Exhibit 10.1
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THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
by and among
CONSOLTEX HOLDINGS, INC.,
CONSOLTEX INC.,
CONSOLTEX MEXICO, S.A. de C.V.,
CONSOLTEX (USA) INC.,
CONSOLTEX INTERNATIONAL INC.,
LINQ INDUSTRIAL FABRICS II, INC., and
RAFYTEK, S.A. de C.V.,
as Borrowers,
NATIONAL BANK OF CANADA
and
BANK OF AMERICA, N.A.
as Agents and as Lenders,
and
BANC OF AMERICA SECURITIES LLC
as Lead Arranger and Lead Book Manager
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
January 24, 2002
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TABLE OF CONTENTS
Page
ARTICLE I
Amendment, Restatement, Definitions and Terms
1.1 Amendment and Restatement................................................................................2
1.2 Definitions..............................................................................................3
1.3 Rules of Interpretation.................................................................................55
ARTICLE II
The Credit Facilities
2.1 Term Loan...............................................................................................58
2.2 Revolving Loans.........................................................................................61
2.3 Use of Proceeds.........................................................................................66
2.4 Notes...................................................................................................66
2.5 Canadian Swing Line.....................................................................................66
ARTICLE III
Letters of Credit
3.1 Letters of Credit.......................................................................................69
3.2 Reimbursement and Participations........................................................................69
ARTICLE IV
Bankers' Acceptances, Eurodollar Funding, Fees, and Payment Conventions
4.1. Bankers' Acceptances....................................................................................74
4.2 Interest Rate Options...................................................................................76
4.3 Conversions and Elections of Subsequent Interest Periods................................................77
4.4 Payment of Interest.....................................................................................78
4.5 Prepayments of Eurodollar Rate Loans and Bankers' Acceptances...........................................79
4.6 Manner of Payment.......................................................................................79
4.7 Fees....................................................................................................80
4.8 Pro Rata Payments.......................................................................................81
4.9 Computation of Rates and Fees...........................................................................82
4.10 Deficiency Advances; Failure to Purchase Participations.................................................82
4.11 Intraday Funding........................................................................................83
4.12 Risk Participation among Lenders........................................................................84
4.13. Utilization of Canadian Dollars.........................................................................85
ARTICLE V
Security
5.1 Security................................................................................................89
5.2 Further Assurances......................................................................................90
5.3 Information Regarding Collateral........................................................................90
5.4. Lock Boxes and Lock Box Accounts........................................................................91
5.5 Deposit Accounts........................................................................................91
5.6 Power of Attorney of Canadian Agent and Canadian Collateral Trustee.....................................92
5.7 Mexican Collateral......................................................................................92
ARTICLE VI
Change in Circumstances
6.1 Increased Cost and Reduced Return.......................................................................94
6.2 Limitation on Types of Loans............................................................................96
6.3 Illegality..............................................................................................96
6.4 Treatment of Affected Loans.............................................................................96
6.5 Compensation............................................................................................97
6.6 Taxes...................................................................................................97
ARTICLE VII
Conditions to Making Loans and Issuing Letters of Credit
7.1 Conditions of Closing and the Additional Advance of the US Term Loan...................................100
7.2 Conditions of Revolving Loans and Letter of Credit.....................................................105
7.3 Post-Closing...........................................................................................106
ARTICLE VIII
Representations and Warranties
8.1 Organization and Authority.............................................................................107
8.2 Loan Documents.........................................................................................107
8.3 Solvency...............................................................................................108
8.4 Subsidiaries and Stockholders..........................................................................108
8.5 Ownership Interests....................................................................................108
8.6 Financial Condition....................................................................................108
8.7 Title to Properties....................................................................................109
8.8 Taxes..................................................................................................109
8.9 Other Agreements.......................................................................................110
8.10 Litigation.............................................................................................110
8.11 Margin Stock...........................................................................................110
8.12 Regulated Company......................................................................................110
8.13 Patents, Etc...........................................................................................110
8.14 No Untrue Statement....................................................................................111
8.15 No Consents, Etc.......................................................................................111
8.16 Employee Benefit Plans.................................................................................111
8.17 No Default.............................................................................................113
8.18 Environmental Laws.....................................................................................113
8.19 Employment Matters.....................................................................................113
8.20 RICO...................................................................................................114
8.21 Assets of Consoltex Holdings...........................................................................114
8.22. Lock Box Accounts......................................................................................114
8.23 Perfected Security Interests...........................................................................114
8.24 Fee Limitation Agreement...............................................................................114
8.25 Subordinated Note Lockup Agreements....................................................................114
ARTICLE IX
Affirmative Covenants
9.1 Financial Reports, Etc.................................................................................115
9.2 Maintain Properties....................................................................................119
9.3 Existence, Qualification, Etc..........................................................................120
9.4 Regulations and Taxes..................................................................................120
9.5 Insurance..............................................................................................120
9.6 True Books.............................................................................................121
9.7 Right of Inspection....................................................................................121
9.8 Observe all Laws.......................................................................................122
9.9 Governmental Licenses..................................................................................122
9.10 Covenants Extending to Other Persons...................................................................122
9.11 Officer's Knowledge of Default.........................................................................122
9.12 Suits or Other Proceedings.............................................................................123
9.13 Notice of Environmental Complaint or Condition.........................................................123
9.14 Environmental Compliance...............................................................................123
9.15 Indemnification........................................................................................123
9.16 Further Assurances.....................................................................................124
9.17 Employee Benefit Plans.................................................................................124
9.18 Continued Operations...................................................................................125
9.19. Lease Purchase Agreement...............................................................................126
9.20 Lock Boxes and Lock Box Accounts.......................................................................126
9.21 Payment of FIBC Holdback Amount........................................................................126
9.22 Consummation of the Subordinated Note Exchange.........................................................127
9.23 Waivers of Lien Rights.................................................................................127
9.24 Non-Exchanged Subordinated Notes.......................................................................127
ARTICLE X
Negative Covenants
10.1 Financial Covenants....................................................................................128
10.2 Acquisitions...........................................................................................129
10.3 Capital Expenditures...................................................................................129
10.4 Liens..................................................................................................129
10.5 Indebtedness...........................................................................................131
10.6 Transfer of Assets.....................................................................................133
10.7 Investments............................................................................................134
10.8 Merger or Consolidation................................................................................135
10.9 Restricted Payments....................................................................................135
10.10 Transactions with Affiliates...........................................................................136
10.11 Compliance with ERISA, the Code, Foreign Benefit Laws, Mexican Benefit Law and Canadian Benefit Law....136
10.12 Fiscal Year............................................................................................137
10.13 Dissolution, etc.......................................................................................137
10.14 Limitations on Sales and Leasebacks....................................................................138
10.15 Change in Control......................................................................................138
10.16 Rate Hedging Obligations...............................................................................138
10.17 Negative Pledge Clauses................................................................................138
10.18 Compensation; Reimbursement of Expenses................................................................138
10.19 Change in Accountants..................................................................................138
10.20 Prepayments, Etc. of Indebtedness......................................................................138
10.21. Subordinated Debt......................................................................................139
10.22. PIK Notes..............................................................................................139
10.23 Fee Limitation Agreement...............................................................................140
10.24. Consoltex Holdings.....................................................................................140
10.25 Limitations on Upstreaming.............................................................................140
10.26 Limitations on Deposit Accounts........................................................................140
10.27 Limitations on Subsidiaries............................................................................140
10.28. AIP PIK Notes..........................................................................................140
10.29. Payment Deferral Arrangements..........................................................................141
10.30. Tennessee Assets.......................................................................................141
10.31. Subordinated Note Lockup Agreements....................................................................141
10.32. FIBC Escrow Agreement..................................................................................141
ARTICLE XI
Events of Default and Acceleration
11.1 Events of Default......................................................................................142
11.2 Agents to Act..........................................................................................145
11.3 Cumulative Rights......................................................................................145
11.4 No Waiver..............................................................................................146
11.5 Allocation of Proceeds.................................................................................146
ARTICLE XII
The Agent
12.1 Appointment, Powers, and Immunities....................................................................148
12.2 Reliance by Agents.....................................................................................148
12.3 Defaults...............................................................................................149
12.4 Rights as Lender.......................................................................................149
12.5 Indemnification........................................................................................150
12.6 Non-Reliance on Agent and Other Lenders................................................................150
12.7 Resignation of Agent...................................................................................150
ARTICLE XIII
Miscellaneous
13.1 Assignments and Participations.........................................................................152
13.2 Notices................................................................................................154
13.3 Right of Set-off; Adjustments..........................................................................157
13.4 Survival...............................................................................................157
13.5 Expenses...............................................................................................157
13.6 Amendments and Waivers.................................................................................158
13.7 Counterparts; Facsimile Signatures.....................................................................159
13.8 Termination............................................................................................159
13.9 Indemnification; Limitation of Liability...............................................................159
13.10 Severability...........................................................................................160
13.11 Entire Agreement.......................................................................................160
13.12 Agreement Controls.....................................................................................161
13.13 Usury Savings Clause...................................................................................161
13.14 Governing Law; Waiver of Jury Trial....................................................................161
13.15 Confidentiality........................................................................................163
13.16 Events of Default......................................................................................163
13.17 Credit Agreement.......................................................................................163
13.18 Reaffirmation of Guarantors............................................................................163
13.19 Consoltex International Reincorporation................................................................163
EXHIBIT A: Applicable Commitment Percentages...........................................................A-1
EXHIBIT B: Form of Assignment and Acceptance...........................................................B-1
EXHIBIT C: Notice of Appointment (or Revocation) of Authorized Representative..........................C-1
EXHIBIT D: Form of Borrowing Base Certificate..........................................................D-1
EXHIBIT E: Form of Borrowing Notice....................................................................E-1
EXHIBIT F: Form of Interest Rate Selection Notice......................................................F-1
EXHIBIT G-1: Form of Revolving Note....................................................................G-1-1
EXHIBIT G-2: Form of Term Note.........................................................................G-2-1
EXHIBIT H: Form of Fourth Amendment to Mortgage........................................................H-1
EXHIBIT I-1: Form of Opinion of Xxxxxxxx & Xxxxx.......................................................I-1-1
EXHIBIT I-2: Form of Opinion of Young, Clement, Rivers & Tisdale, LLP..................................I-2-1
EXHIBIT I-3: Form of Opinion of Xxxxxxx XxXxxxxx Stirling Scales.......................................I-3-1
EXHIBIT I-4: Form of Opinion of Xxxxx Xxxxxxx Freed & Gesmer...........................................I-4-1
EXHIBIT I-5: Form of Opinion of Xxxxx, Xxxxxxx x Xxxxxxx, S.C..........................................I-5-1
EXHIBIT J: Form of Compliance Certificate..............................................................J-1
EXHIBIT K: Form of Waiver of Lien Rights...............................................................K-1
EXHIBIT L: Form of Excess Cash Flow Certificate........................................................L-1
Schedule 5.3: Information Regarding Collateral.......................................................S-1
Schedule 5.4: Lock Box and Cash Collateral Accounts..................................................S-2
Schedule 5.5: Deposit Accounts ......................................................................S-3
Schedule 8.4: Subsidiaries and Investments in Other Persons .........................................S-4
Schedule 8.6: Indebtedness ..........................................................................S-5
Schedule 8.7: Liens .................................................................................S-6
Schedule 8.8: Tax Matters ...........................................................................S-7
Schedule 8.10: Litigation ............................................................................S-8
Schedule 8.13: Intellectual Property .................................................................S-9
Schedule 8.16: Pension Plans ........................................................................S-10
Schedule 8.16(e): Unfunded Employment Benefit Plans.....................................................S-11
Schedule 8.19: Employment Matters ..................................................................S-12
THIRD AMENDED & RESTATED CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
January 24, 2002 (as amended, restated, supplemented, amended and restated
or otherwise modified, and as in effect from time to time, the
"Agreement"), is made by and among each of CONSOLTEX HOLDINGS, INC., a
Delaware corporation having its principal place of business on the date
hereof in New York, New York, U.S.A., ("Consoltex Holdings"), CONSOLTEX
INC., a corporation incorporated under the laws of New Brunswick, Canada,
having its principal place of business on the date hereof in Xxxxx
Xxxxx-Xxxxxxx, Xxxxxx, Xxxxxx ("Consoltex"), CONSOLTEX (USA) INC., a New
York corporation having its principal place of business on the date hereof
in New York, New York, U.S.A. ("Consoltex USA"), CONSOLTEX INTERNATIONAL
INC. (formerly known as The Xxxxxx-Xxxxxxxx Group Ltd. (formerly known as
The Balson-Hercules Group Ltd.)), a Rhode Island corporation having its
principal place of business on the date hereof in New York, New York,
U.S.A. ("Consoltex International"), LINQ INDUSTRIAL FABRICS II, INC., a
Delaware corporation having its principal place of business on the date
hereof in Summerville, South Carolina, U.S.A. ("LINQ"), CONSOLTEX MEXICO,
S.A. DE C.V., a Mexican corporation having its principal place of business
on the date hereof in Mexico City, Mexico ("Consoltex Mexico"), and
RAFYTEK, S.A. DE C.V., a Mexican corporation having its principal place of
business on the date hereof in Mexico City, Mexico ("Rafytek") (Consoltex
Holdings, Consoltex, Consoltex USA, Consoltex International, LINQ,
Consoltex Mexico and Rafytek are collectively referred to herein as the
"Borrowers" and individually referred to as a "Borrower");
RAFYTICA, S.A., a Costa Rican corporation having its principal place of
business on the date hereof in San Xxxx, Costa Rica ("Rafytica"), ROYALTON
MEXICANA, S.A. DE C.V., a Mexican corporation having its principal place of
business on the date hereof in Naucalpan de Xxxxxx, Xxxxxx ("Xxxxxxxx"),
xxx XXXXXXXX XX XXXXXX S.A. DE C.V., a Mexican corporation having its
principal place of business on the date hereof in Mexico City, Mexico ("New
Royalton");
NATIONAL BANK OF CANADA, a bank governed by the Bank Act (Canada) (the
"Bank Act"), having its head office in Montreal, Quebec, Canada, in its
capacity as a Lender ("NBC"), BANK OF AMERICA, N.A., successor in interest
to NationsBank, National Association, a national banking association
organized and existing under the laws of the United States, having its
principal office in Charlotte, North Carolina, U.S.A., in its capacity as a
Lender ("Bank of America"), and EACH OTHER FINANCIAL INSTITUTION EXECUTING
AND DELIVERING A SIGNATURE PAGE HERETO and each other financial institution
which may hereafter execute and deliver an instrument of assignment with
respect to this Agreement pursuant to Section 13.1 (hereinafter NBC, Bank
of America and each other such financial institutions may be referred to
individually as a "Lender" or collectively as the "Lenders"), NATIONAL BANK
OF CANADA, in its capacity as administrative agent for the Canadian
Facilities Lenders (as defined herein) (in such capacity, or any successor
administrative agent appointed in accordance with the terms of Section
12.7, the "Canadian Agent"), and BANK OF AMERICA, N.A., successor in
interest to NationsBank, National Association, in its capacity as
administrative agent for the U.S. Facilities Lenders (as defined herein)
(in such capacity, or any successor administrative agent appointed in
accordance with the terms of Section 12.7, the "US Agent" and together with
the Canadian Agent, the "Agents");
W I T N E S S E T H:
WHEREAS, the Borrowers, the Agents and the Lenders are party to
that certain Second Amended and Restated Credit Agreement dated as of
November 7, 2000, as amended by Amendment No. 1 to Second Amended and
Restated Credit Agreement dated as of December 29, 2000, as further amended
by Amendment No. 2 to Second Amended and Restated Credit Agreement dated as
of March 30, 2001, as further amended by Amendment No. 3 to Second Amended
and Restated Credit Agreement dated as of May 21, 2001, as further amended
by Amendment No. 4 to Second Amended and Restated Credit Agreement dated as
of May 24, 2001, as further amended by Amendment No. 5 to Second Amended
and Restated Credit Agreement dated as of August 8, 2001, as further
amended by Amendment No. 6 to Second Amended and Restated Credit Agreement
dated as of October 26, 2001, as further amended by the Consent and Waiver
Agreement dated as of December 19, 2001, and as further amended by
Amendment No. 7 to Second Amended and Restated Credit Agreement dated as of
December 28, 2001 (as so amended, the "Existing Credit Agreement"),
pursuant to which the Lenders have agreed to make available to certain
Borrowers each of the following: (a) a U.S. term loan facility, (b) a
Canadian term loan facility, (c) a US revolving credit facility, and (d) a
Canadian revolving credit facility, all in the respective amounts and on
the terms therein provided; and
WHEREAS, the Borrowers have requested that the Lenders amend and
restate the Existing Credit Agreement, among other things, to revise the
financial covenants and to extend the Stated Termination Date; and
WHEREAS, the Lenders and the Agents are willing to amend and
restate the Existing Credit Agreement and to continue to make certain
credit facilities available to the Borrowers upon the terms and conditions
set forth herein;
NOW, THEREFORE, the Borrowers, the Lenders and the Agents, along
with the Guarantors, hereby agree as follows:
ARTICLE I
Amendment, Restatement, Definitions and Terms
1.1 Amendment and Restatement.
(a) Each Borrower, each Guarantor, the Agents and the Lenders
hereby agree that upon the effectiveness of this Agreement, the terms and
provisions of the Existing Credit Agreement which in any manner govern or
evidence the Obligations, the rights and interests of the Agents and the
Lenders and any terms, conditions or matters related to any thereof, shall
be and hereby are amended and restated in their entirety by the terms,
conditions and provisions of this Agreement, and the terms and provisions
of the Existing Credit Agreement, except as otherwise expressly provided
herein, shall be superseded by this Agreement.
(b) Notwithstanding this amendment and restatement of the
Existing Credit Agreement, including anything in this Section 1.1, and of
any related "Loan Document" (as such term is defined in the Existing Credit
Agreement and referred to herein, individually or collectively, as the
"Prior Loan Documents"), (i) all of the indebtedness, liabilities and
obligations owing by any Credit Party under the Existing Credit Agreement
and other Prior Loan Documents shall continue as Obligations hereunder, and
(ii) each of this Agreement and the Notes and any other Loan Document (as
defined herein) that is amended and restated in connection with this
Agreement is given as a substitution of, and not as a payment of, the
indebtedness, liabilities and obligations of the Borrowers and the
Guarantors under the Existing Credit Agreement or any Prior Loan Document
and neither the execution and delivery of such documents nor the
consummation of any other transaction contemplated hereunder is intended to
constitute a novation of the Existing Credit Agreement or of any of the
other Prior Loan Documents or any obligations thereunder. Upon the
effectiveness of this Agreement, all Loans and Bankers Acceptances owing by
the Borrowers, or any of them, and outstanding under the Existing Credit
Agreement shall continue as Loans or Bankers Acceptances, as applicable,
hereunder and shall constitute Advances hereunder, and all Letters of
Credit outstanding under the Existing Credit Agreement and any of the Prior
Loan Documents shall continue as Letters of Credit hereunder. Base Rate
Loans under the Existing Agreement shall accrue interest at the Base Rate
hereunder and the parties hereto agree that the Interest Periods for all
Eurodollar Rate Loans and all Bankers' Acceptances outstanding under the
Existing Credit Agreement on the Closing Date shall remain in effect
without renewal, interruption or extension as Eurodollar Rate Loans or
Bankers' Acceptances, as applicable, under this Agreement and accrue
interest at the Eurodollar Rate or as Bankers' Acceptances hereunder;
provided that on and after the Closing Date the Applicable Margin
applicable to any Loan, Bankers' Acceptance or Letter of Credit hereunder
shall be as set forth in the definition of Pricing Grid below, without
regard to any margin applicable thereto under the Existing Credit Agreement
prior to the Closing Date.
1.2 Definitions. For the purposes of this Agreement, in
addition to the definitions set forth above, the following terms shall have
the respective meanings set forth below:
"Acceleration Event" means that (i) an Event of Default
has occurred and is continuing and (ii) all or a portion of the
Obligations have become due and payable in accordance with the
terms of Section 11.1(A).
"Accounts Receivable" means all accounts receivable of
the Borrowers (excluding Consoltex Holdings, Consoltex Mexico and
Rafytek) either (a) created by such Borrower in the ordinary
course of the business of such Borrower arising from the sale of
inventory and/or the provision of services in such Borrower's
ordinary course of business, or (b) acquired by such Borrower from
Consoltex Mexico or any of the Mexican Companies in the ordinary
course of the business of such Borrower so long as such accounts
receivable originally arose from the sale of inventory and/or the
provision of services in the ordinary course of business of the
transferor thereof.
"Acquisition" means the acquisition of (i) a controlling
equity interest in another Person (including the purchase of an
option, warrant or convertible or similar type security to acquire
such a controlling interest at the time it becomes exercisable by
the holder thereof), whether by purchase of such equity interest
or upon exercise of an option or warrant for, or conversion of
securities into, such equity interest, or (ii) assets of another
Person which constitute all or substantially all of the assets of
such Person or of a line or lines of business conducted by such
Person.
"Additional Equity Investment" means each of the
following: (a) the net amount of cash received from the issuance
of any additional equity securities by Consoltex Holdings to, or
from any equity investment made in or contributed surplus
contributed to Consoltex Holdings by, AIP, one of its affiliated
investment funds or AIP/CGI, after the Closing Date, in each case
so long as not subject to any call or put provisions and having no
dividends (other than paid-in-kind dividends) payable thereon
until after the date that is 95 days after the occurrence of the
Facility Termination Date, and (b) the net amount of cash received
by Consoltex Holdings after the Closing Date from the issuance of
any AIP PIK Notes.
"Adjusted Consolidated EBITDA" means (a) for the
Four-Quarter Period ended December 31, 2001, Consolidated EBITDA
for such Four-Quarter Period, (b) for the one fiscal quarter ended
March 31, 2002, Consolidated EBITDA for such fiscal quarter times
four, (c) for the two fiscal quarters ended June 30, 2002,
Consolidated EBITDA for such two fiscal quarters times two, (d)
for the three fiscal quarters ended September 30, 2002,
Consolidated EBITDA for such three fiscal quarters times
four-thirds (4/3), and (e) for each period of measurement
thereafter, Consolidated EBITDA for such period.
"Advance" means any borrowing under any Facility.
"Advance Date Exchange Rate" means, with respect to a
specified Advance or Loan in Canadian Dollars, a Canadian Letter
of Credit issued in Canadian Dollars or a Bankers' Acceptance
accepted in Canadian Dollars, the Spot Rate of Exchange determined
for the date such Advance is originally made, such Canadian Letter
of Credit is issued or such Bankers' Acceptance is accepted,
provided that, if such Advance, Loan or Bankers' Acceptance is
Continued, or such Canadian Letter of Credit is renewed, for a
subsequent Interest Period in Canadian Dollars, or if an Advance
originally made in Dollars is Converted into an Advance or Loan in
Canadian Dollars, in each case pursuant to Section 4.3, the
Advance Date Exchange Rate with respect to such Advance or Loan
shall be the Spot Rate of Exchange two Business Days preceding the
effective date of the latest Continuation or the Conversion of
such Advance, Loan or Bankers' Acceptance, or renewal of such
Canadian Letter of Credit, and the Dollar Equivalent Amount of
such Advance, Loan, Bankers' Acceptance or Canadian Letter of
Credit shall be adjusted as set forth in Section 4.13; provided
further that, if such Canadian Letter of Credit is issued for a
term exceeding three (3) months, the Advance Date Exchange Rate
with respect to such Canadian Letter of Credit shall be the Spot
Rate of Exchange on the last Business Day of each fiscal quarter
of Consoltex Holdings and the Dollar Equivalent Amount of such
Canadian Letter of Credit shall be adjusted as set forth in
Section 4.13; and provided further that, if such Canadian Letter
of Credit is drawn upon, the Advance Date Exchange Rate shall be
the Spot Rate of Exchange for the date of such drawing only for
the purposes of repayment of Reimbursement Obligations and
determining the Dollar Equivalent Amount of such Canadian Letter
of Credit Outstandings; and provided further that, with respect to
each Base Rate Loan outstanding on the last Business Day of each
fiscal quarter of Consoltex Holdings, the Advance Date Exchange
Rate with respect to such Base Rate Loan shall be the Spot Rate of
Exchange on the last Business Day of such fiscal quarter and the
Dollar Equivalent Amount of such Base Rate Loan shall be adjusted
as set forth in Section 4.13.
"Affiliate" means any Person (i) which directly or
indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with any Borrower; or
(ii) which beneficially owns or holds 10% or more of any class of
the outstanding voting stock (or in the case of a Person which is
not a corporation, 10% or more of the equity interest) of any
Borrower; or 10% or more of any class of the outstanding voting
stock (or in the case of a Person which is not a corporation, 10%
or more of the equity interest) of which is beneficially owned or
held by any Borrower. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through ownership of voting stock, by contract or otherwise.
"Agents" has the meaning given such term in the preamble
hereto.
"Agreement" has the meaning given such term in the
preamble hereto.
"AIP" means AIP Capital Fund II and its Affiliates,
including without limitation American Industrial Partners, a
Delaware general partnership.
"AIP Capital Fund II" means American Industrial Partners
Capital Fund II, L.P., a Delaware limited partnership.
"AIP PIK Notes" means any subordinated debenture or note
issued by Consoltex Holdings in favor of AIP, one of its
affiliated investment funds or AIP/CGI from time to time on or
after January 1, 2001, and any additional paid-in-kind notes
issued pursuant to the terms of any AIP PIK Notes, each of which
debentures and notes shall provide for the accrual of interest on
a non-cash basis, is subordinated to the Obligations and defers
all cash payments (including prepayments, whether by acceleration
or otherwise) of interest, principal, fees or other amounts until
after the day that is 95 days after the occurrence of the Facility
Termination Date, all in form and substance satisfactory to the
Agents.
"AIP/CGI" means AIP/CGI, Inc., a Delaware corporation.
"Alternate Code" has the meaning given such term in
Section 1.3(b).
"Annualized Capital Expenditures" means (a) for the
period ended June 30, 2002, Capital Expenditures during the two
fiscal quarters ended June 30, 2002 times two, (b) for the period
ended September 30, 2002, Capital Expenditures for the three
fiscal quarters ended September 30, 2002 times four-thirds (4/3),
(c) for the period ended December 31, 2002, Capital Expenditures
during the Four-Quarter Period ended December 31, 2002, and (d)
for each period of measurement thereafter, Capital Expenditures
for such period.
"Annualized Combined Consoltex EBITDA" means (a) for the
one fiscal quarter ended June 30, 2002, Combined Consoltex EBITDA
for such fiscal quarter times four, (b) for the two fiscal
quarters ended September 30, 2002, Combined Consoltex EBITDA for
such two fiscal quarters times two, (c) for the three fiscal
quarters ended December 31, 2002, Combined Consoltex EBITDA for
such three fiscal quarters times four-thirds (4/3), and (d) for
each period of measurement thereafter, Combined Consoltex EBITDA
for such period.
"Annualized Consolidated EBITDA" means (a) for the one
fiscal quarter ended June 30, 2002, Consolidated EBITDA for such
fiscal quarter times four, (b) for the two fiscal quarters ended
September 30, 2002, Consolidated EBITDA for such two fiscal
quarters times two, (c) for the three fiscal quarters ended
December 31, 2002, Consolidated EBITDA for such three fiscal
quarters times four-thirds (4/3), and (d) for each period of
measurement thereafter, Consolidated EBITDA for such period.
"Annualized Consolidated Fixed Charges" means:
(a) for the one fiscal quarter ended June 30,
2002, the sum of (i) Consolidated Fixed Charges for such
fiscal quarter times four and (ii) all payments of
principal in respect of Consolidated Total Debt regularly
scheduled to be made at any time during the calendar year
ending December 31, 2002;
(b) for the two fiscal quarters ended September
30, 2002, the sum of (i) Consolidated Fixed Charges for
such fiscal quarters times two and (ii) all payments of
principal in respect of Consolidated Total Debt regularly
scheduled to be made at any time during the calendar year
ending December 31, 2002;
(c) for the three fiscal quarters ended December
31, 2002, the sum of (i) Consolidated Fixed Charges for
such fiscal quarters times four-thirds (4/3) and (ii) all
payments of principal in respect of Consolidated Total
Debt regularly scheduled to be made at any time during
the calendar year ending December 31, 2002;
(d) for each period of measurement thereafter,
the sum of (i) Consolidated Fixed Charges for such period
and (ii) all payment of principal in respect of
Consolidated Total Debt regularly scheduled to be made at
any time during such period (other than amounts of
Revolving Credit Loans and Term Loans due on the Stated
Termination Date); provided, however, that in each of (a)
through (d) above, to the extent otherwise included,
mandatory prepayments of principal made in accordance
with Section 2.1(e) shall be excluded from part (ii) of
each such calculation.
"Annualized LINQ EBITDA" means (a) for the one fiscal
quarter ended June 30, 2002, LINQ EBITDA for such fiscal quarter
times four, (b) for the two fiscal quarters ended September 30,
2002, LINQ EBITDA for such two fiscal quarters times two, (c) for
the three fiscal quarters ended December 31, 2002, LINQ EBITDA for
such three fiscal quarters times four-thirds (4/3), and (d) for
each period of measurement thereafter, LINQ EBITDA for such
period.
"Applicable Commitment Fee" means, at any time and from
time to time, 0.50% per annum.
"Applicable Commitment Percentage" means, for each Lender
at any time, a fraction, (i) with respect to the US Revolving
Credit Facility and the US Letter of Credit Facility, the
numerator of which shall be such Lender's Commitment to the US
Revolving Credit Facility and the denominator of which shall be
the Total Commitment with respect to the US Revolving Credit
Facility, (ii) with respect to the Canadian Revolving Credit
Facility and the Canadian Letter of Credit Facility, the numerator
of which shall be such Lender's Commitment to the Canadian
Revolving Credit Facility and the denominator of which shall be
the Total Commitment with respect to the Canadian Revolving Credit
Facility, (iii) with respect to the US Term Loan Facility, the
numerator of which shall be such Lender's Commitment to the US
Term Loan Facility and the denominator of which shall be the Total
Commitment with respect to the US Term Loan Facility, and (iv)
with respect to the Canadian Term Loan Facility, the numerator of
which shall be such Lender's Commitment to the Canadian Term Loan
Facility and the denominator shall be the Total Commitment with
respect to the Canadian Term Loan Facility, which Applicable
Commitment Percentage for each Lender with respect to each
applicable Facility as of the Closing Date is as set forth in
Exhibit A; provided that the Applicable Commitment Percentage of
each Lender shall be increased or decreased to reflect any
assignments to or by such Lender effected in accordance with
Section 13.1.
"Applicable Lending Office" means, for each Lender and
for each Type of Loan, the "Lending Office" of such Lender (or of
an affiliate of such Lender) designated for such Type of Loan on
the signature pages hereof or such other office of such Lender (or
an affiliate of such Lender) as such Lender may from time to time
specify to the Agent and the Borrower by written notice in
accordance with the terms hereof as the office by which its Loans
of such Type are to be made and maintained.
"Applicable Margin" means that percent per annum as set
forth as the Applicable Margin in the Pricing Grid and subject to
further adjustment as therein provided.
"Applicable Outstanding Percentage" means, with respect
to any Lender at any date of determination, a fraction, the
numerator of which shall be the sum of all Outstandings owing to
such Lender under all the Facilities at such date and the
denominator of which shall be the total of all the Outstandings
under all the Facilities at such date.
"Applicable Total Commitment Percentage" means, with
respect to any Lender on any date, a fraction, the numerator of
which shall be such Lender's aggregate Commitments under all the
Facilities on such date and the denominator of which shall be the
sum of all the Lenders' Commitments under all the Facilities on
such date; provided that the Applicable Total Commitment
Percentage of each Lender shall be increased or decreased to
reflect any assignments to or by such Lender effected in
accordance with Section 13.1.
"Applications and Agreements for Letters of Credit"
means, collectively, the Applications and Agreements for Letters
of Credit, or similar documentation, executed by any applicable
Borrower under a Revolving Credit Facility from time to time and
delivered to the applicable Issuing Bank to support the issuance
of Letters of Credit.
"Asset Disposition" means any voluntary disposition,
whether by sale, lease or transfer, of (a) any of the assets of
any Borrower or any of its Subsidiaries that is permitted under
Section 10.6(c), (f) or (g), and (b) any of the capital stock, or
securities or investments exchangeable, exercisable or convertible
for or into, or otherwise entitling the holder to receive any of
the capital stock, of any Subsidiary of Consoltex Holdings (other
than a disposition to a Borrower or a Guarantor).
"Assignment and Acceptance" shall mean an Assignment and
Acceptance substantially in the form of Exhibit B (with blanks
appropriately filled in) delivered to the Agents in connection
with an assignment of all or a portion of a Lender's interest
under this Agreement pursuant to Section 13.1.
"Authorized Representative" means any of the President or
any Vice President of Consoltex Holdings or, with respect to
financial matters, the chief financial officer of Consoltex
Holdings, or any other Person expressly designated by the Board of
Directors of Consoltex Holdings (or the appropriate committee
thereof) as an Authorized Representative, as set forth from time
to time in a certificate delivered to the Agents in substantially
the form of Exhibit C.
"Available Liquidity" means, as at any date of
determination thereof, an amount equal to the result of (a) total
availability under the Revolving Credit Facilities (without regard
to Outstandings thereunder) after giving effect to the Borrowing
Base (but excluding any Overadvance Amount), plus (b) (without
duplication) collected cash balances in the deposit accounts of
the Borrowers and the Guarantors (limited to $500,000 of cash not
subject to a Cash Collateral Agreement and the provisions of this
Agreement relating to Lock Boxes and Lock Box Accounts), minus (c)
all Outstandings under the Revolving Credit Facilities, including
Outstandings under the Letter of Credit Facilities, all Bankers'
Acceptances and all Canadian Letters of Credit, minus (d) any
accounts payable of any Borrowers and any Guarantor that are
unpaid more than 30 days past the due date set forth on the
invoices for such accounts payable, minus (e) any payroll, taxes
or other amounts owed by any of the Borrowers and any of the
Guarantors that are due but not paid, minus (f) any other amounts
that any of the Borrowers or any of the Guarantors has accrued or
failed to pay to the extent that such accrual or failure to pay is
inconsistent with such Borrower's or Guarantor's past practice in
paying or accruing similar items prior to the Closing Date.
"Bank Act" has the meaning given such term in the
preamble hereto.
"Bank of America" has the meaning given such term in the
preamble hereto.
"Bankers' Acceptances" means (i) with respect to any
Canadian Facilities Lender (other than a Non-BA Lender), a
non-interest bearing xxxx of exchange drawn by Consoltex, on the
standard form used by the Canadian Facility Lender accepting it,
at its Lending Office, or (ii) with respect to a Non-BA Lender, a
Discount Note payable to the order of such Non-BA Lender, both the
xxxx of exchange and the Discount Note to be denominated in
Canadian Dollars and issued under a Canadian Facility. Subject to
the Canadian Facility Lenders electing to use a clearing house as
contemplated by the Depository Bills and Notes Act (S.C. 1998 c.
13) (the "Act"), "Bankers' Acceptance" shall mean a depository
xxxx (as defined in the Act) in Canadian Dollars signed by a
Borrower and accepted by a Canadian Facility Lender.
"Bankers' Acceptance Segment" means a Segment under a
Canadian Facility utilized by way of Bankers' Acceptances.
"BAS" means Banc of America Securities LLC and its
successors.
"Base Rate" means, as applicable:
(i) with regard to Advances made in Canadian
Dollars under either of the Canadian Facilities, the
Applicable Margin plus the greater, for each day, of:
(a) the Reference Rate then in force; or
(b) the annual rate of interest which
is the rate determined as being the arithmetic
average (rounded upwards, if necessary, to the
nearest 0.01%) of the discount rates for
Canadian Dollar bankers' acceptances having a
maturity date of thirty (30) days appearing on
the CDOR Page of the "Reuters Screen" (as
defined in the 1991 International Swap and
Derivatives Association Inc. definitions, as
amended or modified from time to time) at 10:00
a.m. (Montreal time) on such day or, if such day
is not a Business Day, on the preceding Business
Day or if such rates do not appear on the CDOR
Page of the Reuters Screen as contemplated on
any such day, then the rate shall be calculated
as the arithmetic average of the discount rate
for Canadian Dollar bankers' acceptances having
a maturity date of 30 days quoted for such day
by three brokers of good standing selected by
the Canadian Agent, in each case plus 1.25%;
(ii) with regard to Advances made in Dollars
under either of the Canadian Facilities, the Applicable
Margin plus the greater, for each day, of (a) the
Reference Rate then in effect or (b) the Federal Funds
Rate on such day plus 1.25%; and
(iii) with regard to Advances made under either
of the US Facilities, the Applicable Margin plus the per
annum rate of interest equal to the greater, for each
day, of (a) the Prime Rate then in effect or (b) the
Federal Funds Rate on such day plus 0.50%.
Any change in the Base Rate resulting from a change in
the Prime Rate, the Reference Rate or the Federal Funds Rate shall
become effective as of 12:01 A.M. on the Business Day on which
each such change occurs. Each of the Base Rate, the Reference Rate
and the Prime Rate is a reference rate used by the Agents in
determining interest rates on certain loans and is not intended to
be the best or lowest rate of interest charged on any extension of
credit to any debtor.
"Base Rate Loan" means a Loan (including a Segment) for
which the rate of interest is determined by reference to the Base
Rate.
"Base Rate Refunding Loan" means a Base Rate Loan made
under a Revolving Credit Facility either to (i) satisfy
Reimbursement Obligations arising from a drawing under a Letter of
Credit or (ii) pay NBC in respect of Canadian Swing Line Loan
Outstandings.
"Base Rate Segment" means a Segment bearing interest or
to bear interest at the Base Rate.
"Board" means the Board of Governors of the Federal
Reserve System (or any successor body).
"Borrower" and "Borrowers" have the meanings given such
terms in the preamble hereto.
"Borrowers' Canadian Account" means , as the context may
require, (i) demand deposit account number 00-000-00 with the
Canadian Agent with respect to Consoltex for Canadian Dollars, and
(ii) demand deposit account number 00-000-00 with the Canadian
Agent with respect to Consoltex for Dollars, as applicable, and in
each instance includes any successor account with the Canadian
Agent, which may be maintained at one or more offices of the
Canadian Agent or an agent of the Canadian Agent, for the
Borrowers under the Canadian Facilities, as is agreed in writing
from time to time between the Canadian Agent and such Borrowers.
"Borrowers' US Account" means, as the context may
require, (i) demand deposit account number 0000-000-000 with
respect to LINQ, (ii) demand deposit account number 0000-000-000
with respect to Consoltex International, (iii) demand deposit
account number 0000-000-000 with respect to Consoltex USA, and
(iv) demand deposit account number 0000-000-000 with respect to
Rafytek, as applicable, and in each instance including any
successor account with the US Agent, which may be maintained at
one or more offices of the US Agent or an agent of the US Agent,
for such Borrowers under the US Facilities, as is agreed in
writing from time to time between the US Agent and such Borrowers.
"Borrowing Base" means, as of any date of determination
thereof, an amount equal to (a) the sum of (i) the product of the
aggregate amount as of such date of all Eligible Receivables, as
set forth in the most recent Borrowing Base Certificate delivered
pursuant to Section 9.1(h), multiplied by 80%, (ii) the product of
the aggregate amount as of such date of all Eligible Factor
Receivables, as set forth in the most recent Borrowing Base
Certificate delivered pursuant to Section 9.1(h), multiplied by
80%, (iii) the lesser of (A) $2,500,000 or (B) the product of the
aggregate stated amount as of such date of all Eligible Letters of
Credit, as set forth in the most recent Borrowing Base Certificate
delivered pursuant to Section 9.1(h), multiplied by 50%, and (iv)
the lesser of (x) $22,000,000 or (y) the product of the aggregate
amount as of such date of all Eligible Inventory, as set forth in
the most recent Borrowing Base Certificate delivered pursuant to
Section 9.1(h), multiplied by 50%, minus (b) reserves instituted
by any Agent at the direction of the Required Lenders. Until the
first Borrowing Base Certificate is delivered pursuant to Section
9.1(h) after the Closing Date, all references in this definition
to a Borrowing Base Certificate shall be to the Borrowing Base
Certificate delivered pursuant to Section 7.1(a)(xxii).
"Borrowing Base Certificate" means a certificate
substantially in the form of Exhibit D prepared and delivered by
an Authorized Representative to the Agents pursuant to Section
7.1(a)(xxii) and from time to time thereafter in accordance with
Section 9.1(h).
"Borrowing Notice" means the notice delivered by an
Authorized Representative in connection with an Advance under
either Revolving Credit Facility or an issuance of Bankers'
Acceptances under the Canadian Revolving Credit Facility,
substantially in the form of Exhibit E.
"Business Day" means, (i) except as expressly provided in
clause (ii), any day which is not a Saturday, Sunday or a day on
which banks in the Province of Quebec and in the States of New
York and North Carolina are authorized or obligated by law,
executive order or governmental decree to be closed and, (ii) with
respect to the selection, funding, interest rate, payment, and
Interest Period of any Eurodollar Rate Loan, any day which is a
Business Day under clause (i) above, and on which the relevant
international financial markets are open for the transaction of
business contemplated by this Agreement in Xxxxxx, Xxxxxxx,
Xxxxxxxx, Xxxxxx and Charlotte, North Carolina.
"Canadian Agent" has the meaning given such term in the
preamble hereto.
"Canadian Benefit Law" means any applicable Canadian
federal or provincial statute, law, regulation, order or decree
having the force of law regulating, relating to or imposing
liability or standards of conduct concerning any Canadian Employee
Pension Plan.
"Canadian Borrower" means any Borrower that is formed
under the laws of Canada or any political subdivision thereof.
"Canadian Collateral Trustee" means Xxxxxxxxxx Trust
Inc., a trust company, or any successor thereto, as collateral
trustee pursuant to certain Security Instruments with respect to
Collateral located in Canada or the Canadian Agent acting in such
capacity.
"Canadian Dollar Equivalent Amount" means with respect to
Canadian Dollars and a specified Dollar amount, the amount of
Canadian Dollars into which such Dollar amount would be converted,
based on the applicable Advance Date Exchange Rate.
"Canadian Dollar Loan" has the meaning given to such term
in Section 4.13(b).
"Canadian Dollars" and the symbol "CDN $" means dollars
constituting legal tender for the payment of public and private
debts in Canada.
"Canadian Employee Pension Plan" means any employee
benefit plan registered as a pension plan in Canada under Canadian
Benefit Law and that is maintained by any Borrower or with respect
to which any Borrower could incur a liability.
"Canadian Facility" means any of the Canadian Term Loan
Facility, the Canadian Revolving Credit Facility or the Canadian
Swing Line Facility.
"Canadian Facilities Lenders" means, collectively, the
Canadian Term Loan Facility Lenders, the Canadian Revolving Credit
Facility Lenders and the Canadian Swing Line Facility Lender.
"Canadian Government Loan" means that certain no-interest
loan made by the Government of Quebec, Canada and the Government
of Canada to Consoltex, in the original principal amount of
CDN$3,404,110.
"Canadian Issuing Bank" means initially NBC and
thereafter any Canadian Revolving Credit Facility Lender which is
the successor to NBC as issuer of Canadian Letters of Credit under
Article III.
"Canadian Letter of Credit" means a standby or commercial
letter of credit issued under the Canadian Revolving Credit
Facility by the Canadian Issuing Bank for the account of an
applicable Facility Borrower in favor of a Person advancing credit
to or securing an obligation on behalf of such Facility Borrower.
"Canadian Letter of Credit Facility" means the facility
described in Article III hereof providing for the issuance by the
Canadian Issuing Bank for the account of the applicable Facility
Borrowers of Canadian Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding $5,000,000.
"Canadian Letter of Credit Outstandings" means, as of any
date of determination, the aggregate amount available to be drawn
under all Canadian Letters of Credit plus Reimbursement
Obligations then outstanding.
"Canadian Revolving Credit Commitment" means, with
respect to each Lender under the Canadian Revolving Credit
Facility, the obligation of such Lender to make Canadian Revolving
Credit Loans to Consoltex or any other Borrower thereunder up to
an aggregate principal amount at any one time outstanding equal to
such Lender's Applicable Commitment Percentage of the Total
Commitment applicable to the Canadian Revolving Credit Facility.
"Canadian Revolving Credit Facility" means the facility
described in Article II hereof providing for Advances in Dollars
or Canadian Dollars and for Bankers' Acceptances, in favor or at
the request of an applicable Facility Borrower by the Canadian
Revolving Credit Facility Lenders in the aggregate principal
amount at any time outstanding not exceeding the Total Commitment
applicable to such Facility at such time.
"Canadian Revolving Credit Facility Lenders" means,
collectively, each Lender identified on Exhibit A hereto as being
a Lender having a Commitment under the Canadian Revolving Credit
Facility and each other financial institution that executes and
delivers an Assignment and Acceptance pursuant to Section 13.1 in
which such institution acquires a Commitment under such Facility.
"Canadian Revolving Credit Loan" means any Loan,
including without limitation any Base Rate Refunding Loan, under
the Canadian Revolving Credit Facility made in accordance with
Article II to any Facility Borrower thereunder.
"Canadian Revolving Credit Outstandings" means, as of any
date of determination, the aggregate principal amount of all
Canadian Revolving Credit Loans then outstanding.
"Canadian Swing Line Facility" means the revolving line
of credit established by the Canadian Swing Line Facility Lender
in favor of the Facility Borrowers pursuant to Section 2.5.
"Canadian Swing Line Facility Lender" means NBC.
"Canadian Swing Line Loans" means Loans made by the
Canadian Swing Line Facility Lender to the Facility Borrowers
pursuant to Section 2.5.
"Canadian Swing Line Loan Outstandings" means, as of any
date of determination, the aggregate principal amount of all
Canadian Swing Line Loans then outstanding.
"Canadian Term Loan" means the advances previously made
pursuant to the Canadian Term Loan Facility under the Existing
Credit Agreement (including any advances made prior thereto but
included as Canadian Term Loans therein), as restructured hereby,
to Consoltex.
"Canadian Term Loan Commitment" means, with respect to
each Canadian Term Loan Facility Lender, the obligation of such
Lender to have made the Advance under the Canadian Term Loan
Facility to Consoltex in a principal amount equal to such Lender's
Applicable Commitment Percentage of the Total Commitment
applicable to the Canadian Term Loan Facility, as set forth on
Exhibit A.
"Canadian Term Loan Facility" means the facility
described in Article II reflecting amounts previously advanced
under the Existing Credit Agreement (including any prior advances
incorporated therein), as restructured hereby, in Dollars or
Canadian Dollars in favor of the applicable Facility Borrowers by
the Canadian Term Loan Facility Lenders in the aggregate principal
amount of the Total Commitment applicable to such Facility.
"Canadian Term Loan Facility Lenders" means,
collectively, each Lender identified on Exhibit A hereto as being
a Lender having a Commitment under the Canadian Term Loan Facility
and each other financial institution that executes and delivers an
Assignment and Acceptance pursuant to Section 13.1 in which such
Lender acquires a Commitment under such Facility.
"Canadian Term Loan Outstandings" means, as of any date
of determination, the aggregate principal amount of all Canadian
Term Loans then outstanding.
"Canadian Termination Event" means (i) a notice given
with respect to a Canadian Employee Pension Plan that registration
under Canadian Benefit Law may be revoked; or (ii) the termination
of a Canadian Employee Pension Plan or the filing of a notice of
intent under Canadian Benefit Law to terminate any such plan or
the treatment of any amendment to any such plan as a termination;
or (iii) the appointment of a provisional administrator, including
any Governmental Authority, to administer any Canadian Employee
Pension Plan.
"Capital Expenditures" means, with respect to the
Borrowers and their Subsidiaries on a consolidated basis, for any
period the sum (without duplication) of (a) all expenditures
(whether paid in cash or accrued as liabilities) by any Borrower
or any Subsidiary during such period for items that would be
classified as "property, plant or equipment" or comparable items
on the consolidated balance sheet of the Borrower and its
Subsidiaries and, to the extent not included therein, all
transactional costs incurred in connection with such expenditures
provided the same have been capitalized, excluding, however, the
amount of any Capital Expenditures paid for or to be paid for with
proceeds of (i) casualty insurance, condemnation awards (or
payments in place thereof) or indemnity payments received from
third parties; (ii) any sale or trade in of worn-out, obsolete,
surplus or damaged fixed assets; or (iii) any government grants
received by any Borrower or any Subsidiary which are for the
restricted purpose of funding Capital Expenditures and which, if
to be repaid, are repayable in not less than three (3) years and
on which no interest accrues or is payable, in each case as
evidenced in writing and submitted to the Agents together with the
compliance certificate delivered pursuant to Section 9.1(a)(v) or
9.1(b)(v) for such period, and (b) with respect to any Capital
Lease entered into by any Borrower or any Subsidiary during such
period, the present value of the lease payments due under such
Capital Lease over the term of such Capital Lease applying a
discount rate equal to the interest rate provided in such lease
(or in the absence of a stated interest rate, that rate used in
the preparation of the financial statements described in Section
9.1(a)(i)), all the foregoing in accordance with GAAP applied on a
Consistent Basis.
"Capital Leases" means all leases which have been or
should be capitalized in accordance with GAAP as in effect from
time to time including Statement No. 13 of the Financial
Accounting Standards Board and any successor thereof.
"Cash Collateral Agreement" means, collectively (or
individually as the context may indicate) each Cash Collateral
Agreement in form and substance satisfactory to the Agents and the
Lenders delivered to the Agents in connection with the
establishment of the Lock Box Account, and any additional Cash
Collateral Agreement delivered to the Relevant Agent pursuant to
Section 9.20 or otherwise under this Agreement or any other Loan
Document, as the same may be amended, restated, supplemented,
amended and restated or otherwise modified from time to time.
"Change of Control" means, at any time:
(i) the sale, lease or transfer, in one or a
series of related transactions, of all or substantially
all of the assets of Consoltex Holdings to any "person"
or "group" (each as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act);
(ii) the adoption of a plan relating to the
liquidation or dissolution of Consoltex Holdings;
(iii) any "person" or "group" (each as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other
than AIP either (A) becomes the "beneficial owner" (as
defined in Rule 13d-3 of the Exchange Act ), directly or
indirectly, of Voting Securities of Consoltex Holdings
(or securities convertible into or exchangeable for such
Voting Securities) representing more than 50% of the
combined voting power of all Voting Securities of
Consoltex Holdings (on a fully diluted basis) or (B)
otherwise has the ability, directly or indirectly, to
elect a majority of the board of directors of Consoltex
Holdings;
(iv) during any period of up to 24 consecutive
months, commencing on the Closing Date, individuals who
at the beginning of such 24-month period were directors
of Consoltex Holdings shall cease for any reason (other
than the death, disability or retirement of an officer of
Consoltex Holdings that is serving as a director at such
time so long as another officer of Consoltex Holdings
replaces such Person as a director) to constitute a
majority of the board of directors of Consoltex Holdings,
provided that any new directors that are nominated by a
majority of the then existing board of directors shall be
counted in determining such majority of the board of
directors of Consoltex Holdings;
(v) any Person or two or more Persons (other
than AIP) acting in concert shall have acquired by
contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation thereof,
will result in its or their acquisition of the power to
exercise, directly or indirectly, a controlling influence
on the management or policies of Consoltex Holdings; or
(vi) Consoltex Holdings shall at any time cease
to own, either directly or through Subsidiaries,
beneficially and of record 100% of the Voting Securities
and all other capital stock of each other Borrower or
Guarantor, except for directors' qualifying shares.
"Closing Date" means the date as of which this Agreement
is executed by the Borrowers, the Guarantors, the Lenders and the
Agents and on which the conditions set forth in Section 7.1 have
been satisfied.
"Code" means the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder.
"Collateral" means, collectively, all property of any
Borrower, any Subsidiary or any other Person in which the US
Collateral Agent, the Canadian Agent, the Canadian Collateral
Trustee or any Lender is granted a Lien under any Security
Instrument as security for all or any portion of the Obligations
or any other obligation arising under any Loan Document.
"Combined Consoltex EBITDA" means, for any period of
computation thereof, the sum of Consoltex EBITDA and Consoltex
International EBITDA on a combined basis determined in accordance
with GAAP applied on a Consistent Basis, with appropriate
adjustments for required intercompany eliminations.
"Commitment" means, for each Lender under any certain
Facility, the obligation of such Lender to make Advances (or
Bankers' Acceptances under any Canadian Facility) available under
such Facility to the Facility Borrowers (including the acquisition
and funding of Participations as herein provided other than as
provided in Section 4.12) in an aggregate principal amount from
time to time up to such Lender's Applicable Commitment Percentage
of the Total Commitment for such Facility at such time; provided,
that as used in the definition of "Applicable Total Commitment
Percentage", for purposes of the application of Section 4.12
hereof, "Commitments" shall be calculated immediately prior to the
occurrence of any Event of Default, subject to adjustment for
later assignments, and such calculation shall be made without
giving effect to any then existing or thereafter imposed interim
limit on or adjustment to the funding of any Facility that does
not expressly state that it is a permanent increase, decrease or
termination of the Commitments of the Lenders.
"Consistent Basis" in reference to the application of
GAAP means the accounting principles observed in the period
referred to are comparable in all material respects to those
applied in the preparation of the audited financial statements of
the Borrower delivered on the Closing Date pursuant to Section
8.6(a).
"Consolidated Current Assets" means all assets (other
than cash) of Consoltex Holdings and its Subsidiaries (but
excluding Consoltex Mexico and the Mexican Companies) which are
expected to be realized in cash, sold in the ordinary course of
business, or consumed within one year or which would be classified
as a current asset, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis, with
appropriate adjustments to exclude all transactions with Consoltex
Mexico or any of the Mexican Companies.
"Consolidated Current Liabilities" means all liabilities
of Consoltex Holdings and its Subsidiaries (but excluding
Consoltex Mexico and the Mexican Companies) which by their terms
are payable within one year (including all Indebtedness payable on
demand or maturing not more than one year from the date of
computation and the current portion of Indebtedness having a
maturity date in excess of one year, but excluding the current
portion of any Indebtedness for Money Borrowed), all determined on
a consolidated basis in accordance with GAAP applied on a
Consistent Basis, with appropriate adjustments to exclude all
transactions with Consoltex Mexico or any of the Mexican
Companies.
"Consolidated EBITDA" means, with respect to the
Borrowers and their Subsidiaries, for any period of computation
thereof, the sum of the following (without duplication): (i)
Consolidated Net Income, (ii) Consolidated Interest Expense, (iii)
income tax expense, (iv) amortization expense, (v) depreciation
expense, (vi) any non-recurring or extraordinary non-cash losses
for such period (net of any non-recurring or extraordinary gains),
(vii) all management or other fees payable by Consoltex Holdings
to AIP accrued, but not paid in cash, during such period, (viii)
to the extent not included in Consolidated Interest Expense, any
Ticking Fee paid in cash during such period and all fees and
expenses paid in cash during such period in connection with each
inspection or audit pursuant to Section 9.7(b) or (c), but
excluding the fees and expenses of any field audit inspection
performed pursuant to part (i) of the second sentence of Section
9.7(b), and (ix) with respect to any foreign currency exchange
gains and losses that are set forth as a specific gain or loss in
the financial statements most recently delivered pursuant to
Section 9.1(a)(i) or 9.1(b)(i), (a) to the extent of any such
foreign currency exchange gain included in Net Income, less such
gain and (b) to the extent of any such foreign currency exchange
loss included in Net Income, plus such loss, all determined on a
consolidated basis and in accordance with GAAP applied on a
Consistent Basis; provided, however, that notwithstanding the
foregoing, there shall be excluded from such computation any
non-cash expense related to post-retirement employee benefits.
"Consolidated Fixed Charge Coverage Ratio" means, with
respect to Consoltex Holdings and its Subsidiaries for any period
of computation thereof, the ratio of (i) Annualized Consolidated
EBITDA applicable to such period less (without duplication)
Annualized Capital Expenditures applicable to such period, to (ii)
Annualized Consolidated Fixed Charges applicable to such period.
"Consolidated Fixed Charges" means, with respect to the
Borrowers and their Subsidiaries for any period of computation
thereof, the sum of, without duplication, (i) Consolidated
Interest Expense paid in cash for such period, (ii) all expenses
incurred during such period with respect to the sale of Accounts
Receivable to one or more factors, (iii) all income tax expenses
paid in cash during such period, (iv) all management fees paid to
AIP during such period, (v) all amounts paid in cash during such
period to holders of Subordinated Notes not participating in the
Subordinated Note Exchange, and (vi) all severance payments made
to Xxxxxxx Xxxxxxx or Xxxxx Xxxxxxxx during such period, all
determined on a consolidated basis in accordance with GAAP applied
on a Consistent Basis.
"Consolidated Interest Expense" means, with respect to
any period of computation thereof, the interest expense of
Consoltex Holdings and its Subsidiaries during such period,
including without limitation (i) the current amortized portion of
debt discounts to the extent included in interest expense, (ii)
the current amortized portion of all fees (including fees payable
in respect of any Rate Hedging Obligations) payable in connection
with the incurrence of Indebtedness to the extent included in
interest expense, and (iii) the portion of any payments made in
connection with Capital Leases allocable to interest expense, all
determined on a consolidated basis in accordance with GAAP applied
on a Consistent Basis.
"Consolidated Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) Consolidated Senior Debt
(determined as at such date) to (ii) Adjusted Consolidated EBITDA
(for the applicable period ending on (or most recently ended prior
to) such date).
"Consolidated Net Income" means, for any period of
computation thereof, the gross revenues from operations of
Consoltex Holdings and its Subsidiaries (including payments
received by Consoltex Holdings and Subsidiaries of (i) interest
income, and (ii) dividends and distributions made in the ordinary
course of their businesses by Persons in which investment is
permitted pursuant to this Agreement and not related to an
extraordinary event), less all operating and non-operating
expenses of Consoltex Holdings and its Subsidiaries including
taxes on income, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis; but excluding
as income: (a) net gains on the sale, conversion or other
disposition of capital assets, (b) net gains on the acquisition,
retirement, sale or other disposition of capital stock and other
securities of Consoltex Holdings or its Subsidiaries, (c) net
gains on the collection of proceeds of life insurance policies,
(d) any write-up of any asset, (e) net gains attributable to any
Person that is not a wholly owned Subsidiary of such Person,
except to the extent of the amount of dividends or other
distributions referred to in clause (ii) above, (f) net gains
attributable to any Person that accrued prior to the date such
Person became a Subsidiary of any Borrower or was merged into or
consolidated with any Borrower or any of its Subsidiaries, and (g)
any other net gain or credit of an extraordinary nature, in each
case as determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis.
"Consolidated Senior Debt" means, as of any date on which
the amount thereof is to be determined, the aggregate principal
amount of all Consolidated Total Debt as of such date minus, to
the extent otherwise included in Consolidated Total Debt, the
aggregate principal amount of all Subordinated Debt as of such
date.
"Consolidated Total Debt" means, as of any date on which
the amount thereof is to be determined, the sum (without
duplication) of (i) all Indebtedness for Money Borrowed of
Consoltex Holdings and its Subsidiaries, including without
limitation all Subordinated Debt, but excluding (A) any
Subordinated Notes that are subject to a Payment Deferral
Arrangement, and (B) the AIP PIK Notes, (ii) the aggregate Rate
Hedge Value owing by Consoltex Holdings and its Subsidiaries with
respect to all applicable Rate Hedging obligations incurred
thereby, (iii) all Contingent Obligations of Consoltex Holdings
and its Subsidiaries, (iv) all obligations of Consoltex Holdings
and its Subsidiaries arising out of the acquisition of Marino
owing to the former shareholders of Marino, and (v) all
obligations of Consoltex Holdings and its Subsidiaries arising out
of the Canadian Government Loan, including in each case all such
items incurred by any partnership or joint venture as to which
Consoltex Holdings or any of its Subsidiaries is liable as a
general partner or joint venturer, all determined on a
consolidated basis.
