ATBB\bkboston\syntheti\4A&R\4A&Rloan.exe 12/05/95 11:42AM
[Execution Draft]
FOURTH AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
Dated as of October 20, 1995
Among
SYNTHETIC INDUSTRIES, INC.
as the Borrower
and
THE FINANCIAL INSTITUTIONS
PARTY HERETO FROM TIME TO TIME
as the Lenders
and
THE FIRST NATIONAL BANK OF BOSTON
as the Agent
TABLE OF CONTENTS*
Page
ARTICLE 1 - DEFINITIONS -2-
SECTION 1.1. Definitions -2-
SECTION 1.2. General -30-
ARTICLE 2 - REVOLVING CREDIT FACILITY -32-
SECTION 2.1. Revolving Credit Loan -32-
SECTION 2.2. Manner of Borrowing -32-
SECTION 2.3. Repayment of Advances -34-
SECTION 2.4. Revolving Credit Note -35-
ARTICLE 2A - TERM LOAN FACILITY -36-
SECTION 2A.1. Term Loan -36-
SECTION 2A.2. Manner of Borrowing Term Loan -36-
SECTION 2A.3. Repayment of Term Loans -36-
SECTION 2A.4. Term Note -37-
ARTICLE 2B - LETTER OF CREDIT FACILITY -38-
SECTION 2B.1. Letters of Credit -38-
SECTION 2B.2. Payments under Letters of Credit -38-
SECTION 2B.3. Letter of Credit Expiration Date -38-
SECTION 2B.4. Letter of Credit Fees -39-
ARTICLE 2C - INTEREST RATE PROTECTION AGREEMENTS -40-
SECTION 2C.1. Interest Rate Protection Agreement -40-
SECTION 2C.2. Conditions to Transactions -40-
ARTICLE 3 - GENERAL LOAN PROVISIONS -41-
SECTION 3.1. Interest -41-
SECTION 3.2. Agent's Fee and Arrangement Fee -43-
SECTION 3.3. Intentionally Omitted -43-
SECTION 3.4. Commitment Fee -43-
SECTION 3.5. Computation of Fees, Etc. -43-
SECTION 3.6. Voluntary Reductions of Facility. -43-
SECTION 3.7. Conversion or Continuation of Advances -43-
SECTION 3.8. Duration of Interest Periods; Number of
Borrowings -45-
SECTION 3.9. Voluntary Prepayments; Termination of Agreement
-45-
SECTION 3.10. Changed Circumstances -47-
SECTION 3.10A Replacement of Lender -50-
SECTION 3.11. Payments Not at End of Interest Period; Failure
to Borrow -51-
SECTION 3.12. Manner of Payment -52-
SECTION 3.13. Pro Rata Treatment; Settlement between Agent
and Lenders -52-
SECTION 3.14. Loan Account -53-
ARTICLE 4 - CONDITIONS PRECEDENT -55-
SECTION 4.1. Conditions Precedent to Effectiveness -55-
SECTION 4.2. Subsequent Borrowings -58-
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BORROWER -59-
SECTION 5.1. Representations and Warranties -59-
SECTION 5.2. Survival of Representations and Warranties, Etc.
-66-
ARTICLE 6 - SECURITY INTEREST -68-
SECTION 6.1. Security Interest -68-
SECTION 6.2. Continued Priority of Security Interest -69-
ARTICLE 7 - COLLATERAL COVENANTS -71-
SECTION 7.1. Collection of Receivables -71-
SECTION 7.2. Verification and Notification -72-
SECTION 7.3. Disputes, Returns and Adjustments -72-
SECTION 7.4. Invoices -72-
SECTION 7.5. Delivery of Instruments -73-
SECTION 7.6. Sales of Inventory -73-
SECTION 7.7. Work in Process -73-
SECTION 7.8. Ownership and Defense of Title -73-
SECTION 7.9. Insurance -74-
SECTION 7.10. Location of Offices and Collateral -75-
SECTION 7.11. Records Relating to Collateral -75-
SECTION 7.12. Inspection -75-
SECTION 7.13. Maintenance of Equipment -76-
SECTION 7.14. Information and Reports -76-
SECTION 7.15. Power of Attorney -77-
SECTION 7.16. Leaseholds -77-
SECTION 7.17. Motor Vehicle Title Certificates -78-
SECTION 7.18. Title Insurance -78-
ARTICLE 8 - AFFIRMATIVE COVENANTS -79-
SECTION 8.1. Preservation of Legal Existence and Similar
Matters -79-
SECTION 8.2. Compliance with Applicable Law -79-
SECTION 8.3. Maintenance of Property -79-
SECTION 8.4. Conduct of Business -79-
SECTION 8.5. Insurance -79-
SECTION 8.6. Payment of Taxes and Claims -80-
SECTION 8.7. Accounting Methods and Financial Records -80-
SECTION 8.8. Visits and Inspections -80-
SECTION 8.9. Use of Proceeds -81-
SECTION 8.10. Hazardous Waste and Substances; Environmental
Requirements -81-
SECTION 8.11. Loans to Foreign Subsidiaries -82-
ARTICLE 9 - INFORMATION -83-
SECTION 9.1. Financial Statements -83-
SECTION 9.2. Accountants' Certificate -84-
SECTION 9.3. Officer Certificate -84-
SECTION 9.4. Copies of Other Reports -85-
SECTION 9.5. Notice of Litigation and Other Matters -86-
SECTION 9.6. ERISA -86-
SECTION 9.7. Accuracy of Information -87-
SECTION 9.8. Revisions or Updates to Schedules -00-
XXXXXXX 00 - XXXXXXXX XXXXXXXXX -88-
SECTION 10.1. Financial Ratios -88-
SECTION 10.2. Indebtedness for Money Borrowed -89-
SECTION 10.3. Guaranties -90-
SECTION 10.4. Investments -90-
SECTION 10.5. Capital Expenditures -90-
SECTION 10.6. Restricted Payments and Purchases, Etc. -91-
SECTION 10.7. Merger, Consolidation and Sale of Assets -91-
SECTION 10.8. Transactions with Affiliates -91-
SECTION 10.9. Liens -91-
SECTION 10.10. Capitalized Lease Obligations -91-
SECTION 10.11. Operating Leases -91-
SECTION 10.12. Plans -91-
SECTION 10.13. Sales and Leasebacks -92-
SECTION 10.14. Prepayments of Indebtedness for
Money Borrowed -92-
SECTION 10.15. Change in Business -92-
SECTION 10.16. Issuance of Stock by Subsidiaries -92-
SECTION 10.17. No Amendment. -92-
ARTICLE 11 - DEFAULT -93-
SECTION 11.1. Events of Default -93-
SECTION 11.2. Remedies -97-
SECTION 11.3. Control by Majority Lenders -100-
SECTION 11.4. Application of Proceeds -100-
SECTION 11.5. Power of Attorney -101-
SECTION 11.6. Miscellaneous Provisions Concerning
Remedies -102-
ARTICLE 12 - AGENT -104-
SECTION 12.1. Grant of Authority -104-
SECTION 12.2. Action on Instructions -104-
SECTION 12.3. Responsibility of the Agent -104-
SECTION 12.4. Representations by the Lenders -105-
SECTION 12.5. Expenses and Indemnification -105-
SECTION 12.6. Rights of Agent -106-
SECTION 12.7. Right to Resign -106-
SECTION 12.8. Reliance by Borrower -106-
ARTICLE 13 - MISCELLANEOUS -107-
SECTION 13.1. Notices -107-
SECTION 13.2. Expenses -108-
SECTION 13.3. Stamp and Other Taxes -108-
SECTION 13.4. Setoff -108-
SECTION 13.5. Pro-Rata Participation -109-
SECTION 13.6. Litigation -110-
SECTION 13.7. Consent to Advertising and Publicity -111-
SECTION 13.8. Reversal of Payments -111-
SECTION 13.9. Injunctive Relief -111-
SECTION 13.10. Accounting Matters -111-
SECTION 13.11. Participations; Assignments -112-
SECTION 13.12. Amendments -115-
SECTION 13.13. Performance of Borrower's Duties -115-
SECTION 13.14. Indemnification -116-
SECTION 13.15. All Powers Coupled with Interest -116-
SECTION 13.16. Survival -116-
SECTION 13.17. Titles and Captions -117-
SECTION 13.18. Severability of Provisions -117-
SECTION 13.19. Governing Law -117-
SECTION 13.20. Counterparts -117-
SECTION 13.21. Reproduction of Documents -117-
SECTION 13.22. Term of Agreement -118-
SECTION 13.23. Effect of Effectiveness of Agreement -118-
ARTICLE 14 - GUARANTY OF FOREIGN FACILITY DEBT -119-
SECTION 14.1. Guaranty -119-
SECTION 14.2. Payment by Borrower -119-
SECTION 14.3. Waiver -119-
SECTION 14.4. Absolute Obligation -120-
SECTION 14.5. Payments Free and Clear of Taxes, Etc. -121-
SECTION 14.6. Currency Changes -121-
SECTION 14.7. Recovery of Payments -122-
SECTION 14.8. Subrogation -122-
SECTION 14.9. Consent to Amendments, Etc. -123-
SECTION 14.10. Binding Nature of Certain Adjudications -123-
SECTION 14.11. Validity and Enforceability of Guaranty -124-
EXHIBITS AND SCHEDULES
Exhibit A Form of Fourth Amended and Restated Revolving Credit Note
Exhibit B Form of Term Note
Exhibit C-1 Form of Opinion of Counsel for Borrower (Xxxxxx & Xxxx)
Exhibit C-2 Form of Opinion of Counsel for Borrower (Xxxxxx Xxxxxx
Butowsky Xxxxxxx Xxxxxx & Xxxx)
Exhibit C-3 Form of Opinion of Tennessee Counsel for Borrower
(Xxxxxx & Xxxxxx)
Exhibit D Financial Certificate
Exhibit E Form of Borrowing Base Certificate
Exhibit F Form of Notice of Borrowing
Exhibit G Form of Notice of Conversion or Continuation
Exhibit H Form of Assignment and Acceptance
Schedule 1.1 Mortgages
Permitted Liens
Foreign Facilities
Schedule 5.1(a) Jurisdictions in which Qualified
Schedule 5.1(b) Subsidiaries
Schedule 5.1(d) Conflicts
Schedule 5.1(f) Governmental Approvals
Schedule 5.1(g) Title Exceptions
Schedule 5.1(h) Liens
Schedule 5.1(i) Indebtedness for Money Borrowed and Guarantees
Schedule 5.1(j) Litigation
Schedule 5.1(k) Patents and Trademarks
Schedule 5.1(l) Tax Returns, etc.
Schedule 5.1(m) Burdensome Provisions
Schedule 5.1(p) Plans
Schedule 5.1(t) Principal Office and Location of Books and Records
Schedule 5.1(u) Location of Inventory
Schedule 5.1(v) Location of Equipment
Schedule 5.1(w) Real Property
Schedule 5.1(x) Corporate and Fictitious Names
Schedule 8.9 Use of Proceeds
FOURTH AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
Dated as of October 20, 1995
SYNTHETIC INDUSTRIES, INC., a Delaware corporation, as the Borrower,
hereby agrees with the financial institutions party to this Agreement from time
to time as the Lenders and THE FIRST NATIONAL BANK OF BOSTON, a national banking
association, as agent for the Lenders, as follows:
PRELIMINARY STATEMENT
The Borrower, as borrower, The First National Bank of Boston ("Bank of
Boston"), Sanwa Business Credit Corporation, and SouthTrust Bank of Georgia,
N.A. as lenders, and Bank of Boston, as agent for the lenders, are parties to a
Third Amended and Restated Revolving Credit and Security Agreement dated as of
January 13, 1995, as amended by Amendment No. 1 dated as of May 26, 1995 (said
Agreement, as so amended, the "Existing Credit Agreement"). As of the date of
this Agreement, the aggregate outstanding principal balance of the Revolving
Credit Loans, under and as defined in the Existing Credit Agreement, is
approximately $19,887,944.44, the aggregate principal balance of the Term Loan
outstanding under (and as defined in) the Existing Credit Agreement, is
approximately $25,500,000, the aggregate outstanding principal amount of Foreign
Facility Debt as defined in the Existing Credit Agreement is approximately
$112,000, and the aggregate face amount of outstanding Letters of Credit as
defined in the Existing Credit Agreement is $1,100,000.
The Borrower has requested certain modifications to the terms of the
Existing Credit Agreement, and the Lenders have agreed to such requested
modifications, all upon and subject to the terms, provisions and conditions
hereinafter set forth. The Borrower, the Lenders and the Agent have further
agreed, in connection with making such modifications to the Existing Credit
Agreement and for the convenience of the parties and others, to amend and
restate, in its entirety, the Existing Credit Agreement, including all such
agreed modifications thereto.
