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EXHIBIT 10.12
$75,000,000
LOAN AND SECURITY AGREEMENT
AMONG
THOMASTON XXXXX, INC.,
AS BORROWER,
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
AS LENDERS,
FOOTHILL CAPITAL CORPORATION,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
AND
FOOTHILL CAPITAL CORPORATION
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS CO-AGENTS
AS OF JULY 27, 1999
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TABLE OF CONTENTS
Page(s)
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I. DEFINITIONS AND CONSTRUCTION.......................................................................1
A. Definitions...............................................................................1
1.2 Accounting Terms.........................................................................23
1.3 Code.....................................................................................24
1.4 Construction.............................................................................24
1.5 Schedules and Exhibits...................................................................24
2. LOAN AND TERMS OF PAYMENT.........................................................................24
2.1 Revolving Advances.......................................................................24
2.2 Letters of Credit........................................................................33
2.3 Tranche A Term Loans.....................................................................36
2.4 Tranche B Term Loans.....................................................................37
2.5 Payments.................................................................................38
2.6 Overadvances.............................................................................40
2.7 Interest and Letter of Credit Fees: Rates, Payments, and
Calculations.............................................................................40
2.8 Collection of Accounts...................................................................42
2.9 Crediting Payments; Application of Collections...........................................42
2.10 Designated Account.......................................................................43
2.11 Maintenance of Loan Account; Statements of Obligations...................................43
2.12 Fees.....................................................................................43
2.13 Eurodollar Rate Loans....................................................................44
2.14 Illegality...............................................................................46
2.15 Requirements of Law......................................................................47
2.16 Indemnity................................................................................48
3. CONDITIONS; TERM OF AGREEMENT.....................................................................49
3.1 Conditions Precedent to the Initial Advance, Letter of Credit and the
Term Loans...............................................................................49
3.2 Conditions Precedent to all Advances, all Letters of Credit and the Term
Loans....................................................................................52
3.3 Condition Subsequent.....................................................................52
3.4 Term.....................................................................................53
3.5 Effect of Termination....................................................................53
3.6 Early Termination by Borrower............................................................53
3.7 Termination Upon Event of Default........................................................54
4. CREATION OF SECURITY INTEREST.....................................................................54
4.1 Grant of Security Interest...............................................................54
4.2 Negotiable Collateral....................................................................54
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4.3 Collection of Accounts, General Intangibles, and Negotiable
Collateral...............................................................................54
4.4 Delivery of Additional Documentation Required............................................55
4.5 Power of Attorney........................................................................55
4.6 Right to Inspect.........................................................................56
5. REPRESENTATIONS AND WARRANTIES....................................................................56
5.1 No Encumbrances..........................................................................56
5.2 Eligible Accounts........................................................................56
5.3 Eligible Inventory.......................................................................57
5.4 Equipment................................................................................57
5.5 Location of Inventory and Equipment......................................................57
5.6 Inventory Records........................................................................57
5.7 Location of Chief Executive Office; FEIN.................................................57
5.8 Due Organization and Qualification; Subsidiaries.........................................57
5.9 Due Authorization; No Conflict...........................................................58
5.10 Litigation...............................................................................59
5.11 No Material Adverse Change. .............................................................59
5.12 Solvency.................................................................................59
5.13 Employee Benefits........................................................................59
5.14 Environmental Condition..................................................................59
5.15 Intellectual Property....................................................................60
5.16 Year 2000 Compliance.....................................................................60
6. AFFIRMATIVE COVENANTS.............................................................................60
6.1 Accounting System........................................................................60
6.2 Collateral Reporting.....................................................................60
6.3 Financial Statements, Reports, Certificates..............................................61
6.4 Tax Returns..............................................................................62
6.5 Guarantor Reports........................................................................63
6.6 Returns..................................................................................63
6.7 Title to Equipment.......................................................................63
6.8 Maintenance of Equipment.................................................................63
6.9 Taxes....................................................................................63
6.10 Insurance................................................................................64
6.11 No Setoffs or Counterclaims..............................................................65
6.12 Location of Inventory and Equipment......................................................65
6.13 Compliance with Laws.....................................................................66
6.14 Employee Benefits........................................................................66
6.15 Leases...................................................................................67
7. NEGATIVE COVENANTS................................................................................67
7.1 Indebtedness.............................................................................67
7.2 Liens....................................................................................68
7.3 Restrictions on Fundamental Changes......................................................68
7.4 Disposal of Assets.......................................................................68
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7.5 Change Name..............................................................................68
7.6 Guarantee................................................................................68
7.7 Nature of Business.......................................................................68
7.8 Prepayments and Amendments...............................................................68
7.9 Change of Control........................................................................69
7.10 Consignments.............................................................................69
7.11 Distributions............................................................................69
7.12 Accounting Methods.......................................................................69
7.13 Investments..............................................................................69
7.14 Transactions with Affiliates.............................................................69
7.15 Suspension...............................................................................70
7.16 Compensation.............................................................................70
7.17 Use of Proceeds..........................................................................70
7.18 Change in Location of Chief Executive Office; Inventory and Equipment
with Bailees.............................................................................70
7.19 No Prohibited Transactions Under ERISA...................................................70
7.20 Financial Covenants......................................................................71
7.21 Capital Expenditures.....................................................................72
8. EVENTS OF DEFAULT.................................................................................73
9. THE LENDER GROUP'S RIGHTS AND REMEDIES............................................................75
9.1 Rights and Remedies......................................................................75
9.2 Remedies Cumulative......................................................................78
9.3 Special Provisions Regarding Tranche B Lenders...........................................78
10. TAXES AND EXPENSES................................................................................79
11. WAIVERS; INDEMNIFICATION..........................................................................79
11.1 Demand; Protest; etc.....................................................................79
11.2 The Lender Group's Liability for Collateral..............................................79
11.3 Indemnification..........................................................................79
12. NOTICES...........................................................................................80
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER........................................................82
14. DESTRUCTION OF BORROWER'S DOCUMENTS...............................................................83
15. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS........................................................83
15.1 Assignments and Participations...........................................................83
15.2 Successors...............................................................................86
16. AMENDMENTS; WAIVERS...............................................................................86
16.1 Amendments and Waivers...................................................................86
16.2 No Waivers; Cumulative Remedies..........................................................87
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17. AGENT; CO-AGENTS; THE LENDER GROUP................................................................88
17.1 Appointment and Authorization of Agent and the Co-Agents.................................88
17.2 Delegation of Duties.....................................................................89
17.3 Liability of Agent-Related Persons and Co-Agent Related Persons..........................89
17.4 Reliance by Agent and the Co-Agents......................................................89
17.5 Notice of Default or Event of Default....................................................90
17.6 Credit Decision..........................................................................91
17.7 Costs and Expenses; Indemnification......................................................91
17.8 Agent in Individual Capacity.............................................................92
17.9 Successor Agent..........................................................................92
17.10 Withholding Tax..........................................................................93
17.11 Collateral Matters.......................................................................94
17.12 Restrictions on Actions by Lenders; Sharing of Payments..................................95
17.13 Agency for Perfection....................................................................96
17.14 Payments by Agent to the Lenders.........................................................96
17.15 Concerning the Collateral and Related Loan Documents.....................................96
17.16 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information...................................................97
17.17 Several Obligations; No Liability........................................................98
18. GENERAL PROVISIONS................................................................................98
18.1 Effectiveness............................................................................98
18.2 Section Headings.........................................................................98
18.3 Interpretation...........................................................................99
18.4 Severability of Provisions...............................................................99
18.5 Counterparts; Telefacsimile Execution....................................................99
18.6 Revival and Reinstatement of Obligations.................................................99
18.7 Integration..............................................................................99
18.8 Time is of the Essence. ................................................................100
18.9 Press Releases..........................................................................100
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SCHEDULES AND EXHIBITS
Schedule C-1 Commitments
Schedule E-1 Eligible Inventory Locations
Schedule E-2 Eligible Off-Site Inventory Locations
Schedule P-1 Permitted Liens
Schedule R-1 Real Property Collateral
Schedule 2.8 List of Deposit Accounts
Schedule 3.1(k) Collateral Access Agreements
Schedule 5.10 Litigation
Schedule 5.13 ERISA Benefit Plans
Schedule 5.14 Environmental Matters
Schedule 5.15 Intellectual Property
Schedule 6.12 Location of Inventory and Equipment
Schedule 7.1 Indebtedness
Schedule 7.10 Consignments and Xxxx and Hold Sales
Schedule 7.14 Transactions with Affiliates
Exhibit A-1 Form of Assignment and Acceptance
Exhibit C-1 Form of Compliance Certificate
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (THIS "AGREEMENT"), is entered into
as of July 27, 1999, among THOMASTON XXXXX, INC., a Georgia corporation
("Borrower"), with its chief executive office and principal place of business
located at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx 00000, on the one hand, and
the financial institutions listed on the signature pages hereof (such financial
institutions, together with their respective successors and assigns, are
referred to hereinafter each individually as a "Lender" and collectively as the
"Lenders"), FOOTHILL CAPITAL CORPORATION, as administrative agent and
collateral agent ("Agent") and FOOTHILL CAPITAL CORPORATION and GENERAL
ELECTRIC CAPITAL CORPORATION as co- agents (collectively, the "Co-Agents"), on
the other hand.
The parties agree as follows:
I. DEFINITIONS AND CONSTRUCTION.
A. DEFINITIONS. As used in this Agreement, the
following terms shall have the following definitions:
"Account Debtor" means, as of any relevant date, any
Person who is obligated under, with respect to, or on account of, an Account.
"Accounts" means all currently existing and hereafter
arising accounts, contract rights, and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods or the rendition of services
by Borrower, irrespective of whether earned by performance, and any and all
credit insurance, guaranties, or security therefor.
"Accounts Payable Reserve" means reserves (determined
from time to time by the Co-Agents in their discretion) for accounts payable
more than sixty (60) days past due.
"Adjusted Eurodollar Rate" means, with respect to
each Interest Period for any Eurodollar Rate Loan, the rate per annum (rounded
upwards, if necessary, to the next 1/16%) determined by dividing (a) the
Eurodollar Rate for such Interest Period by (b) a percentage equal to (i) one
hundred percent (100%) minus (ii) the Reserve Percentage. The Adjusted
Eurodollar Rate shall be adjusted on and as of the effective day of any change
in the Reserve Percentage.
"Advances" has the meaning set forth in Section
2.1(a).
"Affiliate" means, as applied to any Person, any
other Person who directly or indirectly controls, is controlled by, is under
common control with or is a director
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or officer of such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to vote five percent (5%) or
more of the securities having ordinary voting power for the election of
directors or the direct or indirect power to direct the management and policies
of a Person.
"Agent" means Foothill, solely in its capacity as
administrative agent and collateral agent for the Lender Group, and shall
include any successor agent.
"Agent's Account" has the meaning set forth in
Section 2.8.
"Agent Advance" has the meaning set forth in
Section 2.1(h).
"Agent Loan" has the meaning set forth in Section
2.1(g).
"Agent-Related Persons" means Agent, together with
its Affiliates, and the officers, directors, employees, counsel, agents, and
attorneys-in-fact of Agent and such Affiliates.
"Agreement" has the meaning set forth in the preamble
hereto.
"Assignee" has the meaning set forth in Section 15.1.
"Assignment and Acceptance" has the meaning set forth
in Section 15.1 (a) and shall be in the form of Exhibit A-1.
"Authorized Person" means any officer or other
employee of Borrower.
"Availability" means, as of the date of
determination, the result (so long as such result is a positive number) of (a)
the lesser of the Borrowing Base or the Maximum Tranche A Amount, less (b) the
Revolving Facility Usage.
"Average Unused Portion of Maximum Tranche A Amount"
means, as of any date of determination, (a) the Maximum Tranche A Amount, less
(b) the sum of (i) the average Daily Balance of Advances and Tranche A Term
Loans that were outstanding during the immediately preceding month, plus (ii)
the average Daily Balance of the undrawn Letters of Credit that were
outstanding during the immediately preceding month.
"Back Bay" means Back Bay Capital Funding LLC, a
Delaware limited liability company.
"Bankruptcy Code" means the United States Bankruptcy
Code (11 U.S.C. ss. 101 et seq.), as amended, and any successor statute.
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"Benefit Plan" means a "defined benefit plan" (as
defined in Section 3(35) of ERISA) for which Borrower, any Subsidiary of
Borrower, or any ERISA Affiliate has been an "employer" (as defined in Section
3(5) of ERISA) within the past six years.
"Borrower" has the meaning set forth in the preamble
to this Agreement.
"Borrower's Books" means all of Borrower's books and
records including: ledgers; records indicating, summarizing, or evidencing
Borrower's properties or assets (including the Collateral) or liabilities; all
information relating to Borrower's business operations or financial condition;
and all computer programs, disk or tape files, printouts, runs, or other
computer prepared information.
"Borrowing" means a borrowing hereunder consisting of
Advances made on the same day by the Lenders, or by Agent in the case of an
Agent Loan or an Agent Advance.
"Borrowing Base" has the meaning set forth in Section
2.1(a).
"Business Day" means any day that is not a Saturday,
Sunday, or other day on which national banks are authorized or required to
close and Agent and Co- Agents are open.
"Business Plan" has the meaning set forth in Section
6.3(e).
"Change of Control" shall be deemed to have occurred
at such time as (a) a "person" or "group" (within the meaning of Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) (other than the Xxxxxxxxx
Family, Mt. Xxxxxx Xxxxx or any Person acquiring ownership of Borrower under
the warrants provided for in connection with the SunTrust Loan Agreement)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of more than thirty percent
(30%) of the total voting power of all classes of stock then outstanding of
Borrower entitled to vote in the election of directors, or (b) the Xxxxxxxxx
Family ceases to own or control at least twenty-five percent (25%) of the total
voting power of all classes of stock then outstanding of Borrower entitled to
vote in the election of directors, or (c) without double counting the officers
and directors of Borrower as of the Closing Date, together with Xxxxxxxxx
Family, cease to own or control at least a majority of the total voting power
of all classes of stock then outstanding of Borrower entitled to vote in the
election of directors.
"Closing Date" means the date of the first to occur
of the making of the initial Advance, the issuance of the initial Letter of
Credit or the funding of the Term Loans.
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"Co-Agent Related Person" means a Co-Agent, together
with its Affiliates, and the officers, directors, employees, counsel, agents,
and attorneys-in-fact of such Co-Agent and such Affiliates.
"Co-Agents" shall have the meaning set forth in the
preamble of this Agreement.
"Code" means the Georgia Uniform Commercial Code.
"Collateral" means all real and personal property of
Borrower, whether now existing or hereafter arising, including without
limitation each of the following:
1. the Accounts,
2. Borrower's Books,
3. the Equipment,
4. the General Intangibles,
5. the Inventory,
6. the Negotiable Collateral,
7. the Investment Property and its components,
8. the Real Property Collateral,
9. any money, or other assets of Borrower that
now or hereafter come into the possession, custody, or control of the Lender
Group, and
10. the proceeds and products, whether tangible
or intangible, of any of the foregoing, including proceeds of insurance
covering any or all of the Collateral, and any and all Accounts, Borrower's
Books, Equipment, General Intangibles, Inventory, Negotiable Collateral,
Investment Property, Real Property, money, deposit accounts, or other tangible
or intangible property resulting from the sale, exchange, collection, or other
disposition of any of the foregoing, or any portion thereof or interest
therein, and the proceeds thereof.
"Collateral Access Agreement" means a landlord
waiver, mortgagee waiver, bailee letter, or acknowledgment agreement of any
warehouseman, processor, printer, lessor, consignee, or other Person in
possession of, having a Lien upon, or having rights or interests in the
Equipment or Inventory, in each case, in form and substance satisfactory to
Agent.
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"Collections" means all cash, checks, notes,
instruments, and other items of payment (including, insurance proceeds,
proceeds of cash sales, rental proceeds, and tax refunds).
"Commitment" means, at any time with respect to a
Lender, the principal amount set forth beside such Lender's name under the
heading "Commitment" on Schedule C-1 or on the signature page of the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 15.1, as such Commitment may be
adjusted from time to time in accordance with the provisions of Section 15.1,
which amount is the aggregate amount of such Lender's Tranche A Commitment and
Tranche B Commitment, and "Commitments" means, collectively, the aggregate
amount of the commitments of all of the Lenders.
"Compliance Certificate" means a certificate
substantially in the form of Exhibit C-1 and delivered by the chief accounting
officer of Borrower to Agent.
"Consolidated Current Assets" means, as of any date
of determination, the aggregate amount of all current assets of Borrower that
would, in accordance with GAAP, be classified on a balance sheet as current
assets.
"Consolidated Current Liabilities" means, as of any
date of determination, the aggregate amount of all current liabilities of
Borrower that would, in accordance with GAAP, be classified on a balance sheet
as current liabilities. For purposes of this definition, all Obligations
outstanding under this Agreement shall be deemed to be current liabilities
without regard to whether they would be deemed to be so under GAAP.
"Cost" means, with respect to Eligible Inventory, the
lower of cost or market value of such Eligible Inventory as determined on a
basis consistent with Borrower's current and historical accounting practices.
"Current Pay Interest" has the meaning set forth in
Section 2.7(a).
"Daily Balance" means the amount of an Obligation
owed at the end of a given day.
"deems itself insecure" means that the Person deems
itself insecure in accordance with the provisions of Section 1-208 of the Code.
"Default" means an event, condition, or default that,
with the giving of notice, the passage of time, or both, would be an Event of
Default.
"Defaulting Lender" has the meaning set forth in
Section 2.1 (f)(ii).
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"Defaulting Lenders Rate" means the Reference Rate
for the first three (3) days from and after the date the relevant payment is
due and thereafter at the interest rate then applicable to Advances.
"Designated Account" means account number
2080000693888 of Borrower maintained with Borrower's Designated Account Bank,
or such other deposit account of Borrower (located within the United States)
which has been designated, in writing and from time to time, by Borrower to
Agent.
"Designated Account Bank" means First Union National
Bank, whose office is located at Atlanta, Georgia, and whose ABA number is
000000000.
"Dilution" means, in each case based upon the
experience of the immediately prior three (3) months, the result of dividing
the Dollar amount of (a) bad debt write-downs, discounts, advertising, returns,
promotions, credits, or other dilution with respect to the Accounts, by (b)
Borrower's Collections (excluding extraordinary items) plus the Dollar amount
of clause (a).
"Dilution Reserve" means, as of any date of
determination, an amount sufficient to reduce the Lenders' advance rate against
Eligible Accounts by one percentage point for each percentage point by which
Dilution is in excess of five (5%).
"Disbursement Letter" means an instructional letter
executed and delivered by Borrower to Agent regarding the extensions of credit
to be made on the Closing Date, the form and substance of which shall be
satisfactory to Agent.
"Dollars or $" means United States dollars.
"East Bank" means East Bank Trading Co., a Georgia
corporation.
"EBITDA" means, for any period, the net income (or
net loss) of Borrower, for such period as determined in accordance with GAAP,
(a) plus, to the extent reflected in the changes in the statement of net income
for such period, the sum of, without duplication, the following for Borrower
(i) interest expense, (ii) taxes actually paid, (iii) depreciation and
amortization expense, (iv) extraordinary losses, (v) non-cash adjustments for
original issue discount, and (vi) the non-cash adjustments approved by the
Lenders from time to time, and (b) minus, to the extent reflected in the
changes in the statement of net income for such period, extraordinary gains of
Borrower.
"Eligible Accounts" means, collectively, the Eligible
Domestic Accounts and the Eligible Foreign Accounts.
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"Eligible Xxxx and Hold Accounts" means those
Accounts that do not qualify as Eligible Domestic Accounts solely because the
goods giving rise to such Accounts have not been shipped to the Account Debtor.
"Eligible Xxxx and Hold Inventory" means those items
of inventory that do not qualify as Eligible Landed Inventory solely because
such inventory has been sold (but not shipped) to an Account Debtor so long as
such sale is represented by an Eligible Xxxx and Hold Account.
"Eligible Domestic Accounts" means those Accounts net
of customary reserves (other than reserves provided for elsewhere in this
Agreement) created by Borrower in the ordinary course of business, that arise
out of Borrower's sale of goods or rendition of services, that strictly comply
with each and all of the representations and warranties respecting Accounts
made by Borrower to the Lender Group in the Loan Documents, and that are and at
all times continue to be acceptable to the Co-Agents in all respects; provided,
however, that standards of eligibility may be fixed and revised from time to
time by the Co- Agents in the Co-Agents' reasonable credit judgment. Eligible
Accounts shall not include the following:
(a) (i) Accounts that the Account Debtor has
failed to pay within
(A) sixty (60) days of due date
therefor, or
(B) (x) with respect to
Accounts in an aggregate amount of up to $600,000 and with respect to which the
Account Debtor is Sweet Xxx, subject to the credit quality of Sweet Xxx being
acceptable to the Co-Agents as determined by the Co-Agents from time to time in
their reasonable credit judgment, one hundred twenty (120) days of invoice
date,
(y) during the period from
the Closing Date to the date one hundred twenty (120) days following the
Closing Date only, with respect to Accounts in an aggregate amount up to
$1,200,000 and with respect to which the Account Debtor is East Bank, subject
to the credit quality of East Bank being acceptable to the Co- Agents as
determined by the Co-Agents from time to time in the their reasonable credit
judgment, one hundred twenty (120) days of invoice date, and
(z) with respect to all
other Accounts, ninety (90) days of invoice date, or
(ii) Accounts with selling terms of more
than sixty (60) days;
(b) Accounts owed by an Account Debtor or its
Affiliates where 50% or more of all Accounts owed by that Account Debtor (or
its Affiliates) are deemed ineligible under clause (a) above;
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(c) Accounts with respect to which the Account
Debtor is an employee, Affiliate, or agent of Borrower;
(d) Accounts with respect to which goods are
placed on consignment, guaranteed sale, sale or return, sale on approval, xxxx
and hold, or other terms by reason of which the payment by the Account Debtor
may be conditional;
(e) Accounts that are not payable in Dollars or
with respect to which the Account Debtor: (i) does not maintain its chief
executive office in the United States or Canada, or (ii) is not organized under
the laws of the United States or any State thereof or Canada or any province
thereof, or (iii) is the government of any foreign country or sovereign state,
or of any state, province, municipality, or other political subdivision
thereof, or of any department, agency, public corporation, or other
instrumentality thereof;
(f) Accounts with respect to which the Account
Debtor is either (i) the United States or any department, agency, or
instrumentality of the United States (exclusive, however, of Accounts with
respect to which Borrower has complied, to the satisfaction of the Co-Agents,
with the Assignment of Claims Act, 31 U.S.C. ss. 3727), or (ii) any State of
the United States (exclusive, however, of Accounts owed by any State that does
not have a statutory counterpart to the Assignment of Claims Act);
(g) Accounts with respect to which the Account
Debtor is a creditor of Borrower, has or has asserted a right of setoff, has
disputed its liability, or has made any claim with respect to the Account
(including without limitation for amounts due to the Account Debtor for
cooperative advertising);
(h) Accounts with respect to an Account Debtor
(other than Wal- Mart or VF JeansWear) whose total obligations owing to
Borrower exceed ten percent (10%) of all Eligible Accounts, to the extent of
the obligations owing by such Account Debtor in excess of such percentage;
(i) Accounts with respect to Wal-Mart, as
Account Debtor, so long as the Co-Agents are reasonably satisfied with the
credit quality of such Account Debtor as determined by the Co-Agents from time
to time, to the extent Wal-Mart's total obligations owing to Borrower exceed
twenty percent (20%) of all Eligible Accounts;
(j) Accounts with respect to VF JeansWear, as
Account Debtor, so long as the Co-Agents are reasonably satisfied with the
credit quality of such Account Debtor as determined by the Co-Agents from time
to time, to the extent VF JeansWear's total obligations owing to Borrower
exceeds twenty percent (20%) of all Eligible Accounts;
(k) Accounts with respect to which the Account
Debtor is subject to any Insolvency Proceeding, or becomes insolvent, or goes
out of business;
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(l) Accounts the collection of which the
Co-Agents, in their reasonable credit judgment, believe to be doubtful by
reason of the Account Debtors' financial condition;
(m) Accounts with respect to which the goods
giving rise to such Account have not been shipped and billed to the Account
Debtor, the services giving rise to such Account have not been performed and
accepted by the Account Debtor, or the Account otherwise does not represent a
final sale; and
(n) Accounts that represent progress payments
or other advance xxxxxxxx that are due prior to the completion of performance
by Borrower of the subject contract for goods or services.
"Eligible Foreign Accounts" means those Accounts that
do not qualify as Eligible Domestic Accounts solely because the Account Debtor
with respect to such Accounts (i) does not maintain its chief executive office
in the United States or Canada or (ii) is not organized under the laws of the
United States or any State thereof or Canada or any province thereof, or (iii)
is the government of any foreign country or sovereign state, or of any state,
province, municipality, or other political subdivision thereof, or of any
department, agency, province, municipality, or other political subdivision
thereof, or of any department, agency, public corporation, or other
instrumentality thereof, but either (a) such Accounts are supported by an
irrevocable letter of credit satisfactory to the Co-Agents (as to form,
substance, and issuer or domestic confirming bank) that has been delivered to
Agent and is directly drawable by Agent, or (b) such Accounts are covered by
credit insurance in form and amount, and by an insurer, satisfactory to the
Co-Agents.
"Eligible Inventory" means the Eligible Landed
Inventory and the Eligible Off-Site Inventory.
"Eligible Landed Inventory" means Inventory
consisting of first quality finished goods held for sale in the ordinary course
of Borrower's business and raw materials for such finished goods (including
griege goods and Rolled Stock), that are located at or in-transit between
Borrower's premises identified on Schedule E-1, that strictly comply with each
and all of the representations and warranties respecting Inventory made by
Borrower to the Lender Group in the Loan Documents, and that are and at all
times continue to be acceptable to the Lender Group in all respects; provided,
however, that standards of eligibility may be fixed and revised from time to
time by the Co-Agents in the Co-Agents' reasonable credit judgment. In
determining the amount to be so included, Inventory shall be valued at the
lower of cost or market on a basis consistent with Borrower's current and
historical accounting practices. An item of Inventory shall not be included in
Eligible Landed Inventory if:
(a) it is not owned solely by Borrower or
Borrower does not have good, valid, and marketable title thereto;
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(b) it is not located at, or in-transit between,
Borrower's premises identified on Schedule E-1;
(c) it is not located on property owned or
leased by Borrower or in a contract warehouse, in each case, subject to a
Collateral Access Agreement executed by the mortgagee, lessor, the
warehouseman, or other third party, as the case may be, and segregated or
otherwise separately identifiable from goods of others, if any, stored on the
premises;
(d) it is not subject to a valid and perfected
first priority security interest in favor Agent, for itself and for the benefit
of the Lender Group;
(e) it consists of goods returned or rejected by
Borrower's customers or goods in transit; and
(f) it is obsolete or slow moving, a restrictive
or custom item, work-in-process, a component that is not part of finished
goods, or constitutes spare parts, packaging and shipping materials, supplies
used or consumed in Borrower's business, Inventory subject to a Lien in favor
of any third Person (other than a Lien arising under subsection (b), (c)(to the
extent such Lien is in favor of Wachovia), (e), (f), (g), or (i) of the
definition of Permitted Liens), xxxx and hold goods, defective goods,
"seconds," or Inventory acquired on consignment.
"Eligible Off-Site Inventory" means those items of
Inventory consisting of griege goods that do not qualify as Eligible Landed
Inventory solely because they are not in a location set forth on Schedule E-1
but such Inventory is located at a printer or processor which has executed a
Collateral Access Agreement in favor of Agent and is segregated or otherwise
separately identifiable from goods of others, if any, on the premises of such
printer or processor. As of the Closing Date, the locations of Eligible
Off-Site Inventory are as set forth on Schedule E-2.
"Eligible Transferee" means (a) a commercial bank
organized under the laws of the United States, or any state thereof, and having
total assets in excess of $5,000,000,000, or the asset based lending Affiliate
of such bank, (b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country, and having total
assets in excess of $5,000,000,000, or the asset based lending Affiliate of
such bank; provided that such bank is acting through a branch or agency located
in the United States, (c) a finance company, insurance or other financial
institution, or fund that is engaged in making, purchasing, or otherwise
investing in commercial loans in the ordinary course of its business and having
total assets in excess of $500,000,000, (d) any Affiliate (other than
individuals) of an existing Lender, and (e) any other Person approved by the
Co-Agents.
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"Equipment" means all of Borrower's present and
hereafter acquired machinery, machine tools, motors, equipment, furniture,
furnishings, fixtures, vehicles (including motor vehicles and trailers), tools,
parts, goods (other than consumer goods, farm products, or Inventory), wherever
located, including, (a) any interest of Borrower in any of the foregoing, and
(b) all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing.
"Equipment Net Liquidation Value" means the value of
Equipment on a net liquidation basis determined from time to time by an
appraiser satisfactory to the Co-Agents based on a comparable methodology as
used by MB Valuation Services, Inc. in connection with its appraisal of the
Equipment completed in connection with the closing of this Agreement.