"Consolidated Working Capital" means, as of any date on
which the amount thereof is to be determined, the excess of
Consolidated Current Assets over Consolidated Current Liabilities.
"Consoltex" has the meaning given such term in the
preamble hereto.
"Consoltex EBITDA" means, with respect to Consoltex on a
stand alone basis, for any period of computation thereof, the sum
of the following (without duplication): (i) Net Income, (ii)
Interest Expense, (iii) income tax expense, (iv) amortization
expense, (v) depreciation expense, (vi) any non-recurring or
extraordinary non-cash losses for such period (net of any
non-recurring or extraordinary gains), (vii) corporate overhead on
the books of Consoltex attributable solely to Consoltex Holdings
and its Subsidiaries (other than Consoltex) on a consolidated
basis, (viii) to the extent not included in Interest Expense, any
Ticking Fee paid in cash during such period, and (ix) with respect
to any foreign currency exchange gains and losses that are set
forth as a specific gain or loss in the financial statements most
recently delivered pursuant to Section 9.1(a)(i) or 9.1(b)(i), (a)
to the extent of any such foreign currency exchange gain included
in Net Income, less such gain and (b) to the extent of any such
foreign currency exchange loss included in Net Income, plus such
loss, all determined in accordance with GAAP applied on a
Consistent Basis; provided, however, that notwithstanding the
foregoing, there shall be excluded from such computation any
non-cash expense related to post-retirement employee benefits;
provided further, however, that adjustments shall be made to
eliminate the effect of all transactions of Consoltex with
Consoltex Holdings or any of its Subsidiaries other than such
transactions as are made in the ordinary course of the business of
Consoltex and Consoltex Holdings or the applicable Subsidiary
consistent with past practice.
"Consoltex Holdings" has the meaning given such term in
the preamble hereto.
"Consoltex International" has the meaning given such term
in the preamble hereto, subject the provisions of Section 13.19.
"Consoltex International EBITDA" means, with respect to
Consoltex International on a stand alone basis, for any period of
computation thereof, the sum of the following (without
duplication): (i) Net Income, (ii) Interest Expense, (iii) income
tax expense, (iv) amortization expense, (v) depreciation expense,
(vi) any non-recurring or extraordinary non-cash losses for such
period (net of any non-recurring or extraordinary gains), (vii) to
the extent not included in Interest Expense, any Ticking Fee paid
in cash during such period, and (viii) with respect to any foreign
currency exchange gains and losses that are set forth as a
specific gain or loss in the financial statements most recently
delivered pursuant to Section 9.1(a)(i) or 9.1(b)(i), (a) to the
extent of any such foreign currency exchange gain included in Net
Income, less such gain and (b) to the extent of any such foreign
currency exchange loss included in Net Income, plus such loss, all
determined in accordance with GAAP applied on a Consistent Basis;
provided, however, that notwithstanding the foregoing, there shall
be excluded from such computation any non-cash expense related to
post-retirement employee benefits; provided further, however, that
adjustments shall be made to eliminate the effect of all
transactions of Consoltex International with Consoltex Holdings or
any of its Subsidiaries other than such transactions as are made
in the ordinary course of the business of Consoltex International
and Consoltex Holdings or the applicable Subsidiary consistent
with past practice.
"Consoltex International Reincorporation" means the
movement of the state of formation of Consoltex International from
Rhode Island to Delaware, by (a) the creation of a new Subsidiary
of Consoltex USA formed in Delaware, and (b) the merger of
Consoltex International into such new Subsidiary pursuant to a
statutory merger or such other merger as is acceptable to the
Agents.
"Consoltex Mexico" has the meaning given such term in the
preamble hereto.
"Consoltex USA" has the meaning given such term in the
preamble hereto.
"Contingent Obligation" means, as to any Person, any
direct or indirect liability of that Person with respect to any
Indebtedness, lease, dividend, guaranty, letter of credit or other
obligation (each a "primary obligation") of another Person (the
"primary obligor"), whether or not contingent, (a) to purchase,
repurchase or otherwise acquire any such primary obligation or any
property constituting direct or indirect security therefor, or (b)
to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital
or equity capital of the primary obligor in respect of any such
primary obligation or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial
condition of such primary obligor, or (c) to purchase property,
securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary
obligor thereof to make payment of such primary obligation, or (d)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss or failure or inability to perform in
respect thereof. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount
of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof.
"Continue," "Continuation," and "Continued" shall refer,
as applicable and in each case pursuant to Section 4.3 hereof, to
(i) the continuation in the same currency of a Eurodollar Rate
Loan of one Type as a Eurodollar Rate Loan of the same Type from
one Interest Period to the next Interest Period, or (ii) the
election of a subsequent period for a Bankers' Acceptance or a
Bankers' Acceptance Segment to begin on the last day of the then
current period for such Bankers' Acceptance or Bankers' Acceptance
Segment.
"Control Agreement" means a control agreement from the
Registrar of any Subsidiary, in form and substance acceptable to
the Relevant Agent and in which the Registrar (1) acknowledges
that the pledgor is at the date of such acknowledgment the sole
record, and to its knowledge, beneficial owner of such Subsidiary
Securities, (2) acknowledges the Lien in favor of the US
Collateral Agent or Canadian Collateral Trustee, as applicable,
conferred under the Pledge Agreement and that such Lien will be
reflected on the registry for such Subsidiary Securities, (3)
agrees that it will not register any transfer of such Subsidiary
Securities nor acknowledge any Lien in favor of any other Person
on such Subsidiary Securities, without the prior written consent
of the US Collateral Agent or Canadian Collateral Trustee, as
applicable, in each instance, until it receives notice from the US
Collateral Agent or Canadian Collateral Trustee, as applicable,
that all Liens on such Collateral in favor of US Collateral Agent
or Canadian Collateral Trustee, as applicable, for the benefit of
the Agents and the Lenders have been released or terminated, and
(4) agrees that upon receipt of notice from the US Collateral
Agent or Canadian Collateral Trustee, as applicable, that an Event
of Default has occurred and is continuing and that the Subsidiary
Securities identified in such notice have been transferred to a
transferee identified in such notice, it will duly record such
transfer of Subsidiary Securities on the appropriate registry
without requiring further consent from the pledgor and shall
thereafter treat the transferee as the sole record and beneficial
owner of such Subsidiary Securities pending further transfer,
notwithstanding any contrary instruction received from the
pledgor.
"Convert," "Conversion," and "Converted" shall refer to
(i) a conversion pursuant to Section 4.3 of one Type of Loan into
another Type of Loan, including with respect to Bankers'
Acceptances or (ii) a conversion of a Loan from one currency to
another currency as herein permitted, as applicable.
"Credit Parties" means, collectively, each Borrower, each
Guarantor and each other Person providing Collateral pursuant to
any Security Instrument.
"Default" means any event or condition which, with the
giving or receipt of notice or lapse of time or both, would
constitute an Event of Default hereunder.
"Default Rate" means (i) with respect to each Eurodollar
Rate Loan, until the end of the Interest Period applicable
thereto, a rate of two percent (2%) above the Eurodollar Rate
applicable to such Loan, and thereafter at a rate of interest per
annum which shall be two percent (2%) above the Base Rate, (ii)
with respect to Base Rate Loans, Swing Line Loans, Reimbursement
Obligations, fees, and other amounts payable in respect of (x)
Obligations (other than with respect to Bankers' Acceptances) or
(y) (except as otherwise expressly provided therein) the
obligations of any other Credit Party under any of the other Loan
Documents, a rate of interest per annum which shall be two percent
(2%) above the Base Rate and (iii) in any case, the maximum rate
permitted by applicable law, if lower.
"Deposit Account Agreement" means, with respect to any
deposit account of any Borrower except the Mexican Companies and
Consoltex Mexico (other than with respect to accounts held by any
Mexican Company or Consoltex Mexico at a United States or Canadian
financial institution or a branch, division or Affiliate thereof),
with any financial institution, an agreement executed and
delivered by the applicable depository institution to the Relevant
Agent, the US Collateral Agent or the Canadian Collateral Trustee,
as applicable, acknowledging and agreeing to the Lien attaching to
such deposit account in favor of the Relevant Agent, the US
Collateral Agent or the Canadian Collateral Trustee, as
applicable, for the benefit of the Agents and the Lenders, in form
and substance reasonably acceptable to the Agents and the Lenders.
"Direct Foreign Subsidiary" means each Subsidiary of
Consoltex Holdings that is not a Domestic Subsidiary and a
majority of whose Voting Securities, or a majority of whose
Subsidiary Securities, are owned by Consoltex Holdings or a
Domestic Subsidiary of Consoltex Holdings; provided, however, that
this definition of "Direct Foreign Subsidiary" shall not include
Consoltex.
"Discount" means (i) with respect to a Bankers'
Acceptance accepted by a Canadian Facility Lender which is a bank
governed by the Bank Act, the amount which is the difference
between the face amount of such Bankers' Acceptance and the
Discounted Proceeds and (ii) with respect to a Bankers' Acceptance
which is a Discount Note, the amount determined by the Canadian
Agent as being the arithmetic average (rounded upward to the
nearest 1/100th of 1%), of the discounts applicable to the
Bankers' Acceptances accepted by (or that would be accepted by)
the Canadian Facility Lenders which are banks governed by the Bank
Act and issued under the same Facility on the day the Discount
Note is issued and having the same maturity as such Discount Note.
"Discount Note" means a non-interest bearing note in form
and substance reasonably satisfactory to a Non-BA Lender, issued
by Consoltex under a Canadian Facility in favor of a Non-BA Lender
and discounted by such Non-BA Lender, the Loan evidenced by such
note being made in lieu of accepting Bankers' Acceptances.
"Discounted Proceeds" means in respect of any Bankers'
Acceptance to be accepted by a Canadian Facility Lender which is a
bank governed by the Bank Act on any day, an amount (rounded to
the nearest whole cent, and with one-half of one cent being
rounded up) calculated on such day by multiplying:
(a) the face amount of such Bankers' Acceptance, by
(b) the price, where the price is determined by
dividing one by the sum of one plus the product
of:
(i) the Discount Rate (expressed as a
decimal); and
(ii) a fraction, the numerator of which is
the number of days in the term of such
Bankers' Acceptance and the denominator
of which is 365;
with the price as so determined being rounded up
or down to the fifth decimal place and .000005
being rounded up.
"Discount Rate" with respect to an issue of Bankers'
Acceptances with the same maturity date, means the rate determined
by the Canadian Agent as being the discount rate, calculated on
the basis of a year of 365 days, of each of the Canadian Facility
Lenders which are banks governed by the Bank Act, established in
accordance with their normal practices at or about 9:30 a.m.
(Montreal time) on the date of issue and acceptance of such
Bankers' Acceptances, for bankers' acceptances having a face value
comparable, and a maturity date identical, to the face value and
maturity date of the Bankers' Acceptances forming part of such
issue to be accepted by each such Canadian Facility Lender.
"Dollar Equivalent Amount" means, (a) the amount
denominated in Dollars, and (b) with respect to any Canadian
Dollar amount, the amount of Dollars into which the Canadian
Dollar amount would be converted, based on the applicable Advance
Date Exchange Rate.
"Dollars" and the symbol " $" means dollars constituting
legal tender for the payment of public and private debts in the
United States of America.
"Domestic Subsidiary" means (i) any Subsidiary of
Consoltex Holdings organized under the laws of the United States
of America, any state or territory thereof or the District of
Columbia and (ii) notwithstanding (i) above, Consoltex and any
Subsidiary of Consoltex.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate
of a Lender, and (iii) any other Person approved by the Agent and,
unless an Event of Default has occurred and is continuing at the
time any assignment is effected in accordance with Section 13.1,
Consoltex Holdings, such approval not to be unreasonably withheld
or delayed by Consoltex Holdings and such approval to be deemed
given by Consoltex Holdings (in the absence of notice to the
contrary, effective upon receipt) within five (5) Business Days
after notice of such proposed assignment has been provided by the
assigning Lender to Consoltex Holdings; provided, however, that
neither Consoltex Holdings nor any Subsidiary or Affiliate of
Consoltex Holdings shall qualify as an Eligible Assignee.
"Eligible Factor Receivables" means the aggregate amount
of all payment rights to amounts due to any US Borrower or
Canadian Borrower from factors of Accounts Receivable of any US
Borrower or Canadian Borrower, net of the aggregate amount of such
payment rights as to which any such factor may have a right of
offset or recoupment, so long as (a) such payment rights arise
from transactions and pursuant to agreements not in violation of
Section 10.5(i) hereof, (b) the US Collateral Agent, the Canadian
Collateral Trustee or the Canadian Agent, as applicable, shall
have a first priority perfected security interest in such payment
rights pursuant to the Security Instruments, free of any Lien
other than such security interest and Statutory Borrowing Base
Permitted Liens, and (c) the applicable factor has been notified
to make payments to a Lock Box or Lock Box Account, as applicable,
of the applicable Borrower as required by Section 9.20.
"Eligible Inventory" means all of the Inventory located
in the United States or Canada, without duplication (valued at the
lower of cost, determined using the first-in-first-out method or
rolling average method, replacement cost and net realizable value,
but in no event valued at greater than fair market value),
consisting of uncut and undyed greige goods inventory, raw
materials, polypropylene products, and finished goods inventory,
and in which the US Collateral Agent, the Canadian Collateral
Trustee or the holders of any Bank Act security shall have a first
priority perfected security interest pursuant to the Security
Instruments, free of any Lien other than such security interest
and Statutory Borrowing Base Permitted Liens, and which (a)
conforms in all material respects to the warranties contained in
the Security Agreement, (b) is not damaged or defective in any
way, (c) is not sold or segregated for sale or otherwise reflected
as an account receivable of any Borrower or any Guarantor, (d) is
not consigned inventory unless a waiver of the consignee's Lien in
form and substance reasonably acceptable to the Agents and the
Lenders has been executed by such consignee and delivered to the
Relevant Agent, (e) is not inventory-in-transit (except
inventory-in-transit between locations of any Borrowers) or
located in a place other than at the locations listed on Schedule
5.3 or such other locations acceptable to the Agents as to which
the Borrowers shall have complied with the provisions of Section
5.3 hereof hereto, (f) is not work-in-process, (g) is not
constituting packaging materials and supplies (other than
packaging materials which are inventory held for sale to third
parties), (h) is not inventory evidenced by negotiable warehouse
receipts or by non-negotiable warehouse receipts or bills of
lading or documents of title which have not been issued in the
name of the Relevant Agent or the Canadian Collateral Trustee, and
(i) is not inventory deemed ineligible by the Relevant Agent or
the Canadian Collateral Trustee in its reasonable judgment and
discretion; provided that, to the extent otherwise included in
Eligible Inventory, Eligible Inventory will be reduced by (i) any
supplies, spare parts, goods returned or rejected by customers of
any Borrower which are not saleable or are subject to a Lien of
any factor of accounts receivable of any Borrower, goods to be
returned to suppliers of any Borrower, goods in transit to third
parties (other than the agents, leaseholds or warehouses of any
Borrower to the extent such locations are in compliance with the
provisions hereof), (ii) any reserves required under GAAP for xxxx
and hold (deferred shipment) sales as and to the extent such
reserves relate to such Eligible Inventory, (iii) any Inventory of
Consoltex International other than Inventory located on property
owned or leased by Consoltex International or held at a bonded
warehouse for the benefit of Consoltex International, and (iv) any
Inventory located on a property leased by any Borrower with
respect to which the landlord of such property has not delivered a
Waiver of Lien Rights with respect to such property.
"Eligible Letters of Credit" means at any date commercial
letters of credit issued for the account of any of the US
Borrowers or Consoltex in connection with the purchase of raw
materials and finished goods, which raw materials and finished
goods have not been received as Inventory as of such date, and
each of which commercial letters of credit has an expiration date
not later than the earlier of (i) the date that is 120 days after
its issuance, or (ii) the date that is ninety (90) days beyond the
Stated Termination Date.
"Eligible Receivables" means all of (i) the Accounts
Receivable evidenced by an invoice (valued at the face amount of
such invoice) in which the US Collateral Agent, the Canadian Agent
or the Canadian Collateral Trustee shall have a first priority
perfected security interest pursuant to the Security Instruments,
free of any Lien other than such security interest and Statutory
Borrowing Base Permitted Liens, and (ii) the accounts receivable
of Rafytek which are supported by a xxxx of sale to LINQ that has
been delivered, and is reasonably acceptable, to the US Collateral
Agent ("Rafytek Accounts"); provided that both clauses (i) and
(ii) shall exclude (a) Accounts Receivable and Rafytek Accounts
outstanding for longer than ninety (90) days (120 days in the case
of agrotextile and cotton bale wrap customers of LINQ) from the
date of original invoice (unless they are supported by a letter of
credit that has been assigned or pledged, and is reasonably
acceptable, to the Relevant Agent); (b) all Accounts Receivable
and Rafytek Accounts owed by an account debtor to the extent more
than fifty percent (50%) of the Accounts Receivable and Rafytek
Accounts owed by such account debtor to any applicable Borrower
are deemed ineligible hereunder; (c) Accounts Receivable and
Rafytek Accounts owing from any Affiliate of any Borrower or any
Subsidiary; (d) Accounts Receivable and Rafytek Accounts owed by a
creditor of any Borrower or any of their Subsidiaries to the
extent of the amount of the obligation of such Borrower or
Subsidiaries to such creditor; (e) Accounts Receivable and Rafytek
Accounts which are in dispute or subject to any post-dated payment
items, retainage, counterclaim, contra-account or offset, but only
to the extent of the amount disputed and the specific amount
subject to post-dated payment items, retainage, counterclaim,
contra-account or offset; (f) Accounts Receivable and Rafytek
Accounts owing by any account debtor which has entered into
insolvency proceedings; (g) Accounts Receivable and Rafytek
Accounts arising from a sale on a xxxx-and-hold, guaranteed sale,
sale-or-return, sale-on-approval, consignment or similar basis or
which is subject to repurchase, return, rejection, repossession,
loss or damage; (h) Accounts Receivable owed by an account debtor
domiciled outside of the continental United States of America or
Canada, unless (1) the applicable Account Receivable is supported
by a letter of credit that has been remitted, and is reasonably
acceptable, to the US Collateral Agent or the Canadian Agent, as
the case may be, or (2) the applicable Account Receivable is
insured by an insurer reasonably acceptable to the US Collateral
Agent, the US Agent or the Canadian Agent, as the case may be; (i)
Accounts Receivable and Rafytek Accounts owed by the United States
of America, Canada, Mexico or any other federal, state, provincial
or other governmental or quasi governmental unit, agency or
subdivision; (j) Accounts Receivable and Rafytek Accounts that are
denominated in any currency other than Dollars or Canadian
Dollars; (k) Accounts Receivable and Rafytek Accounts as to which
the goods giving rise to the Account Receivable or Rafytek Account
have not been delivered to and accepted by the account debtor or
the service giving rise to the Account Receivable or Rafytek
Account has not been completely performed or which do not
represent a final sale; (l) Accounts Receivable and Rafytek
Accounts for which the total of all Accounts Receivable and
Rafytek Accounts from any three account debtors (together with the
Affiliates of the account debtors) would, when combined, exceed
thirty-five percent (35%) of the total Accounts Receivable and
Rafytek Accounts of the Borrowers and their Subsidiaries (to the
extent of such excess); (m) Accounts Receivable and Rafytek
Accounts which, by contract, subrogation, mechanics' lien laws or
otherwise, are subject to claims by any Borrower's or any of their
Subsidiaries' creditors or other third parties or which are owed
by account debtors as to whom any creditor of any Borrower or any
of their Subsidiaries (including any bonding company) has a lien
or retainage rights; (n) any and all other Accounts Receivable and
Rafytek Accounts the validity, collectibility, or amount of which
is determined in good faith in accordance with GAAP by any
Borrower or any of their Subsidiaries to be doubtful; (o) Accounts
Receivable and Rafytek Accounts owed by an account debtor which is
located in a jurisdiction where the applicable Borrower or
Subsidiary are required to qualify to transact business or to file
reports, unless such Borrower or such Subsidiary has so qualified
or filed and provided written evidence satisfactory to the Agents
of such compliance; (p) any Accounts Receivable and Rafytek
Accounts as to which any representation, warranty or covenant
contained in the Security Agreement shall be untrue or misleading,
(q) Accounts Receivable and Rafytek Accounts subject to a Lien of,
or which have been sold, assigned or otherwise disposed of, to any
factor of Accounts Receivable or Rafytek Accounts of any Borrower
or any Subsidiary, and (r) any other Accounts Receivable and
Rafytek Accounts which the Agents otherwise in their reasonable
discretion deems to be ineligible.
"Employee Benefit Plan" means (i) any employee benefit
plan, including any Pension Plan, within the meaning of Section
3(3) of ERISA which (A) is maintained for employees of any
Borrower or any of their ERISA Affiliates, or any Subsidiary or is
assumed by any Borrower or any of their ERISA Affiliates, or any
Subsidiary in connection with any Acquisition or (B) at any time
within the last six (6) Fiscal Years has been maintained for the
employees of any Borrower, any current or former ERISA Affiliate,
or any Subsidiary and (ii) any plan, arrangement, understanding or
scheme maintained by any Borrower or any Subsidiary that provides
retirement, deferred compensation, employee or retiree medical or
life insurance, severance benefits or any other benefit covering
any employee or former employee and which is administered under
any Foreign Benefit Law or regulated by any Governmental Authority
other than the United States of America.
"Environmental Laws" means, collectively, as applicable
to and governing any certain Borrower or its properties, (i) each
binding Canadian, Mexican and Costa Rican applicable federal,
provincial or local Act, Statute, Regulation, By-Law, policy,
code, instruction, guideline, indicator, order, infraction notice,
correction notice, decision, declaration, injunction, decree,
order-in-council, judgment and summons, and, as applicable in
Quebec, the "Politique de rehabilitation des terrains contamines"
and the "Lignes directrices en matiere d'enlevement de reservoirs
souterrains ayant contenu des produits petroliers" and pertains in
whole or in part to the environment or to its protection, adopted,
published, sent or rendered by any Governmental Authority; and
(ii) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Superfund Amendments and
Reauthorization Act of 1986, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act, as amended, the
Clean Air Act, as amended, the Clean Water Act, as amended, any
other "Superfund" or "Superlien" law or any other federal, state
or local statute, law, ordinance, code, rule, regulation, order,
decree, permit or license regulating, relating to, or imposing
liability or standards of conduct concerning, any environmental
matters or conditions, environmental protection or conservation,
or any Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time, and any successor statute
and all rules and regulations promulgated thereunder.
"ERISA Affiliate," as applied to any Borrower, means any
Person or trade or business which is a member of a group which is
under common control with any Borrower, who together with such
Borrower, is treated as a single employer within the meaning of
Section 414(b) and (c) of the Code.
"Eurodollar Rate" means the interest rate per annum
calculated according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
-------------------------------
Rate 1- Reserve Requirement Margin
"Eurodollar Rate Loan" means a Loan (including a Segment)
for which the rate of interest is determined by reference to the
Eurodollar Rate.
"Eurodollar Rate Segment" means a Segment bearing
interest or to bear interest at the Eurodollar Rate.
"Event of Default" means any of the occurrences set forth
as such in Section 11.1.
"Excess Cash Flow" means, with respect to Consoltex
Holdings and its Subsidiaries:
(a) for the Four-Quarter Period ended December 31, 2001,
the difference of (i) Consolidated EBITDA for such Four-Quarter
Period, minus (ii) Consolidated Fixed Charges for such
Four-Quarter Period; and
(b) for the Four-Quarter Period ending December 31, 2002,
the difference of (i) Consolidated EBITDA for such Four-Quarter
Period (including therein any net gain or loss, as applicable, of
an irregular or extraordinary nature otherwise excluded from the
calculation thereof in the definition of "Consolidated Net
Income") minus (ii) the Excess Cash Flow Deductibles for such
Four-Quarter Period.
"Excess Cash Flow Deductibles" means, with respect to
Consoltex Holdings and its Subsidiaries for the Four-Quarter
Period ending December 31, 2002, (a) the positive amount by which
Consolidated Working Capital as at the end of such Four-Quarter
Period exceeds Consolidated Working Capital as at the end of the
Four-Quarter Period ended December 31, 2001, if any, provided that
such amount shall not exceed $5,200,000, plus (b) Capital
Expenditures for such Four-Quarter Period not in excess of the
applicable amount set forth in Section 10.3, plus (c) Consolidated
Fixed Charges for such Four-Quarter Period, plus (d) all regularly
scheduled payments of principal in respect of Consolidated Total
Debt made during such Four-Quarter Period, plus (without
duplication) (e) the aggregate amount of any optional prepayments
of principal of the Term Loans made by the Borrowers pursuant to
Section 2.1(d) hereof during such Four-Quarter Period, minus (f)
the positive amount by which Consolidated Working Capital as at
the end of the Four-Quarter Period ended December 31, 2001,
exceeds Consolidated Working Capital as at the end of such
Four-Quarter Period, if any.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended, and the regulations promulgated thereunder.
"Existing Credit Agreement" has the meaning given such
term in the preamble hereto.
"Existing Credit Agreement Closing Date" means November
7, 2000, the date on which certain of the Borrowers, the Agents
and the Lenders entered into the Existing Credit Agreement.
"Facility" means any of the Revolving Credit Facilities,
the Letter of Credit Facilities, the Term Loan Facilities and the
Canadian Swing Line Facility.
"Facility Borrower" means, when in relation to (i) the
Canadian Revolving Credit Facility, the Canadian Swing Line
Facility and the Canadian Letter of Credit Facility: Consoltex;
(ii) the Canadian Term Loan Facility: Consoltex; (iii) the U.S.
Revolving Credit Facility and the U.S. Letter of Credit Facility:
each of Consoltex Holdings, Consoltex USA, Consoltex
International, LINQ, Consoltex Mexico (subject to the Mexican
Borrowing Limit) and Rafytek (subject to the Mexican Borrowing
Limit); and (iv) the US Term Loan Facility: each of LINQ and
Consoltex Mexico (subject to the Mexican Borrowing Limit).
"Facility Guaranty" means, collectively (or individually
as the context may indicate), (i) that certain Guaranty Agreement
dated as of the Original Closing Date by Consoltex, Consoltex USA,
Consoltex International, LINQ (as assignee of Old LINQ), Consoltex
Mexico, Rafytek, Rafytica and certain other entities that have
been merged or amalgamated out of existence to the Agents and the
Canadian Collateral Trustee, (ii) that certain Guaranty Agreement
dated as of May 31, 1996 by Xxxx Xxx to the Agents and the
Canadian Collateral Trustee, (iii) that certain Guaranty Agreement
dated as of October 22, 1999 by Marino, Royalton, Vestco and
Marino Mexico to the Agents and the Canadian Collateral Trustee,
(iv) that certain Guaranty Agreement dated as of September 29,
2000 by Consoltex Holdings to the Agents and the Canadian
Collateral Trustee, (v) that certain Guarantee dated as of
November 7, 2000 by Consoltex to the Agents and the Canadian
Collateral Trustee, (vi) that certain Guaranty Joinder Agreement
dated as of August 8, 2001 by New Royalton to the Agents and the
Canadian Collateral Trustee, and (vii) any additional direct or
indirect guaranty of any of the obligations or liabilities of any
of the Borrowers or Guarantors under any of the Loan Documents (as
defined herein or in the Original Credit Agreement or in the
Existing Credit Agreement) delivered on or before the Closing Date
or at any other time pursuant to the Original Credit Agreement (or
any of the "Loan Documents" as defined therein), the Existing
Credit Agreement (or any of the "Loan Documents" as defined
therein), or otherwise pursuant to the terms hereof or any of the
other Loan Documents, in each case as heretofore or hereafter
modified, amended or supplemented from time to time.
"Facility Termination Date" means such date as all of the
following shall have occurred: (a) each applicable Borrower shall
have permanently terminated each of the Revolving Credit
Facilities and the Canadian Swing Line Facility by payment in full
of all Revolving Credit Outstandings, Letter of Credit
Outstandings and Canadian Swing Line Loan Outstandings, together
with all accrued and unpaid interest thereon, except for the
undrawn portion of Letters of Credit as have been fully cash
collateralized in a manner consistent with the terms of Section
11.1(B), (b) each applicable Borrower shall have paid all Term
Loan Outstandings in full, together with all accrued and unpaid
interest thereon, (c) all Swap Agreements shall have been
terminated, expired or cash collateralized to the satisfaction of
the Relevant Agent and the applicable Lenders, (d) all Term Loan
Commitments, Revolving Credit Commitments and Letter of Credit
Commitments shall have terminated or expired and (e) each Borrower
shall have fully, finally and irrevocably paid and satisfied in
full all Obligations (other than Obligations consisting of
continuing indemnities and other Contingent Obligations of such
Borrower or any Guarantor that may be owing to the Lenders
pursuant to the Loan Documents and expressly survive termination
of this Agreement).
"FASB 133" means Statement of Financial Accounting
Standards No. 133.
"Federal Funds Rate" means, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted
to the Relevant Agent on such day on such transaction from three
Federal funds brokers of recognized standing selected by the
Relevant Agent.
"Fee Limitation Agreement" means the agreement of AIP
addressed to the Borrowers, the Agents and the Lenders, limiting
the payment of management fees by the Borrower to AIP to: (a)
$342,500 paid after the Existing Credit Agreement Closing Date as
remittance of a portion of the accrued and unpaid management fees
as of the Existing Credit Agreement Closing Date; (b) $57,083 to
be paid monthly in each of October, November and December, 2000;
and (c) an amount each month thereafter consisting of all or part
of the monthly fee due AIP of up to $114,166 and such accrued and
unpaid management fees from prior periods; provided, however, that
such agreement shall provide that all fees under (c) shall be
limited in amount, or restricted, to the extent necessary such
that, after giving pro forma effect to the payment of such fee,
there would not then exist a default in the Consolidated Fixed
Charge Coverage Ratio.
"FIBC Disposition" means the disposition of the flexible
intermediate bulk containers division of the operations of the
Borrowers to Coated Products Holdings, Incorporated.
"FIBC Holdback Amount" means that portion of the sales
price of the FIBC Disposition which, pursuant to the terms of the
FIBC Disposition, is being held in escrow as of the Closing Date
and, subject to reductions as a result of various sales price and
indemnification adjustments, (a) fifty percent of which (after
such adjustments) shall be released from escrow and delivered to
one or more of the Borrowers on the first anniversary of the
closing of the FIBC Disposition, and (b) the remainder of which
shall be released from escrow and delivered to one or more of the
Borrowers on the date that is eighteen months after the closing of
the FIBC Disposition, all as set forth in the documents relating
to the FIBC Disposition.
"FIBC Escrow Agreement" means that certain Escrow
Agreement dated as of December 19, 2001, pursuant to which the
FIBC Holdback Amount is retained and distributed.
"Fiscal Year" means the twelve month fiscal period of
Consoltex Holdings and its Subsidiaries commencing on January 1 of
each calendar year and ending on December 31 of such calendar
year.
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan.
"Four-Quarter Period" means a period of four full
consecutive fiscal quarters of Consoltex Holdings and its
Subsidiaries, taken together as one accounting period.
"Fourth Amendment to Mortgage" means that certain Fourth
Amendment to Mortgage with respect to the Mortgage and the
Mortgaged Property in the form attached hereto as Exhibit H.
"GAAP" or "Generally Accepted Accounting Principles"
means generally accepted accounting principles at such time
applicable in the United States of America, being those principles
of accounting set forth in pronouncements of the Financial
Accounting Standards Board, the American Institute of Certified
Public Accountants, or which have other substantial authoritative
support and are applicable in the circumstances as of the date of
a report.
"GMAC" means GMAC Business Credit, LLC.
"Governmental Authority" shall mean as applicable to and
governing any certain Borrower, any United States of America, any
Canadian, any Mexican and any Costa Rican federal, state,
provincial, municipal, national or other governmental department,
ministry, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any
court, in each case whether associated with the United States of
America or any of its states, Canada or any of its provinces,
Mexico or any of its states, Costa Rica or a foreign entity or
government.
"Grantor" has the meaning given such term in Section 5.3.
"Guarantors" means, at any date, each of Consoltex
Holdings, Consoltex, Consoltex USA, Consoltex International, LINQ,
Consoltex Mexico, the Mexican Companies, and any other
Subsidiaries or other Persons who are or are required to be
parties to a Facility Guaranty at such date, each of which shall
guarantee all Obligations of all Borrowers and all other
Guarantors, provided that Consoltex Mexico and each of the Mexican
Companies shall only guarantee the Obligations of Consoltex
Mexico, Consoltex and the Mexican Companies.
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials and lead), the generation, handling,
storage, transportation, disposal, treatment, release, discharge
or emission of which is subject to any Environmental Law.
"Income Tax Act" means the Income Tax Act, R.S.C. 1985,
5th Supplement, as amended, and any regulations promulgated
thereunder.
"Indebtedness" means as to any Person, without
duplication, (a) all Indebtedness for Money Borrowed of such
Person, (b) all Rate Hedging Obligations of such Person, (c) all
Synthetic Lease Obligations of such Person, (d) all indebtedness
secured by any Lien on any property or asset owned or held by such
Person regardless or whether the indebtedness secured thereby
shall have been assumed by such Person or is non-recourse to the
credit of such Person, and (e) all Contingent Obligations of such
Person, including all such items incurred by any partnership or
joint venture as to which such Person is liable as a general
partner or joint venturer.
"Indebtedness for Money Borrowed" means with respect to
any Person, without duplication, all indebtedness in respect of
money borrowed, including without limitation all obligations under
Capital Leases, the deferred purchase price of any property or
services, the aggregate face amount of all surety bonds, letters
of credit (including without limitation Letters of Credit issued
hereunder), and Bankers' Acceptances, and (without duplication)
all payment and reimbursement obligations in respect thereof
whether or not matured, evidenced by a promissory note, bond,
debenture or similar written obligation for the payment of money
(including reimbursement agreements and conditional sales or
similar title retention agreements), including all such items
incurred by any partnership or joint venture as to which such
Person is liable as a general partner or joint venturer, other
than trade payables and accrued expenses incurred in the ordinary
course of business.
"Indemnified Party" means each Agent and each Lender and
each of their affiliates and their respective officers, directors,
employees, agents, and advisors.
"Initial Mortgaged Properties" has the meaning given such
term in Section 8.1(xv) of the Original Credit Agreement.
"Indirect Foreign Subsidiary" means a Subsidiary of
Consoltex Holdings that is neither a Domestic Subsidiary nor a
Direct Foreign Subsidiary.
"Interbank Offered Rate" means, with respect to any
Eurodollar Rate Loan for the Interest Period applicable thereto:
(a) the rate per annum equal to the rate
determined by the Agent to be the offered rate that
appears on the page of the Telerate screen that displays
an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on
the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or
(b) in the event the rate referenced in the
preceding subsection (a) does not appear on such page or
service or such page or service shall cease to be
available, the rate per annum equal to the rate
determined by the Agent to be the offered rate on such
other page or other service that displays an average
British Bankers Association Interest Settlement Rate for
deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00
a.m. (London time) two Business Days prior to the first
day of such Interest Period, or
(c) in the event the rates referenced in the
preceding subsections (a) and (b) are not available, the
rate per annum determined by the Agent as the rate of
interest (rounded upward to the next 1/100th of 1%) at
which deposits in Dollars for delivery on the first day
of such Interest Period in same day funds in the
approximate amount of the Eurodollar Rate Loan being
made, continued or converted by Bank of America and with
a term equivalent to such Interest Rate would be offered
by Bank of America's London Branch to major banks in the
offshore Dollar market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period.
"Interest Expense" means, with respect to any period of
computation thereof and with respect to LINQ, Consoltex or
Consoltex International, as the context may indicate, on a
standalone unconsolidated basis, the interest expense of such
Person during such period, including without limitation (i) the
current amortized portion of debt discounts to the extent included
in interest expense, (ii) the current amortized portion of all
fees (including fees payable in respect of any Rate Hedging
Obligations) payable in connection with the incurrence of
Indebtedness to the extent included in interest expense, and (iii)
the portion of any payments made in connection with Capital Leases
allocable to interest expense, all determined in accordance with
GAAP applied on a Consistent Basis.
"Interest Period" means, for each Eurodollar Rate Loan, a
period commencing on the date such Eurodollar Rate Loan is made or
Converted or Continued and ending, at the Borrower's option, on
the date one, two, three or, subject to availability, six months
thereafter as notified to the Agent by the Authorized
Representative in accordance with the terms hereof; provided that,
(i) if an Authorized Representative fails to
notify the Relevant Agent of the length of an Interest
Period at least three (3) Business Days prior to the
first day of such Interest Period, the Loan for which
such Interest Period was to be determined shall be deemed
to be a Base Rate Loan as of the first day thereof;
(ii) if an Interest Period for a Eurodollar Rate
Loan would end on a day which is not a Business Day, such
Interest Period shall be extended to the next Business
Day (unless such extension would cause the applicable
Interest Period to end in the succeeding calendar month,
in which case such Interest Period shall end on the next
preceding Business Day);
(iii) any Interest Period which begins on the
last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall
end on the last Business Day of a calendar month; and
(iv) no Interest Period shall extend past the
Stated Termination Date then in effect for Revolving
Credit Loans or past the Term Loan Maturity Date for any
Term Loans.
"Interest Rate Selection Notice" means a written notice
in substantially the form of Exhibit F delivered to the Relevant
Agent by an Authorized Representative in connection with (i) the
election of a subsequent Interest Period for any Eurodollar Rate
Loan or the Conversion of any Eurodollar Rate Loan under a
particular Facility into a Base Rate Loan under such Facility or
the Conversion of any Base Rate Loan under a particular Facility
into a Eurodollar Rate Loan under such Facility, (ii) the
conversion of any Segment in Canadian Dollars under a particular
Canadian Facility into a Segment in Dollars under such Facility or
of any Segment in Dollars under a particular Canadian Facility
into a Segment in Canadian Dollars under such Facility, (iii) the
Continuation of any Bankers' Acceptances or the Conversion of any
Bankers' Acceptances under a Canadian Facility into Base Rate
Loans or Eurodollar Rate Loans under such Canadian Facility and
(iv) the Conversion of a Base Rate Loan or a Eurodollar Rate Loan
under a Canadian Facility into Bankers' Acceptances under such
Canadian Facility.
"Issuing Bank" means one or the other of the Canadian
Issuing Bank and the US Issuing Bank, as applicable.
"Inventory" means all inventory of the Borrowers
(exclusive of Consoltex Holdings, Consoltex Mexico and Rafytek) as
defined in the Security Agreement.
"LC Account Agreement" means the LC Account Agreement
dated as of the date hereof between the Facility Borrowers and the
Agents, as amended, modified or supplemented from time to time.
"Lender" and "Lenders" have the meanings given such terms
in the preamble hereto and in each event, where applicable,
"Lenders" shall include without limitation the Canadian Swing Line
Facility Lender.
"Les Gantiers Debenture" means that certain Convertible
Debenture by and between Consoltex Holdings and Les Gantiers
Limited dated as of September 29, 2000 in the aggregate initial
principal amount of $2,123,000, as amended.
"Letter of Credit" means any of a Canadian Letter of
Credit or a US Letter of Credit.
"Letter of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to acquire Participations in
respect of Letters of Credit and Reimbursement Obligations up to
an aggregate amount at any one time outstanding equal to such
Lender's Applicable Commitment Percentage of the Total US Letter
of Credit Commitment or the Total Canadian Letter of Credit
Commitment, as applicable, as the same may be increased or
decreased from time to time pursuant to this Agreement.
"Letter of Credit Facility" means, collectively, the
Canadian Letter of Credit Facility and the US Letter of Credit
Facility.
"Letter of Credit Outstandings" means, collectively or
individually as the context may require, each of the Canadian
Letter of Credit Outstandings and the US Letter of Credit
Outstandings.
"Lien" means any interest in or right with respect to
property of any certain Borrower or its Subsidiaries, securing any
obligation owed to, or a claim by, a Person other than the owner
of the property, whether such interest is based on the Civil Code
of Quebec, the Ley General de Titulos y Operaciones de Credito of
Mexico (the Mexican General Law of Negotiable Instruments and
Credit Transactions), the applicable Uniform Commercial Code, the
common law, statute or contract, and including but not limited to
the right of an unpaid vendor or supplier to dissolve the sale or
to repossess goods, any lien, security interest or priority
arising by operation of law or from a mortgage, hypothec,
encumbrance, pledge, security agreement, conditional sale, trust
receipt or any other title retention device or a lease, trust,
deemed trust, consignment for security purposes or bailment for
security purposes and including also a margin payment made in
connection with a Rate Hedging Obligation. For the purposes of
this Agreement, any Borrower and any Subsidiary shall be deemed to
be the owner of any property which it has acquired or holds
subject to a conditional sale agreement, financing lease, or other
arrangement pursuant to which title to the property has been
retained by or vested in some other Person until full payment of
its purchase price or for security purposes.
"LINQ" has the meaning given such term in the preamble
hereto.
"LINQ EBITDA" means, with respect to LINQ on a stand
alone basis, for any period of computation thereof, the sum of the
following (without duplication): (i) Net Income, (ii) Interest
Expense, (iii) income tax expense, (iv) amortization expense, (v)
depreciation expense, (vi) any non-recurring or extraordinary
non-cash losses for such period (net of any non-recurring or
extraordinary gains), (vii) to the extent not included in Interest
Expense, any Ticking Fee paid in cash during such period, and
(viii) with respect to any foreign currency exchange gains and
losses that are set forth as a specific gain or loss in the
financial statements most recently delivered pursuant to Section
9.1(a)(i) or 9.1(b)(i), (a) to the extent of any such foreign
currency exchange gain included in Net Income, less such gain and
(b) to the extent of any such foreign currency exchange loss
included in Net Income, plus such loss, all determined in
accordance with GAAP applied on a Consistent Basis; provided,
however, that notwithstanding the foregoing, there shall be
excluded from such computation any non-cash expense related to
post-retirement employee benefits; provided further, however, that
adjustments shall be made to eliminate the effect of all
transactions of LINQ with Consoltex Holdings or any of its
Subsidiaries other than such transactions as are made in the
ordinary course of the business of LINQ and Consoltex Holdings or
the applicable Subsidiary consistent with past practice.
"Loan" or "Loans" means any of the Canadian Revolving
Credit Loans, US Revolving Credit Loans, the Canadian Term Loan,
the US Term Loan or the Canadian Swing Line Loans, including any
Segment, and any Bankers' Acceptances issued thereunder to the
full extent of its face amount.
"Loan Documents" means this Agreement, the Notes, the
Security Instruments, the Facility Guaranties, the Lock Box
Agreements, the Deposit Account Agreements, the LC Account
Agreement, the Applications and Agreements for Letter of Credit,
each Mortgage, the Fourth Amendment to Mortgage, all documents
relating to a Payment Deferral Arrangement, and all other
agreements, instruments and documents heretofore or hereafter
executed and delivered to or in favor of any Lender (including the
Canadian Issuing Bank or the US Issuing Bank) or either Agent in
connection with the Loans made and transactions contemplated under
this Agreement, as the same may be amended, supplemented or
replaced from the time to time.
"Lock Box" means one or more post office boxes or other
similar places for the receipt of mail established by any US
Borrower or Canadian Borrower reasonably acceptable to the
Relevant Agent and over which the US Agent, the US Collateral
Agent, the Canadian Agent or the Canadian Collateral Trustee, as
applicable, shall have received a Lock Box Agreement in accordance
with Section 9.20 or otherwise, giving such US Agent, US
Collateral Agent, Canadian Agent or Canadian Collateral Trustee
rights with respect to the receiving and opening of mail received
therein, the depositing of proceeds of Accounts Receivable
received therein in the appropriate Lock Box Account, and such
other rights and remedies as are otherwise provided for in the
applicable Lock Box Agreement and Cash Collateral Agreement.
"Lock Box Account" means one or more accounts established
by any US Borrower or Canadian Borrower with the US Agent or the
Canadian Agent, including any of the Borrowers' US Accounts or the
Borrowers' Canadian Accounts if so designated by the Borrower
owning such account, over which the US Agent, the US Collateral
Agent, the Canadian Agent or the Canadian Collateral Trustee, as
applicable, shall have complete dominion and control for the
receipt of payments in respect of all Accounts Receivable in
accordance with the terms of a Cash Collateral Agreement executed
with respect to each such account in accordance with Section 9.20
or otherwise, and into which the proceeds of any Accounts
Receivable received in any Lock Box are deposited as provided
herein or in an applicable Lock Box Agreement.
"Lock Box Agreements" means, collectively, each certain
Lock Box Agreement by and among certain of the US Borrowers or
Canadian Borrowers and the US Agent, the US Collateral Agent, the
Canadian Agent or the Canadian Collateral Trustee, as applicable,
providing for the establishment and operations of the Lock Boxes,
as amended, restated, modified or replaced from time to time in
accordance with its terms, in form and substance reasonably
satisfactory to the Agents and the Lenders.
"Management Investment" means any equity contribution
made to Consoltex Holdings in exchange for additional equity
interests in, or right to acquire additional equity interests in,
Consoltex Holdings in connection with its management stock option
plan and the exercise of options issued thereunder after the
Closing Date.
"Marino" means Marino Technologies, Inc., all of whose
stock was previously acquired by Consoltex USA and which was
subsequently merged into Old LINQ.
"Marino Mexico" means Marino Technologies de Mexico, S.A.
de C.V., which was merged into Rafytek on or about June 29, 2001.
"Material Adverse Effect" means a material adverse effect
on (i) the business, properties, operations, prospects or
condition, financial or otherwise, of Consoltex Holdings and its
Subsidiaries, taken as a whole, (ii) the ability of the Borrower
and the Guarantors, taken as a whole, to observe the covenants and
agreements contained herein or in any other Loan Document, or
(iii) the rights, powers and remedies of the Relevant Agent, the
US Collateral Agent, the Canadian Collateral Trustee or any Lender
under any Loan Document or the validity, legality or
enforceability thereof.
"Mexican Benefit Law" means any applicable Mexican
federal or state statute, law, regulation, order or decree having
the force of law regulating, relating to or imposing liability or
standards of conduct concerning any Mexican Employee Pension Plan.
"Mexican Borrowing Limit" means, with respect to
Consoltex Mexico as to the US Term Loan Facility, and with respect
to Consoltex Mexico and Rafytek collectively as to the US
Revolving Credit Facility , the respective maximum principal
amounts set forth below:
(a) US Term Loan Facility (Consoltex Mexico) $0.00
(b) US Revolving Credit Facility (Consoltex Mexico
and Rafytek) $6,000,000.00
; provided that the limit with respect to the US Revolving Credit
Facility will be reduced from time to time by good faith
negotiations between the Borrowers and the Lenders in connection
with the occurrence of a Permitted Asset Disposition or any
wind-down, liquidation or other divestiture of Consoltex Mexico or
any Mexican Company.
"Mexican Companies" means collectively, each of Rafytek,
Royalton, New Royalton and Rafytica.
"Mexican Employee Pension Plan" means any employee
benefit plan registered as a pension plan in Mexico under Mexican
Benefit Law and that is maintained by any Subsidiary of Consoltex
Holdings organized under the laws of Mexico or any political
subdivision thereof, or with respect to which any of them could
incur a liability.
"Mexican Stock Pledge Agreements" means, collectively or
individually as the context may indicate, each of (i) that certain
Stock Pledge Agreement dated as of the Existing Credit Agreement
Closing Date by and between Consoltex Mexico and the US Collateral
Agent for the benefit of the Agents and the Lenders, (ii) that
certain Stock Pledge Agreement dated as of the Existing Credit
Agreement Closing Date by and between Rafytek and the US
Collateral Agent for the benefit of the Agents and the Lenders,
(iii) that certain Stock Pledge Agreement dated as of the Existing
Credit Agreement Closing Date by and between Consoltex and the US
Collateral Agent for the benefit of the Agents and the Lenders,
(iv) that certain Stock Pledge Agreement dated as of the Existing
Credit Agreement Closing Date by and between Consoltex USA and the
US Collateral Agent for the benefit of the Agents and the Lenders,
(v) that certain Stock Pledge Agreement dated as of the Existing
Credit Agreement Closing Date by and between Old LINQ and the US
Collateral Agent for the benefit of the Agents and the Lenders,
(vi) that certain Stock Pledge Agreement dated as of August 8,
2001 by and between Consoltex Mexico and the US Collateral Agent
for the benefit of the Agents and the Lenders, and (vii) any
additional stock pledge agreement or other pledge of equity
interests delivered on or before the Closing Date or at any other
time pursuant to the Original Credit Agreement (or any of the
"Loan Documents" as defined therein), the Existing Credit
Agreement (or any of the "Loan Documents" as defined therein), or
otherwise pursuant to the terms hereof or any of the other Loan
Documents, in each case as heretofore or hereafter amended,
modified or supplemented from time to time, including by way of
any applicable Pledge Agreement Supplement.
"Mexican Termination Event" means (i) a notice given with
respect to a Mexican Employee Pension Plan that registration under
Mexican Benefit Law may be revoked; or (ii) the termination of a
Mexican Employee Pension Plan or the filing of a notice of intent
under Mexican Benefit Law to terminate any such plan or the
treatment of any amendment to any such plan as a termination; or
(iii) the appointment of a provisional administrator, including
any Governmental Authority, to administer any Mexican Employee
Pension Plan.
"Mortgage" means, collectively or individually as the
context may indicate, all hypothecs, mortgages, deeds of trust and
deeds granting a Lien to the Canadian Collateral Trustee, the US
Collateral Agent or a trustee for the benefit of either Agent for
the benefit of the Lenders in Collateral constituting real
property and fixtures to secure Obligations existing as of the
Existing Credit Agreement Closing Date or at any time thereafter,
as any such documents are amended effective as of the Closing Date
by the Fourth Amendment to Mortgage and as otherwise heretofore or
hereafter amended, modified or supplemented from time to time.
"Mortgaged Property" means, collectively, the real
property and fixtures of the Borrowers as described in the
Mortgages.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower or
any ERISA Affiliate is making, or is accruing an obligation to
make, contributions or has made, or been obligated to make,
contributions within the preceding six (6) Fiscal Years, other
than the District 65 Pension Plan from which Consoltex
International withdrew effective January 31, 1995.
"NBC" has the meaning given such term in the preamble
hereto.
"Net Income" means, for any period of computation thereof
and with respect to LINQ, Consoltex or Consoltex International, as
the context may indicate, on a standalone unconsolidated basis,
the gross revenues from operations of such Person (including
payments received by such Person of (i) interest income, and (ii)
dividends and distributions made in the ordinary course of their
businesses by Persons in which investment is permitted pursuant to
this Agreement and not related to an extraordinary event), less
all operating and non-operating expenses of such Person including
taxes on income, all determined in accordance with GAAP applied on
a Consistent Basis; but excluding as income: (a) net gains on the
sale, conversion or other disposition of capital assets, (b) net
gains on the acquisition, retirement, sale or other disposition of
capital stock and other securities of such Person, (c) net gains
on the collection of proceeds of life insurance policies, (d) any
write-up of any asset, (e) net gains attributable to any Person
that is not a wholly owned Subsidiary of such Person, except to
the extent of the amount of dividends or other distributions
referred to in clause (ii) above, (f) net gains attributable to
any Person that accrued prior to the date such Person became a
Subsidiary of or was merged into or consolidated with LINQ,
Consoltex or Consoltex International, as applicable, and (g) any
other net gain or credit of an extraordinary nature, in each case
as determined in accordance with GAAP applied on a Consistent
Basis.
"Net Proceeds" (a) from any public or private offering of
any security means cash payments received by any Borrower or any
Subsidiary therefrom as and when received, net of all legal,
accounting, banking and underwriting fees and expenses,
commissions, discounts and other issuance expenses incurred in
connection therewith and all taxes required to be paid or accrued
as a consequence of such issuance; and (b) from any Asset
Disposition means cash payments received by any Borrower or any
Subsidiary therefrom (including any cash payments received
pursuant to any note or other debt security received in connection
with any Asset Disposition) as and when received, net of (i) all
legal fees and expenses and other fees and expenses paid to third
parties and incurred in connection therewith, (ii) all taxes
required to be paid or accrued as a consequence of such
disposition, and (iii) all amounts applied to repayment of
Indebtedness (other than the Obligations) secured by a Lien on the
asset or property disposed.
"New Royalton" has the meaning given thereto in the
preamble hereof.
"Non-BA Lender" means a Canadian Facility Lender which is
not a bank governed by the Bank Act and in favor of which are
issued Discount Notes.
"Non-Funding Lender" means any Lender that shall at any
time fail to advance funds as herein provided, including without
limitation as a result of being in any insolvency or receivership
proceeding, for so long as such Lender's failure to advance funds
shall continue.
"Notes" means, collectively, the Term Notes and the
Revolving Notes.
"Notice Officers" has the meaning given such term in
Section 9.11.
"Obligations" means the obligations, liabilities and
Indebtedness of each Borrower and each Guarantor with respect to
(i) the principal and interest on the Loans, whether or not
evidenced by Notes, and on Bankers' Acceptances issued under the
Canadian Facilities, (ii) the Reimbursement Obligations and
otherwise in respect of the Letters of Credit, (iii) all
liabilities of any Borrower to any Lender (or any affiliate of any
Lender) which arise under a Swap Agreement, and (iv) the payment
and performance of all other obligations, liabilities and
Indebtedness of the Borrowers and the Guarantors to the Lenders
(including the Canadian Issuing Bank and the US Issuing Bank), the
Agents, the US Collateral Agent, the Canadian Collateral Trustee
or BAS hereunder, under any one or more of the other Loan
Documents or with respect to the Loans.
"Old LINQ" means LINQ Industrial Fabrics, Inc., a
Delaware corporation, which was disposed of pursuant to the FIBC
Disposition.
"Operating Documents" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally
authorized incorporated or unincorporated entity, the bylaws,
operating agreement, partnership agreement, limited partnership
agreement or other applicable documents relating to the operation,
governance or management of such entity.
"Organizational Action" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally
authorized incorporated or unincorporated entity, any corporate,
organizational or partnership action (including any required
shareholder, member or partner action), or other similar official
action, as applicable, taken by such entity.
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally
authorized incorporated or unincorporated entity, the articles of
incorporation, certificate of incorporation, articles of
organization, certificate of limited partnership or other
applicable organizational or charter documents relating to the
creation of such entity.
"Original Credit Agreement" means that certain Credit
Agreement by and among the Agents, certain of the Borrowers and
Guarantors, and certain of the Lenders dated as of March 19, 1996,
as amended by Amendment No. 1 to Credit Agreement dated as of
February 14, 1997, by Amendment No. 2 to Credit Agreement dated as
of December 12, 1997, by that certain letter agreement dated as of
March 16, 1998, by Amendment No. 4 to Credit Agreement dated as of
June 8, 1998, by Amendment No. 5 to Credit Agreement dated as of
September 29, 1998, by Amendment No. 6 to Credit Agreement dated
as of December 31, 1998, by Amendment No. 7 to Credit Agreement
dated as of May 17, 1999 and by Amendment No. 8 to Credit
Agreement dated as of August 2, 1999.
"Original Closing Date" means March 19, 1996, the date on
which certain of the Borrowers, the Agents and certain of the
Lenders first entered into the Original Credit Agreement.
"Outstandings" means, as the context may require, at any
date, (i) with respect to any certain Facility, the aggregate
principal amount of the Loans then outstanding under such
Facility, including the aggregate face amount of Bankers'
Acceptances then outstanding thereunder, and the then aggregate
amount remaining undrawn under the Letters of Credit issued
thereunder plus Reimbursement Obligations relating thereto then
outstanding and (ii) with respect to all the Facilities, the
aggregate principal amount of the Loans then outstanding under all
the Facilities, including the aggregate face amount of Bankers'
Acceptances then outstanding thereunder, and the then aggregate
amount remaining undrawn under the Letters of Credit issued
thereunder plus Reimbursement Obligations relating thereto then
outstanding on such date.
"Overadvance Amount" means, as of any date of
determination thereof, an amount equal to the lesser of (a)
$2,000,000 and (b) the positive difference, if any, between (i)
the Overadvance Borrowing Base minus (ii) the Borrowing Base, all
as set forth on the most recent Borrowing Base Certificate
delivered pursuant to Section 9.1(h) or Section 7.1(a)(xxii), as
applicable.
"Overadvance Borrowing Base" means as of any date of
determination thereof, an amount equal to (a) the sum of (i) the
product of the aggregate amount as of such date of all Eligible
Receivables, as set forth in the most recent Borrowing Base
Certificate delivered pursuant to Section 9.1(h), multiplied by
85%, (ii) the product of the aggregate amount as of such date of
all Eligible Factor Receivables, as set forth in the most recent
Borrowing Base Certificate delivered pursuant to Section 9.1(h),
multiplied by 85%, (iii) the lesser of (A) $2,500,000 or (B) the
product of the aggregate stated amount as of such date of all
Eligible Letters of Credit, as set forth in the most recent
Borrowing Base Certificate delivered pursuant to Section 9.1(h),
multiplied by 50%, and (iv) the lesser of (x) $22,000,000 or (y)
the product of the aggregate amount as of such date of all
Eligible Inventory, as set forth in the most recent Borrowing Base
Certificate delivered pursuant to Section 9.1(h), multiplied by
52.5%, minus (b) reserves instituted by any Agent at the direction
of the Required Lenders. Until the first Borrowing Base
Certificate is delivered pursuant to Section 9.1(h) after the
Closing Date, all references in this definition to a Borrowing
Base Certificate shall be to the Borrowing Base Certificate
delivered pursuant to Section 7.1(a)(xxii).
"Overadvance Period" means, individually, each period of
time from (i) the Closing Date to and including March 31, 2002,
and (ii) January 1, 2003 to and including March 31, 2003.
"Participating Lenders" has the meaning given such term
in Section 4.12.
"Participation" means, as the context may require, (i)
with respect to any Lender (other than the applicable Issuing
Bank) and a Letter of Credit, the extension of credit represented
by the participation of such Lender hereunder in the liability of
such Issuing Bank in respect of a Letter of Credit issued by such
Issuing Bank in accordance with the terms hereof, (ii) with
respect to any Lender, the extension of credit represented by the
participation of such Lender in the liability of another Lender
under a Facility to which the participating Lender is not a party
in accordance with Section 4.12 hereof and (iii) with respect to
any Canadian Revolving Credit Facility Lender (other than the
Canadian Swing Line Facility Lender), the extension of credit
represented by the participation of such Lender in the liability
of the Canadian Swing Line Facility Lender in respect of a
Canadian Swing Line Loan made in accordance with the terms hereof.
"Payment Deferral Arrangement" means, individually or
collectively as the context may indicate, one or more
arrangements, and the documentation related thereto, pursuant to
which AIP or one of its affiliated investment funds acquires and
holds Subordinated Notes and enters into documentation providing
for, among other things, the deferral of the receipt of any
amounts with respect to such Subordinated Notes (whether
representing scheduled payments or prepayments, whether by
acceleration or otherwise, of interest, principal, fees or any
other amount), the non-transferability of such Subordinated Notes,
and the right of the Agents and the Lenders to vote the interest
in such Subordinated Notes of such holder in the event of a
bankruptcy proceeding, all in form and substance satisfactory to
the Agents.
"PBGC" means the Pension Benefit Guaranty Corporation and
any successor thereto.