NOW, THEREFORE, in consideration of the foregoing, the modifications
to the Existing Credit Agreement and the mutual promises hereinafter set forth,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree that the Existing Credit
Agreement is hereby amended and restated in its entirety, subject to the
applicable conditions set forth in ARTICLE 4, as follows:
ARTICLE 1 - DEFINITIONS
SECTION 1.1. Definitions. For the purposes of this Agreement:
"Account Debtor" means a Person who is obligated on a Receivable.
"Acquire" or "Acquisition", as applied to any Business Unit or Investment,
means the acquiring or acquisition of such Business Unit or Investment by
purchase, exchange, issuance of stock or other securities, or by merger,
reorganization or any other method.
"Advance" means an advance by a Lender to the Borrower pursuant to ARTICLE
2 or ARTICLE 2A and refers to a Base Rate Advance or a Eurodollar Advance.
"Affiliate" means, with respect to a Person, any other Person (other than a
Subsidiary) that, (a) directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such given
Person, (b) directly or indirectly beneficially owns or holds ten percent (10%)
or more of any class of voting stock or partnership or other interest of such
Person or any Subsidiary of such Person, or (c) ten percent (10%) or more of the
voting stock or partnership or other interest of which is directly or indirectly
beneficially owned or held by such Person or a Subsidiary of such Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, partnership or other interests
by contract or otherwise. SI Management, Synthetic Management and Synthetic
L.P. each shall be deemed to be an Affiliate of the Borrower.
"Agency Account" means an account of the Borrower maintained by it with a
Clearing Bank pursuant to an Agency Account Agreement.
"Agency Account Agreement" means an agreement among the Borrower, the Agent
on behalf of the Lenders and a Clearing Bank concerning the collection of
payments which represents the proceeds of Receivables or of any other
Collateral.
"Agent" means Bank of Boston and any successor Agent appointed pursuant to
SECTION 12.7.
"Agent's Office" means the office of the Agent designated as such from time
to time as provided in SECTION 13.1(C).
"Agreement" means and includes the Existing Credit Agreement as amended and
restated by this Fourth Amended and Restated Revolving Credit and Security
Agreement, including all Schedules, Exhibits and other attachments hereto, and
all amendments, modifications and supplements thereto and hereto.
"Agreement Date" means the date as of which this Agreement is dated.
"Applicable Law" means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all governmental bodies and of all
orders and decrees of all courts and arbitrators, including, without limitation,
of all Environmental Laws.
"Applicable Margin" means (a) as to the Base Rate, 0.75% as to each Base
Rate Advance made as part of a Borrowing under the Revolving Credit Facility and
1% as to each Base Rate Advance made as part of a Borrowing under the Term Loan
Facility, and (b) as to the Eurodollar Rate, 2.50% as to each Eurodollar Advance
made as part of a Borrowing under the Revolving Credit Facility and 2.75% as to
each Eurodollar Advance made as part of a Borrowing under the Term Loan
Facility.
"Assignment and Acceptance" means an assignment and acceptance in the form
attached hereto as EXHIBIT H assigning all or a portion of a Lender's interests,
rights and obligations under this Agreement pursuant to SECTION 13.11.
"Authorized Officer" means those officers of the Borrower authorized to
execute and deliver Loan Documents and to request Borrowings and identified in
the certificate described in SECTION 4.1(A)(III) or from time to time thereafter
pursuant to authorizations in form and substance satisfactory to the Agent.
"Bank of Boston" means The First National Bank of Boston, Boston,
Massachusetts, and its successors and assigns.
"Base Rate" means at any time the greater of (i) the rate of interest
announced from time to time by Bank of Boston at its head office at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, as its "base rate" at such time (or the
comparable rate of any successor Agent acting as such at such time) and (ii) 1/2
of 1% per annum over the Federal Funds Effective Rate at such time (rounded
upwards, if necessary, to the next higher 1/8 of 1%).
"Base Rate Advance" means an Advance bearing interest determined with
reference to the Base Rate.
"Basket Debt" means outstanding "Indebtedness" (as defined in the
Indenture) of the Borrower (other than the Loans) that is "Permitted
Indebtedness" (as defined in the Indenture) solely by reason of the provisions
of clause (x) of the Indenture definition "Permitted Indebtedness."
"Borrower" means Synthetic Industries, Inc., a Delaware corporation, and
its successors and assigns.
"Borrowing" means all Advances of the same Type made by the Lenders, or
converted or continued by the Borrower (or otherwise in accordance with the
provisions of SECTION 3.7) on the same date for the same Interest Period (if
applicable).
"Borrowing Base" means, at any time, an amount equal to the lesser of
(a) the Revolving Credit Facility in effect at such time MINUS the
Letter of Credit Reserve MINUS the Foreign Facility Reserve MINUS any Basket
Debt MINUS the Interest Rate Protection Reserve, and
(b) the sum of
(i) 85% (or such lesser percentage as the Majority Lenders in
their sole discretion determine from time to time) of the face value of
Eligible Receivables due and owing at such time, PLUS
(ii) the lesser of
(A) $20,000,000, and
(B) 50% (or such lesser percentage as the Majority
Lenders in their sole discretion determine from time to time) of the
lesser of cost (on a full absorption basis), determined on a first-in-
first-out or FIFO accounting basis, and fair market value of Eligible
Inventory at such time, MINUS
(iii) the Letter of Credit Reserve MINUS
(iv) the Foreign Facility Reserve MINUS
(v) any Basket Debt MINUS
(vi) the Interest Rate Protection Reserve.
"Borrowing Base Certificate" means a certificate in the form attached
hereto as EXHIBIT E.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banks in Boston, Massachusetts, New York, New York or Atlanta, Georgia are
authorized to close, and, with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Advances,
any day that is also a day for trading by and between banks in Dollar deposits
in the interbank Eurodollar market.
"Business Unit" means the assets constituting the business or a division or
operating unit thereof of any Person.
"Capital Expenditures" means, with respect to any Person, all expenditures
made or liabilities incurred for the acquisition of assets (other than an
Acquisition of assets which constitute a Business Unit or the purchase of
Inventory) which are not, in accordance with GAAP, treated as expense items for
such Person in the year made or incurred or as a prepaid expense applicable to a
future year or years.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Chief Financial Officer" means the Chief Financial Officer of the
Borrower, who currently is Xxx X. Xxxxxxx.
"Clearing Bank" means a banking institution with which an Agency Account
has been established pursuant to an Agency Account Agreement.
"Collateral" means and includes all of the Borrower's right, title and
interest in and to each of the following, wherever located and whether now or
hereafter existing or now owned or hereafter acquired or arising:
(a) all Receivables,
(b) all Inventory,
(c) all Equipment,
(d) all Foreign Subsidiary Stock,
(e) all Foreign Subsidiary Debt,
(f) all General Intangibles,
(g) all Patent Collateral,
(h) all Trademark Collateral,
(i) all goods and other property, whether or not delivered,
(i) the sale or lease of which gives or purports to give rise to
any Receivable, including, but not limited to, all merchandise returned or
rejected by or repossessed from customers, or
(ii) securing any Receivable,
including, without limitation, all rights as an unpaid vendor or lienor
(including, without limitation, stoppage in transit, replevin and reclamation)
with respect to such goods and other properties,
(j) All mortgages, deeds to secure debt and deeds of trust on
real or personal property, guaranties, leases, security agreements, and other
agreements and property which secure or relate to any Receivable, or other
Collateral, or are acquired for the purpose of securing and enforcing any item
thereof,
(k) all documents of title, including bills of lading and warehouse
receipts, policies and certificates of insurance, securities, chattel paper, and
any other documents and instruments,
(l) all files, correspondence, computer programs, tapes, discs and
related data processing software which contain information identifying or
pertaining to any of the Collateral, including, without being limited to, any
Receivables or any Account Debtor, or showing the amounts thereof or payments
thereon or otherwise necessary or helpful in the realization thereon or the
collection thereof,
(m) all cash or property deposited with a Lender or any Affiliate of a
Lender or in any Agency Account or which a Lender or such Affiliate is entitled
to retain or otherwise possess as Collateral pursuant to the provisions of this
Agreement, any of the Security Documents, any agreement relating to any Letters
of Credit or any Interest Rate Protection Agreement or foreign exchange
arrangement or agreement,
(n) any demand, time, savings, passbook, money market or like
depository account, and all certificates of deposit, maintained with a bank,
savings and loan association, credit union or like organization, other than an
account evidenced by a certificate of deposit that is an instrument under the
UCC,
(o) all general intangibles, including, without limitation, all tax
refunds, trademarks, trade names, patents, patent applications, trade secrets
and proprietary information, and
(p) any and all products and cash and non-cash proceeds of the
foregoing (including, but not limited to, any claims to any items referred to in
this definition, and any claims against third parties for loss of, damage to or
destruction of any or all of the Collateral or for proceeds payable under or
unearned premiums with respect to policies of insurance) in whatever form,
including, but not limited to, cash, negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements and
other documents.
"Commitment" means, as to each Lender, the amount set forth opposite such
Lender's name on ANNEX A hereto under the caption "Commitment," as such amount
may be reduced pursuant to SECTION 3.6 or otherwise modified as reflected in the
Register (as defined in SECTION 13.11(D) below).
"Commitment Percentage" of any Lender means the percentage set forth
opposite the name of such Lender on ANNEX A hereto.
"Consolidated" or "Consolidation" means the consolidation in accordance
with GAAP of the accounts or items as to which such term applies.
"Consolidated Subsidiaries" means the Foreign Subsidiaries and such other
Subsidiaries whose Consolidation with the Borrower is consented to from time to
time in writing by the Majority Lenders.
"Controlled Disbursement Account" means the account maintained by and in
the name of the Borrower with the Disbursing Bank for the purposes of disbursing
Revolving Credit Loan proceeds and amounts deposited thereto pursuant to
SECTION 7.1(B).
"Default" means any of the events specified in SECTION 11.1 which with the
passage of time or giving of notice or both would constitute an Event of
Default.
"Designated Deposit Account" means a deposit account to be maintained by
the Borrower with the Agent at the Agent's Office, as from time to time
designated by the Borrower by written notification to the Agent.
"Disbursing Bank" means any United States commercial bank with which a
Controlled Disbursement Account is maintained.
"Dollar" and "$" means freely transferrable United States dollars.
"Dollar Equivalent" of the principal or face amount of any Foreign Facility
Debt means, at any time, the amount in Dollars for which such principal or face
amount could be exchanged as determined by the spot rate quoted by the principal
office of the Agent's Affiliate in London at 11:00 A.M. (London time) two
Business Days prior to the date on which such equivalent is to be determined.
"EBITDA" means, for any period, Consolidated Net Income of the Borrower and
its Consolidated Subsidiaries for such period, PLUS any amount in respect of
federal or state income taxes, interest expense, depreciation expense or
amortization expense in connection with intangible assets, and MINUS any amount
in respect of federal or state income tax refunds or interest income, in each
case of the Borrower and its Consolidated Subsidiaries for the same period, to
the extent deducted or included, as the case may be, in computing such
Consolidated Net Income.
"Effective Date" means the later of:
(a) the Agreement Date, and
(b) the date on which the applicable conditions set forth in ARTICLE
4 shall first have been fulfilled.
"Effective Interest Rate" means the rate of interest per annum on the Loans
in effect from time to time pursuant to the provisions of SECTIONS 3.1(A), (B),
(C) AND (D).
"Eligible Assignee" means (i) a commercial bank organized under the laws of
the United States, or any State thereof, having total assets in excess of
$3,000,000,000 or any commercial finance or asset-based lending affiliate of any
such commercial bank, having total assets in excess of $3,000,000,000; (ii) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof, having a net worth of at least $250,000,000
calculated in accordance with GAAP; (iii) any Person, having a net worth of at
least $250,000,000 calculated in accordance with GAAP, whose primary business is
asset-based lending; and (iv) any Lender listed on the signature page of this
Agreement; PROVIDED in each case that the representation contained in SECTION
12.4 hereof shall be applicable with respect to such institution or Lender.