"ERISA" means the Employee Retirement Income Security
Act of 1974, 29 U.S.C. xx.xx. 1000 et seq., amendments thereto, successor
statutes, and regulations or guidance promulgated thereunder.
"ERISA Affiliate" means (a) any corporation subject
to ERISA whose employees are treated as employed by the same employer as the
employees of Borrower under IRC Section 414(b), (b) any trade or business
subject to ERISA whose employees are treated as employed by the same employer
as the employees of Borrower under IRC Section 414(c), (c) solely for purposes
of Section 302 of ERISA and Section 412 of the IRC, any organization subject to
ERISA that is a member of an affiliated service group of which Borrower is a
member under IRC Section 414(m), or (d) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any party subject to ERISA that is a party to
an arrangement with Borrower and whose employees are aggregated with the
employees of Borrower under IRC Section 414(o).
"ERISA Event" means (a) a Reportable Event with
respect to any Benefit Plan or Multiemployer Plan, (b) the withdrawal of
Borrower, any of its Subsidiaries or ERISA Affiliates from a Benefit Plan
during a plan year in which it was a "substantial employer" (as defined in
Section 4001(a)(2) of ERISA), (c) the providing of notice of intent to
terminate a Benefit Plan in a distress termination (as described in Section
4041(c) of ERISA), (d) the institution by the PBGC of proceedings to terminate
a Benefit Plan or Multiemployer Plan, (e) any event or condition (i) that
provides a basis under Section 4042(a)(1), (2), or (3) of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
or Multiemployer Plan, or (ii) that may result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the partial or
complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of
Borrower, any of its Subsidiaries or ERISA Affiliates from a Multiemployer
Plan, or (g) providing any security to any Plan under Section 401(a)(29) of the
IRC by Borrower or its Subsidiaries or any of their ERISA Affiliates.
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"Eurodollar Rate" means, with respect to the Interest
Period for a Eurodollar Rate Loan, the interest rate per annum at which United
States dollar deposits are offered to Xxxxx Fargo Bank, National Association by
major banks in the London interbank market (or other Eurodollar Rate market
selected by Agent) on or about 2:00 p.m. (Atlanta, Georgia time) two (2)
Business Days prior to the commencement of such Interest Period in amounts
comparable to the amount of the Eurodollar Rate Loans requested by and
available to Borrower in accordance with this Agreement, with a maturity of
comparable duration to the Interest Period selected by Borrower.
"Eurodollar Rate Loan" means a Loan (or any portion
thereof) (other than a Tranche B Term Loan) made or outstanding hereunder
during any period when interest on such Loan (or portion thereof) is payable
based on the Eurodollar Rate.
"Event of Default" has the meaning set forth in
Section 8.
"Existing Lender" means SunTrust Bank, Atlanta, as
agent for the lenders party to the SunTrust Loan Agreement.
"FEIN" means Federal Employer Identification Number.
"Foothill" means Foothill Capital Corporation, a
California corporation, with an office in Atlanta, Georgia.
"Funding Date" means the date on which a Borrowing
occurs.
"GAAP" means generally accepted accounting principles
as in effect from time to time in the United States, consistently applied.
"GE Capital" means General Electric Capital
Corporation, a New York corporation.
"General Intangibles" means all of Borrower's present
and future general intangibles and other personal property (including contract
rights (including without limitation all rights of Borrower under the Rattlers
Letter Agreement), rights arising under common law, statutes, or regulations,
choses or things in action, goodwill, patents, trade names, trademarks,
servicemarks, copyrights, blueprints, drawings, purchase orders, customer
lists, monies due or recoverable from pension funds, route lists, rights to
payment and other rights under any royalty or licensing agreements,
infringement claims, computer programs, information contained on computer disks
or tapes, literature, reports, catalogs, deposit accounts, insurance premium
rebates, tax refunds, and tax refund claims), other than goods, Accounts, and
Negotiable Collateral.
"Governing Documents" means the certificate or
articles of incorporation, by-laws, or other organizational or governing
documents of any Person.
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"Hazardous Materials" means (a) substances that are
defined or listed in, or otherwise classified pursuant to, any applicable laws
or regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity,
or "EP toxicity", (b) oil, petroleum, or petroleum derived substances, natural
gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and
other wastes associated with the exploration, development, or production of
crude oil, natural gas, or geothermal resources, (c) any flammable substances
or explosives or any radioactive materials, and (d) asbestos in any form or
electrical equipment that contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of 50 parts per million.
"Xxxxxxxxx Family" means, collectively, Xxxxxx
Xxxxxxxxx, Xx., Xxxxxx Xxxxxxxxx, Xx., Xxxxxxx Xxxxxxxxx, Xxxx Xxxxxxxxx,
Xxxxxxx Xxxxx, any family member of any of the foregoing, their heirs and
estates, and any trust in which any of the foregoing are the beneficiaries.
"Indebtedness" means: (a) all obligations of
Borrower for borrowed money, (b) all obligations of Borrower evidenced by
bonds, debentures, notes, or other similar instruments and all reimbursement or
other obligations of Borrower in respect of letters of credit, bankers
acceptances, interest rate swaps, or other financial products, (c) all
obligations of Borrower under capital leases, (d) all obligations or
liabilities of others secured by a Lien on any property or asset of Borrower,
irrespective of whether such obligation or liability is assumed, and (e) any
obligation of Borrower guaranteeing or intended to guarantee (whether
guaranteed, endorsed, co-made, discounted, or sold with recourse to Borrower)
any indebtedness, lease, dividend, letter of credit, or other obligation of any
other Person.
"Insolvency Proceeding" means any proceeding
commenced by or against any Person under any provision of the Bankruptcy Code
or under any other bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally
with creditors, or proceedings seeking reorganization, arrangement, or other
similar relief.
"Intangible Assets" means, with respect to any
Person, that portion of the book value of all of such Person's assets that
would be treated as intangibles under GAAP.
"Intercreditor Agreement" means that certain
Intercreditor Agreement dated as of the date hereof by and among the Existing
Lender, as agent for the lenders party to the SunTrust Loan Agreement, and
Foothill, as Agent for the Lenders, which agreement shall be acknowledged by
Borrower.
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"Interest Period" means, for any Eurodollar Rate
Loan, the period commencing on the Business Day such Eurodollar Rate Loan is
disbursed or continued, or on the Business Day on which a Reference Rate Loan
is converted to such Eurodollar Rate Loan, and ending on the date one (1), two
(2), or three (3) months thereafter, as selected by Borrower and notified to
Agent pursuant to Section 2.13, but in no event ending after the Maturity Date
of this Agreement.
"Inventory" means all present and future inventory in
which Borrower has any interest, including goods held for sale or lease or to
be furnished under a contract of service and all of Borrower's present and
future raw materials, work in process, finished goods, and packing and shipping
materials, wherever located.
"Inventory Reserves" means reserves (determined from
time to time by the Co-Agents in their discretion) for (a) the estimated costs
relating to unpaid freight charges, warehousing or storage charges, taxes,
duties, and other similar unpaid costs associated with the acquisition of
Eligible Inventory by Borrower, plus (b) the estimated reclamation claims of
unpaid sellers of Inventory sold to Borrower.
"Investment Property" means all of Borrower's
"investment property" as such term is defined in the Code, now owned or
hereafter acquired by Borrower and, in any event, including without limitation
all securities, whether certificated or uncertificated, security entitlements,
securities accounts, commodity contracts and commodity accounts.
"IRC" means the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.
"L/C" has the meaning set forth in Section 2.2(a).
"L/C Guaranty" has the meaning set forth in Section
2.2(a).
"Lender" and "Lenders" have the respective meanings
set forth in the preamble to this Agreement, and shall include any other Person
made a party to this Agreement in accordance with the provisions of Section
15.1.
"Lender Group" means, individually and collectively,
each of the individual Lenders, the Agent and the Co-Agents.
"Lender Group Expenses" means all: out-of-pocket
costs or expenses (including taxes, and insurance premiums) required to be paid
by Borrower under any of the Loan Documents that are paid or incurred by the
Lender Group; reasonable fees or charges paid or incurred by the Lender Group
in connection with the Lender Group's transactions with Borrower, including,
fees or out-of-pocket charges for photocopying, notarization, couriers and
messengers, telecommunication, public record searches (including tax lien,
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litigation, and UCC searches and including searches with the patent and
trademark office, the copyright office, or the department of motor vehicles),
filing, recording, publication, appraisal (including periodic Personal Property
Collateral or Real Property Collateral appraisals), real estate surveys, real
estate title policies and endorsements, and environmental audits; costs and
expenses incurred by Agent in the disbursement of funds to Borrower (by wire
transfer or otherwise); reasonable charges paid or incurred by Agent resulting
from the dishonor of checks; costs and expenses paid or incurred by Agent or
any Co-Agent to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Personal Property Collateral or the Real Property Collateral, or any portion
thereof, irrespective of whether a sale is consummated; costs and expenses paid
or incurred by the Lender Group in examining Borrower's Books or setting up
electronic collateral reporting from Borrower to Agent; costs and expenses of
third party claims or any other suit paid or incurred by the Lender Group in
enforcing or defending the Loan Documents or in connection with the
transactions contemplated by the Loan Documents or the Lender Group's
relationship with Borrower or any guarantor; and the Lender Group's reasonable
attorneys fees and expenses incurred in advising, structuring, drafting,
reviewing, administering, amending, terminating, enforcing (including
reasonable attorneys fees and expenses and the fees and expenses of any
financial advisor retained on behalf of the Lender Group incurred in connection
with a "workout," a "restructuring," or an Insolvency Proceeding concerning
Borrower or any guarantor of the Obligations), defending, or concerning the
Loan Documents, irrespective of whether suit is brought.
"Letter of Credit" means an L/C or an L/C Guaranty,
as the context requires.
"Lien" means any interest in property securing an
obligation owed to, or a claim by, any Person other than the owner of the
property, whether such interest shall be based on the common law, statute, or
contract, whether such interest shall be recorded or perfected, and whether
such interest shall be contingent upon the occurrence of some future event or
events or the existence of some future circumstance or circumstances, including
the lien or security interest arising from a mortgage, deed of trust,
encumbrance, pledge, hypothecation, assignment, deposit arrangement, security
agreement, adverse claim or charge, conditional sale or trust receipt, or from
a lease, consignment, or bailment for security purposes and also including
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and encumbrances
affecting Real Property.
"Liquidation Value" means the product of (a) the Cost
of each type of Eligible Inventory (net of Inventory Reserves applicable
thereto) to which reference is made in the calculation of "Borrowing Base" in
Section 2.1(a)(y) and of Eligible Xxxx and Hold Inventory (net of Inventory
Reserves applicable thereto) multiplied by (b) that percentage determined by
the then most recent appraisal of the Borrower's Inventory undertaken at the
request of Agent as reflecting that appraiser's estimate of the recovery on
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Cost of that type of Inventory in a liquidation thereof, each of which
appraisals shall be made in a manner consistent with the methodology employed
to prepare that appraisal of Borrower's Inventory prepared by MB Valuation
Services, Inc. and dated January 2, 1999.
"Loan Account" has the meaning set forth in Section
2.11.
"Loan Documents" means this Agreement, the
Disbursement Letter, the Letters of Credit, the Lockbox Agreements, the
Mortgages, the Trademark Security Agreement, the Stock Pledge Agreement, the
Patent Security Agreement, the Subsidiary Guaranty, the Subsidiary Security
Agreement, the Intercreditor Agreement, any note or notes executed by Borrower
and payable to the Lender Group, and any other agreement entered into, now or
in the future, in connection with this Agreement.
"Loans" means, collectively, the Advances and Term
Loans, and "Loan" means any one (or portion thereof) of the foregoing Loans.
"Lockbox Account" shall mean a depositary account
established pursuant to one of the Lockbox Agreements.
"Lockbox Agreements" means those certain Lockbox
Operating Procedural Agreements and those certain Depository Account
Agreements, in form and substance satisfactory to Agent, each of which is among
Borrower, Agent, and one of the Lockbox Banks.
"Lockbox Banks" means First Union National Bank, or
such other Person or Persons as Agent and Borrower may designate from time to
time.
"Lockboxes" has the meaning set forth in Section 2.8.
"Material Adverse Change" means (a) a material
adverse change in the business, prospects, operations, results of operations,
assets, liabilities or condition (financial or otherwise) of Borrower or any
Subsidiary of Borrower, (b) the material impairment of Borrower's or any
Subsidiary's ability to perform its obligations under the Loan Documents to
which it is a party or of the Lender Group to enforce the Obligations or
realize upon the Collateral (as defined hereunder and under the Subsidiary
Security Agreement), (c) a material adverse effect on the value of the
Collateral (as defined hereunder and under the Subsidiary Security Agreement)
or the amount that the Lender Group would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of such Collateral (as defined hereunder and under the Subsidiary Security
Agreement), or (d) a material impairment of the priority of the Lender Group's
Liens with respect to the Collateral (as defined hereunder and under the
Subsidiary Security Agreement).
"Maturity Date" has the meaning set forth in Section
3.4.
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"Maximum Tranche A Amount" means $70,000,000.
"Maximum Amount" means, as of any date of
determination, the sum of (a) the Maximum Tranche A Amount and (b) the then
outstanding principal balance of the Tranche B Term Loans.
"Mortgages" means one or more mortgages, deeds of
trust, or deeds to secure debt, executed by Borrower in favor of Agent, the
form and substance of which shall be satisfactory to Agent, that encumber the
Real Property Collateral and the related improvements thereto.
"Mt. Xxxxxx Xxxxx" means, collectively, Mount Xxxxxx
Xxxxx, Inc., X.X. Xxxxxxx Corporation, together with each "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934) that is the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of more than ten
(10%) of the total voting power of all classes of stock then outstanding
thereof entitled to vote in the election of directors thereof.
"Multiemployer Plan" means a "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA) to which Borrower, any of its
Subsidiaries, or any ERISA Affiliate has contributed, or was obligated to
contribute, within the past six (6) years.
"Negotiable Collateral" means all of Borrower's
present and future letters of credit, notes, drafts, instruments, investment
property, security entitlements, securities (including the shares of stock of
Subsidiaries of Borrower), documents, personal property leases (wherein
Borrower is the lessor), chattel paper, and Borrower's Books relating to any of
the foregoing.
"Obligations" means, without double counting, all
Loans, Advances, debts, principal, interest (including any interest that, but
for the provisions of the Bankruptcy Code, would have accrued), contingent
reimbursement obligations under any outstanding Letters of Credit, premiums
(including Tranche A Early Termination Fees and Tranche B Early Termination
Fees), liabilities (including all amounts charged to Borrower's Loan Account
pursuant hereto), loans, obligations, fees, charges, costs, or Lender Group
Expenses (including any fees or expenses that, but for the provisions of the
Bankruptcy Code, would have accrued), lease payments, guaranties, covenants,
and duties owing by Borrower to the Lender Group of any kind and description
(whether pursuant to or evidenced by the Loan Documents or pursuant to any
other agreement between the Lender Group and Borrower, and irrespective of
whether for the payment of money), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and
including any debt, liability, or obligation owing from Borrower to others that
the Lender Group may have obtained by assignment or otherwise, and further
including all interest not paid when due and
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all Lender Group Expenses that Borrower is required to pay or reimburse by the
Loan Documents, by law, or otherwise.
"Originating Lender" has the meaning set forth in
Section 15.1(e).
"Overadvance" has the meaning set forth in Section
2.6.
"Participant" has the meaning set forth in Section
15.1(c).
"Patent Security Agreement" means that certain Patent
Security Agreement of even date herewith among Borrower and Agent, in form and
substance satisfactory to Agent.
"Pay-Down Letter" means a letter, in form and
substance satisfactory to Agent, from the Existing Lender, respecting (i) the
amount necessary to repay in part the obligations (other than the SunTrust Term
Loan) of Borrower owing to the Existing Lender and other lenders for whom the
Existing Lender is acting as agent in an amount acceptable to the Agent, the
Co-Agents and Back Bay, and (ii) delivery of the documents required to evidence
the priority of the Liens existing in favor of Existing Lender in and to the
properties or assets of Borrower as set forth in the Intercreditor Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation
as defined in Title IV of ERISA, or any successor thereto.
"Permitted Liens" means (a) Liens held by the Lender
Group, (b) Liens for unpaid taxes that either (i) are not yet due and payable
or (ii) are the subject of Permitted Protests, (c) Liens set forth on Schedule
P-1, (d) the interests of lessors under operating leases and purchase money
security interests and Liens of lessors under capital leases to the extent that
the acquisition or lease of the underlying asset is permitted under Section
7.21 and so long as the Lien only attaches to the asset purchased or acquired
and only secures the purchase price of the asset, (e) Liens arising by
operation of law in favor of warehousemen, landlords, carriers, mechanics,
materialmen, laborers, or suppliers, incurred in the ordinary course of
business of Borrower or a Subsidiary of Borrower, as applicable, and not in
connection with the borrowing of money, and which Liens either (i) are for sums
not yet due and payable, or (ii) are the subject of Permitted Protests, (f)
Liens arising from deposits made in connection with obtaining worker's
compensation or other unemployment insurance, (g) Liens or deposits to secure
performance of bids, tenders, or leases (to the extent permitted under this
Agreement), incurred in the ordinary course of business of Borrower or a
Subsidiary of Borrower, as applicable, and not in connection with the borrowing
of money, (h) Liens arising by reason of security for surety or appeal bonds in
the ordinary course of business of Borrower or a Subsidiary of Borrower, as
applicable, (i) Liens of or resulting from any judgment or award that would not
cause a Material Adverse Change and as to which the time for the appeal or
petition for rehearing of which has not yet expired, or in respect of which
Borrower or a Subsidiary of Borrower, as applicable, is in good faith
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prosecuting an appeal or proceeding for a review, and in respect of which a
stay of execution pending such appeal or proceeding for review has been
secured, (j) Liens with respect to the Real Property Collateral that are (i) in
favor of Wachovia Bank, N.A. to secure the SunTrust Term Loan, or (ii)
exceptions to the commitments for title insurance issued in connection with the
Mortgages, as accepted by Agent, and (k) with respect to any Real Property that
is not part of the Real Property Collateral, easements, rights of way, zoning
and similar covenants and restrictions, and similar encumbrances that
customarily exist on properties of Persons engaged in similar activities and
similarly situated and that in any event do not materially interfere with or
impair the use or operation of the Collateral by Borrower or the value of the
Lender Group's Lien thereon or therein, or materially interfere with the
ordinary conduct of the business of Borrower or a Subsidiary of Borrower, as
applicable.
"Permitted Protest" means the right of Borrower to
protest any Lien (other than any such Lien that secures the Obligations), tax
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on the books of Borrower in an amount that is
reasonably satisfactory to the Co-Agents, (b) any such protest is instituted
and diligently prosecuted by Borrower in good faith, and (c) the Co-Agents are
satisfied that, while any such protest is pending, there will be no impairment
of the enforceability, validity, or priority of any of the Liens of the Lender
Group in and to the Collateral.
"Person" means and includes natural persons,
corporations, limited liability companies, limited partnerships, general
partnerships, limited liability partnerships, joint ventures, trusts, land
trusts, business trusts, or other organizations, irrespective of whether they
are legal entities, and governments and agencies and political subdivisions
thereof.
"Personal Property Collateral" means all Collateral
other than the Real Property Collateral.
"PIK Interest"has the meaning set forth in Section
2.7(a).
"Plan" means any employee benefit plan, program, or
arrangement maintained or contributed to by Borrower or with respect to which
it may incur liability.
"Pro-Rata Share" means, with respect to a Lender, a
fraction (expressed as a percentage), the numerator of which is the amount of
such Lender's Commitment and the denominator of which is the aggregate amount
of the Commitments.
"Rattlers Letter Agreement" means that certain letter
agreement dated December 23, 1997 between Borrower and Xxxx Xxxxxx, Xx., as
modified, amended or replaced from time to time.
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"Real Property" means any estates or interests in
real property now owned or hereafter acquired by Borrower.
"Real Property Collateral" means the parcel or
parcels of real property and the related improvements thereto identified on
Schedule R-1, and any Real Property hereafter acquired by Borrower.
"Reference Rate" means the variable rate of interest,
per annum, most recently announced by Xxxxx Fargo Bank, National Association,
or any successor thereto, as its "base rate," irrespective of whether such
announced rate is the best rate available from such financial institution;
provided, however, that in the event Xxxxx Fargo Bank, National Association, or
any successor thereto, shall abolish or abandon the practice of establishing a
base rate, or should the same become unascertainable, Agent shall designate a
comparable reference rate which shall be deemed the Reference Rate hereunder.
"Reference Rate Loan" means a Loan (or any portion
thereof) (other than a Tranche B Term Loan) made or outstanding hereunder
during any period when interest on such Loan (or portion thereof) is payable
based on the Reference Rate.
"Reportable Event" means any of the events described
in Section 4043(c) of ERISA or the regulations thereunder other than a
Reportable Event as to which the provision of 30 days notice to the PBGC is
waived under applicable regulations.
"Required Lenders" means, at any time, Foothill (so
long as it is Agent or a Co-Agent hereunder) and GE Capital (so long as it is a
Co-Agent hereunder), together with such other Lenders whose Pro-Rata Shares
together with Foothill (so long as it is Agent or a Co-Agent hereunder) and GE
Capital (so long as it is a Co-Agent hereunder) aggregate sixty-six and
two-thirds (662/3%) or more of the Commitments.
"Requirement of Law" means, as to any Person: all (a)
(i) statutes and regulations and (ii) court orders and injunctions,
arbitrators' decisions, and/or similar rulings, in each instance by any
governmental authority, or other body which has jurisdiction over such Person,
or any property of such Person, or of any other Person whose conduct such
Person would be responsible and (b) that Person's Governing Documents.
"Reserve Percentage" means and refers to, as of the
date of determination thereof, the maximum percentage (rounded upward, if
necessary to the nearest 1/100th of one percent (1%), as determined by Agent
(or its Affiliates) in accordance with its (or their) usual procedures (which
determination shall be conclusive in the absence of manifest error), that is in
effect on such date as prescribed by the Federal Reserve Board for determining
the reserve requirements (including supplemental, marginal, or emergency
reserve requirements) with respect to eurocurrency funding (currently referred
to as "eurocurrency liabilities") by Xxxxx Fargo Bank, National Association or
its Affiliates.
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"Retiree Health Plan" means an "employee welfare
benefit plan" within the meaning of Section 3(1) of ERISA that provides
benefits to individuals after termination of their employment, other than as
required by Section 601 of ERISA.
"Revolving Facility Usage" means, as of any date of
determination, the aggregate amount of Advances, undrawn or unreimbursed
Letters of Credit outstanding and Tranche A Term Loans outstanding.
"Rolled Stock" means Inventory consisting of print
and solid tint sheeting used to produce the consumer product line of business
of Borrower.
"Settlement" has the meaning set forth in Section
2.1(i)(i).
"Settlement Date" has the meaning set forth in
Section 2.1(i)(i).
"Solvent" means, with respect to any Person on a
particular date, that on such date (a) at fair valuations, all of the
properties and assets of such Person are greater than the sum of the debts,
including contingent liabilities, of such Person, (b) the present fair salable
value of the properties and 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 is able to realize upon
its properties and assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that it
will, incur debts beyond such Person's ability to pay as such debts mature, and
(e) 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 properties and
assets would constitute unreasonably small capital after giving due
consideration to the prevailing practices in the industry in which such Person
is engaged. In computing the amount of contingent liabilities at any time, it
is intended that such liabilities will be computed at the amount that, in light
of all the facts and circumstances existing at such time, represents the amount
that reasonably can be expected to become an actual or matured liability.
"Stock Pledge Agreement" means that certain Stock
Pledge Agreement of even date herewith among Borrower and Agent, in form and
substance satisfactory to Agent.
"Subsidiary" of a Person means a corporation,
partnership, limited liability company, or other entity in which that Person
directly or indirectly owns or controls the shares of stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors (or appoint other comparable managers) of such corpora tion,
partnership, limited liability company, or other entity.
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"Subsidiary Guaranty" means that certain Subsidiary
Guaranty of even date herewith from Thomaston Xxxxx FSC in favor of Agent, in
form and substance satisfactory to Agent.
"Subsidiary Security Agreement" means that certain
Subsidiary Security Agreement of even date herewith between Thomaston Xxxxx FSC
and Agent, in form and substance satisfactory to Agent.
"SunTrust Lenders" means the lenders party to the
SunTrust Loan Agreement.
"SunTrust Loan Agreement" means that certain Credit
and Security Agreement dated as of August 19, 1998 by and among Borrower,
SunTrust Bank, Atlanta, as agent and the lenders from time to time party
thereto, as such agreement may be amended, restated supplemented or otherwise
modified from time to time in accordance with the terms of the Intercreditor
Agreement.
"SunTrust Term Loan" means that certain term loan in
the principal amount of $15,000,000 as of the Closing Date made by the SunTrust
Lenders to Borrower pursuant to the SunTrust Loan Agreement.
"Tangible Net Worth" means, as of any date of
determination, the difference of (a) Borrower's total stockholder's equity,
minus (b) the sum of: (i) all Intangible Assets of Borrower (including net
deferred taxes), (ii) all of Borrower's prepaid expenses, and (iii) all amounts
due to Borrower from Affiliates, plus (c) non-cash adjustments approved by the
Lenders from time to time.
"Term Loans" means, collectively, the Tranche A Term
Loans and the Tranche B Term Loans.
"Thomaston Xxxxx FSC" means Thomaston Xxxxx FSC,
Inc., a U.S. Virgin Islands corporation.
"Trademark Security Agreement" means that certain
Trademark Security Agreement of even date herewith among Borrower and Agent, in
form and substance satisfactory to Agent.
"Tranche A Commitment" means, at any time with
respect to a Lender, the principal amount set forth beside such Lender's name
under the heading "Tranche A Commitment" on Schedule C-1 or on Schedule 1 to
the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 15.1, as such Tranche A
Commitment may be adjusted from time to time in accordance with the provisions
of Section 15.1 and "Tranche A Commitments"
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means, collectively, the aggregate amount of the Tranche A Commitments of all
Lenders and which shall not exceed $70,000,000 in the aggregate at any time.
"Tranche A Early Termination Fee" has the meaning set
forth in Section 3.6.
"Tranche A Lender" means any Lender who has a Tranche
A Commitment.
"Tranche A Pro-Rata Share" means, with respect to a
Lender, a fraction (expressed as a percentage), the numerator of which is the
amount of such Lender's Tranche A Commitment and the denominator of which is
the aggregate amount of the Tranche A Commitments.
"Tranche A Term Loans" has the meaning set forth in
Section 2.3(a).
"Tranche B Commitment" means, at any time with
respect to a Lender, the principal amount set forth beside such Lender's name
under the heading "Tranche B Commitment" on Schedule C-1 or on Schedule 1 to
the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 15.1, as such Tranche B
Commitment may be adjusted from time to time in accordance with the provisions
of Section 15.1 and "Tranche B Commitments" means, collectively, the aggregate
amount of the Tranche B Commitments of all Lenders and which shall not exceed
$5,000,000 in the aggregate at any time, exclusive of PIK Interest as provided
for under Section 2.7.
"Tranche B Lender" means any Lender who has a Tranche
B Commitment.
"Tranche B Early Termination Fee" has the meaning set
forth in Section 3.6.
"Tranche B Pro-Rata Share" means, with respect to a
Lender, a fraction (expressed as a percentage), the numerator of which is the
amount of such Lender's Tranche B Commitment and the denominator of which is
the aggregate amount of the Tranche B Commitments.
"Tranche B Term Loans" has the meaning set forth in
Section 2.4(a).
"VF JeansWear" means V.F. Corporation, a Pennsylvania
corporation.
"Voidable Transfer" has the meaning set forth in
Section 15.8.
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"Wal-Mart" means Wal-Mart Stores, Inc., a Delaware
corporation.
1.2 ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. When
used herein, the term "financial statements" shall include the notes and
schedules thereto. Whenever the term "Borrower" is used in respect of a
financial covenant or a related definition, it shall be understood to mean
Borrower on a consolidated basis unless the context clearly requires otherwise.
1.3 CODE. Any terms used in this Agreement that are
defined in the Code shall be construed and defined as set forth in the Code
unless otherwise defined herein.
1.4 CONSTRUCTION. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, the term "including" is not
limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement refer to
this Agreement as a whole and not to any particular provision of this
Agreement. An Event of Default shall "continue" or be "continuing" until such
Event of Default has been waived in writing by the requisite members of the
Lender Group or by Agent upon the direction of the requisite members of the
Lender Group. Section, subsection, clause, schedule, and exhibit references are
to this Agreement unless otherwise specified. Any reference in this Agreement
or in the Loan Documents to this Agreement or any of the Loan Documents shall
include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, and supplements, thereto and thereof, as
applicable.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and
exhibits attached to this Agreement shall be deemed incorporated herein by
reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVING ADVANCES.