"Pension Plan" means any employee pension benefit plan
within the meaning of Section 3(2) of ERISA, other than a
Multiemployer Plan, which is subject to the provisions of Title IV
of ERISA or Section 412 of the Code and which (i) is maintained
for employees of any Borrower or any of their ERISA Affiliates or
is assumed by any Borrower or any of their ERISA Affiliates in
connection with any Acquisition or (ii) has been maintained within
the past six (6) preceding Fiscal Years for the employees of any
Borrower or any current or former ERISA Affiliate.
"Permitted Asset Disposition" means, individually or
collectively as the context may indicate, the voluntary sale or
transfer, for cash and otherwise on terms and conditions
satisfactory to the Agents, of any of the assets (other than
inventory in the ordinary course of business) or capital stock of:
(i) the small bag business of Rafytek, (ii) Rafytica, (iii)
Royalton, (iv) New Royalton, and (v) Consoltex Mexico, provided
that to the extent the terms or conditions of any such disposition
materially differ from the terms and conditions disclosed to the
Agents and the Lenders on or prior to the Closing Date, the terms
and conditions of such disposition shall be satisfactory to the
Required Lenders.
"Permitted Liens" means those Liens permitted under
Section 10.4.
"Person" means an individual, partnership, corporation,
limited liability company, limited liability partnership, trust,
unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof.
"PIK Notes" means, collectively, the Les Gantiers
Debenture and any additional PIK Debentures (as defined in the Les
Gantiers Debenture) issued pursuant to Section 1(b) of the Les
Gantiers Debenture.
"Pledge Agreement" means, collectively (or individually
as the context may indicate), (i) that certain Amended and
Restated Stock Pledge Agreement dated as of January 3, 2000 by and
among Consoltex, Consoltex USA and Consoltex Mexico and the US
Collateral Agent for the benefit of the Agents and the Lenders,
(ii) that certain Stock Pledge Agreement (Mexican Subsidiaries)
dated as of the Original Closing Date by and among Consoltex,
Consoltex USA, Consoltex Mexico and the Agents and the US
Collateral Agent for the benefit of the Agents and the Lenders,
(iii) any deed of hypothec by Consoltex in favor of the Canadian
Collateral Trustee, (iv) that certain Stock Pledge Agreement (Xxxx
Xxx) dated as of May 31, 1996 by and among Consoltex Mexico, the
Agents and the US Collateral Agent for the benefit of the Agents
and the Lenders, (v) that certain Stock Pledge Agreement (1999 -
Mexican Subsidiaries) dated as of October 22, 1999 by and between
Marino and the US Collateral Agent for the benefit of the Agents
and the Lenders, (vi) that certain Stock Pledge Agreement
(Consoltex Holdings, Inc.) dated as of October 2, 2000 by and
among Consoltex Holdings, the Agents and the US Collateral Agent
for the benefit of the Agents and the Lenders, (vii) each of the
Mexican Stock Pledge Agreements, (viii) that certain Movable
Hypothec With Delivery (Pledge) dated as of the Existing Credit
Agreement Closing Date by and among Consoltex Holdings in favor of
the Canadian Collateral Trustee for the benefit of the Agents and
the Lenders, and (ix) any additional hypothec, stock pledge
agreement delivered on or before the Closing Date or at any other
time pursuant to the Original Credit Agreement (or any of the
"Loan Documents" as defined therein), the Existing Credit
Agreement (or any of the "Loan Documents" as defined therein), or
otherwise pursuant to the terms hereof or any of the other Loan
Documents, in each case as heretofore or hereafter amended,
modified or supplemented from time to time, including by way of
any applicable Pledge Agreement Supplement.
"Pledge Agreement Supplement" means, with respect to each
Pledge Agreement, the Pledge Agreement Supplement in the form
affixed as an Exhibit to such Pledge Agreement.
"Pledged Interests" means the Subsidiary Securities
required to be pledged as Collateral pursuant to Article V or the
terms of any Pledge Agreement or any other Loan Document.
"Pricing Grid" means:
---------------------------------------------------------------------------------------------------
Applicable Margin for
Eurodollar Rate Loans and Applicable Margin
Tier Consolidated Leverage Ratio Bankers' Acceptances for Base Rate Loans
---------------------------------------------------------------------------------------------------
I Less than 3.50 to 1.00 3.50% 2.50%
---------------------------------------------------------------------------------------------------
II Greater than or equal to 3.50 4.00% 3.00%
to 1.00
---------------------------------------------------------------------------------------------------
The Applicable Margin shall be established at the end of
each fiscal quarter of the Borrower (each, a "Determination
Date"). Any change in the Applicable Margin following each
Determination Date shall be determined based upon the computations
set forth in the certificate furnished to the Agents pursuant to
Section 9.1(a)(v) and Section 9.1(b)(v), subject to review and
approval of such computations by the Agents, and shall be
effective commencing on the Business Day such certificate is
received until the Business Day on which a new certificate is
delivered or is required to be delivered, whichever shall first
occur; provided however, if the Borrowers shall fail to deliver
any such certificate within the time period required by Section
9.1, then the Applicable Margin shall be Tier II from the date
such certificate was due until the appropriate certificate is so
delivered. Subject to the provisions of the immediately preceding
sentence, from the Closing Date to the date of receipt of the
certificate required by Section 9.1(b)(v) for the March 31, 2002
Determination Date, and setting forth the Consolidated Leverage
Ratio as of such date, the Applicable Margin shall be Tier II.
Without limitation of, and in addition to, any other provision of
this Agreement, including the application of the Default Rate and
the occurrence of a Default or Event of Default, at all times
during any period, including any Overadvance Period, when the
Revolving Credit Outstandings exceed the Borrowing Base, the
Applicable Margin shall be as set forth above plus one half of one
percent (.50%).
"Prime Rate" means the per annum rate of interest
established from time to time by the US Agent as its prime rate,
which rate may not be the lowest rate of interest charged by the
US Agent to its customers.
"Principal Office" means, when used in relation to (i)
the Canadian Agent: the office of the Canadian Agent at National
Bank of Canada, 000, xxx xx Xx Xxxxxxxxxxx Xxxxx, Syndication
Xxxxxx, 0xx Xxxxx, Xxxxxxxx, Xxxxxx, X0X 0X0, Attention: Senior
Manager, or such other office and address as the Canadian Agent
may from time to time designate to the applicable Facility
Borrowers and the Canadian Facility Lenders for such purpose and
to (ii) the US Agent: the office of the US Agent at Bank of
America, N.A., Independence Center, 00xx Xxxxx, XX0-000-00-00,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Agency Services, or
such other office and address as the US Agent may from time to
time designate to the applicable Facility Borrowers and the US
Facility Lenders for such purpose.
"Rafytek" has the meaning given such term in the preamble
hereto.
"Rafytek Accounts" has the meaning given such term in the
definition of Eligible Receivables.
"Rafytica" has the meaning given such term in the
preamble hereto.
"Rate Hedging Obligations" means, without duplication,
any and all obligations of any Borrower or any Subsidiary, whether
absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions
and modifications thereof and substitutions therefor), under (i)
any and all agreements, devices or arrangements designed to
protect at least one of the parties thereto from the fluctuations
of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions,
including, but not limited to, Canadian Dollar-denominated,
Dollar-denominated, Mexican Peso cross-currency interest rate
exchange agreements, forward currency exchange agreements,
interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts, warrants and those
commonly known as interest rate "swap" agreements; (ii) all other
"derivative instruments" as defined in FASB 133 and which are
subject to the reporting requirements of FASB 133; and (iii) any
and all cancellations, buybacks, reversals, terminations or
assignments of any of the foregoing. For purposes of any
computation hereunder, each Rate Hedging Obligation shall be
valued at the Rate Hedge Value thereof.
"Rate Hedge Value" means, with respect to each contract,
instrument or other arrangement creating a Rate Hedging
Obligation, the net obligations of any Borrower or any Subsidiary
thereunder equal to the termination value thereof as determined in
accordance with its provisions (if such Rate Hedging Obligation
has been terminated) or the xxxx to market value thereof as
determined on the basis of available quotations from any
recognized dealer in, or from Bloomberg or other similar service
providing market quotations for, the applicable Rate Hedging
Obligation (if such Rate Hedging Obligation has not been
terminated).
"Reference Rate" means the interest rate expressed as an
annual rate announced publicly from time to time by NBC as being
its reference rate then in effect for determining the interest
rate on commercial loans made by NBC in Canada in Canadian Dollars
or, when used in relation to Advances in Dollars, in Dollars
(regardless of whether or not any such loans are actually made).
"Registrar" means, with respect to any Subsidiary
Securities, any Person authorized or obligated to maintain records
of the registration of ownership or transfer of ownership of
interests in such Subsidiary Securities, and in the event no such
Person shall have been expressly designated by the related
Subsidiary, shall mean (i) as to any corporation or limited
liability company, its Secretary (or comparable official), and
(ii) as to any partnership, its general partner (or managing
general partner if one shall have been appointed).
"Regulation D" means Regulation D of the Board as the
same may be amended or supplemented from time to time.
"Reimbursement Obligation" shall mean at any time, the
obligation of any Borrower with respect to any Letter of Credit to
reimburse the applicable Issuing Bank and the Canadian Revolving
Credit Lenders or the US Revolving Credit Lenders, as the case may
be, to the extent of their respective Participations (including by
the receipt by the Canadian Issuing Bank or the US Issuing Bank of
proceeds of Loans pursuant to Section 2.2(c)(iii)) for amounts
theretofore paid by the applicable Issuing Bank pursuant to a
drawing under any Letter of Credit to the extent such obligations
have not been satisfied by or on behalf of such Borrower prior to
such time, whether from the proceeds of a Base Rate Refunding Loan
or otherwise.
"Related LC Documents" has the meaning given thereto in
Section 3.2(i)(i).
"Relevant Agent" means the Canadian Agent or the US
Agent, as applicable.
"Required Lenders" means, as of any date, Lenders on such
date having Credit Exposures (as defined below) aggregating at
least 66-2/3% of the aggregate Credit Exposures of all the Lenders
on such date. For purposes of the preceding sentence, the amount
of the "Credit Exposure" of each Lender (i) at any time prior to
the occurrence of an Acceleration Event, shall be equal to the sum
of the aggregate principal amount of such Lender's Commitment
under the Revolving Credit Facilities (unless such Lender is a
Non-Funding Lender, in which event such amount shall be the
aggregate principal amount of Loans owing to such Lender under the
Revolving Credit Facilities (including the face amount of Bankers'
Acceptances accepted by such Lender)), plus the amount of such
Lender's Applicable Commitment Percentage, if any, of Outstandings
under the Letter of Credit Facilities (unless such Lender has not
funded its Participation in a Reimbursement Obligation, in which
event such amount shall be such Lender's Applicable Commitment
Percentage of undrawn and outstanding Letters of Credit plus the
amount of Participations in outstanding Reimbursement Obligations
it has funded) plus, if the Term Loan Facilities have not been
repaid or prepaid in full prior to such time, the amount of such
Lender's Term Loan Outstandings; and (ii) at any time after the
occurrence of an Acceleration Event, shall be equal to the
aggregate principal amount of all Outstandings owing to such
Lender after taking into account all payments actually received or
made by such Lender pursuant to Section 4.12 hereof; provided
that, if any Lender shall have failed to pay to the Canadian
Issuing Bank or the US Issuing Bank, as the case may be, its
entire Applicable Commitment Percentage of any Reimbursement
Obligation, the Credit Exposure of such Lender attributable to
such unfunded amount of such Reimbursement Obligations shall be
deemed to be held by the Lender that is also the applicable
Issuing Bank for purposes of this definition. For purposes of
Section 12.7, Credit Exposures shall be determined only with
respect to the Canadian Facilities or the US Facilities, as
applicable.
"Reserve Requirement" means, with respect to any US
Facility Lender for any day during any Interest Period, the
reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day, whether or not
applicable to any Lender, under regulations issued from time to
time by the Board for determining the maximum reserve requirement
(including any emergency, special, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"). The
Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be
adjusted automatically as of the effective date of any change in
the Reserve Requirement.
"Restricted Payment" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of stock of any Borrower or any Subsidiary Securities of any
Subsidiary (other than those payable or distributable solely to a
Borrower or any Guarantor) now or hereafter outstanding, except a
dividend payable solely in shares of a class of stock to the
holders of that class; (b) any redemption, conversion, exchange,
retirement or similar payment, purchase or other acquisition for
value, direct or indirect, of the principal of (i) any
Subordinated Debt (including any Subordinated Replacement Note),
(ii) any PIK Note (other than the conversion of any PIK Note into
shares of capital stock of Consoltex Holdings and the issuance of
additional PIK Debentures in lieu of cash interest, each in
accordance with the terms of the Les Gantiers Debenture), (iii)
any AIP PIK Note (other than the conversion of any AIP PIK Note
into shares of capital stock of Consoltex Holdings and the
issuance of additional AIP PIK Notes in lieu of cash interest,
each in accordance with the terms of the applicable debenture or
note), or (iv) any shares of any class of stock of any Borrower or
any Subsidiary Securities of any Subsidiary (other than those
payable or distributable solely to a Borrower or any Guarantor)
now or hereafter outstanding; (c) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of any
Borrower or any Subsidiary Securities of any Subsidiary now or
hereafter outstanding; (d) any issuance and sale of Subsidiary
Securities of any Subsidiary of any Borrower (or any option,
warrant or right to acquire such stock) other than to a Borrower
or a Guarantor; and (e) any payment to AIP of management or other
fees other than in accordance with the Fee Limitation Agreement.
"Revolving Credit Commitment" means, collectively or
individually as the context may require, each of the Canadian
Revolving Credit Commitments and the US Revolving Credit
Commitments.
"Revolving Credit Facility Lender" means one or the other
of the Canadian Revolving Credit Facility Lenders and the US
Revolving Credit Facility Lenders, as the context may require.
"Revolving Credit Facility" means, collectively or
individually as the context may require, each of the Canadian
Revolving Credit Facility and the US Revolving Credit Facility.
"Revolving Credit Loan" means, individually or
collectively as the context may require, the Canadian Revolving
Credit Loans and the US Revolving Credit Loans.
"Revolving Credit Outstandings" means, individually or
collectively as the context may require, the Canadian Revolving
Credit Outstandings and the US Revolving Credit Outstandings.
"Revolving Credit Termination Date" means the earliest of
(i) the Stated Termination Date or (ii) such date of termination
of the Lenders' obligations pursuant to Section 11.1 upon the
occurrence of an Event of Default, or (iii) such date as the
Borrowers may voluntarily and permanently terminate the Revolving
Credit Facilities by payment in full of all Outstandings under the
Revolving Credit Facilities, under the Canadian Swing Line
Facility, and under the Letter of Credit Facilities and
cancellation or cash collateralization pursuant to the Cash
Collateral Agreement of all Letters of Credit and Bankers'
Acceptances, together with all accrued and unpaid interest
thereon, and by termination of the Total Commitments under the
Revolving Credit Facilities in accordance with Section 2.2(e).
"Revolving Notes" means, collectively, the promissory
notes of the applicable Facility Borrowers evidencing US Revolving
Loans executed and delivered to the US Revolving Credit Facility
Lenders as provided in Section 2.4 substantially in the form of
Exhibit G-1, with appropriate insertions as to amounts, dates and
names of the applicable Lenders amending and restating the
corresponding promissory notes most recently issued by the
Facility Borrowers under the US Revolving Credit Facility to such
US Revolving Credit Facility Lender pursuant to the Existing
Credit Agreement.
"Royalton" has the meaning given thereto in the preamble
hereof.
"Security Agreement" means, collectively (or individually
as the context may indicate), (i) that certain Security Agreement
dated as of the Original Closing Date by the Borrowers (including
LINQ as assignee of Old LINQ) and the Guarantors (other than
Consoltex Holdings, Consoltex Mexico, Rafytek, Royalton, New
Royalton and Rafytica) to the US Collateral Agent and the Canadian
Collateral Trustee, (ii) that certain Security Agreement dated as
of October 22, 1999 by Marino and Walpole to the US Collateral
Agent and the Canadian Collateral Trustee, and (iii) any
additional security agreement, hypothec, bond, pledge agreement or
other agreement relating to the granting of collateral by any of
the Borrowers or any of the Guarantors delivered on or before the
Closing Date or at any other time pursuant to the Original Credit
Agreement (or any of the "Loan Documents" as defined therein), the
Existing Credit Agreement (or any of the "Loan Documents" as
defined therein), or otherwise pursuant to the terms hereof or any
of the other Loan Documents, in each case as heretofore or
hereafter modified, amended or supplemented from time to time.
"Security Instruments" means, collectively, the Pledge
Agreements, the Security Agreements, the Mortgages, the Cash
Collateral Agreement, the Lock Box Agreements, the Facility
Guaranties, the Deposit Account Agreements, the LC Account
Agreement, the Fourth Amendment to Mortgage and all other
agreements (including control agreements), instruments and other
documents, whether now existing or hereafter in effect, pursuant
to which any Borrower or any Guarantor shall grant or convey to
the US Agent, the Lenders, the Canadian Agent, the US Collateral
Agent or the Canadian Collateral Trustee a Lien in, or any other
Person shall acknowledge any such Lien in, property as security
for all or any portion of the Obligations or any other obligation
under any Loan Document, including without limitation each of the
deed of hypothec and issue of bonds granted by Consoltex in favor
of the Canadian Collateral Trustee, each of the bonds issued or to
be issued from time to time by Consoltex in favor of each of the
Lenders or the Canadian Collateral Trustee, each of the pledge of
bond agreement granted or to be granted from time to time by
Consoltex in favor of each of the Lenders or the Canadian
Collateral Trustee, each security under Section 427 of the Bank
Act granted by Consoltex in favor of the Lenders under the
Canadian Facilities which are banks governed by the Bank Act, the
conditional trademark license agreements by Consoltex in favor of
the Canadian Collateral Trustee and the special power of attorney
with respect to intellectual property by Consoltex in favor of the
Canadian Collateral Trustee, as any of them may be amended,
modified or supplemented from time to time.
"Segment" means, as the context may require, (i) a
portion of the principal amount outstanding under any Term Loan
Facility (or all thereof) in the same currency with respect to
which a particular interest rate is (or is proposed to be)
applicable or (ii) a portion of the principal amount outstanding
under any Canadian Facility which is utilized by way of Bankers'
Acceptances.
"Selling Lender" has the meaning given such term in
Section 4.12.
"Solvent" means, when used with respect to any Person,
that at the time of determination:
(a) the fair value of its assets (both at fair
valuation and at present fair saleable value on an
orderly basis) is in excess of the total amount of its
liabilities, including Contingent Obligations; and
(b) it is then able and expects to be able to
pay its debts as they mature; and
(c) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Spot Rate of Exchange" means (i) in determining the
Dollar Equivalent Amount of a Canadian Dollar amount as of any
date, the spot exchange rate determined by the Canadian Agent in
accordance with its usual procedures for the purchase by the
Canadian Agent of Dollars with Canadian Dollars at approximately
10:00 A.M. on the Business Day that is two (2) Business Days prior
to such date, and (ii) in determining the Canadian Dollar
Equivalent Amount of a specified Dollar amount on any date, the
spot exchange rate determined by the Canadian Agent in accordance
with its usual procedures for the purchase by the Canadian Agent
of Canadian Dollars with Dollars at approximately 10:00 A.M. on
the Business Day that is two Business Days prior to such date.
"Stated Termination Date" means December 31, 2003.
"Statutory Borrowing Base Permitted Liens" means those
Liens set forth in Sections 10.4(b), (c), (d) and (l).
"Statutory Permitted Liens" means those Liens set forth
in Sections 10.4 (e), (f), (h), (j), (o) and (q), together with
all Statutory Borrowing Base Permitted Liens.
"Subordinated Debt" means (i) all Obligations (as defined
as of the Existing Credit Agreement Closing Date in the
Subordinated Indenture) with respect to the Subordinated Notes
(notwithstanding any adjustments to such Obligations pursuant to
the terms of any Payment Deferral Arrangement) (ii) all
obligations with respect to the Subordinated Replacement Notes as
set forth therein and in the Subordinated Replacement Indenture,
(iii) all obligations of any Borrower or any Subsidiary with
respect to any PIK Notes, and (iv) all obligations of Consoltex
Holdings (or any other Borrower or any Subsidiary) with respect to
any AIP PIK Notes.
"Subordinated Indenture" means that certain Indenture
dated as of September 30, 1993 among Consoltex USA, Consoltex,
Consoltex International, Old LINQ and First Trust National
Association, as Trustee, as amended from time to time in
accordance with its terms.
"Subordinated Notes" has the meaning given the term
"Notes" as of the Existing Credit Agreement Closing Date in the
Subordinated Indenture.
"Subordinated Note Exchange" means the execution by
Consoltex USA, Consoltex, Consoltex International, LINQ and First
Trust National Association of the Subordinated Replacement
Indenture, the issuance of the Subordinated Replacement Notes
pursuant to the terms thereof, the return to or cancellation by
the issuers of the Subordinated Notes with respect to which
Subordinated Replacement Notes are issued, and all other
transactions related thereto.
"Subordinated Note Exchange Lockup Agreements" means,
individually or collectively as the context may indicate, those
agreements entered into by certain holders of Subordinated Notes
with respect to which such holders agree, pursuant to the terms
thereof, to accept Subordinated Replacement Notes in exchange for
Subordinated Notes and otherwise accept the offer of, and
participate in, the Subordinated Note Exchange.
"Subordinated Replacement Indenture" means that certain
Indenture to be entered into among Consoltex Holdings, Consoltex
USA, Consoltex, Consoltex International, LINQ, Consoltex Mexico,
Rafytek and U.S. Bank, N.A., as Trustee, and pursuant to which the
Subordinated Replacement Notes are to be issued, as amended from
time to time in accordance with its terms and this Agreement.
"Subordinated Replacement Notes" means those promissory
notes issued in connection with, or other instruments or evidence
of obligations under, the Subordinated Replacement Indenture,
including without limitation the definition of "Notes" in the
Subordinated Replacement Indenture.
"Subsidiary" means (i) any subsidiary (within the meaning
ascribed to it as of the date hereof in the Canada Business
Corporations Act) of any Borrower or any one or more of any
Borrower's Subsidiaries, (ii) any corporation or other entity in
which more than 50% of its outstanding voting stock or more than
50% of all equity interests is owned directly or indirectly by any
Borrower or by one or more of any Borrower's Subsidiaries and
(iii) any partnership or limited partnership of which more than
50% of the outstanding units or interests are owned directly or
indirectly by any Borrower or by one or more of any Borrower's
Subsidiaries.
"Subsidiary Securities" means the shares of capital stock
or the other equity interests issued by or equity participations
in any Subsidiary, whether or not constituting a "security" under
Article 8 of the Uniform Commercial Code as in effect in any
jurisdiction.
"Swap Agreement" means one or more agreements between any
Borrower and any Person with respect to Indebtedness evidenced by
any or all of the Notes, on terms mutually acceptable to such
Borrower and such Person and approved by the Required Lenders,
which agreements create Rate Hedging Obligations; provided,
however, that no such approval of the Required Lenders shall be
required to the extent such agreements are entered into between
any Borrower and any Lender or any affiliate of any Lender.
"Synthetic Lease Obligations" means all monetary
obligations of a lessee under any tax retention or other synthetic
leases which is treated as an operating lease under GAAP but the
liabilities under which are or would be characterized as
indebtedness of such Person for tax purposes or upon the
insolvency of such Person. The amount of Synthetic Lease
Obligations in respect of any synthetic lease at any date of
determination thereof shall be equal to the aggregate purchase
price of any property subject to such lease less the aggregate
amount of payments of rent theretofore made which reduce the
lessee's obligations under such synthetic lease and which are not
the financial equivalent of interest.
"Term Loan" means, collectively or individually as the
context may require, the Canadian Term Loan and the US Term Loan.
"Term Loan Commitment" means, collectively or
individually as the context may require, each of the Canadian Term
Loan Commitments and the US Term Loan Commitments.
"Term Loan Facility" means, collectively or individually
as the context may require, each of the Canadian Term Loan
Facility and the US Term Loan Facility.
"Term Loan Facility Lender" means any one or more of the
Canadian Term Loan Facility Lenders and the US Term Loan Facility
Lenders.
"Term Loan Maturity Date" means December 31, 2003.
"Term Loan Outstandings" means, individually or
collectively as the context may require, the Canadian Term Loan
Outstandings and the US Term Loan Outstandings.
"Term Loan Termination Date" means the earliest of (i)
the Term Loan Maturity Date or (ii) such date of termination of
Lenders' obligations pursuant to Section 11.1 upon the occurrence
of an Event of Default, or (iii) such date as the Borrower may
voluntarily and permanently terminate both (but not only one) of
the Term Loan Facilities by payment in full of all Obligations
incurred in connection with the Term Loan.
"Term Notes" means, collectively, the promissory notes of
the applicable Facility Borrowers evidencing the US Term Loan
executed and delivered to the US Term Loan Facility Lenders as
provided in Section 2.4 substantially in the form of Exhibit G-2
with appropriate insertions as to amounts, dates and names of
applicable Lenders, amending and restating the promissory notes
most recently issued by the Facility Borrowers under the US Term
Loan Facility pursuant to the Existing Credit Agreement.
"Termination Event" means: (i) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued
thereunder (unless the notice requirement has been waived by
applicable regulation); or (ii) the withdrawal of the Borrower or
any ERISA Affiliate from a Pension Plan during a plan year in
which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or was deemed such under Section 4062(e) of
ERISA; or (iii) the termination of a Pension Plan, the filing of a
notice of intent to terminate a Pension Plan or the treatment of a
Pension Plan amendment as a termination under Section 4041 of
ERISA; or (iv) the institution of proceedings to terminate a
Pension Plan by the PBGC; or (v) any other event or condition
which would constitute grounds under Section 4042(a) of ERISA for
the termination of, or the appointment of a trustee to administer,
any Pension Plan; or (vi) the partial or complete withdrawal of
the Borrower or any ERISA Affiliate from a Multiemployer Plan; or
(vii) the imposition of a Lien pursuant to Section 412 of the Code
or Section 302 of ERISA; or (viii) any event or condition which
results in the reorganization or insolvency of a Multiemployer
Plan under Section 4241 or Section 4245 of ERISA, respectively; or
(ix) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution
by the PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA; or (x) any event or condition with respect
to any Employee Benefit Plan which is regulated by any Foreign
Benefit Law that results in the termination of such Employee
Benefit Plan or the revocation of such Employee Benefit Plan's
authority to operate under the applicable Foreign Benefit Law.
"Third Party Mexican Accounts Payable" means, as of any
date of measurement thereof, those accounts payable of Consoltex
Mexico and each of the Mexican Companies (other than Rafytica)
arising in the ordinary course of business and owing to trade
creditors other than any Person that is a Borrower or a Guarantor.
"Ticking Fee" has the meaning given thereto in Section
4.7(f).
"Total Commitment" means (i) with respect to the Canadian
Revolving Credit Facility, an aggregate principal amount equal to
$11,230,245.60 as reduced from time to time in accordance with
Section 2.2, (ii) with respect to the Canadian Term Loan Facility,
an aggregate principal amount equal to $ 12,024,445.45, (iii) with
respect to the US Revolving Credit Facility an aggregate principal
amount equal to $22,769,754.40, as reduced from time to time in
accordance with Section 2.2, and (iv) with respect to the US Term
Loan Facility an aggregate principal amount equal to
$21,818,719.55.
"Total Canadian Letter of Credit Commitment" means an
amount not to exceed $5,000,000.
"Total US Letter of Credit Commitment" means an amount
not to exceed $5,000,000.
"Type" shall mean any type of Loan (i.e., a Bankers'
Acceptance (including a Bankers' Acceptance Segment), a Base Rate
Loan or a Eurodollar Rate Loan).
"US Agent" has the meaning given such term in the
preamble hereto.
"US Borrower" means any Borrower that is formed under the
laws of the United States or any political subdivision thereof.
"US Collateral Agent" means Bank of America, N.A.,
successor in interest to NationsBank, National Association, or any
successor thereto, as collateral agent pursuant to the Security
Instruments and the US Agent acting in such capacity.
"US Facilities Lenders" means, collectively, each of the
US Revolving Credit Facility Lenders and the US Term Loan Facility
Lenders.
"US Facility" means, one or the other of the US Term Loan
Facility and the US Revolving Credit Facility.
"US Guarantor" means any Guarantor that is formed under
the laws of the United States or any political subdivision
thereof.
"US Issuing Bank" means initially Bank of America and
thereafter any US Revolving Credit Facility Lender which is the
successor to Bank of America as issuer of US Letters of Credit
under Article III.
"US Letter of Credit" means a standby or commercial
letter of credit issued under the US Revolving Credit Facility by
the US Issuing Bank for the account of an applicable Facility
Borrower in favor of a Person advancing credit to or securing an
obligation on behalf of such Facility Borrower.
"US Letter of Credit Facility" means the facility
described in Article III hereof providing for the issuance by the
US Issuing Bank for the account of the applicable Facility
Borrowers of US Letters of Credit in an aggregate stated amount at
any time outstanding not exceeding $5,000,000.
"US Letter of Credit Outstandings" means, as of any date
of determination, the aggregate amount available to be drawn under
all US Letters of Credit plus Reimbursement Obligations then
outstanding.
"US Revolving Credit Commitment" means, with respect to
each Lender under the US Revolving Credit Facility, the obligation
of such Lender to make US Revolving Credit Loans to the applicable
Borrowers up to an aggregate principal amount at any one time
outstanding equal to such Lender's Applicable Commitment
Percentage of the Total Commitment applicable to the US Revolving
Credit Facility.
"US Revolving Credit Facility" means the facility
described in Article II hereof providing for Advances in Dollars
in favor or at the request of an applicable Facility Borrower
(subject to the Mexican Borrowing Limit) in an aggregate principal
amount at any time outstanding not exceeding the Total Commitment
applicable to such Facility at such time.
"US Revolving Credit Facility Lenders" means,
collectively, each Lender identified as such on Exhibit A hereto
as being a Lender having a Commitment under the US Revolving
Credit Facility and each other financial institution that is an
assignee thereof and executes and delivers an Assignment and
Acceptance pursuant to Section 13.1 in which such institution
acquires a Commitment under such Facility.
"US Revolving Credit Loan" means any Loan, including
without limitation any Base Rate Refunding Loan, under the US
Revolving Credit Facility made in accordance with Article II to
any Facility Borrower thereunder (subject to the Mexican Borrowing
Limit).
"US Revolving Credit Outstandings" means, as of any date
of determination, the aggregate principal amount of all US
Revolving Credit Loans then outstanding.
"US Term Loan" means the advances previously made
pursuant to the US Term Loan Facility under the Existing Credit
Agreement (including any advances made prior thereto but included
as a US Term Loan therein), as restructured hereby, to the
applicable Facility Borrowers (subject to the Mexican Borrowing
Limit) in Dollars.
"US Term Loan Commitment" means, with respect to each US
Term Loan Facility Lender, the obligation of such Lender to have
made the Advance under the US Term Loan Facility to the applicable
Facility Borrowers (subject to the Mexican Borrowing Limit) in a
principal amount equal to such Lender's Applicable Commitment
Percentage of the Total Commitment applicable to the US Term Loan,
as set forth on Exhibit A.
"US Term Loan Facility" means the facility described in
Article II reflecting amounts previously advanced under the
Existing Credit Agreement (including any prior advances
incorporated therein), as restructured hereby, in Dollars in favor
of the applicable Facility Borrowers (subject to the Mexican
Borrowing Limit) by the US Term Loan Facility Lenders in the
aggregate principal amount of the Total Commitment applicable to
such Facility.
"US Term Loan Facility Lenders" means, collectively, each
Lender identified as such on Exhibit A hereto as being a Lender
having a Commitment under the US Term Loan Facility and each other
financial institution that is an assignee thereof and executes and
delivers an Assignment and Acceptance pursuant to Section 13.1 in
which such institution acquires a Commitment under such Facility.
"US Term Loan Outstandings" means, as of any date of
determination, the aggregate principal amount of all US Term Loans
then outstanding.
"Xxxx Xxx" means Xxxx Xxx, S.A. de C.V., which was merged
into Rafytek on or about April 3, 2001.
"Vestco" means Vest Company Vestco, S.A. de C.V., which
was merged into Royalton on or about March 13, 2001.
"Voting Securities" means shares of capital stock issued
by a corporation, or equivalent interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
"Waiver of Lien Rights" means any Waiver of Lien Rights
substantially in the form of Exhibit K hereto delivered by a
landlord to the Agents with respect to any property leased by any
Borrower or any Subsidiary.
"Walpole" means Walpole Inc., a New Jersey corporation,
which was previously merged into Old LINQ.
1.3 Rules of Interpretation.
-----------------------
(a) All accounting terms not specifically defined herein
shall have the meanings assigned to such terms and shall be
interpreted in accordance with GAAP applied on a Consistent Basis.
(b) Each term defined in Article 1, 8 or 9 of the New
York Uniform Commercial Code shall have the meaning given therein
unless otherwise defined herein, except to the extent that the
Uniform Commercial Code or the equivalent thereto of another
jurisdiction or the Civil Code of Quebec (the "Alternate Code") is
expressly stated as controlling in respect of attachment,
perfection, priority or enforcement, in which case such terms
shall have the meaning given in the Alternate Code.
(c) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision
thereof.
(d) Except as otherwise expressly provided, references in
any Loan Document to articles, sections, paragraphs, clauses,
annexes, appendices, exhibits and schedules are references to
articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules in or to such Loan Document.
(e) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of
such defined term, and all references to the masculine gender
shall include reference to the feminine or neuter gender, and vice
versa, as the context may require.
(f) When used herein or in any other Loan Document, words
such as "hereunder," "hereto," "hereof" and "herein" and other
words of like import shall, unless the context clearly indicates
to the contrary, refer to the whole of the applicable document and
not to any particular article, section, subsection, paragraph or
clause thereof.
(g) References to "including" means including without
limiting the generality of any description preceding such term,
and such term shall not limit a general statement to matters
similar to those specifically mentioned.
(h) Except as otherwise expressly provided, all dates and
times of day specified herein shall refer to such dates and times
at Montreal, Canada and Charlotte, North Carolina, as applicable.
(i) Whenever interest rates or fees are established in
whole or in part by reference to a numerical percentage expressed
as "___%," such arithmetic expression shall be interpreted in
accordance with the convention that 1% = 100 basis points.
(j) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the
opportunity to request) revisions to, the Loan Documents, and any
rule of construction that ambiguities are to be resolved against
the drafting party shall be inapplicable in the construing and
interpretation of the Loan Documents and all exhibits, schedules
and appendices thereto.
(k) Any reference to an officer of the Borrower or any
other Person by reference to the title of such officer shall be
deemed to refer to each other officer of such Person, however
titled, exercising the same or substantially similar functions.
(l) All references to any agreement or document as
amended, modified or supplemented, or words of similar effect,
shall mean such document or agreement, as the case may be, as
amended, modified or supplemented from time to time only as and to
the extent permitted therein and in the Loan Documents.
(m) For all purposes of this Agreement (but not for
purposes of the preparation of any financial statements delivered
pursuant hereto), the equivalent in Canadian Dollars of an amount
in Dollars, and the equivalent in Dollars of an amount in Canadian
Dollars, shall be determined as set forth in the definitions of
Dollar Equivalent Amount and Canadian Dollar Equivalent Amount, as
applicable.
ARTICLE II
The Credit Facilities
2.1 Term Loan.
---------
(a) Funding. The Borrowers and the Guarantors acknowledge
that the aggregate principal amount of the Term Loan Commitments
is outstanding as term loans under the Existing Credit Agreement,
and such outstandings are hereby deemed to constitute Outstandings
under the US Term Loan (subject to the Mexican Borrowing Limit)
and the Canadian Term Loan, as applicable, such that the Dollar
Equivalent Amounts of the Outstandings under the US Term Loan and
the Canadian Term Loan hereby equal the US Term Loan Commitments
and Canadian Term Loan Commitments of each Lender as set forth on
Exhibit A. The principal amount of each Segment of each Term Loan
outstanding hereunder from time to time shall bear interest and
the Term Loans shall be repayable as herein provided. No amount of
the Term Loans repaid or prepaid by any Borrower may be reborrowed
hereunder, and no subsequent Advances of Term Loan amounts shall
be made by any Lender.
(b) Acknowledgement of Prior Term Loan Advances. The
Borrowers and the Guarantors acknowledge that each Term Loan
Facility Lender has previously made available to the applicable
Facility Borrower the Advance of the applicable Term Loan
reflected herein as made by it in an amount sufficient to fund
entirely its Term Loan Commitment hereunder. Each Facility
Borrower with respect to the Canadian Term Loan Facility and the
US Term Loan Facility hereby acknowledges to and agrees with each
Lender and the Relevant Agent that the Term Loans are fully funded
and no further Advances are to be made thereunder on the Closing
Date or thereafter.
(c) Payment of Principal. The principal amount of the
Term Loans shall be repaid in quarterly installments on the dates
and in the amounts set forth below for each Term Loan (as any of
such amounts may have been reduced at or prior to such time
pursuant to Sections 2.1(d) and 2.1(e)):
------------------------- ---------------------------------------------------------------------------------
Quarter Ended Principal Due
------------------------- ---------------------------------------- ----------------------------------------
Canadian Term Loan US Term Loan
------------------------- ---------------------------------------- ----------------------------------------
June 30, 2002 $108,000.00 $192,000.00
------------------------- ---------------------------------------- ----------------------------------------
September 30, 2002 $108,000.00 $192,000.00
------------------------- ---------------------------------------- ----------------------------------------
December 31, 2002 $72,000.00 $128,000.00
------------------------- ---------------------------------------- ----------------------------------------
March 31, 2003 $0.00 $0.00
------------------------- ---------------------------------------- ----------------------------------------
June 30, 2003 $504,000.00 $896,000.00
------------------------- ---------------------------------------- ----------------------------------------
September 30, 2003 $576,000.00 $1,024,000.00
------------------------- ---------------------------------------- ----------------------------------------
December 31, 2003 All remaining Canadian All remaining US
Term Loan Outstandings Term Loan Outstandings
------------------------- ---------------------------------------- ----------------------------------------
provided, however, that the entire amount of Term Loan
Outstandings shall be due and payable in full on the Term Loan
Termination Date together with interest accrued thereon to such
date.
(d) Optional Prepayments. Prepayments may be made on each
Term Loan (including with respect to the face amount of Bankers'
Acceptances), provided they be made for pro rata amounts and at
the same time for each Term Loan, in whole or in part from time to
time on any Business Day, without penalty or premium, upon at
least three (3) Business Days' telephonic notice from an
Authorized Representative (effective upon receipt) to each of the
Agents prior to 10:30 A.M. (Charlotte, NC time), which notice
shall be irrevocable. The Authorized Representative shall provide
each Agent written confirmation of each such telephonic notice but
failure to provide such confirmation shall not affect the validity
of such telephonic notice. Any prepayment, whether of a Base Rate
Segment, a Bankers' Acceptance Segment or a Eurodollar Rate
Segment, shall be made at a prepayment price equal to (i) the
amount of principal to be prepaid, plus (ii) all accrued and
unpaid interest on the amount so prepaid, to the date of
prepayment. All prepayments under this Section 2.1(d) shall be
made in the minimum principal amount of $500,000 (or, as to
segments in Canadian Dollars, the Canadian Dollar Equivalent
Amount of Canadian Dollars) or any integral multiple of $100,000
(or, as to segments in Canadian Dollars, the Canadian Dollar
Equivalent Amount of Canadian Dollars) in excess thereof (or in
the entire remaining principal balance of the Term Loan), and all
such prepayments of principal shall be made by the Facility
Borrowers such that they may be applied pro rata to the Canadian
Term Loan and the US Term Loan, and such prepayments in all cases
shall be applied to installments of principal under each Term Loan
in inverse order of their maturities.
(e) Mandatory Prepayments. In addition to the required
payments of principal of the Term Loan set forth in Section 2.1(c)
and any optional payments of principal of the Term Loan effected
under Section 2.1(d), the following required prepayments of the
Term Loans, each such payment to be made to the Relevant Agent for
the benefit of the applicable Term Loan Facility Lenders, shall be
made within the time period specified below:
(i) commencing with the Fiscal Year ended
December 31, 2001, and for each Fiscal Year thereafter,
an annual prepayment shall be made in an amount equal to
(a) fifty percent (50%) of Excess Cash Flow for such
Fiscal Year if the Consolidated Leverage Ratio as of the
last day of such Fiscal Year is less than or equal to
3.50 to 1.00, or (b) seventy-five percent (75%) of Excess
Cash Flow for such Fiscal Year if the Consolidated
Leverage Ratio as of the last day of such Fiscal Year is
greater than 3.50 to 1.00;
(ii) upon the release from escrow and delivery
to any Borrower or Guarantor of any portion of the FIBC
Holdback Amount, a prepayment shall be made in an amount
equal to one hundred percent (100%) of such portion of
the FIBC Holdback Amount so released;
(iii) a prepayment shall be made from the cash
proceeds of each private and public offering not
prohibited by the terms hereof of equity securities of
any Borrower or any Subsidiary (other than cash proceeds
from any Additional Equity Investment and any Management
Investment) in an amount equal to one hundred percent
(100%) of the Net Proceeds of each such issuance of
equity securities of any Borrower or any Subsidiary
(including without limitation any security not
constituting Indebtedness exchangeable, exercisable or
convertible for or into equity securities);
(iv) a prepayment shall be made from the
proceeds of each Asset Disposition, other than a
Permitted Asset Disposition, in an amount equal to one
hundred percent (100%) of the Net Proceeds of such Asset
Disposition; and
(v) a prepayment shall be made from the proceeds
of each Permitted Asset Disposition in an amount equal to
one hundred percent (100%) of the Net Proceeds of such
Permitted Asset Disposition.
Each prepayment set forth in Section 2.1(e)(ii) through
(v) above will be made within ten (10) Business Days of receipt of
any such proceeds, whether such receipt is partial or entire,
without regard to any contingencies, earn-outs or future payments,
and in each case upon not less than five (5) Business Days'
irrevocable written notice to the Agents, which notice shall be
given as soon as practicable after the receipt of any such
proceeds of any nature, and shall include a certificate of an
Authorized Representative setting forth in reasonable detail the
calculations utilized in computing the amount of such prepayment.
Each prepayment set forth in Section 2.1(e)(i) above will be made
simultaneously with the delivery of a certificate of the Chief
Financial Officer of Consoltex Holdings or another Authorized
Representative substantially in the form of Exhibit L hereto
setting forth the calculation of Excess Cash Flow for such Fiscal
Year and the Consolidated Leverage Ratio as of the last day of
such Fiscal Year, which certificate shall be delivered as soon as
practicable but in any event no later than 120 days after the end
of each Fiscal Year, beginning with such a certificate for the
Fiscal Year ended December 31, 2001. All mandatory prepayments
made pursuant to Sections 2.1(e)(i), (ii), (iii) and (v) shall be
applied pro rata to the Canadian Term Loan and the US Term Loan,
and shall be applied to remaining installments of principal under
each Term Loan in inverse order of their maturities, and in the
event that all Term Loans have been paid in full, shall thereafter
be applied to repay the Canadian Revolving Credit Facility and the
US Revolving Credit Facility pro rata, and to permanently reduce
the Revolving Credit Commitments pro rata in an amount equal to
such repayment. All mandatory prepayments made pursuant to Section
2.1(e)(iv) shall be applied (x) first, to the extent the asset so
disposed of constituted part of the Borrowing Base prior to its
disposition, to the extent of its value in the Borrowing Base
(after application of the applicable advance rate to such asset
under the definition of "Borrowing Base"), to repay the Canadian
Revolving Credit Facility and the US Revolving Credit Facility pro
rata, and to permanently reduce the Revolving Credit Commitments
pro rata in an amount equal to such repayment, (y) second, pro
rata to the Canadian Term Loan and the US Term Loan to reduce the
remaining installments of principal under each Term Loan in
inverse order of their maturities, and (z) third, in the event
that the Term Loans have been paid in full, thereafter to repay
the Canadian Revolving Credit Facility and the US Revolving Credit
Facility pro rata, and to permanently reduce the Revolving Credit
Commitments pro rata in an amount equal to such repayment.
2.2 Revolving Loans.
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(a) Commitment. Subject to the terms and conditions of
this Agreement, (i) each US Revolving Credit Facility Lender
severally agrees to make Advances in Dollars to any one or more of
the Facility Borrowers under the US Revolving Credit Facility
(subject to the Mexican Borrowing Limit) on a pro rata basis as to
each US Revolving Credit Loan requested by such Facility Borrowers
on any day determined by such Lender's Applicable Commitment
Percentage with respect to the US Revolving Credit Facility up to
but not exceeding the US Revolving Credit Commitment of such
Lender, and (ii) each Canadian Revolving Credit Facility Lender
severally agrees to make Advances and accept Bankers' Acceptances
in Dollars or in the Canadian Dollar Equivalent Amount of Canadian
Dollars (as selected by the applicable Facility Borrower) to any
one or more of the Facility Borrowers under the Canadian Revolving
Credit Facility on a pro rata basis as to each Canadian Revolving
Credit Loan requested by such Facility Borrowers on any day
determined by such Lender's Applicable Commitment Percentage with
respect to the Canadian Revolving Credit Facility up to but not
exceeding the Dollar Equivalent Amount equal to the Canadian
Revolving Credit Commitment of such Lender; provided, however,
that the Lenders will not be required and shall have no obligation
to make any such Advance (A) so long as a Default or an Event of
Default has occurred and is continuing or (B) if the Agent has
accelerated the maturity of any of the Notes as a result of an
Event of Default; provided further, however, that immediately
after giving effect to each such Advance, the provisions of
Section 2.2(b)(i), (ii) and (iii) are not violated. Within such
limits (and the Mexican Borrowing Limit) and subject to the other
terms and conditions of this Agreement, the Facility Borrowers
under the Revolving Credit Facilities and under the Canadian Swing
Line Facility may borrow and (under the Canadian Revolving Credit
Facility only) issue Bankers' Acceptances, repay and reborrow
under the Revolving Credit Facilities and under the Canadian Swing
Line Facility on a Business Day from the Original Closing Date
until, but (as to borrowings, reborrowings or the issuance of
Bankers' Acceptances) not including, the Revolving Credit
Termination Date. Bankers' Acceptances are not available, and
shall not be issued or accepted under, the US Revolving Credit
Facility.
(b) Amounts. Except as otherwise permitted by all of the
Lenders from time to time, (i) the amount of US Revolving Credit
Outstandings plus US Letter of Credit Outstandings shall not
exceed at any time the Total Commitment under the US Revolving
Credit Facility at such time, (ii) the amount of US Revolving
Credit Outstandings plus US Letter of Credit Outstandings owing by
Consoltex Mexico and Rafytek shall not exceed at any time the
Mexican Borrowing Limit at such time, (iii) the Dollar Equivalent
Amount of Canadian Revolving Credit Outstandings plus Canadian
Letter of Credit Outstandings plus Canadian Swing Line Loan
Outstandings at any time shall not exceed the Dollar Equivalent
Amount of the Total Commitment under the Canadian Revolving Credit
Facility at such time, and (iv) the Dollar Equivalent Amount of
all Outstandings under the Revolving Credit Facilities, the Letter
of Credit Facilities and the Canadian Swing Line Facility shall
not at any time exceed the sum of (A) the Borrowing Base as
calculated in Dollars at such time plus (B) during an Overadvance
Period, the Overadvance Amount as calculated in Dollars at such
time. In the event any of clauses (i), (ii), (iii) or (iv) above
are violated at any time, such payments and prepayments as shall
be necessary to comply with each such subsection, including
payments on the first day after the expiration of an Overadvance
Period to the extent the Overadvance Amount is then being
utilized, shall be made immediately, and in the case of a
violation of clause (iv) shall be made pro rata between the
Canadian Revolving Credit Facility and the US Revolving Credit
Facility. Each Advance under the Revolving Credit Facilities,
other than Base Rate Refunding Loans and Bankers' Acceptances,
shall be in an amount of at least $100,000 (or the Canadian Dollar
Equivalent Amount thereof in Canadian Dollars), and, if greater
than $100,000, an integral multiple of $100,000 (or the Canadian
Dollar Equivalent Amount thereof in Canadian Dollars).
(c) Advances.
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(i) An Authorized Representative shall give the
Agent (1) at least three (3) Business Days' irrevocable
telephonic notice of each Eurodollar Rate Loan (whether
representing an additional borrowing or the Continuation
of a borrowing hereunder or the Conversion of a borrowing
hereunder from a Base Rate Loan to a Eurodollar Rate
Loan) prior to 11:00 A.M., (2) at least two (2) Business
Days' irrevocable telephonic notice of each Bankers'
Acceptance under the Canadian Revolving Credit Facility
(whether representing an additional borrowing or the
Continuation of a borrowing hereunder or the Conversion
of a borrowing hereunder from a Base Rate Loan or a
Eurodollar Rate Loan to a Bankers' Acceptance) prior to
11:00 A.M. and (3) irrevocable telephonic notice of each
Base Rate Loan (other than Base Rate Refunding Loans to
the extent the same are effected without notice pursuant
to Section 2.2(c)(iii) and whether representing an
additional borrowing hereunder or the Conversion of
borrowing hereunder from Eurodollar Rate Loans or
Bankers' Acceptances to Base Rate Loans) prior to 11:00
A.M. on the day of such proposed Revolving Loan. Each
such notice shall be effective upon receipt by the
Relevant Agent, shall specify the Facility Borrower, the
amount of the borrowing, the type of Revolving Loan
(Dollars or, in the case of the Canadian Revolving Credit
Facility only, Canadian Dollars; Base Rate, Eurodollar
Rate or, in the case of the Canadian Revolving Credit
Facility only, Bankers' Acceptances), the date of
borrowing and, if a Eurodollar Rate Loan or a Bankers'
Acceptance, the Interest Period to be used in the
computation of interest. The Authorized Representative
shall provide the Agent written confirmation of each such
telephonic notice in the form of a Borrowing Notice or
Interest Rate Selection Notice (as applicable) with
appropriate insertions but failure to provide such
confirmation shall not affect the validity of such
telephonic notice. Notice of receipt of such Borrowing
Notice or Interest Rate Selection Notice, as the case may
be, together with the amount of each Revolving Credit
Facility Lender's portion of an Advance requested
thereunder, shall be provided by the Relevant Agent to
each such Revolving Credit Facility Lender by
telefacsimile transmission with reasonable promptness,
but (provided the Relevant Agent shall have received such
notice by 11:00 A.M.) not later than 1:00 P.M. on the
same day as the Agent's receipt of such notice.
(ii) Not later than 2:00 P.M. on the date
specified for each borrowing under this Section 2.2, each
applicable Revolving Credit Facility Lender shall,
pursuant to the terms and subject to the conditions of
this Agreement, make the amount of the Advance or
Advances to be made by it on such day available by wire
transfer to the Relevant Agent in the amount of its pro
rata share, determined according to such Revolving Credit
Facility Lender's Applicable Commitment Percentage of the
Revolving Loan or Revolving Loans to be made on such day.
Such wire transfer shall be directed to the Relevant
Agent at its Principal Office and shall be in the form of
Dollars or, solely with respect to the Canadian Revolving
Credit Facility and as selected by the applicable
Facility Borrower, the Canadian Dollar Equivalent Amount
of Canadian Dollars, in each case constituting
immediately available funds. The amount so received by
the Relevant Agent shall, subject to the terms and
conditions of this Agreement, be made available to the
appropriate Facility Borrower by delivery of the proceeds
thereof to the applicable Borrowers' US Account or
Borrowers' Canadian Account, as the case may be, or
otherwise as shall be directed in the applicable
Borrowing Notice by the Authorized Representative and
reasonably acceptable to the Relevant Agent; provided,
that if any Lender accepts Bankers' Acceptances, Section
4.1(c) shall apply.
(iii) Notwithstanding the foregoing, if a
drawing is made under any Letter of Credit, such drawing
is honored by either Issuing Bank, and the applicable
Borrower shall not immediately fully reimburse the
applicable Issuing Bank in respect of such drawing from
other funds available to such Borrower, (A) provided that
the conditions to making a Revolving Credit Loan as
herein provided shall then be satisfied, the
Reimbursement Obligation arising from such drawing shall
be paid to the applicable Issuing Bank by the Relevant
Agent without the requirement of notice to or from, or
any other action of, the applicable Facility Borrower or
any other Borrower, from immediately available funds
which shall be advanced as a Base Rate Refunding Loan to
the Relevant Agent at its Principal Office by each
Canadian Revolving Credit Facility Lender under the
Canadian Revolving Credit Facility or by each US
Revolving Credit Facility Lender under the US Revolving
Credit Facility, as the case may be, in an amount equal
to its Applicable Commitment Percentage of the Dollars
Equivalent Amount of such Reimbursement Obligation, and
(B) if the conditions to making a Revolving Loan as
herein provided shall not then be satisfied, each
Canadian Revolving Credit Facility Lender under the
Canadian Revolving Credit Facility or each US Revolving
Credit Facility Lender under the US Revolving Credit
Facility, as the case may be, shall fund by payment to
the Relevant Agent (for the benefit of the applicable
Issuing Bank) at its Principal Office in immediately
available funds the purchase from the applicable Issuing
Bank of their respective Participations in the Dollar
Equivalent Amount of the related Reimbursement Obligation
based on their respective Applicable Commitment
Percentages of the Total Letter of Credit Commitment. If
a drawing is presented under any Letter of Credit in
accordance with the terms thereof and the applicable
Facility Borrower shall not immediately reimburse the
relevant Issuing Bank in respect thereof, then notice of
such drawing or payment shall be provided promptly by the
relevant Issuing Bank to the Relevant Agent and the
Relevant Agent shall provide notice to each Canadian
Revolving Credit Facility Lender or each US Revolving
Credit Facility Lender, as the case may be, by telephone
or telefacsimile transmission. If notice to such Lenders
of a drawing under any Letter of Credit is given by the
Relevant Agent at or before 12:00 noon on any Business
Day, each Canadian Revolving Credit Facility Lender or
each US Revolving Credit Facility Lender, as the case may
be, shall either make a Base Rate Refunding Loan or fund
the purchase of its Participation as specified above in
the amount of such Lender's Applicable Commitment
Percentage of such drawing or payment and shall pay such
amount to the Relevant Agent for the account of the
applicable Issuing Bank at its Principal Office in
Dollars and in immediately available funds before 2:30
P.M. on the same Business Day. If such notice to the
Canadian Revolving Credit Facility Lender or US Revolving
Credit Facility Lender, as the case may be, is given by
the Relevant Agent after 12:00 noon on any Business Day,
each such Lender shall either make such Base Rate
Refunding Loan or fund such purchase before 12:00 noon on
the next following Business Day.
(d) Repayment of Revolving Loans. The principal amount of
each Revolving Credit Loan (including each Base Rate Refunding
Loan) shall be due and payable to the Relevant Agent for the
benefit of each Canadian Revolving Credit Facility Lender or US
Revolving Credit Facility Lender, as the case may be, in full on
the Revolving Credit Termination Date, or earlier as specifically
provided herein. The principal amount of any Revolving Credit Loan
may be prepaid in whole or in part on any Business Day, upon (A)
at least three (3) Business Days' irrevocable telephonic notice in
the case of each Revolving Credit Loan that is a Eurodollar Rate
Loan or, in the case of the Canadian Revolving Credit Facility
only, a Bankers' Acceptance from an Authorized Representative
(effective upon receipt) to the Relevant Agent prior to 11:00 A.M.
and (B) irrevocable telephonic notice in the case of each
Revolving Credit Loan that is a Base Rate Loan (including a Base
Rate Refunding Loan) from an Authorized Representative (effective
upon receipt) to the Relevant Agent prior to 11:00 A.M. on the day
of such proposed repayment. The Authorized Representative shall
provide the Relevant Agent written confirmation of each such
telephonic notice but failure to provide such confirmation shall
not effect the validity of such telephonic notice. All prepayments
of Revolving Credit Loans made by the applicable Facility Borrower
shall be in the minimum amount of $100,000 (or the Canadian Dollar
Equivalent Amount thereof in Canadian Dollars) or such greater
amount which is an integral multiple of $100,000 (or the Canadian
Dollar Equivalent Amount thereof in Canadian Dollars), or the
amount equal to all Revolving Credit Outstandings, or such other
amount as necessary to comply with Section 2.1(e) or Section
2.2(b). All receipts and deposits received from any Lock Box shall
be deposited in the applicable Lock Box Account on a daily basis
in accordance with Section 9.20. All amounts deposited in the
applicable Lock Box Account and constituting collected funds (in
accordance with the applicable Cash Collateral Agreement) shall be
applied daily to repay the Canadian Revolving Credit Outstandings
and the US Revolving Credit Outstandings, as applicable, without
regard to any minimum or integral payment provided in the
immediately preceding sentence, at all times after (i) the
Required Lenders shall so request (by notice to the Agents and the
Borrowers), or (ii) any one or more Lenders shall so request (by
notice to the Agents and the Borrowers) after the occurrence of an
Event of Default that has not been cured prior to the giving of
such notice by such Lender (but regardless of whether such Event
of Default has been waived). Prepayments shall also be made as set
forth in Section 2.1(e).
(e) Reductions. The Facility Borrowers under the
applicable Revolving Credit Facility shall have the right from
time to time but not more frequently than once each calendar
month, upon not less than five (5) Business Days' written notice
to the Relevant Agent from the Chief Financial Officer of
Consoltex Holdings, effective upon receipt, to reduce the Total
Commitment of the Canadian Revolving Credit Facility and the US
Revolving Credit Facility, without penalty or premium, and any
such reduction shall only be made pro rata between the Canadian
Revolving Credit Facility and the US Revolving Credit Facility.
The Relevant Agent shall give each Revolving Credit Facility
Lender, within one (1) Business Day of receipt of such notice,
telefacsimile notice, or telephonic notice (confirmed in writing),
of such reduction. Each such reduction shall be in the aggregate
amount of $500,000 or such greater amount which is in an integral
multiple of $100,000, or the entire remaining Total Commitment
with respect to the Revolving Credit Facilities, and shall
permanently reduce each of the applicable Total Commitments pro
rata. Each reduction of the Total Commitment with respect to the
Canadian Revolving Credit Facility and the US Revolving Credit
Facility shall be accompanied by payment of (i) the Canadian
Revolving Credit Loans or Canadian Swing Line Loans to the extent
that, after giving effect to such reduction, the principal amount
of Canadian Revolving Credit Outstandings plus Canadian Letter of
Credit Outstandings plus Canadian Swing Line Loan Outstandings
exceeds the Total Commitment with respect to the Canadian
Revolving Credit Facility, and (ii) the US Revolving Credit Loans
to the extent that, after giving effect to such reduction, the
principal amount of US Revolving Credit Outstandings plus US
Letter of Credit Outstandings exceeds the Total Commitment with
respect to the US Revolving Credit Facility, in each case together
with accrued and unpaid interest on the amounts prepaid.
Reductions shall also be made in accordance with Section 2.1(e).
2.3 Use of Proceeds. The proceeds of the Term Loans have been, and
the proceeds of the Revolving Credit Loans shall be, used by the Borrower
for working capital, capital expenditures and other lawful corporate
purposes.
2.4 Notes.
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(a) Revolving Notes. Revolving Loans made by each US Revolving
Credit Facility Lender shall be evidenced by the Revolving Note payable to
the order of such US Revolving Credit Facility Lender in the respective
amount of its US Revolving Credit Commitment, which Revolving Note shall be
dated the Closing Date or a later date pursuant to an Assignment and
Acceptance and shall be duly completed, executed and delivered by the
Facility Borrowers under the US Revolving Credit Facility.