"Eligible Inventory" means Inventory which the Majority Lenders in their
sole discretion determine to meet all of the following requirements:
(a) such Inventory is owned by the Borrower, is subject to the
Security Interest, which is perfected as to such Inventory, and is subject to no
other Lien whatsoever other than a Permitted Lien,
(b) such Inventory consists of either raw materials or finished goods
(but does not include supplies and packaging used or consumed in packaging,
packing, shipping, advertising, selling or leasing such raw materials or
finished goods),
(c) such Inventory is in good condition and meets, in all material
respects, all standards imposed by any governmental agency, or department or
division thereof, having regulatory authority over such goods, their use or
sale,
(d) such Inventory is currently either usable or salable, at prices
approximating at least cost, in the normal course of the Borrower's business,
(e) such Inventory is located at one of the locations set forth in the
most recent Schedule of Inventory and, if such location is premises leased by
the Borrower, the landlord at such location has agreed in writing, in form and
substance satisfactory to the Agent, to waive any lien such landlord may have on
the Inventory,
(f) such Inventory does not exceed six months' sales determined on the
basis of average monthly sales for the 12 months immediately preceding the date
of determination and does not include any item of a product line or type of
Inventory of which no sales have been made during the 180 days immediately
preceding the date of determination,
(g) such Inventory is not Inventory of the Borrower's Lumite Division,
and
(h) such Inventory is not determined by the Majority Lenders to be
ineligible based on customary credit and collateral criteria utilized by asset
based lenders.
"Eligible Receivable" means a Receivable which the Majority Lenders in
their sole discretion determine to meet all of the following requirements:
(a) such Receivable is owned by the Borrower and represents a complete
bona fide transaction which requires no further act under any circumstances on
the part of the Borrower to make such Receivable payable by the Account Debtor,
(b) such Receivable is not past due more than 60 days from the due
date of the original invoice,
(c) the goods the sale of which gave rise to such Receivable were
shipped or delivered to the Account Debtor on an absolute sale basis and not on
a xxxx and hold sale basis, a consignment sale basis, a guaranteed sale basis, a
sale or return basis, or on the basis of any other similar understanding and no
material part of such goods has been returned or rejected,
(d) such Receivable is not evidenced by chattel paper or an instrument
of any kind unless such chattel paper or instrument has been delivered to and is
in the possession of the Agent,
(e) the Account Debtor with respect to such Receivable is not
insolvent or the subject of any bankruptcy or insolvency proceedings of any kind
or of any other proceeding or action, threatened or pending, which might have a
Materially Adverse Effect on such Account Debtor,
(f) such Receivable is not owing by an Account Debtor having 50% or
more in face value of its then-existing Receivables owing to the Borrower past
due more than 60 days from the due date of the original invoice,
(g) such Receivable is not owing by an Account Debtor (other than Xxxx
Industries, Inc.) whose then-existing Receivables owing to the Borrower exceed
in face amount 15% of the Borrower's total Eligible Receivables or 35% of the
Borrower's total Eligible Receivables if the Account Debtor thereon is Xxxx
Industries, Inc. (PROVIDED that in each case only such excess shall be excluded
from Eligible Receivables pursuant to this CLAUSE (G)),
(h) if such Receivable arises from the performance of services, such
services have been fully rendered,
(i) such Receivable is a valid, legally enforceable obligation of the
Account Debtor with respect thereto and is not subject to any present, or
contingent, and no facts exist which are the basis for any future, offset,
deduction or counterclaim, dispute or other defense on the part of such Account
Debtor,
(j) such Receivable is subject to the Security Interest, which is
perfected as to such Receivable, and is subject to no other Lien whatsoever
other than a Permitted Lien,
(k) such Receivable is evidenced by an invoice or other documentation
in form acceptable to the Majority Lenders in their reasonable judgment,
(l) such Receivable does not arise out of any transaction with any
Subsidiary or Affiliate of the Borrower,
(m) such Receivable is not subject to the Assignment of Claims Act of
1940, as amended from time to time, or any Applicable Law now or hereafter
existing similar in effect thereto, or to any provision prohibiting its
assignment or requiring notice of or consent to such assignment, unless all such
required notices have been given, all such required consents have been received
and all other procedures have been complied with such that such Receivable shall
have been duly and validly assigned to the Agent on behalf of the Lenders
pursuant to ARTICLE 6,
(n) the goods giving rise to such Receivable were not, at the time of
the sale thereof, subject to any Lien except the Security Interest and Permitted
Liens,
(o) if the Account Debtor with respect to such Receivable is not
located in Canada or the United States of America, the face value of such
Receivable when added to the aggregate face value of all other Receivables the
Account Debtors in respect of which are not located in Canada or the United
States of America, does not exceed 15% of the Borrower's total Eligible
Receivables, and
(p) neither the Account Debtor with respect to such Receivable, nor
such Receivable, is determined by the Majority Lenders to be ineligible based on
customary credit and collateral criteria utilized by asset based lenders.
"Environmental Laws" means all federal, state, local and foreign laws now
or hereafter in effect relating to pollution or protection of the environment,
including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water, or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes, and any and all regula
tions, codes, plans, orders, decrees, judgments, injunctions, notices or demand
letters issued, entered, promulgated or approved thereunder.
"Equipment" means and includes, all machinery, apparatus, equipment,
fittings, fixtures and other tangible personal property (other than Inventory)
of every kind and description used in a Person's business operations or owned by
a Person or in which a Person has an interest, and all parts, accessories and
special tools and all increases and accessions thereto and substitutions and
replacements therefor and shall include, without limitation, all property that
would be included in the term "equipment" or "fixture" as defined in the UCC.
"ERISA" means the Employee Retirement Income Security Act of 1974, as in
effect from time to time.
"Eurocurrency Liability" has the meaning specified in Regulation D (or any
successor regulation) of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Advance" means an Advance bearing interest at a rate determined
with reference to the Eurodollar Rate.
"Eurodollar Rate" means for the Interest Period for each Eurodollar Advance
made as part of the same Borrowing, a rate of interest determined by Bank of
Boston to be the prevailing rate per annum at which deposits in Dollars are
offered to Bank of Boston by first-class banks in the interbank Eurodollar
market in which it regularly participates on or about 10:00 a.m. (Boston time)
two Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of such Borrowing for a period
approximately equal to such Interest Period.
"Eurodollar Reserve Percentage" applicable to any Interest Period as to
each Lender, means the rate (expressed as a decimal) applicable to such Lender
during such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System for determining the reserve
requirement (including, without limitation, any basic, supplemental, emergency
or marginal reserve requirement) of such Lender with respect to Eurocurrency
Liabilities.
"Event of Default" means any of the events specified in SECTION 11.1,
provided that any requirement for notice or lapse of time or any other condition
has been satisfied.
"Existing Guaranties" means the Guaranties outstanding on the Agreement
Date to the extent set forth on SCHEDULE 5.1(I).
"Existing Indebtedness" means Indebtedness issued and outstanding on the
Agreement Date to the extent set forth on SCHEDULE 5.1(I) and any renewals,
extensions or refundings thereof, but not any increases in principal amounts
thereof outstanding on the date of such renewal, extension or refunding.
"Existing Liens" means the Liens outstanding on the Agreement Date to the
extent set forth on SCHEDULE 5.1(H).
"Federal Funds Effective Rate" means for any day, the interest rate per
annum 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, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by the
Agent.
"Financing Statements" means any and all Uniform Commercial Code financing
statements executed and delivered by the Borrower to the Agent, naming the Agent
on behalf of the Lenders as secured party and the Borrower as debtor, in
connection with this Agreement and the Mortgages.
"Foreign Facilities" means any and all loan facilities, guarantees, letters
of credit or other financial accommodations, listed on SCHEDULE 1.1 - FOREIGN
FACILITIES or made at any time and from time to time on or after the Effective
Date, in each case made by any of the Lenders or any Affiliate of a Lender
directly to or for the benefit of any of the Foreign Subsidiaries.
"Foreign Facility Agreements" means any and all notes, letters of credit,
guarantees, instruments, agreements and other documents given as evidence of, as
security for or in extension or renewal of, or otherwise executed in connection
with, the Foreign Facilities.
"Foreign Facility Debt" means the aggregate amount determined from time to
time to be the Dollar Equivalent of the Indebtedness outstanding from time to
time under the Foreign Facilities.
"Foreign Facility Reserve" means, on any date, the aggregate amount of all
Foreign Facility Debt outstanding and unpaid on the last day of the calendar
month next preceding the date of determination.
"Foreign Subsidiaries" means, collectively, SIE and Fibermesh GmbH.
"Foreign Subsidiary Debt" means all Indebtedness at any time and from time
to time of each of the Foreign Subsidiaries to the Borrower and all instruments,
documents and agreements evidencing, securing or otherwise relating thereto.
"Foreign Subsidiary Stock" means all of the issued and outstanding capital
stock of SIE.
"GAAP" means generally accepted accounting principles consistently applied
and maintained throughout the period indicated and, when used with reference to
the Borrower or its Consolidated Subsidiaries, consistent with the prior
financial practice of the Borrower; PROVIDED, HOWEVER, that, in the event that
changes shall be mandated by the Financial Accounting Standards Board or any
similar accounting authority of comparable standing, or shall be recommended by
Borrower's certified public accountants, such changes shall be included in GAAP
only from and after such date as the Borrower and the Majority Lenders shall
have amended this Agreement to the extent necessary to reflect any such changes
in the financial covenants set forth in ARTICLE 10.
"General Intangibles" means any and all of the Borrower's rights under
contracts not yet earned by performance and not evidenced by an instrument or
chattel paper and all of the Borrower's now owned or hereafter acquired general
intangibles, choses in action and causes of action and all other intangible
personal property of the Borrower of every kind and nature (other than
Receivables), including, without limitation, all Patent Collateral, Trademark
Collateral, corporate or other business records, inventions, designs,
blueprints, plans, specifications, trade secrets, goodwill, computer software,
customer lists, registrations, licenses, franchises, tax refund claims,
reversions or any rights thereto and any other amounts payable to the Borrower
from any Plan or other employee benefit plan, rights and claims against carriers
and shippers, rights to indemnification, business interruption insurance and
proceeds thereof, property, casualty or any similar type of insurance and any
proceeds thereof, proceeds of insurance covering the lives of key employees on
which the Borrower is beneficiary and any letter of credit, guarantee, claim,
security interest or other security held by or granted to the Borrower to secure
payment by an Account Debtor of any of the Receivables.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
governmental bodies, whether federal, state, foreign, national, provincial or
local, and all agencies thereof.
"Guaranteed Foreign Facility Obligations" means any and all obligations
Guaranteed by the Borrower pursuant to ARTICLE 14 hereof.
"Guaranty", "Guaranteed" or to "Guarantee" as applied to any obligation of
another Person shall mean and include
(a) a guaranty (other than by endorsement of negotiable instruments
for collection in the ordinary course of business), directly or indirectly,
in any manner, of any part or all of such obligation of such other Person, and
(b) an agreement, direct or indirect, contingent or otherwise, and
whether or not constituting a guaranty, the practical effect of which is to
assure the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation of such other Person
whether by
(i) the purchase of securities or obligations,
(ii) the purchase, sale or lease (as lessee or lessor) of
property or the purchase or sale of services primarily for the purpose of
enabling the obligor with respect to such obligation to make any payment or
performance (or payment of damages in the event of nonperformance) of or on
account of any part or all of such obligation, or to assure the owner of
such obligation against loss,
(iii) the supplying of funds to or in any other manner
investing in the obligor with respect to such obligation,
(iv) repayment of amounts drawn down by beneficiaries of
letters of credit, or
(v) the supplying of funds to or investing in a Person on
account of all or any part of such Person's obligation under a Guaranty of
any obligation or indemnifying or holding harmless, in any way, such Person
against any part or all of such obligation.
"Indebtedness" as applied to a Person means, without duplication,
(a) all items (except items of capital stock, additional paid-in
capital or retained earnings, or of general contingency) which in accordance
with GAAP would be included in determining total liabilities as shown on the
liability side of a balance sheet of such Person as at the date as of which
Indebtedness is to be determined,
(b) all obligations for money borrowed or for the deferred purchase
price of property or services,
(c) all obligations (including, during the noncancellable term of any
lease in the nature of a title retention agreement, all future payment
obligations under such lease discounted to their present value in accordance
with GAAP) secured by any Lien to which any property or asset owned or held by
such Person is subject, whether or not the obligation secured thereby shall have
been assumed or is non-recourse,
(d) all obligations of other Persons which such Person has
Guaranteed, including, but not limited to, all obligations of such Person
consisting of recourse liability with respect to accounts receivable sold or
otherwise disposed of by such Person,
(e) in the case of the Borrower (without duplication) all obligations
under the Loans and the Senior Subordinated Debt, and
(f) all obligations (including contingent obligations) of such Person
in respect of Interest Rate Protection Agreements.
"Indenture" means the Indenture dated as of December 14, 0000, xxxxxxx xxx
Xxxxxxxx xxx Xxxxxx Xxxxxx Trust Company of New York, Trustee, as supplemented
by a Supplemental Indenture dated as of October 20, 1995, pursuant to which the
Senior Subordinated Debentures are issued, as the same may be amended, modified
or supplemented from time to time as permitted hereby.