(a) Subject to the terms and conditions of this
Agreement, each Tranche A Lender agrees to make advances ("Advances") to
Borrower in an amount at any one time outstanding not to exceed such Lender's
Tranche A Pro-Rata Share of an amount equal to the lesser of (i) the Maximum
Tranche A Amount less the outstanding balance of all undrawn or unreimbursed
Letters of Credit, less the outstanding balance of all Tranche A Term Loans, or
(ii) the Borrowing Base less (A) the aggregate amount of all undrawn or
unreimbursed Letters of Credit, less (B) the aggregate amount of the Accounts
Payable Reserve. For purposes of this Agreement, "Borrowing Base", as of any
date of determination, shall mean the result of:
(x) the lesser of (i) the sum of (A)
eighty-five percent (85%) of Eligible Domestic Accounts plus
(B) the lesser of (I) $1,000,000, or (II) seventy-five
percent (75%) of Eligible Foreign Accounts, less the
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amount, if any, of the Dilution Reserve, and (ii) an amount
equal to Borrower's Collections with respect to Accounts for
the immediately preceding sixty (60) day period, plus
(y) the lowest of (i) $20,000,000, (ii)
the sum of (A) sixty-five percent (65%) of the Cost of
Eligible Inventory consisting of finished goods; (B) the
lesser of (I) $3,000,000 or (II) sixty-five percent (65%) of
the Cost of Eligible Xxxx and Hold Inventory, plus (C)
sixty-five percent (65%) of the Cost of Eligible Inventory
consisting of raw materials (other than griege goods); plus
(D) the lesser of (I) $6,000,000 or (II) forty percent (40%)
of the Cost of Eligible Inventory consisting of griege goods;
plus (E) the lesser of (I) $3,000,000 or (II) forty percent
(40%) of the Cost of Eligible Inventory consisting of Rolled
Stock; provided, however, that, notwithstanding anything to
the contrary contained in the foregoing clause (ii), in the
case of each type of Eligible Inventory, the advances
applicable to such type of Eligible Inventory shall at no
time exceed ninety percent (90%) of the Liquidation Value of
such type of Eligible Inventory, and (iii) 100% of the amount
of credit availability created by clause (x) above, minus the
Inventory Reserves minus
(z) the aggregate amount of reserves,
if any, established by the Co-Agents under Sections 2.1(b),
6.15 and 10.
(b) Anything to the contrary in this Section
notwithstanding, the Co-Agents shall have the right to establish reserves
against the Borrowing Base in such amounts as the Co-Agents, in their
reasonable judgment (from the perspective of an asset-based lender) shall deem
necessary or appropriate, including reserves on account of (i) sums that
Borrower is required to pay (such as taxes, assessments, insurance premiums,
or, in the case of leased assets, rents or other amounts payable under such
leases) and has failed to pay under any Section of this Agreement or any other
Loan Document, and (ii) without duplication of the foregoing, amounts owing by
Borrower to any Person to the extent secured by a Lien on, or trust over, any
of the Collateral, which Lien or trust, in the reasonable determination of the
Co-Agents (from the perspective of an asset-based lender), would be likely to
have a priority superior to the Liens of Agent (such as landlord liens, ad
valorem taxes, or sales taxes where given priority under applicable law) in and
to such item of Collateral.
(c) Amounts borrowed pursuant to this Section
2.1 may be repaid and, subject to the terms and conditions of this Agreement,
reborrowed at any time during the term of this Agreement.
(d) Procedure for Borrowing. Each Borrowing
under the Tranche A Commitments shall be made upon Borrower's irrevocable
request therefor delivered to Agent (which notice must be received by Agent no
later than 1:00 p.m. (Atlanta, Georgia
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time) on the Funding Date if such advance is for $5,000,000 or less or no later
than 1:00 p.m. (Atlanta, Georgia time) on the Business Day immediately
preceding the requested Funding Date if such advance is for more than
$5,000,000) specifying (i) the amount of the Borrowing; and (ii) the requested
Funding Date, which shall be a Business Day.
(e) Agent's Election. Promptly after receipt of
a request for a Borrowing pursuant to Section 2.1(d) in excess of $5,000,000,
Agent shall elect, in its discretion, (i) to have the terms of Section 2.1(f)
apply to such requested Borrowing, or (ii) to make an Agent Loan pursuant to
the terms of Section 2.1(g) in the amount of the requested Borrowing. Any
requested Borrowing of $5,000,000 or less shall be made as an Agent Loan
pursuant to the terms of Section 2.1(g). Agent shall give the Co-Agents prompt
notice of any Agent Loan in excess of $5,000,000.
(f) Making of Advances.
(i) In the event that Agent shall elect
to have the terms of this Section 2.1(f) apply to a requested Borrowing in
excess of $5,000,000 as described in Section 2.1(e), then promptly after
receipt of a request for a Borrowing pursuant to Section 2.1(d), Agent shall
notify the Tranche A Lenders, not later than 4:00 p.m. (Atlanta, Georgia time)
on the Business Day immediately preceding the Funding Date applicable thereto,
by telephone and promptly followed by telecopy, or other similar form of
transmission, of the requested Borrowing. Each Tranche A Lender shall make the
amount of such Tranche A Lender's Tranche A Pro-Rata Share of the requested
Borrowing available to Agent in same day funds, to such account of Agent as
Agent may designate, not later than 3:00 p.m. (Atlanta, Georgia time) on the
Funding Date applicable thereto. After Agent's receipt of the proceeds of such
Advances, upon satisfaction of the applicable conditions precedent set forth in
Sections 3.1 and 3.2, Agent shall make the proceeds of such Advances available
to Borrower on the applicable Funding Date by transferring same day funds equal
to the proceeds of such Advances received by Agent to the Designated Account;
provided, however, that, subject to the provisions of Section 2.1(l), the Agent
shall not request any Tranche A Lender to make, and no Tranche A Lender shall
have the obligation to make, any Advance if Agent shall have received written
notice from any Lender, or otherwise has actual knowledge, that (A) one or more
of the applicable conditions precedent set forth in Sections 3.1 or 3.2 will
not be satisfied on the requested Funding Date for the applicable Borrowing, or
(B) the requested Borrowing would exceed the Availability on such Funding Date.
(ii) Unless Agent receives notice from a
Tranche A Lender on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the date
of such Borrowing, that such Tranche A Lender will not make available as and
when required hereunder to Agent for the account of Borrower the amount of that
Tranche A Lender's Tranche A Pro-Rata Share of the Borrowing, Agent may assume
that each Tranche A Lender has made or will make such amount available to Agent
in immediately available funds on the Funding Date and Agent
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may (but shall not be so required), in reliance upon such assumption, make
available to Borrower on such date a corresponding amount. If and to the extent
any Tranche A Lender shall not have made its full amount available to Agent in
immediately available funds and Agent in such circumstances has made available
to Borrower such amount, that Tranche A Lender shall on the Business Day
following such Funding Date make such amount available to Agent, together with
interest at the Defaulting Lenders Rate for each day during such period. A
notice from Agent submitted to any Tranche A Lender with respect to amounts
owing under this subsection shall be conclusive, absent manifest error. If such
amount is paid to Agent such payment to Agent shall constitute such Tranche A
Lender's Advance on the date of Borrowing for all purposes of this Agreement.
If such amount is not paid to Agent on the Business Day following the Funding
Date, Agent will notify Borrower of such failure to fund and, upon demand by
Agent, Borrower shall pay such amount to Agent for Agent's account, together
with interest thereon for each day elapsed since the date of such Borrowing, at
a rate per annum equal to the interest rate applicable at the time to the
Advances composing such Borrowing. The failure of any Tranche A Lender to make
any Advance on any Funding Date shall not relieve any other Tranche A Lender of
any obligation hereunder to make an Advance on such Funding Date, but no
Tranche A Lender shall be responsible for the failure of any other Tranche A
Lender to make the Advance to be made by such other Tranche A Lender on any
Funding Date. Any Tranche A Lender that fails to make any Advance that it is
required to make hereunder on any Funding Date and that has not cured such
failure by making such Advance within one (1) Business Day after written demand
upon it by Agent to do so, shall constitute a "Defaulting Lender" for purposes
of this Agreement until such Advance is made.
(iii) Agent shall not be obligated to
transfer to a Defaulting Lender any payments made by Borrower to Agent for the
Defaulting Lender's benefit; nor shall a Defaulting Lender be entitled to the
sharing of any payments hereunder. Amounts payable to a Defaulting Lender shall
instead be paid to or retained by Agent. Agent may hold and, in its discretion,
re-lend to Borrower the amount of all such payments received or retained by it
for the account of such Defaulting Lender. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents and determining
Pro-Rata Shares and Tranche A Pro-Rata Shares, such Defaulting Lender shall be
deemed not to be a "Lender" or "Tranche A Lender" and such Defaulting Lender's
Commitment shall be deemed to be zero. This section shall remain effective with
respect to such Defaulting Lender until (A) the Obligations under this
Agreement shall have been declared or shall have become immediately due and
payable or (B) the requisite non-Defaulting Lenders, Agent, and Borrower shall
have waived such Defaulting Lender's default in writing. The operation of this
section shall not be construed to increase or otherwise affect the Commitment
of any non-Defaulting Lender, or relieve or excuse the performance by Borrower
of their duties and obligations hereunder.
(g) Making of Agent Loans.
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(i) In the event the Agent shall elect
to have the terms of this Section 2.1(g) apply to a requested Borrowing in
excess of $5,000,000 as described in Section 2.1(e) or in the event of any
requested Borrowing of $5,000,000 or less, Agent shall make an Advance in the
amount of such Borrowing (any such Advance made solely by Agent pursuant to
this Section 2.1(g) being referred to as an "Agent Loan" and such Advances
being referred to collectively as "Agent Loans") available to Borrower on the
Funding Date applicable thereto by transferring same day funds to Borrower's
Designated Account. Each Agent Loan is an Advance hereunder and shall be
subject to all the terms and conditions applicable to other Advances, except
that all payments thereon shall be payable to Agent solely for its own account
(and for the account of the holder of any participation interest with respect
to such Advance). Subject to the provisions of Section 2.1(l), the Agent shall
not make any Agent Loan if the Agent shall have received written notice from
any Lender, or otherwise has actual knowledge, that (i) one or more of the
applicable conditions precedent set forth in Sections 3.1 or 3.2 will not be
satisfied on the requested Funding Date for the applicable Borrowing, or (ii)
the requested Borrowing would exceed the Availability on such Funding Date.
Agent shall not otherwise be required to determine whether the applicable
conditions precedent set forth in Sections 3.1 or 3.2 have been satisfied on
the Funding Date applicable thereto prior to making, in its sole discretion,
any Agent Loan.
(ii) The Agent Loans shall be secured by
the Collateral and shall constitute Advances and Obligations hereunder, and
shall bear interest at the rate applicable from time to time to Obligations
pursuant to Section 2.7.
(h) Agent Advances.
(i) Agent hereby is authorized by
Borrower and the Lenders, from time to time in the Co-Agents' sole discretion,
(1) after the occurrence of a Default or an Event of Default (but without
constituting a waiver of such Default or Event of Default), or (2) at any time
that any of the other applicable conditions precedent set forth in Section 3.1
or 3.2 have not been satisfied, to make Advances to Borrower on behalf of the
Lenders which the Co-Agents, in their reasonable business judgment, deems
necessary or desirable (A) to preserve or protect the Collateral, or any
portion thereof, (B) to enhance the likelihood of, or maximize the amount of,
repayment of the Obligations, or (C) to pay any other amount chargeable to
Borrower pursuant to the terms of this Agreement, including Lender Group
Expenses and the costs, fees, and expenses described in Section 10 (any of the
Advances described in this Section 2.1(h) being hereinafter referred to as
"Agent Advances"); provided, that the Co-Agents shall not direct Agent to make
any Agent Advances to Borrower without the consent of the Lenders if the amount
thereof would exceed $1,500,000 in the aggregate at any one time.
(ii) Agent Advances shall be repayable on
demand and secured by the Collateral, shall constitute Advances and Obligations
hereunder, and shall bear interest at the rate applicable from time to time to
the Obligations pursuant to Section 2.7.
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(i) Settlement. It is agreed that each Tranche
A Lender's funded portion of the Advances is intended by the Tranche A Lenders
to be equal at all times to such Tranche A Lender's Tranche A Pro-Rata Share of
the outstanding Advances. Such agreement notwithstanding, Agent and the Lenders
agree (which agreement shall not be for the benefit of or enforceable by
Borrower) that in order to facilitate the administration of this Agreement and
the other Loan Documents, settlement among them as to the Advances, the Agent
Loans, and the Agent Advances shall take place on a periodic basis in
accordance with the following provisions:
(i) Agent shall request settlement
("Settlement") with the Tranche A Lenders on a weekly basis (or all Lenders on
a weekly basis at any time that Agent Advances are outstanding and are to be
allocated to all Lenders), or on a more frequent basis if so determined by
Agent (or requested by any Co-Agent), (1) for itself, with respect to each
Agent Loan and Agent Advance, and (2) with respect to Collections received, as
to each by notifying the Tranche A Lenders (or all Lenders, as the case may be)
by telephone and promptly followed by telecopy, or other similar form of
transmission, of such requested Settlement, no later than 4:00 p.m. (Atlanta,
Georgia time) on the Business Date immediately preceding the date of such
requested Settlement (the "Settlement Date"). Such notice of a Settlement Date
shall include a summary statement of the amount of outstanding Advances, Term
Loans, Agent Loans, and Agent Advances for the period since the prior
Settlement Date, the amount of repayments received in such period, and the
amounts allocated to each Lender of the principal, interest, fees, and other
charges for such period. Subject to the terms and conditions contained herein
(including Section 2.1(i)(ii)): (y) if a Lender's balance of the Advances,
Tranche A Term Loans and Agent Loans exceeds such Lender's Tranche A Pro-Rata
Share of the Advances, Tranche A Term Loans and Agent Loans or if a Lender's
balance of the Agent Advances exceeds such Lender's Pro- Rata Share, Tranche A
Pro-Rata Share or Tranche B Pro-Rata Share (as provided in the next succeeding
sentence of this Section 2.1(i)(i)) of the Agent Advances as of a Settlement
Date, then Agent shall by no later than 4:00 p.m (Atlanta, Georgia time) on the
Settlement Date transfer in same day funds to the account of such Lender as
such Lender may designate, an amount such that each such Lender shall, upon
receipt of such amount, have as of the Settlement Date, its Tranche A Pro-Rata
Share of the Advances, Tranche A Term Loans and Agent Loans and its Pro-Rata
Share, Tranche A Pro-Rata Share or Tranche B Pro-Rata Share, as the case may
be, of Agent Advances; and (z) if a Lender's balance of the Advances, Tranche A
Term Loans and Agent Loans is less than such Lender's Tranche A Pro-Rata Share
of the Advances, Tranche A Term Loans and Agent Loans or if a Lender's balance
of the Agent Advances is less than such Lender's Pro-Rata Share of the Agent
Advances as of a Settlement Date, such Lender shall no later than 4:00 p.m.
(Atlanta, Georgia time) on the Settlement Date transfer in same day funds to
such account of Agent as Agent may designate, an amount such that each such
Lender shall, upon transfer of such amount, have as of the Settlement Date, its
Tranche A Pro-Rata Share of the Advances, Tranche A Term Loans and Agent Loans
and its Pro-Rata Share, Tranche A Pro-Rata Share or Tranche B Pro-Rata Share,
as the case may be, of Agent Advances. Notwithstanding the foregoing, (1)
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Agent Advances (other than Agent Advances made on account of interest and fees
specifically payable in respect of to the Advances, Tranche A Term Loans,
Tranche A Commitment, Tranche B Term Loans or Tranche B Commitment, as the case
may be) made at a time when the Tranche A Commitment has been terminated but
prior to the full repayment of the Advances and Tranche A Term Loans shall be
allocated to all Lenders based on their Pro-Rata Share of such Agent Advances,
(2) Agent Advances made on account of interest and fees specifically payable in
respect of the Advances, the Tranche A Term Loans or the Tranche A Commitment
shall be allocated to the Tranche A Lenders based on their Tranche A Pro-Rata
Share of such Agent Advances, (3) (x) Agent Advances made at a time after the
Tranche A Commitment has been terminated and after the full repayment of
Advances and the Tranche A Term Loans and (y) Agent Advances made on account of
interest and fees specifically payable in respect of the Tranche B Term Loans
or Tranche B Commitment at a time when the Tranche A Commitment has been
terminated shall be allocated to the Tranche B Lenders based on their Tranche B
Pro-Rata Share, and (4) the portion of such Agent Advances allocated to the
Tranche B Lenders shall be added to the principal balance of the Tranche B Term
Loans and shall bear interest at the rate applicable to Tranche B Term Loans.
Such amounts made available to Agent under clause (z) of the immediately
preceding sentence shall be applied against the amounts of the applicable Agent
Loan or Agent Advance and, together with the portion of such Agent Loan or
Agent Advance representing Agent's (in its capacity as a Lender hereunder)
Tranche A Pro-Rata Share (or Pro-Rata Share in the case of certain Agent
Advances) thereof, shall constitute Advances of such Lenders; provided,
however, that the amount of Agent Advances allocated and paid by a Tranche B
Lender shall be added to the principal balance of the Tranche B Term Loan of
such Tranche B Lender. If any such amount is not made available to Agent by any
Lender on the Settlement Date applicable thereto to the extent required by the
terms hereof, Agent shall be entitled to recover for its account such amount on
demand from such Lender together with interest thereon at the Defaulting
Lenders Rate.
(ii) In determining whether a Lender's
balance of the Advances, Tranche A Term Loans, Agent Loans, and Agent Advances
is less than, equal to, or greater than such Lender's Tranche A Pro-Rata Share
of the Advances, Tranche A Term Loans and Agent Loans and Pro-Rata Share,
Tranche A Pro-Rata Share or Tranche B Pro- Rata Share, as the case may be, of
Agent Advances as of a Settlement Date, Agent shall, as part of the relevant
Settlement, apply to such balance the portion of payments actually received by
Agent with respect to principal, interest, fees payable by Borrower and
allocable to the Lenders hereunder, and proceeds of Collateral. To the extent
that a net amount is owed to any such Lender after such application, such net
amount shall be distributed by Agent to that Lender as part of such Settlement;
provided, however, that the closing fee payable by Borrower under Section
2.12(a) shall be distributed to the Tranche A Lenders within three (3) Business
Days following the Closing Date without regard to the netting of amounts owing
to or owed by any Tranche A Lender as part of a Settlement.
(iii) Between Settlement Dates, Agent, to
the extent no Agent Advances or Agent Loans are outstanding, may pay over to
Agent (in its capacity as
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a Lender hereunder) any payments received by Agent, which in accordance with
the terms of the Agreement would be applied to the reduction of the Advances,
for application to Agent's (in its capacity as a Lender hereunder) Tranche A
Pro-Rata Share of the Advances. If, as of any Settlement Date, Collections
received since the then immediately preceding Settlement Date have been applied
to Agent's (in its capacity as a Lender hereunder) Tranche A Pro-Rata Share of
the Advances other than to Agent Loans or Agent Advances, as provided for in
the previous sentence, Agent (in its capacity as a Lender hereunder) shall pay
to the Agent for the accounts of the Tranche A Lenders, and Agent shall pay to
the Tranche A Lenders, to be applied to the outstanding Advances of such
Lenders, an amount such that each Tranche A Lender shall, upon receipt of such
amount, have, as of such Settlement Date, its Tranche A Pro-Rata Share of the
Advances. During the period between Settlement Dates, Agent with respect to
Agent Loans and Agent Advances, and each Lender with respect to the Term Loans
and the Advances (other than Agent Loans and Agent Advances), shall be entitled
to interest at the applicable rate or rates payable under this Agreement on the
daily amount of funds employed by Agent or the Lenders, as applicable.
(j) Notation. The Agent shall record on its
books the principal amount of the Term Loans and the Advances owing to each
Lender, including the Agent Loans and Agent Advances owing to Agent, and the
interests therein of each Lender, from time to time. In addition, each Lender
is authorized, at such Lender's option, to note the date and amount of each
payment or prepayment of principal of such Lender's Term Loan and Advances in
its books and records, including computer records, such books and records
constituting rebuttably presumptive evidence, absent manifest error, of the
accuracy of the information contained therein.
(k) Lenders' Failure to Perform. All Advances
(other than Agent Loans and Agent Advances) shall be made by the Tranche A
Lenders simultaneously and in accordance with their Tranche A Pro-Rata Shares.
It is understood that (i) no Tranche A Lender shall be responsible for any
failure by any other Tranche A Lender to perform its obligation to make any
Advances hereunder, nor shall any Commitment of any Tranche A Lender be
increased or decreased as a result of any failure by any other Tranche A Lender
to perform its obligation to make any Advances hereunder, and (ii) no failure
by any Tranche A Lender to perform its obligation to make any Advances
hereunder shall excuse any other Tranche A Lender from its obligation to make
any Advances hereunder.
(l) Overadvances. (i) Agent (at the direction of
the Co-Agents) may make voluntary Overadvances without the written consent of
the Lenders for amounts charged to the applicable Loan Account for interest,
fees or Lender Group Expenses pursuant to Section 2.1(h)(i)(2)(C). If the
conditions for borrowing under Section 3.2 cannot be fulfilled, the Agent may
(at the direction of the Co-Agents), but is not obligated to, knowingly and
intentionally continue to make Advances (including Agent Loans) to Borrower
such failure of condition notwithstanding, so long as, at any time, (i) either
(A) the outstanding Revolving Facility Usage would not exceed the Borrowing
Base by more than $1,500,000 or (B) (y) the outstanding Revolving Facility
Usage would not exceed the
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Borrowing Base by more than the amount proposed by the Co-Agents and agreed to
by the Lenders, and (z) such Advances are made pursuant to a plan (proposed by
the Co-Agents and agreed to by the Required Lenders) for the elimination of the
outstanding Revolving Facility Usage in excess of the Borrowing Base, and (ii)
the outstanding Revolving Facility Usage (except for and excluding amounts
charged to the applicable Loan Account for interest, fees, or Lender Group
Expenses) does not exceed the Maximum Tranche A Amount. The foregoing
provisions are for the sole and exclusive benefit of Agent, the Co- Agents and
the Lenders and are not intended to benefit Borrower in any way. The Advances
and Agent Loans, as applicable, that are made pursuant to this Section 2.1(l)
shall be subject to the same terms and conditions as any other Agent Advance or
Agent Loan, as applicable, except that the rate of interest applicable thereto
shall be the rates set forth in Section 2.7(c)(i) without regard to the
presence or absence of a Default or Event of Default; provided, that the
Required Lenders may, at any time, revoke the Co-Agents' authorization
contained in this Section 2.1(l) to direct the Agent to make Overadvances
(except for and excluding amounts charged to the applicable Loan Account for
interest, fees, or Lender Group Expenses), any such revocation to be in writing
and to become effective upon the Co-Agents' receipt thereof; provided further,
however, that the making of such Overadvances shall not constitute a waiver of
such Event of Default arising therefrom. Notwithstanding anything in this
Section 2.1(l), Overadvances allowed pursuant to this Section 2.1(l) (exclusive
of Overadvances for interest, fees or Lender Group Expenses) when added to any
Agent Advances allowed pursuant to Section 2.1(h) shall not exceed $1,500,000.
(ii) In the event Agent obtains actual knowledge that
Revolving Facility Usage exceeds the amount permitted by the preceding
paragraph, regardless of the amount of or reason for such excess, Agent shall
notify the Lenders as soon as practicable (and prior to making any (or any
further) intentional Overadvances (except for and excluding amounts charged to
the applicable Loan Account for interest, fees, or Lender Group Expenses)
unless the Co-Agents determine that prior notice would result in imminent harm
to the Collateral or its value), and the Lenders thereupon shall, together with
the Co-Agents, jointly determine the terms of arrangements that shall be
implemented with Borrower intended to reduce, within a reasonable time, the
outstanding principal amount of the Advances to Borrower to an amount permitted
by the preceding paragraph. In the event any Lender disagrees over the terms of
reduction and/or repayment of any Overadvance, the terms of reduction and/or
repayment thereof shall be implemented according to the determination of the
Required Lenders.
(iii) Each Lender shall be obligated to settle with Agent
as provided in Section 2.1(i) for the amount of such Lender's Pro-Rata Share or
Tranche A Pro-Rata Share, as the case may be, of any unintentional Overadvances
by Agent reported to such Lender, any intentional Overadvances made as
permitted under this Section 2.1(l), and any Overadvances resulting from the
charging to the applicable Loan Account of interest, fees, or Lender Group
Expenses.
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(m) Effect of Bankruptcy. If a case is commenced
by or against any Borrower under the Bankruptcy Code, or other statute
providing for debtor relief, then, without the approval of Lenders the Lender
Group shall not make additional loans or provide additional financial
accommodations under the Loan Documents to such Borrower as debtor or
debtor-in-possession, or to any trustee for such Borrower, nor consent to the
use of cash collateral (provided that the applicable Loan Account shall
continue to be charged, to the fullest extent permitted by law, for accruing
interest, fees, and Lender Group Expenses).
2.2 LETTERS OF CREDIT.
(a) Agreement to Cause Issuance; Amounts;
Outside Expiration Date. Subject to the terms and conditions of this Agreement,
Agent agrees to issue letters of credit for the account of Borrower (each, an
"L/C") or to issue guarantees of payment (each such guaranty, an "L/C
Guaranty") with respect to letters of credit issued by an issuing bank for the
account of Borrower. Agent shall have no obligation to issue a Letter of Credit
if any of the following would result:
(i) the aggregate amount of undrawn and
unreimbursed Letters of Credit, would exceed the Borrowing Base less the amount
of outstanding Advances (including any Agent Advances and Agent Loans) less the
outstanding amount of Tranche A Term Loans; or
(ii) the aggregate amount of all undrawn
or unreimbursed Letters of Credit would exceed the lower of: (x) the Maximum
Tranche A Amount less the amount of outstanding Advances (including any Agent
Advances and Agent Loans); less the aggregate amount of the Accounts Payable
Reserve; or (y) $5,000,000; or
(iii) the outstanding Obligations would
exceed the Maximum Amount.
Borrower expressly understands and agrees that Agent shall have no obligation
to arrange for the issuance by issuing banks of the letters of credit that are
to be the subject of L/C Guarantees. Borrower and the Lender Group acknowledge
and agree that certain of the letters of credit that are to be the subject of
L/C Guarantees may be outstanding on the Closing Date. Each Letter of Credit
shall have an expiry date no later than sixty (60) days prior to the date on
which this Agreement is scheduled to terminate under Section 3.4 (without
regard to any potential renewal term) and all such Letters of Credit shall be
in form and substance acceptable to Agent in its sole discretion. If the
Tranche A Lenders are obligated to advance funds under a Letter of Credit,
Borrower immediately shall reimburse such amount to Agent and, in the absence
of such reimbursement, the amount so advanced immediately and automatically
shall be deemed to be an Advance hereunder and, thereafter, shall bear interest
at the rate then applicable to Advances under Section 2.7.
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(b Indemnification. Borrower hereby agrees to
indemnify, save, defend, and hold the Tranche A Lenders harmless from any loss,
cost, expense, or liability, including payments made by the Tranche A Lenders,
expenses, and reasonable attorneys fees incurred by the Tranche A Lenders
arising out of or in connection with any Letter of Credit. Borrower agrees to
be bound by the issuing bank's regulations and interpretations of any letters
of credit guarantied by the Tranche A Lenders and opened to or for Borrower's
account or by Agent's interpretations of any Letter of Credit issued by Agent
to or for Borrower's account, even though this interpretation may be different
from Borrower's own, and Borrower understands and agrees that the Tranche A
Lenders shall not be liable for any error, negligence, or mistake, whether of
omission or commission, in following Borrower's instructions or those contained
in the Letter of Credit or any modifications, amendments, or supplements
thereto other than their gross negligence or wilful misconduct. Borrower
understands that the L/C Guarantees may require the Tranche A Lenders to
indemnify the issuing bank for certain costs or liabilities arising out of
claims by Borrower against such issuing bank. Borrower hereby agrees to
indemnify, save, defend, and hold the Tranche A Lenders harmless with respect
to any loss, cost, expense (including reasonable attorneys fees), or liability
incurred by the Tranche A Lenders under any L/C Guaranty as a result of the
Tranche A Lenders' indemnification of any such issuing bank.
(c Supporting Materials. Borrower hereby
authorizes and directs any bank that issues a letter of credit guaranteed by an
L/C Guaranty to deliver to Agent all instruments, documents, and other writings
and property received by the issuing bank pursuant to such letter of credit,
and to accept and rely upon Agent's instructions and agreements with respect to
all matters arising in connection with such letter of credit and the related
application. Borrower may or may not be the "applicant" or "account party" with
respect to such letter of credit.
(d Costs of Letters of Credit. Any and all
charges, commissions, fees, and costs incurred by Agent relating to the letters
of credit guaranteed by an L/C Guaranty shall be considered Lender Group
Expenses for purposes of this Agreement and immediately shall be reimbursable
by Borrower to Agent.
(e Cash Collateral. Immediately upon the
termination of this Agreement, Borrower agrees to either (i) provide cash
collateral to be held by Agent in an amount equal to 105% of the maximum amount
of the Lender Group's obligations under Letters of Credit, or (ii) cause to be
delivered to Agent releases of all of the Tranche A Lenders' obligations under
outstanding Letters of Credit. At Agent's discretion, any proceeds of
Collateral received by Agent after the occurrence and during the continuation
of an Event of Default may be held as the cash collateral required by this
Section 2.2(e).