(b) Term Notes. The portion of the US Term Loan made by each US
Term Loan Facility Lender shall be evidenced by the Term Note payable to
the order of such US Term Loan Facility Lender in the respective amount of
its US Term Loan Commitment, which Term Notes shall be dated the Closing
Date or a later date pursuant to an Assignment and Acceptance and shall be
duly completed, executed and delivered by the Facility Borrowers under the
US Term Loan.
2.5 Canadian Swing Line.
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(a) Notwithstanding any other provision of this Agreement
to the contrary, in order to administer the Canadian Revolving
Credit Facility in an efficient manner, to facilitate the payment
of checks in circulation issued by Facility Borrowers, and to
minimize the transfer of funds between the Canadian Agent and the
Canadian Revolving Credit Facility Lenders, the Canadian Swing
Line Facility Lender shall make available Canadian Swing Line
Loans to the Facility Borrowers under the Canadian Revolving
Credit Facility prior to the Revolving Credit Termination Date.
The Canadian Swing Line Facility Lender shall not be obligated to
make any Canadian Swing Line Loan pursuant hereto (i) if the
Canadian Swing Line Facility Lender has actual knowledge that the
applicable Facility Borrower is not in compliance with all the
conditions to the making of Canadian Revolving Credit Loans set
forth in this Agreement, (ii) if after giving effect to such
Canadian Swing Line Loan, the Canadian Swing Line Loan
Outstandings exceed $4,000,000 (or the Dollar Equivalent Amount
thereof in Canadian Dollars), (iii) if after giving effect to such
Canadian Swing Line Loan, the sum of the Dollar Equivalent Amount
of Canadian Swing Line Loan Outstandings, Canadian Revolving
Credit Outstandings and Canadian Letter of Credit Outstandings
exceeds the Total Commitment with respect to the Canadian
Revolving Credit Facility, or (iv) if after giving effect to such
Canadian Swing Line Loan, the Dollar Equivalent Amount of all
Outstandings under the Revolving Credit Facilities, the Letter of
Credit Facilities and the Canadian Swing Line Facility shall
exceed the sum of (A) the Borrowing Base as calculated in Dollars
at such time plus (B) during an Overadvance Period, the
Overadvance Amount as calculated in Dollars at such time. The
applicable Facility Borrowers may, subject to the conditions set
forth in the preceding sentence, borrow, repay and reborrow under
this Section 2.5.
(b) The interest payable on Canadian Swing Line Loans is
solely for the account of the Canadian Swing Line Facility Lender.
Canadian Swing Line Loans shall bear interest solely at the Base
Rate. Canadian Swing Line Loans shall accrue interest at the
Default Rate if any Event of Default shall occur and be
continuing, and all accrued and unpaid interest on Swing Line
Loans shall be payable on the dates and in the manner provided in
Section 4.4 with respect to interest on Base Rate Loans.
(c) Upon the making of a Canadian Swing Line Loan, each
Canadian Revolving Credit Facility Lender shall be deemed to have
purchased from the Canadian Swing Line Facility Lender a
Participation therein in an amount equal to such Canadian
Revolving Credit Facility Lender's Applicable Commitment
Percentage of such Canadian Swing Line Loan. Upon demand made by
the Canadian Swing Line Facility Lender, each Canadian Revolving
Credit Facility Lender shall, according to its Applicable
Commitment Percentage of such Canadian Swing Line Loan, promptly
provide to the Canadian Swing Line Facility Lender its purchase
price therefor in an amount equal to its Participation therein in
Dollars or, as to Participation in Canadian Swing Line Loan
Outstandings denominated in Canadian Dollars, in the Canadian
Dollars Equivalent Amount of Canadian Dollars. Any provision by a
Canadian Revolving Credit Facility Lender pursuant to demand of
the Canadian Swing Line Facility Lender of the purchase price of
its Participation shall when made be deemed to be (i) provided
that the conditions to making Canadian Revolving Credit Loans
shall be satisfied, a Base Rate Refunding Loan under Section 2.2,
and (ii) in all other cases, the funding by each Canadian
Revolving Credit Facility Lender of the purchase price of its
Participation in such Canadian Swing Line Loan. The obligation of
each Canadian Revolving Credit Facility Lender to so provide its
purchase price to the Canadian Swing Line Facility Lender shall be
absolute and unconditional and shall not be affected by the
occurrence of an Event of Default or any other occurrence or
event.
The applicable Facility Borrowers, at their option and subject to
the terms hereof, may request an Advance pursuant to Section 2.2
in an amount sufficient to repay Canadian Swing Line Loan
Outstandings on any date and the Canadian Agent shall provide from
the proceeds of such Advance to the Canadian Swing Line Facility
Lender the amount necessary to repay such Canadian Swing Line Loan
Outstandings (which the Canadian Swing Line Facility Lender shall
then apply to such repayment) and credit any balance of the
Advance in immediately available funds in the manner directed by
the applicable Facility Borrower pursuant to Section 2.2(c)(ii).
The proceeds of such Advances shall be paid to the Canadian Swing
Line Facility Lender for application to the Canadian Swing Line
Loan Outstandings and the Canadian Revolving Credit Facility
Lenders shall then be deemed to have made Canadian Revolving
Credit Loans in the amount of such Advances. The Canadian Swing
Line Facility shall continue in effect until the Revolving Credit
Termination Date, at which time all Canadian Swing Line Loan
Outstandings and accrued interest thereon shall be due and payable
in full.
ARTICLE III
Letters of Credit
3.1 Letters of Credit. Each of the Issuing Banks agrees, subject
to the terms and conditions of this Agreement, upon request of a Facility
Borrower under the applicable Letter of Credit Facility and for its
account, to issue from time to time Letters of Credit under the applicable
Letter of Credit Facility upon delivery to the applicable Issuing Bank of
an Application and Agreement for Letter of Credit relating thereto in form
and content acceptable to such Issuing Bank; provided, that (i) neither
Issuing Bank shall be obligated to issue (or renew) any Letter of Credit if
it has been notified by either Agent or has actual knowledge that a Default
or Event of Default has occurred and is continuing, (ii) no US Letter of
Credit shall be issued (or renewed) if, after giving effect thereto, the US
Letter of Credit Outstandings would exceed $5,000,000, (iii) no Canadian
Letter of Credit shall be issued (or renewed) if, after giving effect
thereto, the Dollar Equivalent Amount of Canadian Letter of Credit
Outstandings would exceed $5,000,000, (iv) no US Letter of Credit shall be
issued (or renewed) if, after giving effect thereto, the US Letter of
Credit Outstandings plus the US Revolving Credit Outstandings shall exceed
the Total Commitment with respect to the US Revolving Credit Facility, (v)
no Canadian Letter of Credit shall be issued (or renewed) if, after giving
effect thereto, the Dollar Equivalent Amount of Canadian Letter of Credit
Outstandings plus the Canadian Revolving Credit Outstandings plus the
Canadian Swing Line Loan Outstandings shall exceed the Total Commitment
with respect to the Canadian Revolving Credit Facility, and (vi) no Letter
of Credit shall be issued (or renewed) if, after giving effect thereto,
Dollar Equivalent Amount of all Outstandings under the Revolving Credit
Facilities, the Letter of Credit Facilities and the Canadian Swing Line
Facility shall exceed the sum of (A) the Borrowing Base as calculated in
Dollars at such time plus (B) during an Overadvance Period, the Overadvance
Amount as calculated in Dollars at such time. No Letter of Credit shall
have an expiry date (including all rights of the applicable Facility
Borrower or any beneficiary named in such Letter of Credit to require
renewal) or payment date occurring later than the earlier to occur of one
year after the date of its issuance or the ninetieth (90th) day after the
Stated Termination Date; provided, however, in the event such expiry date
is after the Stated Termination Date, there shall be deposited with the
Relevant Agent on or before the Business Day prior to the Stated
Termination Date an amount of cash equal to the stated amount of such
Letter of Credit remaining undrawn at the date of such deposit to be held
pursuant to the terms of the applicable LC Account Agreement. Letters of
Credit issued under the US Letter of Credit Facility shall be issued in
Dollars and Letters of Credit issued under the Canadian Letter of Credit
Facility may be issued in Dollars or in the Canadian Dollar Equivalent
Amount of Canadian Dollars.
3.2 Reimbursement and Participations.
--------------------------------
(a) Each Facility Borrower under the applicable Letter of
Credit Facility hereby unconditionally agrees to pay to the
applicable Issuing Bank immediately on demand at its Principal
Office all amounts required to pay all drafts drawn or purporting
to be drawn under the Letters of Credit issued for the account of
such Facility Borrower and all reasonable expenses incurred by the
applicable Issuing Bank in connection with each such Letter of
Credit, and in any event and without demand to place in possession
of the applicable Issuing Bank (which shall include Advances under
the applicable Revolving Credit Facility if permitted by Section
2.2 and Canadian Swing Line Loans with respect to Canadian Letters
of Credit if permitted by Section 2.5) sufficient funds to pay all
debts and liabilities arising under any Letter of Credit. Each of
the Issuing Banks agrees to give the applicable Facility Borrower
prompt notice of any request for a draw under any Letter of
Credit. The applicable Issuing Bank may charge any account the
applicable Facility Borrower may have with it for any and all
amounts such Issuing Bank pays under any Letter of Credit, plus
charges and reasonable expenses as from time to time agreed to by
such Issuing Bank and such Facility Borrower; provided that to the
extent permitted by Section 2.2(c)(iii) and Section 2.5, amounts
shall be paid pursuant to Advances under the applicable Revolving
Credit Facility or, if the Borrower shall elect, by Canadian Swing
Line Loans in the case of Canadian Letters of Credit. Each
Facility Borrower under either Letter of Credit Facility agrees to
pay the applicable Issuing Bank interest on any Reimbursement
Obligations not paid when due hereunder at the Default Rate.
(b) In accordance with the provisions of Section 2.2(c),
each Issuing Bank shall notify the Relevant Agent of any drawing
under any Letter of Credit promptly following the receipt by such
Issuing Bank of such drawing.
(c) Each applicable Revolving Credit Facility Lender
(other than the applicable Issuing Bank) shall automatically
acquire on the date of issuance thereof, a Participation in the
liability of the applicable Issuing Bank in respect of each Letter
of Credit in an amount equal to such Revolving Credit Facility
Lender's Applicable Commitment Percentage of such liability, and
to the extent that the applicable Facility Borrower is obligated
to pay the applicable Issuing Bank under Section 3.2(a), each such
Revolving Credit Facility Lender (other than the Issuing Bank)
thereby shall absolutely, unconditionally and irrevocably assume,
and shall be unconditionally obligated to pay to the applicable
Issuing Bank, its Applicable Commitment Percentage of the
liability of such Issuing Bank under such Letter of Credit in the
manner and with the effect provided in Section 2.2(c)(iii).
(d) Simultaneously with the making of each payment by a
Revolving Credit Facility Lender to an Issuing Bank pursuant to
Section 2.2(c)(iii)(B), such Revolving Credit Facility Lender
shall, automatically and without any further action on the part of
such Issuing Bank or such Revolving Credit Facility Lender,
acquire a Participation in an amount equal to such payment
(excluding the portion thereof constituting interest accrued prior
to the date the Revolving Credit Facility Lender made its payment)
in the related Reimbursement Obligation of the applicable Facility
Borrower. Each Revolving Credit Facility Lender's obligation to
make payment to the Relevant Agent for the account of the
applicable Issuing Bank pursuant to Section 2.2(c)(iii) and
Section 3.2(c), and the right of such Issuing Bank to receive the
same, shall be absolute and unconditional, shall not be affected
by any circumstance whatsoever and shall be made without any
offset, abatement, withholding or reduction whatsoever. In the
event the applicable Revolving Credit Facility Lender has
purchased Participations in any Reimbursement Obligation as set
forth above, then at any time payment (in fully collected,
immediately available funds) of such Reimbursement Obligation, in
whole or in part, is received by the applicable Issuing Bank from
the applicable Facility Borrower, such Issuing Bank shall promptly
pay to each such Revolving Credit Facility Lender an amount (in
Dollars or in the Canadian Dollar Equivalent Amount of Canadian
Dollars, as applicable) equal to its Applicable Commitment
Percentage of such payment from such Facility Borrower.
(e) Promptly following the end of each calendar quarter,
the US Issuing Bank and the Canadian Issuing Bank shall each
deliver to the Relevant Agent and the Borrowers (pursuant to
Section 13.2) a notice describing the aggregate undrawn amount of
all US Letters of Credit and Canadian Letters of Credit,
respectively, at the end of such quarter. Upon the request of any
Revolving Credit Facility Lender from time to time, the applicable
Issuing Bank shall deliver to the Relevant Agent, and the Relevant
Agent shall deliver to such Revolving Credit Facility Lender, any
other information reasonably requested by such Revolving Credit
Facility Lender with respect to each applicable Letter of Credit
outstanding.
(f) The issuance by the US Issuing Bank of each US Letter
of Credit and by the Canadian Issuing Bank of each Canadian Letter
of Credit shall, in addition to the conditions precedent set forth
in Article VII, be subject to the conditions that each such Letter
of Credit be in such form and contain such terms as shall be
reasonably satisfactory to the applicable Issuing Bank consistent
with the then current practices and procedures of such Issuing
Bank with respect to similar letters of credit, and the Facility
Borrowers under the applicable Letter of Credit Facility shall
have executed and delivered such other instruments and agreements
relating to such Letters of Credit as the applicable Issuing Bank
shall have reasonably requested consistent with such practices and
procedures. All Letters of Credit shall be issued pursuant to and
subject to the Uniform Customs and Practice for Documentary
Credits, 1993 revision, International Chamber of Commerce
Publication No. 500 or, if the Issuing Bank shall elect by express
reference in an affected Letter of Credit, the International
Chamber of Commerce International Standby Practices commonly
referred to as "ISP98," or any subsequent amendment or revision of
either thereof.
(g) The Facility Borrowers under the applicable Letter of
Credit Facility agree that the applicable Issuing Bank may, in its
sole discretion, accept or pay, as complying with the terms of any
Letter of Credit, any drafts or other documents otherwise in order
which may be signed or issued by an administrator, executor,
trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, liquidator, receiver, attorney in fact or
other legal representative of a party who is authorized under such
Letter of Credit to draw or issue any drafts or other documents.
(h) Without limiting the generality of the provisions of
Section 13.9, each Facility Borrower hereby agrees to indemnify
and hold harmless each Issuing Bank, each other Lender and each of
the Agents from and against any and all claims and damages,
losses, liabilities, reasonable costs and expenses which either
Issuing Bank, such other Lender or either Agent may incur (or
which may be claimed against either Issuing Bank, such other
Lender or either Agent) by any Person by reason of or in
connection with the issuance or transfer of or payment or failure
to pay under any Letter of Credit; provided that no Facility
Borrower shall be required to indemnify either Issuing Bank, any
other Lender or either Agent for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the
extent, (i) caused by the willful misconduct or gross negligence
of the party to be indemnified or (ii) caused by the failure of
such Issuing Bank to pay under any Letter of Credit after the
presentation to it of a request for payment strictly complying
with the terms and conditions of such Letter of Credit, unless
such payment is prohibited by any law, regulation, court order or
decree. The indemnification and hold harmless provisions of this
Section 3.2(h) shall survive repayment of the Obligations,
occurrence of the Revolving Credit Termination Date, the Facility
Termination Date and expiration or termination of this Agreement.
(i) Without limiting the rights of the applicable
Facility Borrowers as set forth in Section 3.2(h), the obligation
of the Facility Borrowers under the applicable Letter of Credit
Facility to immediately reimburse the applicable Issuing Bank for
drawings made under Letters of Credit and such Issuing Bank's
right to receive such payment shall be absolute, unconditional and
irrevocable, and such obligations of the applicable Facility
Borrowers shall be performed strictly in accordance with the terms
of this Agreement and such Letters of Credit and the related
Application and Agreement for any Letter of Credit, under all
circumstances whatsoever, including the following circumstances:
(i) any lack of validity or
enforceability of the Letter of Credit, the obligation
supported by the Letter of Credit or any other agreement
or instrument relating thereto (collectively, the
"Related LC Documents");
(ii) any amendment or waiver of or any
consent to or departure from all or any of the Related LC
Documents;
(iii) the existence of any claim,
setoff, defense (other than the defense of payment in
accordance with the terms of this Agreement) or other
rights which any Facility Borrower may have at any time
against any beneficiary or any transferee of a Letter of
Credit (or any persons or entities for whom any such
beneficiary or any such transferee may be acting), the
Agents, the Lenders or any other Person, whether in
connection with the Loan Documents, the Related LC
Documents or any unrelated transaction;
(iv) any breach of contract or other
dispute between any Facility Borrower and any beneficiary
or any transferee of a Letter of Credit (or any persons
or entities for whom such beneficiary or any such
transferee may be acting), the Agents, the Lenders or any
other Person;
(v) any draft, statement or any other
document presented under any 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 whatsoever so long as any such
document appeared to comply with the terms of such Letter
of Credit;
(vi) the existence, character, quality,
quantity, condition, value, or delivery (including the
time, place, manner or order thereof) of property
described or purportedly described in documents presented
in connection with any Letter of Credit or the existence,
nature or extent of any insurance relating thereto;
(vii) any delay, extension of time,
renewal, compromise or other indulgence or modification
granted or agreed to by the Relevant Agent, with or
without notice to or approval by the applicable Facility
Borrower in respect of any Obligations of the Facility
Borrowers; or
(viii) any other circumstance or
happening whatsoever, whether or not similar to any of
the foregoing.
ARTICLE IV
Bankers' Acceptances, Eurodollar Funding, Fees, and Payment Conventions
4.1 Bankers' Acceptances.
--------------------
(a) Period and Other Details. Bankers' Acceptances shall
be for a period of 1, 2, 3 or 6 months; shall not allow for any
day of grace; shall be signed as drawer by the applicable Facility
Borrower under the Canadian Term Loan Facility or the Canadian
Revolving Credit Facility or on its behalf by any one of the
Canadian Facility Lenders requested to accept such Bankers'
Acceptances to whom such Facility Borrower hereby gives an
irrevocable power of attorney for such purpose; shall be issued on
a Business Day; and shall mature on a Business Day which falls on
or before the Term Loan Maturity Date or the Stated Termination
Date, as the case may be.
(b) Amounts. Each Bankers' Acceptance shall be of a
minimum amount for each Canadian Facility Lender of the Dollar
Equivalent Amount of CDN$500,000 and integral multiples of the
Dollar Equivalent Amount of CDN $100,000 in excess thereof.
(c) Deposit in the Account. An amount equal to Discounted
Proceeds relating to Bankers' Acceptances issued on any Business
Day or, in the case of a Discount Note, an amount equal to the
face amount of the Discount Note less the Discount, shall be
deposited by the relevant Canadian Facilities Lenders before 2:00
P.M. on such day in the Borrower's Canadian Account unless
Bankers' Acceptances are traded by the applicable Facility
Borrower on the money market in which event the Discounted
Proceeds shall be deposited by the applicable Facility Borrower
before 2:00 P.M. on such day in the Borrower's Canadian Account.
The applicable Facility Borrower shall cause an amount equal to
the acceptance fee (to be distributed to the relevant Canadian
Facilities Lenders by the Canadian Agent as contemplated in
Section 4.1(f) below) to be deposited before 2:00 P.M. on such day
in the Borrower's Canadian Account.
(d) Trading. The applicable Facility Borrower under the
Canadian Term Loan Facility or the Canadian Revolving Credit
Facility may trade the Bankers' Acceptances (but not a Discount
Note) on the money market or directly with the Canadian Facilities
Lenders. The Canadian Agent shall have no duties or liabilities
with respect to such trading.
(e) Payment. On the maturity date of any Bankers'
Acceptance outstanding, the applicable Facility Borrower shall,
subject to any Conversion or election in accordance with Section
4.3, pay to the Canadian Agent an amount equal to the face amount
of such Bankers' Acceptance; if such amount is not so paid or
otherwise shall be the subject of a Conversion or election in
accordance with Section 4.3, it shall automatically be debited by
the Canadian Agent from the Borrower's Canadian Account as a Base
Rate Loan under the Canadian Revolving Credit Facility made to the
applicable Facility Borrower.
(f) Acceptance Fee. Upon acceptance of a Bankers'
Acceptance or the issuance of a Discount Note, an acceptance fee
equal to the Applicable Margin, multiplied by the face amount of
such Bankers' Acceptance or Discount Note, as the case may be, and
multiplying the product so obtained by a fraction having a
numerator equal to the number of days of the period of such
Bankers' Acceptance and a denominator of 365, shall be paid by the
relevant Facility Borrower to the Canadian Agent, for the account
of the applicable Canadian Facilities Lenders.
From the date and as long as Outstandings under any
Facility bear interest at the Default Rate, as provided for
herein, the acceptance fee payable pursuant to this Section 4.1(f)
shall be equal to the Applicable Margin increased by two percent
(2%), such increase to be calculated on the face amount of any
outstanding Bankers' Acceptances for the number of days to elapse
between and including such date and the last day of the period of
such Bankers' Acceptances. The applicable Facility Borrower shall
pay such increase upon demand from the Canadian Agent for the
account of the relevant Canadian Facilities Lenders; should the
Default Rate cease to be applicable on a date which is prior to
the last day of the period of the Bankers' Acceptances, the
Canadian Agent shall then make an appropriate adjustment and upon
receipt from the relevant Canadian Facilities Lenders of the
amount representing such adjustment, remit same to the applicable
Facility Borrower.
Should an increase or a decrease occur in the Applicable
Margin during the period of any outstanding Bankers' Acceptances,
the acceptance fee payable with respect to such Bankers'
Acceptances pursuant to this Section 4.1(f) shall be equal, as
from the date of such change, to the Applicable Margin so
increased or decreased, such increase or decrease to be calculated
on the face amount of such Bankers' Acceptances for the number of
days to elapse between and including such date and the last day of
the period of such Bankers' Acceptances. The relevant Facility
Borrower shall pay such increase upon demand from the Canadian
Agent for the account of the relevant Canadian Facilities Lenders;
in the case of a decrease, the Canadian Agent shall make an
appropriate adjustment and upon receipt from the relevant Canadian
Facilities Lenders of the amount representing such adjustment,
remit same to the relevant Facility Borrower.
(g) Bankers' Acceptances by Non-BA Lenders. Whenever a
Facility Borrower under the Canadian Term Loan Facility or the
Canadian Revolving Credit Facility obtains an Advance by way of
Bankers' Acceptances, each Non-BA Lender shall, in lieu of
accepting a Bankers' Acceptance, make a Loan under such Canadian
Facility evidenced by a Discount Note.
(h) Depository Bills and Notes Act. Bankers' Acceptances
may be issued in the form of a depository xxxx and deposited with
a clearing house, both terms as defined in the Depository Bills
and Notes Act. The Canadian Facility Lenders and the Borrowers
shall agree on the procedures to be followed, acting reasonably.
The Canadian Facility Lenders are also authorized to issue
depository bills as replacements for previously issued Bankers'
Acceptances, on the same terms as those replaced, and deposit them
with a clearing house against cancellation of the previously
issued Bankers' Acceptances.
(i) Notwithstanding the provisions of Section 4.1(a)
hereof, if any Bankers' Acceptance issued hereunder has a maturity
date falling after the Term Loan Maturity Date or the Stated
Termination Date, not less than one Business Day prior to the Term
Loan Maturity Date or the Stated Termination Date, as the case may
be, the relevant Borrower under the Canadian Revolving Credit
Facility shall provide to the Canadian Agent an amount equal to
the face amount of all such Bankers' Acceptances in Canadian
Dollars to serve as cash collateral security, which amount may be
entirely set-off against the amount of the Bankers' Acceptances in
circulation which the Canadian Facility Lenders have accepted and
will be imputed to the payment of such Bankers' Acceptances at
their maturity. Such Borrower under the Canadian Revolving Credit
Facility shall sign and remit as security with regard thereto all
appropriate documents which the Canadian Agent might judge
necessary or desirable, specifically including a pledge or an
assignment of the credit balance of any deposit account held as
security.
4.2 Interest Rate Options. Eurodollar Rate Loans, Base Rate Loans
and, in the case of the Canadian Facilities only, Bankers' Acceptances may
be outstanding at the same time and, so long as no Default or Event of
Default shall have occurred and be continuing, the applicable Facility
Borrower shall have the option to elect the Type of Loan and the duration
of the initial and any subsequent Interest Periods and to Convert Revolving
Credit Loans and Segments of the Term Loans (including, in the case of the
Canadian Term Loan only, Bankers' Acceptance Segments) in accordance with
Sections 2.2(c)(i) and 4.3, as applicable; provided, however, (a) (a) there
shall not be outstanding at any one time Eurodollar Rate Segments having
more than five (5) different Interest Periods under the US Term Loan
Facility or Eurodollar Rate Segments having more than three (3) different
Interest Periods under the Canadian Term Loan Facility, (b) there shall not
be outstanding at any one time Eurodollar Rate Loans having more than ten
(10) different Interest Periods under the US Revolving Credit Facility,
Eurodollar Rate Loans having more than four (4) different Interest Periods
under the Canadian Revolving Credit Facility, or Bankers' Acceptances under
the Canadian Revolving Credit Facility having more than two (2) different
periods, (c) each Eurodollar Rate Loan (including each Conversion into and
each Continuation as a Eurodollar Rate Loan) shall be in the Dollar
Equivalent Amount of $100,000 or, if greater than the Dollar Equivalent
Amount of $100,000, an integral multiple of the Dollar Equivalent Amount of
$100,000, and (d) no Eurodollar Rate Segment shall have an Interest Period
that extends beyond the Term Loan Termination Date and no other Eurodollar
Rate Loan shall have an Interest Period that extends beyond the Stated
Termination Date. If the Relevant Agent does not receive a Borrowing Notice
or an Interest Rate Selection Notice giving notice of election of the
duration of an Interest Period or of Conversion of any Loan to or
Continuation of a Loan as a Eurodollar Rate Loan by the time prescribed by
Sections 2.2(c)(i) and 4.3, as applicable, the applicable Facility Borrower
shall be deemed to have elected to obtain or Convert such Loan to (or
Continue such Loan as) a Base Rate Loan until such Facility Borrower
notifies the applicable Agent in accordance with Section 4.3. The
applicable Facility Borrower shall not be entitled to elect to Continue any
Loan as or Convert any Loan into a Eurodollar Rate Loan or a Bankers'
Acceptance if a Default or Event of Default shall have occurred and be
continuing. All Loans (as such term is defined in the Existing Credit
Agreement) outstanding as of the Closing Date that are not Converted or
Continued as of the Closing Date shall be deemed to be Loans of the same
Type under this Agreement and shall on the Closing Date commence to bear
interest at the rate or rates (including any default rates) provided under
this Agreement for such Type, and the Applicable Margin applicable to any
Loan, Bankers' Acceptance or Letter of Credit shall, on and after the
Closing Date, be as set forth in the definition of Pricing Grid in this
Agreement, without regard to any margin applicable thereto under the
Existing Credit Agreement prior to the Closing Date.
4.3 Conversions and Elections of Subsequent Interest Periods.
Subject to the limitations set forth in the definition of "Interest Period"
and in Section 4.2, Section 4.13 and Article VI, the Facility Borrowers
may:
(a) upon delivery of telephonic notice to the Relevant
Agent (which shall be irrevocable) on or before 11:00 A.M. on any
Business Day, Convert any Eurodollar Rate Loan or, in the case of
the Canadian Facilities only, Bankers' Acceptance (including any
Bankers' Acceptance Segment) to a Base Rate Loan on the last day
of the Interest Period for such Eurodollar Rate Loan or Bankers'
Acceptance; and
(b) provided that no Default or Event of Default shall
have occurred and be continuing, upon delivery of telephonic
notice to the Relevant Agent (which shall be irrevocable) on or
before 11:00 A.M. three (3) Business Days prior to the date of
such Conversion or Continuation:
(i) elect a subsequent Interest Period
for any Eurodollar Rate Loan under any Facility to begin
on the last day of the then current Interest Period for
such Eurodollar Rate Loan; or
(ii) Convert any Base Rate Loan under
any Facility to a Eurodollar Rate Loan on any Business
Day.
(c) if such Facility is a Canadian Facility, provided
that no Default or Event of Default shall have occurred and be
continuing, upon delivery of telephonic notice to the Canadian
Agent (which shall be irrevocable) on or before 11:00 A.M. two (2)
Business Days prior to the date of such Continuation, elect a
subsequent period for a new Bankers' Acceptance or a Bankers'
Acceptance Segment to begin on the last day of the then current
period for such Bankers' Acceptance or Bankers' Acceptance
Segment;
(d) if such Facility is a Canadian Facility, provided
that no Default or Event of Default shall have occurred and be
continuing, upon delivery of telephonic notice to the Canadian
Agent (which shall be irrevocable) on or before 11:00 A.M. two (2)
Business Days prior to the date of such Conversion, Convert any
Eurodollar Rate Loan under such Facility to a Bankers' Acceptance
(including a Bankers' Acceptance Segment) under such Facility to
begin on the last day of the then current Interest Period for such
Eurodollar Rate Loan;
(e) if such Facility is a Canadian Facility other than
the Canadian Swing Line Facility, provided that no Default or
Event of Default shall have occurred and be continuing, upon
delivery of telephonic notice to the Canadian Agent (which shall
be irrevocable) on or before 11:00 A.M. two (2) Business Days
prior to the date of such Conversion, convert any Base Rate Loan
under such Facility into a Bankers' Acceptance (including a
Bankers' Acceptance Segment) under such Facility;
(f) if such Facility is a Canadian Facility, provided
that no Default or Event of Default shall have occurred and be
continuing, upon delivery of telephonic notice to the Canadian
Agent (which shall be irrevocable) on or before 11:00 A.M. three
(3) Business Days before the last day of the period of any
Bankers' Acceptance (including any Bankers' Acceptance Segment)
under such Facility, convert such Bankers' Acceptance (including
any Bankers' Acceptance Segment) into a Eurodollar Rate Loan under
such Facility to begin on the last day of the then current period
for such Bankers' Acceptance (including any Bankers' Acceptance
Segment);
(g) if such Facility is a Canadian Facility, on any
Business Day, convert any Base Rate Loan under such Facility in
Canadian Dollars into a Base Rate Loan under such Facility in
Dollars or a Base Rate Loan under such Facility in Dollars into a
Base Rate Loan under such Facility in the Canadian Dollar
Equivalent of Canadian Dollars.
Each such notice shall be effective upon receipt by the Relevant
Agent, shall specify the amount of the Loan or Segment affected,
the type of Loan or Segment (Revolving Credit Loan or Segment of a
Term Loan Facility) affected, and, if a Continuation as or
Conversion into a Eurodollar Rate Loan or, in the case of a
Facility that is a Canadian Facility only, a Bankers' Acceptance
(including a Bankers' Acceptance Segment), the Interest Period to
be used in the computation of interest. The Authorized
Representative shall provide the Relevant Agent written
confirmation of each such telephonic notice in the form of a
Borrowing Notice or Interest Rate Selection Notice (as applicable)
with appropriate insertions but failure to provide such
confirmation shall not affect the validity of such telephonic
notice. Notice of receipt of such Borrowing Notice or Interest
Rate Selection Notice, as the case may be, shall be provided by
the Relevant Agent to each applicable Lender by telefacsimile
transmission with reasonable promptness, but (provided the
Relevant Agent shall have received such notice by 11:00 A.M.) not
later than 3:00 P.M. on the same day as the Relevant Agent's
receipt of such notice. All such Continuations or Conversions of
Loans and Segments shall be effected pro rata based on the
Applicable Commitment Percentages of each Lender under the
applicable Facility.
4.4 Payment of Interest. Each applicable Facility Borrower shall
pay interest on the outstanding and unpaid principal amount of each Segment
of each Term Loan and on each Revolving Credit Loan, commencing on the
first date of such Segment or Revolving Credit Loan until such Segment or
Revolving Credit Loan, as the case may be, shall be repaid, at the
applicable Base Rate or Eurodollar Rate as designated by such Facility
Borrower in the related Borrowing Notice or Interest Rate Selection Notice
or as otherwise provided hereunder. Interest on each Segment and on each
Revolving Credit Loan shall be paid on the earlier of (a) in the case of
any Base Rate Loan, monthly in arrears on the last Business Day of each
calendar month, commencing on January 31, 2002, until, as to any Base Rate
Segment, the Term Loan Termination Date, and as to any other Base Rate
Loans, the Revolving Credit Termination Date, at which date as applicable
the entire principal amount of and all accrued interest on the Term Loans
and the Revolving Credit Loans, respectively, shall be paid in full, (b) in
the case of any Eurodollar Rate Loan, on last day of the applicable
Interest Period for such Eurodollar Rate Loan and, with respect to any
Eurodollar Rate Loan with an Interest Period greater than three months, on
the date that is three months after the first date of the applicable
Eurodollar Rate Loan, and (c) upon payment in full of the Term Loans (or
any Segments thereof) or the related Revolving Credit Loans; provided,
however, that if any Event of Default shall occur and be continuing, all
amounts outstanding hereunder shall bear interest thereafter until paid in
full at the Default Rate.
4.5 Prepayments of Eurodollar Rate Loans and Bankers' Acceptances.
Whenever any payment of principal shall be made in respect of any Loan
hereunder, whether at maturity, on acceleration, by optional or mandatory
prepayment or as otherwise required or permitted hereunder, with the effect
that any Eurodollar Rate Loan or Bankers' Acceptance shall be prepaid in
whole or in part prior to the last day of the Interest Period or period
applicable to such Eurodollar Rate Loan or Bankers' Acceptance, such
payment of principal shall be accompanied by the additional payment, if
any, required by Section 6.5.
4.6 Manner of Payment.
-----------------
(a) Each payment of principal (including any prepayment)
and payment of interest and fees (other than acceptance fees
referred to in Section 4.1(f)), and any other amount required to
be paid to a Lender, an Issuing Bank, an Agent or the Canadian
Swing Line Facility Lender with respect to any Loan, Letter of
Credit, Reimbursement Obligation, or Canadian Swing Line Loan,
shall be made to the Relevant Agent at the Principal Office in
Dollars or in the Dollar Equivalent Amount of Canadian Dollars in
immediately available funds without condition or deduction for any
setoff, recoupment, deduction or counterclaim on or before 12:30
P.M. on the date such payment is due. The Relevant Agent may, but
shall not be obligated to, debit the amount of such payment from
any one or more Lock Box Accounts or ordinary deposit accounts of
a Facility Borrower with such Relevant Agent.
(b) Any payment made by or on behalf of the Borrower that
is not made both in Dollars or the Dollar Equivalent Amount of
Canadian Dollars in immediately available funds and prior to 12:30
P.M. on the date such payment is to be made shall constitute a
non-conforming payment. Any such non-conforming payment shall not
be deemed to be received until the later of (i) the time such
funds become available funds and (ii) the next Business Day. Any
non-conforming payment may constitute or become a Default or Event
of Default as otherwise provided herein. Interest shall continue
to accrue at the Default Rate on any principal or fees as to which
no payment or a non-conforming payment is made from the date such
amount was due and payable until the later of (i) the date such
funds become available funds or (ii) the next Business Day.
(c) In the event that any payment hereunder or under any
of the Notes or any other Loan Documents becomes due and payable
on a day other than a Business Day, then such due date shall be
extended to the next succeeding Business Day unless provided
otherwise under the definition of "Interest Period"; provided,
however, that interest and applicable fees shall continue to
accrue during the period of any such extension; and provided
further, however, that in no event shall any such due date be
extended (i) for any Term Loan, beyond the Term Loan Termination
Date, and (ii) for any Revolving Credit Loan, beyond the Revolving
Credit Termination Date.
4.7 Fees.
----
(a) Commitment Fee. For the period beginning on the
Closing Date and ending on the Revolving Credit Termination Date,
(i) each Facility Borrower under the Canadian Revolving Credit
Facility agrees to pay to the Canadian Agent, for the pro rata
benefit of the Canadian Revolving Credit Facility Lenders based on
their Applicable Commitment Percentages, a commitment fee equal to
the Applicable Commitment Fee multiplied by the average daily
amount by which the Total Commitment with respect to the Canadian
Revolving Credit Facility exceeds the sum of the Canadian
Revolving Credit Outstandings (without giving effect to Canadian
Swing Line Outstandings except in the case of the Canadian Swing
Line Facility Lender) plus Canadian Letter of Credit Outstandings,
and (ii) each Facility Borrower under the US Revolving Credit
Facility agrees to pay to the US Agent, for the pro rata benefit
of the US Revolving Credit Facility Lenders based on their
Applicable Commitment Percentages, a commitment fee equal to the
Applicable Commitment Fee multiplied by the average daily amount
by which the Total Commitment with respect to the US Revolving
Credit Facility exceeds the sum of the US Revolving Credit
Outstandings plus US Letter of Credit Outstandings. Such fees
shall be due in arrears on the last Business Day of each March,
June, September and December commencing on March 31, 2002, to and
on the Revolving Credit Termination Date. Notwithstanding the
foregoing, so long as any Canadian Revolving Credit Facility
Lender or US Revolving Credit Facility Lender fails to make
available any portion of its Revolving Credit Commitment when
requested, such Lender shall not be entitled to receive payment of
its pro rata share of such fee until such Lender shall make
available such portion.
(b) Participation Fee. In consideration of the making of
the Total Commitments of the Lenders, the Facility Borrowers agree
to pay to the Relevant Agent for the pro rata benefit of the
respective Lenders based on their respective Applicable Commitment
Percentages of the Total Commitment, an upfront participation fee
at the time and in the amount agreed to by the Borrowers and the
Agents for the benefit of the Agents and the Lenders.
(c) Letter of Credit Facility Fees. The Facility
Borrowers under a certain Letter of Credit Facility shall, with
respect to any Letter of Credit issued thereunder, pay to the
Relevant Agent, for the pro rata benefit of the Revolving Credit
Facility Lenders with respect to the applicable Revolving Credit
Facility based on their Applicable Commitment Percentages of the
Canadian Letter of Credit Facility at such time, in the case of
the Canadian Revolving Credit Facility Lenders, and of the US
Letter of Credit Facility at such time, in the case of the US
Revolving Credit Facility Lenders, a fee based on the aggregate
amount available to be drawn on each outstanding Letter of Credit
issued under such Letter of Credit Facility at a rate per annum
equal to the Applicable Margin in effect from time to time under
the Revolving Credit Facilities for Eurodollar Rate Loans
calculated for the stated duration of each such Letter of Credit.
Such fees shall be payable on the date of issuance (or renewal) of
each such Letter of Credit.
(d) Letter of Credit Fronting and Administrative Fees.
The Facility Borrowers under a certain Letter of Credit Facility
shall pay to the Issuing Bank for such Letter of Credit Facility
(i) a fronting fee of 0.125% per annum on the initial aggregate
amount available to be drawn on each outstanding Letter of Credit
issued under such Letter of Credit Facility, such fee to be due
and payable in full with respect to each Letter of Credit on the
date of issuance (or renewal) thereof, and (ii) such
administrative fee and other fees, if any, in connection with the
Letters of Credit in such amounts and at such times as the
applicable Issuing Bank and the applicable Facility Borrowers with
respect to such Letter of Credit Facility shall agree from time to
time.
(e) Agents' Fees. The Borrowers agrees to pay to each of
the Agents, for their respective individual accounts, an annual
Agent's fee as from time to time agreed to by the Borrowers and
the Agents in writing.
(f) Ticking Fee. Commencing on April 30, 2003, and on the
last day of each month thereafter until the Facility Termination
Date, the Borrowers shall pay a fee (the "Ticking Fee") to the US
Agent for the benefit of the Lenders in an amount equal to (x) the
sum of (i) the Term Loan Outstandings and (ii) the aggregate
Revolving Credit Commitments, multiplied by (y) the amount set
forth opposite each such month below:
------------------------------------------------------- -----------------------------------------------------
Month Monthly Ticking Fee
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
April, May and June 2003 0.15%
------------------------------------------------------- -----------------------------------------------------
July, August and September 2003 0.25%
------------------------------------------------------- -----------------------------------------------------
October, November and December 2003 0.35%
------------------------------------------------------- -----------------------------------------------------
The Ticking Fee shall be allocated pro rata among the Lenders
according to each Lender's Applicable Commitment Percentage of the
Term Loan Outstandings and Revolving Credit Commitment.
4.8 Pro Rata Payments. Except as otherwise specified herein, (a)
each payment on account of the principal of and interest on Loans, the fees
described in Section 4.7(a), (b) and (c), and Canadian Swing Line Loans and
Reimbursement Obligations as to which the Lenders have funded their
respective Participations which remain outstanding, shall be made to the
Relevant Agent for the account of the Lenders under each such Facility pro
rata based on their Applicable Commitment Percentages with respect to each
such Facility, (b) all payments to be made by the Facility Borrowers for
the account of each of the Lenders on account of principal, interest and
fees, shall be made without diminution, set-off, recoupment or
counterclaim, and (c) the Relevant Agent will promptly distribute to the
Lenders under the applicable Facility in immediately available funds
payments received in fully collected, immediately available funds from the
applicable Facility Borrower.
4.9 Computation of Rates and Fees.
-----------------------------
(a) Calculation - Canadian Facilities. Except as may be
otherwise expressly provided, with respect to the Canadian
Facilities (i) the interest is calculated each day at the rate as
provided for herein, until but excluding the day of full payment
of the amount on which it accrues and in the case of the
Eurodollar Rate, it is calculated on the number of days comprised
in the applicable Interest Period; (ii) the interest is calculated
daily; (iii) the interest is calculated on the basis of a 365-day
year (except for the Eurodollar Rate which is calculated on a
360-day basis); (iv) in the determination of the interest rate or
the calculation of interest, the interest paid shall not be deemed
to have been reinvested; (v) the Applicable Margin and fees
(including acceptance fees) are calculated as interest is
calculated. For the purposes of the Interest Act (Canada), in the
case of a leap year, the yearly rate of interest to which the rate
of interest calculated on a 365-day basis is equivalent shall be
such rate multiplied by three hundred and sixty-six (366) and
divided by three hundred and sixty-five (365). For the purposes of
the same Act, the annual rate of interest equivalent to the
Eurodollar Rate is calculated by dividing the amount of the
interest calculated for the applicable Interest Period by the
amount of the Eurodollar Rate Segment, multiplied by a fraction
whose numerator is equal to the true number of days included in
the twelve (12) months making up the applicable year and whose
denominator is equal to the true number of days accumulated during
the applicable Interest Period.
(b) Calculation - US Facilities. Except as may be
otherwise expressly provided, with respect to the US Facilities
all interest rates (including the Base Rate, each Eurodollar Rate,
and the Default Rate) and fees shall be computed on the basis of a
year of 360 days and calculated for actual days elapsed.
4.10 Deficiency Advances; Failure to Purchase Participations. No
Revolving Credit Facility Lender shall be responsible for any default of
any other Lender under the same Facility in respect to such other Lender's
obligation to make any Revolving Credit Loan or Advance under such
Revolving Credit Facility or to fund its purchase of any Participation
hereunder nor shall the Revolving Credit Commitment, Term Loan Commitment
or Letter of Credit Commitment of any Lender hereunder be increased as a
result of such default of any other Lender. Without limiting the generality
of the foregoing or the provisions of Section 4.11, in the event any
Revolving Credit Facility Lender shall fail to advance funds to the
applicable Facility Borrower as herein provided, including without
limitation as a result of being in any insolvency or receivership
proceeding (a "Non-Funding Lender"), the Relevant Agent may in its
discretion, but shall not be obligated to, advance under the applicable
Note with respect to such Facility in its favor as a Lender all or any
portion of such amount or amounts (each, a "deficiency advance") and shall
thereafter be entitled to payments of principal of and interest on such
deficiency advance in the same manner and at the same interest rate or
rates to which such Non-Funding Lender would have been entitled had it made
such Advance under its Note; provided that, (i) such Non-Funding Lender
shall not be entitled to receive payments of principal, interest or fees
with respect to such deficiency advance until such deficiency advance
(together with interest thereon as provided in clause (ii)) shall be paid
by such Non-Funding Lender and (ii) upon payment to the Relevant Agent from
such Non-Funding Lender of the entire outstanding amount of each such
deficiency advance, together with accrued and unpaid interest thereon, from
the most recent date or dates interest was paid to the Relevant Agent by
the Facility Borrowers under the applicable Revolving Credit Facility on
each Revolving Credit Loan comprising the deficiency advance at the
Reference Rate in the case of the Canadian Revolving Credit Facility and at
the Federal Funds Rate in the case of the US Revolving Credit Facility,
then such payment shall be credited against the applicable Note of the
Relevant Agent in full payment of such deficiency advance and such Facility
Borrowers under the applicable Revolving Credit Facility shall be deemed to
have borrowed the amount of such deficiency advance from such other
Revolving Credit Facility Lender as of the most recent date or dates, as
the case may be, upon which any payments of interest were made by such
Facility Borrowers thereon. In the event any Revolving Credit Facility
Lender shall fail to fund its purchase of a Participation after notice from
the applicable Issuing Bank or the Canadian Swing Line Facility Lender, as
applicable, such Revolving Credit Facility Lender shall pay to such Issuing
Bank or Canadian Swing Line Facility Lender, as applicable, such amount on
demand, together with interest at the Reference Rate in the case of the
Canadian Letter of Credit Facility or Canadian Swing Line Facility and at
the Federal Funds Rate in the case of the US Letter of Credit Facility, on
the amount so due from the date of such notice to the date such purchase
price is received by the Issuing Bank or the Canadian Swing Line Facility
Lender, as applicable.
4.11 Intraday Funding. Without limiting the provisions of Section
4.10, unless the applicable Facility Borrowers or any applicable Lender has
notified the Relevant Agent not later than 12:00 Noon of the Business Day
before the date any payment (including in the case of Lenders any Advance)
to be made by it is due, that it does not intend to remit such payment, the
Relevant Agent may, in its discretion, assume that each Facility Borrower
or each Lender, as the case may be, has timely remitted such payment in the
manner required hereunder and may, in its discretion and in reliance
thereon, make available such payment (or portion thereof) to the Person
entitled thereto as otherwise provided herein. If such payment was not in
fact remitted to the Relevant Agent in the manner required hereunder, then:
(i) if a Facility Borrower failed to make such payment,
each Lender under a Facility with respect to which such Facility
Borrower so failed to make such payment shall forthwith on demand
repay to the Relevant Agent the amount of such assumed payment
made available to such Lender, together with interest thereon in
respect of each day from and including the date such amount was
made available by the Relevant Agent to such Lender to the date
such amount is repaid to the Relevant Agent at the Federal Funds
Rate; and
(ii) if any Lender failed to make such payment with
respect to any Facility, the Relevant Agent shall be entitled to
recover such corresponding amount forthwith upon the Relevant
Agent's demand therefor, the Relevant Agent promptly shall notify
the applicable Facility Borrowers, and each such Facility Borrower
shall promptly pay such corresponding amount to the Relevant Agent
in immediately available funds upon receipt of such demand. The
Relevant Agent also shall be entitled to recover interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Relevant Agent to
each such Facility Borrower to the date such corresponding amount
is recovered by the Relevant Agent, (A) from any such Canadian
Facilities Lender at a rate per annum equal to the daily Reference
Rate and from any such US Facilities Lender at a rate per annum
equal to the daily Federal Funds Rate or (B) from each such
Facility Borrower, at a rate per annum equal to the interest rate
applicable to the applicable Loan which includes such
corresponding amount. Until the Relevant Agent shall recover such
corresponding amount together with interest thereon, such
corresponding amount shall constitute a deficiency advance within
the meaning of Section 4.10. Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its commitments
hereunder or to prejudice any rights which any Agent or any
Facility Borrower may have against any Lender as a result of any
default by such Lender hereunder.
4.12 Risk Participation among Lenders. (a) Each Lender agrees that
if it or any of its affiliates shall, whether through the exercise of a
right of banker's lien, set-off or counterclaim, as proceeds realized from
Collateral, as payments from any Borrower or any Guarantor, or otherwise,
obtain payment with respect to Obligations owed to it (other than pursuant
to Article VI) such that its Applicable Outstanding Percentage is less than
its Applicable Total Commitment Percentage, then (i) such Lender (a
"Participating Lender") shall be deemed to have simultaneously purchased
from the other Lenders (each a "Selling Lender") a Participation in the
Outstandings owing to them such that, following such purchase, each
Lender's Applicable Outstanding Percentage is equal to its Applicable Total
Commitment Percentage, and (ii) such other adjustments shall be made from
time to time as shall be equitable to ensure that the Lenders share such
payments in such a way that each Lender's Applicable Outstanding Percentage
is equal to its Applicable Total Commitment Percentage; provided, however,
that for purposes of this Section 4.12(a), with respect to any Lender that
has not funded its share of the outstanding Loans and Obligations, such
Lender's "Commitments" as used in the term "Applicable Total Commitment
Percentage" shall be determined after subtracting all such unfunded
amounts. Each Participating Lender shall pay to the Relevant Agent for the
account of the Selling Lenders in Dollars and in immediately available
funds, an amount equal to its Participation (as given notice thereof by the
Relevant Agent or an affected Lender) within five (5) Business Days after
receipt of such notice. Simultaneously with the making of each such
payment, each Participating Lender shall, automatically and without any
further action on the part of any Lender, acquire a Participation in the
amount of such payment in the Obligations of the applicable Facility
Borrowers related to the Outstandings in which each such Participating
Lender purchases such Participation. The Borrowers expressly consent to the
foregoing arrangements and agree that each Participating Lender may
exercise all rights of payment (including, without limitation, all rights
of set-off, banker's lien or counterclaim) with respect to such
Participation as fully as if such Participating Lender were the direct
holder of such portion. If all or any portion of any such excess payment is
thereafter recovered from the Participating Lender which received the same,
the purchase provided in this Section 4.12(a) shall be rescinded to the
extent of such recovery, without interest.
(b) If at any time on or after any date that is the earlier of (i)
the last day of any fiscal quarter during which an Event of Default has
occurred, so long as such Event of Default is continuing, and (ii) the
occurrence of an acceleration of the Obligations pursuant to Section 11.1,
any Lender's Applicable Outstanding Percentage is not equal to such
Lender's Applicable Total Commitment Percentage, then each Participating
Lender shall purchase Participations in the Outstandings owing to the
Selling Lenders in an amount by each Participating Lender such that, after
giving effect to such Participations, the Applicable Outstanding Percentage
for each Lender shall be equal to such Lender's Applicable Total Commitment
Percentage; provided, however, that for purposes of this Section 4.12, with
respect to any Lender that has not funded its share of the outstanding
Loans and Obligations, such Lender's "Commitments" as used in the term
"Applicable Total Commitment Percentage" shall be determined after
subtracting all such unfunded amounts. Each Participating Lender shall pay
to the Relevant Agent for the account of the Selling Lenders in Dollars and
in immediately available funds, an amount equal to its Participation (as
given notice thereof by the Relevant Agent) within five (5) Business Days
after receipt of such notice. Simultaneously with the making of each such
payment, each Participating Lender shall, automatically and without any
further action on the part of any Lender, acquire a Participation in the
amount of such payment in the Obligations of the applicable Facility
Borrowers related to the Outstandings in which each such Participating
Lender purchases such Participation. The Borrowers expressly consent to the
foregoing arrangements and agree that each Participating Lender may
exercise all rights of payment (including, without limitation, all rights
of set-off, banker's lien or counterclaim) with respect to such
Participation as fully as if such Participating Lender were the direct
holder of such portion. If all or any portion of any such excess payment is
thereafter recovered from the Participating Lender which received the same,
the purchase provided in this Section 4.12(b) shall be rescinded to the
extent of such recovery, without interest.
4.13. Utilization of Canadian Dollars. (a) Each request for a
Canadian Revolving Credit Loan or Canadian Letter of Credit shall
constitute the applicable Facility Borrower's request for (i) a Canadian
Revolving Credit Loan or Canadian Letter of Credit, as the case may be, of
the Dollar Equivalent Amount of the amount of Canadian Dollars specified in
such Borrowing Notice or request for a Letter of Credit and (ii) such
Canadian Revolving Credit Loan or Canadian Letter of Credit, as the case
may be, to be made available by the Canadian Revolving Credit Facility
Lenders or the Canadian Issuing Bank, as the case may be, to or for the
account of the applicable Facility Borrower in the Canadian Dollar
Equivalent Amount of such Dollar Equivalent Amount. The principal amount
outstanding on any Canadian Revolving Credit Loan or Canadian Term Loan
made in Canadian Dollars shall be recorded in the Canadian Agent's records
in Dollars as if the Canadian Revolving Credit Loan or Canadian Term Loan
had initially been made in Dollars, in the Dollar Equivalent Amount of such
Canadian Revolving Credit Loan or Canadian Term Loan, as reduced from time
to time by the Dollar Equivalent Amount of any principal payments with
respect to such Canadian Revolving Credit Loan or Canadian Term Loan. The
principal amount outstanding on any Canadian Letter of Credit issued in
Canadian Dollars shall be recorded in the Canadian Issuing Bank's records
in Dollars as if the Canadian Letter of Credit had been issued in Dollars
in the Dollar Equivalent Amount of such Canadian Letter of Credit, as such
amount may be adjusted as provided in the definition of "Advance Date
Exchange Rate". For the purposes of determining the maximum amount of
Canadian Revolving Credit Outstandings and Canadian Term Loan Outstandings
hereunder, it is intended by the parties that all Canadian Revolving Credit
Loans and segments of Canadian Term Loans shall be the functional
equivalent of Canadian Revolving Credit Loans and segments of Canadian Term
Loans made and repaid in Dollars and shall be included in such
determination based on their Dollar Equivalent Amount as determined from
time to time as set forth herein. For the purposes of determining the
maximum amount of Canadian Letter of Credit Outstandings and Canadian
Revolving Credit Outstandings and Canadian Term Loan Outstandings
hereunder, it is intended by the parties that all Canadian Letters of
Credit shall be the functional equivalent of Canadian Letters of Credit
made and repaid in Dollars and shall be included in such determination
based on their Dollar Equivalent Amount as determined from time to time as
set forth herein. It is recognized that some Canadian Lenders may elect to
record Canadian Revolving Credit Loans and segments of Canadian Term Loans
in Canadian Term Loan Outstandings in Canadian Dollars. The Canadian Agent
shall maintain records (which records, with respect to Canadian Letters of
Credit, shall be based upon information furnished to the Canadian Agent by
the Canadian Issuing Bank) sufficient to identify at any time (i) the
Advance Date Exchange Rate with respect to, and Dollar Equivalent Amount
of, each Canadian Revolving Credit Loan and segments of Canadian Term Loans
and each Canadian Letter of Credit issued in Canadian Dollars and (ii) the
portion of Canadian Revolving Credit Outstandings attributable to each
Advance.
(b) The applicable Facility Borrower may elect to Continue a
Canadian Revolving Credit Loan or any Segment of the Canadian Term Loan (a
"Canadian Dollar Loan") pursuant to the terms of Section 4.3 and subject to
the conditions set forth in this Section 4.13. In the event a Canadian
Dollar Loan is Continued, such election to Continue the Canadian Dollar
Loan shall be treated as an Advance and the Canadian Agent shall notify the
applicable Facility Borrower and the Canadian Facilities Lenders of the new
Advance Date Exchange Rate (determined as provided in the definition
thereof), the Interest Period and the rate for such Continued Canadian
Dollar Loan. The Canadian Facilities Lenders shall each be deemed to have
made an Advance to the Canadian Borrower of its Applicable Commitment
Percentage of each Canadian Dollar Loan in Canadian Dollars and the
Canadian Agent shall apply the new Advance Date Exchange Rate for such new
Interest Period to such Continued Canadian Dollars Equivalent Amount to
determine the new Dollar Equivalent Amount of such Canadian Dollar Loan and
shall adjust its books and the Canadian Revolving Credit Outstandings or
the Canadian Term Loan Outstandings, as applicable. In the event that such
adjustment with respect to a Continued Canadian Dollar Loan would cause (i)
the Dollar Equivalent Amount of Canadian Revolving Credit Outstandings plus
Canadian Letter of Credit Outstandings plus Canadian Swing Line Loan
Outstandings to exceed the Total Commitment for the Canadian Revolving
Credit Facility, or (ii) the Dollar Equivalent Amount of all Outstandings
under the Revolving Credit Facilities, the Letter of Credit Facilities and
the Canadian Swing Line Facility to exceed the sum of (A) the Borrowing
Base as calculated in Dollars at such time plus (B) during an Overadvance
Period, the Overadvance Amount as calculated in Dollars at such time, the
applicable Facility Borrower shall, immediately on the effective date of
such Continuation, repay (a "Rate Adjustment Payment") the portion of such
Canadian Dollar Loan (applying the new Advance Date Exchange Rate)
necessary to ensure that, giving effect to the Continuation of such
Canadian Dollar Loan, the terms of Section 2.2(b)(ii) and (iii) are
complied with. If the Canadian Agent does not receive an Interest Rate
Selection Notice giving notice of election of the duration of an Interest
Period or Continuation of a Canadian Dollar Loan by the time prescribed in
Section 2.2 or 4.3, as applicable, the applicable Facility Borrower shall
be deemed to have elected to repay such Canadian Dollar Loan and if such
Canadian Dollar Loan is not repaid on the last day of the applicable
Interest Period, together with accrued interest thereon, such Canadian
Dollar Loan shall be converted to a Base Rate Loan in the Dollar Equivalent
Amount of such Canadian Dollar Loan. The applicable Facility Borrower shall
not be entitled to elect to Continue any Canadian Dollar Loan if a Default
or Event of Default shall have occurred and be continuing.
(c) In the event a Canadian Letter of Credit issued in Canadian
Dollars is for a term exceeding three (3) months, the Dollar Equivalent
Amount of the corresponding Canadian Letter of Credit Outstandings shall be
recalculated as of the last Business Day of each fiscal quarter of
Consoltex Holdings and the Canadian Agent shall notify the applicable
Facility Borrower, the US Agent and the Canadian Facilities Lenders of the
new Advance Date Exchange Rate (determined as provided in the definition
thereof) for such Canadian Letter of Credit. The Canadian Agent shall apply
the new Advance Date Exchange Rate to determine the new Dollar Equivalent
Amount of such Canadian Letter of Credit and shall adjust its books and the
Canadian Letter of Credit Outstandings. In the event that such adjustment
with respect to a Letter of Credit causes (w) the Dollar Equivalent Amount
of Participations by any Canadian Revolving Credit Facility Lender in
Canadian Letters of Credit and Reimbursement Obligations with respect to
Canadian Letter of Credit Commitment to exceed such Lender's Canadian
Letter of Credit Commitment, (x) the Dollar Equivalent Amount of Canadian
Letter of Credit Outstandings to exceed the Total Canadian Letter of Credit
Commitment, (y) the Dollar Equivalent Amount of Canadian Revolving Credit
Outstandings plus Canadian Letter of Credit Outstandings plus Canadian
Swing Line Loan Outstandings to exceed the Total Commitment for the
Canadian Revolving Credit Facility, or (z) the Dollar Equivalent Amount of
all Outstandings under the Revolving Credit Facilities, the Letter of
Credit Facilities and the Canadian Swing Line Facility to exceed the sum of
(A) the Borrowing Base as calculated in Dollars at such time plus (B)
during an Overadvance Period, the Overadvance Amount as calculated in
Dollars at such time, the applicable Facility Borrower shall immediately
make such payments and prepayments of Canadian Dollar Loans as shall be
necessary to comply with the terms of Section 2.2(b)(ii) and (iii) and also
to ensure that the Dollar Equivalent Amount of Participations by any
Canadian Revolving Credit Facility Lender in Canadian Letters of Credit and
Reimbursement Obligation with respect to Canadian Letters of Credit does
not exceed such Lender's Canadian Letter of Credit Commitment and that the
Dollar Equivalent Amount of Canadian Letter of Credit Outstandings does not
exceed the Total Canadian Letter of Credit Commitment.
