days' notice to the
Agent, terminate in whole or reduce in part the unused portions of the Term A
Commitments, the Term B Commitments, the Swing Line Commitment, the Letter of
Credit Facility and the Unused Working Capital Commitments, as the case may be;
provided, however, that each partial reduction of a Facility (i) shall be in an
aggregate amount of $1,000,000 or an integral multiple of $250,000 in excess
thereof, (ii) shall be made ratably among the Appropriate Lenders in accordance
with their Commitments with respect to such Facility and (iii) shall, with
respect to any reduction of the Term A Facility or Term B Facility, be made
ratably between such Facilities.
(b) Mandatory. (i) On the date of the Term A Borrowing, after
giving effect to such Term A Borrowing, and from time to time thereafter upon
each repayment or prepayment of the Term A Advances, the aggregate Term A
Commitments of the Term A Lenders shall be automatically and permanently
reduced, on a pro rata basis, by an amount equal to the amount by which the
aggregate Term A Commitments immediately prior to such reduction exceed the
aggregate unpaid principal amount of the Term A Advances then outstanding.
(ii) On the date of the Term B Borrowing, after giving effect
to such Term B Borrowing, and from time to time thereafter upon each repayment
or prepayment of the Term B Advances, the aggregate Term B Commitments of the
Term B Lenders shall be automatically and permanently reduced, on a pro rata
basis, by an amount equal to the amount by which the aggregate Term B
Commitments immediately prior to such reduction exceed the aggregate unpaid
principal amount of the Term B Advances then outstanding.
(iii) The Working Capital Facility shall be automatically and
permanently reduced on the date on which any prepayment of the Working Capital
Facility is required to be made pursuant to Section 2.06(b)(i) or 2.06(b)(ii) by
an amount equal to the applicable Reduction Amount, provided that each such
reduction of the Working Capital Facility shall be made ratably among the
Working Capital Lenders in accordance with their Working Capital Commitments.
48
(iv) The Swing Line Facility and the Letter of Credit Facility
shall each be automatically and permanently reduced from time to time on the
date of each reduction in the Working Capital Facility by the amount, if any, by
which each such Facility exceeds the Working Capital Facility after giving
effect to such reduction of the Working Capital Facility.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may,
without any premium or penalty other than pursuant to Section 8.04(c), upon at
least one Business Day's notice in the case of Base Rate Advances and three
Business Days' notice in the case of Eurodollar Rate Advances, in each case to
the Agent (received not later than 1:00 P.M. (New York City time) stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding aggregate principal
amount of the Advances comprising part of the same Borrowing in whole or ratably
in part, together with accrued interest to the date of such prepayment on the
aggregate principal amount prepaid unless such prepayment is with respect to a
Swing Line Advance or a Working Capital Advance which is a Base Rate Advance;
provided, however, that (x) each partial prepayment (other than prepayments of
Swing Line Advances) shall be in an aggregate principal amount of $500,000 or an
integral multiple of $250,000 in excess thereof and (y) if any prepayment of a
Eurodollar Rate Advance shall be made other than on the last day of an Interest
Period therefor, the Borrower shall also pay any amounts owing pursuant to
Section 8.04(c). Each such prepayment which is made with respect to any Term
Advances shall be applied, subject to Section 2.06(c), ratably to the Term
Facilities and ratably to the remaining principal installments thereof.
(b) Mandatory. (i) Commencing for the 1999 Fiscal Year, the
Borrower shall, no later than the 30th day following the date on which it
delivers the financial statements referred to in Section 5.03(c) (but in any
event within 120 days after the end of each Fiscal Year), prepay an aggregate
principal amount of the Advances comprising part of the same Borrowings equal to
50% of the amount of Excess Cash Flow for such Fiscal Year. Each such prepayment
of any Advances shall be applied as set forth in Section 2.06(b)(ii).
(ii) The Borrower shall, on the date of receipt of the Net
Cash Proceeds by any Loan Party or any of their Subsidiaries from (A) the sale,
lease, transfer or other disposition of any assets of such Loan Party or any of
its Subsidiaries (other than any sale, lease, transfer or other disposition of
assets pursuant to Section 5.02(e)), (B) the incurrence or issuance by such Loan
Party or any of its Subsidiaries of any Debt (other than Debt issued or incurred
pursuant to Section 5.02(b)), (C) the sale or issuance by such Loan Party or any
of its Subsidiaries of any capital stock or other ownership or profit interest,
any securities convertible into or exchangeable for capital stock or other
ownership or profit interest or any warrants, rights or options to acquire
capital stock or other ownership or profit interest (other than any issuance by
Universal pursuant to Section 5.02(g)(iv)), or (D) any Extraordinary Receipt
received by or paid to or for the account of such Loan Party or any of its
Subsidiaries and not otherwise included in clause (A), (B) or (C) above, prepay
an aggregate principal amount of the Advances comprising part of the same
49
Borrowings equal to the amount of such Net Cash Proceeds. Each such prepayment
of any Advances shall be applied as follows:
first, subject to Section 2.06(c), ratably to the Term
Facilities and ratably to the remaining principal installments thereof,
and
second, to the extent that no Term Advances remain
outstanding, permanently to reduce the Working Capital Facility as set
forth in clause (v) below.
(iii) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Working Capital Advances comprising part of
the same Borrowings, the Swing Line Advances and the Letter of Credit Advances
equal to the amount by which (A) the sum of the aggregate principal amount of
(x) the Working Capital Advances, (y) the Swing Line Advances and (z) the Letter
of Credit Advances then outstanding plus the aggregate Available Amount of all
Letters of Credit then outstanding exceeds (B) the lesser of the Working Capital
Facility and the Loan Value of Eligible Collateral on such Business Day (as
determined based on the most recent Borrowing Base Certificate delivered to the
Lender Parties hereunder).
(iv) The Borrower shall, on each Business Day, pay to the
Agent for deposit in the L/C Cash Collateral Account an amount sufficient to
cause the aggregate amount on deposit in such Account to equal the amount by
which the aggregate Available Amount of all Letters of Credit then outstanding
exceeds the Letter of Credit Facility on such Business Day.
(v) Prepayments of the Working Capital Facility made pursuant
to clause (i), (ii) or (iii) of this Section 2.06(b) shall be applied first to
prepay Swing Line Advances and Letter of Credit Advances then outstanding until
such Advances are paid in full, and second to prepay Working Capital Advances
then outstanding comprising part of the same Borrowings until such Advances are
paid in full and third deposited in the L/C Cash Collateral Account to cash
collateralize 100% of the Available Amount of the Letters of Credit then
outstanding; and, in the case of prepayments of the Working Capital Facility
required pursuant to clause (i) or (ii) above, the amount remaining (if any)
after the prepayment in full of the Working Capital Advances then outstanding
and the cash collateralization of the aggregate Available Amount of Letters of
Credit then outstanding (the sum of such prepayment amounts, cash
collateralization amounts and remaining amount being referred to herein as the
"REDUCTION AMOUNT") may be retained by the Borrower. Upon the drawing of any
Letter of Credit for which funds are on deposit in the L/C Cash Collateral
Account, such funds shall be applied to reimburse the Issuing Bank or Working
Capital Lenders, as applicable.
(vi) Notwithstanding any of the other provisions of this
Section 2.06(b), so long as no Default shall have occurred and be continuing, if
any prepayment of Eurodollar Rate Advances is required to be made under clauses
(i), (ii) or (iii) of this Section 2.06(b) on any day other than on the last day
of the Interest Period therefor, the Borrower may in its sole discretion
50
(but shall not be required to), deposit the amount of any such prepayment
otherwise required to be made hereunder in a cash collateral account (the "CASH
COLLATERAL ACCOUNT") of the Borrower maintained with the Agent, until the last
day of such Interest Period, at which time the Agent shall be authorized
(without any further action by the Borrower) to apply such prepayment as set
forth in such relevant clauses (i), (ii) or (iii) of this Section 2.06(b).
(vii) All prepayments under this Section 2.06(b) shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid. In the case of any prepayment of Eurodollar Rate Advances
required to be made under this Section 2.06(b) and not provided for in clause
(vi) above, the Borrower shall also pay any amounts owing in respect of such
Eurodollar Rate Advances pursuant to Section 8.04(c).
(c) Term B Opt-Out. With respect to any prepayment of the Term
Advances, the Agent shall ratably pay the Term A Lenders and the Term B Lenders;
provided, however, that any Term B Lender, at its option, to the extent that any
Term Advances are then outstanding, may elect not to accept such prepayment
(such Lender being a "DECLINING LENDER"), in which event the provisions of the
next sentence shall apply. Any Term B Lender may elect not to accept its ratable
share of the prepayment referred to in any Prepayment Notice by giving written
notice to the Agent not later than 11:00 A.M. (New York City time) on the
Business Day immediately preceding the scheduled Prepayment Date. On the
Prepayment Date, an amount equal to that portion of the Prepayment Amount
available to prepay Term B Lenders (less any amounts that would otherwise be
payable to Declining Lenders) shall be shall be applied to prepay Term B
Advances owing to Term B Lenders other than Declining Lenders and any amounts
that would otherwise have been applied to prepay Term B Advances owing to
Declining Lenders shall instead be applied ratably to prepay the remaining Term
Advances as provided in Sections 2.06(a) and (b); provided further that on
prepayment in full of Term Advances owing to Term Lenders other than Declining
Lenders, the remainder of any Prepayment Amount shall be applied ratably to
prepay Term B Advances owing to Declining Lenders.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance made to the
Borrower from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(A) the Base Rate in effect from time to time plus (B) the Applicable
Margin, payable in arrears quarterly on the last day of each March,
June, September and December, commencing March 31, 1999, on the date of
any prepayment thereof to the extent required under Section 2.06 and on
the Termination Date.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period
51
for such Advance to the sum of (A) the Eurodollar Rate for such
Interest Period for such Advance plus (B) the Applicable Margin,
payable in arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each day
that occurs during such Interest Period every three months from the
first day of such Interest Period and on the date such Eurodollar Rate
Advance shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default under Section 6.01(c) with respect to any
covenant contained in Section 5.04 or under Section 6.01(a), the Agent may, and
upon the request of the Required Lenders shall, require that the Borrower shall
pay interest on (i) the unpaid principal amount of each Advance owing to each
Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above and on demand, at a rate per annum equal at all times to 2% per annum
above the rate per annum required to be paid on such Advance pursuant to clause
(a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the
amount of any interest, fee or other amount payable under the Loan Documents
that is not paid when due, from the date such amount shall be due until such
amount shall be paid in full, payable in arrears on the date such amount shall
be paid in full and on demand, at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid, in the case of interest, on
the Type of Advance on which such interest has accrued pursuant to clause (a)(i)
or (a)(ii) above and, in all other cases, on Base Rate Advances pursuant to
clause (a)(i) above; provided, however, that following acceleration of the
Advances pursuant to Section 6.01, interest shall accrue and be payable at the
rate required by this Section 2.07(b), whether or not requested by the Agent or
the Required Lenders. In addition, following a final judgment with respect to
any Obligation of the Loan Parties under the Loan Documents, interest shall
accrue at the higher of the statutory judgment rate or the rate specified in the
preceding sentence, payable on demand.
(c) Notice of Interest Rate. Promptly after receipt of a
Notice of Borrowing pursuant to Section 2.02(a), the Agent shall give notice to
the Borrower and each Appropriate Lender of the applicable interest rate
determined by the Agent for purposes of clause (a)(i) or (ii).
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay
to the Agent for the account of the Lenders a commitment fee, from the Third
Restatement Date in the case of each Restatement Lender and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender until the Termination Date, payable in
arrears quarterly on the last day of each March, June, September and December,
commencing March 31, 1999, and on the Termination Date, at the rate of 1/2 of 1%
per annum on the average daily unused portion of each Appropriate Lender's Term
Commitment and on the average daily Unused Working Capital Commitment of such
Lender.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to
the Agent for the account of each Working Capital Lender a commission, payable
in arrears quarterly on the last
52
day of each March, June, September and December, commencing March 31, 1999, and
on the Termination Date, on such Lender's Pro Rata Share of the average daily
aggregate Available Amount during such quarter of all Letters of Credit
outstanding from time to time at a rate per annum equal to the Applicable Margin
then applicable to Eurodollar Rate Advances under the Working Capital Facility.
(ii) The Borrower shall pay to the Issuing Bank, for its own
account, such commissions, issuance fees, fronting fees, transfer fees and other
fees and charges in connection with the issuance or administration of each
Letter of Credit as the Borrower and the Issuing Bank shall agree.
(c) Agent's Fees. The Borrower shall pay to the Agent for its
own account such fees as may from time to time be agreed between the Borrower
and the Agent.
SECTION 2.09. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Agent not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Sections 2.07 and 2.10,
Convert all or any portion of the Advances made to the Borrower of one Type
comprising the same Borrowing into Advances of the other Type; provided,
however, that if any Conversion of Eurodollar Rate Advances into Base Rate
Advances is made other than on the last day of an Interest Period for such
Eurodollar Rate Advances the Borrower shall also pay any amounts owing pursuant
to Section 8.04(c), any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum amount specified in
Section 2.02(b), no Conversion of any Advances shall result in more separate
Borrowings than permitted under Section 2.02(b) and each Conversion of Advances
comprising part of the same Borrowing under any Facility shall be made ratably
among the Appropriate Lenders in accordance with their Commitments under such
Facility. Each such notice of Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Advances to
be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on the Borrower requesting such
Conversion.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $1,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Borrower and the Appropriate Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance.
53
(iii) Upon the occurrence and during the continuance of any
Event of Default and upon notice from the Agent to the Borrower, (x) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (y) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining Letters of Credit or of agreeing to make or
of making or maintaining Letter of Credit Advances, then the Borrower shall from
time to time, upon demand by such Lender Party (with a copy of such demand to
the Agent), pay to the Agent for the account of such Lender Party additional
amounts sufficient to compensate such Lender Party for such increased cost. A
certificate as to the amount of such increased cost, submitted to the Borrower
by such Lender Party, shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender Party determines that compliance with any
law or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder and
other commitments of such type or the issuance or maintenance of the Letters of
Credit (or similar contingent obligations), then, upon demand by such Lender
Party (with a copy of such demand to the Agent), the Borrower shall pay to the
Agent for the account of such Lender Party, from time to time as specified by
such Lender Party, additional amounts sufficient to compensate such Lender Party
in the light of such circumstances, to the extent that such Lender Party
reasonably determines such increase in capital to be allocable to the existence
of such Lender Party's commitment to lend or to issue Letters of Credit
hereunder or to the issuance or maintenance of any Letters of Credit. A
certificate as to such amounts submitted to the Borrower by such Lender Party
shall be conclusive and binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed at least 50% of the then aggregate unpaid principal
amount thereof notify the Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Lenders of
making, funding or maintaining their Eurodollar Rate Advances for such Interest
Period, the Agent shall forthwith so notify the Borrower and the Appropriate
Lenders, whereupon (i) each such Eurodollar Rate Advance under any Facility will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base
54
Rate Advance and (ii) the obligation of the Appropriate Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Agent shall notify the Borrower that such Lenders have determined that the
circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Agent, (i) each Eurodollar Rate Advance under each Facility under
which such Lender has a Commitment will automatically, upon such demand, Convert
into a Base Rate Advance and (ii) the obligation of the Appropriate Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Agent shall notify the Borrower that such Lender has determined that
the circumstances causing such suspension no longer exist.
(e) Each Lender Party agrees that, upon the occurrence of any
circumstances entitling such Lender Party to additional compensation (or to
deliver a demand therefor) or to suspend its obligation to make Eurodollar Rate
Advances under any of the foregoing provisions of this Section 2.10, such Lender
Party shall use reasonable efforts (consistent with its internal policy and with
applicable legal and regulatory restrictions) to designate a different
Applicable Lending Office for any Advances affected by such circumstances if the
making of such designation, in the case of Section 2.10(a) or 2.10(b), would
avoid the need for, or reduce the amount of, such additional compensation or, in
the case of Section 2.10(c) or 2.10(d), would allow the Lenders to continue to
perform their obligations to make Eurodollar Rate Advances and, in any such
case, would not, in the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party. Nothing in this Section 2.10(f) shall
affect or postpone any of the rights of any Lender Party or any of the
obligations of the Borrower under any of the foregoing provisions of this
Section 2.10 in any manner.