(f) Increased Costs. If by reason of (i) any
change in any applicable law, treaty, rule, or regulation or any change in the
interpretation or application by any governmental authority of any such
applicable law, treaty, rule, or regulation, or (ii) compliance by the issuing
bank or the Tranche A Lenders with any direction, request, or
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requirement (irrespective of whether having the force of law) of any
governmental authority or monetary authority including, without limitation,
Regulation D of the Board of Governors of the Federal Reserve System as from
time to time in effect (and any successor thereto):
(i any reserve, deposit, or similar
requirement is or shall be imposed or modified in respect of any Letters of
Credit issued hereunder, or
(ii there shall be imposed on the
issuing bank or the Tranche A Lenders any other condition regarding any letter
of credit, or Letter of Credit, as applicable, issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the
cost to the issuing bank or the Tranche A Lenders of issuing, making,
guaranteeing, or maintaining any letter of credit, or Letter of Credit, as
applicable, or to reduce the amount receivable in respect thereof by such
issuing bank or the Tranche A Lenders, then, and in any such case, Agent may,
at any time within one hundred twenty (120) days after the additional cost is
incurred or the amount received is reduced, notify Borrower, and Borrower shall
pay on demand such amounts as the issuing bank or Agent may specify to be
necessary to compensate the issuing bank or Agent for such additional cost or
reduced receipt, together with interest on such amount from the date of such
demand until payment in full thereof at the rate set forth in Section 2.7(a) or
(c)(i), as applicable. The determination by the issuing bank or Agent, as the
case may be, of any amount due pursuant to this Section 2.2(f), as set forth in
a certificate setting forth the calculation thereof in reasonable detail,
shall, in the absence of manifest or demonstrable error, be final and
conclusive and binding on all of the parties hereto.
(g Participations.
(i Purchase of Participations.
Immediately upon issuance of any Letter of Credit in accordance with this
Section 2.2, each Tranche A Lender shall be deemed to have irrevocably and
unconditionally purchased and received without recourse or warranty, an
undivided interest and participation in the credit support or enhancement
provided through Agent to such issuer in connection with the issuance of such
Letter of Credit, equal to such Tranche A Lender's Tranche A Pro-Rata Share of
the face amount of such Letter of Credit (including, without limitation, all
obligations of Borrower with respect thereto, and any security therefor or
guaranty pertaining thereto).
(ii Documentation. Upon the request of
any Tranche A Lender, Agent shall furnish to such Lender copies of any Letter
of Credit, reimbursement agreements executed in connection therewith,
application for any Letter of Credit and credit support or enhancement provided
through Agent in connection with the issuance of any Letter of Credit, and such
other documentation as may reasonably by requested by such Tranche A Lender.
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(iii Obligations Irrevocable. The
obligations of each Tranche A Lender to make payments to Agent with respect to
any Letter of Credit or with respect to any credit support or enhancement
provided through Agent with respect to a Letter of Credit, and the obligations
of Borrower to make payments to Agent, for the account of the Tranche A
Lenders, shall be irrevocable, not subject to any qualification or exception
whatsoever, including, without limitation, any of the following circumstances:
(A any lack of validity or
enforceability of this Agreement or any of the other Loan Documents;
(B the existence of any claim,
setoff, defense, or other right which any Borrower may have at any time against
a beneficiary named in a Letter of Credit or any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), any Lender,
Agent, the issuer of such Letter of Credit, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transactions between such Borrower or any other Person and the beneficiary
named in any Letter of Credit);
(C any draft, certificate, or
any other document presented under the 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;
(D the surrender or impairment
of any security for the performance or observance of any of the terms of any of
the Loan Documents; or
(E the occurrence of any
Default or Event of Default.
2.3 TRANCHE A TERM LOANS.
(a Several Tranche A Term Loans. Subject to
the terms and conditions of this Agreement, each Tranche A Lender severally
agrees to make a term loan (each a "Tranche A Term Loan" and collectively the
"Tranche A Term Loans") to Borrower on the Closing Date, in an amount equal to
each such Lender's Tranche A Pro-Rata Share of $20,000,000. Each Tranche A
Lender shall make the amount of such Lender's Tranche A Term Loan available to
Agent in same day funds, not later than 12:00 noon (Atlanta, Georgia time), on
the Closing Date. After Agent's receipt of the proceeds of such Tranche A Term
Loans, upon satisfaction of the applicable conditions precedent set forth in
Sections 3.1 and 3.2, Agent shall make the proceeds of such Tranche A Term
Loans available to Borrower on the Closing Date by transferring same day funds
equal to the proceeds of such Tranche A Term Loans received by Agent to the
Designated Account. All amounts outstanding under the Tranche A Term Loans
shall constitute Obligations.
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(b Amortization. The Tranche A Term Loan of
each Tranche A Lender shall be due and payable by Borrower in equal monthly
installments of principal equal to such Tranche A Lender's Tranche A Pro-Rata
Share of $333,333.33, commencing on August 1, 1999 and continuing on the first
day of each succeeding month thereafter. On the earlier of the Maturity Date or
the date of termination of this Agreement, whether by its terms, by prepayment,
by acceleration, or otherwise, the outstanding principal balance, and all
accrued and unpaid interest under the Tranche A Term Loans shall be due and
payable in full.
(c Optional Prepayments of Term Loans. The
unpaid principal balance of the Tranche A Term Loan may be prepaid in whole or
in part without penalty or premium at any time during the term of this
Agreement upon thirty (30) days prior written notice by Borrower to Agent. All
partial prepayments of principal on the Tranche A Term Loans will be applied
ratably to installments due on each such Tranche A Term Loan in the inverse
order of their maturity.
2.4 TRANCHE B TERM LOANS.
(a Several Tranche B Term Loans. Subject to the
terms and conditions of this Agreement, each Tranche B Lender severally agrees
to make a term loan (each a "Tranche B Term Loan" and collectively the "Tranche
B Term Loans") to Borrower on the Closing Date, in an amount equal to each such
Lender's Tranche B Pro-Rata Share of $5,000,000. Each Tranche B Lender shall
make the amount of such Lender's Tranche B Term Loan available to Agent in same
day funds, not later than 12:00 noon (Atlanta, Georgia time), on the Closing
Date. After Agent's receipt of the proceeds of such Tranche B Term Loans, upon
satisfaction of the applicable conditions precedent set forth in Sections 3.1
and 3.2, Agent shall make the proceeds of such Tranche B Term Loans available
to Borrower on the Closing Date by transferring same day funds equal to the
proceeds of such Tranche B Term Loans received by Agent to the Designated
Account. All amounts outstanding under the Tranche B Term Loans shall
constitute Obligations.
(b Amortization/Subordination. The outstanding
principal balance, and all accrued and unpaid interest under the Tranche B Term
Loans shall be due and payable in full on the earlier of the Maturity Date or
the date of termination of this Agreement whether by its terms, by prepayment,
by acceleration, or otherwise. The Tranche B Lenders hereby subordinate (i) all
amounts due in respect of the Tranche B Term Loans to all other Obligations
(other than the Tranche A Early Termination Fee) and (ii) all amounts due in
respect of the Tranche B Early Termination Fee to all amounts due in respect of
the Tranche A Early Termination Fee. Except as expressly permitted hereunder,
the Tranche B Lenders shall not accept any payment on account of (A) the
Tranche B Term Loans until the other Obligations (other than the Tranche A
Early Termination Fee) are paid in full in cash and the Tranche A Commitment is
terminated, and (B) the Tranche B Early Termination Fee until the Tranche A
Early Termination Fee is paid in full in cash. Notwithstanding the foregoing,
if any Tranche B Lender receives any payment or other asset
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of Borrower that is not otherwise permitted to be paid or delivered herein,
such Tranche B Lender shall hold such payment or asset in trust for the Tranche
A Lenders and shall promptly deliver to Agent such payment or asset to Agent
for the benefit of the Tranche A Lenders.
(c Optional Prepayments of Term Loans. The
Tranche B Term Loans may not be prepaid in part at any time during the term of
this Agreement and may be prepaid in full only in accordance with Section 3.6
hereof.
2.5 PAYMENTS.
(a Payments by Borrower.
(i All payments to be made by Borrower
shall be made without set-off, recoupment, deduction, or counterclaim, except
as otherwise required by law. Except as otherwise expressly provided herein,
all payments by Borrower shall be made to Agent for the account of the Lenders
or Agent, as the case may be, at Agent's address set forth in Section 12, and
shall be made in immediately available funds, no later than 2:00 p.m. (Atlanta,
Georgia time) on the date specified herein. Any payment received by Agent later
than 2:00 p.m. (Atlanta, Georgia time), at the option of Agent, shall be deemed
to have been received on the following Business Day and any applicable interest
or fee shall continue to accrue until such following Business Day.
(ii Whenever any payment is due on a day
other than a Business Day, such payment shall be made on the following Business
Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(iii Unless Agent receives notice from
Borrower prior to the date on which any payment is due to the Lenders that
Borrower will not make such payment in full as and when required, Agent may
assume that Borrower has made such payment in full to Agent on such date in
immediately available funds and Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent Borrower
has not made such payment in full to Agent, each Lender shall repay to Agent on
demand such amount distributed to such Lender, together with interest thereon
at the Reference Rate for each day from the date such amount is distributed to
such Lender until the date repaid.
(b Apportionment and Application of Payments.
(i Except as otherwise provided with
respect to Defaulting Lenders, aggregate principal and interest payments shall
be apportioned ratably among the Lenders (according to the unpaid principal
balance of the Advances, Tranche A Term Loans and Tranche B Term Loans to which
such payments relate held by each Lender) and
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payments of the fees (other than fees designated for Agent's separate account
and except as specifically provided in Section 2.12) shall, as applicable, be
apportioned ratably among the Lenders.
(ii All payments shall be remitted to
Agent and, except upon the occurrence and during the continuance of an Event of
Default, all such payments (excluding payments relating to principal or
interest on the Term Loans or of specific Advances, or constituting payment of
specific fees) and all proceeds of Collateral (other than proceeds of
Equipment) received by Agent, shall be applied, first, to pay any fees or
expense reimbursements then due to Agent or the Co-Agents from Borrower;
second, to pay any fees or expense reimbursements then due to the Lenders from
Borrower; third, to pay interest due in respect of all Advances, including
Agent Loans and Agent Advances; fourth, to pay or prepay principal of Agent
Loans and Agent Advances; fifth, to pay Current Pay Interest due in respect of
all Tranche B Term Loans; sixth, ratably to pay principal of the Advances
(other than Agent Loans and Agent Advances) and unreimbursed obligations in
respect of Letters of Credit; and seventh, ratably to pay any other Obligations
(other than in respect of principal and PIK Interest on the Tranche B Term
Loans) due to Agent or any Lender by Borrower. Agent shall promptly distribute
to each Lender, pursuant to the applicable wire transfer instructions received
from each Lender in writing, such funds as it may be entitled to receive,
subject to a Settlement delay as provided for in Section 2.1(i).
(iii Except upon the occurrence and
during the continuance of an Event of Default, all proceeds from the sale or
liquidation of Equipment received by Agent, shall be applied, first, to pay or
prepay principal on the Tranche A Term Loans in the inverse order of maturity;
and second, in the order set forth in Section 2.5(b)(ii) above.
(iv Upon the occurrence and during the
continuance of an Event of Default, all payments shall be applied, first, to
pay any fees or expense reimbursements then due to Agent or the Co-Agents from
Borrower; second, to pay any fees (other than fees set forth in Section 2.12(b)
and Section 3.6) or expense reimbursements then due to the Lenders from
Borrower; third, to pay interest due in respect of all Advances, including
Agent Loans and Agent Advances; fourth, to pay interest due in respect of all
Tranche A Term Loans; fifth, to cash collateralize issued and outstanding
Letters of Credit; sixth, ratably to pay principal of the Advances; seventh,
ratably to pay principal of the Tranche A Term Loans; eighth, ratably to pay
any other Obligations (other than fees provided for in Section 3.6) due to
Agent or any Tranche A Lender by Borrower; ninth, to pay fees set forth in
Section 2.12(b); tenth, to pay interest due in respect of all Tranche B Term
Loans; eleventh, ratably to pay principal of Tranche B Term Loans; twelfth,
ratably to pay any other Obligations (other than fees provided for in Section
3.6) due to any Tranche B Lender by Borrower; thirteenth, ratably to pay the
Tranche A Early Termination Fee to the Tranche A Lenders; and fourteenth,
ratably to pay the Tranche B Early Termination Fee to the Tranche B Lenders;
provided, however, that with respect to any payment from the proceeds from the
sale of Equipment, such proceeds shall be applied ratably to pay principal
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of the Tranche A Term Loans (as set forth in "seventh" above ) prior to the
application of such proceeds to pay principal of Advances (as set forth in
"sixth" above).
(c Promise to Pay. Borrower hereby promises to
pay in United States Dollars in full to Agent, for the benefit of the Lender
Group, the Obligations, including, without limitation, the principal amount of
all Advances and Term Loans, and all accrued and unpaid interest and fees
thereon, all in accordance with the terms of this Agreement.
2.6 OVERADVANCES. If, at any time or for any reason, the
amount of Obligations owed by Borrower to the Lender Group pursuant to Sections
2.1 or 2.2 is greater than either the Dollar or percentage limitations set
forth in Sections 2.1 or 2.2 (an "Overadvance"), Borrower immediately shall pay
to Agent, in cash, the amount of such excess to be used by Agent to reduce the
Obligations pursuant to the terms of Section 2.5(b).
2.7 INTEREST AND LETTER OF CREDIT FEES: RATES, PAYMENTS,
AND CALCULATIONS.
(a Interest Rate. Except as provided in
Section 2.7(c) below,
(i all Obligations (other than Advances
consisting of Eurodollar Rate Loans, undrawn Letters of Credit and the Term
Loans), shall bear interest on the Daily Balance at a per annum rate equal to
the Reference Rate, plus one (1.00) percentage point,
(ii all Advances consisting of
Eurodollar Rate Loans shall bear interest at a per annum rate equal to the
Adjusted Eurodollar Rate plus three and one-quarter of one (3.25) percentage
points,
(iii all Tranche A Term Loans consisting
of (A) Eurodollar Rate Loans shall bear interest at a per annum rate equal to
the Adjusted Eurodollar Rate plus three and three-quarters of one (3.75)
percentage points, and (B) Reference Rate Loans shall bear interest at a per
annum rate equal to the Reference Rate plus one and three-quarters of one
(1.75) percentage points, and
(iv all Tranche B Term Loans shall bear
(x) current pay interest ("Current Pay Interest") at a per annum rate equal to
fifteen (15) percentage points and (y) payment-in-kind interest ("PIK
Interest") at a per annum rate equal to three and one-half of one (3.50)
percentage points.
(b Letter of Credit Fee. Borrower shall pay
Agent, for the benefit of the Tranche A Lenders, a fee (in addition to the
charges, commissions, fees, and costs set forth in Section 2.2(d)) equal to two
and three-quarters of one percent (2.75%) per
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annum times the Daily Balance of the aggregate undrawn amount of all Letters of
Credit that were outstanding during the immediately preceding month.
(c) Default Rate. Upon the occurrence and
during the continuation of an Event of Default, (i) all Obligations (except for
undrawn Letters of Credit), shall bear interest at a per annum rate equal to
three (3) percentage points above the applicable rate provided for in Section
2.7(a) hereof, and (ii) the Letter of Credit fee provided in Section 2.7(b)
shall be increased to five and three-quarters of one percent (5.75%) per annum
times the amount of the aggregate undrawn amount of all outstanding Letters of
Credit.
(d) Intentionally Omitted.
(e) Payments. Interest (other than PIK Interest
and interest accruing in respect of Eurodollar Rate Loans) and Letter of Credit
fees payable hereunder shall be due and payable, in arrears, on the first day
of each month during the term hereof. PIK Interest shall be due and payable on
the Maturity Date or such earlier date as the Tranche B Term Loans shall be due
and payable in full. Interest in respect of each Eurodollar Rate Loan shall be
due and payable, in arrears, on the last day of the Interest Period therefor.
Borrower hereby authorizes Agent, at its option, without prior notice to
Borrower, to charge such interest and Letter of Credit fees, all Lender Group
Expenses (as and when incurred), the charges, commissions, fees, and costs
provided for in Section 2.2(d) (as and when accrued or incurred), the fees and
charges provided for in Section 2.12 (as and when accrued or incurred), and all
installments or other payments due under the Term Loans or any Loan Document to
the applicable Loan Account, which amounts thereafter shall accrue interest at
the rate then applicable to Advances hereunder; provided, however, that upon a
Default or Event of Default, Current Pay Interest on the Tranche B Term Loans
shall not be charged to the Loan Account and such interest shall be added to
the principal balance of the Tranche B Term Loans and shall bear interest at
the rate applicable to the Tranche B Term Loans. Any interest not paid when due
(other than Current Pay Interest accruing after the occurrence of a Default or
Event of Default and PIK Interest) shall be compounded and shall thereafter
accrue interest at the rate then applicable to Reference Rate Loans hereunder.
Current Pay Interest accruing after a Default or Event of Default and PIK
Interest shall be compounded and shall accrue interest at the rate then
applicable to Tranche B Term Loans hereunder.
(f) Computation. The Reference Rate as of the
date of this Agreement is seven and one-half percent (7.5%) per annum. In the
event the Reference Rate is changed from time to time hereafter, the applicable
rate of interest hereunder automatically and immediately shall be increased or
decreased by an amount equal to such change in the Reference Rate. All interest
and fees chargeable under the Loan Documents shall be computed on the basis of
a 360 day year for the actual number of days elapsed.
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(g) Intent to Limit Charges to Maximum Lawful
Rate. In no event shall the interest rate or rates payable under this
Agreement, plus any other amounts paid in connection herewith, exceed the
highest rate permissible under any law that a court of competent jurisdiction
shall, in a final determination, deem applicable. Borrower and the Lender
Group, in executing and delivering this Agreement, intend legally to agree upon
the rate or rates of interest and manner of payment stated within it; provided,
however, that, anything contained herein to the contrary notwithstanding, if
said rate or rates of interest or manner of payment exceeds the maximum
allowable under applicable law, then, ipso facto as of the date of this
Agreement, Borrower is and shall be liable only for the payment of such maximum
as allowed by law, and payment received from Borrower in excess of such legal
maximum, whenever received, shall be applied to reduce the principal balance of
the Obligations to the extent of such excess.
2.8 COLLECTION OF ACCOUNTS.
(a) Borrower shall at all times maintain lockboxes (the
"Lockboxes") and, immediately after the Closing Date, shall instruct all
Account Debtors with respect to the Accounts, General Intangibles, and
Negotiable Collateral of Borrower to remit all Collections in respect thereof
to such Lockboxes. Borrower, Agent, and the Lockbox Banks shall enter into the
Lockbox Agreements, which among other things shall provide for the opening of a
Lockbox Account for the deposit of Collections at a Lockbox Bank. Borrower
agrees that all Collections and other amounts received by Borrower from any
Account Debtor or any other source immediately upon receipt shall be deposited
into a Lockbox Account. No Lockbox Agreement or arrangement contemplated
thereby shall be modified by Borrower without the prior written consent of
Agent. Upon the terms and subject to the conditions set forth in the Lockbox
Agreements, all amounts received in each Lockbox Account shall be wired each
Business Day into an account (the "Agent's Account") maintained by Agent at a
depositary selected by Agent.
(b) Borrower shall not open or maintain any deposit
account or investment account with any bank or other financial institution
other than the Designated Account, the Lockbox Account and the other accounts
listed on Schedule 2.8. All deposit accounts and investment accounts of
Borrower and its Subsidiaries are listed on Schedule 2.8.
2.9 CREDITING PAYMENTS; APPLICATION OF COLLECTIONS. The
receipt of any Collections by Agent (whether from transfers to Agent by the
Lockbox Banks pursuant to the Lockbox Agreements or otherwise) immediately
shall be applied provisionally to reduce the Obligations outstanding under
Section 2.1, but shall not be considered a payment on account unless such
Collection item is a wire transfer of immediately available federal funds and
is made to the Agent's Account or unless and until such Collection item is
honored when presented for payment. From and after the Closing Date, Agent
shall be entitled to charge Borrower for one (1) Business Day of 'clearance' or
'float' for the sole account of Agent at the rate set forth in Section
2.7(a)(i) or Section 2.7(c)(i), as applicable, on all
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Collections that are received by Agent (regardless of whether forwarded by the
Lockbox Banks to Agent, whether provisionally applied to reduce the Obligations
under Section 2.1, or otherwise). This across-the-board one (1) Business Day
clearance or float charge on all Collections is acknowledged by the parties to
constitute an integral aspect of the pricing of the Lender Group's financing of
Borrower, and shall apply irrespective of the characterization of whether
receipts are owned by Borrower or Agent, and whether or not there are any
outstanding Advances, the effect of such clearance or float charge being the
equivalent of charging one (1) Business Day of interest on such Collections.
Should any Collection item not be honored when presented for payment, then
Borrower shall be deemed not to have made such payment, and interest shall be
recalculated accordingly. Anything to the contrary contained herein
notwithstanding, any Collection item shall be deemed received by Agent only if
it is received into the Agent's Account on a Business Day on or before 2:00
p.m. Atlanta, Georgia time. If any Collection item is received into the Agent's
Account on a non-Business Day or after 2:00 p.m. Atlanta, Georgia time on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.
2.10 DESIGNATED ACCOUNT. Agent and the Lender Group are
authorized to make the Advances, the Letters of Credit and the Term Loans under
this Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person, or without instructions if pursuant to
Section 2.7(e). Borrower agrees to establish and maintain the Designated
Account with the Designated Account Bank for the purpose of receiving the
proceeds of the Advances and the Term Loans requested by Borrower and made by
the Lender Group hereunder. Unless otherwise agreed by Agent and Borrower, any
Advance and the Term Loans requested by Borrower and made by the Lender Group
hereunder shall be made to the Designated Account.
2.11 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF
OBLIGATIONS. Agent shall maintain an account on its books in the name of
Borrower (the "Loan Account") on which Borrower will be charged with all
Advances and the Term Loans made by the Lender Group to Borrower or for
Borrower's account, including, accrued interest, Lender Group Expenses, and any
other payment Obligations of Borrower; provided, however, that Back Bay shall
send monthly interest statements setting forth the monthly interest accrual and
payment due in respect of the Tranche B Term Loans to Borrower, with a copy to
Agent, no later than ten (10) days prior to the due date therefor. In
accordance with Section 2.9, the Loan Account will be credited with all
payments received by Agent from Borrower or for Borrower's account, including
all amounts received in the Agent's Account from any Lockbox Bank. Agent shall
render statements regarding the Loan Account to Borrower, including principal,
interest, fees, and including an itemization of all charges and expenses
constituting the Lender Group Expenses owing, and such statements shall be
conclusively presumed to be correct and accurate and constitute an account
stated between Borrower and the Lender Group unless, within thirty (30) days
after receipt thereof by Borrower, Borrower shall deliver to Agent written
objection thereto describing the error or errors contained in any such
statements.
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2.12 FEES. Borrower shall pay to Agent for the ratable
benefit of the Lender Group (except where otherwise indicated) the following
fees:
(a) Tranche A Fees. The fees described in that
certain Fee Letter of even date herewith among Borrower, Agent, Foothill and GE
Capital.
(b) Tranche B Fees.
(i) Tranche B Commitment Fee. A
commitment fee of $150,000 payable to Agent for the benefit of Back Bay, which
fee has been fully earned and which is due and payable on the Closing Date.
(ii) Facility Fee. A facility fee in the
amount of $75,000 per annum, earned in full on the Closing Date, and payable to
Agent for the benefit of Back Bay on the earlier of each anniversary of the
Closing Date, or the date of termination of this Agreement.
(c) Financial Examination and Appraisal Fees.
For each of the respective sole accounts of Agent and, to the extent a Lender
accompanies Agent under Section 4.6, such Lender: (i) fee of $750 per day per
examiner, plus out-of-pocket expenses for each financial analysis and
examination (i.e., audits) of Borrower performed by personnel employed by Agent
and any such Lender; (ii) fee of $750 per day per Person, plus out-of-pocket
expenses, to set up electronic collateral reporting from Borrower to Agent,
(iii) an appraisal fee of $1,500 per day per appraiser, plus out-of-pocket
expenses for each appraisal of the Collateral performed by personnel employed
by Agent and any such Lender; and (iv) the actual charges paid or incurred by
Agent if it elects to employ the services of one or more third Persons to
perform such financial analyses and examinations (i.e., audits) of Borrower or
to appraise the Collateral or to set up electronic collateral reporting from
Borrower to Agent; provided, however, that notwithstanding clause (i) above, so
long as no Default or Event of Default exists, Borrower shall be responsible
for the payment of examination fees provided for in such clause (i) in
connection with no more than four (4) examinations per year.
(d) Servicing Fee. On the first day of each
month during the term of this Agreement, and thereafter so long as any
Obligations are outstanding, a servicing fee payable in arrears (i) to the
Agent (for the sole benefit of Agent) in an amount equal to $5,000, and (ii) to
the Agent (for the sole benefit of Back Bay) in an amount equal to $2,500.
(e) Miscellaneous. Except as specifically
provided herein, the fees set forth herein shall be fully earned when due,
non-refundable when paid and, if applicable computed on the basis of a 360 day
year for the actual number of days elapsed.
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2.13 EURODOLLAR RATE LOANS. Any other provisions herein to
the contrary notwithstanding, the following provisions shall govern with
respect to Eurodollar Rate Loans as to the matters covered:
(a) Borrowing; Conversion; Continuation.
Borrower may from time to time, on or after the Closing Date, request in
writing to Agent: (i) Loans (other than Tranche B Term Loans) to constitute
Eurodollar Rate Loans; (ii) that Reference Rate Loans be converted into
Eurodollar Rate Loans; or (iii) that existing Eurodollar Rate Loans continue
for an additional Interest Period. Any such request shall specify the aggregate
amount of the requested Eurodollar Rate Loans, the proposed funding date
therefor (which shall be a Business Day, and with respect to continued
Eurodollar Rate Loans shall be the last day of the Interest Period of the
existing Eurodollar Rate Loans being continued) and the proposed Interest
Period, in each case subject to the limitations set forth below. Eurodollar
Rate Loans may only be made, continued, or extended if, as of the proposed
funding date therefor, each of the following conditions is satisfied:
(v) no Event of Default exists;
(w) no more than five (5) Eurodollar Rate Loans
may be in effect at any one time;
(x) the amount of each Eurodollar Rate Loan
borrowed, converted, or continued must be
in an amount not less than $1,000,000 and
integral multiples of $500,000 in excess
thereof;
(y) Agent shall have determined that the
Interest Period or Adjusted Eurodollar Rate
is available to the Lenders and can be
readily determined as of the date of the
request for such Eurodollar Rate Loan by
Borrower; and
(z) Agent shall have received such request at
least two (2) Business Days prior to the
proposed funding date therefor.
Any request by Borrower to borrow Eurodollar Rate Loans, to convert Reference
Rate Loans to Eurodollar Rate Loans, or to continue any existing Eurodollar
Rate Loans shall be irrevocable, except to the extent that Agent shall
determine under Section 2.13(a), 2.14 or 2.15 that such Eurodollar Rate Loans
cannot be made or continued.
(b) Determination of Interest Paid. By giving
notice as set forth in Section 2.13(a), Borrower shall have the option of
selecting a one (1), two (2), or three (3) month Interest Period for such
Eurodollar Rate Loan. The determination of Interest Periods shall be subject to
the following provisions:
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(i) in the case of immediately
successive Interest Periods, each
successive Interest Period shall
commence on the day on which the
next preceding Interest Period
expires;
(ii) if any Interest Period would
otherwise expire on a day which is
not a Business Day, the Interest
Period shall be extended to expire
on the next succeeding Business
Day; provided, however, that if
the next succeeding Business Day
occurs in the following calendar
month, then such Interest Period
shall end on the last Business Day
of the calendar month at the end
of such Interest Period;
(iii) if any Interest Period begins on
the last Business Day of a month
or on a day for which there is no
numerically corresponding day in
the calendar month at the end of
such Interest Period, then the
Interest Period shall end on the
last Business Day of the calendar
month at the end of such Interest
Period; and
(iv) Borrower may not select an
Interest Period which expires
later than the Maturity Date.
(c) Automatic Conversion: Optional Conversion by
Agent. Any Eurodollar Rate Loan shall automatically convert to a Reference Rate
Loan upon the last day of the applicable Interest Period, unless Agent has
received a request to continue such Eurodollar Rate Loan at least two (2)
Business Days prior to the end of such Interest Period in accordance with the
terms of Section 2.13(a). Any Eurodollar Rate Loan shall, at the Tranche A
Lenders' option, upon notice to Borrower, convert to a Reference Rate Loan in
the event that (i) an Event of Default shall have occurred and be continuing as
of the last day of the Interest Period for such Eurodollar Rate Loan, or (ii)
this Agreement is terminated, and Borrower shall pay to Agent for the benefit
of the Tranche A Lenders any amounts required by Section 2.16 as a result
thereof.