"Initial General Partners" means, collectively, Chill Investments, Inc., a
Delaware corporation, Xxxxxxx Investments, Inc., a Delaware corporation, Xxxxxx
Investments, Inc., a Delaware corporation, Kenner Investments, Inc., a Delaware
corporation and Freed Investments, Inc., a Delaware corporation.
"Installment Payment Date" means the first day of each calendar month
commencing November 1, 1998.
"Interest Payment Date" means the first day of each calendar month,
commencing November 1, 1995 and continuing thereafter until the Secured
Obligations have been irrevocably paid in full.
"Interest Period" means as to each Borrowing consisting of Eurodollar
Advances, the period commencing on the date of the making or continuation of or
conversion to such Borrowing and ending one, two, three or six months
thereafter, as the Borrower may elect in the applicable Notice of Borrowing or
Notice of Conversion or Continuation, provided that:
(a) no Interest Period applicable to a Borrowing under the Revolving
Credit Facility shall end after the Termination Date;
(b) no Interest Period applicable to a Borrowing constituting part of
the Term Loan shall end after the final maturity date of the Term Loan nor end
after any applicable Installment Payment Date unless an aggregate principal
amount of Borrowings constituting part of the Term Loan at least equal to the
principal amount due on such Installment Payment Date shall consist of Base Rate
Advances or of other Borrowings consisting of Eurodollar Advances having
Interest Periods that end on or before such Installment Payment Date;
(c) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in the next calendar month or such extension would conflict
with clause (a) or (b) above, in which case such Interest Period shall end on
the immediately preceding Business Day;
(d) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of a calendar month; and
(e) no Interest Period shall be available for a duration of less than
one month.
"Interest Rate Protection Agreement" shall mean an interest rate swap, cap
or collar agreement or similar arrangement between any Person and a financial
institution providing for the transfer or mitigation of interest risks either
generally or under specific contingencies.
"Interest Rate Protection Reserve" means, on any date, the aggregate amount
of the estimated liability of the Borrower and its Subsidiaries under all
Interest Rate Protection Agreements, as determined by the Agent using its
customary practices and criteria.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
"Inventory" means and includes,
(a) all goods intended for sale or lease by a Person, or for display
or demonstration, including, without limitation, in the case of the Borrower,
all primary and secondary carpet backing, bale wrap, intermediate bulk
containers, geo-textiles, yarns, concrete additives and industrial fabrics,
(b) all work in process,
(c) all raw materials and other materials and supplies of every
nature and description used or which might be used in connection with the
manufacture, packing, shipping, advertising, selling, leasing or furnishing of
such goods or otherwise used or consumed in a Person's business,
(d) all documents evidencing and General Intangibles relating to any
of the foregoing, and
(e) shall include, without limitation, all property that would be
included in the term "inventory" of a Person as defined in the UCC.
"Investment" means, with respect to any Person:
(a) any share of capital stock, partnership interest, evidence of
Indebtedness or other security issued by any other Person,
(b) any loan, advance or extension of credit to, or contribution to
the capital of, any other Person,
(c) any Guaranty of the obligation of any other Person,
(d) any other investment (other than the Acquisition of a Business
Unit) in any other Person, and
(e) any commitment or option to make an Investment if, in the case of
an option, the consideration therefor exceeds $100.
"Lender" means, at any time, any financial institution party to this
Agreement as a "Lender" at such time, including any such Person becoming a party
hereto pursuant to assignment from another Lender, and each of their respective
successors and assigns.
"Lender's Office" means the office of each Lender specified in or
determined in accordance with the provisions of SECTION 13.1.
"Letter of Credit" means any letter of credit outstanding on the Effective
Date as a "Letter of Credit" under the Existing Credit Agreement or issued by
Bank of Boston for the account of the Borrower pursuant to the provisions of
ARTICLE 2B.
"Letter of Credit Facility" means at any time obligations arising under
Letters of Credit in the aggregate face amount of up to the lesser of (a) the
excess of the Borrowing Base (before deduction of the Letter of Credit Reserve)
over the sum of the principal amount of the Revolving Credit Loan outstanding at
such time, and (b) $3,000,000.
"Letter of Credit Reserve" means at any time an amount equal to the sum of
the aggregate face amount of all Letters of Credit PLUS unsatisfied
reimbursement obligations in respect of Letters of Credit, outstanding at such
time.
"Lien" as applied to the property of any Person means:
(a) any mortgage, deed to secure debt, deed of trust, lien, pledge,
charge, lease constituting a Capitalized Lease Obligation, conditional sale or
other title retention agreement, or other security interest, security title or
encumbrance of any kind in respect of any property of such Person, or upon the
income or profits therefrom,
(b) any arrangement, express or implied, under which any property of
such Person is transferred, sequestered or otherwise identified for the purpose
of subjecting the same to the payment of Indebtedness or performance of any
other obligation in priority to the payment of the general, unsecured creditors
of such Person,
(c) any Indebtedness which is unpaid more than 60 days after the same
shall have become due and payable and which if unpaid might by law (including
but not limited to bankruptcy and insolvency laws), or otherwise, be given any
priority whatsoever over general unsecured creditors of such Person, and
(d) the filing of, or any agreement to give, any financing statement
under the Uniform Commercial Code or its equivalent in any jurisdiction.
"Loan" means the Revolving Credit Loan or the Term Loan, and "Loans" means
more than one such Loan.
"Loan Documents" means collectively this Agreement, the Notes, the Security
Documents and each other instrument, agreement or document executed by the
Borrower or any Affiliate or Subsidiary of the Borrower in connection with this
Agreement.
"Loan Party" means the Borrower and each Subsidiary and Affiliate of the
Borrower that is a party to one or more of the Loan Documents.
"Lockbox" means a U. S. Post Office Box specified in, or pursuant to, an
Agency Account Agreement.
"Majority Lenders" means Lenders whose outstanding Loans aggregate at least
66-2/3% of all outstanding Loans or, if no Loans are outstanding, Lenders whose
Commitments represent at least 66-2/3% of the Commitments of all Lenders.
"Materially Adverse Effect" means, with respect to any Person, a materially
adverse effect upon such Person's business, assets, liabilities, condition
(financial or otherwise), results of operations or business prospects.
"Money Borrowed" means, as applied to Indebtedness,
(a) Indebtedness for money borrowed,
(b) Indebtedness, whether or not in any such case the same was for
money borrowed,
(i) represented by notes payable, and drafts accepted, that
represent extensions of credit,
(ii) constituting obligations evidenced by bonds, debentures,
notes or similar instruments, or
(iii) upon which interest charges are customarily paid or that
was issued or assumed as full or partial payment for property,
(c) Indebtedness that constitutes a Capitalized Lease Obligation, and
(d) Indebtedness that is such by virtue of CLAUSE (D) of the
definition thereof, but only to the extent that the obligations Guaranteed
are obligations that would constitute Indebtedness for Money Borrowed.
"Mortgages" means and includes any and all of the mortgages, deeds of
trust, deeds to secure debt and other instruments (including any and all
assignments of any of the foregoing) executed and delivered by the Borrower to
or for the benefit of the Lenders in connection with this Agreement, including,
without limitation, each of such instruments listed on SCHEDULE 1.1 - MORTGAGES
hereto, as the same may be modified from time to time.
"Multiemployer Plan" has the meaning set forth in Section 4001(a)(3) of
ERISA, as amended or revised from time to time.
"Net Amount" means, with respect to any Investments made by any Person, the
gross amount of all such Investments MINUS the aggregate amount of all cash
received and the fair value, at the time of receipt by such Person, of all
property received as payments of principal or premiums, returns of capital,
liquidating dividends or distributions, proceeds of sale or other dispositions
with respect to such Investments.
"Net Income" means, as applied to any Person, the net income (or net loss)
of such Person for the period in question after giving effect to deduction of or
provision for all operating expenses, all taxes and reserves (including reserves
for deferred taxes) and all other proper deductions, all determined in accor
dance with GAAP provided that there shall be excluded:
(a) any restoration of any contingency reserve, except to the extent
that provision for such reserve was made out of income during such period,
(b) any net gains or losses on the sale or other disposition, not in
the ordinary course of business, of Investments, Business Units and other
capital assets, provided that there shall also be excluded any related charges
for taxes thereon,
(c) any net gain arising from the collection of the proceeds of any
insurance policy,
(d) any write-up of any asset, and
(e) any other extraordinary item.
"Net Worth" means, with respect to any Person, such Person's total
shareholders' equity (including capital stock, additional paid-in capital and
retained earnings, after deducting treasury stock) which would appear as such on
a balance sheet of such Person prepared in accordance with GAAP.
"Note" means any of the Revolving Credit Notes or the Term Notes, and
"Notes" means more than one such Note.
"Notice of Borrowing" has the meaning specified in SECTION 2.2(A).
"Notice of Conversion or Continuation" has the meaning specified in SECTION
3.7(B).
"Operating Cash Flow" means, for any period of four consecutive fiscal
quarters of the Borrower, EBITDA for such period, MINUS
(a) the amount of any federal or state income taxes paid in cash by
the Borrower and its Consolidated Subsidiaries during such period (net of any
cash refunds of federal or state income taxes received during such period),
MINUS
(b) an amount equal to the lesser of (i) Capital Expenditures during
such period and (ii)(A) for any such period ending after the Effective Date and
on or before September 30, 1996, $6,000,000 and (B) for any such period ending
thereafter, $10,000,000.
"Operating Lease" means any lease (other than a lease constituting a
Capitalized Lease Obligation) of real or personal property, having a stated term
of 12 months or more, including specified renewals and extensions exercisable at
the option of the Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
agency.
"Patent Assignment" means, collectively, the Assignment for Security, dated
December 2, 1986, and the Security Assignment (Patents) dated as of March 12,
1992, each made by the Borrower to the Agent, for the benefit of the Lenders,
with respect to certain patents owned by the Borrower, as such documents may
have been or may be amended or supplemented from time to time.
"Patent Collateral" means and includes, in each case whether now existing
or hereafter arising,
(a) any and all patents and patent applications, together with any
reissue, continuation, continuation-in-part or extension of any thereof,
(b) the inventions which are the subject matter thereof, and
(c) all proceeds of any of the foregoing.
"Pending Borrowing" has the meaning specified in SECTION 3.10(A).
"Permitted Investments" means:
(a) Investments of the Borrower in:
(i) negotiable certificates of deposit, time deposits and
banker's acceptances issued by a Lender or an Affiliate of a Lender or by
any United States bank or trust company having capital, surplus and
undivided profits in excess of $100,000,000,
(ii) any direct obligation of the United States of America or
any agency or instrumentality thereof which has a remaining maturity at
the time of purchase of not more than one year and repurchase agreements
relating to the same,
(iii) sales on credit and employee or similar advances in the
ordinary course of business,
(iv) notes, accepted in the ordinary course of business,
evidencing overdue accounts payable arising in the ordinary course of
business, and
(v) existing Investments in Foreign Subsidiaries, and
Investments in Foreign Subsidiaries arising after the Effective Date,
including those in connection with the Foreign Facilities, not in excess of
$100,000 in the aggregate at any time;
(b) other Investments of the Borrower, the Net Amount of which does
not at any time exceed $100,000; and
(c) Investments of any Subsidiary of the Borrower in notes made to
such Subsidiary by the Borrower or by any other Subsidiary of the Borrower.
"Permitted Liens" means:
(a) Liens securing taxes, assessments and other governmental charges
or levies (excluding any Lien imposed pursuant to any of the provisions of
ERISA) or the claims of materialmen, mechanics, carriers, warehousemen or
landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business, but (i) in all cases only if payment shall not at the time
be required to be made in accordance with SECTION 8.6 and (ii) in the case of
landlords, only if such liens are junior to the Security Interest in any of the
Collateral,
(b) Liens consisting of deposits or pledges made in the ordinary
course of business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar legislation,
(c) Liens constituting encumbrances in the nature of zoning
restrictions, easements, and rights or restrictions of record on the use of real
property, which do not materially detract from the value of such property or
impair the use thereof in the business of the Borrower,
(d) Liens shown on SCHEDULE 1.1 - PERMITTED LIENS,
(e) Purchase Money Liens, and
(f) Liens of the Agent and the Lenders arising under this Agreement
and the other Loan Documents.