(d) The Dollar Equivalent Amount of all Base Rate Loans under the
Canadian Revolving Credit Facility and the Canadian Term Loan Facility
("Canadian Base Rate Loans") shall be recalculated as of the last Business
Day of each fiscal quarter of Consoltex Holdings and the Canadian Agent
shall notify the applicable Facility Borrower, the US Agent and the
Canadian Facilities Lenders of the new Advance Date Exchange Rate
(determined as provided in the definition thereof) for such Canadian Base
Rate Loans. The Canadian Agent shall apply the new Advance Date Exchange
Rate to determine the new Dollar Equivalent Amount of such Canadian Base
Rate Loans and shall adjust its books and the Canadian Revolving Credit
Outstandings and the Canadian Term Loan Outstandings, as applicable. In the
event that such adjustment with respect to the Canadian Base Rate Loans
causes (i) the Dollar Equivalent Amount of Canadian Revolving Credit
Outstandings plus Canadian Letter of Credit Outstandings plus Canadian
Swing Line Loan Outstandings to exceed the Total Commitment for the
Canadian Revolving Credit Facility, or (ii) the Dollar Equivalent Amount of
all Outstandings under the Revolving Credit Facilities, the Letter of
Credit Facilities and the Canadian Swing Line Facility to exceed the sum of
(A) the Borrowing Base as calculated in Dollars at such time plus (B)
during an Overadvance Period, the Overadvance Amount as calculated in
Dollars at such time, the applicable Facility Borrower shall immediately
make such payments and prepayments of Canadian Base Rate Loans as shall be
necessary to comply with the terms of Section 2.2(b)(ii) and (iii).
ARTICLE V
Security
5.1 Security. As security for the full and timely payment and
performance of all Obligations, the following Facility Borrowers shall, on
or before the Closing Date, do or cause to be done all things necessary in
the opinion of the Agents and the Lenders and counsel to the Agents and the
Lenders to grant to the Relevant Agent, the US Collateral Agent or the
Canadian Collateral Trustee, as applicable, for the benefit of the Agents
and the Lenders, the following duly perfected first priority security
interests and hypothecs, subject to no prior Lien other than Statutory
Permitted Liens and Liens permitted pursuant to Section 10.4(g) or other
encumbrance or restriction on transfer:
(a) a collateral security interest and, with respect to
Collateral located in Canada, a security interest, mortgage and
hypothec, or a security interest under Section 427 of the Bank
Act, by each of the Facility Borrowers and Guarantors (other than
Consoltex Mexico and each of the Mexican Companies) in all
Collateral as described in the Security Instruments;
(b) pledge of the bonds issued by Consoltex and secured
by the Collateral of Consoltex;
(c) cross corporate guarantees of the Obligations of each
of the Facility Borrowers and of each Guarantor by each of the
Guarantors (Consoltex Mexico and the Mexican Companies to
guarantee only the Obligations of Consoltex Mexico, Consoltex, and
the Mexican Companies); and
(d) assignment, pledge and hypothec of 100% of the issued
and outstanding shares of each of the Guarantors (sixty-five
percent (65%) in the case of the voting shares of Consoltex
Mexico), with the exception of the shares issued by Consoltex
Holdings;
in each case in accordance with the terms, and to the extent required in,
the applicable Security Instruments, and do all things necessary in the
reasonable opinion of the Agents and their counsel to grant to the US
Collateral Agent and the Canadian Collateral Trustee for the benefit of the
Agents and the Lenders a duly perfected first priority security interest in
all Collateral subject to no prior Lien other than Statutory Permitted
Liens and Liens permitted pursuant to Section 10.4(g).
Without limiting the foregoing, each Borrower and each Subsidiary
having rights in any Subsidiary Securities to be pledged pursuant to
Section 5.1(d) shall, to the extent not previously delivered, on the
Closing Date deliver to the Agents, in form and substance reasonably
acceptable to the Agents, (A) a Pledge Agreement which shall pledge to the
Relevant Agent for the benefit of the Agents and the Lenders the Subsidiary
Securities owned by such Borrower or Subsidiary and described in Section
5.1(d), and any supplements or amendments to any Pledge Agreement
previously delivered to the extent necessary to effectuate the purposes of
this Article V, such earlier delivered Pledge Agreement, or the other Loan
Documents, (B) if such Subsidiary Securities are in the form of
certificated securities, such certificated securities, together with
undated stock powers or other appropriate transfer documents endorsed in
blank pertaining thereto, (C) if such Subsidiary Securities do not
constitute securities and the Subsidiary has not elected to have such
interests treated as securities under Article 8 of the Uniform Commercial
Code, a Control Agreement from the Registrar of such Subsidiary Securities
and (D) Uniform Commercial Code financing statements reflecting the Lien in
favor of the Agents, the US Collateral Agent and the Canadian Collateral
Trustee, or any of them as applicable, on such Subsidiary Securities, each
in form and substance acceptable to the Agents, and shall take such further
action and deliver or cause to be delivered such further documents as
required by the Security Instruments or otherwise as the Agents may request
to effect the transactions contemplated by this Article V. Notwithstanding
anything to the contrary herein, no Borrower, Guarantor or Subsidiary shall
issue Subsidiary Securities that are not certificated.
5.2 Further Assurances. At the request of either Agent or any
Lender, the Borrowers will or will cause their Subsidiaries, as the case
may be, to execute, by their respective duly authorized officers, alone or
with either Agent, the US Collateral Agent or the Canadian Collateral
Trustee, as applicable, any certificate, instrument, financing statement,
control agreement, statement or document, or to procure any such
certificate, instrument, statement or document, or to take such other
action (and pay all connected costs) which either Agent or any Lender
reasonably deems necessary from time to time to create, continue or
preserve the Liens and security interests in the Collateral (and the
perfection and priority thereof) of the US Agent, the Canadian Agent, the
US Collateral Agent and the Canadian Collateral Trustee contemplated hereby
and by the other Loan Documents and specifically including (a) all
Collateral acquired by any Borrower or any Guarantor after the Closing
Date, (b) with respect to any Collateral located in Canada, any increase in
the amount of the bonds and all security instruments securing repayment of
the bonds at any time the value of a Canadian Dollar is less than $0.60,
and (c) with respect to any deposit accounts held with any financial
institution domiciled in Mexico, such action as may be reasonably necessary
to perfect a security interest in or control over any such deposit accounts
by one of the Agents, the US Collateral Agent or the Canadian Collateral
Trustee. Each Agent is hereby irrevocably authorized to execute and file or
cause to be filed, with or if permitted by applicable law without the
signature of a Borrower or any Guarantor appearing thereon, all Uniform
Commercial Code financing statements reflecting such Borrower or any
Guarantor as "debtor" and the US Agent, the Canadian Agent, the US
Collateral Agent or the Canadian Collateral Trustee, as applicable, as
"secured party", and continuations thereof and amendments thereto, as
either Agent reasonably deems necessary or advisable to give effect to the
transactions contemplated hereby and by the other Loan Documents.
5.3 Information Regarding Collateral. Each Borrower represents,
warrants and covenants that (i) the jurisdiction of formation,
jurisdictional identification number (if any), and the chief executive
office of such Borrower and each of its Subsidiaries providing Collateral
pursuant to a Security Instrument (each, a "Grantor") prior to or at the
Closing Date is located at the address or addresses specified on Schedule
5.3, and (ii) Schedule 5.3 contains a true and correct copy of Schedule 5.3
of the Existing Credit Agreement, as delivered on the Existing Credit
Agreement Closing Date, along with a true and complete list of (a) the
exact legal name, jurisdiction of formation, and address of each Grantor
and of each other Person that has effected any merger or consolidation with
a Grantor or contributed or transferred to a Grantor any property
constituting Collateral at any time since the Existing Credit Agreement
Closing Date (excluding Persons making sales in the ordinary course of
their businesses to a Grantor of property constituting inventory in the
hands of such seller), (b) each location of the chief executive office of
each Grantor at any time since the Existing Credit Agreement Closing Date,
(c) each location at which any property constituting Collateral is or has
been located since the Existing Credit Agreement Closing Date (together
with the name of each owner of the real property located at such address if
not the applicable Grantor and a summary description of the relationship
between the applicable Grantor and such Person), and (d) each trade name,
trademark or other trade style used by any Grantor since the Existing
Credit Agreement Closing Date and the purposes for which it was used. No
Borrower shall change or permit any other Grantor to change its name,
jurisdiction of formation (whether by reincorporation, merger or
otherwise), the location of its chief executive office or any location
specified in clause (c) of the immediately preceding sentence, or use or
permit any other Grantor to use, any additional trade name, trademark or
other trade style, except upon giving not less than thirty (30) days' prior
written notice to each Agent and taking or causing to be taken all such
action at such Borrower's or such other Grantor's expense as may be
reasonably requested by either Agent, the US Collateral Agent or the
Canadian Collateral Trustee to perfect or maintain the perfection of the
Lien of the US Agent or the Canadian Collateral Trustee, as applicable, in
the applicable Collateral.
5.4 Lock Boxes and Lock Box Accounts. As security for the full and
timely payment and performance of all Obligations now existing or hereafter
arising, on or prior to the Closing Date each US Borrower and each Canadian
Borrower shall, and shall cause each Guarantor (other than Consoltex Mexico
and each Mexican Company) to, deliver to the US Agent, the US Collateral
Agent, the Canadian Agent or the Canadian Collateral Trustee, as
applicable, in form and substance reasonably acceptable to the Agents, a
Cash Collateral Agreement and a Lock Box Agreement to establish one or more
Lock Boxes and one or more Lock Box Accounts and shall have directed all
account debtors, including licensees and factors of Accounts Receivable, to
make all payments exclusively to the applicable Lock Box or Lock Box
Account of such US Borrower or Canadian Borrower. Schedule 5.4 contains a
true and correct list of each Lock Box and each Lock Box Account.
5.5 Deposit Accounts. No Borrower maintains any deposit account of
any nature with any financial institution except as set forth in Schedule
5.4 or 5.5, provided that each deposit account of each Borrower must either
(i) be subject to a Cash Collateral Agreement delivered on or prior to the
Closing Date (or at any time thereafter in accordance with Section 9.20) by
the relevant financial institution to the Relevant Agent, the US Collateral
Agent or the Canadian Collateral Trustee, as applicable, (ii) be subject to
a Deposit Account Agreement delivered on or prior to the Closing Date (or
at any time thereafter with respect to Section 10.26) by the relevant
financial institution to the Relevant Agent, the US Collateral Agent or the
Canadian Collateral Trustee, as applicable, or (iii) be an account of
Consoltex Mexico or Rafytek with a financial institution domiciled in
Mexico. Schedule 5.5 contains a true and correct list of all deposit
accounts of the Borrowers as of the Closing Date, as updated at any time
thereafter, provided that any additional deposit accounts described in any
updated Schedule 5.5 shall be the subject of a Cash Collateral Agreement or
a Deposit Account Agreement as provided in Section 9.20 or 10.26,
respectively.
5.6 Power of Attorney of Canadian Agent and Canadian Collateral
Trustee. For greater certainty, and without limiting the powers of the
Canadian Agent and the Canadian Collateral Trustee under the Security
Instruments, each of the Lenders hereby acknowledges that the Canadian
Collateral Trustee shall, for the purposes of holding any security granted
under the hypothecs described in Section 5.1(a) to secure payment of the
bonds described in Section 5.1(b), be the holder of an irrevocable power of
attorney (fonde de pouvoir) (within the meaning of Article 2692 of the
Civil Code of Quebec) for all present and future Lenders and in particular
for all present and future holders of such bonds. Each of the Lenders
hereby constitutes, to the extent necessary, the Canadian Collateral
Trustee as the holder of such irrevocable power of attorney (fonde de
pouvoir) in order to hold security granted under such hypothecs to secure
such bonds. Each assignee of a Lender shall be deemed to have confirmed and
ratified the constitution of the Canadian Collateral Trustee as the holder
of such irrevocable power of attorney (fonde de pouvoir) by execution of
the relevant Assignment and Acceptance. Notwithstanding the provisions of
Section 32 of the Act respecting the Special Powers of Legal Persons
(Quebec), the Canadian Collateral Trustee may acquire and be the holder of
a bond. By executing a bond, the issuer of the bond shall be deemed to have
acknowledged that the bond constitutes a title of indebtedness, as such
term is used in Article 2692 of the Civil Code of Quebec.
5.7 Mexican Collateral.
------------------
(a) At any time after the Closing Date, any Lender, by written
notice to each of the Agents and to the Borrowers pursuant to Section 13.2,
may require that Consoltex Mexico and the Mexican Companies (other than
Rafytica), or any of them, as security for the full and timely payment and
performance of all Obligations of Consoltex Mexico and the Mexican
Companies (other than Rafytica), as applicable, do or cause to be done all
things necessary in the opinion of the Agents and the Lenders and counsel
to the Agents and the Lenders to grant to the Relevant Agent, the US
Collateral Agent or the Canadian Collateral Trustee, as applicable, for the
benefit of the Agents and the Lenders, duly perfected first priority
security interests, subject to no prior Lien other than Statutory Permitted
Liens and Liens permitted pursuant to Section 10.4(g), and to no other
encumbrance or restriction on transfer, in all or a portion of its assets,
as directed by such Lender.
(b) In the event that notice is given pursuant to Section 5.7(a),
the Required Lenders shall promptly determine, and shall give prompt notice
to the Borrowers and the Lenders, of the method of taking such security
interest in such assets of Consoltex Mexico and the Mexican Companies
(other than Rafytica).
(c) Within sixty (60) days after receiving the notice required by
Section 5.7(a), the Borrowers will, and will cause their Subsidiaries, as
the case may be, in compliance with Section 5.2 and otherwise, to execute,
by their respective duly authorized officers, alone or with either Agent,
the US Collateral Agent or the Canadian Collateral Trustee, as applicable,
any certificate, instrument, financing statement, control agreement, pledge
agreement, mortgage, statement or document, or to procure any such
certificate, instrument, agreement, mortgage, statement or document, or to
take such other action (and pay all connected costs) which either Agent or
any Lender reasonably deems necessary to create the Liens and security
interests contemplated by this Section 5.7 and by the other Loan Documents.
ARTICLE VI
Change in Circumstances
6.1 Increased Cost and Reduced Return.
---------------------------------
(a) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency:
(i) shall subject such Lender (or its
Applicable Lending Office) to any tax, duty, or other
charge with respect to any Eurodollar Rate Loans, any
Advance under a Bankers' Acceptance Segment, its Note, or
its obligation to make Eurodollar Rate Loans or Advances
under a Bankers' Acceptance Segment, or change the basis
of taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under this Agreement or its
Note in respect of any Eurodollar Rate Loans (other than
taxes imposed on the overall net income of such Lender by
the jurisdiction in which such Lender has its principal
office or such Applicable Lending Office);
(ii) shall impose, modify, or deem
applicable any reserve, special deposit, assessment,
compulsory loan, or similar requirement (other than the
Reserve Requirement utilized in the determination of the
Eurodollar Rate) relating to any extensions of credit or
other assets of, or any deposits with or other
liabilities or commitments of, such Lender (or its
Applicable Lending Office), including the Canadian Term
Loan Commitment or the US Term Loan Commitment or
Revolving Credit Commitment, as applicable, of such
Lender hereunder; or
(iii) shall impose on such Lender (or
its Applicable Lending Office) or on the London interbank
market any other condition affecting this Agreement or
its Note or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to
such Lender (or its Applicable Lending Office) of making,
Converting into, Continuing, or maintaining any Loans or to reduce
any sum received or receivable by such Lender (or its Applicable
Lending Office) under this Agreement or its Note with respect to
any Eurodollar Rate Loans, then the applicable Facility Borrowers
shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction. If
any Lender requests compensation by any Facility Borrower under
this Section 6.1(a), such Facility Borrower may, by notice to such
Lender (with a copy to the Agents), suspend the obligation of such
Lender to make or Continue Loans of the Type with respect to which
such compensation is requested, or to Convert Loans of any other
Type into Loans of such Type, until the event or condition giving
rise to such request ceases to be in effect (in which case the
provisions of Section 6.4 shall be applicable); provided that such
suspension shall not affect the right of such Lender to receive
the compensation so requested.
(b) If, after the date hereof, any Lender shall have
determined that the adoption of any applicable law, rule, or
regulation regarding capital adequacy or any change therein or in
the interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the
force of law) of any such governmental authority, central bank, or
comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or
such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its
policies with respect to capital adequacy), then from time to time
upon demand the applicable Facility Borrowers shall pay to such
Lender such additional amount or amounts as will compensate such
Lender for such reduction.
(c) Each Lender shall promptly notify the Borrowers and
the Agents of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Lender to compensation
pursuant to this Section 6.1 and will designate a different
Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in
the reasonable judgment of such Lender, be otherwise
disadvantageous to it. Any Lender claiming compensation under this
Section 6.1 shall furnish to the applicable Facility Borrowers and
the Agents a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in
the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
(d) The provisions of this Section 6.1 shall continue in
effect notwithstanding the Facility Termination Date; provided,
however, that any demand for compensation shall be made by the
applicable Lender within sixty (60) days after the date on which
the officer of such Lender who has responsibility for compliance
with the obligations under this Agreement knows or has reason to
know of such Lender's right to any compensation under this Section
6.1 or, if any such Lender fails to deliver such demand within
such sixty-day period, such Lender shall only be entitled to
compensation for any compensation otherwise owing under this
Section 6.1 from and after the date that is sixty days prior to
the date such Lender delivers such demand.
6.2 Limitation on Types of Loans. If on or prior to the first day
of any Interest Period for any Eurodollar Rate Loan or any Bankers'
Acceptance Segment the Relevant Agent determines (which determination shall
be conclusive) that:
(a) by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period; or
(b) the Eurodollar Rate will not adequately and fairly
reflect the cost to the Lenders of funding Eurodollar Rate Loans
for such Interest Period; or
(c) no market exists for Bankers' Acceptances;
then the Relevant Agent shall give the other Agent and the
Borrowers prompt notice thereof specifying the relevant Type of
Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Lenders shall be under no
obligation to make additional Loans of such Type, Continue Loans
of such Type, or to Convert Loans of any other Type into Loans of
such Type and the applicable Facility Borrowers shall, on the last
day(s) of the then current Interest Period(s) for the outstanding
Loans of the affected Type, either prepay such Loans or Convert
such Loans into another Type of Loan in accordance with the terms
of this Agreement.
6.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful or contrary to any
directive or guideline for any Lender or its Applicable Lending Office to
make, maintain, or fund Eurodollar Rate Loans or Advances under any
Bankers' Acceptance Segment hereunder, then such Lender shall promptly
notify the Borrowers thereof and such Lender's obligation to make or
Continue Eurodollar Rate Loans or Advances under any Bankers' Acceptance
Segment and to Convert other Types of Loans into Eurodollar Rate Loans or
Advances under any Bankers' Acceptance Segment shall be suspended until
such time as such Lender may again make, maintain, and fund Eurodollar Rate
Loans or Advances under any Bankers' Acceptance Segment (in which case the
provisions of Section 6.4 shall be applicable).
6.4 Treatment of Affected Loans. If the obligation of any Lender
to make a Eurodollar Rate Loan or Advances under any Bankers' Acceptance
Segment or to Continue, or to Convert Loans of any other Type into, Loans
of a particular Type shall be suspended pursuant to Section 6.1 or 6.3
hereof (Loans of such Type being herein called "Affected Loans" and such
Type being herein called the "Affected Type"), such Lender's Affected Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of
the then current Interest Period(s) for Affected Loans (or, in the case of
a Conversion required by Section 6.3 hereof, on such earlier date as such
Lender may specify to the Borrowers with a copy to the Agents) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 6.1 or 6.3 hereof that gave rise to such Conversion no
longer exist:
(a) to the extent that such Lender's Affected Loans have
been so Converted, all payments and prepayments of principal that
would otherwise be applied to such Lender's Affected Loans shall
be applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued
by such Lender as Loans of the Affected Type shall be made or
Continued instead as Base Rate Loans, and all Loans of such Lender
that would otherwise be Converted into Loans of the Affected Type
shall be Converted instead into (or shall remain as) Base Rate
Loans.
If such Lender gives notice to the Borrowers (with a copy to the
Agents) that the circumstances specified in Section 6.1 or 6.3
hereof that gave rise to the Conversion of such Lender's Affected
Loans pursuant to this Section 6.4 no longer exist (which such
Lender agrees to do promptly upon such circumstances ceasing to
exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be
automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Loans of the
Affected Type, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to
principal amounts, Types, and Interest Periods) in accordance with
their respective Term Loan Commitments and Revolving Credit
Commitments.
6.5 Compensation. Upon the request of any Lender, the applicable
Facility Borrowers shall pay to such Lender such amount or amounts as shall
be sufficient (in the reasonable opinion of such Lender) to compensate it
for any loss, cost, or expense (including loss of anticipated profits)
incurred by it as a result of:
(i) any payment of face amount in respect of a Banker's
Acceptance or Bankers' Acceptance Segment on a date other than the
last day of the period of such Bankers' Acceptance or Bankers'
Acceptance Segment, or any payment, prepayment, or Conversion of a
Eurodollar Rate Loan for any reason (including, without
limitation, the acceleration of the Loans pursuant to Section
11.1, any prepayments pursuant to Article II and any repayments
pursuant to Section 4.13), on a date other than the last day of
the Interest Period for such Loan or period for such Bankers'
Acceptance; or
(ii) any failure by such Facility Borrowers (for any
reason, including the failure of any condition precedent specified
in Article VII to be satisfied, other than the failure of such
Lender to make a Loan notwithstanding satisfaction of all
conditions precedent thereto) to borrow, Convert, Continue, or
prepay a Eurodollar Rate Loan on the date for such borrowing,
Conversion, Continuation, or prepayment specified in the relevant
notice of borrowing, prepayment, Continuation, or Conversion under
this Agreement.
The provisions of this Section 6.5 shall continue in
effect notwithstanding the Facility Termination Date.
6.6 Taxes.
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(a) Any and all payments by each Borrower to or for the
account of any Lender or either Agent hereunder or under any other
Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender and
each Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such
Lender (or its Applicable Lending Office) or such Agent (as the
case may be) is organized or any political subdivision thereof
(all such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred
to as "Taxes"). If any Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable under this
Agreement or any other Loan Document to any Lender or either
Agent, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions
applicable to additional sums payable under this Section 6.6) such
Lender or such Agent receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Borrower
shall make such deductions, (iii) such Borrower shall pay the full
amount deducted to the relevant taxation authority or other
authority in accordance with applicable law, and (iv) such
Borrower shall furnish to the Agents, at their respective address
referred to in Section 13.2, the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, each Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise
or property taxes or charges or similar levies which arise from
any payment made under this Agreement or any other Loan Document
or from the execution or delivery of, or otherwise with respect
to, this Agreement or any other Loan Document (hereinafter
referred to as "Other Taxes").
(c) Each Borrower jointly and severally agrees to
indemnify each Lender and each Agent for the full amount of Taxes
and Other Taxes (including, without limitation, any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 6.6) paid by such Lender or such Agent (as the
case may be) and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto.
(d) With respect only to the US Facilities, each US
Facilities Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of each
Lender listed on the signature pages hereof and on or prior to the
date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing
by any Borrower or the US Agent (but only so long as such Lender
remains lawfully able to do so), shall provide the Borrowers and
the US Agent with (i) Internal Revenue Service Form 1001 or 4224,
as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the United States is
a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or
business in the United States, (ii) Internal Revenue Service Form
W-8 (including Form W-8BEN or W-8EC1) or W-9, as appropriate, or
any successor form prescribed by the Internal Revenue Service, and
(iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h)
and 881(c) of the Internal Revenue Code), certifying that such
Lender is entitled to an exemption from or a reduced rate of tax
on payments pursuant to this Agreement or any of the other Loan
Documents.
(e) For any period with respect to which a Lender has
failed to provide the Borrowers and the US Agent with the
appropriate form pursuant to Section 6.6(d) (unless such failure
is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to
be provided), such Lender shall not be entitled to indemnification
under Section 6.6(a) or 6.6(b) with respect to Taxes imposed by
the United States; provided, however, that should a Lender, which
is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrowers shall take such
steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to this Section 6.6,
then such Lender will agree to use reasonable efforts to change
the jurisdiction of its Applicable Lending Office so as to
eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the reasonable judgment of
such Lender, is not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment
of Taxes, the Borrowers shall furnish to the Agents the original
or a certified copy of a receipt evidencing such payment.
(h) The provisions of this Section 6.6 shall continue in
effect notwithstanding the Facility Termination Date.
ARTICLE VII
Conditions to Making Loans and Issuing Letters of Credit
7.1 Conditions of Closing. The closing of this Agreement is
subject to the conditions precedent that:
(a) the Agents shall have received on or prior to the
Closing Date, each of which shall be in form and substance
satisfactory to the Agents and the Lenders, the following:
(i) executed originals of each of this
Agreement, the Notes, any required Facility Guaranty, any
other required Security Instruments, and any other Loan
Documents, together with all schedules and exhibits
thereto;
(ii) a fully executed copy of the Fourth
Amendment to Mortgage;
(iii) the favorable written opinion or opinions
with respect to the Loan Documents and the transactions
contemplated thereby and the perfection and priority of
the security granted thereunder of special counsel to the
Borrowers and the Guarantors dated the Closing Date,
addressed to the Agents and the Lenders, including
opinions of Xxxxxxxx & Ellis, Young, Xxxxxxx, Rivers &
Tisdale, LLP; Xxxxxxx XxXxxxxx Stirling Scales; Xxxxx
Xxxxxxx Freed & Gesmer; and Xxxxx, Xxxxxxx x Xxxxxxx,
S.C., such opinions (other than those relating to title)
substantially in the form of Exhibits I-1 through I-5;
(iv) resolutions of the boards of directors, the
shareholders or other appropriate governing body (or of
the appropriate committee thereof) of each Borrower and
each Guarantor (without duplication) certified by its
secretary or assistant secretary as of the Closing Date,
approving the amendment and restatement set forth herein
and the Facilities as restructured hereunder, and
approving and adopting this Agreement and the Loan
Documents to be executed by such Person, and authorizing
the execution and delivery thereof;
(v) specimen signatures of officers or other
appropriate representatives executing the Loan Documents
on behalf of each of the Borrowers and each of the
Guarantors, certified by the secretary, assistant
secretary or general attorney-in-fact, as applicable, of
such Borrower or Guarantor as of the Closing Date;
(vi) the Organizational Documents of each of the
Borrowers and each of the Guarantors certified as of a
recent date by the Secretary of State or equivalent
Governmental Authority of its jurisdiction of
organization, provided that with respect to Consoltex
Mexico and the Mexican Companies (other than Rafytica)
such certification shall be provided by the general
attorney-in-fact thereof;
(vii) Operating Documents of each of the
Borrowers and each of the Guarantors certified as of the
Closing Date as true and correct by its secretary,
assistant secretary or general attorney-in-fact, as
applicable;
(viii) certificates issued as of a recent date
by the Secretaries of State or equivalent Governmental
Authority of the respective jurisdictions of formation of
each of the Borrowers and each of the Guarantors as to
the due existence and good standing of such Person,
provided that to the extent that no Governmental
Authority in Mexico provides such certificate, none shall
be required;
(ix) appropriate certificates of qualification
to do business, good standing and, where appropriate,
authority to conduct business under assumed name, issued
in respect of each of the Borrowers and each of the
Guarantors as of a recent date by the Secretary of State
or equivalent Governmental Authority of each jurisdiction
in which the failure to be qualified to do business or
authorized so to conduct business would reasonably be
expected to have a Material Adverse Effect, provided that
with respect to Consoltex International such certificates
may be in the name of The Xxxxxx-Xxxxxxxx Group Ltd.,
predecessor by name change to Consoltex International,
provided further that to the extent that no Governmental
Authority in Mexico or in any political subdivision
thereof provides such certificate, none shall be
required;
(x) a certificate of the Chief Financial Officer
of Consoltex Holdings as to (A) the absence of any
Default or Event of Default as of the Closing Date, after
giving effect to Section 13.16, and (B) the absence of
any material adverse change since September 30, 2001 in
the business, assets, liabilities (actual or contingent),
operations, condition (financial or otherwise) or
prospects of the Borrowers and their Subsidiaries taken
as a whole or in the facts and information regarding such
entities as represented to date;
(xi) a marked up irrevocable commitment from the
title insurer to update the policies insuring title on
the Initial Mortgaged Properties as originally delivered
pursuant to Section 8.1(xv) of the Original Credit
Agreement;
(xii) if elected by the applicable Facility
Borrowers, one or more Interest Rate Selection Notices;
(xiii) to the extent not previously filed,
evidence of the filing of Uniform Commercial Code
financing statements (or amendments to previously filed
financing statements) reflecting the filing in all places
required by applicable law to perfect the Liens of the
Agents under the Security Instruments as a first priority
Lien as to items of Collateral in which a security
interest may be perfected by the filing of financing
statements, and such other documents and/or evidence of
other actions as may be necessary under applicable law
(including the laws of Canada, the United States and/or
Mexico) to perfect the Liens of the Agents, the US
Collateral Agent or the Canadian Collateral Trustee, as
applicable, under the Security Instruments as a first
priority Lien in and to such other Collateral as the
Agents may require, including without limitation:
(A) to the extent not previously
delivered, the delivery by the Borrower of all
stock certificates evidencing Pledged Interests,
accompanied in each case by duly executed stock
powers (or other appropriate transfer documents)
in blank affixed thereto; and
(B) the delivery by each Borrower or
Guarantor of certificates of the Registrar of
each partnership or limited liability company
Subsidiary evidencing the due registration on
the registration books of such Person of the
Lien in favor of the Agents conferred under the
Security Instruments;
(xiv) evidence that all fees payable by the
Borrowers on or prior to the Closing Date to the Agents,
BAS and the Lenders have been paid in full, including the
due diligence expenses of the Agents and the fees and
expenses of counsel for the Agents and other parties
performing related services to the Agents, including
asset reviews and audits and consulting services,
including all fees and expenses of PricewaterhouseCoopers
LLP, to the extent invoiced prior to or on the Closing
Date (which may include amounts constituting reasonable
estimates of such fees and expenses incurred or to be
incurred in connection with the transaction; provided
that no such estimate shall thereafter preclude the final
settling of accounts as to such fees and expenses);
(xv) a certificate of the chief financial
officer of each issuer of the Subordinated Notes,
certifying that the Obligations under all the Facilities,
notwithstanding this amendment and restatement, qualify
as "Senior Debt" (as defined in the Subordinated
Indenture);
(xvi) a certified copy of the written notice by
the chief financial officer of each issuer of the
Subordinated Notes to the trustee under the Subordinated
Indenture designating the Obligations under all the
Facilities, notwithstanding this amendment and
restatement, as "Designated Senior Debt" under the
Subordinated Indenture;
(xvii) a certificate of an Authorized
Representative demonstrating that holders representing
not less than 95% of the outstanding principal amount of
the Subordinated Notes have entered into Subordinated
Note Exchange Lockup Agreements, and attaching copies of
each such Subordinated Note Exchange Lockup Agreement
thereto certified as being true, correct and complete;
(xviii) certified copies of all necessary
consents, amendments and agreements of the holders of the
Subordinated Notes and the PIK Notes relating to this
Agreement and the respective transactions contemplated
thereby;
(xix) a certified copy of the most current
version of the Subordinated Replacement Indenture, the
form of the Subordinated Replacement Notes, and all other
documentation deemed material by the US Agent and its
legal counsel relating to the Subordinated Note Exchange,
including all documentation relating to the settlement
with holders of Subordinated Notes who are not
participating in the Subordinated Note Exchange;
(xx) such information regarding litigation, tax,
accounting, labor, insurance, pension liabilities (actual
or contingent), real estate leases, material contracts,
debt agreements, property ownership, environmental
matters, contingent liabilities, management structure and
other matters as requested by the Agents or the Lenders;
(xxi) (A) the consolidated and consolidating
financial statements of the Borrowers and their
Subsidiaries for the Fiscal Years ended December 31,
1998, 1999 and 2000, including balance sheets, income and
cash flow statements, audited by Deloitte & Touche or
such other independent public accountants of recognized
national standing as are acceptable to the Agents, (B)
unaudited consolidated and consolidating interim income,
balance sheet and cash flow statements of the Borrowers
and their Subsidiaries for the nine-month period ended
September 30, 2001, (C) pro forma unaudited interim
income, balance sheet and cash flow statements of the
Borrowers and their Subsidiaries for the nine-month
period ended September 30, 2001 reflecting the FIBC
Disposition, (D) the actual month end balance sheet of
each Borrower most recently prepared thereby prior to the
Closing Date, (E) an accounts payable aging report,
broken out by division, for the Borrowers and their
Subsidiaries, prepared as of November 30, 2001, and (F)
such other financial information as the Agents and the
Lenders may reasonably request;
(xxii) a Borrowing Base Certificate as of
November 30, 2001, together with related schedules of
aged accounts receivable, letters of credit issued for
the purchase of raw materials and certain finished goods,
and raw materials inventory;
(xxiii) fully executed originals of a Lock Box
Agreement and a Cash Collateral Agreement with respect to
LINQ; and
(xxiv) such other documents, instruments,
certificates and opinions as the Agent or any Lender may
reasonably request on or prior to the Closing Date in
connection with the consummation of the transactions
contemplated hereby; and
(b) In the good faith judgment of the Agents and the
Lenders:
(i) there shall not have occurred or become
known to either Agent or any Lender any event, condition,
situation or status since September 30, 2001 that has had
or could reasonably be expected to result in a Material
Adverse Effect;
(ii) no litigation, action, suit, investigation
or other arbitral, administrative or judicial proceeding
shall be pending or threatened which would reasonably be
expected (A) to result in a Material Adverse Effect, or
(B) to materially adversely affect the FIBC Disposition
or the Subordinated Note Exchange;
(iii) there shall be no order, decree, judgment,
ruling or injunction restraining, preventing, threatening
to unwind or otherwise materially adversely affecting or
delaying, or imposing any material conditions on, the
FIBC Disposition or the Subordinated Note Exchange;
(iv) (A) the Borrowers and the Guarantors shall
have received, or with respect to the Subordinated Note
Exchange all necessary arrangements shall have been made
for the Borrowers and the Guarantors to receive, all
approvals, consents and waivers, and shall have made or
given all filings and notices as shall be required or
desirable to consummate the Subordinated Note Exchange
and otherwise in connection with the Agreement, the Loan
Documents, or the transactions contemplated hereby, (B)
all such approvals and consents shall be in full force
and effect (or, with respect to the Subordinated Note
Exchange, such arrangements for approvals and consents
not yet available or received shall remain in place and
be effective to accomplish such receipt), (C) all
applicable waiting periods shall have expired without any
action being taken by any authority that could restrain,
prevent or impose any material adverse conditions on the
Subordinated Note Exchange, the Facilities, this
Agreement, the Loan Documents or any of the transactions
contemplated hereby or thereby, all of the above without
the occurrence of any default under, conflict with or
violation of (x) any applicable law, rule, regulation,
order or decree of any Governmental Authority or arbitral
authority or (y) any agreement, document or instrument to
which any of the Credit Parties is a party or by which
any of them or their properties is bound;
(v) the terms and conditions of the Subordinated
Note Exchange, and the plans for dealing with
non-exchanging holders of Subordinated Notes, shall have
been fully disclosed to and shall be satisfactory to the
Agents and the Lenders;
(vi) the corporate, capital and ownership
structure of the Borrowers and their subsidiaries
(including articles of incorporation, bylaws and
management of the Borrowers and their subsidiaries),
giving effect to the FIBC Disposition, and the status of
all litigation of the Borrowers and their subsidiaries
shall be reasonably satisfactory to the Agents and the
Lenders; and
(c) the representations and warranties of the Borrowers
and their Subsidiaries set forth in Article VIII and in each of
the other Loan Documents shall be true and correct in all material
respects on and as of the date hereof;
7.2 Conditions of Revolving Loans and Letter of Credit. The
obligations of the Lenders to make any Revolving Credit Loans, and the
Issuing Banks to issue (or renew) any Letters of Credit, and the Canadian
Swing Line Facility Lender to make Canadian Swing Line Loans, hereunder on
or subsequent to the Closing Date are subject to the satisfaction of the
following conditions:
(a) the satisfaction of all conditions set forth in
Section 7.1 hereof;
(b) the Agent or, in the case of Canadian Swing Line
Loans, the Canadian Swing Line Facility Lender, shall have
received a Borrowing Notice if required by Article II;
(c) the representations and warranties of the Borrowers
and their Subsidiaries set forth in Article VIII and in each of
the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Advance, Canadian Swing
Line Loan or Letter of Credit issuance or renewal, with the same
effect as though such representations and warranties had been made
on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date
and except that the financial statements referred to in Section
8.6(a) shall be deemed (solely for the purpose of the
representation and warranty contained in such Section 8.6(a) but
not for the purpose of any cross reference to such Section 8.6(a)
or to the financial statements described therein contained in any
other provision of Section 8.6(a) or elsewhere in Article VIII) to
be those financial statements most recently delivered to the
Agents and the Lenders pursuant to Section 9.1 from the date
financial statements are delivered to the Agents and the Lenders
in accordance with such Section;
(d) in the case of the issuance of a Letter of Credit,
the applicable Facility Borrower shall have executed and delivered
to the applicable Issuing Bank an Application and Agreement for
Letter of Credit in form and content reasonably acceptable to such
Issuing Bank together with such other instruments and documents as
it shall reasonably request;
(e) at the time of (and after giving effect to) each
Advance, Canadian Swing Line Loan or the issuance of a Letter of
Credit, no Default or Event of Default specified in Article XI
shall have occurred and be continuing; and
(f) immediately after giving effect to:
(i) a Revolving Credit Loan, a Letter
of Credit (or renewal thereof) or a Canadian Swing Line
Loan, (A) the amount of US Revolving Credit Outstandings
plus US Letter of Credit Outstandings shall not exceed
the Total Commitment for the US Revolving Credit
Facility, (B) the Dollar Equivalent Amount of Canadian
Revolving Credit Outstandings plus Canadian Letter of
Credit Outstandings plus Canadian Swing Line Loan
Outstandings shall not exceed the Total Commitment for
the Canadian Revolving Credit Facility, (C) the Dollar
Equivalent Amount of all Outstandings under the Revolving
Credit Facilities, the Letter of Credit Facilities and
the Canadian Swing Line Facility shall not exceed the sum
of (x) the Borrowing Base as calculated in Dollars at
such time plus (y) during an Overadvance Period, the
Overadvance Amount as calculated in Dollars at such time,
and (D) the amount of US Revolving Credit Outstandings of
Consoltex Mexico and Rafytek shall not exceed the Mexican
Borrowing Limit applicable thereto;
(ii) a Letter of Credit or renewal
thereof, the aggregate principal balance of all
outstanding Participations in Letters of Credit and
Reimbursement Obligations (or in the case of the
applicable Issuing Bank, its remaining interest after
deduction of all Participations in Letters of Credit and
Reimbursement Obligations of other Lenders) for each
applicable Lender and in the aggregate shall not exceed,
respectively, (X) such Lender's Letter of Credit
Commitment or (Y) the Total Canadian Letter of Credit
Commitment or Total US Letter of Credit Commitment, as
applicable; and
(iii) a Canadian Swing Line Loan, the
Canadian Swing Line Loan Outstandings shall not exceed
$4,000,000.
7.3 Post-Closing. After the Closing date but prior to February 15,
2002 the Agents and the Lenders shall have received, in form and substance
satisfactory to them:
(a) Uniform Commercial Code and similar lien search results in
such jurisdictions in the United States, Canada and Mexico as are deemed
necessary by the Relevant Agent, showing only those Liens as are acceptable
to the Lenders; and
(b) appropriate certificates of qualification to do business, good
standing and, where appropriate, authority to conduct business under
assumed name, issued in respect of Consoltex International by the Secretary
of State or equivalent Governmental Authority of each jurisdiction in which
the failure to be qualified to do business or authorized so to conduct
business would reasonably be expected to have a Material Adverse Effect.
ARTICLE VIII
Representations and Warranties
Each Borrower represents and warrants with respect to itself and
to its Subsidiaries (which representations and warranties shall survive the
delivery of the documents mentioned herein and the making of Loans), that:
8.1 Organization and Authority.
--------------------------
(a) Each Borrower and each Guarantor is a corporation
duly organized and validly existing under the laws of the
jurisdiction of its formation;
(b) Each Borrower and each Guarantor (x) has the
requisite power and authority (including without limitation those
under Environmental Laws) to own its properties and assets and to
carry on its business as now being conducted and as contemplated
in the Loan Documents, and (y) is qualified to do business in
every jurisdiction in which failure so to qualify would have a
Material Adverse Effect;
(c) Each Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other
Loan Documents to which it is a party;
(d) Each Guarantor has the power and authority to
execute, deliver and perform the Facility Guaranty and each of the
other Loan Documents to which it is a party; and
(e) When executed and delivered, each of the Loan
Documents to which any Borrower or any Guarantor is a party will
be the legal, valid and binding obligation or agreement, as the
case may be, of such Borrower or Guarantor, enforceable against
such Borrower or Guarantor in accordance with its terms, subject
to the effect of any applicable bankruptcy, moratorium,
insolvency, reorganization or other similar law affecting the
enforceability of creditors' rights generally and to the effect of
general principles of equity (whether considered in a proceeding
at law or in equity).
8.2 Loan Documents. The execution, delivery and performance by
each Borrower and each Guarantor of each of the Loan Documents to which it
is a party:
(a) have been duly authorized by all requisite
Organizational Action of each Borrower and each Guarantor required
for the lawful execution, delivery and performance thereof;
(b) do not violate any provisions of (i) any applicable
law, rule or regulation, (ii) any judgment, writ, order,
determination, decree or arbitral award of any Governmental
Authority or arbitral authority binding on any Borrower or any
Guarantor or its properties, or (iii) the Organizational Documents
or Operating Documents of any Borrower or any Guarantor;
(c) do not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which,
with notice or lapse of time or both, would constitute an event of
default, under any contract, indenture, agreement or other
instrument or document to which any Borrower or any Guarantor is a
party, or by which the properties or assets of any Borrower or any
Guarantor are bound, including without limitation the Subordinated
Replacement Indenture and the Subordinated Replacement Notes and
the forms thereof on the Closing Date and at all times thereafter
until their execution and delivery, except where such conflict,
breach or event of default would not reasonably be expected to
have a Material Adverse Effect; and
(d) do not and will not result in the creation or
imposition of any Lien upon any of the properties or assets of any
Borrower or any Guarantor except any Liens in favor of the US
Collateral Agent, the Canadian Collateral Trustee, the Agents and
the Lenders created by the Security Instruments.
8.3 Solvency. Each Credit Party (other than, with respect only to
subsection (a) of the definition of "Solvent", each of the Mexican
Companies) is Solvent after giving effect to the transactions contemplated
by the Loan Documents, and the Borrowers and Guarantors, considered on a
consolidated basis, are Solvent.
8.4 Subsidiaries and Stockholders. No Borrower has any
Subsidiaries other than those Persons listed as Subsidiaries in Schedule
8.4, which Schedule 8.4 states as of the date hereof the organizational
form of each entity, the authorized and issued capitalization of each
Subsidiary listed thereon, the number of shares or other equity interests
of each class of capital stock or interest issued and outstanding of each
such Subsidiary and the number and/or percentage of outstanding shares or
other equity interest (including options, warrants and other rights to
acquire any interest) of each such class of capital stock or other equity
interest owned by Borrower or by any such Subsidiary; the outstanding
shares or other equity interests of each such Subsidiary have been duly
authorized and validly issued and are fully paid and non-assessable; and
Borrower and each such Subsidiary owns beneficially and of record all the
shares and other interests it is listed as owning in Schedule 8.4, free and
clear of any Lien (other than Liens created under the Security Instruments
and Statutory Permitted Liens); there are no shareholders agreement
existing among the shareholders of the Borrowers.
8.5 Ownership Interests. No Borrower owns any interest in any
Person other than the Persons listed in Schedule 8.4, equity investments in
Persons not constituting Subsidiaries permitted under Section 10.7.
8.6 Financial Condition.
-------------------
(a) Consoltex Holdings has heretofore furnished to each
Lender an audited consolidated and related consolidating balance
sheet of Consoltex Holdings and its Subsidiaries as at December
31, 2000 and the notes thereto and the related consolidated
statements of income, stockholders' equity and cash flows for the
Fiscal Year then ended, as examined and certified by Deloitte &
Touche, and unaudited consolidated and consolidating interim
financial statements of Consoltex Holdings and its Subsidiaries
consisting of consolidated and consolidating balance sheets and
related consolidated and consolidating statements of income,
stockholders' equity and cash flows, in each case without notes,
for and as of the end of the nine-month period ending September
30, 2001. Except as set forth therein, such financial statements
(including the notes thereto) present fairly the financial
condition of Consoltex Holdings and its Subsidiaries as of the end
of such Fiscal Year and nine-month period and results of their
operations and the changes in its stockholders' equity for the
Fiscal Year and interim period then ended, all in conformity with
GAAP applied on a Consistent Basis, subject however, in the case
of unaudited interim statements to year end audit adjustments;
(b) since the later of (i) the date of the audited
financial statements delivered pursuant to Section 8.6(a) hereof
or (ii) the date of the audited financial statements most recently
delivered pursuant to Section 9.1(a) hereof, there has not
occurred any event, condition or circumstance (other than as
previously disclosed to the Agents and the Lenders in writing
prior to the Closing Date) which has had or could reasonably be
expected to have a Material Adverse Effect, nor have the
businesses or properties of the Borrowers and their Subsidiaries,
taken as a whole, been materially adversely affected as a result
of any fire, explosion, earthquake, accident, strike, lockout,
combination of workers, flood, embargo or act of God; and
(c) except as set forth in the financial statements
referred to in Section 8.6(a) or in Schedule 8.6 or permitted by
Section 10.5, neither the Borrower nor any Subsidiary has
incurred, other than in the ordinary course of business, any
material Indebtedness, Contingent Obligation or other commitment
or liability which remains outstanding or unsatisfied.
8.7 Title to Properties. Each Borrower and each Guarantor has good
and marketable title to all its real and personal properties, subject to no
transfer restrictions or Liens of any kind, except for the transfer
restrictions and Liens described in Schedule 8.7 and Permitted Liens.
8.8 Taxes. Except as set forth in Schedule 8.8, the Borrower and
each Guarantor and each of their Subsidiaries has filed or caused to be
filed all federal, state and local tax returns which are required to be
filed by it and, except for taxes and assessments being contested in good
faith by appropriate proceedings diligently conducted and against which
reserves reflected in the financial statements described in Section 8.6(a)
or Sections 9.1(a) or (b) and satisfactory to Consoltex Holdings'
independent certified public accountants have been established in
accordance with GAAP, have paid or caused to be paid all taxes as shown on
said returns or on any assessment received by it, to the extent that such
taxes or assessments have become due.
8.9 Other Agreements. No Borrower nor any Subsidiary is
----------------
(a) a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions,
which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect; or
(b) in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which such Borrower or
any Subsidiary is a party, which default has had, or if not
remedied within any applicable grace period could reasonably be
likely to have, a Material Adverse Effect.
8.10 Litigation. Except as set forth in Schedule 8.10, there is no
action, suit, investigation or proceeding at law or in equity or by or
before any governmental instrumentality or agency or arbitral body pending,
or, to the knowledge of any Borrower, threatened by or against any
Borrower, any Guarantor or any Subsidiary or affecting any Borrower, any
Guarantor or any Subsidiary or any properties or rights of any Borrower,
any Guarantor or any Subsidiary, which could reasonably be likely to have a
Material Adverse Effect.
8.11 Margin Stock. The proceeds of the borrowings made hereunder
will be used by the respective Borrowers only for the purposes expressly
authorized herein. None of such proceeds will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin stock or
for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry margin stock or for any other
purpose which violates or which would be inconsistent with Regulation U (12
CFR Part 221) or Regulation X (12 CFR Part 224) of the Board. No Borrower
nor any agent acting in its behalf has taken or will take any action which
might cause this Agreement or any of the documents or instruments delivered
pursuant hereto to violate any regulation of the Board or to violate the
Securities Exchange Act of 1934, as amended, or the Securities Act of 1933,
as amended, or any state securities laws, in each case as in effect on the
date hereof.
8.12 Regulated Company. No Borrower nor any Subsidiary is (i) an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (15 U.S.C. ss.
80a-1, et seq.) or (ii) a "holding company" or a "subsidiary company" or
"affiliate" of a "holding company" as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended. The application of the
proceeds of the Loans and repayment thereof by the Borrowers and the
performance by the Borrowers and the Guarantors of the transactions
contemplated by the Loan Documents will not violate any provision of said
Act, or any rule, regulation or order issued by the Securities and Exchange
Commission thereunder, in each case as in effect on the date hereof.
8.13 Patents, Etc. Except as set forth in Schedule 8.13, each
Borrower and each Guarantor owns or has the right to use, under valid
license agreements or otherwise, all material patents, licenses,
franchises, trademarks, trademark rights, trade names, trade name rights,
trade secrets and copyrights necessary to or used in the conduct of its
businesses as now conducted and as contemplated by the Loan Documents,
without known conflict with any patent, license, franchise, trademark,
trade secret, trade name, copyright, other proprietary right of any other
Person. No Borrower, Guarantor or any Subsidiary owns, or has the right to
use under valid license agreements or otherwise, any material copyrights.
8.14 No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on
behalf of any Borrower or any Guarantor in accordance with or pursuant to
any Loan Document nor (b) any statement, representation, or warranty
provided to either Agent in connection with the negotiation or preparation
of the Loan Documents contains any misrepresentation or untrue statement of
material fact or omits to state a material fact necessary, in light of the
circumstance under which it was made, in order to make any such warranty,
representation or statement contained therein not misleading.
8.15 No Consents, Etc. Neither the respective businesses or
properties of any Borrower or any Guarantor, nor any relationship among any
Borrower or any Guarantor and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Loan
Documents and the transactions contemplated thereby, including without
limitation the Subordinated Indenture and the Subordinated Replacement
Indenture and the forms thereof on the Closing Date and at all times
thereafter until their execution and delivery, is such as to require a
consent, approval or authorization of, or filing, registration or
qualification with, any Governmental Authority or any other Person on the
part of any Borrower or any Subsidiary as a condition to the execution,
delivery and performance of, or consummation of the transactions
contemplated by the Loan Documents, which, if not obtained or effected,
would be reasonably likely to have a Material Adverse Effect, or if so,
such consent, approval, authorization, filing, registration or
qualification has been duly obtained or effected, as the case may be, or in
the case of the Subordinated Note Exchange, arrangements for approvals and
consents not yet available or received have been made and will remain in
place and be effective to accomplish such receipt.
8.16 Employee Benefit Plans.
----------------------
(a) Each Borrower and each ERISA Affiliate is in material
compliance with all applicable provisions of ERISA and the
regulations and published interpretations thereunder and in
material compliance with all Foreign Benefit Laws with respect to
all Employee Benefit Plans except for any required amendments for
which the remedial amendment period as defined in Section 401(b)
of the Code has not yet expired. Each Employee Benefit Plan that
is intended to be qualified under Section 401(a) of the Code has
been determined or the Borrower or its Subsidiaries is in the
process of obtaining a determination by the Internal Revenue
Service to be so qualified, each trust related to such plan has
been determined to be exempt under Section 501(a) of the Code, and
each Employee Benefit Plan subject to any Foreign Benefit Law has
received the required approvals by any Governmental Authority
regulating such Employee Benefit Plan. No material liability has
been incurred by the Borrower or any ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any
Employee Benefit Plan or any Multiemployer Plan;
(b) Each Borrower and each ERISA Affiliate is in
compliance with all applicable provisions of (i) all Mexican
Benefit Laws with respect to all Mexican Employee Pension Plans
and (ii) all Canadian Benefit Laws with respect to all Canadian
Employee Pension Plans. No material liability has been incurred by
the Borrower or any ERISA Affiliate which remains unsatisfied for
any taxes or penalties with respect to any Mexican Employee
Pension Plan or Canadian Employee Pension Plan;
(c) No Borrower nor any ERISA Affiliate has (i) engaged
in a nonexempt prohibited transaction described in Section 4975 of
the Code or Section 406 of ERISA affecting any of the Employee
Benefit Plans or the trusts created thereunder which could subject
any such Employee Benefit Plan or trust to a material tax or
penalty on prohibited transactions imposed under Section 4975 of
the Code or ERISA, (ii) incurred any accumulated funding
deficiency with respect to any Employee Benefit Plan, whether or
not waived, or any other liability to the PBGC which remains
outstanding other than the payment of premiums and there are no
premium payments which are due and unpaid, (iii) failed to make a
required contribution or payment to a Multiemployer Plan, (iv)
failed to make a required installment or other required payment
under Section 412 of the Code or Section 302 of ERISA, or (v)
failed to make a required contribution or payment, or otherwise
failed to operate in compliance with any Foreign Benefit Law
regulating any Employee Benefit Plan;
(d) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or
Multiemployer Plan, and no Borrower nor any ERISA Affiliate has
incurred any unpaid withdrawal liability with respect to any
Multiemployer Plan;
(e) Schedule 8.16(e) sets forth a list of all unfunded
Employee Benefit Plans of the Borrowers and their Subsidiaries.
The present value of all vested accrued benefits under each
Employee Benefit Plan which is subject to Title IV of ERISA, or
the funding of which is regulated by any Foreign Benefit Law did
not, as of the most recent valuation date for each such plan,
exceed the then current value of the assets of such Employee
Benefit Plan allocable to such benefits;
(f) The consummation of the Loans and the issuance of the
Letters of Credit provided for herein will not involve any
prohibited transaction under ERISA which is not subject to a
statutory or administrative exemption; and
(g) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of each Borrower
after due inquiry, is threatened concerning or involving any
Employee Benefit Plan;
(h) Set forth on Schedule 8.16 is a list of each Employee
Benefit Plan, Pension Plan, Canadian Employee Pension Plan and
Mexican Employee Pension Plan sponsored by any Borrower or
Guarantor. As of the date hereof, no Borrower or Guarantor
sponsors a Pension Plan, a Canadian Employee Pension Plan, a
Mexican Employee Pension Plan, a Multiemployer Plan or any pension
or retirement plan other than (i) any pension or retirement plan
subject to the laws of the United States, Canadian Benefit Law or
Mexican Benefit Law, and (ii) the obligations under the law of
Mexico with respect to seniority premiums payable to employees of
Rafytek, Royalton, Marino Mexico, Vestco and Xxxx Xxx.
8.17 No Default. As of the date hereof, and after giving effect to
Section 13.16, there does not exist any Default or Event of Default
hereunder.
8.18 Environmental Laws. Except as set forth in the quarterly
environmental report most recently delivered to the Agents pursuant to
Section 9.1(g) and except in each case as would not be reasonably expected
to have a Material Adverse Effect, (i) each Borrower and each Subsidiary is
in compliance with all applicable Environmental Laws and has been issued
and currently maintains all required federal, state and local permits,
licenses, certificates and approvals, and (ii) no Borrower nor any
Subsidiary has been notified of any pending or threatened action, suit,
proceeding or investigation, and no Borrower nor any Subsidiary is aware of
any facts, which (a) calls into question, or could reasonably be expected
to call into question, compliance by any Borrower or any Subsidiary with
any Environmental Laws, (b) seeks, or could reasonably be expected to form
the basis of a meritorious proceeding, to suspend, revoke or terminate any
license, permit or approval necessary for the operation of any Borrower's
or any Subsidiary's business or facilities or for the generation, handling,
storage, treatment or disposal of any Hazardous Materials, or (c) seeks to
cause, or could reasonably be expected to form the basis of a meritorious
proceeding to cause, any property of any Borrower or any Subsidiary to be
subject to any restrictions on ownership, use, occupancy or transferability
under any Environmental Law.
8.19 Employment Matters.
------------------
(a) Except as set forth in Schedule 8.19, none of the
employees of any Borrower or any Subsidiary is subject to any
collective bargaining agreement and there are no strikes, work
stoppages, election or decertification petitions or proceedings,
unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings
pending or, to the knowledge of any Borrower, threatened against
any Borrower or any Subsidiary or between any Borrower or any
Subsidiary and any of its employees, other than employee
grievances arising in the ordinary course of business which would
not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect; and
(b) Except to the extent a failure to maintain compliance
would not reasonably be expected to have a Material Adverse
Effect, each Borrower and each Subsidiary is in compliance in all
respects with all applicable laws, rules and regulations
pertaining to labor or employment matters, including without
limitation those pertaining to wages, hours, occupational safety
and taxation and there is neither pending or threatened any
litigation, administrative proceeding nor, to the knowledge of any
Borrower, any investigation, in respect of such matters which, if
decided adversely, would reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
8.20 RICO. No Borrower nor any Subsidiary is engaged in or has
engaged in any course of conduct that would reasonably be expected to
subject any of their respective properties to any Lien, seizure or other
forfeiture under any criminal law, racketeer influenced and corrupt
organizations law, civil or criminal, or other similar laws.
8.21 Assets of Consoltex Holdings. Consoltex Holdings (a) does not
own, beneficially or of record, any assets other than (i) outstanding
shares of common stock of Consoltex, (ii) outstanding shares of common
stock of Consoltex USA, (iii) outstanding shares of preferred stock of
Consoltex Mexico, and (iv) such other assets as are de minimis with respect
to the consolidating balance sheet of Consoltex Holdings on a stand-alone
basis, and (b) does not conduct business, operations or generate any
revenue except (i) such revenue received as distributions on such shares of
common stock of Consoltex and Consoltex USA and of preferred stock of
Consoltex Mexico, and (ii) such other revenue as is de minimis with respect
to the consolidating income statement of Consoltex Holdings on a
stand-alone basis.
8.22 Lock Box Accounts. As of the Closing Date, or such earlier
date as any Lock Box shall have been established, the obligors, account
parties, licensees and factors of Accounts Receivable have been instructed
to and are directing payment of all Accounts Receivable and all amounts due
from such factors to the appropriate Lock Box or Lock Box Account, as
applicable.
8.23 Perfected Security Interests. The US Agent, Canadian Agent,
US Collateral Trustee or Canadian Collateral Trustee, or more than one of
them as applicable, has a duly perfected first priority Lien, subject to no
other Lien other than Statutory Permitted Liens and Liens permitted
pursuant to Section 10.4(g), on all of the Collateral for the benefit of
the Agents and the Lenders.
8.24 Fee Limitation Agreement. The Fee Limitation Agreement is in
full force and effect, and has not been amended or modified since its
consummation.
8.25 Subordinated Note Lockup Agreements. The holders of the
Subordinated Notes that are party to a Subordinated Note Lockup Agreement,
as set forth in the certificate delivered pursuant to Section 7.1(a)(xvii),
represent a sufficient portion of the aggregate principal amount of the
Subordinated Notes to consummate the Subordinated Note Exchange, and the
plan in effect as of the Closing Date for settling with those holders who
are not subject to a Subordinated Note Lockup Agreement is reasonably
expected by the issuers of the Subordinated Notes not to require more than
$300,000 in cash.