SECTION 2.11. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes, irrespective of any right
of counterclaim or set-off, not later than 11:00 A.M. (New York City time) on
the day when due in U.S. dollars to the Agent at the Agent's Account in same day
funds. The Agent will promptly thereafter cause like funds to be distributed (i)
if such payment by the Borrower is in respect of principal, interest, commitment
fees or any other Obligation then payable hereunder and under the Notes to more
than one Lender Party, to such Lender Parties for the account of their
respective Applicable Lending Offices ratably in accordance with the amounts of
such respective Obligations then payable to such Lender Parties and (ii) if such
payment by the Borrower is in respect of any Obligation then payable hereunder
to one Lender Party, to such Lender Party for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon
55
its acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(e), from and after
the effective date of such Assignment and Acceptance, the Agent shall make all
payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender Party assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) If the Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Agent may, but shall not be obligated
to, elect to distribute such funds to each Lender Party ratably in accordance
with such Lender Party's proportionate share of the principal amount of all
outstanding Advances and the Available Amount of all Letters of Credit then
outstanding, in repayment or prepayment of such of the outstanding Advances or
other Obligations owed to such Lender Party, and for application to such
principal installments, as the Agent shall direct.
(c) The Borrower hereby authorizes each Lender Party, if and
to the extent payment owed to such Lender Party is not made when due hereunder
or, in the case of a Lender, under the Note held by such Lender, to charge from
time to time against any or all of the Borrower's accounts with such Lender
Party any amount so due.
(d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Agent of an interest rate,
fee or commission hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided, however, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the Agent may
assume that the Borrower has made such payment in full to the Agent on such date
and the Agent may, in reliance upon such assumption, cause to be distributed to
each such Lender Party on such due date an amount equal to the amount then due
such Lender Party. If and to the extent the Borrower shall not have so made such
payment in full
56
to the Agent, each such Lender Party shall repay to the Agent forthwith on
demand such amount distributed to such Lender Party together with interest
thereon, for each day from the date such amount is distributed to such Lender
Party until the date such Lender Party repays such amount to the Agent, at the
Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender Party and the Agent,
taxes that are imposed on its overall net income by the United States and taxes
that are imposed on its overall net income (and franchise taxes in lieu thereof)
that are imposed on such Lender Party or the Agent by the state or foreign
jurisdiction under the laws of which such Lender Party or the Agent (as the case
may be) is organized or any political subdivision thereof and, in the case of
each Lender Party, taxes that are imposed on its overall net income (and
franchise taxes in lieu thereof) that are imposed on such Lender Party by the
state or foreign jurisdiction of such Lender Party's Applicable Lending Office
or any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "TAXES"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any Note to any
Lender Party or the Agent, (i) the sum payable by the Borrower shall be
increased as may be necessary so that after the Borrower and the Agent have made
all required deductions (including deductions applicable to additional sums
payable under this Section 2.12) such Lender Party or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other governmental authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performance under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "OTHER TAXES").
(c) The Borrower shall indemnify each Lender Party and the
Agent for and hold it harmless against the full amount of Taxes and Other Taxes,
and for the full amount of taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 2.12, paid by such Lender Party or the Agent
(as the case may be) and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such Lender Party or
the Agent (as the case may be) makes written demand therefor.
57
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original receipt of payment thereof or a certified copy of such receipt. In
the case of any payment hereunder or under the Notes by or on behalf of the
Borrower through an account or branch outside the United States or on behalf of
the Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"UNITED STATES" and "UNITED STATES PERSON" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Restatement Lender
or the Issuing Bank, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it became a Lender Party in the case of each other
Lender Party, and from time to time thereafter upon expiration of such forms or
if requested in writing by the Borrower or the Agent (but only so long
thereafter as such Lender Party remains lawfully able to do so), provide the
Agent and the Borrower with Internal Revenue Service forms 1001 and W-8 or forms
W-9 and 4224 or (in the case of a Lender Party that has certified in writing to
the Agent that it is not a "bank" as defined in Section 881(c)(3)(A) of the
Internal Revenue Code) form W-8 (and, if such Lender Party delivers a form W-8,
a certificate representing that such Lender Party is not a "bank" for purposes
of Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Internal Revenue Code)), as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Lender Party is exempt from or is entitled to a reduced
rate of United States withholding tax on payments under this Agreement or the
Notes or, in the case of a Lender Party providing a form W-8, certifying that
such Lender Party is a foreign corporation, partnership, estate or trust. If the
forms provided by a Lender Party at the time such Lender Party first becomes a
party to this Agreement indicate a United States withholding tax rate in excess
of zero, withholding tax at such rate shall be considered excluded from Taxes
for periods governed by such forms; provided, however, that if, at the effective
date of the Assignment and Acceptance pursuant to which a Lender Party becomes a
party to this Agreement, the Lender Party assignor was entitled to payments
under subsection (a) of this Section 2.12 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender Party
assignee on such date. If any form or document referred to in this subsection
(e) requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the Third Restatement Date
by Internal Revenue Service form 1001, 4224, W-8 (or the related certificate
described above) or W-9, that the Lender Party reasonably
58
considers to be confidential, the Lender Party shall give notice thereof to the
Borrower and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which a Lender Party has
failed to provide the Borrower with the appropriate form described in subsection
(e) above (other than if such failure is due to a change in law occurring after
the date on which a form originally was required to be provided or if such form
otherwise is not required under subsection (e)), such Lender Party shall not be
entitled to gross-up under subsection (a) above or indemnification under
subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed by the
United States; provided, however, that should a Lender Party become subject to
Taxes because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Lender Party shall reasonably request to assist
such Lender Party to recover such Taxes.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party
shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) (a) on account of
Obligations due and payable to such Lender Party hereunder and under the Notes
at such time in excess of its ratable share (according to the proportion of (i)
the amount of such Obligations due and payable to such Lender Party at such time
to (ii) the aggregate amount of the Obligations due and payable to all Lender
Parties hereunder and under the Notes at such time) of payments on account of
the Obligations due and payable to all Lender Parties hereunder and under the
Notes at such time obtained by all the Lender Parties at such time or (b) on
account of Obligations owing (but not due and payable) to such Lender Party
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender Party at such time to (ii) the aggregate amount of the Obligations owing
(but not due and payable) to all Lender Parties hereunder and under the Notes at
such time) of payments on account of the Obligations owing (but not due and
payable) to all Lender Parties hereunder and under the Notes at such time
obtained by all of the Lender Parties at such time, such Lender Party shall
forthwith purchase from the other Lender Parties such participations in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such other Lender
Party shall repay to the purchasing Lender Party the purchase price to the
extent of such Lender Party's ratable share (according to the proportion of (i)
the purchase price paid to such Lender Party to (ii) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (i) the
amount of such other Lender Party's required repayment to (ii) the total amount
so recovered from the purchasing Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.13 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off)
59
with respect to such participation as fully as if such Lender Party were the
direct creditor of the Borrower in the amount of such participation.
SECTION 2.14. Use of Proceeds. (a) The proceeds of the Term
Advances shall be available (and the Borrower agrees that it shall use such
proceeds) to pay consideration in order to consummate the Transaction in
accordance with the terms of the Purchase Agreement and the other transactions
contemplated hereby and transaction fees and expenses in connection therewith.
(b) The proceeds of the Working Capital Advances and issuances
of Letters of Credit shall be available (and the Borrower agrees that it shall
use such proceeds and Letters of Credit) solely, (i) to pay transaction fees and
expenses in connection with the transactions contemplated hereby and (ii) to
provide working capital from time to time for, and for the general corporate
purposes of, the Borrower and its Subsidiaries.
SECTION 2.15. Evidence of Debt. (a) Each Lender shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder. The Borrower agrees
that upon notice by any Lender Party to the Borrower (with a copy of such notice
to the Agent) to the effect that a Note is required or appropriate in order for
such Lender to evidence (whether for purposes of pledge, enforcement or
otherwise) the Advances owing to, or to be made by, such Lender Party, the
Borrower shall promptly execute and deliver to such Lender a Term A Note, a Term
B Note and a Working Capital Note, as applicable, payable to the order of such
Lender Party in a principal amount equal to the Term A Commitment, Term B
Commitment or Revolving Credit Commitment, respectively, of such Lender Party.
All references to Notes in the Loan Documents shall mean Notes, if any, to the
extent issued hereunder.
(b) The Register maintained by the Agent pursuant to Section
8.07(d) shall include a control account, and a subsidiary account for each
Lender, in which accounts (taken together) shall be recorded (i) the date and
amount of each Borrowing made hereunder, the Type of Advances comprising such
Borrowing and, if appropriate, the Interest Period applicable thereto, (ii) the
terms of each Assignment and Acceptance delivered to and accepted by it, (iii)
the amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender Party hereunder, and (iv) the amount of
any sum received by the Agent from the Borrower hereunder and each Lender
Party's share thereof.
(c) Entries made in good faith by the Agent in the Register
pursuant to subsection (b) above, and by each Lender Party in its account or
accounts pursuant to subsection (a) above, shall be prima facie evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrower to, in the case of the Register, each Lender
60
Party and, in the case of such account or accounts, such Lender Party, under
this Agreement, absent manifest error; provided, however, that the failure of
the Agent or such Lender Party to make an entry, or any finding that an entry is
incorrect, in the Register or such account or accounts shall not limit or
otherwise affect the obligations of the Borrower under this Agreement.
(d) References herein to Notes shall mean and be references to Term A
Notes, the Term B Notes and the Working Capital Notes, unless otherwise
specifically indicated, in each case to the extent issued hereunder.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Third Restatement
Date. The amendment and restatement of the Existing Credit Agreement pursuant
hereto shall become effective on and as of the date (the "THIRD RESTATEMENT
Date"), which shall occur on or prior to February 12, 1999, on which each of the
following conditions precedent shall have been satisfied:
(a) The Third Restatement Assignment Agreement shall be in
full force and effect and shall not have been terminated and, pursuant
thereto, the Commitments and Advances (as defined in the Existing
Credit Agreement) of each Existing Lender shall have been sold and
assigned to the Restatement Lenders hereunder on the terms and in the
amounts set forth in the Third Restatement Assignment Agreement or
shall have been terminated in accordance with the terms of the Existing
Credit Agreement and all accrued interest and fees relating to the
Existing Credit Agreement shall have been paid to the Existing Lenders.
(b) The Lender Parties shall be satisfied with:
(i) the corporate and legal structure and
capitalization of each of the Loan Parties, both before and
after giving effect to the Transaction, including the terms
and conditions of the charter, bylaws and each class of
capital stock of each of the Loan Parties and of each
agreement or instrument relating to such structure or
capitalization and (ii) the terms and conditions of the
Transaction and the other transactions contemplated thereby or
a condition thereto (including, without limitation, all legal,
tax and financial aspects thereof); and
(ii) the terms and conditions of each of the
Transaction Documents and each of the other Related Documents.
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(c) Each of the Transaction Documents shall be in full force
and effect and the Transaction, including, without limitation, the
Ansam Asset Acquisition, shall be consummated strictly in accordance
with the terms of such agreements, without any waiver or amendment not
consented to by the Lender Parties of any term, provision or condition
set forth therein, and in compliance with all applicable laws, and the
Lender Parties shall be satisfied that the assets and earnings of the
Borrower are sufficient to support the Obligations of the Borrowers
under this Agreement and the timely amortization of all Debt and other
Obligations of the Borrower.
(d) (i) In the case of each of the Loan Parties, other than
the Ex-Cell Group and Ansam, no Material Adverse Change shall have
occurred since January 4, 1998; (ii) in the case of the Ex-Cell Group,
no material adverse change in the business, condition (financial or
otherwise), operations, performance, properties or prospects of the
Ex-Cell Group shall have occurred since June 30, 1998; and (iii) in the
case of Ansam, no material adverse change in the business, condition
(financial or otherwise), operations, performance, properties or
prospects of Ansam shall have occurred since December 31, 1997.
(e) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Ex-Cell Group, Ansam, any Loan
Party or any of their properties, including any Environmental Action,
pending, or to the best of the Borrower's knowledge threatened, before
any court, governmental agency or arbitrator that (i) could reasonably
be expected to have a Material Adverse Effect, or (ii) purports to
affect the legality, validity or enforceability of this Agreement, any
Note, any other Loan Document, any Related Document or the consummation
of the Transaction and the other transactions contemplated hereby and
thereby.
(f) The Borrower shall have paid to the Agent (i) all fees and
expenses accrued under the Existing Agreement through the Third
Restatement Date and (ii) all fees required under the Fee Letter and
all reasonable fees and expenses of counsel to the Agent.
(g) All governmental and third party consents and approvals
necessary in connection with this Agreement and the Transaction and the
transactions contemplated thereby shall have been obtained (without the
imposition of any conditions other than those that are reasonably
acceptable to the Agent) and shall remain in effect, and all applicable
waiting periods shall have expired without any action being taken by
any competent authority and no law or regulation shall be applicable,
in the reasonable judgment of the Agent, that restrains, prevents or
imposes adverse conditions upon this Agreement or any related
transactions.
62
(h) All Existing Debt, other than the Debt identified on
Schedule 3.01(h)(ii) (the "SURVIVING DEBT"), has been prepaid, redeemed
or defeased in full or otherwise satisfied and extinguished and all
such Surviving Debt is on terms and conditions satisfactory to the
Lender Parties.
(i) The Agent shall have received on or before the Third
Restatement Date the following, each dated the Third Restatement Date
(unless otherwise specified), in form and substance reasonably
satisfactory to the Agent (unless otherwise specified) and (except for
the Notes) in sufficient copies for each Lender:
(i) The Notes payable to the order of the Restatement
Lenders to the extent requested by any Lender pursuant to
Section 2.15.
(ii) Certified copies of the resolutions of the Board
of Directors of the Borrower, each other Loan Party, each of
the Ex-Cell Group, and Ansam approving this Agreement, the
Notes, each other Loan Document and each Related Document to
which it is or is to be a party, and of all documents
evidencing other necessary corporate action and governmental
and other third party approvals and consents, if any, with
respect to this Agreement, the Notes, each other Loan Document
and each Related Document to which it is or is to be a party.
(iii) A copy of the charter or articles (or other
similar organizational document) of the Borrower, each other
Loan Party, each of the Ex-Cell Group, and Ansam and each
amendment thereto, certified (as of a date reasonably near the
Third Restatement Date) by the Secretary of State of the State
of such Loan Party's state of incorporation or organization as
being a true and correct copy thereof.
(iv) A copy of a certificate of the Secretary of
State of the state of incorporation or organization of each
Loan Party, each of the Ex-Cell Group and Ansam reasonably
near the Third Restatement Date, listing the charter or other
organizational documents of such Loan Party and each amendment
thereto on file in his office and certifying that (A) such
amendments are the only amendments to such Loan Party's
charter or other organizational documents on file in his
office, (B) such Loan Party has paid all franchise taxes to
the date of such certificate and (C) such Loan Party is duly
incorporated or organized and in good standing under the laws
of the State of its state of incorporation or organization.
(v) Copies of certificates of the Secretary of State
of each jurisdiction in which each Loan Party, each of the
Ex-Cell Group and Ansam is qualified or licensed as a foreign
corporation in the United States, dated reasonably near the
Third Restatement Date, in each case stating that such Person
is duly qualified and
63
in good standing as a foreign corporation in such jurisdiction
and has filed all annual reports required to be filed to the
date of such certificate.