"Permitted Purchase Money Indebtedness" means Purchase Money Indebtedness
of the Borrower incurred after the Agreement Date
(a) which is secured by a Purchase Money Lien,
(b) the aggregate principal amount of which does not exceed an
amount equal to 80% of the lesser of
(i) the cost (including the principal amount of such
indebtedness, whether or not assumed) of the property subject to such
Lien, and
(ii) the fair value of such property at the time of its
acquisition, and
(iii) which, when aggregated with the principal amount of all
other such Indebtedness and Capitalized Lease Obligations of the
Borrower incurred after the Agreement Date does not exceed $5,000,000
For the purposes of this definition, the principal amount of any Purchase Money
Indebtedness consisting of Capitalized Leases shall be computed as a Capitalized
Lease Obligation.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or unincorporated organization, or a government or
any agency or political subdivision thereof.
"Plan" means an employee benefit plan maintained for employees of the
Borrower that is covered by Title IV of ERISA, including such plans as may be
established after the Agreement Date.
"Pledge Agreement" means the Pledge Agreement, dated as of December 4,
1986, made by the Borrower in favor of the Agent for the account of the Lenders,
pursuant to which the Borrower has pledged to the Agent, for the benefit of the
Lenders, as security for the Secured Obligations, the Foreign Subsidiary Stock
and the Foreign Subsidiary Debt, as amended by Amendment No. 1 to Pledge
Agreement dated March 12, 1992 and as further amended, modified or supplemented
from time to time.
"Purchase Money Indebtedness" means
(a) Indebtedness created to secure the payment of all or any part of
the purchase price of any property,
(b) any Indebtedness incurred at the time of or within 10 days prior
to or after the acquisition of any property for the purpose of financing all or
any part of the purchase price thereof, and
(c) any renewals, extensions or refinancings thereof, but not any
increases in the principal amounts thereof outstanding at the time.
"Purchase Money Liens" means Liens securing Permitted Purchase Money
Indebtedness, but only if such Lien shall at all times be confined solely to the
property the purchase price of which was financed through the incurrence of the
Purchase Money Indebtedness secured by such Lien.
"Real Estate" means the real property, including land and buildings and
improvements thereon, covered by or described in the Mortgages.
"Receivables" means and includes
(a) any and all rights to the payment of money or other forms of
consideration of any kind (whether classified under the UCC as accounts,
contract rights, chattel paper, general intangibles, or otherwise) including,
but not limited to, accounts receivable, letters of credit and the right to
receive payment thereunder, chattel paper, tax refunds, insurance proceeds, any
rights under contracts not yet earned by performance and not evidenced by an
instrument or chattel paper, notes, drafts, instruments, documents, acceptances,
and all other debts, obligations and liabilities in whatever form from any
Person,
(b) all guarantees, security and Liens for payment thereof,
(c) all goods, whether now owned or hereafter acquired, and whether
sold, delivered, undelivered, in transit or returned, which may be represented
by, or the sale or lease of which may have given rise to, any such right to
payment or other debt, obligation or liability, and
(d) all proceeds of any of the foregoing.
"Register" has the meaning set forth in SECTION 13.11(D).
"Replacement Lender" has the meaning set forth in SECTION 3.10A.
"Reportable Event" has the meaning set forth in Section 4043(b) of ERISA,
but shall not include a Reportable Event as to which the provision for 30 days'
notice to the PBGC is waived under applicable regulations.
"Restricted Dividend Payment" means any dividend, distribution or payment
on or with respect to any shares of a Person's capital stock (other than
dividends payable solely in shares of its capital stock), excluding, however,
any such dividend, distribution or payment by any Wholly Owned Subsidiary of the
Borrower to any shareholder of such Subsidiary.
"Restricted Payment" means any redemption or prepayment, prior to the
stated maturity or any regularly scheduled installment or amortization payment
date with respect to such Indebtedness, of any Subordinated Indebtedness or
other Indebtedness that is junior and subordinate to the Loans or to any Foreign
Facility Debt.
"Restricted Purchase" means any payment on account of the purchase,
redemption or other acquisition or retirement of any shares of a Person's
capital stock (except shares acquired on the conversion thereof into other
shares of capital stock of such Person).
"Revolving Credit Facility" means, an amount equal to $40,000,000.
"Revolving Credit Loan" means each loan outstanding on the Effective Date
as a "Revolving Credit Loan" evidenced by the Third Amended and Restated
Revolving Credit Notes dated January 13, 1995 made by the Borrower to the order
of a "Lender" under the Existing Credit Agreement, and the Borrowings made
pursuant to ARTICLE 2.
"Revolving Credit Note" means each Fourth Amended and Restated Revolving
Credit Note made by the Borrower to the order of a Lender evidencing the
obligation of the Borrower to pay the aggregate unpaid principal amount of all
Revolving Credit Loans made to it by such Lender (and any promissory note or
notes that may be issued from time to time in substitution, renewal, extension,
replacement or exchange therefor, whether payable to such Lender or a different
lender and whether issued in connection with a Person becoming a Lender after
the Effective Date or otherwise) substantially in the form of EXHIBIT A hereto,
with all blanks properly completed, either as originally executed or as the same
may from time to time be supplemented, modified, amended, renewed, extended or
refinanced, and "Revolving Credit Notes" means more than one such Revolving
Credit Note.
"SIE" means Synthetic Industries Europe Limited (Reg. No. 2772124), a
registered English limited liability company, wholly owned by the Borrower.
"SI Management" means SI Management L.P., a Delaware limited partnership,
which is the general partner of Synthetic L.P., and its successors and assigns.
"Schedule of Equipment," "Schedule of Inventory" and "Schedule of
Receivables" mean the Schedules described in SECTION 7.14.
"Secured Obligations" means, in each case whether now in existence or
hereafter arising,
(a) the principal of, and interest on, the Loans,
(b) all reimbursement and other obligations to Bank of Boston, the
Agent or any Lender relating to the Letters of Credit,
(c) the Guaranteed Foreign Facility Obligations; and
(d) all indebtedness, liabilities, fees, charges, obligations, cove
nants and duties of the Borrower to the Agent, any Affiliate or Subsidiary of
the Agent, any Lender or any Affiliate or Subsidiary of any Lender, of every
kind, nature and description, direct or indirect, absolute or contingent, due or
not due, contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note, and whether or not for the payment of money, under or in
respect of this Agreement or any of the Loan Documents, other than obligations
under Interest Rate Protection Agreements.
"Security Documents" means each of the following:
(a) the Mortgages,
(b) the Patent Assignment,
(c) the Trademark Assignment,
(d) the Pledge Agreement,
(e) the Financing Statements, and
(f) this Agreement and each other agreement or instrument from time
to time securing the Secured Obligations.
"Security Interest" means the Liens of the Agent on behalf of the Lenders
now or hereafter existing on and in the Collateral or the Real Estate effected
hereby or by any of the Security Documents or pursuant to the terms hereof or
thereof.
"Senior Debt" means with respect to the Borrower and any Consolidated
Subsidiary of the Borrower, the Indebtedness from time to time outstanding under
the Loans and the Foreign Facility Debt and any other Indebtedness for Money
Borrowed which is senior in right of payment to the Senior Subordinated
Debentures.
"Senior Subordinated Debentures" means the Senior Subordinated Debentures
Due 2002 in an original aggregate principal amount of $140,000,000, issued by
the Borrower pursuant to the Indenture.
"Senior Subordinated Debt" means the Indebtedness of the Borrower under the
Senior Subordinated Debentures.
"Subordinated Indebtedness" means, at any time, Indebtedness of the Bor
rower at such time evidenced by the Senior Subordinated Debentures or otherwise
subordinated to the Loans and Notes upon terms and conditions satisfactory to
the Majority Lenders.
"Subsidiary"
(a) when used to determine the relationship of a Person to another
Person, means a Person of which an aggregate of 50% or more of the stock of any
class or classes or 50% or more of other ownership interests is owned of record
or beneficially by such other Person, or by one or more Subsidiaries of such
other Person, or by such other Person and one or more Subsidiaries of such
Person,
(i) if the holders of such stock, or other ownership interests,
(A) are ordinarily, in the absence of contingencies, entitled to vote for the
election of a majority of the directors (or other individuals performing similar
functions) of such Person, even though the right so to vote has been suspended
by the happening of such a contingency, or (B) are entitled, as such holders, to
vote for the election of a majority of the directors (or individuals performing
similar functions) of such Person, whether or not the right so to vote exists by
reason of the happening of a contingency, or
(ii) in the case of such other ownership interests, if such
ownership interests constitute a majority voting interest, and
(b) when used with respect to a Plan, ERISA or a provision of the
Internal Revenue Code pertaining to employee benefit plans, also means any
corporation, trade or business (whether or not incorporated) which is under
common control with the Borrower and is treated as a single employer with the
Borrower under Section 414(b) or (c) of the Internal Revenue Code and the regula
tions thereunder.
"Synthetic L.P." means Synthetic Industries L.P., a Delaware limited
partnership, which owns all of the outstanding capital stock of the Borrower,
and its successors and assigns.
"Synthetic Management" means Synthetic Management G.P., a Georgia general
partnership, the general partners of which are the Initial General Partners.
"Tangible Net Worth" means, as applied to any Person, the Net Worth of such
Person at the time in question, after deducting therefrom the amount of all
intangible items reflected therein, including all unamortized debt discount and
expense, unamortized research and development expense, unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade names, copyrights,
unamortized excess cost of investment in Subsidiaries over equity at dates of
acquisition, and all similar items which should properly be treated as
intangibles in accordance with GAAP.
"Term Loan" means the advances outstanding and unpaid under the Existing
Credit Agreement on the Effective Date (immediately before giving effect to the
Advances to be made under this Agreement on the Effective Date), made as the
principal amount of the "Term Loan" thereunder and the Advances made by the
Lenders to the Borrower on the Effective Date pursuant to SECTION 2A.1.
"Term Loan Facility" means an amount equal to $45,000,000.
"Term Note" means each promissory note made by the Borrower to the order of
a Lender evidencing the obligation of the Borrower to pay the aggregate unpaid
principal amount of the Advances made by such Lender as part of the Term Loan
(and any promissory note or notes that may be issued from time to time in
substitution, renewal, extension, replacement or exchange therefor, whether
payable to such Lender or a different lender and whether issued in connection
with a Person becoming a Lender after the Effective Date or otherwise)
substantially in the form of EXHIBIT B hereto, with all blanks properly
completed, either as originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or refinanced, and "Term
Notes" means more than one such Term Note.
"Termination Date" means October 1, 2001, or such earlier date as all
Secured Obligations shall have been irrevocably paid in full and this Agreement
shall have been terminated at the election of the Borrower, or such later date
to which the same may be extended by agreement of the Borrower, the Agent and
the Lenders.
"Termination Event" means
(a) a Reportable Event, or
(b) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of ERISA, or
(c) the institution of proceedings to terminate a Plan by the PBGC
under Section 4042 of ERISA, or the appointment of a trustee to administer any
Plan.
"Total Interest Expense" means, with respect to the Borrower or any
Consolidated Subsidiary, the total interest expense expressed in Dollars paid or
accrued by the Borrower or such Consolidated Subsidiary, as the case may be,
during a given period on Indebtedness for Money Borrowed determined in
accordance with GAAP.
"Total Unsubordinated Debt" means, with respect to the Borrower or any
Consolidated Subsidiary, all Indebtedness of the Borrower or such Consolidated
Subsidiary, as the case may be, other than Subordinated Indebtedness.
"Trademark Assignment" means, collectively, the Assignment for Security
dated as of December 2, 1986, the Assignment for Security dated as of December
17, 1990, the Security Assignment (Trademarks) dated as of March 12, 1992 and
the Security Assignment (Trademarks) dated as of March 17, 1993, each made by
the Borrower in favor of the Agent, for the benefit of the Lenders, with respect
to certain trademarks owned by the Borrower, as such documents may be amended or
supplemented from time to time.
"Trademark Collateral" means and includes in each case, whether now
existing or hereafter arising,
(a) any and all marks, trademarks, trade names and trademark
applications, and the goodwill of the business symbolized thereby, and
(b) all proceeds of any of the foregoing.
"Type" means a type of Advance and refers to a Base Rate Advance or a
Eurodollar Advance.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of Georgia.
"Unfunded Vested Accrued Benefits" means with respect to any Plan at any
time, the amount (if any) by which
(a) the present value of all vested nonforfeitable benefits under
such Plan exceeds
(b) the fair market value of all Plan assets allocable to such
benefits,
all determined as of the then most recent valuation date for such Plan.
"Unused Facility" means, at any time, the Revolving Credit Facility in
effect at such time LESS the sum at such time of (i) the aggregate outstanding
principal amount of the Revolving Credit Loan and (ii) the Letter of Credit
Reserve.
"Wholly Owned Subsidiary" when used to determine the relationship of a
Subsidiary to a Person or Persons, means a Subsidiary all of the issued and
outstanding shares (other than directors' qualifying shares) of the capital
stock of which shall at the time be owned by such Person or Persons or one or
more of such Person's Wholly Owned Subsidiaries or by such Person or Persons and
one or more of its respective Wholly Owned Subsidiaries.