ARTICLE IX
Affirmative Covenants
Until the Facility Termination Date, unless the Required Lenders
shall otherwise consent in writing, each Borrower will, and where
applicable will cause each Subsidiary to:
9.1 Financial Reports, Etc.
----------------------
(a) As soon as practical and in any event within 120 days
after the end of each Fiscal Year of Consoltex Holdings, including
the Fiscal Year ending December 31, 2001, deliver or cause to be
delivered to each Agent and each Lender (i) audited consolidated
and unaudited consolidating balance sheets of Consoltex Holdings
and its Subsidiaries as at the end of such Fiscal Year, and the
notes thereto, and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows, and the
respective notes thereto, for such Fiscal Year, setting forth
(other than for consolidating statements) comparative financial
statements for the preceding Fiscal Year, all prepared in
accordance with GAAP applied on a Consistent Basis and containing,
with respect to the consolidated financial statements of Consoltex
Holdings, opinions of Deloitte & Touche, or other such independent
certified public accountants selected by Consoltex Holdings and
approved by the Agents, which are unqualified as to the scope of
the audit performed and as to the "going concern" status of the
Consoltex Holdings and without any exception not acceptable to the
Required Lenders, and accompanied (in the case of financial
statements of any Borrower or Guarantor other than Consoltex
Holdings) by a certificate of an Authorized Representative to the
effect that such financial statements present fairly the financial
condition of such Borrower or Guarantor (as the case may be) as of
the end of such Fiscal Year and the results of their operations
and the changes in their financial position for such Fiscal Year,
(ii) audited balance sheet of Consoltex as at the end of such
Fiscal Year, and the notes thereto, and the related statements of
income, stockholders' equity and cash flows, and the respective
notes thereto, for such Fiscal Year, setting forth unaudited
comparative financial statements for the preceding Fiscal Year,
all prepared and expressed in Canadian Dollars in accordance with
GAAP as applied in Canada, all applied on a Consistent Basis and
containing, with respect to the financial statements of Consoltex,
opinions of Deloitte & Touche, or other such independent certified
public accountants selected by Consoltex Holdings and approved by
the Agents, which are unqualified as to the scope of the audit
performed and as to the "going concern" status of Consoltex and
without any exception not reasonably acceptable to the Required
Lenders, (iii) (A) unaudited balance sheet of Consoltex
International as at the end of the Fiscal Year ending December 31,
2001, and the notes thereto, and the related unaudited statements
of income, stockholders' equity and cash flows for Consoltex
International with respect to (x) the operations that were
continuing as of the last day of such Fiscal Year, and (y) the
operations that were discontinued during such Fiscal Year, and in
each case the respective notes thereto, for such Fiscal Year, all
prepared in accordance with GAAP applied on a Consistent Basis,
and (B) audited balance sheet of Consoltex International as at the
end of the Fiscal Year ending December 31, 2002, and the notes
thereto, and the related statements of income, stockholders'
equity and cash flows, and the respective notes thereto, for such
Fiscal Year, setting forth unaudited comparative financial
statements for the preceding Fiscal Year, all prepared in
accordance with GAAP applied on a Consistent Basis and containing,
with respect to the financial statements of Consoltex
International, opinions of Deloitte & Touche, or other such
independent certified public accountants selected by Consoltex
Holdings and approved by the Agents, which are unqualified as to
the scope of the audit performed and as to the "going concern"
status of Consoltex International and without any exception not
reasonably acceptable to the Required Lenders, (iv) audited
balance sheet of LINQ as at the end of such Fiscal Year, and the
notes thereto, and the related statements of income, stockholders'
equity and cash flows, and the respective notes thereto, for such
Fiscal Year, setting forth unaudited comparative financial
statements for the preceding Fiscal Year, all prepared in
accordance with GAAP applied on a Consistent Basis and containing,
with respect to the financial statements of LINQ, opinions of
Deloitte & Touche, or other such independent certified public
accountants selected by Consoltex Holdings and approved by the
Agents, which are unqualified as to the scope of the audit
performed and as to the "going concern" status of LINQ and without
any exception not reasonably acceptable to the Required Lenders,
(v) a certificate of the Chief Financial Officer of Consoltex
Holdings demonstrating (A) the Consolidated Leverage Ratio and (B)
compliance with Sections 10.1 and 10.3, which certificate shall be
substantially in the form of Exhibit J, provided that the
certificate provided for in this Section 9.1(a)(v) for the Fiscal
Year ending December 31, 2001 need only set forth the calculation
of the Consolidated Leverage Ratio as of the end of such Fiscal
Year, and (vi) such other financial statements and other
information as the US Agent determines are necessary to
demonstrate the calculation of Combined Consoltex EBITDA and LINQ
EBITDA, including information relating to transactions with
Consoltex Holdings or any of its Subsidiaries;
(b) as soon as practical and in any event within 45 days
after the end of each fiscal quarter (except the last fiscal
quarter of the Fiscal Year) of Consoltex Holdings, deliver to each
Agent and each Lender (i) consolidated and consolidating balance
sheets of Consoltex Holdings and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated and
consolidating statements of income, stockholders' equity and cash
flows for such fiscal quarter and for the period from the
beginning of the then current Fiscal Year through the end of such
reporting period, and accompanied by a certificate of the Chief
Financial Officer of Consoltex Holdings to the effect that such
financial statements present fairly the financial position of the
Consoltex Holdings and its Subsidiaries as of the end of such
fiscal period and the results of their operations and the changes
in their financial position for such fiscal period, in conformity
with the standards set forth in Section 8.6(a) with respect to
interim financial statements, (ii) a balance sheet of Consoltex as
at the end of such fiscal quarter, and the related statements of
income, stockholders' equity and cash flows for such fiscal
quarter and for the period from the beginning of the then current
Fiscal Year through the end of such reporting period, and
accompanied by a certificate of the Chief Financial Officer of
Consoltex to the effect that such financial statements present
fairly the financial position of Consoltex as of the end of such
fiscal period and the results of its operations and the changes in
its financial position for such fiscal period, in conformity with
the standards set forth in Section 8.6(a) with respect to interim
financial statements, (iii) a balance sheet of Consoltex
International as at the end of such fiscal quarter, and the
related statements of income, stockholders' equity and cash flows
for such fiscal quarter and for the period from the beginning of
the then current Fiscal Year through the end of such reporting
period, and accompanied by a certificate of the Chief Financial
Officer of Consoltex International to the effect that such
financial statements present fairly the financial position of
Consoltex International as of the end of such fiscal period and
the results of its operations and the changes in its financial
position for such fiscal period, in conformity with the standards
set forth in Section 8.6(a) with respect to interim financial
statements, (iv) a balance sheet of LINQ as at the end of such
fiscal quarter, and the related statements of income,
stockholders' equity and cash flows for such fiscal quarter and
for the period from the beginning of the then current Fiscal Year
through the end of such reporting period, and accompanied by a
certificate of the Chief Financial Officer of LINQ to the effect
that such financial statements present fairly the financial
position of LINQ as of the end of such fiscal period and the
results of its operations and the changes in its financial
position for such fiscal period, in conformity with the standards
set forth in Section 8.6(a) with respect to interim financial
statements, (v) a certificate of the Chief Financial Officer of
Consoltex Holdings containing computations for the fiscal quarter
then ended comparable to those required pursuant to Section
9.1(a)(v), and (vi) such other financial statements and other
information as the US Agent determines are necessary to
demonstrate the calculation of Combined Consoltex EBITDA and LINQ
EBITDA, including information relating to transactions with
Consoltex Holdings or any of its Subsidiaries;
(c) as soon as practicable and in any event within
thirty-five (35) days after the end of each calendar month (within
forty-five (45) days after the end of each calendar month that is
also the end of any fiscal quarter of Consoltex Holdings),
Consoltex Holdings shall deliver to each Agent and each Lender (i)
unaudited consolidated and consolidating balance sheets of
Consoltex Holdings and its Subsidiaries as at the end of such
calendar month, and the related consolidated and consolidating
statements of income for such calendar month and for the period
from the beginning of the then current Fiscal Year through the end
of such calendar month, in each case accompanied by a certificate
of the Chief Financial Officer of Consoltex Holdings to the effect
that he has no knowledge that such financial statements do not
present fairly the financial position of the Consoltex Holdings
and its Subsidiaries as of the end of such calendar month and the
results of their operations for such calendar month and such
period from the beginning of such Fiscal Year through the end of
such calendar month, in conformity with the standards set forth in
Section 8.6(a) with respect to interim financial statements, and
(ii) a projection of the Borrowing Base and the Overadvance Amount
for the balance of the term of the Facilities;
(d) together with each delivery of the financial
statements required by Section 9.1(a)(i), deliver to each Agent
and each Lender a letter from Consoltex Holdings' accountants
specified in Section 9.1(a)(i) stating that in performing the
audit necessary to render an opinion on the financial statements
delivered under Section 9.1(a)(i), they obtained no knowledge of
any Default or Event of Default by Consoltex Holdings or any other
Borrower or Guarantor in the fulfillment of the terms and
provisions of this Agreement insofar as they relate to financial
matters (which at the date of such statement remains uncured), or
if the accountants have obtained knowledge of such Default or
Event of Default, a statement specifying the nature and period of
existence thereof;
(e) promptly upon their becoming available to any
Borrower, such Borrower shall deliver to each Agent and each
Lender a copy of (i) all regular or special reports or effective
registration statements which such Borrower or any Subsidiary
shall file with the Securities and Exchange Commission (or any
successor thereto) or the "Commission des valeurs mobilieres du
Quebec" or any other securities exchange commission or securities
exchange, (ii) any proxy statement distributed by such Borrower or
any Subsidiary to its shareholders, bondholders or the financial
community in general, and (iii) any management letter or other
report submitted to any Borrower or any Subsidiary by independent
accountants in connection with any annual, interim or special
audit of any Borrower or any Subsidiary;
(f) within 15 days of approval by the board of directors
of Consoltex Holdings and in any event within sixty (60) days
following the end of each Fiscal Year, including the Fiscal Year
ending December 31, 2001, deliver to each Agent and each Lender
consolidated and consolidating capital and operating expense
budgets and consolidated and consolidating quarterly financial
projections (including balance sheets and statements of income and
cash flows) for each Borrower or Guarantor, as the case may be,
and its Subsidiaries for the next Fiscal Year, as approved by the
board of directors of Consoltex Holdings and prepared in
accordance with GAAP applied on a Consistent Basis;
(g) as soon as practicable and in any event within sixty
(60) days following the end of each fiscal quarter, including the
fiscal quarter ending December 31, 2001, deliver to each Agent and
each Lender an environmental report prepared by the applicable
Borrower with respect to the Mortgaged Properties, in form and
substance reasonably satisfactory to the Agents, and (to the
extent and in the form actually reported to the board of directors
of the applicable Borrower) any other manufacturing facilities;
(h) as soon as practicable and in any event within
twenty-five (25) days after the end of each calendar month,
including the calendar month ending December 31, 2001, Consoltex
Holdings shall deliver to each Agent and each Lender (i) a
Borrowing Base Certificate prepared as of the end of such month,
together with related schedules of aged accounts receivable,
letters of credit issued for the purchase of raw materials and
certain finished goods and listing of finished goods, undyed and
uncut greige goods and raw materials inventory, and (ii) an
accounts payable aging report of the Borrowers and their
Subsidiaries, broken out by division;
(i) as soon as practicable and in any event no later than
Thursday of each calendar week, Consoltex Holdings shall deliver
to each Agent and each Lender data reflecting the Borrowing Base
determined as of the previous Friday, prepared using reasonable
receivable and inventory estimation procedures acceptable to the
Agents, together with related schedules of aged accounts
receivable, letters of credit issued for the purchase of raw
materials and certain finished goods and listing of finished
goods, undyed and uncut greige goods and raw materials inventory;
(j) as soon as practicable and in any event no later than
the Thursday of the following week, Consoltex Holdings shall
deliver to each Agent and each Lender a consolidated weekly cash
journal report of the Borrowers and their Subsidiaries showing, at
a minimum, cash receipts and disbursements for such week, and
projected cash flow for the immediately following sixteen
consecutive weeks;
(k) no later than March 10th of each year Consoltex
Holdings shall deliver to each Agent and each Lender a written
certificate by the Chief Financial Officer of Consoltex Holdings,
in form and substance reasonably satisfactory to the Agents and
the Lenders, certifying that any adjustments made and to be made
in connection with the audit of the Borrowers and their
Subsidiaries for the immediately preceding Fiscal Year do not and
will not materially adversely affect the Borrowing Base as at any
time then or thereafter determined;
(l) upon request of the Agents at any time after January
1, 2003, the Borrowers shall deliver to the Agents and the Lenders
an appraisal report with respect to the equipment and real
property owned by the Borrowers and their Subsidiaries, prepared
by an independent party designated by the Agents at the sole
expense of the Borrowers; and
(m) promptly, from time to time, deliver or cause to be
delivered to the Agents and each Lender such other information
regarding any Borrower's and any Subsidiary's operations, business
affairs and financial condition as the Agents or such Lender may
reasonably request.
The Agents and the Lenders are hereby authorized to deliver a copy
of any such financial or other information delivered hereunder to the
Lenders (or any affiliate of any Lender) or to either Agent, to any
Governmental Authority having jurisdiction over either Agent or any of the
Lenders pursuant to any written request therefor or in the ordinary course
of examination of loan files, or, subject to the confidentiality provision
of Section 13.15, to any other Person who shall acquire or consider the
assignment of, or acquisition of any participation interest in, any
Obligation permitted by this Agreement.
9.2 Maintain Properties. Maintain all properties (other than
property that is substantially worn, damaged, obsolete or, in the
reasonable judgment of any Borrower, no longer best used or useful in its
business or that of any Subsidiary) necessary to its operations in good
working order and condition, ordinary wear and tear excepted, make all
needed repairs, replacements and renewals to such properties, and maintain
free from Liens (other than Permitted Liens) all trademarks, trade names,
patents, copyrights, trade secrets, know-how, and other intellectual
property and proprietary information (or adequate licenses thereto), in
each case as are reasonably necessary to conduct its business as currently
conducted or as contemplated hereby, all in accordance with customary and
prudent business practices.
9.3 Existence, Qualification, Etc. Except as otherwise expressly
permitted under Section 10.8, do or cause to be done all things necessary
to preserve and keep in full force and effect its existence and all
material rights and franchises, and maintain its license or qualification
to do business as a foreign corporation and good standing in each
jurisdiction in which its ownership or lease of property or the nature of
its business makes such license or qualification necessary, except where
the failure to maintain such rights, franchises or foreign license or
qualification would not reasonably be expected to result in a Material
Adverse Effect.
9.4 Regulations and Taxes. Observe and comply in all material
respects with all statutes, laws, rules and governmental regulations and
pay all taxes, assessments, governmental charges, claims for labor,
supplies, rent and any other obligation which, if unpaid, would become a
Lien against any of its properties, except liabilities being contested in
good faith by appropriate proceedings diligently conducted provided that
(i) adequate reserves with respect thereto are maintained on the books of
the applicable Person in accordance with GAAP and (ii) any Lien arising in
connection with any such contest shall be permitted to exist to the extent
provided in Section 10.4.
9.5 Insurance.
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(a) Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks
(including without limitation all-risk property damage, business
interruption, general liability and workers compensation
insurance) as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas
in which such Borrower or such Subsidiary operates, which
insurance may provide for reasonable deductibles from the coverage
provided thereunder; provided, however, and subject to applicable
law, that the Borrowers and their Subsidiaries may self-insure
only with respect to the repair and replacement of vehicles, and
in such case to the same extent as other companies engaged in
similar businesses and owning similar properties in the same
general areas in which any such Borrower or such Subsidiary
operates and consistent with prudent business practice.
(b) Duly and punctually pay or cause to be paid the
premiums and other sums of money payable under each of its
insurance policies required to be maintained hereunder. Each
Mortgaged Property insurance policy held by the Borrowers shall
contain a "Standard Mortgage Clause" reasonably satisfactory to
the Agents providing that such policy may be canceled or modified
only upon thirty (30) days' prior written notice to the Agents.
The insurance policies confirming the insurance hereunder shall
not contain any co-insurance stipulations except as provided in
Section 9.5(a).
(c) Ensure that each policy of property damage insurance
of a Borrower or a Guarantor that is providing Collateral shall
provide for all losses to be paid directly to the US Agent and the
US Collateral Agent or the Canadian Agent and the Canadian
Collateral Trustee and to such Borrower or such Guarantor, as the
case may be, as their interests may appear.
(d) At least ten (10) Business Days before the expiration
of any policy referred to in this Section 9.5, provide the Agents
with proof of its renewal or its replacement failing which the
Agents may, upon reasonable prior notice, renew or replace same at
the expense of the Borrowers, without prejudice to any other right
conferred to the Agents in such event. It is agreed that the
Agents are under no obligation either to note the expiration date
of any policy or to insure the renewal or continuance of any
policy. The Borrowers shall, from time to time, at the reasonable
request of the Agents, furnish the Agents such information
relating to insurance as the Agents may reasonably require. If the
Borrowers fail to comply with any provision of this Section 9.5,
the Agents may, after delivery of reasonable notice to the
Borrower and at the Borrowers' expense, obtain any insurance they
deem necessary.
(e) Promptly notify the Agents of any loss or damage to
any material portion of the Collateral and shall promptly take any
measures reasonably necessary so that the applicable insurer under
any property casualty insurance shall pay the respective insurance
proceeds to the Agents and the Borrowers as required by this
Agreement and the other Loan Documents. Reimbursement under any
liability insurance maintained by any Borrower or any Guarantor
pursuant to this Section 9.5 may be paid directly to the Person
who shall have incurred liability covered by such insurance. In
case of any loss involving damage to any Mortgaged Property, other
fixed assets, equipment or any inventory when subsection (f) below
is not applicable, the Borrower or the Guarantor that owns such
Mortgaged Property, other fixed assets, equipment or inventory
shall make or cause to be made the necessary repairs thereto or
replacements thereof, and any proceeds of insurance properly
received and maintained by such Borrower or such Guarantor, as the
case may be, pursuant to this Section 9.5 shall be paid to them to
pay, or to be reimbursed, for the costs of such repairs or
replacements.
(f) Upon (i) the occurrence and during the continuance of
any Event of Default or (ii) the actual or constructive total loss
(in excess of $1,000,000 per occurrence and $1,500,000 in the
aggregate during the term of this Agreement) of any Mortgaged
Property, equipment, inventory or other fixed assets, pay all
insurance payments in respect of such Mortgaged Property,
equipment, inventory or other fixed assets to the Relevant Agent
to be applied thereby as specified in Section 11.5.
9.6 True Books. Keep true books of record and account in which
full, true and correct entries will be made of all of its dealings and
transactions, and set up on its books such reserves as may be required by
GAAP with respect to doubtful accounts and all taxes, assessments, charges,
levies and claims and with respect to its business in general, and include
such reserves in interim as well as year-end financial statements.
9.7 Right of Inspection.
-------------------
(a) Permit any authorized representative designated by
any Lender or either Agent to visit and inspect any of the
corporate books and financial reports of any Borrower or any
Subsidiary, at the reasonable expense of the Borrowers, and to
discuss its affairs, finances and accounts with its principal
executive, financial and treasury officers and its independent
certified public or chartered accountants, all at reasonable times
during reasonable business hours, at reasonable intervals and with
reasonable prior notice.
(b) Permit any authorized representative designated by
the Relevant Agent to conduct field audit inspections of the
Collateral, properties and operations of each Borrower and each
Guarantor, and lend all reasonable assistance to such
representative in so conducting such field audit inspections,
conducted during normal business hours and upon reasonable notice.
Such field audit inspections shall occur (i) twice per Fiscal Year
with respect to all Collateral by Freed Xxxxxx or any other Person
acceptable to the Agents, with estimated delivery dates of March
31 and September 30 of each Fiscal Year commencing March 31, 2002,
each time at the sole expense of the Borrowers, and (ii) at such
other times as determined by the Agents and the Lenders at the
expense of the Agents and the Lenders, provided that any field
audit conducted during the continuation of a Default or Event of
Default shall be conducted at the sole expense of the Borrowers.
(c) Notwithstanding anything in Section 9.7(a) or (b),
permit, at the sole expense of the Borrowers, the continued and
ongoing review, at any time prior to the Facility Termination
Date, by PricewaterhouseCoopers LLP or any other Person appointed
in lieu thereof by the Agents, and preparation of periodic oral
and written reports thereby to the Agents and the Lenders, of the
business, operations, financial condition, management and
performance of the Borrowers and their Subsidiaries as requested
by the Agents.
9.8 Observe all Laws. Except as would not reasonably be expected
to result in a Material Adverse Effect, conform to and duly observe all
laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business.
9.9 Governmental Licenses. Obtain and maintain all licenses,
permits, certificates, certifications and approvals of all applicable
Governmental Authorities as are required for the conduct of its business as
currently conducted and as contemplated by the Loan Documents, except where
the failure to maintain such license, permit, certificate, certification or
approval would not reasonably be expected to have a Material Adverse
Effect.
9.10 Covenants Extending to Other Persons. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets,
each of the things required of the Borrowers in Sections 9.2 through 9.9,
and 9.18 inclusive.
9.11 Officer's Knowledge of Default. Upon the Chief Financial
Officer of Consoltex Holdings or Xxxx Xxxxxxxx, Xxxx XxXxxxx or C. Xxxxxxx
Xxxxxxxx (or any successor to any such Person holding any office previously
held by such Person in any Borrower) (collectively, the "Notice Officers")
obtaining knowledge of any Default or Event of Default hereunder or under
any other obligation of any Borrower or any Subsidiary to any Lender, or
any event, development or occurrence which would reasonably be expected to
have a Material Adverse Effect, cause such officer or an Authorized
Representative to promptly notify each Agent of the nature thereof, the
period of existence thereof, and what action such Borrower or such
Subsidiary proposes to take with respect thereto.
9.12 Suits or Other Proceedings. Upon any officer of the Borrower
obtaining knowledge of any claim, litigation or other proceedings being
instituted against any Borrower or any Subsidiary, or any attachment, levy,
execution or other process being instituted against any assets of any
Borrower or any Subsidiary, making a claim or claims in an aggregate amount
greater than $500,000 not otherwise covered by insurance, promptly deliver
to each Agent written notice thereof stating the nature and status of such
claim, litigation, dispute, proceeding, levy, execution or other process.
9.13 Notice of Environmental Complaint or Condition. Promptly
provide to each Agent true, accurate and complete copies of any and all
notices, complaints, orders, directives, claims or citations received by
any Borrower or any Subsidiary which would reasonably be expected to have a
Material Adverse Effect relating to any (a) violation or alleged violation
by any Borrower or any Subsidiary of any applicable Environmental Law; (b)
release or threatened release by any Borrower or any Subsidiary, or by any
Person handling, transporting or disposing of any Hazardous Material on
behalf of any Borrower or any Subsidiary, or at any facility or property
owned or leased or operated by any Borrower or any Subsidiary, of any
Hazardous Material, except where occurring legally; or (c) liability or
alleged liability of any Borrower or any Subsidiary for the costs of
cleaning up, removing, remediating or responding to a release of Hazardous
Materials.
9.14 Environmental Compliance. If any Borrower or any Subsidiary
shall receive any letter, notice, complaint, order, directive, claim or
citation alleging that any Borrower or any Subsidiary has violated any
Environmental Law, has released any Hazardous Material, or is liable for
the costs of cleaning up, removing, remediating or responding to a release
of Hazardous Materials, such Borrower shall, within the time period
permitted and to the extent required by the applicable Environmental Law or
the Governmental Authority responsible for enforcing such Environmental
Law, remove or remedy, or cause the applicable Subsidiary to remove or
remedy, such violation or release or satisfy such liability unless (a) the
failure to remove or remedy such violation or release or to satisfy such
liability would not reasonably be expected to have a Material Adverse
Effect, in which case such Borrower shall orally advise each Agent of any
decision not to remove or remedy such violation or release or satisfy such
liability and the basis for any such decision, and at each Agent's option
and at its request, such Borrower shall provide written documentation of
such decision, or (b) such violation or liability is being contested in
good faith by appropriate proceedings and appropriate reserves therefor are
being maintained in accordance with GAAP.
9.15 Indemnification. Without limiting the generality of Section
13.9, and except to the extent such claim, loss, penalty, liability, damage
or expense has resulted from any gross negligence or willful misconduct of,
or the violation of applicable law by, such Indemnified Party, each
Borrower hereby agrees jointly and severally to indemnify and hold each
Indemnified Party harmless from and against any and all claims, losses,
penalties, liabilities, damages and expenses (including assessment and
cleanup costs and reasonable attorneys', consultants' or other expert fees,
expenses and disbursements) arising directly or indirectly from, out of or
by reason of (a) the violation of any Environmental Law by any Borrower or
any Subsidiary or with respect to any property owned, operated or leased by
any Borrower or any Subsidiary or (b) the handling, storage,
transportation, treatment, emission, release, discharge or disposal of any
Hazardous Materials by or on behalf of any Borrower or any Subsidiary
(including on or with respect to property never owned, leased or operated
by any Borrower or any Subsidiary), or on or with respect to property owned
or leased or operated by any Borrower or any Subsidiary. The provisions of
this Section 9.15 shall continue in effect notwithstanding the Facility
Termination Date.
9.16 Further Assurances. At the Borrowers' cost and expense, upon
request of either Agent, duly execute and deliver or cause to be duly
executed and delivered, to such Agent such further instruments, documents,
certificates, financing and continuation statements, and do and cause to be
done such further acts that may be reasonably necessary or advisable in the
reasonable opinion of the Agent to carry out more effectively the
provisions and purposes of this Agreement, the Security Instruments and the
other Loan Documents.
9.17 Employee Benefit Plans.
----------------------
(a) With reasonable promptness, and in any event within
thirty (30) days thereof, give notice to each Agent of (i) the
establishment of any new Pension Plan, stock option plan, bonus
plan, deferred compensation or profit-sharing plan of any Borrower
(which notice shall include a copy of such plan), (ii) the
commencement of material contributions to any Employee Benefit
Plan, Pension Plan, Canadian Employee Pension Plan or Mexican
Employee Pension Plan to which no Borrower or any of their ERISA
Affiliates was previously contributing, (iii) any material
increase in the benefits of any existing Employee Benefit Plan,
Pension Plan, Canadian Employee Pension Plan or Mexican Employee
Pension Plan, (iv) each funding waiver request filed with respect
to any Pension Plan, Canadian Employee Pension Plan or Mexican
Employee Pension Plan and all communications received or sent by
any Borrower or any ERISA Affiliate with respect to such request
and (v) the failure of any Borrower or any ERISA Affiliate to make
a required installment or payment under Section 302 of ERISA or
Section 412 of the Code (in the case of Employee Benefit Plans
regulated by the Code or ERISA) or under any Foreign Benefit Law,
Canadian Benefit Law or Mexican Benefit Law (in the case of
Employee Benefit Plans regulated by any Foreign Benefit Law,
Canadian Benefit Law or Mexican Benefit Law) by the due date;
(b) Promptly and in any event within fifteen (15) days of
becoming aware of the occurrence or forthcoming occurrence of any
(a) Termination Event or (b) nonexempt "prohibited transaction,"
as such term is defined in Section 406 of ERISA or Section 4975 of
the Code, in connection with any Employee Benefit Plan or Pension
Plan or any trust created thereunder, deliver to each Agent a
notice specifying the nature thereof, what action any Borrower or
any ERISA Affiliate has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by
the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto; and
(c) With reasonable promptness but in any event within
fifteen (15) days for purposes of clauses (a), (b) and (c),
deliver to the Agent copies of (a) any unfavorable determination
letter from the Internal Revenue Service regarding the
qualification of an Employee Benefit Plan under Section 401(a) of
the Code, (b) all notices received by any Borrower or any ERISA
Affiliate of the PBGC's or any Governmental Authority's intent to
terminate any Pension Plan or to have a trustee appointed to
administer any Pension Plan, (c) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by each
Borrower or any ERISA Affiliate with the Internal Revenue Service
with respect to each Pension Plan and (d) all notices received by
any Borrower or any ERISA Affiliate from a Multiemployer Plan
sponsor concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA. The applicable
Borrower will notify the Agent in writing within five (5) Business
Days of such Borrower or any ERISA Affiliate obtaining knowledge
or reason to know that such Borrower or any ERISA Affiliate has
filed or intends to file a notice of intent to terminate any
Pension Plan under a distress termination within the meaning of
Section 4041(c) of ERISA.
(d) With reasonable promptness, and in any event within
thirty (30) days of the date the Authorized Representative
receives notice, give notice to each Agent of (i) the
establishment of any new Canadian Employee Pension Plan or Mexican
Employee Pension Plan (which notice shall include a copy of such
plan at the request of either Agent), (ii) the commencement of
contributions to any Canadian Employee Pension Plan to which
Consoltex was not previously contributing, or (iii) the
commencement of contributions to any Mexican Employee Pension Plan
to which Consoltex Mexico or any Mexican Company was not
previously contributing, provided in each case, same would be
reasonably likely to have a Material Adverse Effect;
(e) Promptly and in any event within thirty (30) days of
the Authorized Representative's becoming aware of the occurrence
or forthcoming occurrence of any Canadian Termination Event or
Mexican Termination Event which would be reasonably likely to have
a Material Adverse Effect; and
(f) With reasonable promptness but in any event within
fifteen (15) Business Days, deliver to each Agent copies of any
unfavorable determination letter from Governmental Authority
regarding (i) the registration of a Canadian Employee Pension Plan
of Consoltex that is intended to be registered under Canadian
Benefit Law, or (ii) the registration of a Mexican Employee
Pension Plan of Consoltex Mexico or any Mexican Company that is
intended to be registered under Mexican Benefit Law, except where
such failure to deliver such copies would not reasonably be likely
to have a Material Adverse Effect.
9.18 Continued Operations. Except in connection with an asset
disposition, merger or consolidation permitted under Section 10.6 or 10.8,
continue at all times to conduct its business and engage principally in the
same line or lines of business substantially as heretofore conducted, or
other lines of business substantially related thereto.
9.19 Lease Purchase Agreement. Notwithstanding anything to the
contrary contained in this Agreement or in any Loan Document, LINQ, as
Tenant under the Lease Purchase Agreement by and between Old LINQ and
Dorchester County, South Carolina dated as of December 31, 1997, as
assigned to LINQ by an Assignment and Assumption Agreement dated as of
December 19, 2001 (the "Lease Purchase Agreement"), may take any action
permitted to be taken by the Tenant under the Lease Purchase Agreement,
provided that LINQ shall (i) make such requests and take such action which
it is permitted, but not obligated, to do so under the terms of the Lease
Purchase Agreement or the related documents as from time to time directed
in writing by the Required Lenders, including without limitation pursuant
to Sections 8.6(D) and 10.2(A)(6) of the Lease Purchase Agreement, (ii) not
amend, revise or supplement the Lease Purchase Agreement or the related
documents in any manner materially adverse to the interests of the Lenders,
and (iii) not permit any action to be taken by Dorchester County, South
Carolina under the terms of Section 8.6 of the Lease Purchase Agreement
that LINQ is not otherwise permitted to take under the terms and conditions
of this Agreement or any other Loan Document without the approval of the
Required Lenders.
9.20 Lock Boxes and Lock Box Accounts. At all times after the
Closing Date, each US Borrower and each Canadian Borrower will maintain not
less than one Lock Box and not less than one Lock Box Account, and each
such Lock Box and Lock Box Account shall be maintained as provided herein
and in the applicable Lock Box Agreement and Cash Collateral Agreement, and
shall, so long as such Lock Box and Lock Box Account are required
hereunder, notify and instruct all obligors, account parties and licensees
of the Accounts Receivable, and all factors of accounts receivable from
whom amounts are owing to such US Borrower or Canadian Borrower, to direct
payment of all Accounts Receivable and/or all amounts due from such factors
to the appropriate Lock Box. All receipts in the Lock Box shall be
deposited on a daily basis into the applicable Lock Box Account maintained
pursuant to a Cash Collateral Agreement and as security for the Facilities.
In the event at any time any US Borrower or Canadian Borrower wishes to add
any Lock Box or Lock Box Account, such US Borrower or Canadian Borrower
shall deliver to the Agents (a) an updated Schedule 5.4 setting forth all
Lock Boxes and Lock Box Accounts maintained by all US Borrowers and
Canadian Borrowers at such time, (b) a fully executed Lock Box Agreement
with respect to each additional Lock Box, and (c) a fully executed Cash
Collateral Agreement with respect to each additional Lock Box Account.
9.21 Payment of FIBC Holdback Amount. Each Borrower shall, and
shall cause each of its Subsidiaries to, (a) use its best efforts to comply
with the terms of the FIBC Disposition and otherwise act in such a way that
the portion of the FIBC Holdback Amount to be released from escrow and paid
to Consoltex USA or any other Borrower or Subsidiary of a Borrower is both
paid as early as possible and maximized, and (b) take such actions as are
necessary to assure the collection of such amounts from escrow and payment
of such amounts to the Lenders pursuant to Section 2.1(e)(ii). To the
extent deemed necessary by the Agents, each Borrower shall, and shall cause
each of its Subsidiaries to, (x) grant to the US Agent for the benefit of
the Agents and the Lenders a power of attorney with respect to the
collection of any FIBC Holdback Amount, and (y) assign any claim of such
Borrower or Subsidiary with respect to any FIBC Holdback Amount to the US
Agent for the benefit of the Agents and the Lenders.
9.22 Consummation of the Subordinated Note Exchange. The Borrowers
shall have consummated the Subordinated Note Exchange on or before February
28, 2002, by (a) exchanging Subordinated Notes representing not less than
95% of the aggregate principal amount of the Subordinated Notes for
Subordinated Replacement Notes, (b) executing and delivering the
Subordinated Replacement Indenture, which shall be substantially the same
as the draft of the Subordinated Replacement Indenture delivered to the
Agents and the Lenders on the Closing Date, with only such amendments,
modifications, supplements, or other adjustments thereto as are acceptable
to the Agents and all of the Lenders, (c) settling with such holders of
Subordinated Notes as have elected not to participate in the Subordinated
Note Exchange substantially in the same manner and pursuant to the same
plan as disclosed to the Agents and the Lenders prior to the Closing Date
without any amendment, modification, supplement or adjustment to such plan
not having the prior consent of the Agents and all of the Lenders, so long
as any cash payment thereto is in compliance with Section 10.9(d), (d)
obtaining all required consents to and waivers of any violations caused by
the Subordinated Note Exchange, (e) delivering to the Agents a certificate
of the chief financial officer of each issuer of the Subordinated
Replacement Notes, certifying that the Obligations under all the Facilities
qualify as "Senior Debt" (as defined in the Subordinated Replacement
Indenture, or such other similar term comparable to that found in the
Subordinated Indenture), (f) delivering to the Agents a certified copy of
the written notice by the chief financial officer of each issuer of the
Subordinated Replacement Notes to the trustee under the Subordinated
Replacement Indenture designating the Obligations under all the Facilities
as "Designated Senior Debt" (or such other similar term comparable to that
found in the Subordinated Indenture) under the Subordinated Replacement
Indenture, and (g) taking such other steps as the Agents determine are
necessary to effectively consummate the Subordinated Note Exchange.
9.23 Waivers of Lien Rights. From time to time after the Closing
Date, the applicable Facility Borrower will deliver to the Agents a fully
executed Waiver of Lien Rights with respect to each leased location in
which Inventory to be included in the Borrowing Base is located, prior to
such Inventory being included on any Borrowing Base Certificate delivered
hereunder.
9.24 Non-Exchanged Subordinated Notes. On or before March 15,
2002, with respect to any Subordinated Notes that are then outstanding, the
Borrowers shall have taken all such actions as are necessary such that
there shall not exist any default or event of default under the
Subordinated Indenture or any such Subordinated Notes, including without
limitation any default or event of default arising from the nonpayment of
interest due October 1, 2001 under the Subordinated Indenture and the
Subordinated Notes, and shall have delivered to the Agents and the Lenders
such documents and other evidence as are sufficient to demonstrate such
absence of any default or event of default.
ARTICLE X
Negative Covenants
Until the Facility Termination Date, unless the Required Lenders
shall otherwise consent in writing, no Borrower will, nor will it permit
any Subsidiary to:
10.1 Financial Covenants.
-------------------
(a) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio as of the end of each applicable
period set forth below to be less than that amount set forth below opposite
such period:
Minimum Consolidated
Period Fixed Charge Coverage Ratio
------ ---------------------------
One-quarter period ending June 30, 2002 1.05 to 1.00
Two-quarter period ending September 30, 2002 1.05 to 1.00
Three-quarter period ending December 31, 2002 1.00 to 1.00
Each of the Four-Quarter Periods ending (i) Xxxxx 00, 0000, (xx)
June 30, 2003, and (iii) September 30, 2003
1.00 to 1.00
(b) Minimum Annualized Combined Consoltex EBITDA. Permit
Annualized Combined Consoltex EBITDA as of the end of each applicable
period set forth below to be less than that amount set forth below opposite
such period:
Minimum Annualized
Period Combined Consoltex EBITDA
------ -------------------------
One-quarter period ending June 30, 2002 $9,100,000
Two-quarter period ending September 30, 2002 $8,200,000
Three-quarter period ending December 31, 2002 $8,850,000
Four-Quarter Period ending March 31, 2003 $8,975,000
Four-Quarter Period ending June 30, 2003 $9,600,000
Four-Quarter Period ending September 30, 2003 $10,100,000
(c) Minimum Annualized LINQ EBITDA. Permit Annualized LINQ EBITDA
as of the end of each applicable period set forth below to be less than
that amount set forth below opposite such period:
Minimum Annualized
Period LINQ EBITDA
------ ------------------
One-quarter period ending June 30, 2002 $5,600,000
Two-quarter period ending September 30, 2002 $6,475,000
Three-quarter period ending December 31, 2002 $5,125,000
Four-Quarter Period ending March 31, 2003 $4,200,000
Four-Quarter Period ending June 30, 2003 $4,700,000
Four-Quarter Period ending September 30, 2003 $5,375,000
(d) Maximum Third Party Mexican Accounts Payable. Permit the book
value of the Third Party Mexican Accounts Payable as of any date of
measurement thereof to be greater than $2,750,000; provided that such
amount shall be cumulatively reduced (x) upon the consummation of the sale
of New Royalton pursuant to clause (iv) of the definition of "Permitted
Asset Dispositions" or the cessation of all or substantially all of the
operations of New Royalton, by the lesser of $500,000 or the amount of
Third Party Mexican Accounts Payable on the balance sheet of New Royalton
at such time, (y) by $1,000,000 upon the consummation of the sale of the
small bag business of Rafytek pursuant to clause (i) of the definition of
"Permitted Asset Dispositions", and (z) by such other amounts as are
determined as a result of good faith negotiations between the Borrowers and
the Required Lenders from time to time as a result of the review of
operations and requirements of Consoltex Mexico and the Mexican Companies
(other than Rafytica); and provided further that if at any time Consoltex
Mexico and/or any of the Mexican Companies grants to the Agents and the
Lenders Liens in its assets pursuant to Section 5.7, compliance with this
covenant shall no longer be required.
10.2 Acquisitions. Enter into any agreement, contract, binding
commitment or other binding arrangement providing for any Acquisition, or
take any action to solicit the tender of securities for proxies in respect
thereof in order to effect any Acquisition, or in any other manner effect
any Acquisition.
10.3 Capital Expenditures. Make or become committed to make
Capital Expenditures except (a) Capital Expenditures made during the Fiscal
Year ended December 31, 2002, that do not exceed $3,600,000 in the
aggregate during such Fiscal Year, and (b) Capital Expenditures made during
the Fiscal Year ended December 31, 2003, that do not exceed $3,000,000 in
the aggregate during such Fiscal Year.
10.4 Liens. Incur, create or permit to exist any Lien, charge or
other encumbrance of any nature whatsoever with respect to any property or
assets now owned or hereafter acquired by any Borrower or any Subsidiary,
other than
(a) Liens created under the Security Instruments in favor
of the Agents, the US Collateral Agent, the Canadian Collateral
Trustee and the Lenders, and otherwise existing as of the date
hereof and as set forth in Schedule 8.7;
(b) Liens imposed by law for taxes, assessments or
charges of any Governmental Authority for claims not yet due or
which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves
are being maintained in accordance with GAAP, which Liens are not
yet exercisable to effect the sale or seizure of property subject
thereto;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens arising in
the ordinary course of business and in existence less than 45 days
from the date of creation thereof for amounts not yet due or which
are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves
are being maintained in accordance with GAAP, which Liens are not
yet exercisable to effect the sale or seizure of property subject
thereto;
(d) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security benefits
or to secure the performance of tenders, bids, leases, surety and
appeal bonds, contracts (other than for the repayment of
Indebtedness), statutory obligations and other similar obligations
or arising as a result of progress payments under government
contracts;
(e) easements (including reciprocal easement agreements
and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and zoning and other
restrictions, charges or encumbrances (whether or not recorded)
with respect only to any real property of any Borrower or any
Subsidiary, which do not interfere materially with the ordinary
conduct of the business of any Borrower or any Subsidiary and
which do not materially detract from the value of the property to
which they attach or materially impair the use thereof to any
Borrower or any Subsidiary; and
(f) purchase money Liens to secure Indebtedness permitted
under Section 10.5(d) and incurred to purchase fixed assets,
provided such Indebtedness represents not less than 90% of the
purchase price of such assets as of the date of purchase thereof
and no property other than the assets so purchased secures such
Indebtedness;
(g) Liens granted to factors of Accounts Receivable in
connection with Indebtedness owing thereto permitted hereunder
pursuant to Section 10.5(i) which attach only to those Accounts
Receivables that are factored;
(h) Liens arising in connection with Capital Leases
permitted under Section 10.5(f); provided that no such Lien shall
extend to any Collateral or to any other property other than the
assets subject to such Capital Leases;
(i) Liens in favor of issuers of documentary and
commercial letters of credit not otherwise prohibited under the
terms of this Agreement on (and limited to) the documents and
goods covered thereby;
(j) the reservations, limitations, provisos and
conditions, if any, expressed in any original grants from the
Crown, statutory exception to title and reservation of mineral
rights;
(k) extensions, renewals and replacements of any of the
foregoing so long as such Liens continue only to apply to the
property previously subject thereto;
(l) Liens in favor of customs and revenue authorities
arising as a matter of law to secure the payment of customs duties
resulting from the importation of goods and in each case attaching
only to such goods;
(m) with respect to any real property or fixtures, any
interest or title of a lessor or sublessor and any restriction or
encumbrance to which the interest or title of such lessor or
sublessor may be subject that would not be reasonably expected to
have a Material Adverse Effect;
(n) (i) deposits to secure the performance of leases of
property (whether real, personal or mixed) of the Borrowers and
their Subsidiaries (excluding Capitalized Leases) in the ordinary
course of business and (ii) Liens arising from precautionary
Uniform Commercial Code financing statement filings (or other
similar filings) regarding property subject to operating leases;
(o) Liens arising solely from conditional sale, title
retention, consignment or other similar arrangements for the sale
of goods entered into by any Borrower or any Subsidiary in the
ordinary course of business;
(p) with respect to any real property, title exceptions
referred to in Section 8.7 and title defects or irregularities in
title which are of a minor nature in the aggregate and will not
materially impair the use of the property for the purposes for
which it is held by any Borrower or any of its Subsidiaries; and
(q) with respect to any real property, Liens in favor of
a public utility or any municipality or governmental or other
public authority when required by such utility or other authority
in connection with the operations of any Borrower or any of its
Subsidiaries in the ordinary course of its business.
10.5 Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, howsoever evidenced, except:
(a) Indebtedness existing as of the Closing Date as set
forth in Schedule 8.6; provided that none of the instruments and
agreements evidencing or governing such Indebtedness shall be
amended, modified or supplemented after the Closing Date to change
adversely to any Agent, any Lender, any Borrower or any Subsidiary
any terms of subordination, repayment or rights of enforcement,
conversion, put, exchange, the aggregate principal amount thereof
or the interest rate or fees payable thereon, or other rights from
such terms and rights as in effect on the Closing Date, and any
amendment or modification of, or supplement to, the Subordinated
Indenture or the Les Gantiers Debenture, or any Subordinated Note
or PIK Note or AIP PIK Note, is subject to compliance with
Sections 10.21(b), 10.22(a) and 10.28(a), respectively; provided
further that the Subordinated Indenture may be replaced with the
Subordinated Replacement Indenture, and the Subordinated Notes may
be replaced with the Subordinated Replacement Notes, but the
limitations in the immediately preceding proviso shall then apply
to the Subordinated Replacement Indenture and the Subordinated
Replacement Notes;
(b) Indebtedness owing to any Agent or any Lender in
connection with this Agreement, any Note or other Loan Document;
(c) the endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
business;
(d) purchase money Indebtedness described in Section
10.4(f) not to exceed an aggregate outstanding principal amount at
any time of $250,000;
(e) Indebtedness arising from Rate Hedging Obligations
permitted under Section 10.16;
(f) Indebtedness (i) consisting of Capital Leases in an
aggregate amount at any time not to exceed $250,000 and (ii) in
the case of any such Capital Leases to which any Subsidiary of any
Borrower is a party, guarantees by such Borrower or any of its
Subsidiaries of the obligations of such Subsidiary under such
leases;
(g) Subordinated Debt;
(h) (i) unsecured Indebtedness incurred by any Borrower
or Guarantor (other than Consoltex Mexico and each Mexican
Company) and owing to any other Borrower or Guarantor (other than
Consoltex Mexico and each Mexican Company), (ii) unsecured
Indebtedness incurred by Consoltex Mexico or any Mexican Company
and (A) owing to any of Consoltex Mexico or any Mexican Company or
(B) owing to any Borrower or Guarantor (other than Consoltex
Mexico or any Mexican Company) which does not violate Section
10.7(a), and (iii) unsecured trade Indebtedness incurred by any
Mexican Company in the ordinary course of business and consistent
with past business practices and owing to LINQ, Consoltex or
Consoltex International;
(i) Indebtedness owing to factors of Accounts Receivable
from time to time from any one or more of the Borrowers on a
non-recourse basis to such Borrowers in principal amount at any
time outstanding not to exceed $18,000,000 in the aggregate,
provided that of such amount not more than $2,000,000 in the
aggregate shall at any time be owing to all factors by all
Borrowers in connection with their sales of inventory produced in
and distributed from Mexico to customers in the United States, and
without duplication the guaranty by a Borrower of payment of such
Indebtedness incurred by another Borrower or Subsidiary thereof,
the payment of which is secured by Liens permitted pursuant to
Section 10.4(g).
(j) additional unsecured Indebtedness not otherwise
covered by clauses (a) through (i) above, provided that the
aggregate outstanding principal amount of all such other
Indebtedness permitted under this clause (j) shall in no event
exceed $100,000 at any time; and
(k) Indebtedness extending the maturity of, or renewing,
refunding or refinancing, in whole or in part, Indebtedness
incurred under clauses (a) through (j) of this Section 10.5,
provided that the terms of any such extension, renewal, refunding
or refinancing Indebtedness (and of any agreement or instrument
entered into in connection therewith) are no less favorable to the
Agent and the Lenders than the terms of the Indebtedness as in
effect prior to such action, and provided further that (1) the
aggregate principal amount of or interest rate or rates and fees
payable on such extended, renewed, refunded or refinanced
Indebtedness shall not be increased by such action, (2) the group
of direct or contingent obligors on such Indebtedness shall not be
expanded as a result of any such action, (3) immediately before
and immediately after giving effect to any such extension,
renewal, refunding or refinancing, no Default or Event of Default
shall have occurred and be continuing, and (4) any such refunding,
renewing or refinancing of Indebtedness which is Subordinated Debt
shall be accomplished using other Indebtedness subordinate to the
Obligations hereunder, the terms of which shall be no less
restrictive than the terms of this Agreement and the terms of
subordination of which shall be no less favorable to the Lenders
than the Subordinated Debt being refinanced.
10.6 Transfer of Assets. Sell, lease, transfer or otherwise
dispose of any assets of any Borrower or any Subsidiary other than:
(a) dispositions of inventory in the ordinary course of
business;
(b) sales, transfers or other dispositions (i) among any
Borrower or Guarantor and any other Borrower or Guarantor (in each
case other than Consoltex Mexico and each Mexican Company), (ii)
from any of Consoltex Mexico or any Mexican Company to any
Borrower or Guarantor, (iii) between Consoltex Mexico and any
Mexican Company or among any of the Mexican Companies, and (iv)
among one or more Subsidiaries that are not Guarantors; provided
that, except in connection with a merger or consolidation
permitted under Section 10.8, in no event shall the equity
interests of any Subsidiary of Consoltex Holdings be transferred
to any other Person (including to Consoltex Holdings or any of its
Subsidiaries) without the consent of the Required Lenders;
(c) the termination of any lease of real or personal
property to which any Borrower or any Subsidiary is subject,
whether as lessee or lessor, provided such real or personal
property is not material to the operations or properties of such
Borrower or Subsidiary or, if material, has been acquired by such
Borrower or Subsidiary effective as of the termination of such
lease therefor;
(d) in transactions permitted by Section 10.8;
(e) sales (in the ordinary course of business) of
Accounts Receivable to factors, provided that any Indebtedness
incurred in connection therewith does not violate Section 10.5(i)
and Liens granted in connection therewith do not violate Section
10.4(g);
(f) dispositions of property that is substantially worn,
damaged, obsolete or, in the judgment of any Borrower, no longer
best used or useful in its business or that of any Subsidiary;
(g) each of the Permitted Asset Dispositions; and
(h) dispositions of property not otherwise permitted
above which has a net book value not to exceed $1,000,000 in the
aggregate during the term of this Agreement.
provided that to the extent any sale, lease, transfer or other
disposition of any assets of any Borrower or any Subsidiary
constitutes a Permitted Asset Disposition, such sale, lease,
transfer or other disposition shall be deemed to have been
consummated pursuant to Section 10.6(g) hereof, notwithstanding
the applicability of any other subsection of this Section 10.6.
10.7 Investments. Purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock or other securities, or make or permit to
exist any interest whatsoever in any other Person, or make or permit to
exist any loans, advances or financial assistance to any Person, except
that any Borrower or any Subsidiary may maintain investments or invest in:
(a) any Guarantor; provided, that all investment capital
contributions, equity acquisitions and infusions, loans, advances
or financial assistance by all Borrowers and Guarantors (other
than Consoltex Mexico and each Mexican Company) to Consoltex
Mexico and the Mexican Companies collectively shall not exceed
$1,000,000 in total principal amount during the term of this
Agreement;
(b) investments existing as of the date hereof and as set
forth in Schedule 8.4;
(c) accounts receivable arising and trade credit granted
in the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof in connection with
accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss;
(d) Investments consisting of intercompany Indebtedness
otherwise permitted under Section 10.5;
(e) loans and advances to employees of any Borrower or
any Subsidiary to satisfy or reimburse travel, relocation and
other similar business related expenses of such employees in the
ordinary course of business; and
(f) other loans, advances and investments in an aggregate
principal amount at any time outstanding not to exceed $300,000.
10.8 Merger or Consolidation. (a) Consolidate with or merge into
any other Person, or (b) permit any other Person to merge into it;
provided, however, any Subsidiary of any Borrower may merge or transfer all
or substantially all of its assets into or consolidate with such Borrower
or any wholly-owned Subsidiary of such Borrower which is also a Borrower
(other than Consoltex Mexico and Rafytek), except that none of Consoltex,
Consoltex International or LINQ may merge into any Subsidiary or Borrower,
and no other Subsidiary or Borrower may merge into any of Consoltex,
Consoltex International or LINQ; provided further that notwithstanding the
limitation in the immediately preceding proviso, Consoltex International
may merge into a new Subsidiary of Consoltex USA to consummate the
Consoltex International Reincorporation so long as the new Subsidiary takes
all actions deemed necessary by the US Agent to become a Borrower and a
Guarantor, or confirm its role as a Borrower and a Guarantor, and to
succeed to the Obligations of Consoltex International, and so long as 100%
of the Subsidiary Securities of the new Subsidiary are pledged by the owner
or owners thereof to the US Agent for the benefit of the Agents and the
Lenders, and so long as compliance with the immediately following proviso
is accomplished; provided further that, in the case of any merger or
consolidation referred to in this Section 10.8, if the US Collateral Agent,
the Canadian Collateral Agent, or any Agent on behalf of the Lenders has a
perfected Lien on any property so transferred (or owned by any party
subject to such merger or consolidation), such Lien shall remain
continuously perfected and each of the Borrowers and Guarantors agrees to
take all steps and execute all documents (including without limitation all
Uniform Commercial Code filings) reasonably deemed by the US Agent or the
Canadian Agent to assure such continuous perfection.
10.9 Restricted Payments. Make any Restricted Payment or apply or
set apart any of their assets therefor or agree to do any of the foregoing;
provided, however, the Borrowers and Guarantors, and their respective
Subsidiaries, as applicable, may make the following Restricted Payments in
any Fiscal Year (on a non-cumulative basis, with the effect that amounts
not paid in any Fiscal Year may not be carried over for payment in a
subsequent period) if immediately prior to and immediately after giving
effect thereto no Default or Event of Default shall exist or occur and be
continuing:
(a) any Subsidiary of a Borrower may declare and pay
dividends to such Borrower or any Subsidiary of such Borrower that
is a Borrower;
(b) any Borrower or any Subsidiary may declare dividends
or make distributions in each case payable solely in shares of its
capital stock provided that a Change in Control shall not result
from such dividend or distribution, and provided further that if
such shares are transferred to a Borrower, Guarantor or Subsidiary
in connection with such a dividend or distribution, the shares
shall be pledged under the applicable Pledge Agreement and
delivered to the US Collateral Agent or the Canadian Collateral
Trustee, as applicable;
(c) except with respect to any Subordinated Debt subject
to any Payment Deferral Arrangement, the issuers of the
Subordinated Debt may pay interest thereon in accordance with the
terms thereof as in effect on the Closing Date in the Subordinated
Indenture, the Subordinated Notes, the Les Gantiers Debenture, the
PIK Notes and the AIP PIK Notes, and as in effect upon
consummation of the Subordinated Note Exchange in the Subordinated
Replacement Indenture and the Subordinated Replacement Notes;
provided that, except as set forth in Section 10.22(a) with
respect to the PIK Notes upon satisfaction of the conditions set
forth therein and except with respect to the Subordinated Notes
after consummation of the Subordinated Note Exchange in accordance
with Section 9.22, in no event and notwithstanding the foregoing
shall any such payment be made in cash; provided further that no
such issuer of Subordinated Debt may redeem, retire, defease or
otherwise acquire for value any principal amount of any such
Subordinated Debt for any reason whether as an optional or
mandatory redemption; and
(d) for those holders of Subordinated Notes who do not
participate in the Subordinated Note Exchange, cash payments may
be made in accordance with the terms of the Subordinated Note
Exchange to such non-exchanging holders of Subordinated Notes,
provided that the aggregate amount of such payments shall not
exceed $300,000.
10.10 Transactions with Affiliates. Other than transactions
permitted under Sections 10.5, 10.6, 10.7, 10.8 and 10.9, enter into any
transaction after the Closing Date, including, without limitation, the
purchase, sale, lease or exchange of property, real or personal, or the
rendering of any service, with any Affiliate of any Borrower, except (a)
that such Persons may render services to any Borrower or any Subsidiary for
compensation at the same rates generally paid by Persons engaged in the
same or similar businesses for the same or similar services, (b) that any
Borrower or any Subsidiary may render services to such Persons for
compensation at the same rates generally charged by such Borrower or such
Subsidiary and (c) in either case in the ordinary course of business and
pursuant to the reasonable requirements of any Borrower's (or any
Subsidiary's) business consistent with past practice of such Borrower and
its Subsidiaries and upon fair and reasonable terms no less favorable to
such Borrower (or any Subsidiary) than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate.
10.11 Compliance with ERISA, the Code, Foreign Benefit Laws,
Mexican Benefit Law and Canadian Benefit Law. With respect to any Pension
Plan, Employee Benefit Plan, Canadian Employee Pension Plan, Mexican
Employee Pension Plan, or Multiemployer Plan, as applicable in each case
below:
(a) permit the occurrence of any Termination Event which
would result in a material liability on the part of any Borrower
or any ERISA Affiliate to the PBGC or to any Governmental
Authority; or
(b) permit the present value of all benefit liabilities
under all Pension Plans, under all Canadian Employee Pension
Plans, or under all Mexican Employee Pension Plans, as applicable,
to exceed the current value of the assets of such Pension Plans,
Canadian Employee Pension Plans by more than $5,500,000, or
Mexican Employee Pension Plans, as applicable, allocable to such
benefit liabilities; or
(c) permit any accumulated funding deficiency (as defined
in Section 302 of ERISA and Section 412 of the Code) with respect
to any Pension Plan, whether or not waived; or
(d) fail to make any contribution or payment to any
Multiemployer Plan which any Borrower or any ERISA Affiliate may
be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto; or
(e) engage, or permit any Borrower or any ERISA Affiliate
to engage, in any prohibited transaction under Section 406 of
ERISA or Sections 4975 of the Code for which a civil penalty
pursuant to Section 502(I) of ERISA or a tax pursuant to Section
4975 of the Code may be imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend
any Employee Benefit Plan which establishment or amendment could
result in liability to the Borrower or any ERISA Affiliate or
increase the obligation of any Borrower or any ERISA Affiliate to
a Multiemployer Plan, except where such establishment or amendment
would not reasonably be likely to have a Material Adverse Effect;
or
(g) fail, or permit any Borrower or any ERISA Affiliate
to fail, to establish, maintain and operate each Employee Benefit
Plan in compliance in all material respects with the provisions of
ERISA, the Code, all applicable Foreign Benefit Laws and all other
applicable laws and the regulations and interpretations thereof.
(h) permit the occurrence of any Canadian Termination
Event or Mexican Termination Event which would result in a
material liability on the part of any Borrower; or
(i) engage in a transaction that would render a Canadian
Employee Pension Plan liable to tax under Part XI of the Income
Tax Act or to have its registration revoked by any Governmental
Authority; or
(j) fail, or permit to fail, to establish, maintain and
operate each Canadian Employee Pension Plan and Mexican Employee
Pension Plan in compliance in all material respects with the
provisions of Canadian Benefit Law or Mexican Benefit Law,
respectively.
10.12 Fiscal Year. Change its Fiscal Year.
10.13 Dissolution, etc. Wind up, liquidate or dissolve
(voluntarily or involuntarily) or commence or suffer any proceedings
seeking any such winding up, liquidation or dissolution, except in
connection with a merger or consolidation permitted pursuant to Section
10.8.
10.14 Limitations on Sales and Leasebacks. Except in connection
with Capital Leases otherwise permitted pursuant to Section 10.5(f), enter
into any arrangement or arrangements with any Person providing for the
leasing by any Borrower or any Subsidiary of real or personal property,
whether now owned or hereafter acquired in a single transaction or series
of related transactions, which has been or is to be sold or transferred by
any Borrower or any Subsidiary to such Person or to any other Person to
whom funds have been or are to be advanced by such Person on the security
of such property or rental obligations of any Borrower or any Subsidiary.
10.15 Change in Control. Cause, suffer or permit to exist or occur
any Change of Control, or cause, suffer or permit any Borrower or Guarantor
(other than Consoltex Holdings) not to be wholly owned by a Borrower,
except for the minimum number of shares that must be held by third parties
to comply with applicable law.
10.16 Rate Hedging Obligations. Incur any Rate Hedging Obligations
or enter into any agreements, arrangements, devices or instruments relating
to Rate Hedging Obligations, except pursuant to Swap Agreements in an
aggregate notional amount not to exceed at any time 50% of the Total
Commitments for all Facilities for the purpose of interest rate or currency
exchange protection, and not for speculative purposes.
10.17 Negative Pledge Clauses. Enter into or cause, suffer or
permit to exist any agreement with any Person other than the Agents and the
Lenders pursuant to this Agreement or any other Loan Documents which
prohibits or limits the ability of any Borrower or any Subsidiary to
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, provided that
the Borrower and any Subsidiary may enter into such an agreement in
connection with, and that applies only to, (i) property acquired with the
proceeds of purchase money Indebtedness permitted hereunder, (ii) assets
financed by a Capital Lease permitted hereunder, and (iii) property subject
to any Lien permitted by this Agreement and not released after the date
hereof, when such prohibition or limitation is by its terms effective only
against the assets subject to such Lien.