(vi) A certificate of each Loan Party and each of the
Ex-Cell Group (other than Ex-Cell's Foreign Subsidiaries),
signed on behalf of such Loan Party, Ex-Cell, Ex-Cell
Bentonville and Linde, as the case may be by its President or
a Vice President and its Secretary or an Assistant Secretary,
dated the Third Restatement Date (the statements made in which
certificate shall be true on and as of the Third Restatement
Date), certifying as to:
(A) the absence of any amendments to the
charter or articles (or other similar organizational
document) of such Loan Party, Ex-Cell, Ex-Cell
Bentonville and Linde, as the case may be, since the
date of the Secretary of State's certificate referred
to in Section 3.01(i)(iv);
(B) the accuracy and completeness of the
bylaws (or other similar organizational document) of
such Loan Party, Ex-Cell, Ex-Cell Bentonville and
Linde, as the case may be, as in effect on the Third
Restatement Date (a copy of which was attached to
such certificate);
(C) the due incorporation and good standing
of such Loan Party, Ex-Cell, Ex-Cell Bentonville and
Linde, as the case may be, as a corporation organized
under the laws of the jurisdiction of its
incorporation, and the absence of any proceeding for
the dissolution or liquidation of such Loan Party;
(D) the accuracy of the representations and
warranties set forth in the Loan Documents to which
such Loan Party, Ex-Cell, Ex-Cell Bentonville and
Linde, as the case may be, is or is to be a party as
though made on and as of the Third Restatement Date,
before and after giving effect to the extension of
credit on the Third Restatement Date and to the
application of proceeds therefrom; and
(E) the absence of any event occurring and
continuing, or resulting from the Third Restatement
Date, or the application of proceeds therefrom, that
constitutes a Default.
(vii) A certificate of the Secretary or an Assistant
Secretary of each Loan Party and each of the Ex-Cell Group
(other than Ex-Cell's Foreign Subsidiaries) certifying the
names and true signatures of the officers of such Loan Party
authorized to sign this Agreement, the Notes, each other Loan
Document
64
and each Related Document to which it is or is to be a party
and the other agreements, instruments and documents to be
delivered hereunder and thereunder.
(viii) A third amended and restated security
agreement in substantially the form of Exhibit D-1 hereto
(together with each other security agreement delivered
pursuant to Section 5.01(m) or 5.01(o), in each case as
amended, supplemented or otherwise modified from time to time
in accordance with its terms, the "THIRD AMENDED AND RESTATED
SECURITY AGREEMENT"), duly executed by each of the Loan
Parties and each of the Ex-Cell Group (other than Ex-Cell's
Foreign Subsidiaries), together with:
(A) certificates representing the Pledged
Shares, if any not previously delivered to the Agent,
and accompanied by undated stock powers executed in
blank, and instruments evidencing the Pledged Debt,
if any, not previously delivered to the Agent and
referred to in the Third Amended and Restated
Security Agreement, duly endorsed in blank;
(B) duly executed financing statements (Form
UCC-1 or Form UCC-3 or comparable forms), which are
required to be filed as at the Third Restatement Date
under the Uniform Commercial Code of the States of
all jurisdictions that the Agent may have deemed
necessary or desirable in order to maintain the
perfection and priority of the Liens created under
the Collateral Documents, covering the Collateral
described in the Second Amended and Restated Security
Agreement;
(C) evidence of the maintenance of the
insurance required by the terms of the Third Amended
and Restated Security Agreement;
(D) copies of the Assigned Agreements, if
any not previously delivered to the Agent and
referred to in the Third Amended and Restated
Security Agreement, together with any required
consent to such assignment, in substantially a form
satisfactory to the Agent, duly executed by each
party to such Assigned Agreements other than the Loan
Parties;
(E) confirmation, to the extent required by
the Agent, of each of the Blocked Account Letters
referred to therein, duly executed by the relevant
Loan Party, as the case may be, and the bank referred
to in the Third Amended and Restated Security
Agreement;
(F) evidence that all other actions
(including, without limitation, the completion of all
other recordings and filings of or with respect to
the Third Amended and Restated Security Agreement)
that may
65
be deemed necessary or that the Agent may deem
desirable in order to maintain the perfection and to
protect the first priority liens and security
interests created and maintained under the Security
Agreement, as amended and restated by the Third
Amended and Restated Security Agreement, had been
taken or would be taken in accordance with the terms
of the Loan Documents.
(ix) A consent (the "GLENOIT OF CANADA CONSENT") in
substantially the form of Exhibit N hereto, duly executed by
Glenoit of Canada.
(x) A modification and extension agreement in
substantially the form of Exhibit E-1 hereto (the
"MODIFICATION AND EXTENSION AGREEMENT"), to the deed of trust,
trust deed and mortgage covering the properties (other than
the property located at 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxx
Xxxxxxxx) specified in Part I of Schedule 4.01(gg) (as
amended, supplemented or otherwise modified from time to time
in accordance with its terms, the "EXISTING DEED OF TRUST"),
duly executed by the Borrower, together with:
(A) evidence that counterparts of the
Modification and Extension Agreement to the Existing
Deed of Trust has been duly delivered to Xxxxxxx
Title Guaranty Company on or before the Third
Restatement Date and in all filing or recording
offices that the Agent deemed necessary or desirable
in order to maintain a valid first and subsisting
Lien on the property described in such Existing Deed
of Trust in favor of the Agent and the Restatement
Lenders and that all filing and recording taxes and
fees have been paid,
(B) confirmation of fully paid Xxxxxxx Title
Guaranty Company title insurance policies or
commitments to issue such title insurance policies
(in each case, the "DEED OF TRUST POLICIES") in form
and substance, with endorsements and in amounts
reasonably acceptable to the Agent, issued, coinsured
and reinsured, if appropriate, by title insurers
acceptable to the Agent, insuring the Existing Deed
of Trust to be a valid first and subsisting Lien on
the property described therein, free and clear of all
defects (including, without limitation, mechanics'
and materialmen's Liens) and encumbrances, excepting
only Permitted Encumbrances, and providing for such
other affirmative insurance (including endorsements
for future advances under the Loan Documents and for
mechanics' and materialmen's Liens) and such
coinsurance and direct access reinsurance as the
Agent deemed necessary or desirable,
66
(C) evidence of the insurance required by
the terms of the Existing Deed of Trusts, and
(D) evidence that all other action that the
Agent may deem necessary or desirable in order to
maintain the perfection and to protect the valid
first and subsisting Liens on the property described
in the Existing Deed of Trust has been taken.
(xi) A deed of trust, trust deed and mortgage, in
substantially the form of Exhibit E-2 hereto, covering each of
the properties specified in Part II of Schedule 4.01(gg) (each
as amended, supplemented or otherwise modified from time to
time in accordance with its terms, a "DEED OF Trust"), duly
executed by the Borrower, together with:
(A) evidence that counterparts of each Deed
of Trust have been duly delivered to Xxxxxxx Title
Guaranty Company on or before the Third Restatement
Date in all filing or recording offices that the
Agent deems necessary or desirable in order to create
a valid first and subsisting Lien on the property
described therein in favor of the Agent and the
Lenders and that all filing and recording taxes and
fees have been paid,
(B) fully paid Deed of Trust Policies in
form and substance, with endorsements and in amounts
reasonably acceptable to the Agent, issued, coinsured
and reinsured by title insurers acceptable to the
Agent, insuring each Deed of Trust to be a valid
first and subsisting Lien on the property described
therein, free and clear of all defects (including,
without limitation, mechanics' and materialmen's
Liens) and encumbrances, excepting only Permitted
Encumbrances, and providing for such other
affirmative insurance (including endorsements for
future advances under the Loan Documents and for
mechanics' and materialmen's Liens) and such
coinsurance and direct access reinsurance as the
Agent deems necessary or desirable,
(C) evidence of the insurance required by
the terms of each Deed of Trust, and
(D) evidence that all other action that the
Agent deems necessary or desirable in order to create
valid first and subsisting Liens on the property
described in each Deed of Trust has been taken.
(xii) A third amended and restated parent guarantee
(the "PARENT GUARANTEE") in substantially the form of Exhibit
F-1 hereto and, a third amended
67
and restated subsidiary guarantee (the "U.S. SUBSIDIARY
GUARANTEE") in substantially the form of Exhibit F-2 hereto
(together with each other guarantee delivered pursuant to
Section 5.01(m) and Section 5.01(o), in each case as amended,
supplemented or otherwise modified from time to time in
accordance with its terms, the "GUARANTEES"), duly executed by
Universal and each Subsidiary Guarantor, respectively.
(xiii) Certified copies of each of the Related
Documents as in effect on the Third Restatement Date and the
Key Employee Employment Agreements, duly executed by the
parties thereto and in form and substance satisfactory to the
Restatement Lenders, together with all agreements, instruments
and other documents delivered in connection therewith.
(xiv) Such financial, business and other information
regarding the Ex-Cell Group, Ansam and each Loan Party and its
Subsidiaries as the Lender Parties have requested, including,
without limitation, information as to possible contingent
liabilities, tax matters, environmental matters, obligations
under Plans, Multiemployer Plans and Welfare Plans, collective
bargaining agreements and other arrangements with employee,
audited financial statements of the Ex-Cell Group dated June
30, 1997 and June 30, 1998 and of Ansam dated December 31,
1997, the "Ansam Six Month Statements" (as defined in the
Purchase Agreement), the pro forma Consolidated combined
balance sheet as to the Loan Parties, the Ex-Cell Group and
Ansam dated as of January 2, 1999, Consolidated income
statements for each of the Loan Parties, the Ex-Cell Group and
Ansam, and the Consolidated statement of cash flow for the
Loan Parties for the 12 months ended January 2, 1999 and
forecasts prepared by management, in form and substance
satisfactory to the Lender Parties, of balance sheets, income
statements and cash flow statements on a monthly basis for
Fiscal Years 1999 and 2000 and on an annual basis for each
Fiscal Year thereafter until the Termination Date.
(xv) All consents and agreements requested by the
Agent executed by the lessors of the leaseholds, respectively,
on which Collateral owned by Ex-Cell or any of its U.S.
Subsidiaries or any Loan Party, as applicable, is located,
which provides, among other things, that such lessor waives
any lien it may now or hereafter have on any such Collateral
located on the premises thereof and that, in the case of all
such leaseholds, the Agent has the right to receive notice of
any default by Ex-Cell and its Subsidiaries and such Loan
Party, as the case may be, under such lease and to repossess
any such Collateral located thereon upon the occurrence and
during the continuance of an Event of Default, and such other
rights as may be reasonably requested by the Agent in any such
consent and agreement.
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(xvi) A certificate, signed by the chief financial
officer of each of the Borrower and Universal, in
substantially the form of Exhibit I hereto, attesting to the
Solvency of the Borrower and its Subsidiaries taken as a whole
and Universal and its Subsidiaries taken as a whole,
respectively, after giving effect to the transactions
contemplated hereby.
(xvii) Evidence as at the Third Restatement Date of
insurance, naming the Agent as additional insured and loss
payee with such responsible and reputable insurance companies
or associations, and in such amounts and covering such risks,
as were deemed satisfactory to the Lender Parties, including,
but not limited to, product liability, title, business
interruption, physical damage to property or equipment in form
and substance satisfactory to the Agent.
(xviii) Environmental assessment reports, delivered
to the Borrower by the Sellers pursuant to the terms of the
Purchase Agreement, as to any hazards, costs or liabilities
under Environmental Laws to which Ex-Cell or any of its
Subsidiaries may be subject, the amount and nature of which
and the Borrower's plans with respect to which shall be
acceptable to the Lender Parties.
(xix) A letter, in form and substance satisfactory to
the Agent, from the Borrower to PriceWaterhouse Coopers, its
independent certified public accountants as of the Third
Restatement Date, advising such accountants that the Agent and
the Lender Parties were authorized to exercise all rights of
the Borrower to require such accountants to disclose any and
all financial statements and any other information of any kind
that they may have with respect to each of the Loan Parties
and directing such accountants to comply with any reasonable
request of the Agent or any Lender Party for such information
and acknowledging that the Lender Parties have relied and will
rely upon the financial statements of the Borrower examined
by, and the related reports of, such accountants in
determining whether to enter into, and to take action or
refrain from taking action under, the Loan Documents.
(xx) A Notice of Borrowing and a Borrowing Base
Certificate of the Borrower and its Subsidiaries, taken as a
whole after giving effect to the Transaction and the
transactions contemplated thereby, as of January 31, 1999, in
substantially the form of Exhibit I hereto, duly executed by
the Borrower.
(xxi) A favorable opinion of Xxxxxxxx & Xxxxx,
special counsel for the Loan Parties, in substantially the
form of Exhibit J hereto.
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(xxii) A favorable opinion of Bridgers, Horton,
Xxxxxxxx & Xxxxxxx, special North Carolina counsel to the Loan
Parties, in substantially the form of Exhibit L hereto.
(xxiii) A favorable opinion of Friday, Xxxxxxxx &
Xxxxx, special Arkansas counsel to the Loan Parties, in
substantially the form of Exhibit M hereto.
(xxiv) An undertaking (the "JUNIOR NOTEHOLDERS
UNDERTAKING") by the holders of the Junior Notes in
substantially the Form of Exhibit O hereto, duly executed by
at least 90% of the holders of the Junior Notes other than
those notes held by Soannes.
(xxv) a deed of charge over shares in substantially
the form of Exhibit D-2 hereto (each a "Deed of Charge"), duly
executed by each of AmPac, Ex-Cell and Ex-Cell Fashions (H.K.)