2.14 ILLEGALITY. Any other provision herein to the
contrary notwithstanding, if the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof shall make it unlawful
for an Lender to make or maintain Eurodollar Rate Loans as contemplated by this
Agreement, (a) the obligation of the Lenders hereunder to make Eurodollar Rate
Loans, continue Eurodollar Rate Loans as such, and convert Reference Rate Loans
to Eurodollar Rate Loans shall forthwith be suspended and (b) the then
outstanding Eurodollar Rate Loans, if any, shall be converted automatically to
Reference Rate Loans on the respective last days of the then current Interest
Periods with respect thereto or within such earlier period as required by law;
provided, however, that
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before making any such demand, each Tranche A Lender agrees to use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, in
its reasonable discretion, in any legal, economic, or regulatory manner) to
designate a different lending office if the making of such a designation would
allow such Tranche A Lender or its lending office to continue to perform its
obligations to make Eurodollar Rate Loans. If any such conversion of a
Eurodollar Rate Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, Borrower shall pay to Agent for
the benefit of the Tranche A Lenders such amounts, if any, as may be required
pursuant to Section 2.16. If circumstances subsequently change so that the
Tranche A Lenders shall determine that they are no longer so affected, the
Tranche A Lenders promptly will notify Agent and Agent will promptly notify
Borrower, and upon receipt of such notice, the obligations of the Tranche A
Lenders to make or continue Eurodollar Rate Loans or to convert Reference Rate
Loans into Eurodollar Rate Loans shall be reinstated.
2.15 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or
compliance by the Tranche A Lenders with any request or directive (whether or
not having the force of law) from any central bank or other governmental
authority made subsequent to the date hereof;
(i) shall subject any Tranche A Lender
to any tax, levy, charge, fee,
reduction, or withholding of any
kind whatsoever with respect to
this Agreement or any Loan, or
change the basis of taxation of
payments to any Tranche A Lender
in respect thereof (except for the
establishment of a tax based on
the net income of such Tranche A
Lender or changes in the rate of
tax on the net income of such
Tranche A Lender);
(ii) shall impose, modify or hold
applicable any reserve, special
deposit, compulsory loan, or
similar requirement against assets
held by, deposits or other
liabilities in or for the account
of, loans or other liabilities in
or for the account of, loans or
other extensions of credit by, or
any other acquisitions of funds
by, any office of any Tranche A
Lender; or
(iii) shall impose on any Tranche A
Lender any other condition with
respect to this Agreement or any
Loan;
and the result of any of the foregoing is to increase the cost to any Tranche A
Lender of making, converting into, continuing or maintaining Eurodollar Rate
Loans or to reduce any
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amount receivable hereunder in respect of Eurodollar Rate Loans, or to forego
any other sum payable thereunder or make any payment on account thereof, then,
in any such case, Borrower shall promptly pay such Tranche A Lender, upon its
demand, any additional amounts necessary to compensate such Tranche A Lender
for such increased cost or reduced amount receivable; provided, however, that
before making any such demand, each Tranche A Lender agrees to use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, in
its reasonable discretion, in any legal, economic, or regulatory manner) to
designate a different eurodollar lending office if the making of such
designation would allow such Tranche A Lender or its eurodollar lending office
to continue to perform its obligations to make Eurodollar Rate Loans or to
continue to fund or maintain Eurodollar Rate Loans and avoid the need for, or
materially reduce the amount of, such increased cost. If a Tranche A Lender
becomes entitled to claim any additional amounts pursuant to this Section 2.15,
such Tranche A Lender shall notify Agent and Borrower of the event by reason of
which it has become so entitled. A certificate as to any additional amounts
payable pursuant to this Section 2.15 submitted by a Tranche A Lender to Agent
and Borrower shall be conclusive in the absence of manifest error. If Borrower
so notifies any such Tranche A Lender within five (5) Business Days after such
Tranche A Lender notifies Borrower of any increased cost pursuant to the
foregoing provisions of this Section 2.15 and reimburses such for any cost in
accordance with Section 2.16, Borrower may convert all affected Eurodollar Rate
Loans then outstanding into Reference Rate Loans in accordance with Section
2.13.
(b) If any Lender shall have determined that the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Lender or
any Person controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any governmental
authority made subsequent to the date hereof does or shall have the effect of
increasing the amount of capital required to be maintained or reducing the rate
of return on such Lender's or such Person's capital as a consequence of its
obligations hereunder to a level below that which such Lender or such Person
could have achieved but for such change or compliance (taking into
consideration such Lender's or such Person's policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from time to
time, after submission by such Lender to Agent and Borrower of a prompt written
request therefor, Borrower shall pay to Lender such additional amount or
amounts as will compensate such Lender or such Person for such reduction. This
covenant shall survive the termination of this Agreement and the payment of the
Obligations.
2.16 INDEMNITY. Borrower agrees to indemnify each Tranche
A Lender and to hold each Tranche A Lender harmless from any loss or expense
which such Tranche A Lender may sustain or incur as a consequence of (a) a
default by Borrower in payment when due of the principal amount of or interest
on any Eurodollar Rate Loan, (b) a default by Borrower in making a borrowing
of, conversion into, or continuation of Eurodollar Rate Loans after Borrower
has given a notice requesting the same in accordance with the
provisions of this Agreement, (c) a default by Borrower in making any
prepayment after
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Borrower has given a notice thereof in accordance with the provisions of this
Agreement, or (d) the making of a prepayment of Eurodollar Rate Loans on a day
which is not the last day of an Interest Period with respect thereto (whether
due to the termination of this Agreement upon an Event of Default or
otherwise), including, in each case, any such loss or expenses arising from the
re-employment of funds obtained by it or from fees payable to terminate the
deposits from which such funds were obtained. Calculation of all amounts
payable to the Tranche A Lenders under this Section 2.16 shall be made as
though the Tranche A Lenders had actually funded the relevant Eurodollar Rate
Loan through the purchase of a deposit bearing interest at the Adjusted
Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan
and having a maturity comparable to the relevant Interest Period; provided,
however, that any Tranche A Lender may fund each of the Eurodollar Rate Loans
in a manner it sees fit, and the foregoing assumption shall be utilized only
for the calculation of amounts payable under this Section 2.16. This covenant
shall survive the termination of this Agreement and the payment of the
Obligations.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE, LETTER
OF CREDIT AND THE TERM LOANS. The obligation of the Lender Group to make the
initial Advance, to issue the initial Letter of Credit or to make the Term
Loans is subject to the fulfillment, to the satisfaction of Agent, the
Co-Agents, Back Bay and their respective counsel, of each of the following
conditions on or before the Closing Date:
(a) the Closing Date shall occur on or before
July 30, 1999;
(b) Agent shall have received confirmation of
the filing of its financing statements and fixture filings;
(c) Agent shall have received each of the
following documents, duly executed, and each such document shall be in full
force and effect:
a. the Lockbox Agreements;
b. the Disbursement Letter;
c. the Pay-Down Letter, together with
UCC amendments and other documentation
evidencing the priority of the Liens of the
Existing Lender in and to the properties
and assets of Borrower as set forth in the
Intercreditor Agreement;
d. the Mortgages and any related
fixture filings;
e. the Trademark Security Agreement;
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f. the Stock Pledge Agreement,
together with original stock certificates
representing 100% of the issued and
outstanding capital stock of each
Subsidiary of Borrower, and undated stock
powers duly executed in blank;
g. the Subsidiary Guaranty;
h. the Patent Security Agreement;
i. the Subsidiary Security Agreement;
and
j. the Intercreditor Agreement;
(d) The SunTrust Lenders shall have entered into
an amendment dated as of the Closing Date to the SunTrust Loan Agreement in
form and substance satisfactory to the Co-Agents, Back Bay and their counsel;
(e) Agent shall have received a certificate from
the Secretary of Borrower attesting to the resolutions of Borrower's Board of
Directors authorizing its execution, delivery, and performance of this
Agreement and the other Loan Documents to which Borrower is a party and
authorizing specific officers of Borrower to execute the same;
(f) Agent shall have received copies of
Borrower's Governing Documents, as amended, modified, or supplemented to the
Closing Date, certified by the Secretary of Borrower;
(g) Agent shall have received a certificate of
status with respect to Borrower, dated within ten (10) days of the Closing
Date, such certificate to be issued by the appropriate officer of the
jurisdiction of organization of Borrower, which certificate shall indicate that
Borrower is in good standing in such jurisdiction;
(h) Agent shall have received certificates of
status with respect to Borrower, each dated within fifteen (15) days of the
Closing Date, such certificates to be issued by the appropriate officer of the
jurisdictions in which its failure to be duly qualified or licensed would
constitute a Material Adverse Change, which certificates shall indicate that
Borrower is in good standing in such jurisdictions;
(i) Agent shall have received a certificate of
insurance, together with the endorsements thereto, as are required by Section
6.10, the form and substance of which shall be satisfactory to the Co-Agents,
Back Bay and their counsel;
(j) Agent shall have received duly executed
certificates of title with respect to that portion of the Collateral that is
subject to certificates of title;
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(k) Agent shall have received Collateral Access
Agreements from (x) the landlords of Borrower's distribution centers identified
on Schedule 3.1(k), and (y) third-party processors of Borrower's Inventory
identified on Schedule 3.1(k), and (z) such other lessors, warehousemen,
bailees, and other third persons as Agent may require;
(l) Agent shall have received an opinion of
Borrower's counsel and local counsel (covering the laws of each jurisdiction in
which the Real Property Collateral is located) in form and substance
satisfactory to the Co-Agents and Back Bay in their sole discretion;
(m) Agent shall have received (i) appraisals of
the Real Property Collateral and appraisals of the Inventory and the Equipment,
in each case satisfactory to the Co-Agents and Back Bay, and (ii) mortgagee
title insurance policies (or marked commitments to issue the same) for the Real
Property Collateral issued by a title insurance company satisfactory to Agent
(each a "Mortgage Policy" and, collectively, the "Mortgage Policies") in
amounts satisfactory to Agent assuring Agent that the Mortgages on such Real
Property Collateral are valid and enforceable second priority mortgage Liens on
such Real Property Collateral free and clear of all defects and encumbrances
except Permitted Liens, and the Mortgage Policies shall otherwise be in form
and substance reasonably satisfactory to Agent;
(n) Agent shall have received satisfactory
evidence that all tax returns required to be filed by Borrower have been timely
filed and all taxes upon Borrower or its properties, assets, income, and
franchises (including real property taxes and payroll taxes) have been paid
prior to delinquency, except such taxes that are the subject of a Permitted
Protest;
(o) Agent shall have received evidence
satisfactory to it that, after making the initial Advance on the Closing Date,
the issuance of any Letters of Credit on the Closing Date and the funding of
the Term Loans hereunder on the Closing Date, Borrower shall have unrestricted
cash on hand and Availability, less Borrower's accounts payable over thirty
(30) days past due in an amount equal to or greater than $10,000,000;
(p) Since April 3, 1999, no Material Adverse
Change shall have occurred in Borrower's financial performance and condition or
in the value of the Collateral, and no material deterioration shall have
occurred in Borrower's accounts payable; provided, however, that the amendment,
expiration or termination of the SunTrust Loan Agreement with respect to all
amounts outstanding thereunder (other than the SunTrust Term Loan to be made on
the Closing Date) shall not constitute a Material Adverse Change provided that
the SunTrust Lenders shall not have commenced any collection or enforcement
action against Borrower;
(q) Agent shall have received satisfactory
reference checks on key management;
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(r) Agent shall have completed a satisfactory
updated field audit;
(s) An appraiser satisfactory to the Co-Agents
shall have completed an inspection of Borrower's machinery and equipment;
(t) Agent shall have received Borrower's
business plan, in form and substance satisfactory to the Co-Agents and Back
Bay, specifically providing for the disposal of assets relating to Borrower's
existing yarn and denim business and the announcement of same;
(u) Agent and the Lenders shall have received
payment of such fees and expenses as are due and payable on the Closing Date;
and
(v) all other documents and legal matters in
connection with the transactions contemplated by this Agreement shall have been
delivered, executed, or recorded and shall be in form and substance
satisfactory to Agent and its counsel.
3.2 CONDITIONS PRECEDENT TO ALL ADVANCES, ALL LETTERS OF
CREDIT AND THE TERM LOANS. The following shall be conditions precedent to all
Advances, all Letters of Credit and the Term Loans hereunder:
(a) the representations and warranties contained
in this Agreement and the other Loan Documents shall be true and correct in all
respects on and as of the date of such extension of credit, as though made on
and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date);
(b) no Default or Event of Default shall have
occurred and be continuing on the date of such extension of credit, nor shall
either result from the making thereof; and
(c) no injunction, writ, restraining order, or
other order of any nature prohibiting, directly or indirectly, the extending of
such credit shall have been issued and remain in force by any governmental
authority against Borrower, the Lender Group or any of their Affiliates.
3.3 CONDITION SUBSEQUENT. As a condition subsequent to
initial closing hereunder, Borrower shall perform or cause to be performed the
following (the failure by Borrower to so perform or cause to be performed
constituting an Event of Default):
(a) on or before July 30, 1999, deliver to Agent
an opinion of Borrower's counsel addressing perfection of Agent's security
interest in the Collateral in the States of New York and California in form and
substance satisfactory to the Co-Agents;
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(b) within thirty (30) days of the Closing Date,
deliver to Agent the certified copies of the policies of insurance, together
with the endorsements thereto, as are required by Section 6.10, the form and
substance of which shall be satisfactory to Agent and its counsel;
(c) on or before September 30, 1999, deliver to
Agent evidence in form and substance satisfactory to the Co-Agents, that
Borrower has resolved any and all "Year 2000 problems" with respect to
Borrower's critical systems; and
(d) on or before the date forty-five (45)
days following the Closing Date, deliver to Agent evidence satisfactory to
Agent that the Indebtedness of Borrower under the $3,700,000 Development
Authority of Pike County Tax-Exempt Adjustable Mode Industrial Development
Revenue Bonds (Thomaston Xxxxx, Inc. Project) Series 1995 described in that
certain Indenture of Trust, dated as of April 1, 1995 by and between First
Citizens Bank & Trust Company, as trustee, and Development Authority of Pike
County has been repaid in full.
3.4 TERM. This Agreement shall become effective upon the
execution and delivery hereof by Borrower and the Lender Group and shall
continue in full force and effect for a term ending on the date (the "Maturity
Date") that is five (5) years from the Closing Date unless sooner terminated
pursuant to the terms hereof. The foregoing notwithstanding, Agent at the
direction of the Co-Agents (on behalf of the Lender Group) shall have the right
to terminate the Lender Group's obligations under this Agreement immediately
and without notice upon the occurrence and during the continuation of an Event
of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of
this Agreement, all Obligations (including contingent reimbursement obligations
of Borrower with respect to any outstanding Letters of Credit) immediately
shall become due and payable without notice or demand. No termination of this
Agreement, however, shall relieve or discharge Borrower of Borrower's duties,
Obligations, or covenants hereunder, and the Lender Group's continuing security
interests in the Collateral shall remain in effect until all Obligations have
been fully and finally discharged and the Lender Group's obligation to provide
additional credit hereunder is terminated.
3.6 EARLY TERMINATION BY BORROWER. The provisions of
Section 3.4 that provide for termination of this Agreement by Borrower only on
the Maturity Date notwithstanding, Borrower has the option, at any time upon
ninety (90) days prior written notice to Agent, to terminate this Agreement by
paying to Agent (for the ratable benefit of the Lender Group), in cash, the
Obligations (including an amount equal to 105% of the undrawn amount of the
Letters of Credit), in full, together with (i) a fee (the "Tranche A Early
Termination Fee") (for the ratable benefit of the Tranche A Lenders) (a) in the
amount of $3,500,000 if this Agreement is terminated on or before the first
anniversary of the Closing Date, (b) in the amount of $2,800,000 if this
Agreement is terminated after the first
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anniversary of the Closing Date and on or before the second anniversary of the
Closing Date, (c) in the amount of $2,100,000 if this Agreement is terminated
after the second anniversary of the Closing Date and on or before the third
anniversary of the Closing Date, (d) in the amount of $1,400,000 if this
Agreement is terminated after the third anniversary of the Closing Date and on
or before the fourth anniversary of the Closing Date, or (e) in the amount of
$700,000 if this Agreement is terminated after the fourth anniversary of the
Closing Date and before the Maturity Date, and (ii) payment of a fee (the
"Tranche B Early Termination Fee") (for the ratable benefit of the Tranche B
Lenders) in the amount of (a) $150,000 if the Tranche B Term Loans are prepaid
in whole on or before the first anniversary of the Closing Date, (b) $100,000
if the Tranche B Term Loans are prepaid in whole after the first anniversary of
the Closing Date and on or before the second anniversary of the Closing Date,
(c) $50,000 if the Tranche B Term Loans are prepaid in whole after the second
anniversary of the Closing Date and before the Maturity Date; provided,
however, that if the Obligations are paid in full and the Commitments are
terminated upon the sale of Borrower or substantially all of the assets or
stock of Borrower, the foregoing Tranche A Early Termination Fee shall be
reduced by one-half; provided further, however, that if the Obligations are
paid in full and the Commitments are terminated on or before the date one month
following the Closing Date, payment of a portion of the Tranche A Early
Termination Fee (in an amount necessary to make the effective rate of interest
paid on the Obligations owed to the Tranche A Lenders not greater than five
percent (5%) during such first month following the Closing Date) shall be due
and payable on the first day of the next succeeding month.
3.7 TERMINATION UPON EVENT OF DEFAULT. If the Lender Group
terminates this Agreement upon the occurrence of an Event of Default, in view
of the impracticability and extreme difficulty of ascertaining actual damages
and by mutual agreement of the parties as to a reasonable calculation of the
Lender Group's lost profits as a result thereof, Borrower shall pay to Agent
(for the ratable benefit of the Lender Group) upon the effective date of such
termination, a premium in an amount equal to the Tranche A Early Termination
Fee and the Tranche B Early Termination Fee. The Tranche A Early Termination
Fee and the Tranche B Early Termination Fee shall be presumed to be the amount
of damages sustained by the Lender Group as the result of the early termination
and Borrower agrees that it is reasonable under the circumstances currently
existing. The Tranche A Early Termination Fee and the Tranche B Early
Termination Fee provided for in this Section 3.7 shall be deemed included in
the Obligations.
4. CREATION OF SECURITY INTEREST.
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4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants to
Agent for the benefit of the Lender Group a continuing security interest in all
currently existing and hereafter acquired or arising Personal Property
Collateral in order to secure prompt repayment of any and all Obligations and
in order to secure prompt performance by Borrower of each of its covenants and
duties under the Loan Documents. The security interests of Agent for the
benefit of the Lender Group in the Personal Property Collateral shall attach to
all Personal Property Collateral without further act on the part of the Lender
Group or Borrower. Anything contained in this Agreement or any other Loan
Document to the contrary notwithstanding, except as permitted by Section 7.4,
Borrower has no authority, express or implied, to dispose of any item or
portion of the Personal Property Collateral or the Real Property Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any
Collateral, including proceeds, is evidenced by or consists of Negotiable
Collateral, Borrower, immediately upon the request of Agent or any Co-Agent,
shall endorse and deliver physical possession of such Negotiable Collateral to
Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND
NEGOTIABLE COLLATERAL. Agent or Agent's designee (in its own discretion or at
the request of any Co-Agent) may at any time (in connection with any Account
with respect to which the Account Debtor is located in Puerto Rico) or at any
time after a Default or Event of Default has occurred and is continuing (in
connection with any other Account, General Intangibles and Negotiable
Collateral) (a) notify customers or Account Debtors of Borrower that the
Accounts, General Intangibles, or Negotiable Collateral have been assigned to
Agent for the benefit of the Lender Group or that Agent for the benefit of the
Lender Group has a security interest therein, and (b) collect the Accounts,
General Intangibles, and Negotiable Collateral directly and charge the
collection costs and expenses to the Loan Account. Borrower agrees that it will
hold in trust for the Lender Group, as the Lender Group's trustee, any
Collections that it receives and immediately will deliver said Collections to
Agent in their original form as received by Borrower.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any
time upon the request of Agent, Borrower shall execute and deliver to Agent all
financing statements, continuation financing statements, fixture filings,
security agreements, pledges, assignments, endorsements of certificates of
title, applications for title, affidavits, reports, notices, schedules of
accounts, letters of authority, and all other documents that Agent reasonably
may request, in form satisfactory to Agent, to perfect and continue perfected
the Liens of the Lender Group in the Collateral, and in order to fully
consummate all of the transactions contemplated hereby and under the other the
Loan Documents.
4.5 POWER OF ATTORNEY. Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers, employees, or
agents designated by Agent) as Borrower's true and lawful attorney, with power
to (a) if Borrower refuses to, or fails timely to execute and deliver any of
the documents described in Section 4.4, sign the name
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of Borrower on any of the documents described in Section 4.4, (b) at any time
that an Event of Default has occurred and is continuing or the Lender Group
deems itself insecure, sign Borrower's name on any invoice or xxxx of lading
relating to any Account, drafts against Account Debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to Account
Debtors, (c) send requests for verification of Accounts, (d) endorse Borrower's
name on any Collection item that may come into the Lender Group's possession,
(e) at any time that an Event of Default has occurred and is continuing or the
Lender Group deems itself insecure, notify the post office authorities to
change the address for delivery of Borrower's mail to an address designated by
Agent, to receive and open all mail addressed to Borrower, and to retain all
mail relating to the Collateral and forward all other mail to Borrower, (f) at
any time that an Event of Default has occurred and is continuing or the Lender
Group deems itself insecure (upon consultation with the Co-Agents), make,
settle, and adjust all claims under Borrower's policies of insurance and make
all determinations and decisions with respect to such policies of insurance,
and (g) at any time that an Event of Default has occurred and is continuing or
Agent deems itself insecure (upon consultation with the Co-Agents), settle and
adjust disputes and claims respecting the Accounts directly with Account
Debtors, for amounts and upon terms that Agent (upon consultation with the
Co-Agents) determines to be reasonable, and Agent may cause to be executed and
delivered any documents and releases that Agent determines to be necessary. The
appointment of Agent as Borrower's attorney, and each and every one of Agent's
rights and powers, being coupled with an interest, is irrevocable until all of
the Obligations have been fully and finally repaid and performed and the Lender
Group's obligation to extend credit hereunder is terminated.
4.6 RIGHT TO INSPECT. Agent (through any of its officers,
employees, or agents), and together with any Co-Agent or Lender that so elects,
shall have the right, from time to time hereafter to inspect Borrower's Books
and to check, test, and appraise the Collateral in order to verify Borrower's
financial condition or the amount, quality, value, condition of, or any other
matter relating to, the Collateral. Unless and until a Default or Event of
Default occurs, the Co-Agents intend (a) to conduct appraisals of the Equipment
no more frequently than annually except, with respect to the first year
following the Closing Date, the Co-Agents intend to conduct an appraisal of the
Equipment within sixty (60) days of the Closing Date and again prior to the
first anniversary of the Closing Date and (b) to conduct appraisals of the
Inventory no more frequently than quarterly, with desktop appraisals being
conducted quarterly and full appraisals being conducted semi-annually, except,
with respect to the first quarter following the Closing Date, the Co-Agents
intend to conduct a desk top appraisal of the Inventory within sixty (60) days
of the Closing Date; provided, however, that, at all times, the Co-Agents shall
be entitled to conduct appraisals of the Collateral in their sole discretion.
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5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this
Agreement, Borrower makes the following representations and warranties which
shall be true, correct, and complete in all respects as of the date hereof, and
shall be true, correct, and complete in all respects as of the Closing Date,
and at and as of the date of the making of each Advance, Letter of Credit, and
Term Loans made thereafter, as though made on and as of the date of such
Advance, Letter of Credit or Term Loans (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:
5.1 NO ENCUMBRANCES. Borrower has good and indefeasible
title to the Collateral, free and clear of Liens except for Permitted Liens.
5.2 ELIGIBLE ACCOUNTS. The Eligible Accounts are bona fide
existing obligations created by the sale and delivery of Inventory or the
rendition of services to Account Debtors in the ordinary course of Borrower's
business, unconditionally owed to Borrower without defenses, disputes, offsets,
counterclaims, or rights of return or cancellation. The property giving rise to
such Eligible Accounts has been delivered to the Account Debtor, or to the
Account Debtor's agent for immediate shipment to and unconditional acceptance
by the Account Debtor. Borrower has not received notice of actual or imminent
bankruptcy, insolvency, or material impairment of the financial condition of
any Account Debtor regarding any Eligible Account.
5.3 ELIGIBLE INVENTORY. All Eligible Inventory is of good
and merchantable quality, free from defects.
5.4 EQUIPMENT. All of the Equipment is used or held for
use in Borrower's business and is fit for such purposes.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and
Equipment are not stored with a bailee, warehouseman, or similar party (without
Agent's prior written consent) and are located only at the locations identified
on Schedule 6.12 or otherwise permitted by Section 6.12.
5.6 INVENTORY RECORDS. Borrower keeps correct and accurate
records itemizing and describing the kind, type, quality, and quantity of the
Inventory, and Borrower's cost therefor.
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief
executive office of Borrower is located at the address indicated in the
preamble to this Agreement and Borrower's FEIN is 00-0000000.
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5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Each of Borrower and each Subsidiary of Borrower
is duly organized and existing and in good standing under the laws of the
jurisdiction of its incorporation and qualified and licensed to do business in,
and in good standing in, any state where the failure to be so licensed or
qualified reasonably could be expected to have a Material Adverse Change.
(b) Set forth on Schedule 5.8, is a complete and
accurate list of Borrower's direct and indirect Subsidiaries, showing: (i) the
jurisdiction of their incorporation; (ii) the number of shares of each class of
common and preferred stock authorized for each of such Subsidiaries; and (iii)
the number and the percentage of the outstanding shares of each such class
owned directly or indirectly by Borrower. All of the outstanding capital stock
of each such Subsidiary has been validly issued and is fully paid and
non-assessable.
(c) Except as set forth on Schedule 5.8, no capital
stock (or any securities, instruments, warrants, options, purchase rights,
conversion or exchange rights, calls, commitments or claims of any character
convertible into or exercisable for capital stock) of any direct or indirect
Subsidiary of Borrower is subject to the issuance of any security, instrument,
warrant, option, purchase right, conversion or exchange right, call, commitment
or claim of any right, title, or interest therein or thereto.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) The execution, delivery, and performance by
Borrower and each Subsidiary of Borrower, as applicable, of this Agreement and
the Loan Documents to which Borrower or any such Subsidiary, as applicable, is
a party have been duly authorized by all necessary corporate action.
(b) The execution, delivery, and performance by
Borrower and each Subsidiary of Borrower, as applicable, of this Agreement and
the Loan Documents to which Borrower or any such Subsidiary, as applicable, is
a party do not and will not (i) violate any provision of federal, state, or
local law or regulation (including Regulations T, U, and X of the Federal
Reserve Board) applicable to Borrower or any such Subsidiary, as applicable,
the Governing Documents of Borrower or any such Subsidiary, as applicable, or
any order, judgment, or decree of any court or other governmental authority
binding on Borrower or any such Subsidiary, as applicable, (ii) conflict with,
result in a breach of, or constitute (with due notice or lapse of time or both)
a default under any material contractual obligation or material lease of
Borrower or any such Subsidiary, as applicable, (iii) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any properties
or assets of Borrower or any such Subsidiary, as applicable, other than
Permitted Liens, or (iv) require any approval of stockholders or any approval
or consent of any Person under any material contractual obligation of Borrower
or any such Subsidiary, as applicable.
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(c) Other than the filing of appropriate financing
statements, fixture filings, and mortgages, the execution, delivery, and
performance by Borrower or any Subsidiary of Borrower, as applicable, of this
Agreement and the Loan Documents to which Borrower or any such Subsidiary, as
applicable, is a party do not and will not require any registration with,
consent, or approval of, or notice to, or other action with or by, any federal,
state, foreign, or other governmental authority or other Person.
(d) This Agreement and the Loan Documents to which
Borrower or any Subsidiary of Borrower, as applicable, is a party, and all
other documents contemplated hereby and thereby, when executed and delivered by
Borrower or any such Subsidiary, as applicable, will be the legally valid and
binding obligations of Borrower or any such Subsidiary, as applicable,
enforceable against Borrower or any such Subsidiary, as applicable, in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors' rights generally.
(e) The Liens granted by Borrower and each
Subsidiary of Borrower to Agent (for the benefit of the Lender Group) in and to
Borrower's or any such Subsidiary's properties and assets pursuant to this
Agreement and the other Loan Documents are validly created, perfected, and
first priority Liens (or second priority Liens with respect to the Real
Property Collateral), subject only to Permitted Liens.