10.18 Compensation; Reimbursement of Expenses.
---------------------------------------
(a) Pay any salary, fees, and other direct and indirect
remuneration and compensation to any of its directors and
executive officers in an amount in excess of those amounts paid to
directors and executive officers of comparable companies engaged
in the same general type of business and in similar financial
condition;
(b) Reimburse any stockholder, officer, director,
employee or agent of the Borrower or any Subsidiary for any
expenses incurred by such Person other than reasonable expenses
incurred for or on behalf of the Borrower or any Subsidiary in the
ordinary course of business.
10.19 Change in Accountants. Change its independent public
accountants.
10.20 Prepayments, Etc. of Indebtedness.
---------------------------------
(a) Prepay, redeem, purchase, defease or otherwise
satisfy prior to the scheduled maturity thereof in any manner, or
make any payment in violation of any subordination terms of, any
Indebtedness; or
(b) Amend, modify or change in any manner any term or
condition of any Indebtedness or any lease so that the terms and
conditions thereof are less favorable to the Agent and the Lenders
than the terms of such Indebtedness or leases as of the Closing
Date.
10.21. Subordinated Debt.
-----------------
(a) Fail at any time to maintain for any reason the
Obligations as "Senior Debt" and "Designated Senior Debt" under
the Subordinated Indenture, the Subordinated Notes, the
Subordinated Replacement Indenture and the Subordinated
Replacement Notes;
(b) Without limitation of the generality of Section
10.20(b), amend, revise or supplement, in any manner adverse to
the interests of the Lenders, the subordination provisions or
payment or redemption terms of, the other covenants contained in,
or events of default under, any of the Subordinated Debt, provided
that, as part of the Subordinated Note Exchange, the Subordinated
Replacement Indenture and the Subordinated Replacement Notes may
be executed, delivered and issued, as applicable, so long as the
Subordinated Replacement Indenture, the Subordinated Replacement
Notes and each other material document relating to the
Subordinated Note Exchange are substantially the same as the
drafts thereof delivered to the Agents and the Lenders on the
Closing Date, with any amendment, modification, supplement or
adjustment thereof or thereto being subject to the prior consent
of the Agents and all of the Lenders, and are otherwise
satisfactory to the Agents and the Lenders; and
(c) Except as expressly permitted in Section 10.9(c) or
(d), make any cash payment for any reason with respect to the
Subordinated Notes or the Subordinated Replacement Notes earlier
than the day that is ninety-five (95) days after the Facility
Termination Date.
10.22. PIK Notes.
---------
(a) Without limitation of the generality of Section
10.20(b), amend, revise or supplement, in any manner adverse to
the interests of the Lenders, the subordination provisions or
payment or conversion or redemption terms of the PIK Notes, or any
other covenants contained in, or Events of Default with respect
to, the PIK Notes; or
(b) Pay any principal or interest due and payable under
the PIK Notes in cash, and instead will only pay such interest by
the issuance of PIK Debentures pursuant to Section 1(b) of the
Convertible Debenture; provided, however, that the scheduled
payment of principal and interest due on October 15, 2003 may be
paid in cash if the Available Liquidity of the Borrowers and their
Subsidiaries as of September 15, 2003, as demonstrated on a
certificate delivered to the Agents and Lenders not later than
October 1, 2003, in form and substance satisfactory to the Agents
and the Lenders, is greater than or equal to $7,000,000.
10.23 Fee Limitation Agreement. Pay any fee to AIP other than in
compliance with the Fee Limitation Agreement as delivered to the Agents and
as in effect on the Closing Date, or amend, modify or change in any manner
any term or condition of the Fee Limitation Agreement.
10.24. Consoltex Holdings. Allow or permit Consoltex Holdings to
conduct any business or own any assets other than as set forth in Section
8.21.
10.25 Limitations on Upstreaming. Except as otherwise permitted
herein, enter into any agreement restricting or limiting the payment of
dividends or other distributions or the transfer of assets from any
Subsidiary to any Borrower or Guarantor or to any other Subsidiary owning
Subsidiary Securities of such Subsidiary.
10.26 Limitations on Deposit Accounts. Open or maintain any
deposit account of any nature with any financial institution except to the
extent each such deposit account is set forth on either Schedule 5.4 or
Schedule 5.5; provided that if, at any time, any Borrower wishes to open an
additional deposit account without making such account a Lock Box Account
pursuant to Section 9.20, such Borrower shall deliver to the Agents not
later than 10 days after the opening of such additional deposit account (a)
an updated Schedule 5.5 setting forth a complete description of such
deposit account, including the name and address of the financial
institution (which must be a Lender if the Borrower is domiciled in the
United States or Canada) and the account number, and (b) a fully executed
Deposit Account Agreement or Cash Collateral Agreement with respect to such
deposit account.
10.27 Limitations on Subsidiaries. Create or acquire any
Subsidiary; provided that Consoltex USA may create one Subsidiary,
organized in the state of Delaware, in connection with the Consoltex
International Reincorporation, so long as the Consoltex International
Reincorporation is consummated and the new Subsidiary becomes a Borrower
hereunder and takes all other steps deemed necessary by the Agents to
assure the continuous perfection of the US Collateral Agent, the Canadian
Collateral Trustee, or any Agent on behalf of the Agents and the Lenders in
the assets of Consoltex International prior to the Consoltex International
Reorganization.
10.28. AIP PIK Notes.
-------------
(a) Without limitation of the generality of Section
10.20(b), amend, revise or supplement, in any manner adverse to
the interests of the Lenders, the subordination provisions or
payment or conversion or redemption terms of any AIP PIK Notes, or
any other covenants contained in, or Events of Default with
respect to, any AIP PIK Notes; or
(b) Pay any principal, interest, fees or any other
amounts due and payable under any AIP PIK Notes in cash, and
instead will only pay such amounts by the issuance of additional
AIP PIK Notes or related debentures or notes pursuant to the terms
of the applicable documentation with respect thereto.
10.29. Payment Deferral Arrangements.
-----------------------------
(a) Without limitation of the generality of Section
10.20(b), amend, revise or supplement, in any manner adverse to
the interests of the Lenders, the provisions of any document
relating to a Payment Deferral Arrangement; or
(b) Pay in cash any amount otherwise due and payable
pursuant to the terms of the Subordinated Indenture or otherwise
with respect to any Subordinated Note that is subject to a Payment
Deferral Arrangement.
10.30. Tennessee Assets. Have assets located in the state of
Tennessee with a fair market value in excess of $200,000.
10.31. Subordinated Note Lockup Agreements. Without limitation of
the generality of Section 10.20(b), amend, modify, adjust, revise or
supplement, in any manner adverse to the interests of the Lenders, any
provision, term, agreement, representation, covenant or default or event of
default contained in, or waive, acquiesce in or fail to enforce its rights
with respect to any default or event of default arising under, any
Subordinated Note Lockup Agreement without the prior consent of the Agents
and all of the Lenders.
10.32. FIBC Escrow Agreement. Amend, modify, adjust, revise or
supplement, in any manner that would be adverse to the interests of the
Lenders, including the interest of the Lenders in receiving the prepayment
provided for in Section 2.1(e)(ii), any provision, term, agreement,
representation, covenant or default or event of default contained in, or
waive, acquiesce in or fail to enforce its rights with respect to any
provision of, the FIBC Escrow Agreement without the prior consent of the
Agents and all of the Lenders.
ARTICLE XI
Events of Default and Acceleration
11.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever
(and whether such occurrence shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or
regulation of any Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual
payment of the principal of any Loan, Reimbursement Obligation or
other Obligation, or of any fees on Bankers' Acceptances, when and
as the same shall be due and payable whether pursuant to any
provision of Article II or Article III or Article IV, at maturity,
by acceleration or otherwise; or
(b) if default shall be made in the due and punctual
payment of any amount of interest on any Loan, Reimbursement
Obligation or other Obligation or of any fees or other amounts
payable to any of the Lenders, either Agent or the US Collateral
Agent or Canadian Collateral Trustee, on the date on which the
same shall be due and payable; or
(c) if (i) default shall be made in the performance or
observance of any covenant set forth in Section 5.1, 5.4, 5.5,
9.1(h), 9.1(k) through (m), 9.5, 9.7, 9.11, 9.12, 9.20, 9.22, 9.24
or Article X, (ii) default shall be made in the performance or
observance of any covenant set forth in Section 9.1(a) through
9.1(g), Section 9.1(i) or Section 9.1(j) and such default shall
continue for five (5) or more days, or (iii) the requirement of
Section 7.3 is not satisfied by the time provided for therein;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement or the Notes (other than as
described in clauses (a), (b) or (c) above or clause (k) or clause
(l) below) and such default shall continue for thirty (30) or more
days, or shall occur under, any covenant, agreement or provision
contained in any of the other Loan Documents (beyond any
applicable grace period, if any, contained therein) or in any
instrument or document evidencing or creating any obligation,
guaranty, or Lien in favor of either Agent, the US Collateral
Agent, the Canadian Collateral Trustee or any of the Lenders or
delivered to either Agent, the US Collateral Agent, the Canadian
Collateral Trustee or any of the Lenders in connection with or
pursuant to this Agreement or any of the Obligations, or if any
Loan Document ceases to be in full force and effect (other than as
expressly provided for hereunder or thereunder or with the express
written consent of the Required Lenders or all of the Lenders, as
applicable in accordance with Section 13.6), or if without the
written consent of the Lenders, this Agreement or any other Loan
Document shall be disaffirmed or shall terminate, be terminable or
be terminated or become void or unenforceable for any reason
whatsoever (other than as expressly provided for hereunder or
thereunder or with the express written consent of the Required
Lenders or all of the Lenders, as applicable in accordance with
Section 13.6); or
(e) if there shall occur (i) a default, which is
continuing, in the payment of any principal, interest, premium or
other amount with respect to (A) any Subordinated Debt or (B) any
other Indebtedness or Rate Hedging Obligation (other than the
Loans and other Obligations) of any Borrower or any Subsidiary in
an amount or Rate Hedge Value, as applicable, not less than
$1,000,000 in the aggregate outstanding, or (ii) a default, which
is not waived, in the performance, observance or fulfillment of
any term or covenant contained in the Subordinated Indenture, the
Subordinated Replacement Indenture, the Les Gantiers Debenture,
any Subordinated Note, any Subordinated Replacement Note, any PIK
Note, any AIP PIK Note, any document relating to a Payment
Deferral Arrangement with respect to any Subordinated Note, or any
agreement or instrument under or pursuant to which any
Subordinated Debt or any other Indebtedness or Rate Hedging
Obligation may have been issued, created, assumed, guaranteed or
secured by any Borrower, any Guarantor or any Subsidiary, or (iii)
with respect to any such Rate Hedging Obligation, any termination
event shall occur as to which any Borrower, any Guarantor or any
Subsidiary is the "affected party" under the agreement or
instrument governing such Rate Hedging Obligation, or (iv) any
other event of default as specified in any agreement or instrument
under or pursuant to which any such Subordinated Debt or other
Indebtedness may have been issued, created, assumed, guaranteed or
secured by any Borrower or any Subsidiary, and, in each case, such
default or event of default or termination shall continue for more
than the period of grace, if any, therein specified, or such
default or event of default or termination shall permit the holder
of any such Indebtedness (or any agent or trustee acting on behalf
of one or more holders) to accelerate the maturity of any such
Indebtedness or terminate any agreement or instrument governing
any such Rate Hedging Obligation; or
(f) if any representation, warranty or other statement of
fact contained in any Loan Document or in any writing,
certificate, report or written statement at any time furnished to
either Agent, the US Collateral Agent, the Canadian Collateral
Agent or any Lender by or on behalf of any Borrower or any
Guarantor pursuant to or in connection with any Loan Document
shall be false or misleading in any material respect when given;
or
(g) if any Borrower or any Guarantor or any Subsidiary
shall be unable to pay its debts generally as they become due;
file a petition to take advantage of any insolvency statute; make
an assignment for the benefit of its creditors; commence a
proceeding for the appointment of a receiver, trustee, liquidator
or conservator of itself or of the whole or any substantial part
of its property; file a petition or answer seeking liquidation,
reorganization or arrangement or similar relief under the federal
bankruptcy laws or any other applicable law or statute; or
(h) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver,
trustee, liquidator or conservator of any Borrower, any Guarantor
or any Subsidiary or of the whole or any substantial part of its
properties and such order, judgment or decree continues unstayed
and in effect for a period of sixty (60) days, or approve a
petition filed against any Borrower, any Guarantor or any
Subsidiary seeking liquidation, reorganization or arrangement or
similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any
state, which petition is not dismissed within sixty (60) days; or
if, under the provisions of any other law for the relief or aid of
debtors, a court of competent jurisdiction shall assume custody or
control of any Borrower, any Guarantor or any Subsidiary or of the
whole or any substantial part of its properties, which control is
not relinquished within sixty (60) days; or if there is commenced
against any Borrower, any Guarantor or any Subsidiary any
proceeding or petition seeking reorganization, arrangement or
similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any
state which proceeding or petition remains undismissed for a
period of sixty (60) days; or if any Borrower, any Guarantor or
any Subsidiary takes any action to indicate its consent to or
approval of any such proceeding or petition; or
(i) if (i) one or more judgments or orders where the
amount not covered by insurance (or the amount as to which the
insurer denies liability) is in excess of $500,000 is rendered
against any Borrower, any Guarantor or any Subsidiary, or (ii)
there is any attachment, injunction or execution against any of
the properties of any Borrower, any Guarantor or any Subsidiary
for any amount in excess of $500,000 in the aggregate; and such
judgment, attachment, injunction or execution remains unpaid,
unstayed, undischarged, unbonded or undismissed for a period of
sixty (60) days; or
(j) if any Borrower, any Guarantor or any Subsidiary
shall, other than in the ordinary course of business (as
determined by past practices), suspend all or any part of its
operations for a period of more than 60 days and such suspension
would reasonably be expected to have a Material Adverse Effect on
the Borrowers and their Subsidiaries, taken as a whole; or
(k) if the Borrowers shall not have complied with the
requirements of Section 5.7(c) within the time period provided
therefor;
(l) any Subordinated Note Exchange Lockup Agreement is
determined to be invalid or is renunciated, or any order, decree,
judgment or other judicial or nonjudicial action enjoins or
materially disrupts or affects the terms of the Subordinated Note
Exchange, any Subordinated Lockup Agreement or the Borrowers'
plans to address the non-exchanging holders of Subordinated Notes;
or
(m) if there shall occur and be continuing an Event of
Default as defined in any of the other Loan Documents;
then, and in any such event and at any time thereafter, if such
Event of Default or any other Event of Default shall be
continuing,
(A) either or both of the following actions may
be taken: (i) the Agents may, and at the direction of the
Required Lenders shall, declare any obligation of the
Lenders and the Issuing Banks to make further Revolving
Credit Loans and Canadian Swing Line Loans or to issue
additional Letters of Credit terminated, whereupon the
obligation of each Lender to make further Revolving
Credit Loans, of the Canadian Swing Line Facility Lender
to make further Canadian Swing Line Loans, and of the
Issuing Banks to issue additional Letters of Credit,
hereunder shall terminate immediately, and (ii) the
Agents shall at the direction of the Required Lenders, at
their option, declare by notice to the Borrower any or
all of the Obligations to be immediately due and payable,
and the same, including all interest accrued thereon and
all other obligations of the Borrowers to the Agents, the
US Collateral Agent, the Canadian Collateral Trustee and
the Lenders, shall forthwith become immediately due and
payable without presentment, demand, protest, notice or
other formality of any kind, all of which are hereby
expressly waived, anything contained herein or in any
instrument evidencing the Obligations to the contrary
notwithstanding; provided, however, that notwithstanding
the above, if there shall occur an Event of Default under
clause (g) or (h) above, then the obligation of the
Lenders to make Revolving Credit Loans, of the Canadian
Swing Line Facility Lender to make further Canadian Swing
Line Loans, and of the Issuing Banks to issue Letters of
Credit hereunder shall automatically terminate and any
and all of the Obligations shall be immediately due and
payable without the necessity of any action by the Agents
or the Required Lenders or notice to the Agents or the
Lenders;
(B) The Borrowers shall, upon demand of the
Agents or the Required Lenders, deposit cash with the
Agents in an amount equal to the undrawn amount of each
Letter of Credit issued and outstanding and the aggregate
face amount of all outstanding Bankers' Acceptances, as
collateral security for the repayment of any future
drawings or payments under such Letters of Credit and
Bankers' Acceptances, and such amounts shall be held by
the Agents pursuant to the terms of the LC Account
Agreement or, as to Bankers' Acceptances, pursuant to
such provisions as shall be acceptable to the Canadian
Agent in its discretion; and
(C) the Agents and each of the Lenders shall
have all of the rights and remedies available under the
Loan Documents or under any applicable law.
11.2 Agents to Act. In case any one or more Events of Default
shall occur and be continuing, subject to the provisions of Article XII,
both Agents together may, and at the direction of the Required Lenders
shall, proceed to protect and enforce their rights and remedies contained
herein or in any other Loan Document, or as may be otherwise available at
law or in equity.
11.3 Cumulative Rights. No right or remedy herein conferred upon
the Lenders, the Agents, the US Collateral Agent or the Canadian Collateral
Trustee is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or
remedy shall be cumulative and shall be in addition to every other such
right or remedy contained herein and therein or now or hereafter existing
at law or in equity or by statute, or otherwise.
11.4 No Waiver. No course of dealing between any Borrower and any
Lender, either Agent, the US Collateral Agent or the Canadian Collateral
Trustee or any failure or delay on the part of any Lender, either Agent,
the US Collateral Agent or the Canadian Collateral Trustee in exercising
any rights or remedies under any Loan Document or otherwise available to it
shall operate as a waiver of any rights or remedies and no single or
partial exercise of any rights or remedies shall operate as a waiver or
preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
11.5 Allocation of Proceeds. If an Event of Default has occurred
and not been waived, and the maturity of the Loans has been accelerated
pursuant to Article XI hereof, all payments (including any proceeds of
Collateral) received by either Agent, any Lender, the Canadian Collateral
Trustee or the US Collateral Agent hereunder or under any of the Loan
Documents, in respect of any principal of or interest on the Obligations or
any other amounts payable by any Borrower hereunder, shall be applied by
the Agent in the following order:
(a) the reasonable expenses incurred in connection with
retaking, holding, preserving, processing, maintaining or
preparing for sale, lease or other disposition of, any Collateral,
including reasonable attorney's fees and legal expenses pertaining
thereto;
(b) amounts due to the Lenders and the Issuing Banks
pursuant to Sections 4.7(a), 4.7(b), 4.7(c), 4.7(d), 4.7(f) and
13.5 and all other fees owing to any Agent or to any Lender;
(c) amounts due to the Agent pursuant to Section 4.7(e);
(d) payments
(i) first, of interest on Loans,
Canadian Swing Line Loans and Reimbursement
Obligations, to be applied for the ratable
benefit of the Lenders (with amounts payable in
respect of Canadian Swing Line Loan Outstandings
being included in such calculation and paid to
the Canadian Swing Line Facility Lender);
(ii) then, of principal of Loans,
Canadian Swing Line Loans and Reimbursement
Obligations, to be applied for the ratable
benefit of the Lenders (with amounts payable in
respect of Canadian Swing Line Loan Outstandings
being included in such calculation and paid to
the Canadian Swing Line Facility Lender);
provided that (i) proceeds of the Collateral belonging to
Consoltex and any other Borrowers or Guarantors organized
under the laws of Canada or any province or other
political subdivision thereof shall be applied first to
the payment of the interest owed under the Canadian
Facilities, second to the payment of the principal owed
under the Canadian Facilities, third to payment of the
principal owed under the US Facilities and fourth to the
payment of interest owed under the US Facilities and (ii)
the proceeds of the Collateral belonging to Consoltex
Holdings, Consoltex USA, Consoltex International, LINQ or
any other Borrower or Guarantor organized under the laws
of the United States, Mexico or Costa Rica or any state
or other political subdivision of either thereof shall be
applied first to the payment of the interest owed under
the US Facilities, second to the payment of the principal
owed under the US Facilities, third to the payment of the
principal owed under the Canadian Facilities and fourth
to payment of the interest owed under the Canadian
Facilities; provided further, that proceeds of Collateral
to be applied to principal owed under any of the
Facilities shall be applied first to the payment of Base
Rate Loans and secondly, and ratably in respect of the
Canadian Facilities, to Bankers' Acceptances and
Eurodollar Rate Loans;
(e) payments of cash amounts to the Agents in respect of
outstanding Letters of Credit pursuant to Section 11.1(B);
(f) amounts due to the Issuing Banks, the Agents, the
Lenders and others pursuant to Sections 3.2(h), 9.15 and 13.9;
(g) payments of all other amounts due under any of the
Loan Documents, if any, to be applied for the ratable benefit of
the recipients, including amounts due to any of the Lenders or
their affiliates in respect of Obligations consisting of
liabilities under any Swap Agreement with any of the Lenders or
their affiliates on a pro rata basis according to the amounts
owed; and
(h) any surplus remaining after application as provided
for herein, to the Borrower or otherwise as may be required by
applicable law.
ARTICLE XII
The Agents
12.1 Appointment, Powers, and Immunities. Each of the Lenders
hereby irrevocably appoints and authorizes each of the Canadian Agent and
the US Agent to act as its agent under this Agreement and the other Loan
Documents with such powers and discretion as are specifically delegated to
the Canadian Agent and the US Agent, respectively, by the terms of this
Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. The Agents (which term, including the
terms US Agent and Canadian Agent, as used in this sentence and in Section
12.5 and the first sentence of Section 12.6 hereof shall include each of
their respective affiliates and its own and its affiliates' officers,
directors, employees, and agents):
(a) shall not have any duties or responsibilities except
those expressly set forth in this Agreement and shall not be a
trustee or fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any
recital, statement, representation, or warranty (whether written
or oral) made in or in connection with any Loan Document or any
certificate or other document referred to or provided for in, or
received by any of them under, any Loan Document, or for the
value, validity, effectiveness, genuineness, enforceability, or
sufficiency of any Loan Document, or any other document referred
to or provided for therein or for any failure by any Borrower or
any Guarantor or any other Person to perform any of its
obligations thereunder;
(c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance
of any covenants or agreements by any Borrower or any Guarantor or
the satisfaction of any condition or to inspect the property
(including the books and records) of any Borrower or any Guarantor
or any of their Subsidiaries or affiliates;
(d) shall not be responsible for any action taken or
omitted to be taken by it under or in connection with any Loan
Document, except for its own gross negligence or willful
misconduct.
Each of the Agents may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable
care. None of the terms "Agent", "Agents", "Canadian Agent", "US
Agent", "US Collateral Agent" and "Canadian Collateral Trustee" as
used in the Loan Documents shall connote any fiduciary or other
implied obligation under applicable law, and is used solely as a
matter of market custom to connote an administrative relationship
between independent contracting parties.
12.2 Reliance by Agents. Each of the Agents shall be entitled to
rely, and shall be fully protected in relying, upon any certification,
notice, instrument, writing, or other communication (including, without
limitation, any thereof by telephone or telefacsimile) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf
of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any Borrower or any Guarantor), independent
accountants, and other experts selected by either Agent. The Agents may
deem and treat the payee of any Note as the holder thereof or, with respect
to the Canadian Facilities, treat the financial institution set forth as
the maker of any Loan in the Canadian Agent's records, as the Lender
thereof for all purposes hereof unless and until the Relevant Agent
receives and accepts an Assignment and Acceptance executed in accordance
with Section 13.1 hereof. As to any action not expressly mandated by this
Agreement, neither Agent shall be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) upon
the instructions of the Required Lenders, and such instructions shall be
binding on all of the Lenders; provided, however, that neither Agent shall
be required to take any action unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking any such action.
12.3 Defaults. The Agents shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless either
Agent has received written notice from a Lender or a Borrower specifying
such Default or Event of Default and stating that such notice is a "Notice
of Default." In the event that either Agent receives such a notice of the
occurrence of a Default or Event of Default, such Agent shall give prompt
notice thereof to the other Agent and to the Lenders. The Agents shall
(subject to Section 12.2 hereof) take such action with respect to such
Default or Event of Default as shall reasonably be directed by the Required
Lenders, provided that, unless and until either Agent shall have received
such directions, the Agents may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it or they shall deem advisable in the best interest of
the Lenders.
12.4 Rights as Lender. With respect to each Agent's respective
Commitment to the relevant Revolving Credit Facility, Letter of Credit
Facility and Term Loan Facility, and the Loans made by it and Letters of
Credit issued by it, each of Bank of America and NBC (and any successor
acting as US Agent or Canadian Agent) in their respective capacities as a
Lender hereunder shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not acting as US
Agent or Canadian Agent, and the term "Lender" or "Lenders" shall, unless
the context otherwise indicates, include such Agent in its individual
capacity. Each of Bank of America and NBC (and any successor acting as US
Agent or Canadian Agent) and their respective affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money
to, make investments in, provide services to, and generally engage in any
kind of lending, trust, or other business with any Borrower or any
Guarantor or any of their Subsidiaries or affiliates as if it were not
acting as US Agent or Canadian Agent, and each of Bank of America and NBC
(and any successor acting as US Agent or Canadian Agent) and their
respective affiliates may accept fees and other consideration from any
Borrower or any Guarantor or any of their Subsidiaries or affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
12.5 Indemnification. Each of the Lenders agrees to indemnify each
Agent and each of their respective Affiliates, and their respective
officers, employees and agents (each, an "Agent Indemnitee") (to the extent
not reimbursed under Section 13.9 hereof, but without limiting the
obligations of any Borrower or Guarantor under such Section) ratably in
accordance with their respective Commitments to the Revolving Credit
Facilities and Term Loan Facilities, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against
any Agent Indemnitee (including by any Lender) in any way relating to or
arising out of any Loan Document or the transactions contemplated thereby
or any action taken or omitted by any Agent Indemnitee under or in
connection with any Loan Document or any of the foregoing; provided that no
Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Person to be
indemnified; provided further, however, that no action or omission taken or
occurring at the direction of the Required Lenders shall constitute either
gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse each Agent promptly upon demand
for its ratable share of any costs or expenses payable by any Borrower
under Section 13.5, to the extent that such Agent is not promptly
reimbursed for such costs and expenses by any Borrower. The agreements
contained in this Section 12.5 shall survive payment in full of the Loans
and all other amounts payable under this Agreement and the occurrence of
the Facility Termination Date.
12.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees
that it has, independently and without reliance on either Agent, the US
Collateral Agent, the Canadian Collateral Trustee or any other Lender, and
based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrowers, the Guarantors and their
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon either Agent, the US Collateral
Agent, the Canadian Collateral Trustee or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking
action under the Loan Documents. Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders
by either Agent hereunder, no Agent shall have any duty or responsibility
to provide any Lender with any credit or other information concerning the
affairs, financial condition, or business of any Borrower, any Guarantor or
any of their Subsidiaries or affiliates that may come into the possession
of either Agent or any of their respective affiliates.
12.7 Resignation of Agent. Each Agent may resign at any time by
giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders with respect to the US Facilities or with
respect to the Canadian Facilities, as the case may be, shall have the
right to appoint a successor US Agent or Canadian Agent, respectively. If
no successor US Agent or Canadian Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Agent's giving of notice of resignation, then
the retiring Agent may, on behalf of the Lenders, appoint a successor US
Agent which shall be a commercial bank organized under the laws of the
United States of America having combined capital and surplus of at least
$500,000,000 or a successor Canadian Agent shall be a Schedule I bank under
the Bank Act; provided that if no successor to the retiring Agent has
accepted appointment as the US Agent or Canadian Agent, as applicable, by
the date which is thirty (30) days after the retiring Agent's giving of
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective, the retiring Agent shall be discharged from its
duties and obligations hereunder, and the Lenders shall perform all of the
duties of the Relevant Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above. Upon the
acceptance of any appointment as US Agent or Canadian Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with
all the rights, powers, discretion, privileges, and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article XII shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Agent.
ARTICLE XIII
Miscellaneous
13.1 Assignments and Participations.
------------------------------
(a) Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of
its Loans, its Notes, its Commitment under the Revolving Credit
Facilities and its Commitment under the Term Loan Facilities);
provided, however, that
(i) each such assignment shall be to an
Eligible Assignee;
(ii) except in the case of an
assignment to another Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, any
such partial assignment shall be in an amount at least
equal to $5,000,000 or an integral multiple of $1,000,000
in excess thereof;
(iii) each such assignment by a Lender
shall be of a constant, and not varying, percentage of
all of its rights and obligations under any specified
Facility (but may vary as between the separate Facilities
to which such Lender is a party) (except that any
assignment by NBC or Bank of America shall not include
its respective rights, benefits or duties as an Issuing
Bank or as the provider of Canadian Swing Line Loans in
the case of NBC);
(iv) the parties to such assignment
shall execute and deliver to the Relevant Agent for its
acceptance an Assignment and Acceptance in the form of
Exhibit B hereto, together with any Note subject to such
assignment and a processing fee of $3,500; and
(v) an assignment of the Canadian Swing
Line Facility shall occur only if (A) the entire Canadian
Swing Line Facility is assigned, (B) the institution
which is the assigning Canadian Swing Line Facility
Lender also concurrently assigns to any other Person all
of its rights and obligations under the Canadian
Revolving Credit Facility, and (C) the institution which
is the new Canadian Swing Line Facility Lender is also a
Canadian Revolving Credit Facility Lender.
For each assignment by a Canadian Facility Lender, the
relevant Facility Borrowers hereby agree to execute upon request
of the Canadian Agent (a) Bankers' Acceptances documentation
requested by the assignee and (b) any document as may be required
under the Security Instruments, including any bonds or bond pledge
agreements. Upon such execution, delivery, approval and
acceptance, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations
hereunder or under any such Note have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations
of a Lender hereunder and, if applicable, a holder of such Note
and (y) the assignor thereunder shall, to the extent that rights
and obligations hereunder and, if applicable, under its Note or
Notes have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its
obligations under this Agreement. Each Issuing Bank may assign its
rights and obligations in such capacity to another Lender only
with respect to the total amount of the Canadian Letter of Credit
Facility or US Letter of Credit Facility (as the case may be),
subject to the written consent of each Relevant Agent and, subject
to the conditions with respect to such approval in the definition
of "Eligible Assignee", Consoltex Holdings, and also subject to
execution and delivery of documentation by such assignor and
assignee Issuing Bank as may be satisfactory to the Relevant
Agents and the Borrowers.
Upon execution, delivery, and acceptance of such
Assignment and Acceptance, the assignee thereunder shall be a
party hereto and, to the extent of such assignment, have the
obligations, rights, and benefits of a Lender hereunder and the
assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under
this Agreement. Upon the consummation of any assignment pursuant
to this Section, the assignor, each Agent and each Borrower shall
make appropriate arrangements so that, if required, new Notes are
issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or a
state thereof, it shall deliver to the Borrowers and the Agents
certification as to exemption from deduction or withholding of
Taxes in accordance with Section 6.6.
(b) Each Agent shall maintain at its address referred to
in Section 13.2 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the
names and addresses of the Lenders and the Commitments with
respect to the Revolving Credit Facilities and the Term Loan
Facilities of, and principal amount of the Loans owing to, each
Lender from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Agents and the Lenders may
treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by any Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior
notice.
(c) Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Note subject to
such assignment and payment of the processing fee, the Relevant
Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit B hereto, (i) accept
such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Each Lender may sell participations to one or more
Persons in all or a portion of its rights, obligations or rights
and obligations under this Agreement (including all or a portion
of its Revolving Credit Commitment or Term Loan Commitment or its
Loans); provided, however, that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participant shall
be entitled to the benefit of the yield protection provisions
contained in Article VI and the right of set-off contained in
Section 13.3, and (iv) the Borrowers shall continue to deal solely
and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrowers
relating to its Loans and its Note and to approve any amendment,
modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers decreasing the amount
of principal of or the rate at which interest is payable on such
Loans or Note, extending any scheduled principal payment date or
date fixed for the payment of interest on such Loans or Note, or
extending its Revolving Credit Commitment or Term Loan
Commitment).
(e) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or any
portion of its Loans and its Note to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank. No such assignment
shall release the assigning Lender from its obligations hereunder.
(f) Subject to the confidentiality provisions of Section
13.15, any Lender may furnish any information concerning any
Borrower or any of their Subsidiaries in the possession of such
Lender from time to time to assignees and participants (including
prospective assignees and participants).
(g) Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the
successors and permitted assigns of such party and all covenants,
provisions and agreements by or on behalf of the Borrowers which
are contained in the Loan Documents shall inure to the benefit of
the successors and permitted assigns of the Agents, the US
Collateral Agent, the Canadian Collateral Trustee, the Lenders, or
any of them. No Borrower or Guarantor may assign or otherwise
transfer to any other Person any right, power, benefit, or
privilege (or any interest therein) conferred hereunder or under
any of the other Loan Documents, or delegate (by assumption or
otherwise) to any other Person any duty, obligation, or liability
arising hereunder or under any of the other Loan Documents, and
any such purported assignment, delegation or other transfer shall
be void.
13.2 Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which
delivered (including hand delivery by commercial courier service) to such
party (against receipt therefor), (ii) on the date of transmission to such
party, in the case of notice by telefacsimile (where the proper
transmission of such notice is either acknowledged by the recipient or
electronically confirmed by the transmitting device), or (iii) on the fifth
Business Day after the day on which mailed to such party, if sent prepaid
by certified or registered mail, return receipt requested, in each case
delivered, transmitted or mailed, as the case may be, to the address or
telefacsimile number, as appropriate, set forth below or such other address
or number as such party shall specify by notice hereunder:
(a) if to the Borrowers:
to such Borrower, in care of:
Consoltex Holdings, Inc.
c/o Consoltex Inc.
0000 Xxxxxxxxx Xxxxxxxxxxxxxxx
Xxxxx Xxxxx-Xxxxxxx, Xxxxxx
X0X 0X0
Attn: Ms. C. Xxxxxxx Xxxxxxxx, Vice
President, Legal Affairs and
Corporate Secretary
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
Consoltex (USA) INC.
000 0xx Xxxxxx, 0xx Xxxxx
Xxxxx Tower
New York, New York 10018
Attn: Xx. Xxxx X. Xxxxxxxx, President,
Chief Operating Officer and Chief
Financial Officer
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
American Industrial Partners Capital Fund II, L.P.
c/o American Industrial Partners
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xx. Xxx Xxxxxx, Managing Director
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(b) if to the Canadian Agent:
National Bank of Canada
Sun Life Building
0000 Xxxxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attn: Xx. Xxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
National Bank of Canada
000 xx xx Xxxxxxxxxxx Xxxx, 0xx xxxxx
Xxxxxxxx X0X 0X0
Attn: Xx. Xxxx Xxxx, Vice President
Special Loans & Real Estate
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(c) if to the US Agent or the US Collateral Agent:
Bank of America, N.A.
0000 Xxxxxx Xxxxxx
XX0-000-00-00
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
Bank of America, N.A.
000 Xxxxxxx Xxxxxx
XX0-000-00-00
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxx Xxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(d) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance;
(e) if to any Guarantor, in care of the Borrowers in
accordance with clause (a) above; and
(f) if to the Canadian Collateral Trustee:
Xxxxxxxxxx Trust Inc.
0 Xxxxxxxx Xxxxxxxxxx
Xxxxxx 0000
Casier postal 34
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxxxx, Managing
Director, Corporate Trust Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
13.3 Right of Set-off; Adjustments. Upon the occurrence and during
the continuance of any Event of Default, each Lender (and each of its
affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by such Lender (or any of its
affiliates) to or for the credit or the account of any Borrower against any
and all of the Obligations of such Borrower now or hereafter existing,
irrespective of whether such Lender shall have made any demand under this
Agreement or such Note and although such Obligations may be unmatured. Each
Lender agrees promptly to notify the applicable Borrower after any such
set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Lender under this Section 13.3 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.
13.4 Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans
and the issuance of the Letters of Credit and the execution and delivery to
the Lenders of this Agreement, the Notes and all other Loan Documents and
shall continue in full force and effect so long as any of Obligations
remain outstanding or any Lender has any Commitment hereunder or the
Borrower has continuing obligations hereunder unless otherwise provided
herein.
13.5 Expenses. The Borrowers agree to pay on demand all costs and
expenses of the Agents in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this
Agreement, the other Loan Documents, and the other documents to be
delivered hereunder, including, without limitation, the reasonable fees and
expenses of counsel for each Agent with respect thereto and with respect to
advising the Agents as to its rights and responsibilities under the Loan
Documents. The Borrowers further agree to pay on demand all costs and
expenses of each Agent and each Lender, if any (including, without
limitation, reasonable attorneys' fees and expenses), in connection with
the enforcement (whether through negotiations, legal proceedings, or
otherwise) of the Loan Documents and the other documents to be delivered
hereunder.
13.6 Amendments and Waivers. Any provision of this Agreement or
any other Loan Document may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by each Borrower and
Guarantor party to such Loan Document and either the Required Lenders or
(as to Loan Documents other than the Credit Agreement) the US Agent, the
Canadian Agent, the US Collateral Agent, and the Canadian Collateral
Trustee, or any of them as applicable, on behalf of the Required Lenders
(and, if Article XII or the rights or duties of any Agent are affected
thereby, by such Agent); provided that no such amendment or waiver shall,
unless signed by each Lender directly affected thereby, (i) increase the
Commitments under any Facility of such Lenders, or the Total Commitment
applicable to any Facility, or the Mexican Borrowing Limit, (ii) reduce the
principal of or rate of interest on any Loan or any fees or other amounts
payable hereunder, provided that the Required Lenders may waive the
application of the Default Rate, (iii) postpone any date fixed for the
payment of any scheduled installment of principal of (including, without
limitation, any mandatory prepayment) or interest on any Loan or any fees
or other amounts payable hereunder or for termination of any Commitment
under any Facility, (iv) change the percentage of the Commitment under any
Facility or of the unpaid principal amount of the Notes, or the number of
Lenders, which shall be required for the Lenders or any of them to take any
action under this Section 13.6 or any other provision of this Agreement,
(v) release any Guarantor or all or any portion of the Collateral having a
book value in any release, or collectively in any series of releases prior
to the Facility Termination Date, in excess of $1,000,000, except as
expressly contemplated in the Loan Documents, (vi) eliminate, or cause the
material adverse alteration of, any Cash Collateral Agreement, any Lock Box
Agreement and the related Lock Boxes, Lock Box Accounts and related
arrangements, or any provision herein providing for payments or prepayments
to be made out of proceeds deposited in any Lock Box or Lock Box Account,
(vii) increase the advance rates applicable to any portion of the
definition of "Borrowing Base" or "Overadvance Borrowing Base", or (viii)
extend the time for compliance with, or waive any Event of Default arising
from noncompliance with, Section 5.7(c); and provided, further, that no
such amendment or waiver that affects the rights, privileges or obligations
of the Canadian Swing Line Facility Lender as provider of Canadian Swing
Line Loans, shall be effective unless signed in writing by the Canadian
Swing Line Facility Lender or that affects the rights, privileges or
obligations of either Issuing Bank as issuer of Letters of Credit, shall be
effective unless signed in writing by such Issuing Bank. Notwithstanding
any waiver of any Event of Default, upon the occurrence of an Event of
Default arising as a result of a noncompliance with Section 10.1, Borrowers
agree promptly to enter into (and agree to cause their Subsidiaries to
enter into) reasonable negotiations (which will include a review of asset
valuations determined after completion of purchase price adjustments
resulting from adjustments relating to push-down accounting to the
Borrowers' balance sheets to be completed by the Borrowers no later than
December 31, 2000) with respect to the execution, delivery and performance
of an amendment to this Agreement and related agreements to provide for
separate borrowing base requirements and restrictions on intercompany loans
and advances, each pursuant to terms reasonably requested by GMAC.
No notice to or demand on any Borrower in any case shall entitle
any Borrower to any other or further notice or demand in similar or other
circumstances, except as otherwise expressly provided herein. No delay or
omission on any Lender's or any Agent's part in exercising any right,
remedy or option shall operate as a waiver of such or any other right,
remedy or option or of any Default or Event of Default.
13.7 Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and it shall not be necessary in
making proof of this Agreement to produce or account for more than one such
fully-executed counterpart. The Agents may also require that any such
signature be confirmed by a manually-signed hardcopy thereof. Each party
hereto hereby adopts as an original executed signature page each signature
page hereafter furnished by such party to the Agents (or an agent of either
Agent) bearing (with the consent of the Agents) a facsimile signature by or
on behalf of such party. Nothing contained in this Section shall limit the
provisions of Section 12.2.
13.8 Termination. This Agreement shall terminate on the Facility
Termination Date, except that (x) those provisions which by the express
terms thereof continue in effect notwithstanding the Facility Termination
Date, and (y) obligations in the nature of continuing indemnities or
expense reimbursement obligations not yet due and payable, shall continue
in effect. Notwithstanding the foregoing, if after receipt of any payment
of all or any part of the Obligations, any Agent, any Issuing Bank or any
Lender (including the Canadian Swing Line Facility Lender) is for any
reason compelled to surrender such payment to any Person because such
payment is determined to be void or voidable as a preference, impermissible
setoff, a diversion of trust funds or for any other reason or elects to
repay any such amount in good faith settlement of a pending or threatened
avoidance claim, (i) this Agreement (including the provisions pertaining to
Participations in Letters of Credit, Reimbursement Obligations, and
Canadian Swing Line Loans) shall continue in full force and the Borrowers
shall be liable to, and shall indemnify and hold the applicable Agent or
such Lender harmless for, the amount of such payment surrendered until the
applicable Agent or such Lender shall have been finally and irrevocably
paid in full, and (ii) in the event any portion of any amount so required
to be surrendered by any Agent, any Issuing Bank or the Canadian Swing Line
Facility Lender shall have been distributed to the Lenders, the Lenders
shall promptly repay such amounts to the applicable Agent, the applicable
Issuing Bank or the Canadian Swing Line Facility Lender on demand therefor.
The provisions of the foregoing sentence shall be and remain effective
notwithstanding any contrary action which may have been taken by any Agent,
any Issuing Bank, the Canadian Swing Line Facility Lender or the Lenders in
reliance upon such payment, and any such contrary action so taken shall be
without prejudice to the Agents', the Issuing Banks', the Canadian Swing
Line Facility Lender's or the Lenders' rights under this Agreement and
shall be deemed to have been conditioned upon such payment having become
final and irrevocable.
13.9 Indemnification; Limitation of Liability.
----------------------------------------
(a) The Borrower agrees to indemnify and hold harmless
each Indemnified Party from and against any and all claims,
damages, losses, liabilities, costs, and expenses (including,
without limitation, reasonable attorneys' fees) that may be
incurred by or asserted or awarded against any Indemnified Party,
in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any
investigation, litigation, or proceeding or preparation of defense
in connection therewith) the Loan Documents, the FIBC Disposition,
the Subordinated Note Exchange, each Subordinated Note Lockup
Agreement, the Subordinated Indenture, the Subordinated Notes, the
Subordinated Replacement Indenture, the Subordinated Replacement
Notes, the PIK Notes or any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans,
except to the extent such claim, damage, loss, liability, cost, or
expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the
indemnity in this Section 13.9 applies, such indemnity shall be
effective whether or not such investigation, litigation or
proceeding is brought by any Borrower, its directors, shareholders
or creditors or an Indemnified Party or any other Person or any
Indemnified Party is otherwise a party thereto and whether or not
the transactions contemplated hereby are consummated. Each
Borrower agrees that no Indemnified Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to
it, any of its Subsidiaries, any Guarantor, or any security
holders or creditors thereof arising out of, related to or in
connection with the FIBC Disposition, the Subordinated Note
Exchange, each Subordinated Note Lockup Agreement, the
Subordinated Indenture, the Subordinated Notes, the Subordinated
Replacement Indenture, the Subordinated Replacement Notes, the PIK
Notes or the transactions contemplated herein, except to the
extent that such liability is found in a final non-appealable
judgment by a court of competent jurisdiction to have directly
resulted from such Indemnified Party's gross negligence or willful
misconduct. Each Borrower agrees not to assert any claim against
any Agent, any Lender, any of their affiliates, or any of their
respective directors, officers, employees, attorneys, agents, and
advisers, on any theory of liability, for special, indirect,
consequential, or punitive damages arising out of or otherwise
relating to the Loan Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds
of the Loans.
(b) The agreements and obligations of each Borrower
contained in this Section 13.9 shall continue in effect
notwithstanding the Facility Termination Date.
13.10 Severability. If any provision of this Agreement or the
other Loan Documents shall be determined to be illegal or invalid as to one
or more of the parties hereto, then such provision shall remain in effect
with respect to all parties, if any, as to whom such provision is neither
illegal nor invalid, and in any event all other provisions hereof shall
remain effective and binding on the parties hereto.
13.11 Entire Agreement. This Agreement, together with the other
Loan Documents and any separate fee letters entered into between any
Borrower and any Lender, constitutes the entire agreement among the parties
with respect to the subject matter hereof and supersedes all previous
proposals, negotiations, representations, commitments and other
communications between or among the parties, both oral and written, with
respect thereto (except that those provisions (if any) which by the express
terms of the commitment letter dated as of December 12, 2001 executed by
Bank of America and NBC and accepted by the Borrowers, the Guarantors and
AIP survive the closing of any Facility, shall survive and continue in
effect).
13.12 Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of
this Agreement, the terms and provisions of this Agreement shall control to
the extent of such conflict.
13.13 Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Loans,
including all charges or fees in connection therewith deemed in the nature
of interest under applicable law shall not exceed the Highest Lawful Rate
(as such term is defined below). If the rate of interest (determined
without regard to the preceding sentence) under this Agreement at any time
exceeds the Highest Lawful Rate (as defined below), the outstanding amount
of the Loans made hereunder shall bear interest at the Highest Lawful Rate
until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total
interest due hereunder (taking into account the increase provided for
above) is less than the total amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had
at all times been in effect, then to the extent permitted by law, the
Borrowers shall pay to the Agent an amount equal to the difference between
the amount of interest paid and the amount of interest which would have
been paid if the Highest Lawful Rate had at all times been in effect.
Notwithstanding the foregoing, it is the intention of the Lenders and the
Borrowers to conform strictly to any applicable usury laws. Accordingly, if
any Lender contracts for, charges, or receives any consideration which
constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at
such Lender's option be applied to the outstanding amount of the Loans made
hereunder or be refunded to the Borrower. As used in this paragraph, the
term "Highest Lawful Rate" means the maximum lawful interest rate, if any,
that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to such Lender which are presently in
effect or, to the extent allowed by law, under such applicable laws which
may hereafter be in effect and which allow a higher maximum nonusurious
interest rate than applicable laws now allow.
13.14 Governing Law; Waiver of Jury Trial.
-----------------------------------
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER
THAN THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY
SHALL BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE
FULLY PERFORMED, IN SUCH STATE.
(b) EACH OF THE PARTIES HERETO HEREBY EXPRESSLY AND
IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR
FEDERAL COURT SITTING IN THE XXXXXX XX XXX XXXX, XXXXX XX XXX
XXXX, XXXXXX XXXXXX OF AMERICA AND, BY THE EXECUTION AND DELIVERY
OF THIS AGREEMENT, EACH OF THE PARTIES HERETO EXPRESSLY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY
BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS GENERALLY
AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUCH SUIT, ACTION OR PROCEEDING.
(c) EACH OF THE PARTIES HERETO AGREES THAT SERVICE OF
PROCESS MAY BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS
AND COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID)
TO THE ADDRESS OF SUCH PARTY PROVIDED IN SECTION 13.2, OR BY ANY
OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN
EFFECT IN THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF
SHALL PRECLUDE ANY OF THE PARTIES HERETO FROM BRINGING ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENT IN THE COURTS OF ANY JURISDICTION WHERE ANY OF THE
PARTIES HERETO OR ANY OF SUCH PARTY'S PROPERTY OR ASSETS MAY BE
FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS
OF ANY SUCH JURISDICTION, EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND
ITS PROPERTY BY ANY SUCH OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY
IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH, EACH BORROWER,
EACH AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY
IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION,
SUIT OR PROCEEDING.
(f) EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES
ANY OBJECTION IT MAY HAVE THAT ANY COURT TO WHOSE JURISDICTION IT
HAS SUBMITTED PURSUANT TO THE TERMS HEREOF IS AN INCONVENIENT
FORUM.
13.15 Confidentiality. Each Agent and each Lender agrees to keep
confidential any information delivered or made available to it by any
Borrower or any Guarantor pursuant to this Agreement that is marked
confidential; provided that nothing herein shall prevent any Agent or any
Lender from disclosing such information (i) to any Agent or any Lender or
any affiliate of any Agent or any Lender or any officer, director,
employee, agent or advisor of any Agent or any Lender or any affiliate of
any of them, (ii) as required by any law, rule or regulation, (iii) upon
the order of any court or administrative agency, (iv) upon the request or
demand of any regulatory agency or authority, (v) that is or becomes
available to the public or that is or becomes available to any Agent or any
Lender other than as a result of disclosure by any Agent or any Lender
prohibited by this Agreement, (vi) in connection with any litigation to
which any Agent, any Lender or any of their respective Affiliates may be a
party, (vii) to the extent necessary in connection with the exercise of any
remedy under this Agreement or any other Loan Document, (viii) to any
Agent's or any Lender's legal counsel, independent auditors or other
advisors, and (ix) to any Person purchasing or proposing to purchase an
assignment or a participation pursuant to Section 13.1 which has agreed in
writing to be bound by the provisions of this Section 13.15.
13.16 Events of Default. Upon the occurrence of the Closing Date,
each Event of Default under the Existing Credit Agreement that existed and
was disclosed to the Agents and the Lenders on or prior to the Closing
Date, shall be deemed to have been waived, and shall not constitute an
Event of Default under this Agreement.
13.17 Credit Agreement. Upon the occurrence of the Closing Date,
all references in any of the other Loan Documents to the "Credit
Agreement", including any specific references to the Original Credit
Agreement, the Existing Credit Agreement or any other predecessor to this
Agreement, shall be deemed to refer to this Agreement, as this Agreement
shall from time to time be amended, restated, supplemented, amended and
restated or otherwise modified pursuant to the terms hereof.
13.18 Reaffirmation of Guarantors. In connection with the
restatement set forth herein, and in addition to the other provisions
hereof applying to such Guarantor, each of the Guarantors has joined in the
execution of this Agreement for the purposes of consenting hereto and for
the further purpose of confirming its guaranty of the Obligations of the
Borrowers pursuant to the Facility Guaranty to which such Guarantor is
party, and each such Guarantor does hereby so consent hereto and confirm
such guaranty.
13.19 Consoltex International Reincorporation. Upon the
consummation of the Consoltex International Reincorporation in accordance
with Section 10.8, the new Subsidiary shall be named Consoltex
International Inc. and shall be a Delaware corporation ("New Consoltex
International"), and all references in this Agreement and in each other
Loan Document to Consoltex International shall be deemed to refer to New
Consoltex International.
[Signatures on following pages]
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
made, executed and delivered by their duly authorized officers as of the
day and year first above written.
BORROWERS:
CONSOLTEX HOLDINGS, INC.,
as Borrower and as Guarantor
By: /s/ Xxxx Xx Xxxxx
-------------------------------------
Name: Xxxx Xx Xxxxx
Title: Executive Vice President,
Finance and Taxation
By: /s/ C. Xxxxxxx Xxxxxxxx
-------------------------------------
Name: C. Xxxxxxx Xxxxxxxx
Title: Vice-President, Legal Affairs and
Corporate Secretary
CONSOLTEX INC.,
as Borrower and as Guarantor
By: /s/ Xxxx Xx Xxxxx
-------------------------------------
Name: Xxxx Xx Xxxxx
Title: Executive Vice-President,
Finance and Taxation
By: /s/ C. Xxxxxxx Xxxxxxxx
-------------------------------------
Name: C. Xxxxxxx Xxxxxxxx
Title: Vice-President, Legal Affairs and
Corporate Secretary
CONSOLTEX (USA) INC.,
as Borrower and as Guarantor
By: /s/ Xxxx Xx Xxxxx
-------------------------------------
Name: Xxxx Xx Xxxxx
Title: Executive Vice-President, Finance
and Taxation
By: /s/ C. Xxxxxxx Xxxxxxxx
-------------------------------------
Name: C. Xxxxxxx Xxxxxxxx
Title: Vice-President, Legal Affairs and
Corporate Secretary
CONSOLTEX INTERNATIONAL INC.,
as Borrower and as Guarantor
By: /s/ Xxxx Xx Xxxxx
-------------------------------------
Name: Xxxx Xx Xxxxx
Title: Vice-President, Taxation
By: /s/ C. Xxxxxxx Xxxxxxxx
-------------------------------------
Name: C. Xxxxxxx Xxxxxxxx
Title: Vice-President, Legal Affairs
and Corporate Secretary
LINQ INDUSTRIAL FABRICS II, INC.,
as Borrower and as Guarantor
By: /s/ Xxxx Xx Xxxxx
-------------------------------------
Name: Xxxx Xx Xxxxx
Title: Vice-President, Taxation
By: /s/ C. Xxxxxxx Xxxxxxxx
-------------------------------------
Name: C. Xxxxxxx Xxxxxxxx
Title: Vice-President, Legal Affairs
and Corporate Secretary
CONSOLTEX MEXICO, S.A. DE C.V.,
as Borrower and as Guarantor
By: /s/ Xxxx Xx Xxxxx
-------------------------------------
Name: Xxxx Xx Xxxxx
Title: Attorney-in-Fact
By: /s/ C. Xxxxxxx Xxxxxxxx
-------------------------------------
Name: C. Xxxxxxx Xxxxxxxx
Title: Attorney-in-Fact
RAFYTEK, S.A. de C.V.,
as Borrower and as Guarantor
By: /s/ Xxxx Xx Xxxxx
-------------------------------------
Name: Xxxx Xx Xxxxx
Title: Attorney-in-Fact
GUARANTORS:
RAFYTICA, S.A., as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in-Fact
ROYALTON MEXICANA, S.A. DE C.V., as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in-Fact
ROYALTON DE MEXICO, S.A. DE C.V., as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in-Fact
AGENTS:
NATIONAL BANK OF CANADA,
as Canadian Agent
By: /s/ Xxxx Xxxx
--------------------------------------
Name: Xxxx Xxxx
Title: VP Special Loans & Real Estate
BANK OF AMERICA, N.A.,
as US Agent
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
LENDERS:
NATIONAL BANK OF CANADA
By: /s/ Xxxx Xxxx
--------------------------------------
Name: Xxxx Xxxx
Title: VP Special Loans & Real Estate
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Manager, Special Loans
Lending Office:
Sun Life Building
0000 Xxxxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attn: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
$: Bank One International Corporation
New York Branch
Syndication Loans Department
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx
ABA No.: 000000000
CHIPS No.: 0979
Re: Consoltex
Attn: Xxxxxx Xxxxxxxx or Xxxxxx Xxxxxx
CDN $: Par Swift/Transfert
BNDC CAMMINT IN FAVOUR OF:
National Bank of Canada
Syndication Loans Department
000, xx xx Xxxxxxxxxxx Xxxxxx West
Main Branch
Montreal, Qc Canada H3B 4L2
ACCOUNT no.: 00-000-00
Re: Consoltex
Attn: Xxxxxx Xxxxxxxx or Xxxxxx Xxxxxx
BANK OF AMERICA, N.A.
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Principal
Lending Office:
Bank of America, National Association
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
Bank of America, National Association
ABA# 000000000
Account No.: 136621-22506
Reference: Consoltex
Attention: Corporate Credit Support
THE BANK OF NOVA SCOTIA
By: /s/ X.X. Xxxxx
--------------------------------------
Name: X.X. Xxxxx
Title: Managing Director, Unit Head
By: Not Required.
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Lending Office:
The Bank of Nova Scotia
Scotia Tower, Main Branch
0000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0
Attention: Xxx Xxxxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
The Bank of Nova Scotia
XXX# 000 00000
Account No.:
----------------------------
Reference: Consoltex
Attention: Xxx Xxxxxxxx
GMAC BUSINESS CREDIT, LLC
By: /s/ Xxxxxx Xxxxxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Director
Lending Office:
GMAC Business Credit, LLC
000 Xxxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
Bank One, Michigan
ABA# 000-000-000
Account Name: GMAC Business Credit
Account No.: 0000000-84
Reference: Consoltex, Inc.
Attention: Xxxx Xxxxx
FLEET BUSINESS CREDIT,
LLC (successor to
Sanwa Business Credit
Corp and Fleet
Business Credit
Corporation.)
By: /s/ Xxxxxx X. XxXxxxx
-------------------------------------
Name: Xxxxxx X. XxXxxxx
Title: Vice President
Lending Office:
Fleet Capital Corp.
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
Fleet Business Credit, LLC
ABA# 000-000-000
Account No.: 937-001-5120
Reference: Consoltex
Attention: Xxxxxx Xxxxxxxxxx
EXHIBIT A
Applicable Commitment Percentages
I. Total Facilities
Applicable Commitment
Lender Commitment Percentage
------ ---------- ---------------------
National Bank of Canada $17,102,033.39 25.2081891997%
Bank of America, N.A. $16,421,642.44 24.2053012121%
Fleet Business Credit, LLC $16,531,805.61 24.0000000000%
The Bank of Nova Scotia $6,152,657.66 9.0000000000%
GMAC Business Credit, LLC $11,635,025.90 17.1498866607%
Total Commitment $67,843,165.00 100.0000000000%
II. Canadian Revolving Credit Facility
Canadian Revolving Credit Facility Applicable Commitment
Lenders Commitment Percentage
---------------------------------- ---------- ---------------------
National Bank of Canada $8,387,145.41 74.0000000000%
The Bank of Nova Scotia $2,843,100.19 25.0000000000%
Total Commitment $11,230,245.60 100.0000000000%
III. Canadian Term Loan Facility
Canadian Term Loan Applicable Commitment
Facility Lenders Commitment Percentage
------------------ ---------- ---------------------
National Bank of Canada $8,714,887.98 72.0000000000%
The Bank of Nova Scotia $3,309,557.47 27.0000000000%
Total Commitment $12,024,445.45 100.0000000000%
IV. US Revolving Credit Facility
US Revolving Credit Applicable Commitment
Facility Lenders Commitment Percentage
------------------- ---------- ---------------------
Bank of America, N.A. $8,387,145.70 36.8345901188%
Fleet Business Credit, LLC $8,173,913.05 35.8981168681%
GMAC Business Credit, LLC $6,208,695.65 27.2672930131%
Total Commitment $22,769,754.40 100.0000000000%
V. US Term Loan Facility
US Term Loan Facility Applicable Commitment
Lenders Commitment Percentage
--------------------- ---------- ---------------------
Bank of America, N.A. $8,034,496.74 36.8238691409%
Fleet Business Credit, LLC $8,357,892.56 38.3060634790%
GMAC Business Credit, LLC $5,426,330.25 24.8700673801%
Total Commitment $21,818,719.55 100.0000000000%
EXHIBIT B
Form of Assignment and Acceptance
Reference is made to the Third Amended and Restated Credit
Agreement dated as of January 24, 2002 (the "Agreement") among CONSOLTEX
HOLDINGS, INC., CONSOLTEX INC., CONSOLTEX (USA) INC., CONSOLTEX
INTERNATIONAL INC. (formerly known as The Xxxxxx-Xxxxxxxx Group Ltd.
(formerly known as The Balson-Hercules Group Ltd.)), LINQ INDUSTRIAL
FABRICS II, INC., CONSOLTEX MEXICO, S.A. de C.V. and RAFYTEK, S.A. de C.V.