Limited; and
SECTION 3.02. Conditions Precedent to Each Borrowing, Swing
Line Advance and Issuance. The obligation of each Appropriate Lender to make an
Advance (other than a Letter of Credit Advance made by the Issuing Bank or a
Working Capital Lender pursuant to Section 2.03(c) and a Swing Line Advance made
by a Working Capital Lender pursuant to Section 2.02(b)) on the occasion of each
Borrowing (including on the Third Restatement Date), and the obligation of the
Issuing Bank to issue a Letter of Credit (including the initial issuance) and
the obligation of the Swing Line Bank to make Swing Line Advances, shall be
subject to the further conditions precedent that on the date of such Borrowing
(including a Swing Line Advance made by the Swing Line Bank), issuance or Swing
Line Advance, (a) the following statements shall be true (and each of the giving
of the applicable Notice of Borrowing (including a Swing Line Advance made by
the Swing Line Bank), Notice of Issuance and the acceptance by the Borrower of
the proceeds of such Borrowing or of such Letter of Credit shall constitute a
representation and warranty by the Borrower that both on the date of such notice
and on the date of such Borrowing or issuance such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of such date, before and after giving
effect to such Borrowing or issuance and to the application of the
proceeds therefrom, as though made on and as of such date other than
any such representations or warranties that, by their terms, refer to a
specific date other than the date of such Borrowing or issuance, in
which case as of such specific date;
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default; and
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(iii) for each Working Capital Advance, Swing Line Advance
made by the Swing Line Bank or issuance of any Letter of Credit, the
sum of the Loan Values of the Eligible Collateral (as determined by the
Agent based on the most recent Borrowing Base Certificate delivered to
the Lender Parties hereunder) exceeds the aggregate principal amount of
the Working Capital Advances plus the Swing Line Advances plus the
Letter of Credit Advances to be outstanding plus the aggregate
Available Amount of all Letters of Credit then outstanding after giving
effect to such Advance or issuance, respectively;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Appropriate Lender through the Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to, approved by, or acceptable or satisfactory to, the Lender Parties unless an
officer of the Agent responsible for the transactions contemplated by the Loan
Documents shall have received notice from such Lender Party prior to the Third
Restatement Date specifying its objection thereto and such Lender Party shall
not have made available to the Agent such Lender Party's ratable portion of the
Borrowing on the Third Restatement Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Loan
Parties. The Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which
it owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure to so
qualify or be licensed could not have a Material Adverse Effect and
(iii) has all requisite corporate power and authority (including,
without limitation, all governmental licenses, permits and other
approvals) to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted. All of
the outstanding Equity Interests of each of Glenoit Assets Corp.,
AmPac, Promising Star, Grand Avenue and Glenoit of Canada have been
validly issued, are fully paid and non-assessable and are owned,
directly or indirectly, by the Borrower in the amounts and types
specified on Schedule 4.01(a) free and clear of all Liens. All of the
Equity Interests of the Borrower have been validly issued, are fully
paid
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and non-assessable and are owned by Universal in the amounts and
types specified on Schedule 4.01(a) free and clear of all Liens. All of
the Equity Interests of Universal have been validly issued, are fully
paid and non-assessable and are owned by the Investor Group, in the
amounts and types specified on Schedule 4.01(a) free and clear of all
Liens. All of the Equity Interests of Ex-Cell, Ex-Cell Bentonville,
Linde, Ex-Cell (China), Ex-Cell (Far East) and Ex-Cell (H.K.) are
validly issued and are fully paid and non-assessable and, upon the
consummation of the Transaction, will be owned, directly or indirectly,
by the Borrower, in the amounts and types specified on Schedule 4.01(a)
free and clear of all Liens. For purposes of this Agreement, a Person
wholly owns a Subsidiary notwithstanding that another Person holds an
Equity Interest in such Subsidiary by reason only of a requirement of
the law of the jurisdiction of incorporation of such Subsidiary.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the
Third Restatement Date (as to each such Subsidiary) the jurisdiction of
its incorporation, the number of shares of each class of Equity
Interests authorized, and the number outstanding, on the Third
Restatement Date and the percentage of the outstanding shares of each
such class of its Equity Interests owned (directly or indirectly) by
such Loan Party and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar rights
at the Third Restatement Date. All of the outstanding Equity Interests
in each Loan Party's Subsidiaries have been validly issued, are fully
paid and non-assessable and are owned by such Loan Party or one or more
of its Subsidiaries free and clear of all Liens, except those created
under the Loan Documents. Each such Subsidiary (i) is a corporation
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, (ii) is duly qualified and in
good standing as a foreign corporation in each other jurisdiction in
which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the
failure to so qualify or be licensed could not have a Material Adverse
Effect and (iii) has all requisite corporate power and authority
(including, without limitation, all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party
of this Agreement, the Notes, each other Loan Document and each of the
Related Documents to which it is or is to be a party, and the
consummation of the Transaction and the other transactions contemplated
hereby and thereby, are within such Loan Party's corporate powers, have
been duly authorized by all necessary corporate action, and do not (i)
contravene such Loan Party's charter or bylaws, (ii) violate any law
(including, without limitation, the Securities Exchange Act of 1934 and
the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970), rule, regulation (including,
without limitation, Regulation X of the Board of Governors of the
Federal
72
Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any material contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting any Loan Party, any of its Subsidiaries or any of their
properties or (iv) except for the Liens created under the Loan
Documents, result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of any Loan Party or any
of its Subsidiaries. No Loan Party or any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which could have a
Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of this
Agreement, the Notes, any other Loan Document or any Related Document
to which it is or is to be a party, or for the consummation of the
Transaction and the other transactions contemplated hereby or thereby,
(ii) the grant by any Loan Party of the Liens granted by it pursuant to
the Collateral Documents, (iii) the perfection or maintenance of the
Liens created by the Collateral Documents (including the first priority
nature thereof) or (iv) the exercise by the Agent or any Lender Party
of its rights under the Loan Documents or the remedies in respect of
the Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(d), all of which have been duly obtained, taken, given or
made and are in full force and effect (other than filings with the
patent, trademark and copyright offices of the United States and in the
relevant foreign countries and filings of Deeds of Charge in the
applicable jurisdictions). All applicable waiting periods in connection
with the transactions contemplated hereby and thereby have expired
without any action having been taken by any competent authority
restraining, preventing or imposing materially adverse conditions upon
the Transaction or the rights of the Loan Parties or their Subsidiaries
freely to transfer or otherwise dispose of, or to create any Lien on,
any properties now owned or hereafter acquired by any of them.
(e) This Agreement has been, and each of the Notes, each other
Loan Document and each Related Document when delivered hereunder will
have been, duly executed and delivered by each Loan Party thereto. This
Agreement is, and each of the Notes, each other Loan Document and each
Related Document when delivered hereunder will be, the legal, valid and
binding obligation of each Loan Party thereto, enforceable against such
Loan Party in accordance with its terms except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or limiting creditors' rights or by equitable
principles generally.
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(f) (i) The Consolidated and consolidating balance sheets of
the Borrower and its Subsidiaries as at January 3, 1998, and the
related Consolidated and consolidating statements of income and
Consolidated statement of cash flow of the Borrower and its
Subsidiaries for the Fiscal Year then ended, accompanied by an opinion
as to the Consolidated statements of PriceWaterhouse Coopers,
independent public accountants, and the Consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as at January 2,
1999, and the related Consolidated and consolidating statements of
income and Consolidated statement of cash flow of the Borrower and its
Subsidiaries for the twelve Fiscal Months then ended, duly certified by
the chief financial officer of the Borrower, copies of which have been
furnished to each Lender Party, fairly present, subject, in the case of
said balance sheet as at January 2, 1999, and said statements of income
and cash flow for the twelve Fiscal Months then ended, to year-end
audit adjustments and the absence of financial statement footnotes, the
financial condition of the Borrower and its Subsidiaries as at such
dates and the results of the operations of the Borrower and its
Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles applied on a consistent
basis, and since January 3, 1998 there has been no Material Adverse
Change.
(ii) The Consolidated and consolidating balance
sheets of the Ex-Cell Group as at June 30, 1998, and the related
Consolidated and consolidating statements of income and Consolidated
statement of cash flow of the Ex-Cell-Group for the Fiscal Year then
ended, accompanied by an opinion as to the Consolidated statements
acceptable to the Lender Parties of Xxxxx, Xxxxxx & Company, LLP,
independent public accountants, and the Consolidated and consolidating
balance sheets of the Ex-Cell Group as at December 31, 1998, and the
related Consolidated and consolidating statements of income and
Consolidated statement of cash flow of the Ex-Cell Group for the twelve
Fiscal Months then ended, duly certified by the chief financial officer
of Ex-Cell, copies of each of which have been furnished to each Lender
Party, fairly present, subject, in the case of said balance sheet as at
December 31, 1998 and said statements of income and cash flow for the
twelve Fiscal Months then ended, to year-end audit adjustments and the
absence of financial statement footnotes, the financial condition of
the Ex-Cell Group as at such dates and the results of the operations of
the Ex-Cell Group for the periods ended on such dates, all in
accordance with generally accepted accounting principles applied on a
consistent basis, and since June 30, 1998 there has been no material
adverse change in the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Ex-Cell Group.
(iii) The audited statements of assets, liabilities
and members' equity of Ansam as at December 31, 1997, and the related
statements of changes in members' equity, and revenue and expenses, and
cash flow of Ansam for the Fiscal Year then ended, accompanied by an
opinion acceptable to the Lender Parties of Xxxxx, Xxxxxx & Company,
LLP, independent public accountants, and the reviewed statements of
assets,
74
liabilities and members' equity of Ansam as at June 30, 1998,
including footnotes thereto, and the related statements of changes in
members' equity, and revenue and expenses, and cash flow of Ansam for
the six Fiscal Months then ended, accompanied by an opinion acceptable
to the Lender Parties of Xxxxx, Xxxxxx & Company, LLP, independent
public accountants, copies of each of which have been furnished to each
Lender Party, fairly present, subject, in the case of said statements
of assets, liabilities and members' equity as at December 31, 1997 and
said statements of changes in members' equity, and revenue and
expenses, and cash flow for the six Fiscal Months then ended, to
year-end audit adjustments and the absence of financial statement
footnotes other than as specified herein, the financial condition of
Ansam as at such dates and the results of the operations of Ansam for
the periods ended on such dates, all on a federal income tax basis, and
since December 31, 1997 there has been no material adverse change in
the business, condition (financial or otherwise), operations,
performance, properties or prospects of Ansam.
(iv) The Consolidated and consolidating balance sheets of
AmPac and its Subsidiaries as at December 31, 1997, and the related
Consolidated and consolidating statements of income and Consolidated
statement of cash flow of AmPac and its Subsidiaries for the Fiscal
Year then ended, accompanied by an opinion as to the Consolidated
statements of KPMG Peat Marwick, independent public accountants, and
the Consolidated and consolidating balance sheets of AmPac and its
Subsidiaries as at October 2, 1998, and the related Consolidated and
consolidating statements of income and Consolidated statement of cash
flow of AmPac and its Subsidiaries for the nine Fiscal Months then
ended, duly certified by a co-chief executive officer of AmPac, copies
of which have been furnished to each Lender Party, fairly present,
subject, in the case of said balance sheet as at October 2, 1998, and
said statements of income and cash flow for the nine Fiscal Months then
ended, to year-end audit adjustments and the absence of financial
statement footnotes, the financial condition of AmPac and its
Subsidiaries as at such dates and the results of the operations of
AmPac and its Subsidiaries for the periods ended on such dates, all in
accordance with generally accepted accounting principles applied on a
consistent basis, and since December 31, 1997 there has been no
Material Adverse Change.
(g) The Consolidated and combined pro forma balance sheet of
the Borrower and its Subsidiaries, the Ex-Cell Group and Ansam as at
January 2, 1999, certified by the chief financial officer of the
Borrower, copies of which have been furnished to each Lender Party,
fairly present the Consolidated pro forma financial condition of the
Borrower and its Subsidiaries as at such date after giving effect to
the Transaction and the other transactions contemplated hereby, all in
accordance with GAAP.
(h) The Consolidated forecasted balance sheets, income
statements and cash flow statements of the Borrower and its
Subsidiaries (including the Ex-Cell Group and Ansam in respect of
Section 3.01(i)(xiv)) delivered to the Lender Parties pursuant to
75
Section 3.01(i)(xiv) or 5.03(e) were prepared in good faith on the
basis of the assumptions stated therein, which assumptions were fair in
the light of conditions existing at the time of delivery and on the
Third Restatement Date of such forecasts, and represented, at the time
of delivery, the Borrower's best estimate of its future financial
performance.
(i) Neither the Borrower Information nor any other
information, exhibit or report (excluding any financial projections)
furnished by any Loan Party or any Seller to the Agent or any Lender
Party in connection with the negotiation of the Loan Documents or
pursuant to the terms of the Loan Documents contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading.
(j) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or, to the best of the Loan
Parties' knowledge, threatened before any court, governmental agency or
arbitrator that (i) could reasonably be expected to have a Material
Adverse Effect, or (ii) purports to affect the legality, validity or
enforceability of this Agreement, any Note, any other Loan Document or
any Related Document or the consummation of the transactions
contemplated hereby.
(k) No proceeds of any Advance or drawings under any Letter of
Credit will be used to acquire any equity security of a class that is
registered pursuant to Section 12 of the Securities Exchange Act of
1934.
(l) None of the Loan Parties is engaged in the business of
extending credit for the purpose of purchasing or carrying Margin
Stock, and no proceeds of any Advance or drawings under any Letter of
Credit will be used by any of the Loan Parties to purchase or carry any
Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.
(m) Set forth on Schedule 4.01(m) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans;
provided, however, that with respect to the Plans, Multiemployer Plans
and Welfare Plans of any ERISA Affiliate which is not a Loan Party,
this representation is made to the best knowledge of the Loan Parties.
(n) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan; provided, however, that with respect to
any ERISA Event with respect to any Plan of any ERISA Affiliate which
is not a Loan Party, this representation is made to the best knowledge
of the Loan Parties.
(o) As of the last annual actuarial valuation date, there is
no material unfunded current liability, as defined in Section 302(d)(8)
of ERISA, of any Plan and there has been
76
no material adverse change in the funding status of any such Plan since
such date; provided, however, that with respect to any Plan of any
ERISA Affiliate which is not a Loan Party, this representation is made
to the best knowledge of the Loan Parties.
(p) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan maintained by any Loan
Party, copies of which have been filed with the Internal Revenue
Service and furnished to the Lender Parties, is complete and accurate
and fairly presents the funding status of such Plan, and since the date
of such Schedule B there has been no material adverse change in such
funding status.
(q) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan; provided, however, that with respect to any
Multiemployer Plan of any ERISA Affiliate which is not a Loan Party,
this representation is made to the best knowledge of the Loan Parties.
(r) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no such Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated, within the
meaning of Title IV of ERISA; provided, however, that with respect to
any Multiemployer Plan of any ERISA Affiliate which is not a Loan
Party, this representation is made to the best knowledge of the Loan
Parties.
(s) Except as set forth in the financial statements referred
to in this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106.
(t) Neither the business nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that could have a
Material Adverse Effect.
(u) Except as set forth in Schedule 4.01(u) hereto, the
operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past claims of
non-compliance with such Environmental Laws and Environmental Permits
have been resolved without ongoing material obligations or costs. No
circumstances exist that could reasonably be expected to (i) form the
basis of an Environmental Action against any Loan Party or any of its
Subsidiaries or any of its properties that could have a Material
Adverse
77
Effect or (ii) cause any such property to be subject to any material
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(v) Except as set forth in Schedule 4.01(u) hereto, none of
the material properties currently or formerly owned or operated by any
Loan Party or any of its Subsidiaries is listed, or, to the best
knowledge of the Loan Parties or any of their Subsidiaries, proposed
for listing on the NPL or on the CERCLIS or any analogous foreign,
state or local list or is adjacent to any such property.
(w) Except as set forth in Schedule 4.01(u) hereto, neither
any Loan Party nor any of its Subsidiaries is undertaking, and has not
completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or
response action relating to any actual or threatened release, discharge
or disposal of Hazardous Materials at any site, location or operation,
either voluntarily or pursuant to the order of any governmental or
regulatory authority or the requirements of any Environmental Law.
(x) Neither any Loan Party nor any of its Subsidiaries is a
party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate
restriction the compliance with which could have a Material Adverse
Effect.
(y) The Collateral Documents create a valid and perfected
first priority security interest in the Collateral securing the payment
of the Secured Obligations, and all filings and other actions necessary
or desirable to perfect and protect such security interest have been
duly taken (other than any filings in any foreign jurisdiction with
respect to security interests granted in patents, trademarks and
copyrights of the Loan Parties). The Loan Parties are the legal and
beneficial owners of the Collateral free and clear of any Lien, except
for the Liens created or permitted under the Loan Documents.
(z) Each Loan Party and each of its Subsidiaries and
Affiliates has filed, has caused to be filed or has been included in
all tax returns (Federal, state, local and foreign) required to be
filed and has paid all taxes shown thereon to be due, together with
applicable interest and penalties.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and
accurate list, as of the Third Restatement Date, of each taxable year
of each Loan Party and each of its Subsidiaries and Affiliates (other
than CVC and any of its Affiliates which is not a Loan Party) for which
Federal income tax returns have been filed and for which the expiration
of the applicable statute of limitations for assessment or collection
has not occurred by reason of extension or otherwise (an "OPEN YEAR").
78
(bb) There is no unpaid amount, as of the Third Restatement
Date, of adjustments to the Federal income tax liability of each Loan
Party and each of its Subsidiaries and Affiliates (other than CVC and
any of its Affiliates which is not a Loan Party) proposed by the
Internal Revenue Service with respect to Open Years. No issues other
than those set forth on Schedule 4.01(bb) have been raised by the
Internal Revenue Service in respect of Open Years that, in the
aggregate, could have a Material Adverse Effect.
(cc) There is no unpaid amount, as of the Third Restatement
Date, of adjustments to the state, local and foreign tax liability of
each Loan Party and each of its Subsidiaries and Affiliates (other than
CVC and any of its Affiliates which is not a Loan Party) proposed by
all state, local and foreign taxing authorities (other than amounts
arising from adjustments to Federal income tax returns, if any). No
issues have been raised by such taxing authorities that, in the
aggregate, could have a Material Adverse Effect.