"Working Capital Assets" means, with respect to any Person, the aggregate
amount of accounts receivable (less any allowance for doubtful accounts) and
inventory of such Person properly classified as accounts receivable (less any
allowance for doubtful accounts) or inventory in accordance with GAAP.
"Working Capital Liabilities" means, with respect to any Person, the
aggregate amount of current liabilities of such Person, other than current
maturities of long-term debt (all as determined in accordance with GAAP).
SECTION 1.2. General. All terms of an accounting nature not specifically
defined herein shall have the meaning ascribed thereto by GAAP. The terms
accounts, chattel paper, contract rights, documents, equipment, instruments,
general intangibles, inventory, proceeds, cash proceeds and non-cash proceeds,
as and when used in this Agreement or the Security Documents, shall have the
meanings given those terms in the UCC, except where otherwise specifically
defined herein. Unless otherwise specified, a reference in this Agreement to a
particular article, section or subsection is a reference to that article,
section or subsection of this Agreement. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, the feminine and the neuter.
ARTICLE 2 - REVOLVING CREDIT FACILITY
SECTION 2.1. Revolving Credit Loan. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, each Lender severally and not jointly agrees to make
Advances, ratably according to such Lender's Commitment Percentage, to the
Borrower from time to time from and after the Effective Date to the Termination
Date, as requested by the Borrower in accordance with the terms of SECTION 2.2,
in such amounts as the Borrower shall request, up to an aggregate principal
amount at any one time outstanding equal to the result obtained by multiplying
such Lender's Commitment Percentage by the Borrowing Base in effect at such
time; PROVIDED, HOWEVER, that it is agreed that should such Advances made by any
Lender exceed the maximum amount so determined or any other limitation set forth
in this Agreement, such Advances shall nevertheless constitute Secured
Obligations and, as such, shall be entitled to all benefits thereof and security
therefor. Each Borrowing under the Revolving Credit Facility shall consist of
Advances of the same Type made on the same day by the Lenders ratably according
to their respective Commitment Percentages and each Borrowing comprised of (i)
Base Rate Advances and requested pursuant to SECTION 2.2(A)(I) shall be in an
aggregate amount of $100,000 or an integral multiple thereof or (ii) Eurodollar
Rate Advances shall be in an aggregate amount of $3,000,000 or an integral
multiple of $500,000 in excess thereof. Within the limits of each Lender's
Commitment, the principal amount of any Advance which is repaid may be
reborrowed subject to the terms of this SECTION 2.1. The Agent's and each
Lender's books and records reflecting the date and the amount of each Borrowing
under the Revolving Credit Facility and each repayment of principal thereof
shall constitute PRIMA FACIE evidence of the accuracy of the information
contained therein, subject to the provisions of SECTION 3.14.
SECTION 2.2. Manner of Borrowing. Borrowings under the Revolving Credit
Facility shall be made as follows:
(a) Requests for Borrowing. A request for a Borrowing shall be made,
or shall be deemed to be made, in the following manner:
(i) The Borrower may give the Agent written notice, which shall
be irrevocable, of its intention to make a Borrowing specifying the amount
of the proposed Borrowing and the proposed Borrowing date not later than
2:00 p.m.(Boston time), at least two Business Days prior to the date of a
proposed Borrowing comprised of Base Rate Advances or 10:00 a.m. (Boston
time) at least three Business Days prior to the date of a proposed
Borrowing comprised of Eurodollar Rate Advances. Each such notice (a
"Notice of Borrowing") shall, in addition, specify the Type of Advances
and, if applicable, the Interest Period applicable to such Advances, and
shall be substantially in the form of EXHIBIT F hereto. The Agent may
in its sole and absolute discretion permit any such notice to be made by
telephone, telecopier or telex by an Authorized Officer in which case
the Borrower shall confirm the same by mailing a written Notice of
Borrowing to the Agent within 48 hours thereafter.
(ii) Whenever a check is presented to the Disbursing Bank for
payment against the Controlled Disbursement Account in an amount greater
than the then available balance in such account, the Disbursing Bank shall,
and is hereby irrevocably authorized by the Borrower to, give the Agent
notice thereof, which notice shall be deemed to be a request for a
Borrowing comprised of Base Rate. Advances on the date of such notice in
an amount equal to the excess of such check over such available balance.
(iii) Whenever a drawing occurs under a Letter of Credit, Bank of
Boston shall, and is hereby irrevocably authorized by the Borrower to, give
the Agent notice thereof, which notice shall be deemed to be a request for
a Borrowing comprised of Base Rate Advances on the date of such notice (or
on the next succeeding Business Day if such notice is given after 11:00
a.m. (Boston time) on such date) in an amount equal to the amount of such
drawing.
(iv) Unless the Borrower shall have otherwise notified the
Agent, the becoming due of any amount required to be paid under this
Agreement as interest shall be deemed to be a request for a Borrowing
comprised of Base Rate Advances on the due date in the amount required to
pay such interest.
(v) The becoming due of any other Secured Obligation shall be
deemed to be a request for a Borrowing comprised of Base Rate Advances on
the due date in the amount then so due, and such request shall be
irrevocable.
(b) Disbursement. Promptly following receipt of a Notice of Borrowing
under the Revolving Credit Facility, the Agent shall notify each Lender by
telephone, telecopier or telex of the date and amount of the Borrowing, the Type
of Advances comprising such Borrowing and, if such Borrowing is comprised of
Eurodollar Advances, the interest rate and Interest Period applicable thereto.
Not later than 12:00 noon (Boston time) on the date specified for any Borrowing,
each Lender shall make available its ratable portion of the Borrowing in
immediately available funds to the Agent at the Agent's Office. Upon
fulfillment of the applicable conditions set forth in ARTICLE 4, the Borrower
hereby irrevocably authorizes the Agent on behalf of the Lenders to disburse the
proceeds of the Advances made upon each Borrowing requested, or deemed to be
requested, pursuant to this SECTION 2.2 as follows:
(i) the proceeds of each Borrowing requested under SECTIONS
2.2(A)(I) and (II) shall be disbursed by the Agent in lawful money of the
United States of America in immediately available funds, (A) in the case of
the initial Borrowing, in accordance with the terms of the letter from the
Borrower to the Agent referred to in SECTION 4.1(A)(XIV) and (B) in the
case of each subsequent Borrowing, by wire transfer to the Controlled
Disbursement Account or, in the absence of a Controlled Disbursement
Account, by credit to the Designated Deposit Account or by wire transfer to
such other account as may be agreed upon by the Borrower and the Agent from
time to time, and
(ii) the proceeds of each Borrowing requested under SECTION
2.2(A)(III), (IV) or (V) shall be disbursed by the Agent on behalf of the
Lenders by way of direct payment of the relevant Secured Obligation.
(c) Assumption by Agent. Unless the Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not make
available to the Agent such Lender's ratable portion of such Borrowing, the
Agent may assume that such Lender has made such portion available to the Agent
on the date of such Borrowing in accordance with SECTION 2.2(B) and the Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent such Lender shall not have so
made such ratable portion available to the Agent, such Lender and the Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Agent, if repaid by the Borrower, at the interest rate applicable at the time to
Advances comprising such Borrowing or, if paid by such Lender, at the Federal
Funds Effective Rate, for each such day. If such Lender shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement. The
failure of any Lender to make its Advance available shall not relieve any other
Lender of its obligation, if any, hereunder to make its Advance available on the
date of such Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make its Advance available on the date of any Borrowing.
SECTION 2.3. Repayment of Advances. The Advances under the Revolving Credit
Facility will be repaid as follows:
(a) whether or not any Default or Event of Default has occurred, the
outstanding principal amount of all Advances under the Revolving Credit Facility
is due and payable, and shall be repaid by the Borrower, on the Termination
Date;
(b) if at any time the aggregate outstanding principal amount of all
Advances under the Revolving Credit Facility exceeds the Borrowing Base in
effect at such time, the Borrower shall pay to the Agent, upon demand by the
Agent, for the ratable account of the Lenders for application to the repayment
of the Advances under the Revolving Credit Facility made by them, an amount
equal to such excess; and
(c) the Borrower hereby irrevocably instructs the Agent to pay to the
Lenders ratably for application to the repayment of the Advances under the
Revolving Credit Facility outstanding on any day, an amount equal to the amount
received by the Agent for the account of the Lenders on such day pursuant to
SECTION 7.1(B).
Amounts received pursuant to SUBSECTION (B) OR (C) above shall be applied first
to the repayment of all Base Rate Advances and then to the repayment of
Eurodollar Advances, in each case outstanding under the Revolving Credit
Facility.
SECTION 2.4. Revolving Credit Note. Each Lender's Advances under the
Revolving Credit Facility and the obligations of the Borrower to repay such
Advances shall also be evidenced by, and be repayable in accordance with the
terms of, a single Revolving Credit Note payable to the order of such Lender.
Each Revolving Credit Note shall be dated the Effective Date (or the later
"Effective Date" of any Assignment and Acceptance, if issued pursuant thereto)
and be duly and validly executed and delivered by the Borrower.
ARTICLE 2A - TERM LOAN FACILITY
SECTION 2A.1. Term Loan. Upon the terms and subject to the conditions of,
and in reliance upon the representations and warranties made under, this
Agreement, each Lender, severally and not jointly, agrees to make a Base Rate
Advance as part of a single Borrowing under the Term Loan Facility to the
Borrower on the Effective Date, in a principal amount equal to the excess of (a)
such Lender's Commitment Percentage multiplied by the Term Loan Facility, over
(b) the amount outstanding from such Lender to the Borrower as principal of the
"Term Loan" under and as defined in the Existing Credit Agreement, on the
Effective Date, immediately before the Advances contemplated to be made under
this Agreement on the Effective Date are made. The Lenders agree to accept from
the Borrower, in exchange for (but not in extinguishment of Indebtedness
outstanding under) the "Term Notes" issued under and as defined in the Existing
Credit Agreement, Term Notes conforming to the requirements of this Agreement,
in the aggregate original principal amount of $45,000,000.
SECTION 2A.2. Manner of Borrowing Term Loan. Provided that the Borrower
has given the Agent at least two Business Days' prior notice of the occurrence
of the Effective Date, then, not later than 12:00 noon (Boston time) on the
Effective Date, each Lender shall make available to the Agent in Dollars in same
day funds, an amount equal to such Lender's Base Rate Advance under the Term
Loan Facility to be made on such date in the amount determined in accordance
with the provisions of SECTION 2A.1. Upon the Agent's receipt thereof and the
occurrence of the Effective Date, the Agent shall make such funds available to
the Borrower in accordance with the terms of the letter from the Borrower to the
Agent referred to in SECTION 4.1(A)(XIV).
SECTION 2A.3. Repayment of Term Loans. The Advances constituting the Term
Loan are due and payable, and shall be repaid by the Borrower as follows:
(i) beginning on November 1, 1998 and on each of the eleven successive
Installment Payment Dates thereafter in consecutive monthly
installments of $833,333.33 each; and
(ii) beginning on November 1, 1999 and on each of the twenty-three
successive Installment Payment Dates thereafter, in consecutive
monthly installments of $1,458,333.33 each, PROVIDED, that the final
installment of the Term Loan payable on October 1, 2001 shall be in
the amount of the entire outstanding unpaid balance of the Term Loan.
SECTION 2A.4. Term Note. Each Lender's Advances under the Term Loan
Facility and the obligation of the Borrower to repay such Advances shall also be
evidenced by, and be repayable in accordance with the terms of, a Term Note
payable to the order of each such Lender. Each Term Note shall be dated the
Effective Date (or the later "Effective Date" of any Assignment and Acceptance,
if issued pursuant thereto), and all of such Term Notes shall be duly and
validly executed and delivered by the Borrower.
ARTICLE 2B - LETTER OF CREDIT FACILITY
SECTION 2B.1. Letters of Credit. Upon the written request of the Borrower
from time to time, the Bank of Boston may in its discretion, provided no Default
or Event of Default has occurred and is continuing, issue Letters of Credit for
the account of the Borrower in an aggregate face amount at any time outstanding
not to exceed the Letter of Credit Facility, pursuant to Bank of Boston's
customary application and other letter of credit procedures in effect from time
to time. Upon the issuance of any such Letter of Credit, each other Lender
shall automatically and without further action acquire an undivided
participation in such Letter of Credit in an amount equal to such Lender's
Commitment Percentage multiplied by the face amount of such Letter of Credit.