5.10 LITIGATION. There are no actions or proceedings
pending by or against Borrower or any Subsidiary of Borrower before any court
or administrative agency and Borrower does not have knowledge or belief of any
pending, threatened, or imminent litigation, governmental investigations, or
claims, complaints, actions, or prosecutions involving Borrower, any Subsidiary
of Borrower or any guarantor of the Obligations, except for: (a) ongoing
collection matters in which Borrower or a Subsidiary of Borrower is the
plaintiff; (b) matters disclosed on Schedule 5.10; and (c) matters arising
after the date hereof that, if decided adversely to Borrower or any Subsidiary
of Borrower, would not result in a Material Adverse Change.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements
relating to Borrower, any Subsidiary of Borrower or any guarantor of the
Obligations that have been delivered by Borrower to the Lender Group have been
prepared in accordance with GAAP (except, in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and fairly present Borrower's (or such Subsidiary's or such
guarantor's, as applicable) financial condition as of the date thereof and
Borrower's (or such Subsidiary's or such guarantor's, as applicable) results of
operations for the period then ended. There has not been a Material Adverse
Change with respect to Borrower (or such Subsidiary or such guarantor, as
applicable) since the date of the latest financial statements submitted to the
Lender Group on or before the Closing Date.
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5.12 SOLVENCY. Borrower and each Subsidiary of Borrower
is Solvent. No transfer of property is being made by Borrower or any Subsidiary
of Borrower and no obligation is being incurred by Borrower or any Subsidiary
of Borrower in connection with the transactions contemplated by this Agreement
or the other Loan Documents with the intent to hinder, delay, or defraud either
present or future creditors of Borrower or any Subsidiary of Borrower.
5.13 EMPLOYEE BENEFITS. None of Borrower, any of its
Subsidiaries, or any of their ERISA Affiliates maintains or contributes to any
Benefit Plan, other than those listed on Schedule 5.13. Borrower, each of its
Subsidiaries and each ERISA Affiliate have satisfied the minimum funding
standards of ERISA and the IRC with respect to each Benefit Plan to which it is
obligated to contribute. No ERISA Event has occurred nor has any other
event occurred that may result in an ERISA Event that reasonably could be
expected to result in a Material Adverse Change. None of Borrower or its
Subsidiaries, any ERISA Affiliate, or any fiduciary of any Plan is subject to
any direct or indirect material liability with respect to any Plan under any
applicable law, treaty, rule, regulation, or agreement. None of Borrower or its
Subsidiaries or any ERISA Affiliate is required to provide security to any Plan
under Section 401(a)(29) of the IRC.
5.14 ENVIRONMENTAL CONDITION. Except as set forth on
Schedule 5.14, none of Borrower's or any Subsidiary of Borrower's properties or
assets has ever been used by Borrower or any such Subsidiary or, to the best of
Borrower's knowledge, by previous owners or operators in the disposal of, or to
produce, store, handle, treat, release, or transport, any Hazardous Materials.
None of Borrower's or any Subsidiary of Borrower's properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, or a candidate for
closure pursuant to any environmental protection statute. No Lien arising under
any environmental protection statute has attached to any revenues or to any
real or personal property owned or operated by Borrower or any Subsidiary of
Borrower. Neither Borrower nor any Subsidiary of Borrower has received a
summons, citation, notice, or directive from the Environmental Protection
Agency or any other federal or state governmental agency which indicates the
Borrower may incur a material liability as the result of any action or omission
by Borrower or any Subsidiary of Borrower resulting in the releasing or
disposing of Hazardous Materials into the environment.
5.15 INTELLECTUAL PROPERTY. Neither Borrower nor any
Subsidiary or Borrower owns, licenses or has any rights to or interest in any
patents, trade names, trademarks, servicemarks, registered copyrights, or any
application for the registration of any of the foregoing, except as set forth
on Schedule 5.15.
5.16 YEAR 2000 COMPLIANCE. Borrower and its Subsidiaries
are in the process of implementing a comprehensive program to address the "year
2000 problem" (that is, the risk that computer applications may not be able to
properly perform date-sensitive functions after December 31, 1999) and shall
resolve on or before September 30, 1999 any
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material "year 2000 problem." Borrower has also made reasonable inquiry of its
major suppliers and vendors that, if unable to sell Inventory or provide
services to Borrower, as the case may be, would result in a Material Adverse
Change, with respect to the "year 2000 problem." On the basis of the inquiry,
Borrower has no reason to believe that each such supplier and vendor of
Borrower will not resolve any material "year 2000 problem" on a timely basis.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, Borrower shall do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain, and cause each of its
Subsidiaries to maintain, a standard and modern system of accounting that
enables Borrower and its Subsidiaries to produce financial statements in
accordance with GAAP, and maintain records pertaining to the Collateral (as
defined herein and in the Subsidiary Security Agreement) that contain
information as from time to time may be requested by Agent. Borrower also shall
keep a modern inventory reporting system that shows all additions, sales,
claims, returns, and allowances with respect to the Inventory.
6.2 COLLATERAL REPORTING. Provide Agent (and, at the
request of any Co-Agent, provide the Co-Agents) with the following documents
at the following times in form satisfactory to Agent: (a) on each Business Day,
a sales journal, collection journal, and credit register since the last such
schedule and a calculation of the Borrowing Base as of such date, (b) on a
monthly basis and, in any event, by no later than the fifteenth (15th) day of
each fiscal month during the term of this Agreement, (i) a detailed calculation
of the Borrowing Base, and (ii) a detailed aging, by total, of the Accounts,
together with a reconciliation to the detailed calculation of the Borrowing
Base previously provided to Agent, (c) on a monthly basis and, in any event, by
no later than the fifteenth (15th) day of each fiscal month during the term of
this Agreement, a summary aging, by vendor, of Borrower's accounts payable and
any book overdraft, (d) on a weekly basis, Inventory reports specifying
Borrower's cost and the wholesale market value of its Inventory by category,
with additional detail showing additions to and deletions from the Inventory,
(e) on each Business Day, notice of all returns, disputes, or claims in excess
of $25,000, (f) upon request, copies of invoices in connection with the
Accounts, customer statements, credit memos, remittance advices and reports,
deposit slips, shipping and delivery documents in connection with the Accounts
and for Inventory and Equipment acquired by Borrower, purchase orders and
invoices, (g) on a quarterly basis, a detailed list of Borrower's customers,
(h) on a monthly basis, a calculation of the Dilution for the prior month; and
(i) such electronic data or other reports as to the Collateral or the financial
condition of Borrower as Agent may request from time to time. Original sales
invoices evidencing daily sales shall be mailed by Borrower to each Account
Debtor and, after an Event of Default has occurred and is continuing, and at
Agent's direction (or at the request of any Co-Agent), the
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invoices shall indicate on their face that the Account has been assigned to
Agent (for the benefit of the Lender Group) and that all payments are to be
made directly to Agent.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(a) Deliver to the Co-Agents: (i) as soon as
available, but in any event within thirty (30) days after the end of each month
during each of Borrower's fiscal years, a company prepared balance sheet,
income statement, and statement of cash flow covering Borrower's operations
during such period; and (ii) as soon as available, but in any event within
ninety (90) days after the end of each of Borrower's fiscal years, financial
statements of Borrower for each such fiscal year, audited by independent
certified public accountants reasonably acceptable to the Co-Agents and
certified, without any explanatory or qualifying paragraphs, by such
accountants to have been prepared in accordance with GAAP, together with a
certificate of such accountants addressed to Agent stating that such
accountants do not have knowledge of the existence of any Default or Event of
Default. Such audited financial statements shall include a balance sheet,
profit and loss statement, and statement of cash flow and, if prepared, such
accountants' letter to management. If Borrower is a parent company of one or
more Subsidiaries, or Affiliates, or is a Subsidiary or Affiliate of another
company, then, in addition to the financial statements referred to above,
Borrower agrees to deliver financial statements prepared on a consolidating
basis so as to present Borrower and each such related entity separately, and on
a consolidated basis.
(b) Together with the above, Borrower also shall
deliver to the Co-Agents Borrower's Form 10-Q Quarterly Reports, Form 10-K
Annual Reports, and Form 8-K Current Reports, and any other filings made by
Borrower with the Securities and Exchange Commission, if any, as soon as the
same are filed, or any other information that is provided by Borrower to its
shareholders, and any other report reasonably requested by any Co-Agent
relating to the financial condition of Borrower.
(c) Each month, together with the financial
statements provided pursuant to Section 6.3(a)(i), Borrower shall deliver to
the Co-Agents a certificate signed by its chief financial officer to the effect
that: (i) all financial statements delivered or caused to be delivered to the
Co-Agents hereunder have been prepared in accordance with GAAP (except, in the
case of unaudited financial statements, for the lack of footnotes and being
subject to year-end audit adjustments) and fairly present the financial
condition of Borrower, (ii) the representations and warranties of Borrower
contained in this Agreement and the other Loan Documents are true and correct
in all material respects on and as of the date of such certificate, as though
made on and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date), (iii) for each month that also is
the date on which a financial covenant in Section 7.20 is to be tested, a
Compliance Certificate demonstrating in reasonable detail compliance at the end
of such period with the applicable financial covenants contained in Section
7.20, and (iv) on the date of delivery of such certificate to the Co-Agents
there does not exist any condition or event that constitutes a Default or Event
of Default (or, in the case of clauses (i), (ii), or (iii), to the extent of
any
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non-compliance, describing such non-compliance as to which he or she may have
knowledge and what action Borrower has taken, is taking, or proposes to take
with respect thereto).
(d) Borrower shall have issued written instructions
to its independent certified public accountants authorizing them to communicate
with the Co- Agents, or any of them, and to release to the Co-Agents whatever
financial information concerning Borrower that any Co-Agent may request.
Borrower hereby irrevocably authorizes and directs all auditors, accountants,
or other third parties to deliver to the Co- Agents, at Borrower's expense,
copies of Borrower's financial statements, papers related thereto, and other
accounting records of any nature in their possession, and to disclose to the
Co-Agents any information they may have regarding Borrower's business affairs
and financial conditions.
(e) On or before May 31 of each fiscal year,
Borrower shall deliver to the Co-Agents Borrower's business plan, including
projections of EBITDA, Tangible Net Worth and capital expenditures, for the
next succeeding fiscal year (the "Business Plan"), which Business Plan shall be
reasonably acceptable to the Co-Agents in all respects.
6.4 TAX RETURNS. Deliver to Agent copies of each of
Borrower's and its Subsidiaries' future federal income tax returns, and any
amendments thereto, within thirty (30) days of the filing thereof with the
Internal Revenue Service.
6.5 GUARANTOR REPORTS. Cause any guarantor of any of the
Obligations to deliver its annual financial statements at the time when
Borrower provides its audited financial statements to Agent and copies of all
federal income tax returns as soon as the same are available and in any event
no later than thirty (30) days after the same are required to be filed by law.
6.6 RETURNS. Cause returns and allowances, if any, as
between Borrower and its Account Debtors to be on the same basis and in
accordance with the usual customary practices of Borrower, as they exist at the
time of the execution and delivery of this Agreement. If, at a time when no
Event of Default has occurred and is continuing, any Account Debtor returns any
Inventory to Borrower, Borrower promptly shall determine the reason for such
return and, if Borrower accepts such return, issue a credit memorandum (with a
copy to be sent to Agent) in the appropriate amount to such Account Debtor. If,
at a time when an Event of Default has occurred and is continuing, any Account
Debtor returns any Inventory to Borrower, Borrower promptly shall determine the
reason for such return and, if the Co-Agents consent (which consent shall not
be unreasonably withheld), issue a credit memorandum (with a copy to be sent to
Agent) in the appropriate amount to such Account Debtor.
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6.7 TITLE TO EQUIPMENT. Upon Agent's request, Borrower
immediately shall deliver to Agent, properly endorsed, any and all evidences of
ownership of, certificates of title, or applications for title to any items of
Equipment.
6.8 MAINTENANCE OF EQUIPMENT. Maintain the Equipment in
good operating condition and repair (ordinary wear and tear excepted), and make
all necessary replacements thereto so that the value and operating efficiency
thereof shall at all times be maintained and preserved. Other than those items
of Equipment that constitute fixtures on the Closing Date, Borrower shall not
permit any item of Equipment to become a fixture to real estate or an accession
to other property, and such Equipment shall at all times remain personal
property.
6.9 TAXES. Cause all assessments and taxes, whether
real, personal, or otherwise, due or payable by, or imposed, levied, or
assessed against Borrower, any Subsidiary of Borrower or any of Borrower's or
any Subsidiary of Borrower's property to be paid in full, before delinquency or
before the expiration of any extension period, except to the extent that the
validity of such assessment or tax shall be the subject of a Permitted Protest.
Borrower shall, and shall cause each of its Subsidiaries to, make due and
timely payment or deposit of all such federal, state, and local taxes,
assessments, or contributions required of Borrower or any such Subsidiary of
Borrower, as applicable, by law, and will execute and deliver to Agent, on
demand, appropriate certificates attesting to the payment thereof or deposit
with respect thereto. Borrower will, and will cause each of its Subsidiaries
to, make timely payment or deposit of all tax payments and withholding taxes
required of Borrower or any such Subsidiary of Borrower, as applicable, by
applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state
disability, and local, state, and federal income taxes, and will, upon request,
furnish Agent with proof satisfactory to Agent indicating that Borrower or any
such Subsidiary, as applicable, has made such payments or deposits.
6.10 INSURANCE.
(a) At its expense, keep the Personal Property
Collateral insured against loss or damage by fire, theft, explosion,
sprinklers, and all other hazards and risks, and in such amounts, as are
ordinarily insured against by other owners in similar businesses. Borrower also
shall maintain business interruption, public liability, product liability, and
property damage insurance relating to Borrower's ownership and use of the
Personal Property Collateral, as well as insurance against larceny,
embezzlement, and criminal misappropriation.
(b) At its expense, obtain and maintain (i)
insurance of the type necessary to insure the Improvements and Chattels (as
such terms are defined in the Mortgages), for the full replacement cost
thereof, against any loss by fire, lightning, windstorm, hail, explosion,
aircraft, smoke damage, vehicle damage, earthquakes, elevator collision, and
other risks from time to time included under "extended coverage" policies, in
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such amounts as Agent may require, but in any event in amounts sufficient to
prevent Borrower from becoming a co-insurer under such policies, (ii) combined
single limit bodily injury and property damages insurance against any loss,
liability, or damages on, about, or relating to each parcel of Real Property
Collateral, in an amount of not less than $1,000,000; (iii) business rental
insurance covering annual receipts for a twelve (12) month period for each
parcel of Real Property Collateral; and (iv) insurance for such other risks as
Agent may require. Replacement costs, at Agent's option, may be redetermined by
an insurance appraiser, satisfactory to Agent, not more frequently than once
every twelve (12) months at Borrower's cost.
(c) Intentionally Omitted.
(d) All such policies of insurance shall be in such
form, with such companies, and in such amounts as may be currently in effect or
otherwise reasonably satisfactory to Agent. All insurance required herein shall
be written by companies which are authorized to do insurance business in the
State of Georgia. All hazard insurance and such other insurance as Agent shall
specify, shall contain a mortgagee endorsement satisfactory to Agent, showing
Agent (for the ratable benefit of the Lenders) as sole loss payee thereof, and
shall contain a waiver of warranties. Every policy of insurance referred to in
this Section 6.10 shall contain an agreement by the insurer that it will not
cancel such policy except after thirty (30) days prior written notice to Agent
(for the ratable benefit of the Lenders) and that any loss payable thereunder
shall be payable notwithstanding any act or negligence of Borrower or the
Lender Group which might, absent such agreement, result in a forfeiture of all
or a part of such insurance payment and notwithstanding (i) occupancy or use of
the Real Property Collateral for purposes more hazardous than permitted by the
terms of such policy, (ii) any foreclosure or other action or proceeding taken
by the Lender Group pursuant to the Mortgages upon the happening of an Event of
Default, or (iii) any change in title or ownership of the Real Property
Collateral. Borrower shall deliver to Agent certified copies of such policies
of insurance and evidence of the payment of all premiums therefor.
(e) Original policies or certificates thereof
satisfactory to Agent evidencing such insurance shall be delivered to Agent at
least thirty (30) days prior to the expiration of the existing or preceding
policies. Borrower shall give Agent prompt notice of any loss covered by such
insurance, and Agent (in consultation with the Co-Agents) shall have the right
to adjust any loss exceeding $50,000. Agent (in consultation with the Co-
Agents) shall have the exclusive right to adjust all losses in excess of
$50,000 payable under any such insurance policies without any liability to
Borrower whatsoever in respect of such adjustments. Any monies received as
payment for any loss under any insurance policy including the insurance
policies mentioned above, shall be paid over to Agent (for the ratable benefit
of Lenders) to be applied at the option of Agent (in consultation with the Co-
Agents) either to the prepayment of the Obligations without premium, in such
order or manner as Agent (in consultation with the Co-Agents) may elect, or
shall be disbursed to Borrower under stage payment terms satisfactory to the
Co-Agents for application to the cost of repairs, replacements, or
restorations. All repairs, replacements, or restorations shall be
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effected with reasonable promptness and shall be of a value at least equal to
the value of the items or property destroyed prior to such damage or
destruction. Upon the occurrence of an Event of Default, Agent shall have the
right to apply all prepaid premiums to the payment of the Obligations in such
order or form as Agent shall determine.
(f) Borrower shall not take out separate insurance
concurrent in form or contributing in the event of loss with that required to
be maintained under this Section 6.10, unless Agent is included thereon as
named insured with the loss payable to Agent (for the ratable benefit of
Lenders) under a standard mortgagee endorsement acceptable to Agent. Borrower
immediately shall notify Agent whenever such separate insurance is taken out,
specifying the insurer thereunder and full particulars as to the policies
evidencing the same, and originals of such policies immediately shall be
provided to Agent.
6.11 NO SETOFFS OR COUNTERCLAIMS. Make payments hereunder
and under the other Loan Documents by or on behalf of Borrower without setoff
or counterclaim and free and clear of, and without deduction or withholding for
or on account of, any federal, state, or local taxes.
6.12 LOCATION OF INVENTORY AND EQUIPMENT. Keep the
Inventory and Equipment only at the locations identified on Schedule 6.12;
provided, however, that Borrower may amend Schedule 6.12 so long as such
amendment occurs by written notice to Agent not less than thirty (30) days
prior to the date on which the Inventory or Equipment is moved to such new
location, so long as such new location is within the continental United States,
and so long as, at the time of such written notification, Borrower provides any
financing statements or fixture filings necessary to perfect and continue
perfected (the Lien of Agent for the benefit of the Lender Group), security
interests in such assets and also provides to Agent a Collateral Access
Agreement.
6.13 COMPLIANCE WITH LAWS. Comply, and cause each of its
Subsidiaries to comply, with the requirements of all applicable laws, rules,
regulations, and orders of any governmental authority, including the Fair Labor
Standards Act and the Americans With Disabilities Act, other than laws, rules,
regulations, and orders the non-compliance with which, individually or in the
aggregate, would not have and could not reasonably be expected to cause a
Material Adverse Change.
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6.14 EMPLOYEE BENEFITS.
(a) Deliver to Agent: (i) Promptly, and in any event
within ten (10) Business Days after Borrower or any of its Subsidiaries knows
or has reason to know that an ERISA Event has occurred that reasonably could be
expected to result in a Material Adverse Change, a written statement of the
chief financial officer of Borrower describing such ERISA Event and any action
that is being taking with respect thereto by Borrower, any such Subsidiary or
ERISA Affiliate, and any action taken or threatened by the IRS, Department of
Labor, or PBGC. Borrower or such Subsidiary, as applicable, shall be deemed to
know all facts known by the administrator of any Benefit Plan of which it is
the plan sponsor, (ii) promptly, and in any event within three (3) Business
Days after the filing thereof with the IRS, a copy of each funding waiver
request filed with respect to any Benefit Plan and all communications received
by Borrower, any of its Subsidiaries or, to the knowledge of Borrower, any
ERISA Affiliate with respect to such request, and (iii) promptly, and in any
event within three (3) Business Days after receipt by Borrower, any of its
Subsidiaries or, to the knowledge of Borrower, any ERISA Affiliate, of the
PBGC's intention to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice.
(b) Cause to be delivered to Agent, upon Agent's
request, each of the following: (i) a copy of each Plan (or, where any such
plan is not in writing, complete description thereof) (and if applicable,
related trust agreements or other funding instruments) and all amendments
thereto, all written interpretations thereof and written descriptions thereof
that have been distributed to employees or former employees of Borrower or its
Subsidiaries; (ii) the most recent determination letter issued by the IRS with
respect to each Benefit Plan; (iii) for the three most recent plan years,
annual reports on Form 5500 Series required to be filed with any governmental
agency for each Benefit Plan; (iv) all actuarial reports prepared for the last
three (3) plan years for each Benefit Plan; (v) a listing of all Multiemployer
Plans, with the aggregate amount of the most recent annual contributions
required to be made by Borrower or any ERISA Affiliate to each such plan and
copies of the collective bargaining agreements requiring such contributions;
(vi) any information that has been provided to Borrower or any ERISA Affiliate
regarding withdrawal liability under any Multiemployer Plan; and (vii) the
aggregate amount of the most recent annual payments made to former employees of
Borrower or its Subsidiaries under any Retiree Health Plan.
6.15 LEASES. Pay when due, and cause each of its
Subsidiaries to pay when due, all rents and other amounts payable under any
leases of real property or any leases of personal property which are necessary
for use in Borrower's business or with respect to which the present value of
the remaining lease payments exceeds $25,000 to which Borrower or any such
Subsidiary of Borrower, as applicable, is a party or by which Borrower's or any
such Subsidiary of Borrower's, properties and assets are bound, unless such
payments are the subject of a Permitted Protest. To the extent that Borrower or
any Subsidiary of Borrower fails timely to make payment of such rents and other
amounts
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payable when due under its leases, the Co-Agents shall be entitled, in
their reasonable discretion, to reserve an amount equal to such unpaid amounts
against the Borrowing Base.
6.16 YEAR 2000. Borrower will resolve on or before
September 30, 1999 any material "Year 2000 problem."
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, Borrower will not, and will not permit any Subsidiary of Borrower
to, do any of the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit,
guarantee, or otherwise become or remain, directly or indirectly, liable, with
respect to any Indebtedness, except:
(a) Indebtedness evidenced by this Agreement,
together with Indebtedness to issuers of letters of credit that are the subject
of L/C Guarantees;
(b) Indebtedness set forth on Schedule 7.1;
(c) Indebtedness secured by Permitted Liens;
(d) refinancings, renewals, or extensions of
Indebtedness permitted under clauses (b) and (c) of this Section 7.1 (and
continuance or renewal of any Permitted Liens associated therewith) so long as:
(i) the terms and conditions of such refinancings, renewals, or extensions do
not materially impair the prospects of repayment of the Obligations by
Borrower, (ii) the net cash proceeds of such refinancings, renewals, or
extensions do not result in an increase in the aggregate principal amount of
the Indebtedness so refinanced, renewed, or extended, (iii) such refinancings,
renewals, refundings, or extensions do not result in a shortening of the
average weighted maturity of the Indebtedness so refinanced, renewed, or
extended, and (iv) to the extent that Indebtedness that is refinanced was
subordinated in right of payment to the Obligations, then the subordination
terms and conditions of the refinancing Indebtedness must be at least as
favorable to the Lender Group as those applicable to the refinanced
Indebtedness; and
(e) other Indebtedness that is unsecured and does
not exceed $200,000 in the aggregate.
7.2 LIENS. Create, incur, assume, or permit to exist,
directly or indirectly, any Lien on or with respect to any of Borrower's or any
such Subsidiary's property or assets, of any kind, whether now owned or
hereafter acquired, or any income or profits therefrom, except for Permitted
Liens (including Liens that are replacements of Permitted Liens to the extent
that the original Indebtedness is refinanced under Section 7.1(d) and so long
as the
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replacement Liens only encumber those assets or property that secured the
original Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES. Enter into any
merger, consolidation, reorganization, or recapitalization, or reclassify its
capital stock, or liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, assign, lease, transfer, or
otherwise dispose of, in one transaction or a series of transactions, all or
any substantial part of its property or assets.
7.4 DISPOSAL OF ASSETS. Sell, lease, assign, transfer,
or otherwise dispose of any of Borrower's or any Subsidiary of Borrower's
properties or assets other than (a) sales of Inventory to buyers in the
ordinary course of Borrower's business as currently conducted, and (b) sales of
obsolete or outdated Equipment in an amount not to exceed $50,000 per fiscal
year.
7.5 CHANGE NAME. Change Borrower's or any Subsidiary of
Borrower's name, FEIN, corporate structure (within the meaning of Section
9-402(7) of the Code), or identity, or add any new fictitious name.
7.6 GUARANTEE. Guarantee or otherwise become in any way
liable with respect to the obligations of any third Person except by
endorsement of instruments or items of payment for deposit to the account of
Borrower or which are transmitted or turned over to Agent.
7.7 NATURE OF BUSINESS. Except as permitted by Section
7.15, make any change in the principal nature of Borrower's or any Subsidiary
of Borrower's business.
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing
permitted by Section 7.1(d), prepay, refinance, redeem, retire, defease,
purchase, or otherwise acquire any Indebtedness owing to any third Person,
other than the Obligations in accordance with this Agreement; provided,
however, that Borrower may prepay the SunTrust Term Loan to the extent
permitted in the Intercreditor Agreement;
(b) Directly or indirectly, amend, modify, alter,
increase, or change any of the terms or conditions of any agreement,
instrument, document, indenture, or other writing evidencing or concerning
Indebtedness permitted under Sections 7.1(b), (c), or (d) including, without
limitation, the SunTrust Loan Agreement and the documents related thereto; and
(c) Change its fiscal year end from the Saturday
closest to June 30.
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7.9 CHANGE OF CONTROL. Cause, permit, or suffer,
directly or indirectly, any Change of Control.
7.10 CONSIGNMENTS. Except as set forth on Schedule 7.10,
consign any Inventory or sell any Inventory on xxxx and hold, sale or return,
sale on approval, or other conditional terms of sale.
7.11 DISTRIBUTIONS. Make any distribution or declare or
pay any dividends (in cash or other property, other than capital stock) on, or
purchase, acquire, redeem, or retire any of Borrower's capital stock, of any
class, whether now or hereafter outstanding.
7.12 ACCOUNTING METHODS. Modify or change its method of
accounting or enter into, modify, or terminate any agreement currently
existing, or at any time hereafter entered into with any third party accounting
firm or service bureau for the preparation or storage of Borrower's or any
Subsidiary of Borrower's accounting records without said accounting firm or
service bureau agreeing to provide Agent information regarding the Collateral
(as defined herein and in the Subsidiary Security Agreement) or Borrower's or
any Subsidiary of Borrower's, as applicable, financial condition. Borrower
waives the right to assert a confidential relationship, if any, it may have
with any accounting firm or service bureau in connection with any information
requested by Agent pursuant to or in accordance with this Agreement, and agrees
that Agent may contact directly any such accounting firm or service bureau in
order to obtain such information.
7.13 INVESTMENTS. Directly or indirectly make, acquire,
or incur any liabilities (including contingent obligations) for or in
connection with (a) the acquisition of the securities (whether debt or equity)
of, or other interests in, a Person, (b) loans, advances, capital contributions,
or transfers of property to a Person, or (c) the acquisition of
all or substantially all of the properties or assets of a Person.
7.14 TRANSACTIONS WITH AFFILIATES. Directly or indirectly
enter into or permit to exist any material transaction with any Affiliate of
Borrower except for transactions that are in the ordinary course of Borrower's
business, upon fair and reasonable terms, that are fully disclosed to the
Co-Agents (including without limitation the transactions described on Schedule
7.14), and that are no less favorable to Borrower than would be obtained in an
arm's length transaction with a non-Affiliate.
7.15 SUSPENSION. Except for exiting its denim and yarn
lines of business, suspend or go out of a substantial portion of its business.
7.16 COMPENSATION. Increase the annual fee or per-meeting
fees paid to directors during any year by more than 15% over the prior year;
pay or accrue total cash compensation, during any year, to officers and senior
management employees in an aggregate amount in excess of 115% of that paid or
accrued in the prior year.
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7.17 USE OF PROCEEDS. Use the proceeds of the Advances
and the Term Loans for any purpose other than (a) on the Closing Date, (i) to
repay in full the outstanding principal, accrued interest, and accrued fees and
expenses owing to Existing Lender (other than with respect to the SunTrust Term
Loan), and (ii) to pay transactional costs and expenses incurred in connection
with this Agreement, and (b) thereafter, consistent with the terms and
conditions hereof, for its lawful and permitted corporate purposes.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE;
INVENTORY AND EQUIPMENT WITH BAILEES. Relocate its chief executive office to a
new location without providing thirty (30) days prior written notification
thereof to Agent and so long as, at the time of such written notification,
Borrower provides any financing statements or fixture filings necessary to
perfect and continue perfected the Lien of Agent (for the benefit of the Lender
Group) and also provides to Agent a Collateral Access Agreement with respect to
such new location. The Inventory and Equipment shall not at any time now or
hereafter be stored with a bailee, warehouseman, or similar party without
Agent's prior written consent.