(dd) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the issuance of any Letters of Credit, nor
the application of the proceeds or repayment thereof by the Borrower,
nor the consummation of the other transactions contemplated hereby,
will violate any provision of such Act or any rule, regulation or order
of the Securities and Exchange Commission thereunder.
(ee) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(ff) Set forth on Schedule 3.01(h)(ii) hereto is a complete
and accurate list of all Surviving Debt, showing as of the Third
Restatement Date the principal amount outstanding thereunder, the
maturity date thereof and the amortization schedule therefor.
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and
accurate list of all real property owned by any Loan Party or any of
its Subsidiaries, showing as of the Third Restatement Date the street
address, county or other relevant jurisdiction, state, record owner and
book and fair value thereof. Each Loan Party or such Subsidiary has
good, marketable and insurable fee simple title to such real property,
free and clear of all Liens, other than Liens created or permitted by
the Loan Documents.
(hh) Set forth on Schedule 4.01(hh) hereto is a complete and
accurate list of all leases of real property under which any Loan Party
or any of its Subsidiaries is the lessee, showing as of the Third
Restatement Date the street address, county or other relevant
jurisdiction, state, lessor, lessee, expiration date and annual rental
cost thereof. Each such
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lease is the legal, valid and binding obligation of the lessor thereof,
enforceable in accordance with its terms.
(ii) Set forth on Schedule 4.01(ii) hereto is a complete and
accurate list of all Investments held by any Loan Party or any of its
Subsidiaries, showing as of the Third Restatement Date the amount,
obligor or issuer and maturity, if any, thereof.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and
accurate list of all patents, trademarks, trade names, service marks
and copyrights, and all applications therefor and licenses thereof, of
each Loan Party or any of its Subsidiaries, showing as of the Third
Restatement Date the jurisdiction in which registered, the registration
or application number, as the case may be, and the date of registration
or filing, as the case may be.
(kk) The proceeds of the Advances and the Letters of Credit
will be used by the Loan Parties solely in accordance with the terms of
Section 2.14.
(ll) Each Loan Party has reviewed the areas within its
business and operations which could reasonably be expected to be
adversely affected by, and has developed or is in the process of
developing a program to address on a timely basis, "Year 2000 Issues"
(i.e., the risk that computer applications used by such Loan Party may
be unable to recognize or perform properly date sensitive functions
involving certain dates prior to, and any date after, December 31,
1999) and, based on such review, such Loan Party reasonably believes
that the "Year 2000 Issues" (and the cost of remedying the same) will
not have a Material Adverse Effect.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Obligation
of any Loan Party under or in respect of any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding, any Secured Hedge Agreement shall be
in effect, or any Lender Party shall have any Commitment hereunder:
(a) Compliance with Laws, Etc. Each Loan Party shall comply,
and cause each of its Subsidiaries to comply, in all material respects,
with all applicable laws, rules, regulations and orders material to the
business and operations of such Loan Party, such compliance to include,
without limitation, compliance with ERISA and the Racketeer Influenced
and Corrupt Organizations Chapter of the Organized Crime Control Act of
1970.
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(b) Payment of Taxes, Etc. Each Loan Party shall pay and
discharge, and cause each of its Subsidiaries to pay and discharge,
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its property and
(ii) all lawful claims that, if unpaid, might by law become a Lien upon
its property; provided, however, that no Loan Party nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches to
its property and becomes enforceable against its other creditors.
(c) Compliance with Environmental Laws. Each Loan Party shall
comply, and cause each of its Subsidiaries and all lessees and other
Persons operating or occupying its properties to comply, in all
material respects, with all applicable Environmental Laws and
Environmental Permits; obtain and renew and cause each of its
Subsidiaries to obtain and renew all Environmental Permits necessary
for its operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of
its properties, in accordance with and as required by all applicable
requirements of all Environmental Laws; provided, however, that no Loan
Party nor any of its Subsidiaries shall be required to undertake any
such cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect
to such circumstances.
(d) Maintenance of Insurance. Each Loan Party shall maintain,
and cause each of its Subsidiaries to maintain, insurance with
responsible and reputable insurance companies or associations in such
amounts and covering such risks as is usually carried by companies
engaged in similar businesses and owning similar properties in the same
general areas in which such Loan Party or such Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Each Loan Party
shall preserve and maintain, and cause each of its Subsidiaries to
preserve and maintain, its corporate existence, rights (charter and
statutory), permits, licenses, approvals, privileges and franchises;
provided, however, that the Subsidiaries of the Borrower may consummate
any merger or consolidation permitted under Section 5.02(d).
(f) Visitation Rights. Each Loan Party shall, at any
reasonable time and from time to time upon reasonable prior notice,
permit the Agent or any of the Lender Parties or any agents or
representatives thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of,
such Loan Party and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of such Loan Party and
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any of its Subsidiaries with any of their officers or directors and
with their independent certified public accountants.
(g) Preparation of Environmental Reports. The Loan Parties
shall, at the request of the Agent at the following times, (i) upon the
occurrence and continuance of an Event of Default, (ii) upon the
acquisition of real property by any Loan Party or any of its
Subsidiaries, (iii) upon the Agent's reasonable belief that any of the
representations or warranties contained in Sections 4.01(u), 4.01(v) or
4.01(w) is false in a material respect or that any of the covenants
contained in Section 5.01(c) has been breached in a recent material
respect or, (iv) two other times (determined in the discretion of the
Required Lenders) during the term of this Agreement, provide to the
Lender Parties within 60 days after such request, at the expense of the
Loan Parties, a Phase I environmental site assessment report for any of
their or their Subsidiaries' properties described in such request,
prepared by an environmental consulting firm acceptable to the Agent
indicating, as appropriate, the presence or absence of Hazardous
Materials and the estimated cost of any compliance, removal or remedial
action in connection with any Hazardous Materials on such properties;
without limiting the generality of the foregoing, if the Agent
determines at any time that a material risk exists that any such report
will not be provided within the time referred to above, the Agent may
retain an environmental consulting firm to prepare such report at the
expense of the Loan Parties, and the Loan Parties hereby grant and
agree to cause any Subsidiary that owns any property described in such
request to grant at the time of such request, to the Agent, the Lender
Parties, such firm and any agents or representatives thereof an
irrevocable non-exclusive license, subject to the rights of tenants, to
enter onto their respective properties to undertake such an assessment.
(h) Keeping of Books. Each Loan Party shall keep, and cause
each of its Subsidiaries to keep, proper books of record and account,
in which full and correct entries shall be made of all financial
transactions and the assets and business of such Loan Party and each
such Subsidiary in accordance with generally accepted accounting
principles.
(i) Maintenance of Properties, Etc. Each Loan Party shall
maintain and preserve, and cause each of its Subsidiaries to maintain
and preserve, all of its properties that are reasonably required in the
conduct of its business in good working order and condition, ordinary
wear and tear excepted.
(j) Compliance with Terms of Leaseholds. Each Loan Party shall
make all payments and otherwise perform all obligations in respect of
all leases of real property to which such Loan Party or any of its
Subsidiaries is a party, keep such leases in full force and effect and
not allow such leases to lapse or be terminated or any rights to renew
such leases to be forfeited or cancelled, notify the Agent of any
material default by any party
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with respect to such leases and cooperate with the Agent in all
respects to cure any such default, and cause each of its Subsidiaries
to do so, except where the failure to so comply with the foregoing
could not have a Material Adverse Effect.
(k) Performance of Related Documents and Other Agreements.
Each Loan Party shall perform and observe all of the terms and
provisions of the Related Documents (other than the Stockholders
Agreement) to be performed or observed by it, maintain each such
Related Document (other than the Stockholders Agreement) in full force
and effect, enforce such Related Document (other than the Stockholders
Agreement) in accordance with its terms, take all such action to such
end as may be from time to time requested by the Agent and, upon
request of the Agent, make to each other party to each such Related
Document (other than the Stockholders Agreement) such demands and
requests for information and reports or for action as such Loan Party
is entitled to make under such Related Document (other than the
Stockholders Agreement), except where the failure to so comply with the
foregoing could not have a Material Adverse Effect.
(l) Transactions with Affiliates. Each Loan Party shall
conduct, and cause each of its Subsidiaries to conduct, all
transactions otherwise permitted under the Loan Documents with any of
their Affiliates on terms that are fair and reasonable and no less
favorable to such Loan Party or such Subsidiary than it would obtain in
a comparable arm's-length transaction with a Person not an Affiliate;
provided that the Lender Parties hereby agree that the terms of all
employment-related arrangements and contracts between any Loan Party
and any member of the senior management of such Loan Party shall be
deemed to be fair and reasonable if approved by the board of directors
of such Loan Party.
(m) Covenant to Give Security. In addition to the requirements
of Section 5.01(o), each Loan Party shall at the request of the Agent,
at the expense of such Loan Party, (i) within 10 days after such
request, furnish to the Agent a description of the real and personal
properties of such Loan Party and its Subsidiaries in detail
satisfactory to the Agent, (ii) within 15 days after such request, duly
execute and deliver to the Agent mortgages, pledges, assignments and
other security agreements, as specified by and in form and substance
satisfactory to the Agent, securing payment of all the Obligations of
such Loan Party under the Loan Documents and constituting Liens on all
such properties, (iii) within 30 days after such request, take whatever
action (including, without limitation, the recording of mortgages, the
filing of Uniform Commercial Code financing statements, the giving of
notices and the endorsement of notices on title documents) may be
necessary or advisable in the opinion of the Agent to vest in the Agent
(or in any representative of the Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the
security agreements delivered pursuant to this Section 5.01(m),
enforceable against all third parties in accordance with their terms,
(iv) within 60 days after such request, deliver to the Agent a signed
copy of a favorable
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opinion, addressed to the Agent, of counsel for such Loan Party
acceptable to the Agent as to the matters contained in clauses (i),
(ii) and (iii) above, as to such security agreements being legal, valid
and binding obligations of such Loan Party and its Subsidiaries
enforceable in accordance with their terms and as to such other matters
as the Agent may reasonably request and (v) at any time and from time
to time, promptly execute and deliver any and all further instruments
and documents and take all such other action as the Agent may deem
desirable in obtaining the full benefits of, or in preserving the Liens
of, such security agreements; provided, however, that in the case of an
acquisition of a Foreign Subsidiary by a Loan Party, such Loan Party
shall deliver, or cause to be delivered on its behalf, to the Agent
certificates or other instruments evidencing such Loan Party's Equity
Interest in such Foreign Subsidiary required to be delivered under
clause (i) above within in 60 days of such acquisition.
(n) Syndication. Take all actions which the Agent may
reasonably request to assist it in forming a syndicate acceptable to it
in accordance with Section 8.07, including, but not be limited to, (i)
making senior management of the Borrower and representatives of the
Borrower and the Investor Group available to participate in
informational meetings with potential lenders at such times and places
as the Agent may reasonably request and (ii) timely providing the Agent
with all information reasonably deemed necessary by it to successfully
complete the syndication, including, without limitation, a summary of
the operating prospects (including financial projections) of the
Borrower and its Subsidiaries.
(o) Additional Loan Parties. Each Loan Party shall execute and
deliver, and shall cause any newly organized or acquired Subsidiary of
such Loan Party to execute and deliver, as applicable, to the Agent as
promptly as practicable and in any event within 10 days after the
organization or acquisition of such Subsidiary (i) a security agreement
supplement in the form of Exhibit B to the Third Amended and Restated
Security Agreement, (ii) a guaranty supplement in the form of Exhibit A
to the Subsidiary Guarantee unless the delivery thereof would have
adverse tax consequences for such Subsidiary and such Loan Party has
provided to the Agent written notice acceptable to the Agent of such
adverse consequences, and (iii) such other documents, agreements,
certificates or instruments as the Agent may reasonably request, in
each case in form and substance reasonably satisfactory to the Agent,
and to take all such other actions that may be necessary or that the
Agent may deem reasonably desirable in order to perfect and protect any
pledge, assignment or security interest granted by such security
agreement (granting a security interest in the receivables, inventory,
deposit accounts, equipment, intellectual property and other assets of
such Subsidiary) of such Subsidiary to the Agent for the benefit of the
Lender Parties or to enable the Agent to exercise and enforce its
rights and remedies thereunder.
(p) Interest Rate Hedging. Enter into on or prior to April 15,
1999, and maintain at all times thereafter, interest rate Hedge
Agreements with Persons acceptable
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to the Lender Parties, covering a notional amount of not less than 75%
of the Term Commitments and providing for such Persons to make payments
thereunder for a period of not less than three years to the extent of
increases in interest rates greater than 3.00% above the weighted
average Eurodollar Rate for an Interest Period of one month on the date
hereof.
(q) Further Assurances. (i) Promptly upon request by the
Agent, or any Lender Party through the Agent, correct, and cause each
of its Subsidiaries promptly to correct, any material defect or error
that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and
(ii) Promptly upon the request by the Agent, or any Lender
Party through the Agent, do, execute, acknowledge, deliver, record,
re-record, file, re-file, register, re-register any and all such
further acts, deeds, conveyances, pledge agreements, mortgages, deeds
of trust, trust deeds, assignments, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as the Agent,
or any Lender Party through the Agent, may reasonably require from time
to time in order to (A) carry out more effectively the purposes of the
Loan Documents, (B) to the fullest extent permitted by applicable law,
subject any Loan Party's or any of its Subsidiaries' properties,
assets, rights or interests to the Liens now or hereafter intended to
be covered by any of the Collateral Documents, (C) perfect and maintain
the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and
(D) assure, convey, grant, assign, transfer, preserve, protect and
confirm more effectively unto the Secured Parties under any Loan
Document or under any other instrument executed in connection with any
Loan Document to which any Loan Party or any of its Subsidiaries is or
is to be a party, and cause each of its Subsidiaries to do so, and
(iii) Use reasonable best efforts to cause the due execution
of the Junior Noteholders Undertaking by 100% of all of the holders of
the Junior Notes.
SECTION 5.02. Negative Covenants. So long as any Obligation of
any Loan Party under or in respect of any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding, any Secured Hedge Agreement shall be in
effect, or any Lender Party shall have any Commitment hereunder:
(a) Liens, Etc. None of the Loan Parties shall at any time
create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on
or with respect to any of its properties of any character (including,
without limitation, accounts) whether now owned or hereafter acquired,
or sign or file or suffer to exist, or permit any of its Subsidiaries
to sign or file or suffer to exist, under the Uniform Commercial Code
of any jurisdiction, a financing statement that
85
names the Borrower or any of its Subsidiaries as debtor, or sign or
suffer to exist, or permit any of its Subsidiaries to sign or suffer to
exist, any security agreement authorizing any secured party thereunder
to file such financing statement, or assign, or permit any of its
Subsidiaries to assign, any accounts or other right to receive income,
excluding, however, from the operation of the foregoing restrictions
the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens and Permitted Encumbrances;
(iii) solely in the case of the Borrower and its
Subsidiaries, Liens described on Schedule 5.02(a)(iii) hereto;
(iv) solely in the case of the Borrower and its
Subsidiaries, Liens arising in connection with Capitalized
Leases permitted under Section 5.02(b)(iii)(A); provided that
no such Lien shall extend to or cover any Collateral or assets
other than the assets subject to such Capitalized Leases;
(v) solely in the case of the Borrower and its
Subsidiaries, purchase money Liens upon or in real property or
equipment acquired or held by the Borrower or any of its
Subsidiaries in the ordinary course of business to secure the
purchase price of such property or equipment or to secure Debt
incurred solely for the purpose of financing the acquisition
of any such property or equipment to be subject to such Liens,
or Liens existing on any such property or equipment at the
time of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the
purchase price), or extensions, renewals or replacements of
any of the foregoing for the same or a lesser amount;
provided, however, that no such Lien shall extend to or cover
any property other than the property or equipment being
acquired, and no such extension, renewal or replacement shall
extend to or cover any property not theretofore subject to the
Lien being extended, renewed or replaced; and provided further
that the aggregate principal amount of the Debt secured by
Liens permitted by this clause (v) shall not exceed the amount
permitted under Section 5.02(b)(iii)(A) at any time
outstanding and that any such Debt shall not otherwise be
prohibited by the terms of the Loan Documents;
(vi) solely in the case of the Borrower and its
Subsidiaries, the filing of financing statements solely as a
precautionary measure in connection with operating leases;
(vii) solely in the case of the Borrower and its
Subsidiaries, Liens not otherwise permitted under this Section
5.02(a) securing Debt or other liabilities or
86
obligations of the Borrower and its Subsidiaries in an
aggregate principal amount not to exceed $200,000 at any time
outstanding;
(viii) solely in the case of the Borrower and its
Subsidiaries, the replacement, extension or renewal of any
Lien permitted by clause (iii) above upon or in the same
property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or change
in any direct or contingent obligor) of the Debt secured
thereby; and
(ix) Liens on Ex-Cell Program Receivables in favor of
any Ex-Cell Program Purchaser created under the Ex-Cell
Factoring Program.