Promptly upon the issuance thereof, Bank of Boston shall provide to the Agent
and the Agent shall thereafter provide to each other Lender, a copy of each
Letter of Credit issued pursuant to this SECTION 2B.1. The Borrower's
obligations in respect of each Letter of Credit, including, without being
limited to, its obligations to reimburse Bank of Boston and the other Lenders
for the amount of any drawing thereunder and to pay the fees, charges and
expenses provided for herein or in any other document related to such Letter of
Credit, shall constitute Secured Obligations.
SECTION 2B.2. Payments under Letters of Credit. Bank of Boston shall
notify the Agent of each drawing under a Letter of Credit and the Borrower
hereby irrevocably instructs the Agent (a) to consider each such notification by
Bank of Boston as a request for a Borrowing pursuant to SECTION 2.2(A)(III) and
(b) to pay to Bank of Boston, from the proceeds of the Advances made in
accordance with the provisions of SECTION 2.2(B), an amount equal to the amount
of such drawing. All such Advances shall constitute a Borrowing under the
Revolving Credit Facility made at the time of such payment. Notwithstanding the
provisions of SECTION 2.2 and the foregoing provisions of this SECTION 2B.2,
each Lender shall be obligated directly to Bank of Boston as a participant in
each Letter of Credit to pay directly to Bank of Boston an amount equal to such
Lender's Commitment Percentage multiplied by the amount of each drawing under a
Letter of Credit. Each other Lender shall pay to Bank of Boston, on demand, its
ratable share, in accordance with its Commitment Percentage, of each such
drawing, without regard to whether the Lenders have any obligation to make
Advances under the Revolving Credit Facility or any Lender shall have failed or
refused to make an Advance in the amount of its Commitment Percentage of any
drawing.
SECTION 2B.3. Letter of Credit Expiration Date. No Letter of Credit
issued under this ARTICLE 2B shall have an expiration date later than the
earlier of (a) the first anniversary of the issuance of such Letter of Credit
and (b) the Termination Date, PROVIDED, that, a Letter of Credit may provide for
automatic extensions of the expiration date thereof for successive periods of
one year (but not beyond the Termination Date).
SECTION 2B.4. Letter of Credit Fees. The Borrower shall pay to the Agent
for the account of the Lenders such periodic fees for maintaining any standby
Letter of Credit at the rate of 1-1/2% per annum of the face amount of such
Letter of Credit outstanding from time to time and as to any other type of
Letter of Credit, such fee as Bank of Boston and the Borrower shall agree (which
agreement will be reflected in the application relating to each such Letter of
Credit), but shall pay to Bank of Boston directly and for its own account, on
demand, Bank of Boston's charges for administering each Letter of Credit,
including any fee charged in connection with opening, transferring or processing
drawings under such Letter of Credit. Letter of Credit fees payable to the
Agent for the account of the Lenders shall be paid quarterly in arrears on the
first day of each January, April, July and October so long as any Letter of
Credit is outstanding.
ARTICLE 2C - INTEREST RATE PROTECTION AGREEMENTS
SECTION 2C.1. Interest Rate Protection Agreement. The Borrower may from
time to time enter into interest rate caps, swaps, collars, floors and other
similar transactions including, without limitation, the Master Swap Agreement
between the Bank of Boston and the Borrower dated October 20, 1995, that satisfy
the description set forth in the definition "Interest Rate Protection
Agreement"; PROVIDED, that the aggregate notional amount of all such Interest
Rate Protection Agreements in effect at any time shall be less than the
outstanding principal amount of the Term Loans at such time PLUS the lesser of
(i) $10,000,000 or (ii) the average outstanding Revolving Credit Loan during the
preceding year.
SECTION 2C.2. Conditions to Transactions. Before the Borrower becomes
obligated in respect of any specific transaction pursuant to an Interest Rate
Protection Agreement otherwise consistent with the provisions of this Agreement
(it being understood that any such transaction pursuant to the Master Swap
Agreement would require the further independent agreement of both the Borrower
and the Bank of Boston), the Borrower shall have (i) entered into an amendment
to this Agreement, in form and substance satisfactory to the Agent and the
Lenders, providing that all obligations of the Borrower under any such Interest
Rate Protection Agreement shall constitute "Secured Obligations" hereunder and
(ii) caused to be delivered to the Agent and the Lenders a legal opinion letter
of counsel satisfactory to the Agent and Lenders in their reasonable judgment
and in form and substance acceptable to the Agent and the Lenders to the effect
that obligations of the Borrower pursuant to such Interest Rate Protection
Agreement constitute "Senior Indebtedness" as such term is defined in the
Indenture.
ARTICLE 3 - GENERAL LOAN PROVISIONS
SECTION 3.1. Interest.
(a) Base Rate Advances. The Borrower shall pay interest on the unpaid
principal amount of each Base Rate Advance for each day from the day such
Advance is made (including, in respect of amounts outstanding on the Effective
Date as "Loans" under the Existing Credit Agreement, from the date of the last
payment of interest on such Loans under the Existing Credit Agreement) until the
date such Advance is due or is converted to an Advance of a different Type, at a
rate per annum equal to the Base Rate, PLUS the Applicable Margin, which rate
shall change contemporaneously with any change in the Base Rate. Such interest
shall be payable in arrears on each Interest Payment Date, when such Base Rate
Advance is due (whether at maturity, by reason of acceleration or otherwise) and
upon any conversion of the principal amount of such Base Rate Advance (or any
portion thereof) into an Advance of a different Type, on the date of such
conversion on the principal amount so converted.
(b) Eurodollar Advances.
(i) The Borrower shall pay interest on the unpaid principal
amount of each Eurodollar Advance for each Interest Period applicable
thereto, at a rate per annum equal to the Eurodollar Rate, PLUS the
Applicable Margin. Such interest shall be payable on the last day of such
Interest Period and, if such Interest Period is longer than one month, on
each Interest Payment Date after the first day thereof, and when such
Eurodollar Advance is due (whether at maturity, by reason of acceleration
or otherwise).
(ii) Additional interest on the unpaid principal amount of each
Eurodollar Advance of each Lender shall also be payable from the date of
such Advance until such principal amount is paid in full, so long as such
Lender shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities, at an interest
rate per annum equal at all times to the remainder obtained by subtracting
(A) the Eurodollar Rate for the Interest Period for such Advance from (B)
the rate obtained by dividing such Eurodollar Rate by a percentage
(expressed as a decimal) equal to 1.00 minus the Eurodollar Reserve
Percentage of such Lender for such Interest Period, payable on each date on
which interest is payable on such Advance. Such additional interest shall
be determined by such Lender and notified to the Borrower through the
Agent.
(c) Late Payment, etc. If the Borrower shall fail to pay when due
(whether at maturity, by reason of acceleration or otherwise) all or any portion
of the principal amount of any Advance or if there shall occur an Event of
Default, from and after the date on which the Agent shall give the Borrower
notice thereof, the unpaid principal amount of each Advance shall no longer bear
interest in accordance with the terms of SECTION 3.1(A) or 3.1(B), as
applicable, but shall bear interest for each day from the date of such failure
to pay or Event of Default, as the case may be, until such failure to pay or
Event of Default shall have been cured or waived, at a rate per annum equal to
2% per annum above the otherwise applicable interest rate, payable on demand.
(d) Basis of Computation. The interest rates provided for in SECTIONS
3.1(A), (B) and (C) shall be computed on the basis of a year of 360 days and the
actual number of days elapsed and shall be adjusted automatically as of the
opening of business on the effective date of each change in the Base Rate, if
applicable.
(e) Maximum Rate. It is not intended by the Agent or the Lenders, and
nothing contained in this Agreement or any Note shall be deemed, to establish or
require the payment of a rate of interest in excess of the maximum rate
permitted by Applicable Law (the "Maximum Rate"). If, in any month, the
Effective Interest Rate, absent such limitation, would have exceeded the Maximum
Rate, then the Effective Interest Rate for that month shall be the Maximum Rate,
and, if in future months, the Effective Interest Rate would otherwise be less
than the Maximum Rate, then the Effective Interest Rate shall remain at the
Maximum Rate until such time as the amount of interest paid hereunder equals the
amount of interest which would have been paid if the same had not been limited
by the Maximum Rate. In the event, upon payment in full of the Secured
Obligations, the total amount of interest paid or accrued under the terms of
this Agreement and the Notes is less than the total amount of interest which
would have been paid or accrued if the Effective Interest Rate had at all times
been in effect, then the Borrower shall, to the extent permitted by Applicable
Law, pay to the Agent for the account of the Lenders an amount equal to the
excess of (i) the lesser of (A) the amount of interest which would have been
charged if the Maximum Rate had, at all times, been in effect or (B) the amount
of interest which would have accrued had the Effective Interest Rate, at all
times, been in effect over (ii) the amount of interest actually paid or accrued
under this Agreement and the Notes. In the event any Lender ever receives,
collects or applies as interest any sum in excess of the Maximum Rate, such
excess amount shall be applied to the reduction of the principal balance of the
Secured Obligations, and if no such principal is then outstanding, such excess
or part thereof remaining, shall be paid to the Borrower.
SECTION 3.2. Agent's Fee and Arrangement Fee. In connection with the
transactions contemplated by this Agreement and the amendment and restructuring
of the credit facilities outstanding under the Existing Credit Agreement and as
compensation to the Agent for its part therein, and in consideration of the
ongoing administration of the Revolving Credit Facility, the Borrower will pay
to Bank of Boston such fees as are separately agreed to by them.
[SECTION 3.3. Intentionally Omitted.]
SECTION 3.4. Commitment Fee. In consideration of the Lenders' holding
available for the use of the Borrower hereunder the Unused Facility, the
Borrower shall pay to the Agent for the ratable account of the Lenders, a fee
which shall accrue and be fully earned at the time due and payable and shall not
be subject to refund or rebate by reason of prepayment, acceleration of any
Loans upon Default or any other circumstance, on the average daily Unused
Facility for each day from the Effective Date until the Termination Date at the
rate of 3/8 of 1% per annum, payable quarterly in arrears on the first day of
each January, April, July and October on the average daily Unused Facility for
each day of the preceding quarter (or portion thereof).
SECTION 3.5. Computation of Fees, Etc. All fees stated as a percentage rate
per annum shall be computed on the basis of a year of 360 days and the actual
number of days elapsed and are not, and shall not be deemed to be, interest or a
charge for the use of money, but shall constitute other charges as contemplated
by O.C.G.A. 7-4-2(a)(1).
SECTION 4.6. Voluntary Reductions of Facility. The Borrower shall have the
right, at any time and from time to time, to reduce the amount of the Unused
Facility upon at least three Business Days' written notice to the Agent,
specifying the amount of such reduction, which shall be an integral multiple of
$1,000,000, and the effective date of such reduction, which shall be a Business
Day. On the date specified in such notice, the Revolving Credit Facility shall
automatically be reduced by the amount specified in such notice (and each
Lender's Commitment shall also automatically be reduced by such Lender's
Commitment Percentage of such reduction) and the Borrower shall pay to the Agent
for the ratable account of the Lenders any accrued and unpaid commitment fee,
determined in accordance with the provisions of SECTION 3.4, on the amount by
which the Revolving Credit Facility is reduced.
SECTION 3.7. Conversion or Continuation of Advances.
(a) Provided that no Default or Event of Default shall have occurred
and be continuing, the Borrower may convert or continue all or any part (subject
to the restrictions applicable to Borrowings comprised of each Type of Advance
set forth in SECTION 2.1 and to the provisions of SECTIONS 3.8 and 3.10) of any
outstanding Borrowing which is part of the Revolving Credit Loan or the Term
Loan and is comprised of Advances of one Type (i) into a Borrowing or Borrowings
comprised of Advances of a different Type available hereunder or (ii) as a
Borrowing or Borrowings comprised of Advances of the same Type for a subsequent
Interest Period, in the same aggregate principal amount, on any Business Day
(which, in the case of conversion into or continuation as a Borrowing comprised
of Eurodollar Advances, shall be the last day of the applicable Interest
Period), upon notice given in accordance with SECTION 3.7(B)).
(b) Whenever the Borrower desires to convert an outstanding Borrowing
into a Borrowing comprised of Advances of a different Type available hereunder
or to continue an outstanding Borrowing comprised of Eurodollar Advances for a
subsequent Interest Period, the Borrower shall give notice to the Agent (which
notice shall be irrevocable) not later than 10:00 a.m. (Boston time) on the date
one Business Day before the day on which a proposed conversion of a Borrowing
into a Borrowing comprised of Base Rate Advances or three Business Days prior to
the day on which a proposed conversion or continuation of a Borrowing into or as
a Borrowing comprised of Eurodollar Advances is to be effective (and if the
Borrowing to be converted or continued is comprised of Eurodollar Advances, such
effective date shall be the last day of the Interest Period for such Borrowing).