(the "Borrowers"), each Subsidiary identified as a Guarantor (as defined in
the Agreement) therein, the Lenders (as defined in the Agreement), and each
of National Bank of Canada and Bank of America, N.A. as Agents for the
Lenders (the "Agents"). Unless otherwise defined herein, terms defined in
the Agreement are used herein with the same meanings.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, WITHOUT
RECOURSE and without representation or warranty except as expressly set
forth herein, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under
the Agreement and the other Loan Documents as of the date hereof equal to
the percentage interest specified on Schedule 1 of all outstanding rights
and obligations in the [Canadian Revolving Credit Loans] [the Canadian Term
Loan] [the US Revolving Credit Loans] [the US Term Loan] under the
Agreement and the other Loan Documents. After giving effect to such sale
and assignment, the Assignee's Commitment to the [Canadian Revolving Credit
Facility] [the Canadian Term Loan Facility] [the US Revolving Credit
Facility] [the US Term Loan Facility] and the amount of the Loans owing to
the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any other
instrument or document furnished pursuant thereto; (iii) makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of any Borrower or any Guarantor or the performance
or observance by any Borrower or any Guarantor of any of its obligations
under the Loan Documents or any other instrument or document furnished
pursuant thereto; and (iv) if the Commitment being assigned is in the US
Term Loan Facility or the US Revolving Credit Facility, attaches the Notes
held by the Assignor with respect to its Commitments assigned hereunder and
requests that the US Agent exchange such Notes for new Notes payable to the
order of the Assignee in an amount equal to the Commitments assumed by the
Assignee pursuant hereto and to the Assignor in an amount equal to the
Commitments retained by the Assignor, if any, as specified on Schedule 1.*
-------------------
* In the case of National Bank of Canada as Assignor, excluding any rights,
benefits or duties as provider of Canadian Swing Line Loans, or in the case
of either of the Issuing Banks as Assignor, excluding any rights, benefits
or duties as an Issuing Bank.
3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 9.1 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon any Agent, the Assignor or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement; (iii) confirms that it is
an Eligible Assignee; (iv) appoints and authorizes each Agent to take such
action as agent on its behalf and to exercise such powers and discretion
under the Agreement as are delegated to such Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental
thereto; (v) agrees that it will perform in accordance with their terms all
of the obligations that by the terms of the Agreement are required to be
performed by it as a Lender; and (vi) attaches any U.S. Internal Revenue
Service or other forms required under Section 6.6.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Relevant Agent for acceptance and recording by
such Agent. The effective date for this Assignment and Acceptance (the
"Effective Date") shall be the date of acceptance hereof by the Agent,
unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by the Relevant Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Agreement, and (iii) with
respect to the Bankers' Acceptances listed in Schedule "A" hereto the
Assignee shall pay to the Assignor upon demand of the Assignor in
immediately available funds the Assignee's portion (to be calculated in
proportion to the percentage interest mentioned in Section 1 above) of the
face value of such Bankers' Acceptances which the applicable Borrowers
under a Canadian Facility would not pay to the Assignor upon maturity of
such Bankers' Acceptances, and thus acquire a portion, to be calculated in
the same manner, of the right of the Assignor to be repaid by such Borrower
any amount owed by such Borrower pursuant thereto.
6. Upon such acceptance and recording by the Relevant Agent, from
and after the Effective Date, the Relevant Agent shall make all payments
under the Agreement and the Notes in respect of the interest assigned
hereby (including, without limitation, all payments of principal, interest,
commitment fees and letter of credit fees with respect thereto) to the
Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Agreement and the Notes for periods prior to the
Effective Date directly between themselves.
7. The Assignor shall cause the bond certificate issued by
Consoltex, which is registered in the name of the Assignor to be presented
to the Canadian Collateral Trustee for cancellation and for issuance in
lieu thereof of a bond certificate to be registered in the name of the
Assignee (or in the case of partial assignment of bond certificates
registered in the name of the assignee and bond certificates registered in
the name of the assignor, the nominal amount of which shall be in
proportion to their respective commitments from and after the Effective
Date), and Consoltex shall issue such bonds and any related bond pledge
agreements pursuant to Section 13.1(a) of the Agreement.
8. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
9. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery
of an executed counterpart of Schedule 1 to this Assignment and Acceptance
by telefacsimile shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their
officers thereunto duly authorized as of the date specified thereon.
Schedule 1
Canadian
US Revolving US Term Loan Revolving Credit Canadian Term
Credit Facility Facility Facility Loan Facility
---------------------------------------------------------------------------------------------------------------------
Percentage interest assigned ____% ____% ____% ____%
---------------------------------------------------------------------------------------------------------------------
Assignee's commitment $__________ $__________ $__________ $__________
---------------------------------------------------------------------------------------------------------------------
Aggregate outstanding principal
amount of loans assigned $__________ $__________ $__________ $__________
---------------------------------------------------------------------------------------------------------------------
Principal amount of Note payable
to Assignee $__________ $__________ $__________ $__________
---------------------------------------------------------------------------------------------------------------------
Principal amount of Note payable
to $__________ $__________ $__________ $__________
Assignor
---------------------------------------------------------------------------------------------------------------------
Effective Date (if other than
date of acceptance by Relevant _________, 20__ _________, 20__ _________, 20__ _________, 20__
Agent)
---------------------------------------------------------------------------------------------------------------------
[NAME OF ASSIGNOR], as Assignor
By:
--------------------------------------
Title:
Dated: __________, ____
[NAME OF ASSIGNEE], as Assignee
By:
-------------------------------------
Title:
Domestic Lending Office:
Eurodollar Lending Office:
----------------------------
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
Accepted [and Approved] **
this ___ day of ___________, ____
BANK OF AMERICA, N.A., as US Agent
By:
-----------------------------------------
Title:
Accepted [and Approved] **
this ___ day of ___________, ____
NATIONAL BANK OF CANADA, as Canadian Agent
By:
-----------------------------------------
Title:
[Approved this ____ day
of ____________, ____
CONSOLTEX HOLDINGS, INC.
CONSOLTEX INC.
CONSOLTEX (USA) INC.
CONSOLTEX INTERNATIONAL INC.
LINQ INDUSTRIAL FABRICS II, INC.
CONSOLTEX MEXICO, S.A. de C.V.
RAFYTEK, S.A. de C.V.
By: ]**
-----------------------------------------
Title:
-----------------------
** Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee."
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized Representative
Reference is made to the Third Amended and Restated Credit
Agreement dated as of January 24, 2002 (the "Agreement") among CONSOLTEX
HOLDINGS, INC., CONSOLTEX INC., CONSOLTEX (USA) INC., CONSOLTEX
INTERNATIONAL INC. (formerly known as The Xxxxxx-Xxxxxxxx Group Ltd.
(formerly known as The Balson-Hercules Group Ltd.)), LINQ INDUSTRIAL
FABRICS II, INC., CONSOLTEX MEXICO, S.A. de C.V. and RAFYTEK, S.A. de C.V.
(the "Borrowers"), each Subsidiary identified as a Guarantor (as defined in
the Agreement) therein, the Lenders (as defined in the Agreement), and each
of National Bank of Canada and Bank of America, N.A. as Agents for the
Lenders (the "Agents"). Unless otherwise defined herein, terms defined in
the Agreement are used herein with the same meanings.
[The Borrowers hereby nominate, constitute and appoint each
individual named below as an Authorized Representative under the Loan
Documents, and hereby represent and warrant that (i) set forth opposite
each such individual's name is a true and correct statement of such
individual's office on the date hereof (to which such individual has been
duly elected or appointed), a genuine specimen signature of such individual
and an address for the giving of notice to such Authorized Representative,
and (ii) each such individual has been duly authorized by the Borrowers to
act as an Authorized Representative under the Loan Documents:
Name and Address Office Specimen Signature
--------------------------- ----------- ---------------------
--------------------------- ----------- ---------------------
---------------------------
---------------------------
--------------------------- ----------- ---------------------
---------------------------
---------------------------]
[The Borrowers hereby revoke (effective upon the date specified
below) the prior appointment of ________________ as an Authorized
Representative.]
This the ___ day of __________________, ____.
CONSOLTEX HOLDINGS, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
CONSOLTEX INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
CONSOLTEX (USA) INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
CONSOLTEX INTERNATIONAL INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
LINQ INDUSTRIAL FABRICS II, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
CONSOLTEX MEXICO, S.A. de C.V.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
RAFYTEK, S.A. de C.V.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
EXHIBIT D
Form of Borrowing Base Certificate
To: National Bank of Canada
Sun Life Building
0000 Xxxxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attn: Xx. Xxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
and
Bank of America, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Reference is made to the Third Amended and Restated Credit
Agreement dated as of January 24, 2002 (the "Agreement") among CONSOLTEX
HOLDINGS, INC., CONSOLTEX INC., CONSOLTEX (USA) INC., CONSOLTEX
INTERNATIONAL INC. (formerly known as The Xxxxxx-Xxxxxxxx Group Ltd.
(formerly known as The Balson-Hercules Group Ltd.)), LINQ INDUSTRIAL
FABRICS II, INC., CONSOLTEX MEXICO, S.A. de C.V. and RAFYTEK, S.A. de C.V.
(the "Borrowers"), each Subsidiary identified as a Guarantor (as defined in
the Agreement) therein, the Lenders (as defined in the Agreement), and each
of National Bank of Canada and Bank of America, N.A. as Agents for the
Lenders (the "Agents"). Unless otherwise defined herein, terms defined in
the Agreement are used herein with the same meanings.
The Borrowers, through the undersigned Authorized Representative,
hereby certify to the Agents and the Lenders that the attached Borrowing
Base calculation, including the calculation of the Overadvance Amount for
any certificate that is to be utilized during an Overadvance Period, is
calculated under the terms and conditions of the Agreement.
By:
--------------------------
Authorized Representative
DATE:
--------------------------
EXHIBIT E
Form of Borrowing Notice
To: National Bank of Canada
Sun Life Building
0000 Xxxxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attn: Xx. Xxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
and
Bank of America, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Reference is made to the Third Amended and Restated Credit
Agreement dated as of January 24, 2002 (the "Agreement") among CONSOLTEX
HOLDINGS, INC., CONSOLTEX INC., CONSOLTEX (USA) INC., CONSOLTEX
INTERNATIONAL INC. (formerly known as The Xxxxxx-Xxxxxxxx Group Ltd.
(formerly known as The Balson-Hercules Group Ltd.)), LINQ INDUSTRIAL
FABRICS II, INC., CONSOLTEX MEXICO, S.A. de C.V. and RAFYTEK, S.A. de C.V.
(the "Borrowers"), each Subsidiary identified as a Guarantor (as defined in
the Agreement) therein, the Lenders (as defined in the Agreement), and each
of National Bank of Canada and Bank of America, N.A. as Agents for the
Lenders (the "Agents"). Unless otherwise defined herein, terms defined in
the Agreement are used herein with the same meanings.
______________________, a Facility Borrower under the [Canadian]
[US] Facility indicated below (the "Borrower"), through an Authorized
Representative, hereby gives notice to the [Canadian] [US] Agent that Loans
of the type and amount set forth below be made on the date indicated:
/_/ Canadian Revolving Credit Facility
/_/ US Revolving Credit Facility
Type of Loan
(check one) Interest Period1 Aggregate Amount2 Date of Loan3
------------------ ---------------- ----------------- -------------
Base Rate Loan
Canadian Dollar4 __________ CAN $_________ __________
Base Rate Loan
US Dollar __________ $_____________ __________
Eurodollar Rate
Loan __________ $_____________ __________
Bankers'
Acceptances4 __________ CAN $_________ __________
The Borrower hereby requests that the proceeds of Loans described
in this Borrowing Notice be made available to the Borrower as follows:
[insert transmittal instructions] .
The undersigned hereby certifies that:
1. No Default or Event of Default has occurred and is continuing
either now or after giving effect to the borrowing described herein; and
2. All the representations and warranties set forth in Article
VIII of the Agreement and in the Loan Documents (other than those expressly
stated to refer to a particular date) are true and correct as of the date
hereof except that the reference to the financial statements in Section
8.6(a) of the Agreement shall be deemed (solely for the purpose of the
representation and warranty contained in such Section 8.6(a) but not for
the purpose of any cross reference to such Section 8.6(a) or to the
financial statements described therein contained in any other provision of
Section 8.6 or elsewhere in Article VIII) to refer to those financial
statements most recently delivered to you pursuant to Section 9.1 of the
Agreement (it being understood that any financial statements delivered
pursuant to Section 9.1(b) have not been certified by independent public
accountants).
-------------------
1 For any Eurodollar Rate Loan, one, two, three or (subject to
availability) six months.
2 Must be the Dollar Equivalent Amount of $100,000 (under either
Revolving Credit Facility) (CAN $500,000 per Lender if Bankers'
Acceptances) or if greater an integral multiple of the Dollar
Equivalent Amount of $100,000 (or CAN $100,000 in the case of Bankers'
Acceptances) unless a Base Rate Refunding Loan.
3 At least three (3) Business Days later if a Eurodollar Rate Loan, or
two (2) Business Days later if Bankers' Acceptances.
4 Canadian Revolving Credit Facility only.
3. All conditions contained in the Agreement to the making of any
Loan requested hereby have been met or satisfied in full.
4. After giving effect to the requested Loan, (i) the amount of US
Revolving Credit Outstandings plus US Letter of Credit Outstandings does
not exceed the Total Commitment under the US Revolving Credit Facility as
of this date, (ii) the Dollar Equivalent Amount of Canadian Revolving
Credit Outstandings plus Canadian Letter of Credit Outstandings plus
Canadian Swing Line Loan Outstandings does not exceed the Dollar Equivalent
Amount of the Total Commitment under the Canadian Revolving Credit Facility
as of this date, and (iii) the Dollar Equivalent Amount of all Outstandings
under the Revolving Credit Facilities, the Letter of Credit Facilities and
the Canadian Swing Line Facility does not exceed the sum of (A) the
Borrowing Base as calculated in Dollars at such time plus (B) during an
Overadvance Period, the Overadvance Amount as calculated in Dollars at such
time.
[NAME OF FACILITY BORROWER]
BY:
--------------------------
Authorized Representative
DATE:
--------------------------
EXHIBIT F
Form of Interest Rate Selection Notice
To: National Bank of Canada
Sun Life Building
0000 Xxxxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attn: Xx. Xxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
and
Bank of America, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Reference is made to the Third Amended and Restated Credit
Agreement dated as of January 24, 2002 (the "Agreement") among CONSOLTEX
HOLDINGS, INC., CONSOLTEX INC., CONSOLTEX (USA) INC., CONSOLTEX
INTERNATIONAL INC. (formerly known as The Xxxxxx-Xxxxxxxx Group Ltd.
(formerly known as The Balson-Hercules Group Ltd.)), LINQ INDUSTRIAL
FABRICS II, INC., CONSOLTEX MEXICO, S.A. de C.V. and RAFYTEK, S.A. de C.V.
(the "Borrowers"), each Subsidiary identified as a Guarantor (as defined in
the Agreement) therein, the Lenders (as defined in the Agreement), and each
of National Bank of Canada and Bank of America, N.A. as Agents for the
Lenders (the "Agents"). Unless otherwise defined herein, terms defined in
the Agreement are used herein with the same meanings.
______________________, a Facility Borrower under the [Canadian]
[US] Facility indicated below (the "Borrower"), through an Authorized
Representative, hereby gives notice to the [Canadian] [US] Agent of the
following selection of a type of Loan or Segment and Interest Period:
Facility to which this Interest Rate Selection Notice applies:
-------------------------------------------------------------
/_/ Canadian Revolving Credit Facility
/_/ US Revolving Credit Facility
/_/ Canadian Term Loan Facility
/_/ US Term Loan Facility
Revolving
Credit Loan Interest Aggregate
(circle one) Period(1) Amount(2) Date of Loan(3)
---------- ------ ------ ------------
1. Base Rate Loan
Canadian Dollar4 __________ CAN $_________ __________
2. Base Rate Loan
US Dollar __________ $_____________ __________
3. Eurodollar Rate
Loan __________ $_____________ __________
4. Bankers'
Acceptances4 __________ CAN $_________ __________
Term Loan Segment Interest Aggregate
(circle one) Period(1) Amount(2) Date of Loan(3)
---------- ------ ------ ------------
5. Base Rate Loan
Canadian Dollar4 __________ CAN $_________ __________
6. Base Rate Loan
US Dollar __________ $_____________ __________
7. Eurodollar Rate
Loan __________ $_____________ __________
8. Bankers'
Acceptances4 __________ CAN $_________ __________
----------------
(1) For any Eurodollar Rate Loan or Segment, one, two, three or
(subject to availability) six months; for Bankers' Acceptances
from 30 to 364 days.
(2) Must be $100,000 (or the Canadian Dollar Equivalent Amount thereof
in Canadian Dollars) (CAN $500,000 per Lender if Bankers'
Acceptances) or if greater an integral multiple of $100,000 (or
the Canadian Dollar Equivalent Amount thereof in Canadian Dollars)
(CAN $100,000 in the case of Bankers' Acceptances), unless a Base
Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan
or Eurodollar Rate Segment, or two (2) Business Days later if
Bankers' Acceptances.
Conversion (Canadian Revolving Credit Facility)
Segment no 1, 2, 3, 4 above (circle one) to be a conversion of:
Interest period
Maturity Date Amount
------------- ------
Base Rate Loan
Canadian Dollar N/A CAN $__________
Base Rate Loan
Dollar N/A $_______________
Eurodollar Rate
Loan _______ $______________
Bankers'
Acceptances _______ CAN $__________
Conversion (Canadian Term Loan Facility)
Segment no 5, 6, 7, 8 above (circle one) to be a conversion of:
Interest period
Maturity Date Amount
------------- ------
Base Rate Loan
Canadian Dollar N/A CAN $__________
Base Rate Loan
Dollar N/A $_______________
Eurodollar Rate
Loan _______ $______________
Bankers'
Acceptances _______ CAN $__________
Conversion (US Revolving Credit Facility)
Segment no 2 or 3 above (circle one) to be a conversion of:
Interest period
Maturity Date Amount
------------- ------
Base Rate Loan
Dollar N/A $_______________
Eurodollar Rate
Loan _______ $______________
Conversion (US Term Loan Facility)
Segment no 6 or 7 above (circle one) to be a conversion of:
Interest period
Maturity Date Amount
------------- ------
Base Rate Loan
Dollar N/A $_______________
Eurodollar Rate
Loan _______ $______________
[NAME OF FACILITY BORROWER]
BY:
--------------------------
Authorized Representative
DATE:
--------------------------
EXHIBIT G-1
Form of Revolving Note
Amended and Restated Promissory Note
(US Revolving Credit Facility)
$_____________ January ___, 2002
FOR VALUE RECEIVED, each of CONSOLTEX HOLDINGS, INC., CONSOLTEX
(USA) INC., CONSOLTEX INTERNATIONAL INC. (formerly known as The
Xxxxxx-Xxxxxxxx Group Ltd. (formerly known as The Balson-Hercules Group
Ltd.)), LINQ INDUSTRIAL FABRICS II, INC., CONSOLTEX MEXICO, S.A. de C.V.
and RAFYTEK, S.A. de C.V. (the "Borrowers"), hereby jointly and severally
promises to pay to the order of ________________________ (the "Lender"), in
its individual capacity, at the office of BANK OF AMERICA, N.A., as agent
for the US Revolving Credit Facility Lenders (the "US Agent"), located at
One Independence Center, 000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000 (or at such other place or places as the US Agent may
designate in writing) at the times set forth in the Third Amended and
Restated Credit Agreement dated as of January ___, 2002 among Consoltex
Inc. and the Borrowers, the financial institutions party thereto and each
of the US Agent and National Bank of Canada, as the Canadian Agent (as from
time to time amended, supplemented, restated, amended and restated or
otherwise modified, the "Agreement"; all capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the
Agreement), in lawful money of the United States of America, in immediately
available funds, the principal amount of ________________________ AND
__/100 DOLLARS ($___________________.__) or, if less than such principal
amount, the aggregate unpaid principal amount of all US Revolving Credit
Loans made by the Lender to the Borrowers pursuant to the Agreement and
outstanding on the Revolving Credit Termination Date or such earlier date
as may be required pursuant to the terms of the Agreement, and jointly and
severally promise to pay interest from the date hereof on the unpaid
principal amount hereof, in like money, at said office, on the dates and at
the rates provided in Articles II and IV of the Agreement. All or any
portion of the principal amount of the US ------------------- Revolving
Credit Loans may be prepaid or required to be prepaid as provided in the
Agreement.
If payment of all sums due hereunder is accelerated under the
terms of the Agreement or under the terms of the other Loan Documents
executed in connection with the Agreement, the then remaining principal
amount and accrued but unpaid interest thereon evidenced by this Revolving
Note shall become immediately due and payable, without presentation,
demand, protest or notice of any kind, all of which are hereby waived by
the Borrowers.
In the event this Revolving Note is not paid when due at any
stated or accelerated maturity, each Borrower jointly and severally agrees
to pay, in addition to the principal and interest due hereunder, all costs
of collection, including reasonable attorneys' fees, and interest due
hereunder thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
This Revolving Note is one of the Revolving Notes referred to in
the Agreement and is issued pursuant to and entitled to the benefits and
security of the Loan Documents and the Agreement to which reference is
hereby made for a more complete statement of the terms and conditions upon
which the US Revolving Credit Loans evidenced hereby were or are made and
are to be repaid. This Revolving Note is an amendment and modification of
Amended and Restated Promissory Note (US Revolving Credit Facility) from
each of the Borrowers (LINQ Industrial Fabrics II, Inc., pursuant to that
certain Assignment and Assumption Agreement dated as of December 19, 2001)
in favor of the Lender dated as of November 7, 2000 and does not constitute
a novation of such promissory note. This Revolving Note is subject to
certain restrictions on transfer or assignment as provided in the
Agreement.
This Revolving Note shall be governed by and construed in
accordance with the laws of the State of New York.
All Persons bound on this obligation, whether primarily or
secondarily liable as principals, sureties, guarantors, endorsers or
otherwise, hereby waive to the full extent permitted by law all defenses
based on suretyship or impairment of collateral and the benefits of all
provisions of law for stay or delay of execution or sale of property or
other satisfaction of judgment against any of them Borrower on account of
liability hereon until judgment be obtained and execution issued against
any other of them and returned unsatisfied or until it can be shown that
the maker or any other party hereto had no property available for the
satisfaction of the debt evidenced by this instrument, or until any other
proceedings can be had against any of them, also their right, if any, to
require the holder hereof to hold as security for this Revolving Note any
collateral deposited by any of said Persons as security. Protest, notice of
protest, notice of dishonor, diligence or any other formality are hereby
waived by all parties bound hereon.
[Signature page follows.]
IN WITNESS WHEREOF, the Borrowers have caused this Revolving Note
to be made, executed and delivered by its duly authorized representative as
of the date and year first above written, all pursuant to authority duly
granted.
CONSOLTEX HOLDINGS, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
CONSOLTEX (USA) INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
CONSOLTEX INTERNATIONAL INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
LINQ INDUSTRIAL FABRICS II, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
CONSOLTEX MEXICO, S.A. de C.V.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
RAFYTEK, S.A. de C.V.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
EXHIBIT G-2
Form of Term Note
Amended and Restated Promissory Note
(US Term Loan Facility)
$_________________ January ___, 2002
FOR VALUE RECEIVED, each of LINQ INDUSTRIAL FABRICS II, INC. and
CONSOLTEX MEXICO, S.A. de C.V. (the "Borrowers"), hereby jointly and
severally promises to pay to the order of _______________________________
(the "Lender"), in its individual capacity, at the office of BANK OF
AMERICA, N.A., as agent for the US Term Loan Facility Lenders (the "US
Agent"), located at One Independence Center, 000 Xxxxx Xxxxx Xxxxxx,
XX0-000-00-00, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (or at such other place or
places as the US Agent may designate in writing) at the times set forth in
the Third Amended and Restated Credit Agreement dated as of January ___,
2002 among Consoltex Inc., Consoltex (USA) Inc., Consoltex International
Inc., Consoltex Mexico, S.A. de C.V., Rafytek, S.A. de C.V. and the
Borrowers, the financial institutions party thereto and each of the US
Agent and National Bank of Canada, as the Canadian Agent (as from time to
time amended, supplemented, restated, amended and restated, or otherwise
modified, the "Agreement"; all capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Agreement), in
lawful money of the United States of America, in immediately available
funds, the principal amount of ________________________ AND __/100 DOLLARS
($________________.__) on the Term Loan Termination Date or such earlier
date as may be required pursuant to the terms of the Agreement, and jointly
and severally promise to pay interest from the date hereof on the unpaid
principal amount hereof, in like money, at said office, on the dates and at
the rates provided in Articles II and IV of the Agreement. All
------------------ or any portion of the principal amount of the US Term
Loan may be prepaid or required to be prepaid as provided in the Agreement.
If payment of all sums due hereunder is accelerated under the
terms of the Agreement or under the terms of the other Loan Documents
executed in connection with the Agreement, the then remaining principal
amount hereof and accrued but unpaid interest thereon evidenced by this
Term Note shall become immediately due and payable, without presentation,
demand, protest or notice of any kind, all of which are hereby waived by
the Borrowers.
In the event this Term Note is not paid when due at any stated or
accelerated maturity, each Borrower jointly and severally agrees to pay, in
addition to the principal and interest due hereunder, all costs of
collection, including reasonable attorneys' fees, and interest due
hereunder thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
This Term Note is one of the Term Notes referred to in the
Agreement and is issued pursuant to and entitled to the benefits and
security of the Loan Documents and the Agreement to which reference is
hereby made for a more complete statement of the terms and conditions upon
which the US Term Loans evidenced hereby were made and is to be repaid.
This Term Note is an amendment and modification of Amended and Restated
Promissory Note (US Term Loan Facility) from each of the Borrowers (LINQ
Industrial Fabrics II, Inc. by assignment from LINQ Industrial Fabrics,
Inc., pursuant to that certain Assignment and Assumption Agreement dated as
of December 19, 2001) in favor of the Lender dated as of November 7, 2000
and does not constitute a novation of such existing promissory note. This
Term Note is subject to certain restrictions on transfer or assignment as
provided in the Agreement.
This Term Note shall be governed by and construed in accordance
with the laws of the State of New York.
All Persons bound on this obligation, whether primarily or
secondarily liable as principals, sureties, guarantors, endorsers or
otherwise, hereby waive to the full extent permitted by law all defenses
based on suretyship or impairment of collateral and the benefits of all
provisions of law for stay or delay of execution or sale of property or
other satisfaction of judgment against any of them on account of liability
hereon until judgment be obtained and execution issued against any other of
them and returned unsatisfied or until it can be shown that the maker or
any other party hereto had no property available for the satisfaction of
the debt evidenced by this instrument, or until any other proceedings can
be had against any of them, also their right, if any, to require the holder
hereof to hold as security for this Term Note any collateral deposited by
any of said Persons as security. Protest, notice of protest, notice of
dishonor, diligence or any other formality are hereby waived by all parties
bound hereon.
[Signature page follows.]
IN WITNESS WHEREOF, the Borrowers have caused this Term Note to be
made, executed and delivered by its duly authorized representative as of
the date and year first above written, all pursuant to authority duly
granted.
LINQ INDUSTRIAL FABRICS II, INC.
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
CONSOLTEX MEXICO, S.A. de C.V.
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
EXHIBIT H
Form of Fourth Amendment to Mortgage
See attached.
EXHIBIT I-1
Form of Opinion of Xxxxxxxx & Xxxxx
See attached.
EXHIBIT I-2
Form of Opinion of Young, Clement, Rivers & Tisdale, LLP
See attached.
EXHIBIT I-3
Form of Opinion of Xxxxxxx XxXxxxxx Stirling Scales
See attached.
EXHIBIT I-4
Form of Opinion of Xxxxx Xxxxxxx Freed & Gesmer
See attached.
EXHIBIT I-5
Form of Opinion of Xxxx, Xxxxxxx and Xxxxxxx
See attached.
EXHIBIT J
Form of Compliance Certificate
To: National Bank of Canada
Sun Life Building
0000 Xxxxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attn: Xx. Xxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
and
Bank of America, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
and
Bank of America, N.A.
0000 Xxxxxx Xxxxxx
XX0-000-00-00
Xxx Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Reference is made to the Third Amended and Restated Credit
Agreement dated as of January 24, 2002 (the "Agreement") among CONSOLTEX
HOLDINGS, INC., CONSOLTEX INC., CONSOLTEX (USA) INC., CONSOLTEX
INTERNATIONAL INC. (formerly known as The Xxxxxx-Xxxxxxxx Group Ltd.
(formerly known as The Balson-Hercules Group Ltd.)), LINQ INDUSTRIAL
FABRICS II, INC., CONSOLTEX MEXICO, S.A. de C.V. and RAFYTEK, S.A. de C.V.
(the "Borrowers"), each Subsidiary identified as a Guarantor (as defined in
the Agreement) therein, the Lenders (as defined in the Agreement), and each
of National Bank of Canada and Bank of America, N.A. as Agents for the
Lenders (the "Agents"). Unless otherwise defined herein, terms defined in
the Agreement are used herein with the same meanings.
The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as of __________ (the
"Determination Date") as follows:
1. Consolidated Leverage Ratio calculation. As of the
Determination Date, the Consolidated Leverage Ratio of Consoltex Holdings
and its Subsidiaries, as set forth on Appendix I hereto, was _______ to
_______.
2. Covenant Compliance
[(a) As of the Determination Date, the Borrowers are in compliance
with Section 10.1(a) (See Appendix II attached hereto).]
[(b) As of the Determination Date, the Borrowers are in compliance
with Section 10.1(b) (See Appendix III attached hereto).]
[(c) As of the Determination Date, the Borrowers are in compliance
with Section 10.1(c) (See Appendix IV attached hereto).]
[(d) As of the Determination Date, the Borrowers are in compliance
with Section 10.1(d) (See Appendix V attached hereto).]
[(d) As of the Determination Date, the Borrowers are in compliance
with Section 10.3 (See Appendix VI attached hereto).]
3. No Default
A. Since __________ (the date of the last similar
certification), (a) no Borrower has defaulted in the keeping,
observance, performance or fulfillment of its obligations pursuant
to any of the Loan Documents; and (b) no Default or Event of
Default specified in Article XI of the Agreement has occurred and
is continuing.
B. If a Default or Event of Default has occurred since
__________ (the date of the last similar certification), the
Borrower proposes to take the following action with respect to
such Default or Event of Default: ____________.
(Note, if no Default or Event of Default has occurred,
insert "Not Applicable".)
The Determination Date is the date of the last required financial
statements submitted to the Lenders in accordance with Section 9.1 of the
Agreement, or such other date as may be specified in Section 9.1 for
reporting compliance with any provision of Section 10.1.
IN WITNESS WHEREOF, I have executed this Certificate this _____
day of __________, ____.
By:
--------------------------------
Authorized Representative
Name:
------------------------------
Title:
-----------------------------
Appendix I to Compliance Certificate
------------------------------------
Consolidated Leverage Ratio:
---------------------------
1. Consolidated Senior Debt as of the Determination Date:
(a) Consolidated Total Debt as of the Determination Date:
(i) Indebtedness for Money Borrowed, but excluding
(A) any Subordinated Notes that are subject to a
Payment Deferral Arrangement, and (B) the AIP
PIK Notes $______________
(ii) Aggregate Rate Hedge Value $______________
(iii) Contingent Obligations $______________
(iv) obligations arising out of the acquisition of Marino
owing to the former shareholders of Marino $______________
(v) Canadian Government Loan $______________
(vi) Sum of 1(a)(i) through 1(a)(v) $______________
(b) Subordinated Debt as of the Determination Date:
(i) Obligations with respect to Subordinated Notes $______________
(ii) Obligations with respect to
Subordinated Replacement Notes $______________
(iii) Obligations with respect to PIK Notes $______________
(iv) Obligations with respect to AIP PIK Notes $______________
(v) Sum of 1(b)(i) through 1(b)(iv) $______________
(vi) Obligations with respect to Subordinated Notes
that are subject to a Payment Deferral Arrangement $______________
(vii) Obligations with respect to PIK Notes $______________
(viii) Difference of 1(b)(v) minus 1(b)(vi) minus 1(b)(vii) $______________
----- -----
(c) Consolidated Senior Debt as of the Determination Date:
(i) Amount in line 1(a)(vi) minus amount in line 1(b)(viii) $______________
-----
2. Adjusted Consolidated EBITDA:
(a) Consolidated EBITDA for the period of measurement ending on (or
most recently prior to) the Determination Date:
(i) Consolidated Net Income $______________
(ii) Consolidated Interest Expense $______________
(iii) income tax expense $______________
(iv) amortization expense $______________
(v) depreciation expense $______________
(vi) non-recurring or extraordinary non-cash losses
(net of non-recurring or extraordinary gains) $______________
(vii) management or other fees payable by Consoltex
Holdings accrued, but not paid in cash, during
such period $______________
(viii) Ticking Fee paid in cash (to extent not included in
Consolidated Interest Expense) $______________
(ix) all fees and expenses paid in cash during such period
in connection with each inspection or audit pursuant to
Section 9.7(b) or (c), but excluding the fees and
expenses of any field audit inspection performed pursuant
to part (i) of the second sentence of Section 9.7(b)
(to extent not included in Consolidated Interest Expense $______________
(x) foreign currency exchange losses (net or gains,
negative if gains exceed losses) $______________
(xi) Sum of 2(a)(i) through 2(a)(x) $______________
---
(xii) Non-cash expenses related to post-retirement
employee benefits to extent added back above $______________
(xiii) 2(a)(xi) minus 2(a)(xii) $______________
-----
(b) Adjustment:
(i) If the period is the Four-Quarter period ended
December 31, 2001, the amount in line 2(a)(xiii): $______________
(ii) If the period is the one quarter ending March 31, 2002,
the amount in line 2(a)(xiii) times 4: $______________
(iii) If the period is the two quarters ending June 30, 2002,
the amount in line 2(a)(xiii) times 2: $______________
(iv) If the period is the three quarter ending September 30,
2002, the amount in line 2(a)(xiii) times four-thirds
(4/3): $______________
(v) Any applicable period thereafter, the amount in line
2(a)(xiii): $______________
Consolidated Leverage Ratio [the amount in line 1(c)(i) divided by the
amount in line 2(b)(i), (ii), (iii), (iv) or (v), as applicable]: ________
to 1.00
Appendix II to Compliance Certificate
-------------------------------------
Consolidated Fixed Charge Coverage Ratio:
----------------------------------------
1. Annualized Consolidated EBITDA:
(a) Consolidated EBITDA for the period of measurement ending on (or most recently prior to) the
Determination Date:
(i) Consolidated Net Income $______________
(ii) Consolidated Interest Expense $______________
(iii) income tax expense $______________
(iv) amortization expense $______________
(v) depreciation expense $______________
(vi) non-recurring or extraordinary non-cash losses
(net of non-recurring or extraordinary gains) $______________
(vii) management or other fees payable by Consoltex
Holdings accrued, but not paid in cash, during
such period $______________
(viii) Ticking Fee paid in cash (to extent not included in
Consolidated Interest Expense) $______________
(ix) all fees and expenses paid in cash during such period in
connection with each inspection or audit pursuant to
Section 9.7(b) or (c), but excluding the fees and
expenses of any field audit inspection performed pursuant
to part (i) of the second sentence of Section 9.7(b) (to
extent not included in Consolidated Interest Expense $______________
(x) foreign currency exchange losses (net or gains,
negative if gains exceed losses) $______________
(xi) Sum of 2(a)(i) through 2(a)(x) $______________
---
(xii) Non-cash expenses related to post-retirement
employee benefits to extent added back above $______________
(xiii) 2(a)(xi) minus 2(a)(xii) $______________
-----
(b) Annualization:
(i) If the period is the one quarter ending June 30, 2002,
the amount in line 1(a)(xiii) times 4: $______________
(ii) If the period is the two quarters ending September 30, 2002,
the amount in line 1(a)(xiii) times 2: $______________
(iii) If the period is the three quarter ending December 31, 2002,
the amount in line 1(a)(xiii) times four-thirds (4/3): $______________
(iv) Any applicable period thereafter,
the amount in line 1(a)(xiii): $______________
2. Annualized Capital Expenditures
(a) Capital Expenditures for the period ending
on (or most recently prior to) the Determination Date: $______________
(b) Annualization:
(i) If the period is the two quarters ending June 30, 2002,
the amount in line 2(a) times 2: $______________
(ii) If the period is the three quarters ending September 30,
2002, the amount in line 2(a) times four-thirds (4/3): $______________
(iii) Any applicable period thereafter,
the amount in line 2(a): $______________
3. The amount in line 1(b)(i), (ii), (iii) or (iv) (as applicable)
less the amount in line 2(b)(i), (ii) or (iii) (as applicable): $______________
----
4. Annualized Consolidated Fixed Charges for the period ending on
(or most recently prior to) the Determination Date:
(a) Consolidated Fixed Charges:
(i) Consolidated Interest Expense paid in cash $______________
(ii) expenses incurred with respect to the sale of Accounts
Receivable to one or more factors $______________
(iii) income tax expenses paid in cash $______________
(iv) management fees paid to AIP
(v) amounts paid in cash to holders of Subordinated Notes not
participating in the Subordinated Note Exchange
(vi) severance payments made to Xx. Xxxxxxx or Xx. Xxxxxxxx $______________
(vii) Consolidated Fixed Charges [sum of 4(a)(i) through (vi)]: $______________
---
(b) Annualization:
(i) If the period is the one quarter ending June 30, 2002,
the amount in line 4(a)(vii) times 4: $______________
(ii) If the period is the two quarters ending September 30, 2002,
the amount in line 4(a)(vii) times 2: $______________
(iii) If the period is the three quarter ending December 31, 2002,
the amount in line 4(a)(vii) times four-thirds (4/3): $______________
(iv) Any applicable period thereafter, the amount in line
4(a)(vii): $______________
(c) Principal:
(i) If the period is the one quarter period ending June 30,
2002, the two quarter period ending September 30, 2002 or
the three-quarter period ending December 31, 2002, all
payments of principal scheduled to be made at any time
during the Fiscal Year ending December 31, 2002: $______________
(ii) For any period thereafter, all payments of principal
scheduled to be made at any time during such period: $______________
(d) Annualized Consolidated Fixed Charges:
(i) The amount in line 4(b)(i), (ii), (iii) or (iv),
as applicable: $______________
(ii) The amount in line 4(c)(i) or (ii), as applicable: $______________
(iii) The sum of line 4(d)(i) and 4(d)(ii): $______________
---
Consolidated Fixed Charge Coverage Ratio [The amount in line 3
divided by the amount in line 4(d)(iii)]: ________ to 1.00
Covenant: Consolidated Fixed Charge Coverage Ratio must not be less
than the amount set forth for the Determination Date in
Section 10.1(a).
Appendix III to Compliance Certificate
Annualized Combined Consoltex EBITDA:
1. Consoltex EBITDA for the period of measurement ending on (or most recently prior to) the Determination
Date:
(a) With respect only to Consoltex Inc.:
(i) Net Income $______________
(ii) Interest Expense $______________
(iii) income tax expense $______________
(iv) amortization expense $______________
(v) depreciation expense $______________
(vi) non-recurring or extraordinary non-cash losses
(net of non-recurring or extraordinary gains) $______________
(vii) corporate overhead on the books of Consoltex attributable
solely to Consoltex Holdings and its Subsidiaries (other
than Consoltex on a consolidated basis $______________
(viii) Ticking Fee paid in cash (to extent not included in
Interest Expense) $______________
(ix) foreign currency exchange losses (net or gains,
negative if gains exceed losses) $______________
(x) Sum of 1(a)(i) through 1(a)(ix) $______________
---
(xi) Non-cash expenses related to post-retirement
employee benefits to extent added back above $______________
(xii) Adjustments necessary to eliminate the effect of
transactions with other Borrowers and Guarantors
(negative if positive adjustment) $______________
(xiii) 1(a)(x) minus 1(a)(xi) minus 1(a)(xii) $______________
----- -----
2. Consoltex International EBITDA for the period of measurement ending on (or most recently prior to)
the Determination Date:
(a) With respect only to Consoltex International Inc.:
(i) Net Income $______________
(ii) Interest Expense $______________
(iii) income tax expense $______________
(iv) amortization expense $______________
(v) depreciation expense $______________
(vi) non-recurring or extraordinary non-cash losses
(net of non-recurring or extraordinary gains) $______________
(vii) Ticking Fee paid in cash (to extent not included in
Interest Expense) $______________
(viii) foreign currency exchange losses (net or gains,
negative if gains exceed losses) $______________
(ix) Sum of 2(a)(i) through 2(a)(viii) $______________
---
(x) Non-cash expenses related to post-retirement
employee benefits to extent added back above $______________
(xi) Adjustments necessary to eliminate the effect of
transactions with other Borrowers and Guarantors
(negative if positive adjustment) $______________
(xii) 1(a)(ix) minus 1(a)(x) minus 1(a)(xi) $______________
----- -----
3. Combined Consoltex EBITDA:
(a) Sum of the amount in line 1(a)(xiii) plus the amount in line 2(a)(xii) $______________
--- ----
(b) Adjustments for intercompany eliminations (negative if
adjustments are positive) $______________
(c) The amount in line 3(a) minus the amount in line 3(b) $______________
-----
4. Annualized Combined Consoltex EBITDA:
(a) If the period is the one-quarter period ending June 30, 2002,
the amount in line 3(c) times 4: $______________
(b) If the period is the two-quarter period ending September 30, 2002,
the amount in line 3(c) times 2: $______________
(c) If the period is the three-quarter period ending December 31, 2002,
the amount in line 3(c) times four-thirds (4/3): $______________
(d) Any applicable period thereafter, the amount in line 3(c) $______________
Covenant: Annualized Combined Consoltex EBITDA (as set forth in
line 4(a), (b), (c) or (d), as applicable) must not be
less than the amount set forth for the Determination Date
in Section 10.1(b).
Appendix IV to Compliance Certificate
Annualized LINQ EBITDA:
1. LINQ EBITDA for the period of measurement ending on (or most recently prior to) the Determination Date:
(a) With respect only to LINQ Industrial Fabrics II, Inc.:
(i) Net Income $______________
(ii) Interest Expense $______________
(iii) income tax expense $______________
(iv) amortization expense $______________
(v) depreciation expense $______________
(vi) non-recurring or extraordinary non-cash losses
(net of non-recurring or extraordinary gains) $______________
(vii) Ticking Fee paid in cash (to extent not included in
Interest Expense) $______________
(viii) foreign currency exchange losses (net or gains,
negative if gains exceed losses) $______________
(ix) Sum of 1(a)(i) through 1(a)(viii) $______________
---
(x) Non-cash expenses related to post-retirement
employee benefits to extent added back above $______________
(xi) Adjustments necessary to eliminate the effect of
transactions with other Borrowers and Guarantors
(negative if positive adjustment) $______________
(xii) 1(a)(ix) minus 1(a)(x) minus 1(a)(xi) $______________
----- -----
2. Annualized LINQ EBITDA:
(a) If the period is the one-quarter period ending June 30, 2002,
the amount in line 1(a)(xii) times 4: $______________
(b) If the period is the two-quarter period ending September 30, 2002,
the amount in line 1(a)(xii) times 2: $______________
(c) If the period is the three-quarter period ending December 31, 2002,
the amount in line 1(a)(xii) times four-thirds (4/3): $______________
(d) Any applicable period thereafter, the amount in line 1(a)(xii): $______________
Covenant: LINQ Annualized EBITDA (the amount in line 2(a), (b), (c)
or (d), as applicable) must not be less than the amount
set forth for the Determination Date in Section 10.1(c).
Appendix V to Compliance Certificate
Third Party Mexican Accounts Payable:
1. Total of accounts payable to trade creditors on the balance
sheets of Consoltex Mexico and each of the Mexican Companies
(other than Rafytica) arising in the ordinary course of business
and owing to Persons other than a Borrower or a Guarantor: $______________
Covenant: Third Party Mexican Accounts Payable must not be greater
than the amount set forth for the Determination Date in
Section 10.1(d).
Appendix VI to Compliance Certificate
Capital Expenditures:
1. Capital Expenditures from the first day of the Fiscal Year through
the Determination Date: $______________
Covenant: Capital Expenditures (the amount in line 1) for the Fiscal
Year in which the Determination Date falls must not be
greater than the amount set forth for such Fiscal Year in
Section 10.3.
EXHIBIT K
Form of Waiver of Lien Rights
WAIVER OF LIEN RIGHTS
THIS WAIVER OF LIEN RIGHTS ("Waiver") is entered into this ____
day of ___________, 20__ among _________________, a ____________
[corporation] [partnership] [limited partnership] [limited liability
company] [limited liability partnership] (the "Landlord") in favor of
_______________________________, a ____________ [corporation] [partnership]
[limited partnership] [limited liability company] [limited liability
partnership] (the "Tenant"), BANK OF AMERICA, N.A., a national banking
association organized and existing under the laws of the United States (the
"US Agent"), and NATIONAL BANK OF CANADA, a bank governed by the Bank Act
(Canada) (the "Canadian Agent" and together with the US Agent, the
"Agents"), each acting in its capacity as agent for the Secured Creditors
(as defined below). Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein with the same meaning.
W I T N E S S E T H
WHEREAS, the Tenant and certain of its affiliates (collectively,
the "Borrowers") have entered into that certain Third Amended and Restated
Credit Agreement between the Borrowers, the Agents, and the lenders from
time to time party thereto (collectively, the "Lenders") dated January 24,
2002 (as from time to time heretofore and hereafter amended, modified,
extended, renewed, restated or supplemented, the "Credit Agreement")
pursuant to which the Lenders have agreed to provide to the Borrowers two
term loan facilities in the aggregate principal amount outstanding as of
January ___, 2002 of $33,843,165 and two revolving credit facilities of up
to $34,000,000 in aggregate principal amount (collectively, the "Loans")
(the Agents, the Lenders and each of their respective successors and
assigns are herein collectively defined as the "Secured Creditors");
WHEREAS, pursuant to the terms of the Credit Agreement and certain
other Loan Documents, the Tenant has granted to the US Agent, the Canadian
Agent, the US Collateral Agent or the Canadian Collateral Trustee, as
applicable, for the benefit of the Agents a security interest in certain
personal property of the Tenant, including without limitation the Inventory
and Accounts Receivable of the Tenant (all personal property, but not real
estate or fixtures, in which a security interest is granted by the Tenant
is referred to as the "Pledged Collateral");
WHEREAS, certain of the Pledged Collateral is or may be kept at
the following location: _____________________________________________
(hereinafter the "Premises");
WHEREAS, the Landlord and the Tenant entered into that certain
__________ Lease dated _________________ (the "Lease") pursuant to which
the Landlord leases the Premises to the Tenant;
WHEREAS, the Agents require a waiver of all statutory,
contractual, and any other lien the Landlord may have on any of the
Tenant's Pledged Collateral located on the Premises before the Tenant can
add the value of certain of the Pledged Collateral to the Borrowing Base
pursuant to the Credit Agreement;
NOW THEREFORE, the Tenant, the Landlord and the Agents, on behalf
of the Secured Creditors, in consideration of the sum of ten dollars
($10.00) and other valuable consideration, the receipt of which is hereby
acknowledged, and other benefits accruing to the undersigned, and in order
for the Tenant to add the value of certain of the Pledged Collateral to its
Borrowing Base, hereby agree as follows:
(a) The Landlord warrants that it has not assigned and will not
assign its claims for payment from the Tenant, any of its Liens on any of
the Pledged Collateral, or its rights to foreclose any Lien against any of
the Pledged Collateral or otherwise collect the proceeds of disposition
thereof that the Landlord may lawfully undertake, and that the Landlord has
the right to execute this Waiver of Lien Rights.
(b) The Landlord hereby waives and relinquishes all rights of levy
or distraint for rent;
(c) Any of the Pledged Collateral may be installed in the Premises
and shall not be deemed a fixture or part of the real estate but shall at
all times be considered personal property;
(d) The Landlord disclaims, waives, releases and quitclaims any
interest or lien in any of the Pledged Collateral and agrees to assert no
claim to any of the Pledged Collateral prior to the Facility Termination
Date;
(e) The Agents, or either of them, or either of their
representatives, may enter upon the Premises at any time to (i) inspect or
remove the Pledged Collateral, (ii) advertise and conduct a public auction
or private sale thereon, or (iii) process and prepare Inventory (including
any work in process);
(f) That at the option of either Agent, any of the Pledged
Collateral may remain upon (without any Secured Creditor being deemed to be
taking possession of) said Premises without charge for a period of thirty
(30) days after the receipt by any Agent of written notice by the Landlord
directing removal; either Agent may, subsequent to the 30 day period,
remain on said Premises at the rental provided under the Lease, prorated on
a per diem basis to be determined on a thirty day month, without incurring
any other obligations of the Tenant.
(g) The Landlord agrees to give notice within five (5) days of any
default by the Tenant of any of the provisions of said Lease to each of the
following:
National Bank of Canada
Sun Life Building
0000 Xxxxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attn: Xx. Xxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
and
Bank of America, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Upon receipt of said notice, the Agents shall thereupon have at least
fifteen (15) days to cure said default, but no Agent or any other Secured
Creditor shall have no obligation to do so.
(h) The Landlord hereby indemnifies and holds the Tenant and each
Secured Creditor harmless from and against any and all claims, demands,
liabilities and expenses, including reasonable attorneys' fees, arising in
connection with the enforcement of this Waiver of Lien Rights.
(i) The Landlord shall execute and discharge any forms reasonably
determined by any Agent to be necessary to give effect to any of the
foregoing.
This waiver is binding upon the Landlord and its heirs, personal
representatives, successors and assigns and inures to the benefit of each
Secured Creditor and the successors and assigns of each Secured Creditor.
This Waiver of Liens was given by the Landlord this __ day of
__________, 20__.
[Landlord]
Witnesses:
By:
--------------------------- ---------------------------------
Name:
---------------------------------
Title:
--------------------------- ---------------------------------
STATE OF _________________
SS.
COUNTY OF _____________
On this ____ day of ______________________, 20__, before me personally
appeared ________________________ to me known, who being by me duly sworn,
did depose and say, that (s)he is the _______________ of
____________________, a ___________________, and that (s)he, as
________________, being authorized to do so, executed the foregoing
instrument on behalf of the ___________.
Witness my hand and official seal or stamp, this the _____ day of
___________, 20__.
------------------------
Notary Public
My Commission Expires:
------------------------
EXHIBIT L
Form of Excess Cash Flow Certificate
To: National Bank of Canada
Sun Life Building
0000 Xxxxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attn: Xx. Xxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
and
Bank of America, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
and
Bank of America, N.A.
0000 Xxxxxx Xxxxxx
XX0-000-00-00
Xxx Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Reference is made to the Third Amended and Restated Credit
Agreement dated as of January 24, 2002 (the "Agreement") among CONSOLTEX
HOLDINGS, INC., CONSOLTEX INC., CONSOLTEX (USA) INC., CONSOLTEX
INTERNATIONAL INC. (formerly known as The Xxxxxx-Xxxxxxxx Group Ltd.
(formerly known as The Balson-Hercules Group Ltd.)), LINQ INDUSTRIAL
FABRICS II, INC., CONSOLTEX MEXICO, S.A. de C.V. and RAFYTEK, S.A. de C.V.
(the "Borrowers"), each Subsidiary identified as a Guarantor (as defined in
the Agreement) therein, the Lenders (as defined in the Agreement), and each
of National Bank of Canada and Bank of America, N.A. as Agents for the
Lenders (the "Agents"). Unless otherwise defined herein, terms defined in
the Agreement are used herein with the same meanings.
The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as of [December 31, 2001] [December
31, 2002] (the "Determination Date") that:
(a) As of the Determination Date, the Consolidated Leverage Ratio
of Consoltex Holdings and its Subsidiaries, as set forth on Appendix I
hereto, was _______ to ________;
(b) Excess Cash Flow for the Fiscal Year ended on the
Determination Date, as set forth on Appendix II hereto, was
$______________; and
(c) The prepayment required by Section 2.1(e)(i) of the Credit
Agreement for the Fiscal Year ended on the Determination Date is:
(i) If the Consolidated Leverage Ratio as of the
Determination Date, as set forth in (a) above,
was less than or equal to 3.50 to 1.00, 50%
of the amount in (b) above: $______________
(ii) If the Consolidated Leverage Ratio as of the
Determination Date, as set forth in (a) above,
was greater than 3.50 to 1.00, 75% of the
amount in (b) above: $______________
IN WITNESS WHEREOF, I have executed this Certificate this _____
day of __________, ____.
By:
--------------------------------
Authorized Representative
Name:
------------------------------
Title:
-----------------------------
Appendix I to Excess Cash Flow Certificate
Consolidated Leverage Ratio:
---------------------------
1. Consolidated Senior Debt as of the Determination Date:
(a) Consolidated Total Debt as of the Determination Date:
(i) Indebtedness for Money Borrowed, but excluding
(A) any Subordinated Notes that are subject to a
Payment Deferral Arrangement, and (B) the AIP
PIK Notes $______________
(ii) Aggregate Rate Hedge Value $______________
(iii) Contingent Obligations $______________
(iv) obligations arising out of the acquisition of Marino
owing to the former shareholders of Marino $______________
(v) Canadian Government Loan $______________
(vi) Sum of 1(a)(i) through 1(a)(v) $______________
(b) Subordinated Debt as of the Determination Date:
(i) Obligations with respect to Subordinated Notes $______________
(ii) Obligations with respect to
Subordinated Replacement Notes $______________
(iii) Obligations with respect to PIK Notes $______________
(iv) Obligations with respect to AIP PIK Notes $______________
(v) Sum of 1(b)(i) through 1(b)(iv) $______________
(vi) Obligations with respect to Subordinated Notes
that are subject to a Payment Deferral Arrangement $______________
(vii) Obligations with respect to PIK Notes $______________
(viii) Difference of 1(b)(v) minus 1(b)(vi) minus 1(b)(vii) $______________
(c) Consolidated Senior Debt as of the Determination Date:
(i) Amount in line 1(a)(vi) minus amount in line 1(b)(viii) $______________
2. Adjusted Consolidated EBITDA:
(a) Adjusted Consolidated EBITDA for the period of measurement ending on
(or most recently prior to) the Determination Date:
(i) Consolidated Net Income $______________
(ii) Consolidated Interest Expense $______________
(iii) income tax expense $______________
(iv) amortization expense $______________
(v) depreciation expense $______________
(vi) non-recurring or extraordinary non-cash losses
(net of non-recurring or extraordinary gains) $______________
(vii) management or other fees payable by Consoltex
Holdings accrued, but not paid in cash, during
such period $______________
(viii) Ticking Fee paid in cash (to extent not included in
Consolidated Interest Expense) $______________
(ix) all fees and expenses paid in cash during such period
in connection with each inspection or audit pursuant to
Section 9.7(b) or (c), but excluding the fees and
expenses of any field audit inspection performed pursuant
to part (i) of the second sentence of Section 9.7(b) (to
extent not included in Consolidated Interest Expense $______________
(x) foreign currency exchange losses (net or gains,
negative if gains exceed losses) $______________
(xi) Sum of 2(a)(i) through 2(a)(x) $______________
(xii) Non-cash expenses related to post-retirement
employee benefits to extent added back above $______________
(xiii) 2(a)(xi) minus 2(a)(xii) $______________
Consolidated Leverage Ratio [the amount in line 1(c)(i) divided by the
amount in line 2(a)(xiii)]: ________ to 1.00
Appendix II to Excess Cash Flow Certificate
Excess Cash Flow:
----------------
1. For the Determination Date of December 31, 2001:
(a) Consolidated EBITDA for the Fiscal Year ending on the
Determination Date:
(i) The amount in line 2(a)(xiii) of Appendix I: $______________
(b) Consolidated Fixed Charges for the Fiscal Year ending on the
Determination Date:
(i) Consolidated Interest Expense paid in cash $______________
(ii) expenses incurred with respect to the sale of Accounts
Receivable to one or more factors $______________
(iii) income tax expenses paid in cash $______________
(iv) management fees paid to AIP $______________
(v) amounts paid in cash to holders of Subordinated Notes not
participating in the Subordinated Note Exchange $______________
(vi) severance payments made to Xx. Xxxxxxx or Xx. Xxxxxxxx $______________
(vii) Consolidated Fixed Charges [sum of 1(b)(i) through (vi)]: $______________
(c) Excess Cash Flow:
(i) The amount in line 1(a)(i) minus the amount in line 1(b)(vii): $______________
2. For the Determination Date of December 31, 2002:
(a) Consolidated EBITDA for the Fiscal Year ending on the Determination Date:
(i) The amount in line 2(a)(xiii) of Appendix I: $______________
(ii) Any net gain or loss, as applicable, of an irregular or
extraordinary nature otherwise excluded from the
calculation of "Consolidated Net Income": $______________
(iii) Sum of 2(a)(i) and 2(a)(ii): $______________
(b) Consolidated Fixed Charges for the Fiscal Year ending on the Determination Date:
(i) Consolidated Interest Expense paid in cash $______________
(ii) expenses incurred with respect to the sale of Accounts
Receivable to one or more factors $______________
(iii) income tax expenses paid in cash $______________
(iv) management fees paid to AIP $______________
(v) amounts paid in cash to holders of Subordinated Notes not
participating in the Subordinated Note Exchange $______________
(vi) severance payments made to Xx. Xxxxxxx or Xx. Xxxxxxxx $______________
(vii) Consolidated Fixed Charges [sum of 2(b)(i) through (vi)]: $______________
(c) Excess Cash Flow Deductibles for the Fiscal Year ending on the
Determination Date (in each case without duplication):
(i) the lesser of $5,200,000 and the positive amount by which
Consolidated Working Capital as at the end of such
Four-Quarter Period exceeds Consolidated Working Capital
as at the end of the Four-Quarter Period ended December
31, 2001 ($0 if such change in Consolidated Working
Capital is negative): $______________
(ii) Capital Expenditures for such Four-Quarter Period not in
excess of the applicable amount set forth in Section 10.3: $______________
(iii) Consolidated Fixed Charges for such Four-Quarter Period
(as set forth in line 2(b)(vii) above) $______________
(iv) all regularly scheduled payments of principal in respect of
Consolidated Total Debt made during such Four-Quarter
Period $______________
(v) the aggregate amount of any optional prepayments of principal
of the Term Loans made by the Borrowers pursuant to
Section 2.1(d) hereof during such Four-Quarter Period $______________
(vi) The sum of the amount in lines 2(c)(i) through (v) $______________
(vii) the negative amount by which Consolidated Working
Capital as at the end of such Four-Quarter Period
exceeds Consolidated Working Capital as at the end of the
Four-Quarter Period ended December 31, 2001 (expressed as
a positive number; $0 if such change in Consolidated
Working Capital is positive): $______________
(viii) The amount in line 2(c)(vi) minus the amount in line 2(c)(vii) $______________
(d) Excess Cash Flow:
(i) The amount in line 2(a)(iii) minus the amount in line
2(c) (viii): $______________
Schedule 5.3
Information Regarding Collateral
See attached.
Schedule 5.4
Lock Box and Cash Collateral Accounts
Schedule 5.5
Deposit Accounts
Schedule 8.4
Subsidiaries and Investments in Other Persons
Schedule 8.6
Indebtedness
Schedule 8.7
Liens
Schedule 8.8
Tax Matters
Schedule 8.10
Litigation
Schedule 8.13
Intellectual Property
Schedule 8.16
Pension Plans
Schedule 8.16(e)
Unfunded Employee Benefit Plans
Schedule 8.19
Employment Matters