(b) Debt. None of the Loan Parties shall at any time create,
incur, assume or suffer to exist, or permit any of its Subsidiaries to
create, incur, assume or suffer to exist, any Debt other than:
(i) in the case of Universal:
(A) the Junior Notes;
(B) the Stirling Notes; and
(C) Debt under the Loan Documents.
(ii) in the case of the Borrower:
(A) the Subordinated Notes;
(B) Debt owed to any Subsidiary of the
Borrower; provided, however, that such obligation (1)
is subject to an intercompany subordination agreement
in substantially the form of Exhibit H hereto (an
"INTERCOMPANY SUBORDINATION AGREEMENT") executed by
the Borrower and each such Subsidiary and (2) is
evidenced by a promissory note in form and substance
reasonably satisfactory to the Agent, which shall be
pledged under the terms of the Collateral Documents
to the Agent, on behalf of the Secured Parties,
immediately upon its creation; and
(C) any promissory note delivered in
connection with any earn-out payment as contemplated
by Section 3.02 of the AmPac Stock Purchase
Agreement; provided that (1) any such promissory note
shall be on terms and conditions acceptable to the
Agent and (2) any such
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promissory note shall have been extinguished within
10 days of its issuance.
(iii) in the case of the Borrower and its
Subsidiaries,
(A) Capitalized Leases and Debt secured by
Liens permitted by Section 5.02(a)(v) not to exceed
in the aggregate $8,000,000 at any time outstanding
and the amortization of which shall not exceed
$1,600,000 in any 12-Fiscal Month period,
(B) Debt under the Loan Documents;
(C) Debt owed (I) to the Borrower by any
wholly owned U.S. Subsidiary or any wholly owned
Canadian Subsidiary that is a Loan Party, (II) to
Ex-Cell by Ex-Cell Bentonville, and (III) to the
Borrower or any Subsidiary and constituting
Investment allowed pursuant to Section 5.02(f)(v)(D);
provided, however, that such Debt shall be evidenced
by a promissory note in form and substance reasonably
satisfactory to the Agent, which shall be pledged
under the terms of the Collateral Documents to the
Agent, on behalf of the Secured Parties, immediately
upon its creation;
(D) Surviving Debt identified on Part
(ii)(A) of Schedule 3.01(h) of the Borrower and its
Subsidiaries;
(E) indorsement of negotiable instruments
for deposit or collection or similar transactions in
the ordinary course of business;
(F) other unsecured Debt not otherwise
permitted under this Section 5.02(b) aggregating not
more than $1,000,000 at any one time outstanding; and
(G) Debt incurred by Ex-Cell under the
Ex-Cell Program Agreement.
(c) Capital Expenditures. None of the Loan Parties shall make,
or permit any of its Subsidiaries to make, any Capital Expenditures
that would cause the aggregate of all such Capital Expenditures made by
the Borrower and its Subsidiaries in any period set forth below to
exceed the amount set forth below for such period:
88
Fiscal Year U.S. Dollar Amount
----------- ------------------
Fiscal Year 1999 $8,200,000
Fiscal Year 2000 $6,800,000
Fiscal Year 2001 $6,800,000
Fiscal Year 2002 $6,800,000
Fiscal Year 2003 $6,800,000
Fiscal Year 2004 $6,800,000
; provided, however, that if at the end of any Fiscal Year set forth
above, the amount specified above for such Fiscal Year exceeds the
amount of Capital Expenditures made by the Borrower and its
Subsidiaries during such Fiscal Year (the amount of such excess being
the "EXCESS AMOUNT"), the Borrower and its Subsidiaries shall be
entitled to make additional Capital Expenditures in the succeeding
Fiscal Year in an amount (such amount being referred to herein as the
"CARRY OVER AMOUNT") equal to the lower of (i) the Excess Amount and
(ii) 50% of the amount specified for such prior Fiscal Year.
(d) Mergers, Etc. None of the Loan Parties shall at any time
merge into or consolidate with any Person or permit any Person to merge
into it, or permit any of its Subsidiaries to do so, except that (i)
the Borrower may consummate the Transaction, (ii) any Subsidiary of the
Borrower may merge into or consolidate with any other Subsidiary of the
Borrower provided that, in the case of any such merger or
consolidation, the Person formed by such merger or consolidation shall
be a wholly owned U.S. Subsidiary of the Borrower (iii) any Foreign
Subsidiary of the Borrower may merge into or consolidate with any other
Foreign Subsidiary of the Borrower provided that in the case of any
such merger or consolidation, the Person formed by such merger or
consolidation shall be a wholly owned Subsidiary of the Borrower, and
(iv) any wholly owned U.S. Subsidiary of the Borrower may merge into or
consolidate with the Borrower provided that, in the case of any such
merger or consolidation, the Borrower shall be the surviving Person.
(e) Sales, Etc. of Assets. None of the Loan Parties shall at
any time sell, lease, transfer or otherwise dispose of, or permit any
of its Subsidiaries to sell, lease, transfer or otherwise dispose of,
any assets, or grant any option or other right to purchase, lease or
otherwise acquire any assets, except:
(i) sales of Inventory (including, without
limitation, sales of obsolete or slow-moving Inventory) in the
ordinary course of its business;
89
(ii) sales of assets for cash and for fair value in
an aggregate amount not to exceed $500,000 in any Fiscal Year;
(iii)dispositions of condemned or damaged property;
(iv) licenses of patents, trademarks, trade names,
service marks and copyrights in the ordinary course of
business;
(v) in a transaction otherwise permitted by Section
5.02(d); and
(vi) sales of Ex-Cell Program Receivables in
accordance with the terms and conditions of the Ex-Cell
Program Agreement.
(f) Investments in Other Persons. None of the Loan Parties
shall at any time make or hold, or permit any of its Subsidiaries to
make or hold, any Investment in any Person other than:
(i) loans and advances by the Borrower and its
Subsidiaries to its employees in the ordinary course of
business in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding;
(ii) Investments by the Borrower and its Subsidiaries
in Cash Equivalents, provided that, to the extent such
Investments in Cash Equivalents exceed $750,000 in aggregate
principal amount at any time outstanding, the Agent shall
have, for the benefit of the Secured Parties, a valid
perfected first priority security interest in the Cash
Equivalents in excess of $750,000, and the Borrower shall take
all such action as the Agent may deem necessary or desirable
to perfect and protect such security interest;
(iii) Investments existing on the Third Restatement
Date and described on Schedule 4.01(ii) hereto;
(iv) refundable advances and deposits required to be
made in the ordinary course of business by the Borrower and
its Subsidiaries;
(v) Investments (A) by the Borrower existing on the
Third Restatement Date; (B) by the Borrower in any wholly
owned U.S. Subsidiary or Canadian Subsidiary of the Borrower
that is a Loan Party; (C) by the Borrower or any other Loan
Party in any Related Textile Business or non-Canadian Foreign
Subsidiary in an aggregate amount not to exceed $5,000,000
from the Third Restatement Date; provided, however, that any
such Related Textile Business shall become a wholly owned
Subsidiary of the Borrower or a joint venture in which the
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Borrower has control; provided, further, that, in the case of
each of clauses (B) and (C), no Default shall have occurred
and be continuing at the time such Investment is made or would
result therefrom;
(vi) in the case of the Borrower or any of its
Subsidiaries, Investments consisting of equity or debt in any
obligor of a receivable owing to the Borrower or any of its
Subsidiaries in a bankruptcy action involving such obligor and
which were received by the Borrower or any of its Subsidiaries
in satisfaction of such obligor's obligations to the Borrower
and its Subsidiaries; and
(vii) Investments not otherwise permitted under this
Section 5.02(f) in an aggregate amount not to exceed $250,000
at any time outstanding.
(g) Dividends, Etc. None of the Loan Parties shall at any time
declare or pay any dividends, purchase, redeem, retire, defease or
otherwise acquire for value any of its capital stock or any warrants,
rights or options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such or issue or sell
any capital stock or any warrants, rights or options to acquire such
capital stock, or permit any of its Subsidiaries to do any of the
foregoing or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any capital stock of the
Borrower or any warrants, rights or options to acquire such capital
stock or to issue or sell any capital stock or any warrants, rights or
options to acquire such capital stock, except that:
(i) any Subsidiary of the Borrower may declare and
pay cash dividends to the Borrower or any of its U.S. wholly
owned Subsidiaries;
(ii) in any month in which the semiannual interest
obligations of Universal under the Split-Pay Note become due
and payable, the Borrower may declare and pay cash dividends
to Universal for the sole purpose of enabling Universal to pay
its interest obligations under the Split-Pay Note which become
due and payable in such month; provided, however, that (A)
Universal shall not have the right to pay such interest
in-kind (including, without limitation, in the form of
additional notes) or otherwise defer the payment of such
interest in cash; (B) the aggregate amount of such cash
dividends paid in any six-month period by the Borrower to
Universal for such purposes shall not exceed $300,000 and (C)
no Default shall have occurred and be continuing at the time
such cash dividends are paid or would result therefrom;
(iii) the Borrower may declare and pay cash dividends
to Universal for the sole purpose of enabling Universal (A) to
pay taxes, (B) to pay expenses
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incurred in the ordinary course of business in an aggregate
amount not to exceed $150,000 in any Fiscal Year and (C) to
satisfy Universal's obligations under the Management Stock
Option Plan Agreement to purchase, and Universal may purchase
or redeem, shares of its stock held by any of its employees
upon the death or termination of such employee in exchange for
cash and other consideration in an aggregate amount not to
exceed $300,000; provided, however, that in the case of clause
(C) no Default shall have occurred and be continuing at the
time such cash dividends are paid or would result therefrom;
(iv) Universal may issue shares of, or options to
purchase, its capital stock to members of its senior
management pursuant to the terms of the Management Stock
Option Plan Agreement; provided, however, that the number of
shares of capital stock of Universal which may be issued in
connection with the Management Stock Option Plan Agreement
shall not exceed 5% of the total number of shares of capital
stock of Universal issued and outstanding at any time on a
fully diluted basis.
(v) Universal may issue or sell capital stock to any
Person for not less than fair market value, provided that the
Net Cash Proceeds of all such issuances or sales (other than
such Net Cash Proceeds received pursuant to clause (v) above)
is contributed by Universal to the Borrower and the Borrower
applies such Net Cash Proceeds to the prepayments of Advances
pursuant to Section 2.06(b)(ii);
(vi) Universal may issue stock for all or a portion
of the consideration paid in connection with the acquisition
of a Related Textile Business in accordance with Section
5.02(f)(v) to the seller or sellers of such Business; and
(vii) Universal may declare and make stock dividends
payable in shares of its common stock.
(h) Change in Nature of Business. None of the Loan Parties
shall at any time engage, or permit any of its Subsidiaries to engage,
in any business other than the manufacturing of home textiles and
specialty textiles and other activities incidental thereto, including,
without limitation, the ownership of properties incidental to such
businesses.
(i) Charter Amendments. None of the Loan Parties shall at any
time amend, or permit any of its Subsidiaries to amend, its certificate
of incorporation or bylaws unless agreed to by the Agent in writing in
advance of any such amendment.
(j) Accounting Changes. None of the Loan Parties shall at any
time make or permit, or permit any of its Subsidiaries to make or
permit, any change in (i) accounting
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policies or reporting practices, except as required by generally
accepted accounting principles or (ii) Fiscal Year, except, in
connection with any Subsidiary acquired by a Loan Party, such changes
to such Subsidiary's accounting policies, reporting practices or Fiscal
Year as are required to conform such Subsidiary's accounting policies,
reporting practices or Fiscal Year to the accounting policies,
reporting practices and Fiscal Year of such Loan Party.
(k) Prepayments, Etc., of Debt. None of the Loan Parties shall
at any time (i) prepay, redeem, purchase, defease or otherwise satisfy
prior to the scheduled maturity thereof in any manner, or make any
payment in violation of any subordination terms of, any Debt, other
than (x) the prepayment of the Advances in accordance with the terms of
this Agreement, (y) regularly scheduled or required repayments or
redemptions of Surviving Debt of the Borrower and its Subsidiaries
(other than the Subordinated Notes) and (z) the prepayment of Debt
under the Accounts Receivable Management Agreement, or (ii) amend,
modify or change in any manner any term or condition of any Surviving
Debt, or permit any of its Subsidiaries to do any of the foregoing
other than to prepay any Debt payable to the Borrower.
(l) Amendment, Etc., of Related Documents. None of the Loan
Parties shall at any time cancel or terminate any or consent to or
accept any cancellation or termination thereof, amend, modify or change
in any manner any term or condition of any Related Document or give any
consent, waiver or approval thereunder, waive any default under or any
breach of any term or condition of any Related Document, agree in any
manner to any other amendment, modification or change of any term or
condition of any Related Document or take any other action in
connection with any Related Document that would impair the value of the
interest or rights of such Loan Party thereunder or that would impair
the rights or interests of the Agent or any Lender Party, or permit any
of its Subsidiaries to do any of the foregoing.
(m) Negative Pledge. None of the Loan Parties shall at any
time enter into or suffer to exist, or permit any of its Subsidiaries
to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien upon any of its
property or assets other than (i) in favor of the Secured Parties, (ii)
in connection with any Debt secured by Capitalized Leases and purchase
money Liens, in each case, to the extent permitted under Section
5.02(b)(iii)(A) only with respect to the specific assets referred to in
such Section 5.02(b)(iii)(A), (iii) in connection with the Subordinated
Notes and (iv) in the case of Ex-Cell, in connection with the Ex-Cell
Factoring Program.
(n) Partnerships. None of the Loan Parties shall at any time
become a general partner in any general or limited partnership or joint
venture (other than in a joint venture in which such Loan Party has
control and has made an Investment in accordance with Section
5.02(f)(v)), or permit any of its Subsidiaries to do so.
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(o) Other Transactions. None of the Loan Parties shall at any
time engage, or permit any of its Subsidiaries to engage, in any
transaction involving commodity options or futures contracts or any
similar speculative transactions (including, without limitation,
take-or-pay contracts).
SECTION 5.03. Reporting Requirements. So long as any
Obligation of any Loan Party under or in respect of any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding, any Secured Hedge
Agreement shall be in effect, or any Lender Party shall have any Commitment
hereunder, the Borrower will furnish to the Agent and the Lender Parties:
(a) Default and Prepayment Notices. (i) As soon as possible
and in any event within two Business Days after the occurrence of each
Default or any event, development or occurrence reasonably likely to
have a Material Adverse Effect continuing on the date of such
statement, a statement of the chief financial officer of the Borrower
setting forth details of such Default, event, development or occurrence
and the action that the Borrower has taken and proposes to take with
respect thereto, and (ii) as soon as possible and in any event no later
than 11:00 A.M. (New York City time) at least three Business Days
before any prepayment of Term Advances is to be made by the Borrower
pursuant to Section 2.06 (the "PREPAYMENT Date"), written notice of the
principal amount of such prepayment (the "PREPAYMENT AMOUNT") and the
applicable Prepayment Date. Each such notice (a "PREPAYMENT NOTICE")
shall be by telex or telecopier or otherwise as provided in Section
8.02.