7.19 NO PROHIBITED TRANSACTIONS UNDER ERISA. Directly or
indirectly:
(a) engage, or permit any Subsidiary of Borrower to
engage, in any prohibited transaction which is reasonably likely to result in a
civil penalty or excise tax described in Sections 406 of ERISA or 4975 of the
IRC for which a statutory or class exemption is not available or a private
exemption has not been previously obtained from the Department of Labor;
(b) permit to exist with respect to any Benefit Plan
any accumulated funding deficiency (as defined in Sections 302 of ERISA and 412
of the IRC), whether or not waived;
(c) fail, or permit any Subsidiary of Borrower to
fail, to pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Subsidiary of Borrower
to terminate, any Benefit Plan where such event would result in any liability
of Borrower, any of its Subsidiaries or any ERISA Affiliate under Title IV of
ERISA;
(e) fail, or permit any Subsidiary of Borrower to
fail, to make any required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Subsidiary of Borrower to
fail, to pay any required installment or any other payment required under
Section 412 of the IRC on or before the due date for such installment or other
payment;
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(g) amend, or permit any Subsidiary of Borrower to
amend, a Plan resulting in an increase in current liability for the plan year
such that either of Borrower, any Subsidiary of Borrower or any ERISA Affiliate
is required to provide security to such Plan under Section 401(a)(29) of the
IRC; or
(h) withdraw, or permit any Subsidiary of Borrower
to withdraw, from any Multiemployer Plan where such withdrawal is reasonably
likely to result in any liability of any such entity under Title IV of ERISA;
which, individually or in the aggregate, results in or reasonably would be
expected to result in a claim against or liability of Borrower, any of its
Subsidiaries or any ERISA Affiliate in excess of $50,000.
7.20 FINANCIAL COVENANTS. Fail to maintain:
(a) Minimum EBITDA. EBITDA of at least the amount
set forth in the table below, measured on a fiscal month-end basis for fiscal
year to such date, as of the applicable date set forth in the table below:
-------------------------------------------------
As of the fiscal month Year-to-Date
---------------------- ------------
ended closest to: EBITDA:
----------------- -------
-------------------------------------------------
July 31, 1999 $ 594,000
-------------------------------------------------
August 31, 1999 $ 1,283,000
-------------------------------------------------
September 30, 1999 $ 2,162,000
-------------------------------------------------
October 31, 1999 $ 3,317,000
-------------------------------------------------
November 30, 1999 $ 4,265,000
-------------------------------------------------
December 31, 1999 $ 5,059,000
-------------------------------------------------
January 31, 2000 $ 6,157,000
-------------------------------------------------
February 28, 2000 $ 7,319,000
-------------------------------------------------
March 31, 2000 $ 8,648,000
-------------------------------------------------
April 30, 2000 $10,089,000
-------------------------------------------------
May 31, 2000 $11,586,000
-------------------------------------------------
June 30, 2000 $13,253,000
-------------------------------------------------
(b) Tangible Net Worth. Tangible Net Worth of at
least the amount set forth in the table below, measured on a fiscal month-end
basis, as of the applicable date set forth in the table below:
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----------------------------------------------------------
As of the fiscal month Tangible Net Worth:
---------------------- -------------------
ended closest to:
-----------------
-----------------------------------------------------------
July 31, 1999 $43,675,000
-----------------------------------------------------------
August 31, 1999 $42,778,000
-----------------------------------------------------------
September 30, 1999 $41,664,000
-----------------------------------------------------------
October 31, 1999 $41,254,000
-----------------------------------------------------------
November 30, 1999 $40,615,000
-----------------------------------------------------------
December 31, 1999 $39,384,000
-----------------------------------------------------------
January 31, 2000 $38,929,000
-----------------------------------------------------------
February 28, 2000 $38,557,000
-----------------------------------------------------------
March 31, 2000 $37,945,000
-----------------------------------------------------------
April 30, 2000 $37,867,000
-----------------------------------------------------------
May 31, 2000 $37,865,000
-----------------------------------------------------------
June 30, 2000 $37,639,000
-----------------------------------------------------------
; provided, however, that, based upon Borrower's Business Plan delivered to the
Co-Agents pursuant to Section 6.3(e), the Required Lenders shall establish the
monthly minimum EBITDA and Tangible Net Worth covenants for each fiscal year
after the fiscal year ending closest to June 30, 2000 using the same
methodology as utilized for the fiscal year ending closest to June 30, 2000,
and the covenants shall be presented to Borrower for its approval, which
approval shall not be unreasonably withheld. In the event Borrower does not
approve the proposed covenants, then the Required Lenders shall establish such
covenants, its their reasonable discretion, based upon Borrower's Business Plan
for the applicable fiscal year; provided, however, that with respect to the
minimum Tangible Net Worth covenant set forth in Section 7.20(b), prior to the
date such covenant is established, Borrower shall not fail to maintain Tangible
Net Worth of at least $37,639,000 as of each fiscal month-end.
7.21 CAPITAL EXPENDITURES. Make capital expenditures in
any fiscal month during the fiscal year ending closest to June 30, 2000 in
excess of $333,000; provided, however, that, to the extent Borrower has not
made capital expenditures totaling $333,000 per month during the preceding
months during any fiscal year, the unused amount may be carried forward to the
succeeding months during such fiscal year, but such amounts may not be carried
forward to any succeeding fiscal year; provided further, however, that based
upon Borrower's Business Plan delivered to the Co-Agents pursuant to Section
6.3(e), the Required Lenders shall establish the monthly maximum capital
expenditure covenant for each fiscal year after the fiscal year ending closest
to June 30, 2000 using the same methodology as utilized for the fiscal year
ending closest to June 30, 2000, and the covenant
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shall be presented to Borrower for its approval, which approval shall not be
unreasonably withheld. In the event Borrower does not approve the proposed
covenant, then the Required Lenders shall establish such covenant, its their
reasonable discretion, based upon Borrower's Business Plan for the applicable
fiscal year.
7.22 COLLATERAL COVERAGE. Fail to maintain, as of any
date of determination, a ratio of (a) the principal balance of the Term Loans
as of such date to (b) the most recently determined Equipment Net Liquidation
Value of at least the ratio set forth in the table below as of the date
opposite such ratio:
-------------------------------------------------------------
As of: Term Loans to Equipment
Net Liquidation Value
Ratio:
-------------------------------------------------------------
September 30, 1999 94%
-------------------------------------------------------------
July 31, 2000 85%
-------------------------------------------------------------
July 31, 2001 and each
anniversary thereof 75%
-------------------------------------------------------------
To the extent that Borrower fails to maintain the ratio set forth above as of
the applicable date of determination, in addition to the other remedies
available to the Lender Group hereunder, the Co-Agents shall be entitled, in
their reasonable discretion, to create a reserve against the Borrowing Base in
an amount sufficient to offset any such deficiency.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
8.1 If Borrower fails to pay when due and payable or
when declared due and payable, any portion of the Obligations (whether of
principal, interest (including any interest which, but for the provisions of
the Bankruptcy Code, would have accrued on such amounts), fees and charges due
the Lender Group, reimbursement of Lender Group Expenses, or other amounts
constituting Obligations);
8.2 (a) If Borrower fails or neglects to perform, keep,
or observe any term, provision, condition, covenant, or agreement contained in
Sections 6.2 (Collateral and Financial Reporting), 6.4 (Tax Returns), 6.7
(Title to Equipment), 6.12 (Location of Inventory and Equipment), 6.13
(Compliance with Laws), 6.14 (Employee Benefits), or 6.15 (Leases) of this
Agreement and such failure continues for a period of five (5) Business Days;
(b) if Borrower fails or neglects to perform, keep, or observe any term,
provision, condition, covenant, or agreement contained in Sections 6.1
(Accounting System) or 6.8 (Maintenance of Equipment) of this Agreement and
such failure continues for a period of fifteen (15)
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Business Days; or (c) if Borrower or any Subsidiary of Borrower fails or
neglects to perform, keep, or observe any other term, provision, condition,
covenant, or agreement contained in this Agreement, or in any of the other Loan
Documents (giving effect to any grace periods, if any, expressly provided for
in such Loan Documents) or in any other present or future agreement between
Borrower or any Subsidiary of Borrower, as applicable, and the Lender Group
(giving effect to any grace periods, if any, expressly provided for in such
agreements); in each case, other than any such term, provision, condition,
covenant, or agreement that is the subject of another provision of this Section
8, (in which event such other provision of this Section 8 shall govern);
provided that, during any period of time that any such failure or neglect of
Borrower or any Subsidiary of Borrower referred to in this paragraph exists,
even if such failure or neglect is not yet an Event of Default by virtue of the
existence of a grace period, if any, Lenders shall not be required during such
period to make Advances to Borrower;
8.3 If there is a Material Adverse Change;
8.4 If any material portion of Borrower's or any
Subsidiary of Borrower's properties or assets is attached, seized, subjected to
a writ or distress warrant, or is levied upon, or comes into the possession of
any third Person;
8.5 If an Insolvency Proceeding is commenced by Borrower
or any Subsidiary of Borrower;
8.6 If an Insolvency Proceeding is commenced against
Borrower or any Subsidiary of Borrower and any of the following events occur:
(a) Borrower or such Subsidiary, as applicable, consents to the institution of
the Insolvency Proceeding against it; (b) the petition commencing the
Insolvency Proceeding is not timely controverted; (c) the petition commencing
the Insolvency Proceeding is not dismissed within sixty (60) calendar days of
the date of the filing thereof; provided, however, that, during the pendency of
such period, the Lender Group shall be relieved of its obligation to extend
credit hereunder; (d) an interim trustee is appointed to take possession of all
or a substantial portion of the properties or assets of, or to operate all or
any substantial portion of the business of, Borrower or such Subsidiary, as
applicable; or (e) an order for relief shall have been issued or entered
therein;
8.7 If Borrower or any Subsidiary of Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs and such prohibition
is not terminated within thirty (30) days;
8.8 If a notice of Lien, levy, or assessment (other than
a Permitted Lien) is filed of record with respect to any of Borrower's or any
Subsidiary of Borrower's properties or assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, or if any taxes or debts owing at any time
hereafter to any one or more of such entities becomes a Lien (other than a
Permitted Lien), whether xxxxxx or otherwise, upon any of Borrower's or any
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Subsidiary of Borrower's properties or assets and the same is not paid on the
payment date thereof;
8.9 If a judgment or other claim becomes a Lien or
encumbrance (other than a Permitted Lien) upon any material portion of
Borrower's or any Subsidiary of Borrower's properties or assets;
8.10 (a) If there is a default in any material agreement
to which Borrower or any Subsidiary of Borrower is a party with one or more
third Persons and such default (i) occurs at the final maturity of the
obligations thereunder, or (ii) with respect to any material agreement in which
the principal obligation of Borrower thereunder is equal to or exceeds
$1,000,000, results in a right by such third Person(s), irrespective of whether
exercised, to accelerate the maturity of Borrower's or such Subsidiary's
obligations thereunder; or (b) if there is a default under the SunTrust Loan
Agreement with respect to the SunTrust Term Loan.
8.11 If Borrower makes any payment on account of
Indebtedness that has been contractually subordinated in right of payment to
the payment of the Obligations, except to the extent such payment is permitted
by the terms of the subordination provisions applicable to such Indebtedness;
8.12 If any material misstatement or misrepresentation
exists now or hereafter in any warranty, representation, statement, or report
made to the Lender Group by Borrower or any officer, employee, agent, or
director of Borrower, or if any such warranty or representation is withdrawn;
or
8.13 If the obligation of any guarantor under its
guaranty or other third Person under any Loan Document is limited or terminated
by operation of law or by the guarantor or other third Person thereunder, or
any such guarantor or other third Person becomes the subject of an Insolvency
Proceeding.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during
the continuation, of an Event of Default the Co-Agents (upon the direction of
the Required Lenders or, to the extent provided in Section 9.3, the Tranche B
Lenders) may direct Agent, pursuant to Sections 17.4 and 17.5, without notice
of its election and without demand, do any one or more of the following, all of
which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by
this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable and terminate the Commitments; provided, however, that,
notwithstanding anything herein to the contrary, upon an Event of Default
described in Section 8.5 or Section 8.6, the Commitments shall be terminated
and all Obligations immediately shall be due and payable;
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(b) Cease advancing money or extending credit to or
for the benefit of Borrower under this Agreement, under any of the Loan
Documents, or under any other agreement between Borrower and the Lender Group;
(c) Terminate this Agreement and any of the other
Loan Documents as to any future liability or obligation of the Lender Group,
but without affecting the Lender Group's rights and security interests in the
Personal Property Collateral or the Real Property Collateral and without
affecting the Obligations;
(d) Settle or adjust disputes and claims directly
with Account Debtors for amounts and upon terms which the Co-Agents consider
advisable, and in such cases, Agent will credit Borrower's Loan Account with
only the net amounts received by Agent in payment of such disputed Accounts
after deducting all Lender Group Expenses incurred or expended in connection
therewith;
(e) Cause Borrower to hold all returned Inventory in
trust for the Lender Group, segregate all returned Inventory from all other
property of Borrower or in Borrower's possession and conspicuously label said
returned Inventory as the property of the Lender Group;
(f) Without notice to or demand upon Borrower or any
guarantor, make such payments and do such acts as the Co-Agents consider
necessary or reasonable to protect its security interests in the Collateral.
Borrower agrees to assemble the Personal Property Collateral if the Co-Agents
so require, and to make the Personal Property Collateral available to Agent as
the Co-Agents may designate. Borrower authorizes Agent to enter the premises
where the Personal Property Collateral is located, to take and maintain
possession of the Personal Property Collateral, or any part of it, and to pay,
purchase, contest, or compromise any encumbrance, charge, or Lien that in the
Co-Agents' determination appears to conflict with the Liens of Agent (for the
benefit of the Lender Group) in the Collateral and to pay all expenses incurred
in connection therewith. With respect to any of Borrower's owned or leased
premises, Borrower hereby grants Agent a license to enter into possession of
such premises and to occupy the same, without charge, for up to one (1) year in
order to exercise any of the Lender Group's rights or remedies provided herein,
at law, in equity, or otherwise;
(g) Without notice to Borrower (such notice being
expressly waived), and without constituting a retention of any collateral in
satisfaction of an obligation (within the meaning of Section 9-505 of the
Code), set off and apply to the Obligations any and all (i) balances and
deposits of Borrower held by the Lender Group (including any amounts received
in the Lockbox Accounts), or (ii) indebtedness at any time owing to or for the
credit or the account of Borrower held by the Lender Group;
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(h) Hold, as cash collateral, any and all balances
and deposits of Borrower held by the Lender Group, and any amounts received in
the Lockbox Accounts, to secure the full and final repayment of all of the
Obligations;
(i) Seek the appointment of a receiver or keeper to
take possession of the Collateral and to enforce any remedies provided for
herein, at law or in equity with respect to such appointment without prior
notice of hearing;
(j) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided
for herein) the Personal Property Collateral. Agent is hereby granted a license
or other right to use, without charge, Borrower's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks, service
marks, and advertising matter, or any property of a similar nature, as it
pertains to the Personal Property Collateral, in completing production of,
advertising for sale, and selling any Personal Property Collateral and
Borrower's rights under all licenses and all franchise agreements shall inure
to the Lender Group's benefit;
(k) Sell the Personal Property Collateral at either
a public or private sale, or both, by way of one or more contracts or
transactions, for cash or on terms, in such manner and at such places
(including Borrower's premises) as the Co-Agents determine is commercially
reasonable. It is not necessary that the Personal Property Collateral be
present at any such sale;
(l) Agent shall give notice of the disposition of
the Personal Property Collateral as follows:
(A) Agent shall give Borrower and each holder of
a security interest in the Personal Property Collateral who has filed with
Agent a written request for notice, a notice in writing of the time and place
of public sale, or, if the sale is a private sale or some other disposition
other than a public sale is to be made of the Personal Property Collateral,
then the time on or after which the private sale or other disposition is to be
made;
(B) The notice shall be personally
delivered or mailed, postage prepaid, to Borrower as provided in Section 12, at
least 5 days before the date fixed for the sale, or at least 5 days before the
date on or after which the private sale or other disposition is to be made; no
notice needs to be given prior to the disposition of any portion of the
Personal Property Collateral that is perishable or threatens to decline
speedily in value or that is of a type customarily sold on a recognized market.
Notice to Persons other than Borrower claiming an interest in the Personal
Property Collateral shall be sent to such addresses as they have furnished to
Agent;
(C) If the sale is to be a public sale,
Agent also shall give notice of the time and place by publishing a notice one
time at least five (5) days before the
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date of the sale in a newspaper of general circulation in the county in which
the sale is to be held;
(m) Agent (at the direction of the Co-Agents) may
credit bid and purchase at any public sale; and
(n) Any deficiency that exists after disposition of
the Personal Property Collateral as provided above will be paid immediately by
Borrower. Any excess will be returned, without interest and subject to the
rights of third Persons, by Agent to Borrower.
9.2 REMEDIES CUMULATIVE. The Lender Group's rights and
remedies under this Agreement, the Loan Documents, and all other agreements
shall be cumulative. The Lender Group shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an
election, and no waiver by the Lender Group of any Event of Default shall be
deemed a continuing waiver. No delay by the Lender Group shall constitute a
waiver, election, or acquiescence by it.
9.3 SPECIAL PROVISIONS REGARDING TRANCHE B LENDERS. The
Tranche B Lenders may direct the Co-Agents to direct Agent to exercise the
remedy set forth in Section 9.1(a) upon the occurrence of any of the following
events:
(a) If Borrower fails to pay when due and
payable any Obligation owed to the Tranche
B Lenders, or any of them, and such payment
remains unpaid forty-five (45) days after
the due date therefor;
(b) If any Overadvance (other than an
Overadvance made pursuant to Section
2.1(h)) remains unpaid seventy-five (75)
days after the date such Overadvance is
made or arises;
(c) If any Overadvance (other than an
Overadvance made pursuant to Section
2.1(h)) is made or arises on or before the
date seventy-five (75) days following the
immediately preceding Overadvance (other
than an Overadvance made pursuant to
Section 2.1(h)) and such new Overadvance
remains unpaid thirty (30) days after the
date such Overadvance is made or arises; or
(d) If Borrower fails to keep the covenant set
forth in Section 7.20(a), Section 7.21 or
Section 7.22, such Default remains in
existence seventy-five (75) days following
the date of occurrence thereof, and, with
respect to a failure by Borrower
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to keep the covenant set forth in Section
7.22, a reserve of the type and the amount
set forth in Section 7.22 is not
established.
10. TAXES AND EXPENSES.
If Borrower fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or
assets, rents or other amounts payable under such leases) due to third Persons,
or fails to make any deposits or furnish any required proof of payment or
deposit, all as required under the terms of this Agreement, then, to the extent
that the Co-Agents determine that such failure by Borrower could result in a
Material Adverse Change, in their discretion and without prior notice to
Borrower, the Co-Agents may direct Agent to do any or all of the following: (a)
make payment of the same or any part thereof; (b) set up such reserves in
Borrower's Loan Account as the Co-Agents deem necessary to protect the Lender
Group from the exposure created by such failure; or (c) obtain and maintain
insurance policies of the type described in Section 6.10, and take any action
with respect to such policies as the Co-Agents deem prudent. Any such amounts
paid by Agent shall constitute Lender Group Expenses. Any such payments made by
Agent shall not constitute an agreement by the Lender Group to make similar
payments in the future or a waiver by the Lender Group of any Event of Default
under this Agreement. The Co- Agents need not inquire as to, or contest the
validity of, any such expense, tax, or Lien and the receipt of the usual
official notice for the payment thereof shall be conclusive evidence that the
same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Borrower waives demand,
protest, notice of protest, notice of default or dishonor, notice of payment
and nonpayment, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by the Lender Group on which Borrower may in any
way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. So long
as the Lender Group complies with its obligations, if any, under Section 9-207
of the Code, the Lender Group shall not in any way or manner be liable or
responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage
thereto occurring or arising in any manner or fashion from any cause; (c) any
diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person. All risk of loss,
damage, or destruction of the Collateral shall be borne by Borrower.
11.3 INDEMNIFICATION. Borrower shall pay, indemnify,
defend, and hold Agent, each Agent-Related Person, each Co-Agent, each Co-Agent
Related Person, each Lender, each Participant, and each of their respective
officers, directors, employees, counsel, agents, and attorneys-in-fact (each,
an "Indemnified Person") harmless (to the fullest extent permitted by law) from
and against any and all claims, demands, suits, actions,
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investigations, proceedings, and damages, and all reasonable attorneys fees and
disbursements and other costs and expenses actually incurred in connection
therewith (as and when they are incurred and irrespective of whether suit is
brought), at any time asserted against, imposed upon, or incurred by any of
them in connection with or as a result of or related to the execution,
delivery, enforcement, performance, and administration of this Agreement and
any other Loan Documents or the transactions contemplated herein, and with
respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of the credit
provided hereunder (irrespective of whether any Indemnified Person is a party
thereto), or any act, omission, event or circumstance in any manner related
thereto (all the foregoing, collectively, the "Indemnified Liabilities").
Borrower shall have no obligation to any Indemnified Person under this Section
11.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted from the gross negligence or
willful misconduct of such Indemnified Person. This provision shall survive the
termination of this Agreement and the repayment of the Obligations.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other Loan Document
shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, or
telefacsimile to Borrower or to Agent, as the case may be, at its address set
forth below:
IF TO BORROWER: THOMASTON XXXXX, INC.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxx
Fax No. (000) 000-0000
WITH COPIES TO: XXXXX, DAY, XXXXXX & XXXXX
0000 XxxXxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxx, Esq.
Fax No. (000) 000-0000
IF TO AGENT OR THE FOOTHILL CAPITAL CORPORATION
LENDER GROUP IN CARE 11111 Santa Xxxxxx Blvd.
OF AGENT: Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Business Finance Division Manager
Fax No. (000) 000-0000
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WITH COPIES TO: FOOTHILL CAPITAL CORPORATION
Xxxxxxxxx Xxxx Xxxxxx
Xxxxxxxx 000
0000 Xxxxxxxxx Road, N.E.
Suite 1450
Xxxxxxx, Xxxxxxx 00000
Attn: Business Finance Division Manager
Fax No. (000) 000-0000
AND: PAUL, HASTINGS, XXXXXXXX &
XXXXXX LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx, III, Esq.
Fax No. (000) 000-0000
IF TO THE CO-AGENTS: to the address for notices set forth above
for the Agent
AND: GENERAL ELECTRIC CAPITAL
CORPORATION
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Senior Vice President - Thomaston
Xxxxx, Inc.
Fax No: (000) 000-0000
WITH A COPY TO: XXXXX XXXXXXXX & XXXXXXX
Suite 3100 Promanade II
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Xx., Esq.
Fax No: (000) 000-0000
IF TO THE TRANCHE B
LENDERS: BACK BAY CAPITAL FUNDING LLC
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx
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Fax No: (000) 000-0000
WITH A COPY TO: BACK BAY CAPITAL FUNDING LLC
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxx
Fax No: (000) 000-0000
The parties hereto may change the address at which they are
to receive notices hereunder, by notice in writing in the foregoing manner
given to the other. All notices or demands sent in accordance with this Section
12, other than notices by Agent in connection with Sections 9-504 or 9-505 of
the Code, shall be deemed received on the earlier of the date of actual receipt
or three (3) days after the deposit thereof in the mail. Borrower acknowledges
and agrees that notices sent by Agent in connection with Sections 9-504 or
9-505 of the Code shall be deemed sent when deposited in the mail or personally
delivered, or, where permitted by law, transmitted telefacsimile or other
similar method set forth above.
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13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE
RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER,
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY
IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF XXXXXX, STATE OF
GEORGIA OR, AT THE SOLE OPTION OF THE LENDER GROUP, IN ANY OTHER COURT IN WHICH
THE LENDER GROUP SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS
SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. BORROWER AND EACH
MEMBER OF THE LENDER GROUP WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 13. BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVES
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWER AND EACH MEMBER
OF THE LENDER GROUP REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
14. DESTRUCTION OF BORROWER'S DOCUMENTS.
All documents, schedules, invoices, agings, or other papers
delivered to Agent may be destroyed or otherwise disposed of by Agent four (4)
months after they are delivered to or received by Agent, unless Borrower
requests, in writing, the return of said documents, schedules, or other papers
and makes arrangements, at Borrower's expense, for their return.
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15. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
15.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written notice to Agent
and, so long as no Default or Event of Default has occurred and is continuing,
with the written consent of Borrower (which consent will not be unreasonably
withheld), assign and delegate to one or more Eligible Transferees (each an
"Assignee") all, or any ratable part, of the Obligations, the Commitments, and
the other rights and obligations of such Lender hereunder and under the other
Loan Documents, in a minimum amount of $5,000,000; provided, however, that
Borrower and Agent may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until (i) written
notice of such assignment, together with payment instructions, addresses, and
related information with respect to the Assignee, shall have been given to
Borrower and Agent by such Lender and the Assignee; (ii) such Lender and its
Assignee shall have delivered to Borrower and Agent a fully executed Assignment
and Acceptance ("Assignment and Acceptance") in the form of Exhibit A-1; and
(iii) the assignor Lender or Assignee has paid to Agent for Agent's sole and
separate account a processing fee in the amount of $5,000; provided further,
however, that no consent of Borrower shall be required in connection with an
assignment by a Lender of all or substantially all of its portfolio of loans.
(b) From and after the date that Agent notifies the
assignor Lender that it has received a fully executed Assignment and Acceptance
and payment of the above-referenced processing fee, (i) 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,
shall have the rights and obligations of a Lender under the Loan Documents, and
(ii) the assignor Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents 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
rights and obligations under this Agreement and the other Loan Documents, such
Lender shall cease to be a party hereto and thereto), and such assignment shall
effect a novation between Borrower and the Assignee.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (1) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties, or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency, or value of this Agreement or any other Loan Document furnished
pursuant hereto; (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or any guarantor or the performance or observance by Borrower or any
guarantor of any of its obligations under this
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Agreement or any other Loan Document furnished pursuant hereto; (3) such
Assignee confirms that it has received a copy of this Agreement, together with
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;
(4) such Assignee will, independently and without reliance upon Agent, any
Co-Agent, such assigning Lender, or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (5) such Assignee appoints and authorizes Agent and the Co-Agents to
take such action as agents on behalf and to exercise such powers under this
Agreement as are delegated to Agent and the Co-Agents by the terms hereof,
together with such powers as are reasonably incidental thereto; and (6) such
Assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed
by it as a Lender.
(d) Immediately upon each Assignee's making its
processing fee payment under the Assignment and Acceptance, this Agreement
shall be deemed to be amended to the extent, but only to the extent, necessary
to reflect the addition of the Assignee and the resulting adjustment of the
Commitments of the Assignor and Assignee arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitment of the assigning Lender
pro tanto.
(e) Any Lender may at any time, with the written
notice to Agent, which consent shall not be unreasonably withheld, sell to one
or more Persons (a "Participant") participating interests in the Obligations,
the Commitment, and the other rights and interests of that Lender (the
"Originating Lender") hereunder and under the other Loan Documents; provided,
however, that (i) the Originating Lender's obligations under this Agreement
shall remain unchanged, (ii) the Originating Lender shall remain solely
responsible for the performance of such obligations, (iii) Borrower, Agent and
the Co- Agents shall continue to deal solely and directly with the Originating
Lender in connection with the Originating Lender's rights and obligations under
this Agreement and the other Loan Documents, (iv) no Originating Lender shall
transfer or grant any participating interest under which the Participant has
the sole and exclusive right to approve any amendment to, or any consent or
waiver with respect to, this Agreement or any other Loan Document, except to
the extent such amendment to, or consent or waiver with respect to this
Agreement or of any other Loan Document would (A) extend the final maturity
date of the Obligations hereunder in which such participant is participating;
(B) reduce the interest rate applicable to the Obligations hereunder in which
such Participant is participating; (C) release all or a material portion of the
Collateral (except to the extent expressly provided herein or in any of the
Loan Documents) supporting the Obligations hereunder in which such Participant
is participating; (D) postpone the payment of, or reduce the amount of, the
interest or fees hereunder in which such Participant is participating; or (E)
change the amount or due dates of scheduled principal repayments or prepayments
or premiums in respect of the Obligations hereunder in which such Participant
is participating; and (v) all amounts payable by Borrower hereunder shall be
determined as if such Originating Lender had not sold such
participation;
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except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing
under this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement; provided,
however, that no Participant may exercise any such right of setoff without the
notice to and consent of the Co-Agents. The rights of any Participant shall
only be derivative through the Originating Lender with whom such Participant
participates and no Participant shall have any direct rights as to the other
Lenders, Agent, the Co-Agents, Borrower, the Collections, the Collateral, or
otherwise in respect of the Advances, the Letters of Credit or the Term Loans.
No Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves. The provisions of this Section
15.1(e) are solely for the benefit of the Lender Group, and Borrower shall have
no rights as a third party beneficiary of any of such provisions.
(f) In connection with any such assignment or
participation or proposed assignment or participation, a Lender may disclose to
a third party all documents and information which it now or hereafter may have
relating to Borrower or Borrower's business.