(b) Monthly Financials. As soon as available and in any event
no later than 30 days, or, if such Fiscal Month ends any time during
the first nine Fiscal Months in the 1999 Fiscal Year or in any other
Fiscal Year and is the last month in a Fiscal Quarter, 45 days, after
the end of each Fiscal Month thereafter, a Consolidated and
consolidating balance sheets of each Loan Party and its Subsidiaries as
of the end of such Fiscal Month and Consolidated and consolidating
statements of income and cash flow of such Loan Party and its
Subsidiaries for the period commencing at the end of the previous
Fiscal Month and ending with the end of such Fiscal Month and
Consolidated and consolidating statements of income and cash flow of
such Loan Party and its Subsidiaries for the period commencing at the
end of the previous Fiscal Year and ending with the end of such Fiscal
Month, setting forth in each case in comparative form the corresponding
figures for the corresponding Fiscal Month of the preceding Fiscal
Year, all in reasonable detail and duly certified (subject to year end
audited adjustments) by the chief financial officer of the Borrower as
having been prepared in accordance with generally accepted accounting
principles consistent with those applied in the most recent annual
audit, together with (i) a certificate of said officer stating that no
Default has occurred and is continuing or, if a Default has occurred
and is continuing, a statement as to the nature thereof and the action
that such Loan Party has taken and proposes to take with respect
thereto, (ii) a schedule in
94
form satisfactory to the Agent of the computations used by such Loan
Party in determining the Total Leverage Ratio, (iii) in the event of
any change from GAAP in the generally accepted accounting principles
used in the preparation of such financial statements, a statement of
reconciliation conforming such financial statements to GAAP, (iv)
copies of any management discussions distributed to any member of the
Investor Group other than Xxxxxx X'Xxxxxx, and (v) [consolidating
financial information of Universal]; provided, however, that in respect
of each Fiscal Month ending in March, June, September and December, the
Borrower shall furnish to the Lender Parties a schedule in form
satisfactory to the Agent of the computations used by each Loan Party
in determining compliance with the covenants contained in Section 5.04.
(c) Annual Financials. As soon as available and in any event
no later than 90 days after the end of each Fiscal Year, a copy of the
annual audit report for such year for each Loan Party and its
Subsidiaries, including therein Consolidated and consolidating balance
sheets of such Loan Party and its Subsidiaries as of the end of such
Fiscal Year and Consolidated and consolidating statements of income and
cash flow of such Loan Party and its Subsidiaries for such Fiscal Year,
in each case accompanied, with respect to such Consolidated financial
statements, by an opinion acceptable to the Required Lenders of
PriceWaterhouse Coopers or other independent public accountants of
recognized standing acceptable to the Required Lenders, together with
(x) a certificate of the chief financial officer of such Loan Party
stating that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature thereof
and the action that such Loan Party has taken and proposes to take with
respect thereto, (y) in the event of any change from GAAP in the
generally accepted accounting principles used in the preparation of
such financial statements, a statement of reconciliation conforming
such financial statements to GAAP and (z) copies of management
discussions distributed to any member of the Investor Group other than
Xxxxxx X'Xxxxxx.
(d) Annual Forecasts. As soon as available and in any event no
later than 15 days before the end of each Fiscal Year, forecasts
prepared by management of such Loan Party, in form satisfactory to the
Agent, of Consolidated balance sheets, income statements and cash flow
statements on a monthly basis for the Fiscal Year following such Fiscal
Year then ended.
(e) ERISA Events and ERISA Reports. Promptly and in any event
within 15 days after any Loan Party or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a statement of the
chief financial officer of the Borrower describing such ERISA Event and
the action, if any, that such Loan Party or such ERISA Affiliate has
taken and proposes to take with respect thereto.
95
(f) Plan Terminations. Promptly and in any event within three
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any
Plan.
(g) Plan Annual Reports. Promptly and in any event within 30
days after the filing thereof with the Internal Revenue Service, copies
of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Plan.
(h) Multiemployer Plan Notices. Promptly and in any event
within five Business Days after receipt thereof by any Loan Party or
any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
each notice concerning (i) the imposition of Withdrawal Liability by
any such Multiemployer Plan, (ii) the reorganization or termination,
within the meaning of Title IV of ERISA, of any such Multiemployer Plan
or (iii) the amount of liability incurred, or that may be incurred, by
such Loan Party or any ERISA Affiliate in connection with any event
described in clause (i) or (ii).
(i) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type
described in Section 4.01(j).
(j) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that any Loan Party or any of its Subsidiaries sends to its
stockholders, and copies of all regular, periodic and special reports,
and all registration statements, that any Loan Party or any of its
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority that may be substituted therefor, or with any
national securities exchange.
(k) Creditor Reports. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other holder of the
Debt of any Loan Party or of any of its Subsidiaries pursuant to the
terms of any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Lender Parties pursuant to
any other clause of this Section 5.03.
(l) Agreement Notices. Promptly upon receipt thereof, copies
of all notices, requests and other documents received by any Loan Party
or any of its Subsidiaries under or pursuant to any Related Document or
indenture, loan or credit or similar agreement regarding or related to
any breach or default by any party thereto or any other event that
could materially impair the value of the interests or the rights of any
Loan Party or any of its Subsidiaries or otherwise have a Material
Adverse Effect and copies of any amendment, modification or waiver of
any provision of any Related Agreement or
96
indenture, loan or credit or similar agreement and, from time to time
upon request by the Agent, such information and reports regarding the
Related Documents as the Agent may reasonably request.
(m) Revenue Agent Reports. Within 10 days after receipt,
copies of all Revenue Agent Reports (Internal Revenue Service Form
886), or other written proposals of the Internal Revenue Service, that
propose, determine or otherwise set forth positive adjustments to the
Federal income tax liability of the affiliated group (within the
meaning of Section 1504(a)(1) of the Internal Revenue Code) of which a
Loan Party is a member aggregating $250,000 or more.
(n) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of
any condition or occurrence on any property of any Loan Party or any of
its Subsidiaries that results in a material noncompliance by any Loan
Party or any of its Subsidiaries with any Environmental Law or
Environmental Permit that could be reasonably expected to have a
Material Adverse Effect.
(o) Real Property. As soon as available and in any event
within 30 days after the end of each Fiscal Year, a report
supplementing Schedules 4.01(gg) and 4.01(hh) hereto, including an
identification of all real and leased property disposed of by the
Borrower or any of its Subsidiaries during such Fiscal Year, a list and
description (including the street address, county or other relevant
jurisdiction, state, record owner, book value thereof, and in the case
of leases of property, lessor, lessee, expiration date and annual
rental cost thereof) of all real property acquired or leased during
such Fiscal Year and a description of such other changes in the
information included in such Schedules as may be necessary for such
Schedules to be accurate and complete.
(p) Borrowing Base Certificate. As soon as available and in
any event within 15 Business Days after the end of each Fiscal Month, a
Borrowing Base Certificate of the Borrower and its Subsidiaries, taken
as a whole, as at the end of such Fiscal Month, certified by the chief
financial officer of the Borrower.
(q) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as
any Lender Party (through the Agent) may from time to time reasonably
request.
SECTION 5.04. Financial Covenants. So long as any Obligation
of any Loan Party under or in respect of any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding, any Secured Hedge Agreement shall be
in effect, or any Lender Party shall have any Commitment hereunder, the Borrower
and its Subsidiaries will:
97
(a) Leverage Ratios. (i) Maintain a Total Leverage Ratio as of
the end of each Rolling Period ended during each Fiscal Quarter of each
Fiscal Year set forth below of not more than the ratio set forth below
for each Rolling Period ended during each such Fiscal Quarter:
Fiscal Month Ratio
------------ -----
March 1999 5.85:1.00
June 1999 5.85:1.00
Sep 1999 5.85:1.00
Dec 1999 5.85:1.00
March 2000 5.85:1.00
June 2000 5.85:1.00
Sep 2000 5.85:1.00
Dec 2000 5.85:1.00
March 2001 5.85:1.00
June 2001 5.65:1.00
Sep 2001 5.65:1.00
Dec 2001 5.35:1.00
March 2002 5.35:1.00
June 2002 5.35:1.00
Sep 2002 5.10:1.00
Dec 2002 5.10:1.00
March 2003 4.85:1.00
June 2003 4.85:1.00
Sep 2003 4.60:1.00
Dec 2003 4.60:1.00
March 2004 4.35:1.00
June 2004 4.35:1.00
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Fiscal Month Ratio
------------ -----
Sep 2004 4.35:1.00
Dec 2004 4.35:1.00
(i) Maintain a Senior Leverage Ratio as of the end of
each Rolling Period ended during each Fiscal Quarter of each Fiscal
Year set forth below of not more than the ratio set forth below for
each Rolling Period ended during each such Fiscal Quarter:
Fiscal Month Ratio
------------ -----
March 1999 3.70:1.00
June 1999 3.70:1.00
Sep 1999 3.70:1.00
Dec 1999 3.70:1.00
March 2000 3.70:1.00
June 2000 3.70:1.00
Sep 2000 3.70:1.00
Dec 2000 3.70:1.00
March 2001 3.70:1.00
June 2001 3.50:1.00
Sep 2001 3.50:1.00
Dec 2001 3.25:1.00
March 2002 3.25:1.00
June 2002 3.25:1.00
Sep 2002 3.00:1.00
Dec 2002 3.00:1.00
March 2003 2.75:1.00
June 2003 2.75:1.00
Sep 2003 2.50:1.00
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Dec 2003 2.50:1.00
March 2004 2.25:1.00
June 2004 2.25:1.00
Sep 2004 2.25:1.00
Dec 2004 2.25:1.00
(b) Fixed Charge Coverage Ratio. Maintain a Fixed Charge
Coverage Ratio of 1.05 to 1.00 as of the end of each Rolling Period.
(c) Interest Coverage Ratio. Maintain an Interest Coverage
Ratio as of the end of each Rolling Period ended during each Fiscal
Quarter in each Fiscal Year set forth below of not less than the ratio
set forth below for each Rolling Period ended during each such Fiscal
Quarter:
Fiscal Month Ratio
------------ -----
March 1999 1.65:1.00
June 1999 1.65:1.00
Sep 1999 1.65:1.00
Dec 1999 1.65:1.00
March 2000 1.70:1.00
June 2000 1.70:1.00
Sep 2000 1.75:1.00
Dec 2000 1.75:1.00
March 2001 1.75:1.00
June 2001 1.75:1.00
Sep 2001 1.75:1.00
Dec 2001 1.90:1.00
March 2002 1.90:1.00
June 2002 1.90:1.00
100
Fiscal Month Ratio
------------ -----
Sep 2002 2.00:1.00
Dec 2002 2.00:1.00
March 2003 2.00:1.00
June 2003 2.00:1.00
Sep 2003 2.25:1.00
Dec 2003 2.25:1.00
March 2004 2.25:1.00
June 2004 2.25:1.00
Sep 2004 2.50:1.00
Dec 2004 2.50:1.00
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of, or interest on,
any Advance, or any Loan Party shall fail to make any other payment under any
Loan Document, in each case when the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made; or
(c) any Loan Party or, if applicable, any of its Subsidiaries shall
fail to perform or observe any term, covenant or agreement contained in Xxxxxxx
0.00, 0.00(x), (x), (x), (x), (x) or (o), 5.02, 5.03 or 5.04; or
(d) any Loan Party or, if applicable, any of its Subsidiaries shall
fail to perform any other term, covenant or agreement contained in any Loan
Document on its part to be performed or observed if such failure shall remain
unremedied for 10 Business Days after the earlier of the date on which (A) a
Responsible Officer of any Loan Party becomes aware of such failure or (B)
written notice thereof shall have been given to any Loan Party by the Agent or
any Lender Party; or
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(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
any Debt that is outstanding in a principal or notional amount of at least
$1,000,000 either individually or in the aggregate (but excluding Debt
outstanding hereunder) of such Loan Party or such Subsidiary (as the case may
be), when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any such
Debt and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt to
mature; or any such Debt shall be declared to be due and payable or required to
be prepaid or redeemed (other than by a regularly scheduled required prepayment
or redemption), purchased or defeased, or an offer to prepay, redeem, purchase
or defease such Debt shall be required to be made, in each case prior to the
stated maturity thereof;
(f) there shall occur any Material Adverse Change; or
(g) any Loan Party or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party
or any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its property and,
in the case of any such proceeding instituted against it (but not instituted by
it) that is being diligently contested by it in good faith, either such
proceeding shall remain undismissed or unstayed for a period of 30 days or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or any substantial part of
its property) shall occur; or any Loan Party or any of its Subsidiaries shall
take any corporate action to authorize any of the actions set forth above in
this subsection (g); or
(h) any judgment or order for the payment of money in excess of
$1,000,000 (to the extent not fully paid or discharged) shall be rendered
against any Loan Party or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(i) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that could have a Material Adverse
Effect, and there shall be any period
102
of 10 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or
(j) any provision of any Loan Document after delivery thereof pursuant
to Sections 3.01, 5.01(m) or 5.01(o) shall for any reason cease to be valid and
binding on or enforceable against any Loan Party to it, or any such Loan Party
shall so state in writing; or
(k) any Collateral Document after delivery thereof pursuant to Sections
3.01, 5.01(m) or 5.01(o) shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected first priority lien on and
security interest in a material portion of Collateral purported to be covered
thereby; or
(l) (i) the Investor Group or any member thereof shall sell or
otherwise transfer 10% or more of its shares of capital stock of Universal
(other than, solely in the case of CVC, any sale or transfer to 399 Venture
Partners, Inc., Court Square Capital, Ltd., or Citicorp Capital Investors,
Ltd., each of which is a Delaware corporation and a wholly owned Subsidiary of
Citibank, N.A.), (ii) at any time prior to an initial public offering of
Universal, the Investor Group shall cease to be the record and beneficial owner
of at least 57% of the fully diluted Voting Stock of Universal, (iii) at any
time from and after an initial public offering of Universal, the Investor Group
shall cease to be the record and beneficial owner of at least 40% of the fully
diluted Voting Stock of Universal, (iv) any Person or "group" (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended)
(other than the Investor Group) shall own or control more than 30% of the fully
diluted Voting Stock of Universal, or (v) any Person or two or more Persons
acting in concert (other than the Investor Group) shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of the power
to exercise, directly or indirectly, a controlling influence over the
management or policies of Universal; or
(m) (i) Universal shall cease to own 100% of the Equity Interests of
the Borrower or (ii) any Person other than the Borrower shall own any of the
Equity Interests of any of its Subsidiaries; or
(n) Any Loan Party or any ERISA Affiliate shall incur or could be
reasonably expected to incur liability in excess of $1,000,000 in the aggregate
as a result of one or more of the following and any Loan Party could be
reasonably expected to be required to make a payment in respect of such amount:
(i) the occurrence of any ERISA Event; (ii) the partial or complete withdrawal
of any Loan Party or any of its ERISA Affiliates from a Multiemployer Plan; or
(iii) the reorganization or termination of a Multiemployer Plan;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
Commitments of each Lender Party and the obligation of each Lender to make
Advances (other than Letter of Credit Advances by the Issuing Bank or a Working
Capital Lender pursuant to Section 2.03(c) and Swing Line Advances by a Working
Capital Lender pursuant to Section 2.02(b)) and of the Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at
103
the request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the Advances, all interest thereon and all other amounts
payable under this Agreement, the Notes, if any, and the other Loan Documents to
be forthwith due and payable, whereupon the Advances, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to any Loan Party or any of its
Subsidiaries under the Federal Bankruptcy Code, (x) the Commitments of each
Lender Party and the obligation of each Lender to make Advances (other than
Letter of Credit Advances by the Issuing Bank or a Working Capital Lender
pursuant to Section 2.03(c) and Swing Line Advances by a Working Capital Lender
pursuant to Section 2.02(b) and of the Issuing Bank to issue Letters of Credit
shall automatically be terminated and (y) the Advances, all such interest and
all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default.
If any Event of Default shall have occurred and be continuing, the Agent may,
and upon the request of the Required Lenders shall, irrespective of whether it
is taking any of the actions described in Section 6.01 or otherwise, make demand
upon the Borrower to, and forthwith upon such demand the Borrower will, pay to
the Agent on behalf of the Lender Parties in same day funds at the Agent's
office designated in such demand, for deposit in the L/C Cash Collateral
Account, an amount equal to the aggregate Available Amount of all Letters of
Credit then outstanding. If at any time the Agent determines that any funds held
in the L/C Cash Collateral Account are subject to any right or claim of any
Person other than the Agent and the Lender Parties or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrower will, forthwith upon demand by the Agent, pay to the Agent, as
additional funds to be deposited and held in the L/C Cash Collateral Account, an
amount equal to the excess of (a) such aggregate Available Amount over (b) the
total amount of funds, if any, then held in the L/C Cash Collateral Account that
the Agent determines to be free and clear of any such right and claim.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender Party (in its
capacities as a Lender, the Issuing Bank (if applicable) and a potential Hedge
Bank) hereby appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement and
the other Loan Documents as are delegated to the Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the Debt resulting
from the Advances), the Agent shall not be required to exercise any discretion
or take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be
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binding upon all Lender Parties and all holders of Notes; provided, however,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to this Agreement or applicable law.
The Agent agrees to give to each Lender Party prompt notice of each notice given
to it by the Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (a) may treat
the Lender that made any Advance as the holder of the Debt resulting therefrom
until the Agent receives and accepts an Assignment and Acceptance entered into
by such Lender, as assignor, and an Eligible Assignee, as assignee, as provided
in Section 8.07; (b) may consult with legal counsel (including counsel for any
Loan Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender Party and shall not be
responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in, or in connection with, the
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. BNP and Affiliates. With respect to its Commitments, the
Advances made by it and any Notes issued to it, BNP shall have the same rights
and powers under the Loan Documents as any other Lender Party and may exercise
the same as though it were not the Agent; and the term "Lender Party" or
"Lenders" shall, unless otherwise expressly indicated, include BNP in its
individual capacity. BNP and its affiliates may accept deposits from, lend money
to, act as trustee under indentures of, accept investment banking engagements
from and generally engage in any kind of business with, any Loan Party, any of
its Subsidiaries and any Person who may do business with or own securities of
any Loan Party or any such Subsidiary, all as if BNP were not the Agent and
without any duty to account therefor to the Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender Party and, based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender Party and based on such
documents and information
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as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.
SECTION 7.05. Indemnification. (a) Each Lender Party severally agrees
to indemnify the Agent (to the extent not promptly reimbursed by the Borrower)
from and against such Lender Party's ratable share (determined as provided
below) of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including without limitation reasonable fees and expenses of
counsel) that may be imposed on, incurred by, or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any action taken or
omitted by the Agent under the Loan Documents (collectively, the "INDEMNIFIED
COSTS"); provided, however, that no Lender Party shall be liable for any portion
of such Indemnified Costs resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender Party agrees to
reimburse the Agent promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 8.04, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower. For purposes of this
Section 7.05, the Lender Parties' respective ratable shares of any amount shall
be determined, at any time, according to the sum of (a) the aggregate principal
amount of the Advances outstanding at such time and owing to the respective
Lender Parties, (b) their respective Pro Rata Shares of the aggregate Available
Amount of all Letters of Credit outstanding at such time, (c) the aggregate
unused portions of their respective Term Commitments at such time and (d) their
respective Unused Working Capital Commitments at such time. In the case of any
investigation, litigation or proceeding giving rise to any Indemnified Costs,
this Section 7.05 applies whether any such investigation, litigation, or
proceeding is brought by the Agent, any Lender, any other Lender Party or a
third party. The failure of any Lender Party to reimburse the Agent promptly
upon demand for its ratable share of any amount required to be paid by the
Lender Party to the Agent as provided herein shall not relieve any other Lender
Party of its obligation hereunder to reimburse the Agent for its ratable share
of such amount, but no Lender Party shall be responsible for the failure of any
other Lender Party to reimburse the Agent for such other Lender Party's ratable
share of such amount. Without prejudice to the survival of any other agreement
of any Lender Party hereunder, the agreement and obligations of each Lender
Party contained in this Section 7.05(a) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
(b) Each Lender Party severally agrees to indemnify the Issuing Bank (to the
extent not promptly reimbursed by the Borrower) from and against such Lender
Party's ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Issuing Bank in any way relating to or
arising out of the Loan Documents or any action taken or omitted by the Issuing
Bank under the Loan Documents; provided, however, that no Lender Party shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Issuing Bank's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender Party agrees to reimburse the Issuing
Bank promptly
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upon demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under Section
8.04, to the extent that the Issuing Bank is not promptly reimbursed for such
costs and expenses by the Borrower. For purposes of this Section 7.05(b), the
Lender Parties' respective ratable shares of any amount shall be determined, at
any time, according to the sum of (a) the aggregate principal amount of the
Advances outstanding at such time and owing to the respective Lender Parties,
(b) their respective Pro Rata Shares of the aggregate Available Amount of all
Letters of Credit outstanding at such time, (c) their respective unused portions
of their Term Commitments at such time plus (d) their respective Unused Working
Capital Commitments at such time. The failure of any Lender Party to reimburse
the Issuing Bank promptly upon demand for its ratable share of any amount
required to be paid by the Lender Parties to the Issuing Bank as provided herein
shall not relieve any other Lender Party of its obligation hereunder to
reimburse the Issuing Bank for its ratable share of such amount, but no Lender
Party shall be responsible for the failure of any other Lender Party to
reimburse the Issuing Bank for such other Lender Party's ratable share of such
amount. Without prejudice to the survival of any other agreement of any Lender
Party hereunder, the agreement and obligations of each Lender Party contained in
this Section 7.05(b) shall survive the payment in full of principal, interest
and all other amounts payable hereunder and under the other Loan Documents.
SECTION 7.06. Successor Agents. The Agent may resign at any time by
giving written notice thereof to the Lender Parties and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent provided that, so long as the consent of the Borrower is not
unreasonably withheld, the Borrower shall have the right to consent to any such
successor Agent (other than a successor Agent that is a Lender at such time with
a commitment of at least $5,000,000 and a combined capital and surplus of at
least $500,000,000). If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lender Parties, appoint a successor Agent provided that, so long as the consent
of the Borrower is not unreasonably withheld, the Borrower shall have the right
to consent to any such successor Agent (other than a successor Agent that is a
Lender at such time with a commitment of at least $5,000,000 and a combined
capital and surplus of at least $500,000,000). Upon the acceptance of any
appointment as Agent hereunder by a successor Agent and upon the execution and
filing or recording of such financing statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as the
Required Lenders may request, in order to continue the perfection of the Liens
granted or purported to be granted by the Collateral Documents, such successor
Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under the Loan Documents.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
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SECTION 7.07 Agents. The designation of Fleet National Bank as
Syndication Agent and LaSalle National Bank as Documentation does not confer any
rights or impose any obligations in addition to those rights and obligations
applicable to the Lenders generally.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Notes or any other Loan Document, nor consent to any
departure by the Loan Parties therefrom, shall in any event be effective unless
the same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (a) no amendment, waiver or
consent shall, unless in writing and signed by all of the Lenders, do any of the
following at any time: (i) waive any of the conditions specified in Section
3.01, (ii) change the number of Lenders or the percentage of (x) the
Commitments, (y) the aggregate unpaid principal amount of the Advances or (z)
the aggregate Available Amount of outstanding Letters of Credit that, in each
case, shall be required for the Lenders or any of them to take any action
hereunder, (iii) release all or substantially all of the Collateral in any
transaction or series of related transactions or permit the creation,
incurrence, assumption or existence of any Lien on all or substantially all of
the Collateral in any transaction or series of related transactions to secure
any Obligations other than Obligations owing to the Secured Parties under the
Loan Documents or (iv) amend this Section 8.01 and (b) no amendment, waiver or
consent shall, unless in writing and signed by the Required Lenders, the Agents
and each Lender that has a Commitment under the Term A Facility, Term B Facility
or Working Capital Facility if affected by such amendment, waiver or consent,
(i) increase the Commitments of such Lender, or subject such Lender to any
additional obligations, (ii) reduce the principal of, or interest on, Advances
payable to such Lender or any fees or other amounts payable hereunder to such
Lender, (iii) postpone any date fixed for any payment of principal of, or
interest on, Advances payable to such Lender or any fees or other amounts
payable hereunder to such Lender or (iv) change the order of application of any
prepayment set forth in Section 2.06 in any manner that materially affects such
Lender; provided further that no amendment, waiver or consent shall, unless in
writing and signed by the Swing Line Bank or the Issuing Bank, as the case may
be, in addition to the Lenders required above to take such action, affect the
rights or obligations of the Swing Line Bank or the Issuing Bank, as the case
may be, under this Agreement; and provided further that no amendment, waiver or
consent shall, unless in writing and signed by the Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Agent under this Agreement or the other Loan Documents.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
to the Borrower, at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Chief
Executive Officer, telecopier no. (000) 000-0000; if to
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any Restatement Lender or the Issuing Bank, at its Domestic Lending Office
specified opposite its name on Schedule I hereto; if to any other Lender Party,
at its Domestic Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender Party; and if to the Agent, at its address
at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance
Group, telecopier number (000) 000-0000; or, as to each party, at such other
address as shall be designated by such party in a written notice to the other
parties. All such notices and communications shall, when mailed, telegraphed,
telecopied or telexed, be effective when deposited in the mails, delivered to
the telegraph company, transmitted by telecopier or confirmed by telex
answerback, respectively, except that notices and communications to the Agent
pursuant to Article II, III or VII shall not be effective until received by the
Agent. Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or the Notes or of any Exhibit hereto
to be executed and delivered hereunder shall be effective as delivery of a
manually executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender
Party or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand (i) all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of outside counsel for the
Agent with respect thereto, with respect to advising the Agent as to its rights
and responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Agent and the Lender Parties in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Agent and each Lender Party with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the Agent, each
Lender Party and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "INDEMNIFIED PARTY") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) the
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Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Loan Documents or any of the transactions contemplated
thereby, including, without limitation, any acquisition or proposed acquisition
(including, without limitation, the Transaction and any of the other
transactions contemplated hereby) by the Borrower or any of its Subsidiaries or
Affiliates or (ii) the actual or alleged presence of Hazardous Materials on any
property of any Loan Party or any of its Subsidiaries or any Environmental
Action relating in any way to any Loan Party or any of its Subsidiaries, in each
case whether or not such investigation, litigation or proceeding is brought by
any Loan Party, its directors, shareholders or creditors or an Indemnified Party
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated, except to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. The Borrower also
agrees not to assert any claim against the Agent, any Lender Party or any of
their Affiliates, or any of their respective officers, directors, employees,
attorneys and agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Loan Documents or any of the transactions contemplated
thereby.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of the completion of syndication by the Agent as contemplated by Section
2.02(c), a payment or Conversion pursuant to Section 2.09(b)(i) or 2.10(d),
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason or by an Eligible Assignee to a Lender Party, the Borrower shall,
upon demand by such Lender Party (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender Party any amounts required to
compensate such Lender Party for any additional losses, costs or expenses that
it may reasonably incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Agent or any Lender Party, in its sole
discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
8.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by
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Section 6.01 to authorize the Agent to declare the Notes due and payable
pursuant to the provisions of Section 6.01, each Lender Party and each of its
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Note or Notes (if any) held by such Lender Party, irrespective
of whether such Lender Party shall have made any demand under this Agreement or
such Note or Notes and although such obligations may be unmatured. Each Lender
Party agrees promptly to notify the Borrower after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
Party and its respective Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender Party and its respective Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent and when the
Agent shall have been notified by each Restatement Lender and the Issuing Bank
that such Restatement Lender and the Issuing Bank has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower, the Agent and
each Lender Party and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lender Parties.
SECTION 8.07. Assignments and Participations. (a) Each Lender may, upon
at least five Business Days' notice to the Agent, assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) each such assignment shall be of a uniform, and not
a varying, percentage of all rights and obligations under and in respect of any
one Facility, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 and shall
be in an integral multiple of $500,000, (iii) each such assignment shall be to
an Eligible Assignee, (iv) no such assignments shall be permitted without the
consent of the Agent until the Agent shall have notified the Lender Parties that
syndication of the Commitments hereunder has been completed, and (v) the parties
to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $2,000.
(b) The Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in
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the Register, an Assignment and Acceptance, together with a processing and
recordation fee of $2,000.
(c) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the
case may be, hereunder and (y) the Lender or Issuing Bank assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's or Issuing Bank's rights and obligations under this Agreement, such
Lender or Issuing Bank shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender Party or any other Lender
Party and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Loan Documents as are delegated to the Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender or Issuing Bank, as the case may be.
(e) The Agent shall maintain at its address referred to in Section 8.02
a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lender Parties
and the Commitment under each Facility of, and principal amount of the Advances
owing under each Facility to, each Lender Party from time to
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time (the "REGISTER"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the Agent and
the Lender Parties may treat each Person whose name is recorded in the Register
as a Lender Party hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender Party at any
reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. In the case of
any assignment by a Lender, within five Business Days after its receipt of such
notice, the Borrower shall, at its own expense, execute and deliver to the Agent
in exchange for the surrendered Note or Notes a new Note to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it under a
Facility pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained a Commitment hereunder under such Facility, a new Note to the order
of the assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance, and shall
otherwise be in substantially the form of Exhibit A-1 or A-2 hereto, as the case
may be.
(g) Each Lender Party may sell participations in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it) to any Person other than any Loan Party
or any of its Subsidiaries or Affiliates; provided, however, that (i) such
Lender Party's obligations under this Agreement (including, without limitation,
its Commitments) shall remain unchanged, (ii) such Lender Party shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender Party shall remain the holder of any such Note
for all purposes of this Agreement, (iv) the Borrower, the Agent and the other
Lender Parties shall continue to deal solely and directly with such Lender Party
in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to
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preserve the confidentiality of any Confidential Information received by it from
such Lender Party.
(i) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 8.08. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 8.09. No Liability of the Issuing Bank. The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither the
Issuing Bank nor any of its officers or directors shall be liable or responsible
for: (a) the use that may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (b) the
validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall
be liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (i) the
Issuing Bank's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit comply with the terms of the
Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 8.10. Confidentiality. Neither the Agent nor any Lender Party
shall disclose any Confidential Information to any Person without the consent of
the Borrower, other than (a) to the Agent's or such Lender Party's Affiliates
and their officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and participants, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process and
(c) as requested or required by any state, federal or foreign authority or
examiner regulating banks or banking.
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SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any New York State or federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 8.12. Final Agreement. This written agreement and the other
Loan Documents represent the final agreement between the parties hereto and may
not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties hereto.
SECTION 8.13. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.14. Waiver of Jury Trial. Each of the Borrower, the Agent and
the Lender Parties irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the Advances or the
actions of the Agent or any Lender Party in the negotiation, administration,
performance or enforcement thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE BORROWER
GLENOIT CORPORATION
By /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: EVP and CEO
THE AGENT, ISSUING BANK AND SWING LINE BANK
BANQUE NATIONALE DE PARIS,
as Agent, Issuing Bank and Swing Line Bank
By /s/ Xxxx Xxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxx
Title: Director
By /s/ Xxxx Xxxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxxx
Title: VP
THE RESTATEMENT LENDERS
BANQUE NATIONALE DE PARIS
By /s/ Xxxx Xxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxx
Title: Director
By /s/ Xxxx Xxxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxxx
Title: VP
116
CENTURA BANK
By /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Bank Officer
117
FIRST SOURCE FINANCIAL, LLP.
By /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior VP
118
FLEET BANK, N.A.
By /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior VP
119
LASALLE NATIONAL BANK
By /s/ Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
Title: Assistant VP