(g) Notwithstanding any other provision in this
Agreement, any Lender may at any time create a security interest in, or pledge,
all or any portion of its rights under and interest in this Agreement in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
15.2 SUCCESSORS. This Agreement shall bind and inure to
the benefit of the respective successors and assigns of each of the parties;
provided, however, that Borrower may not assign this Agreement or any rights or
duties hereunder without the Lenders' prior written consent and any prohibited
assignment shall be absolutely void. No consent to assignment by the Lenders
shall release Borrower from its Obligations. A Lender may assign this Agreement
and its rights and duties hereunder pursuant to Section 15.1 and, except as
expressly required pursuant to Section 15.1, no consent or approval by Borrower
is required in connection with any such assignment.
16. AMENDMENTS; WAIVERS.
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16.1 AMENDMENTS AND WAIVERS. No amendment or waiver of
any provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by Borrower therefrom, shall be effective unless the
same shall be in writing and signed by the Required Lenders (or by Agent at the
written request of the Required Lenders) and Borrower and then any such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all the Lenders
and Borrower and acknowledged by Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of principal, interest,
fees, or other amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on, any Loan, or any fees or other amounts payable hereunder
or under any other Loan Document;
(d) modify any (x) payment term or (y) allocation of
Collections or proceeds of Collateral with respect to the Tranche B Term Loans,
including without limitation, any term providing for the prepayment of the
Tranche B Term Loans;
(e) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Advances and Term Loans, which is
required for the Lenders or any of them to take any action hereunder;
(f) increase the advance rate with respect to
Advances (except for the restoration of an advance rate after the prior
reduction thereof), change Section 2.1(b) or modify the definition of "Eligible
Accounts," "Eligible Domestic Accounts," "Eligible Xxxx and Hold Accounts,"
"Eligible Xxxx and Hold Inventory," "Eligible Foreign Accounts," "Eligible
In-Transit Inventory," "Eligible Inventory," "Eligible Landed Inventory" or
"Eligible Off-Site Inventory" in any manner less restrictive to Borrower;
(g) amend or grant any waiver or consent with
respect to Section 7.20(a), Section 7.21 or Section 7.22;
(h) amend this Section or any provision of the
Agreement providing for consent or other action by all Lenders;
(i) release Collateral other than as permitted by
Section 17.1 or as required by the Intercreditor Agreement;
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(j) subordinate the lien of Agent in any of the
Collateral or any of the Obligations (except to the extent permitted herein);
(k) change the definition of "Required Lenders";
(l) release Borrower from any Obligation for the
payment of money; or
(m) amend any of the provisions of Article 17.
and; provided further, that no amendment, waiver or consent shall, unless in
writing and signed by Agent, affect the rights or duties of Agent under this
Agreement or any other Loan Document; provided, further, that no amendment,
waiver or consent shall, unless in writing and signed by the Co-Agents, affect
the rights or duties of the Co-Agents under this Agreement or any other Loan
Document; and, provided further, that the limitation contained in clause (e)
above shall not be deemed to limit the ability of Agent to make Agent Advances
or Agent Loans, as applicable, in accordance with the provisions of Sections
2.1(g), (h), or (l). The foregoing notwithstanding, any amendment,
modification, waiver, consent, termination, or release of or with respect to
any provision of this Agreement or any other Loan Document that relates only to
the relationship of the Lender Group among themselves, and that does not affect
the rights or obligations of Borrower, shall not require consent by or the
agreement of Borrower.
16.2 NO WAIVERS; CUMULATIVE REMEDIES. No failure by
Agent, any Co- Agent, or any Lender to exercise any right, remedy, or option
under this Agreement, any other Loan Document, or any present or future
supplement hereto or thereto, or in any other agreement between or among
Borrower and Agent and/or any Co-Agent and/or any Lender, or delay by Agent,
any Co-Agent or any Lender in exercising the same, will operate as a waiver
thereof. No waiver by Agent, any Co-Agent or any Lender will be effective
unless it is in writing, and then only to the extent specifically stated. No
waiver by Agent, any Co-Agent or the Lenders on any occasion shall affect or
diminish Agent's, each Co-Agent's and each Lender's rights thereafter to
require strict performance by Borrower of any provision of this Agreement.
Agent's, each Co-Agent's and each Lender's rights under this Agreement and the
other Loan Documents will be cumulative and not exclusive of any other right or
remedy which Agent, any Co-Agent or any Lender may have.
17. AGENT; CO-AGENTS; THE LENDER GROUP.
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17.1 APPOINTMENT AND AUTHORIZATION OF AGENT AND THE
CO-AGENTS. Each Lender hereby designates and appoints Foothill as its Agent and
a Co-Agent and GE Capital as a Co-Agent under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes Agent and the Co-Agents
to take such action on its behalf under the provisions of this Agreement and
each other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
and each Co-Agent agree to act as such on the express conditions contained in
this Article 17. The provisions of this Article 17 are solely for the benefit
of Agent, the Co-Agents and the Lenders, and Borrower shall not have any rights
as a third party beneficiary of any of the provisions contained herein;
provided, however, that the provisions of Sections 17.10, 17.11, and 17.16(d)
also shall be for the benefit of Borrower. Any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, neither Agent nor any Co-Agent shall have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent or
any Co-Agent have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations, or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent or any Co-Agent. Except as expressly
otherwise provided in this Agreement, each of Agent and each Co-Agent shall
have and may use its sole discretion with respect to exercising or refraining
from exercising any discretionary rights or taking or refraining from taking
any actions which Agent or such Co-Agent, as the case may be, is expressly
entitled to take or assert under or pursuant to this Agreement and the other
Loan Documents, including making the determinations contemplated by Section
2.1(b). Without limiting the generality of the foregoing, or of any other
provision of the Loan Documents that provides rights or powers to Agent or the
Co-Agents, Lenders agree that Agent shall have the right to exercise the
following powers as long as this Agreement remains in effect: (a) maintain, in
accordance with its customary business practices, ledgers and records
reflecting the status of the Advances, the Term Loans, the Collateral, the
Collections, and related matters; (b) execute and/or file any and all financing
or similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim for Lenders, notices and other written agreements
with respect to the Loan Documents; (c) make Advances for itself or on behalf
of Lenders as provided in the Loan Documents; (d) exclusively receive, apply,
and distribute the Collections as provided in the Loan Documents; (e) open and
maintain such bank accounts and lock boxes as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral and the Collections; (f) at the direction of the
Co-Agents, perform, exercise, and enforce any and all other rights and remedies
of the Lender Group with respect to Borrower, the Advances, the Term Loans, the
Collateral, the Collections, or otherwise related to any of same as provided in
the Loan Documents; and (g) incur and pay such Lender Group Expenses as Agent
or the Co-Agents, as the case may be, may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Documents.
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17.2 DELEGATION OF DUTIES. Except as otherwise provided
in this Section, each of Agent and each Co-Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents,
employees, or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Neither Agent nor any
Co-Agent shall be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects as long as such selection was made in
compliance with this Section and without gross negligence or willful
misconduct. The foregoing notwithstanding, Neither Agent nor any Co-Agent shall
make any material delegation of duties to subagents or non-employee delegees
without the prior written consent of the Required Lenders (it being understood
that routine delegation of such administrative matters as filing financing
statements, or conducting appraisals or audits, is not viewed as a material
delegation that requires prior Required Lender approval).
17.3 LIABILITY OF AGENT-RELATED PERSONS AND CO-AGENT
RELATED PERSONS. None of the Agent-Related Persons nor the Co-Agent Related
Persons shall (i) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Loan Document
or the transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or, (ii) be responsible in any manner to any of the
Lenders for any recital, statement, representation or warranty made by
Borrower, or any Subsidiary or Affiliate of Borrower, or any officer or
director thereof, contained in this Agreement or in any other Loan Document, or
in any certificate, report, statement, or other document referred to or
provided for in, or received by Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person or Co-Agent Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books, or records of Borrower, or any
of Borrower's Subsidiaries or Affiliates.
17.4 RELIANCE BY AGENT AND THE CO-AGENTS. Each of Agent
and each Co-Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex, or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrower or counsel to any
Lender), independent accountants, and other experts selected by Agent or such
Co-Agent, as the case may be. Each of Agent and each Co-Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders or all Lenders, as applicable, and until such instructions
are received, each of Agent and each Co-Agent shall act, or refrain from
acting, as it deems advisable so long as it is not grossly negligent or guilty
of wilful misconduct. If Agent or any Co-Agent so requests, it shall first be
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indemnified to its reasonable satisfaction by Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each of Agent and each Co-Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders or all Lenders, as applicable, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.
17.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Neither Agent
nor any Co-Agent shall be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default, except, in the case of Agent, with respect
to defaults in the payment of principal, interest, fees, and expenses required
to be paid to Agent for the account of Agent or the Lenders, except with
respect to actual knowledge of the existence of an Overadvance, and except with
respect to Defaults and Events of Default of which Agent or such Co-Agent, as
the case may be, has actual knowledge, unless Agent or such Co-Agent, as the
case may be, shall have received written notice from a Lender or Borrower
referring to this Agreement, describing such Default or Event of Default, and
stating that such notice is a "notice of default." Each of Agent and each
Co-Agent promptly will notify the Lenders of its receipt of any such notice or
of any Event of Default of which Agent or such Co-Agent, as the case may be,
has, or is deemed to have, actual knowledge. If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 17.4, each of Agent and each Co-Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Required
Lenders; provided, however, that:
(a) At all times, the Co-Agents may propose and,
with the consent of Required Lenders (which shall not be unreasonably withheld
and which shall be deemed to have been given by a Lender unless such Lender has
notified Agent to the contrary in writing within three (3) days of notification
of such proposed actions by the Co-Agents) Agent (at the direction of the
Co-Agents) may exercise, any remedies on behalf of the Lender Group; and
(b) At all times, once Required Lenders or all
Lenders, as the case may be, have approved the exercise of a particular remedy
or pursuit of a course of action, Agent may, but shall not be obligated to,
make all administrative decisions in connection therewith or take all other
actions reasonably incidental thereto (for example, if the Required Lenders
approve the foreclosure of certain Collateral, Agent shall not be required to
seek consent for the administrative aspects of conducting such sale or handling
of such Collateral).
17.6 CREDIT DECISION. Each Lender acknowledges that none
of the Agent-Related Persons nor the Co-Agent Related Persons has made any
representation or warranty to it, and that no act by Agent or a Co-Agent, as
the case may be, hereinafter taken, including any review of the affairs of
Borrower and its Subsidiaries or Affiliates, shall be
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deemed to constitute any representation or warranty by any Agent-Related Person
or Co-Agent Related Person to any Lender. Each Lender represents to Agent and
each Co-Agent that it has, independently and without reliance upon any
Agent-Related Person or Co-Agent Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition, and creditworthiness of Borrower and any other Person (other
than the Lender Group) party to a Loan Document, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Borrower.
Each Lender also represents that it will, independently and without reliance
upon any Agent-Related Person or Co-Agent Related Person and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals, and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition, and
creditworthiness of Borrower, and any other Person (other than the Lender
Group) party to a Loan Document. Except for notices, reports, and other
documents expressly herein required to be furnished to the Lenders by Agent,
neither Agent nor any Co-Agent shall have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition, or
creditworthiness of Borrower, and any other Person party to a Loan Document
that may come into the possession of any of the Agent-Related Persons or
Co-Agent Related Persons, as the case may be.
17.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur
and pay Lender Group Expenses to the extent Agent deems reasonably necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including without limiting the
generality of the foregoing, but subject to any requirements of the Loan
Documents that it obtain any applicable consents or engage in any required
consultation, court costs, reasonable attorneys fees and expenses, costs of
collection by outside collection agencies and auctioneer fees and costs of
security guards or insurance premiums paid to maintain the Collateral, whether
or not Borrower is obligated to reimburse Agent or Lenders for such expenses
pursuant to the Loan Agreement or otherwise. Agent is authorized and directed
to deduct and retain sufficient amounts from Collections to reimburse Agent for
such out-of-pocket costs and expenses prior to the distribution of any amounts
to Lenders. In the event Agent is not reimbursed for such costs and expenses
from Collections, each Lender hereby agrees that it is and shall be obligated
to pay to or reimburse Agent for the amount of such Lender's Pro-Rata Share
thereof. Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand the Agent-Related Persons, or Co-Agent
Related Persons (to the extent not reimbursed by or on behalf of Borrower and
without limiting the obligation of Borrower to do so), according to their
Pro-Rata Shares, from and against any and all Indemnified Liabilities;
provided, however, that no Lender shall be liable for the payment to the
Agent-Related Persons or Co-Agent Related Persons, as the case may be, of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence,
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bad faith, or willful misconduct. Without limitation of the foregoing, each
Lender shall reimburse each of Agent and each Co-Agent upon demand for its
ratable share of any costs or out-of-pocket expenses (including attorney fees
and expenses) incurred by Agent or any Co-Agent, as the case may be, in
connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the extent that Agent or any
Co-Agent, as the case may be, is not reimbursed for such expenses by or on
behalf of Borrower. The undertaking in this Section 17.7 shall survive the
payment of all Obligations hereunder and the resignation or replacement of
Agent or any Co-Agent, as the case may be.
17.8 AGENT IN INDIVIDUAL CAPACITY. Each of Foothill and
GE Capital and their Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests, in and
generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with Borrower and its Subsidiaries and
Affiliates and any other Person party to any Loan Documents as though Foothill
or GE Capital, as the case may be, were not Agent or a Co-Agent, as the case
may be, hereunder without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Foothill and GE Capital and
their Affiliates may receive information regarding Borrower or their Affiliates
and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrower or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Foothill and GE Capital will use
their reasonable best efforts to obtain), neither Foothill nor GE Capital shall
be under any obligation to provide such information to them. With respect to
the Agent Loans and Agent Advances, Foothill shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not Agent, and the terms "Lender" and "Lenders" include Foothill
in its individual capacity.
17.9 SUCCESSOR AGENT. Any of Agent or any Co-Agent may
resign or may be removed (upon request by the Required Lenders if such Agent's
or Co-Agent's Commitments or Loans represent less than fifteen percent (15%) of
all Commitments or Loans hereunder, as the case may be,) as Agent or Co-Agent,
as the case may be, following notice of such resignation or removal ("Notice")
to the Lenders and Borrower, and effective upon the appointment of and
acceptance of such appointment by, a successor Agent or Co-Agent, as the case
may be. If Agent or any Co-Agent resigns or is removed under this Agreement,
the Required Lenders shall appoint any Lender or Eligible Transferee as
successor Agent or Co-Agent, as the case may be, for the Lenders. If no
successor Agent or Co-Agent, as the case may be, is appointed within thirty
(30) days of such retiring or removed Agent's or Co-Agent's Notice, Agent or
such retiring or removed Co-Agent may appoint a successor Agent or Co-Agent, as
the case may be, after consulting with the Lenders and Borrower. In any such
event, upon the acceptance of its appointment as successor Agent
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or Co-Agent, as the case may be, hereunder, such successor Agent or Co-Agent
shall succeed to all the rights, powers and duties of the retiring or removed
Agent or Co-Agent, as the case may be, and the term "Agent" or "Co-Agent," as
the case may be, shall mean such successor Agent or Co-Agent and such retiring
or removed Agent's or Co-Agent's appointment, powers, and duties as Agent or
Co-Agent, as the case may be, shall be terminated. After any retiring or
removed Agent's or Co-Agent's resignation or removal hereunder as Agent or
Co-Agent, as the case may be, the provisions of this Section 17 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent or Co-Agent, as the case may be, under this Agreement.
17.10 WITHHOLDING TAX.
(a) If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the IRC and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the IRC, such Lender agrees with and in favor of Agent and Borrower, to
deliver to Agent and Borrower:
(i) if such Lender claims an exemption
from, or a reduction of, withholding tax under a United States tax treaty,
properly completed IRS Forms 1001 and W-8 before the payment of any interest in
the first calendar year and before the payment of any interest in each third
succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Lender claims that interest
paid under this Agreement is exempt from United States withholding tax because
it is effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form 4224 before the
payment of any interest is due in the first taxable year of such Lender and in
each succeeding taxable year of such Lender during which interest may be paid
under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be
required under the IRC or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Lender agrees to promptly notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or
reduction of, withholding tax under a United States tax treaty by providing IRS
Form 1001 and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of Borrower, such Lender
agrees to notify Agent and Borrower of the percentage amount in which it is no
longer the beneficial owner of Obligations of Borrower to such Lender. To the
extent of such percentage amount, Agent and Borrower will treat such Lender's
IRS Form 1001 as no longer valid.
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(c) If any Lender claiming exemption from
United States withholding tax by filing IRS Form 4224 with Agent sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of Borrower to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the IRC.
(d) If any Lender is entitled to a reduction in
the applicable withholding tax, Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to Agent, then Agent may
withhold from any interest payment to such Lender not providing such forms or
other documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that Agent
or Borrower did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered, was not
properly executed, or because such Lender failed to notify Agent and Borrower
of a change in circumstances which rendered the exemption from, or reduction
of, withholding tax ineffective, or for any other reason) such Lender shall
indemnify Agent and Borrower fully for all amounts paid, directly or
indirectly, by Agent or Borrower as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the amounts
payable to Agent or Borrower under this Section, together with all costs and
expenses (including attorneys fees and expenses). The obligation of the Lenders
under this subsection shall survive the payment of all Obligations and the
resignation of Agent.
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17.11 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize
Agent, to release any Lien on any Collateral (i) upon the termination of the
Commitments and payment and satisfaction in full by Borrower of all
Obligations; and upon such termination and payment Agent shall deliver to
Borrower, at Borrower's sole cost and expense, all UCC termination statements
and any other documents necessary to terminate the Loan Documents and release
the Liens with respect to the Collateral; (ii) constituting property being sold
or disposed of if a release is required or desirable in connection therewith
and if Borrower certifies to Agent that the sale or disposition is permitted
under Section 7.4 of this Agreement or the other Loan Documents (and Agent may
rely conclusively on any such certificate, without further inquiry); (iii)
constituting property in which Borrower owned no interest at the time the Lien
was granted or at any time thereafter; or (iv) constituting property leased to
Borrower under a lease that has expired or been terminated in a transaction
permitted under this Agreement. Except as provided above, Agent will not
release any Lien on any Collateral without the prior written authorization of
the Lenders. Upon request by Agent or Borrower at any time, the Lenders will
confirm in writing Agent's authority to release any such Liens on particular
types or items of Collateral pursuant to this Section 17.11; provided, however,
that (i) Agent shall not be required to execute any document necessary to
evidence such release on terms that, in Agent's opinion, would expose Agent to
liability or create any obligation or entail any consequence other than the
release of such Lien without recourse, representation, or warranty, and (ii)
such release shall not in any manner discharge, affect or impair the
Obligations or any Liens (other than those expressly being released), upon (or
obligations of Borrower in respect of) all interests retained by Borrower,
including, the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.
(b) Agent shall have no obligation whatsoever
to any of the Lenders to assure that the Collateral exists or is owned by
Borrower, is cared for, protected, or insured or has been encumbered, or that
the Liens of the Agent (for the benefit of the Lender Group) have been properly
or enforced or are entitled to any particular priority, or to exercise at all
or in any particular manner or under any duty of care, disclosure, or fidelity,
or to continue exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission or event
related thereto, subject to the terms and conditions contained herein, Agent
may act in any manner it may deem appropriate, in its sole discretion given
Agent's own interest in the Collateral in its capacity as one of the Lenders
and that Agent shall have no other duty or liability whatsoever to any Lender
as to any of the foregoing, except as otherwise provided herein.
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17.12 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF
PAYMENTS.
(a) Each of the Lenders agrees that it shall
not, without the express consent of the Co-Agents, and that it shall, to the
extent it is lawfully entitled to do so, upon the request of the Co-Agents, set
off against the Obligations any amounts owing by such Lender to Borrower or any
accounts of Borrower now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested to do
so by the Co-Agents, take or cause to be taken any action, including the
commencement of any legal or equitable proceedings, to foreclose any Lien on,
or otherwise enforce any security interest in, any of the Collateral the
purpose of which is, or could be, to give such Lender any preference or
priority against the other Lenders with respect to the Collateral.
(b) Subject to Section 17.8, if, at any time or
times any Lender shall receive (i) by payment, foreclosure, setoff, or
otherwise, any proceeds of Collateral or any payments with respect to the
Obligations of Borrower to such Lender arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's Pro-Rata Share, Tranche A
Pro-Rata Share, or Tranche B Pro-Rata Share, as the case may be, of all such
distributions by Agent, such Lender shall promptly (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in same day funds, as applicable, for the account of all of
the Lenders and for application to the Obligations in accordance with the
applicable provisions of this Agreement, or (2) purchase, without recourse or
warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro-Rata Shares, Tranche A
Pro-Rata Shares, or Tranche B Pro-Rata Shares, as the case may be; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party,
but without interest except to the extent that such purchasing party is
required to pay interest in connection with the recovery of the excess payment.
17.13 AGENCY FOR PERFECTION. Agent, and each Co-Agent, and
each Lender hereby appoints each other Lender as agent for the purpose of
perfecting the Liens of the Lender Group in assets which, in accordance with
Article 9 of the UCC can be perfected only by possession. Should any Lender
obtain possession of any such Collateral, such Lender shall notify Agent
thereof, and, promptly upon Agent's request therefor shall deliver such
Collateral to Agent or in accordance with Agent's instructions.
17.14 PAYMENTS BY AGENT TO THE LENDERS. All payments to be
made by Agent to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available funds pursuant to the instructions set forth
on Schedule C-1, or pursuant to such other wire transfer instructions as each
party may designate for itself by written notice to
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Agent. Concurrently with each such payment, Agent shall identify whether such
payment (or any portion thereof) represents principal, premium or interest on
revolving advances or otherwise.
17.15 CONCERNING THE COLLATERAL AND RELATED LOAN
DOCUMENTS. Each member of the Lender Group authorizes and directs Agent to
enter into this Agreement and the other Loan Documents relating to the
Collateral, for the benefit of the Lender Group. Each member of the Lender
Group agrees that any action taken by Agent, the Co-Agents, Required Lenders,
or all Lenders, as applicable, in accordance with the terms of this Agreement
or the other Loan Documents relating to the Collateral and the exercise by
Agent, the Co-Agents, Required Lenders, or all Lenders, as applicable, of their
respective powers set forth therein or herein, together with such other powers
that are reasonably incidental thereto, shall be binding upon all of the
Lenders.
17.16 FIELD AUDITS AND EXAMINATION REPORTS;
CONFIDENTIALITY; DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By
signing this Agreement, each Lender;
(a) is deemed to have requested that Agent
furnish such Lender, promptly after it becomes available, a copy of each field
audit or examination report (each a "Report" and collectively, "Reports")
prepared by Agent, and Agent shall so furnish each Lender with such Reports;
(b) expressly agrees and acknowledges that
Agent (i) does not make any representation or warranty as to the accuracy of
any Report, and (ii) shall not be liable for any information contained in any
Report;
(c) expressly agrees and acknowledges that the
Reports are not comprehensive audits or examinations, that Agent or other party
performing any audit or examination will inspect only specific information
regarding Borrower and will rely significantly upon Borrower's books and
records, as well as on representations of Borrower's personnel;
(d) agrees to keep all Reports and other
material information obtained by it pursuant to the requirements of this
Agreement in accordance with its reasonable customary procedures for handling
confidential information; it being understood and agreed by Borrower that in
any event such Lender may make disclosures (i) reasonably required by any bona
fide potential or actual Assignee, transferee, or Participant in connection
with any contemplated or actual assignment or transfer by such Lender of an
interest herein or any participation interest in such Lender's rights
hereunder, (ii) of information that has become public by disclosures made by
Persons other than such Lender, its Affiliates, assignees, transferees, or
participants, or (iii) as required or requested by any court, governmental or
administrative agency, pursuant to any subpoena or other legal process, or by
any law, statute, regulation, or court order; provided, however, that, unless
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prohibited by applicable law, statute, regulation, or court order, such Lender
shall notify Borrower of any request by any court, governmental or
administrative agency, or pursuant to any subpoena or other legal process for
disclosure of any such non-public material information concurrent with, or
where practicable, prior to the disclosure thereof; and
(e) without limiting the generality of any
other indemnification provision contained in this Agreement, agrees: (i) to
hold Agent and any such other Lender preparing a Report harmless from any
action the indemnifying Lender may take or conclusion the indemnifying Lender
may reach or draw from any Report in connection with any loans or other credit
accommodations that the indemnifying Lender has made or may make to Borrower,
or the indemnifying Lender's participation in, or the indemnifying Lender's
purchase of, a loan or loans of Borrower; and (ii) to pay and protect, and
indemnify, defend, and hold Agent and any such other Lender preparing a Report
harmless from and against, the claims, actions, proceedings, damages, costs,
expenses and other amounts (including, attorney costs) incurred by Agent and
any such other Lender preparing a Report as the direct or indirect result of
any third parties who might obtain all or part of any Report through the
indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrower to Agent, and, upon receipt of such request,
Agent shall provide a copy of same to such Lender promptly upon receipt
thereof; (y) to the extent that Agent is entitled, under any provision of the
Loan Documents, to request additional reports or information from Borrower, any
Lender may, from time to time, reasonably request Agent to exercise such right
as specified in such Lender's notice to Agent, whereupon Agent promptly shall
request of Borrower the additional reports or information specified by such
Lender, and, upon receipt thereof, Agent promptly shall provide a copy of same
to such Lender; and (z) any time that Agent renders to Borrower a statement
regarding the Loan Account, Agent shall send a copy of such statement to each
Lender.
17.17 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding
that certain of the Loan Documents now or hereafter may have been or will be
executed only by or in favor of Agent in its capacity as such, and not by or in
favor of the Lenders, any and all obligations on the part of Agent (if any) to
make any Advances shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such Advances not to exceed, in principal
amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 17.7, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group. No
Lender shall be responsible to Borrower or any other
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Person for any failure by any other Lender to fulfill its obligations to make
Advances, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
18. GENERAL PROVISIONS.
18.1 EFFECTIVENESS. This Agreement shall be binding and
deemed effective when executed by Borrower and the Lender Group.
18.2 SECTION HEADINGS. Headings and numbers have been set
forth herein for convenience only. Unless the contrary is compelled by the
context, everything contained in each section applies equally to this entire
Agreement.
18.3 INTERPRETATION. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against the
Lender Group or Borrower, whether under any rule of construction or otherwise.
On the contrary, this Agreement has been reviewed by all parties and shall be
construed and interpreted according to the ordinary meaning of the words used
so as to fairly accomplish the purposes and intentions of all parties hereto.
18.4 SEVERABILITY OF PROVISIONS. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
18.5 COUNTERPARTS; TELEFACSIMILE EXECUTION. This
Agreement may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and delivered,
shall be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement. Delivery of an executed counterpart
of this Agreement by telefacsimile shall be equally as effective as delivery of
an original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telefacsimile also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Agreement.
18.6 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the
incurrence or payment of the Obligations by Borrower or any guarantor of the
Obligations or the transfer by any or all of such parties to the Lender Group
of any property of either or both of such parties should for any reason
subsequently be declared to be void or voidable under any state or federal law
relating to creditors' rights, including provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences, and other voidable or
recoverable payments of money or transfers of property (collectively, a
"Voidable Transfer"), and if the Lender Group is required to repay or restore,
in whole or in part, any such Voidable Transfer, or elects to do so upon the
reasonable advice of its counsel, then, as to any such Voidable Transfer, or
the amount thereof that the Lender Group is required or elects to repay or
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restore, and as to all reasonable costs, expenses, and attorneys fees of the
Lender Group related thereto, the liability of Borrower or such guarantor
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.
18.7 INTEGRATION. This Agreement, together with the other
Loan Documents, reflects the entire understanding of the parties with respect
to the transactions contemplated hereby and shall not be contradicted or
qualified by any other agreement, oral or written, before the date hereof.
18.8 TIME IS OF THE ESSENCE. Time is of the essence of
this Agreement.
18.9 PRESS RELEASES. Borrower agrees that neither it nor
its Affiliates will in the future issue any press releases or other public
disclosure using the name of Foothill or GE Capital or their affiliates or
referring to this Agreement or the other Loan Documents without at least five
(5) Business Days' prior notice to Foothill and GE Capital and without the
prior written consent of Foothill and GE Capital unless (and only to the extent
that) Borrower or such Affiliate is required to do so under law and then, in
any event, Borrower or such Affiliate will consult with Foothill and GE Capital
before issuing such press release or other public disclosure. Borrower consents
to the publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
Agent or such Lender shall provide a draft of any such tombstone or similar
advertising material to Borrower for review and comment prior to the
publication thereof. Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements with Borrower's consent which shall not be unreasonably withheld
or delayed.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in Atlanta, Georgia.
THOMASTON XXXXX, INC.,
a Georgia corporation
By /s/
-----------------------------------------
Title:
-------------------------------------
FOOTHILL CAPITAL CORPORATION, a California
corporation with an office in Atlanta,
Georgia, as Agent, a Co-Agent and as a
Lender
By /s/
-----------------------------------------
Title:
-------------------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation
with an office in Atlanta, Georgia,
as a Co-Agent and as a Lender
By /s/
-----------------------------------------
Title:
-------------------------------------
BACK BAY CAPITAL FUNDING LLC,
a Delaware limited liability company, as a
Lender
By /s/
-----------------------------------------
Title:
-------------------------------------