Each such notice (each a "Notice of Conversion or Continuation") shall (i)
identify the Borrowing to be converted or continued, including the Type of
Advances comprising such Borrowing, the aggregate principal balance thereof and,
if applicable, the last day of the Interest Period therefor, (ii) specify the
effective date of conversion or continuation, (iii) specify the principal amount
of such Borrowing to be converted or continued and, if converted, the Type or
Types of Advances into which conversion of such principal amount (or specified
portions thereof) is to be made, and (iv) in the case of any conversion into or
continuation as a Borrowing comprised of Eurodollar Advances, the Interest
Period to be applicable to such converted or continued Borrowing. Each such
Notice of Conversion or Continuation shall be substantially in the form of
EXHIBIT G hereto. The Agent may in its sole and absolute discretion permit any
such notice to be given by telephone, telecopier or telex by an Authorized
Officer, in which case the Borrower shall confirm the same by mailing a written
Notice of Conversion or Continuation to the Agent within 48 hours thereafter.
No provision of this Agreement shall be deemed or construed to permit the
"conversion" of the Term Loan (or portion thereof) into a Revolving Credit Loan
or the reverse.
SECTION 3.8. Duration of Interest Periods; Number of Borrowings.
(a) Subject to the provisions of the definition of Interest Period,
the duration of each Interest Period applicable to the Advances comprising a
Borrowing shall be as specified in the relevant Notice of Borrowing or Notice of
Conversion or Continuation. The Borrower shall have the option to elect a
subsequent Interest Period to be applicable to such Borrowing by giving notice
of such election in accordance with the provisions of SECTION 3.7(B).
(b) If the Agent does not receive, in accordance with the provisions
of SECTION 3.7(B), a Notice of Conversion or Continuation specifying a
subsequent Interest Period for any outstanding Borrowing comprised of Eurodollar
Advances, or if, when such Notice must be given, a Default or Event of Default
exists, then the Borrower shall be deemed to have elected to convert such
Borrowing in whole into a Borrowing comprised of Base Rate Advances on the last
day of the Interest Period applicable to such outstanding Borrowing.
(c) The Borrower may not elect an Interest Period which, when added
to the number of Interest Periods then applicable, would result in there being,
at any one time (and treating all Base Rate Advances outstanding under the
Revolving Credit Facility as one Borrowing and all Base Rate Advances
outstanding under the Term Loan Facility as one Borrowing), more than eleven
Borrowings outstanding.
SECTION 3.9. Voluntary Prepayments; Termination of Agreement.
(a) The Borrower shall have the right, at any time and from time to
time, upon at least two Business Days' notice to the Agent specifying the date
and amount of such prepayment, to prepay the Term Loan and the Revolving Credit
Loan in whole or in part and, if the Loans are prepaid in full, to terminate
this Agreement, without penalty (it being understood and acknowledged by all
parties that application of Collateral proceeds to repay Advances under the
Revolving Credit Facility pursuant to SECTION 2.3(B) is not and shall not be
deemed to be a voluntary prepayment of the Revolving Credit Loan for purposes of
this SECTION 3.9) but subject to the provisions of SECTION 3.11; PROVIDED, that
any partial prepayment of the Loans shall be applied first to the prepayment of
the principal amount of the Term Loan, and, after payment in full of the
principal amount of the Term Loan, to the prepayment of the outstanding
principal amount of the Revolving Credit Loan and all other amounts then due
under this Agreement and the Notes; PROVIDED, FURTHER, that if the Loans are
prepaid in whole or in part pursuant to this SECTION 3.9
(i) prior to November 1, 1998, the Borrower shall pay to the
Agent, for the ratable account of the Lenders, on the date of such
prepayment, a fee as liquidated damages therefor and not as a penalty, as
follows:
(A) $850,000 in connection with the prepayment in full
of the Loans from the proceeds of Indebtedness for Money Borrowed, or
(B) an amount equal to 1% of the principal amount so
prepaid in connection with any prepayment made from any source other
than proceeds of Indebtedness for Money Borrowed or internal cash flow
of the Borrower, and
(ii) on or after November 1, 1998 and prior to October 1, 2001,
an amount equal to 1% of the principal amount so prepaid.
(b) Each partial prepayment of the Loans shall be in an aggregate
principal amount equal to $500,000 or an integral multiple of $100,000 in excess
thereof and, to the extent such prepayment is a prepayment of the Term Loan, as
applicable, shall be applied to the principal installments of the Term Loan in
inverse order of maturity. Interest on the amount prepaid, accrued to the
prepayment date, and all other amounts then due and payable by the Borrower to
the Agent or to the Agent for the account of the Lenders under this Agreement or
the Notes shall be paid on such date. Any notice of prepayment given by the
Borrower hereunder shall be irrevocable, and the amount to be prepaid (including
accrued interest thereon) shall be due and payable on the date, which shall be a
Business Day, specified in such notice.
(c) On any date on which the aggregate principal amount of the Loans
is to be prepaid in full or substantially in full, the Borrower shall also pay
to the Agent (i) the principal amount of the Foreign Facilities, together with
interest accrued thereon to the date of such prepayment, (ii) an amount in cash,
to be held by the Agent for the benefit of the Lenders as cash collateral
pursuant to such agreement as the Agent and the Lenders shall reasonably
specify, equal to the aggregate face amount of all Letters of Credit outstanding
(or the Borrower may satisfy its obligations under this clause (ii) by causing
all outstanding Letters of Credit to be returned to Bank of Boston for
cancellation in a manner and pursuant to agreements and other documents in form
and substance satisfactory to the Agent and the Lenders), and (iii) any and all
other amounts accrued or due and payable to the Agent and the Lenders hereunder
and under the Notes, including, without being limited to, any and all accrued
fees, amounts payable pursuant to SECTIONS 2B.4, 3.4 and 13.2, any amounts
payable under the separate agreement referred to in SECTION 3.2, and the
applicable prepayment fee determined in accordance with the provisions of
SECTION 3.9(A). Upon receipt by the Agent of an amount equal to the aggregate
unpaid principal amount of all Loans and interest accrued thereon, an amount
equal to the aggregate amount of all Foreign Facility Debt and accrued interest
thereon, an amount equal to the aggregate stated amount of all outstanding
Letters of Credit or the return of such Letters of Credit, as the case may be,
and all such other amounts, this Agreement shall be terminated and none of the
Agent, the Lenders or the Borrower shall have any further obligations to any
other party hereto except for the Borrower's obligations to the Agent and the
Lenders pursuant to SECTIONS 13.2 and 13.14.
(d) Notwithstanding the foregoing provisions of this SECTION 3.9, if
the Majority Lenders shall have determined that Inventory of the Borrower is not
Eligible Inventory solely pursuant to the provisions of SUBPARAGRAPH (H) of the
definition of Eligible Inventory or that Receivables of the Borrower are not
Eligible Receivables solely pursuant to the provisions of SUBPARAGRAPH (P) of
the definition of Eligible Receivables and (i) the result of such determination
or determinations is to reduce the Borrowing Base to an amount which is less
than 80% of the average monthly principal amount of the Revolving Credit Loan
outstanding during the 12 months (determined for each such month based on
average daily principal outstanding during such month) immediately preceding the
date of such determination (or of the last of such determinations) and (ii)
within 60 days thereafter the Borrower prepays the outstanding principal amount
of the Loans in full, together with accrued interest thereon and the other
amounts required to be paid pursuant to SECTION 3.9(C), the prepayment fee
otherwise required to be paid pursuant to SECTION 3.9(A) shall not be payable.
SECTION 3.10. Changed Circumstances.
(a) In the event that:
(i) on any date on which the Eurodollar Rate would otherwise be
set, Bank of Boston shall have determined in good faith (which
determination shall be final and conclusive) that adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate, or
(ii) the Majority Lenders shall notify the Agent that they have
determined in good faith (which determination shall be final and
conclusive) that the Eurodollar Rate shall no longer represent the
effective cost to the Majority Lenders of making or maintaining Eurodollar
Advances to be made by them, or
(iii) any Lender shall notify the Agent that it has determined in
good faith (which determination shall be final and conclusive) that the
making or continuation of or conversion of any Advance of such Lender to a
Eurodollar Advance has been made impracticable or unlawful by (A) the
occurrence of a contingency that materially and adversely affects the
interbank Eurodollar market or (B) compliance by such Lender in good faith
with any Applicable Law or interpretation or change thereof by any
governmental authority charged with the interpretation or administration
thereof or with any request or directive of any such governmental authority
(whether or not having the force of law);
then, and in any such event, the Agent shall forthwith so notify the Borrower
thereof and:
(A) Until the Agent notifies the Borrower that
the circumstances giving rise to any notice given pursuant to
SECTION 3.10(A) no longer apply, the obligation of the Lenders to
allow selection by the Borrower of Eurodollar Advances shall be
suspended. If at the time the Agent so notifies the Borrower,
the Borrower has previously given the Agent a Notice of Borrowing
or a Notice of Conversion or Continuation with respect to one or
more Borrowings to be made as or to be converted into or
continued as Borrowings comprised of Eurodollar Advances (each, a
"Pending Borrowing") but such Pending Borrowings have not yet
been so made, converted or continued, each such Notice shall be
deemed to be an election by the Borrower of Borrowings comprised
of Base Rate Advances.
(B) On such date as is specified in any notice to the
Borrower from the Agent pursuant to SECTION 3.10(A) (which date shall
not be earlier than the date such notice is given), the Borrower shall
prepay the outstanding principal amount of all Eurodollar Advances,
together with interest thereon and any amount required to be paid
pursuant to SECTION 3.11, or convert all such outstanding Eurodollar
Advances into Base Rate Advances by giving a Notice of Conversion or
Continuation pursuant to SECTION 3.7(B).
(b) In case of any change in law, regulation, treaty or official
directive or the interpretation or application thereof by any court or by any
governmental authority charged with the administration thereof or the compliance
with any guideline or request of any central bank or other governmental
authority (whether or not having the force of law):
(i) subjects any Lender to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by the
Borrower or otherwise with respect to the transactions contemplated hereby
(except for taxes on the overall net income of such Lender imposed by the
United States of America or any political subdivision thereof), or
(ii) imposes, modifies or deems applicable any deposit
insurance, reserve, special deposit or similar requirement against assets
held by, or deposits in or for the account of, or loans by, any Lender
(other than such requirements as are already provided for in
SECTION 3.1(B)(II)), or
(iii) imposes upon any Lender any other condition with respect to
its performance under this Agreement,
and the result of any of the foregoing is to increase the cost to such Lender,
reduce the income receivable by such Lender or impose any expense upon such
Lender with respect to any Advances, such Lender shall notify the Agent and the
Borrower thereof. The Borrower agrees to pay to such Lender the amount of such
increase in cost, reduction in income or additional expense as and when such
cost, reduction or expense is incurred or determined, upon presentation by such
Lender of a statement of the amount and setting forth such Lender's calculation
thereof, which statement shall be deemed true and correct absent manifest error,
PROVIDED, that no Lender shall be entitled to charge nor shall the Borrower be
obligated to pay any such amount relating to a period more than 90 days prior to
the date on which such statement is presented.
(c) If any Lender determines that (i) the adoption of or change in,
in each case after the date hereof, any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies, or any
change after the date hereof in the interpretation or application thereof by any
governmental authority charged with the administration thereof, or (ii)
compliance by such Lender with any guideline, request or directive of any such
entity regarding capital adequacy (whether or not having the force of law)
promulgated after the date hereof, has the effect of reducing the return on such
Lender's capital as a consequence of its Commitment to make Advances hereunder
to a level below that which such Lender could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's then-
existing policies with respect to capital adequacy and assuming the full
utilization of such Lender's capital) by any amount deemed by such Lender to be
material, then such Lender shall notify the Agent and the Borrower thereof. The
Borrower agrees to pay to such Lender the amount of such reduction of capital as
and when such reduction is determined, upon presentation by such Lender of a
statement of the amount and setting forth such Lender's calculation thereof,
which statement shall be deemed true and correct absent manifest error,
PROVIDED, that no Lender shall be entitled to charge nor shall the Borrower be
required to pay any such amount relating to a period more than 90 days prior to
the date on which such statement is presented. In determining such amount, a
Lender may use any reasonable averaging and attribution methods.
SECTION 3.10A Replacement of Lender. In the event that any Lender makes a
demand for payment pursuant to SECTION 3.10, or terminates the Commitment of the
Lender to make Eurodollar Advances or to convert Base Rate Advances to
Eurodollar Advances pursuant to SECTION 3.10(A)(III), the Borrower shall have
the right, if no Default or Event of Default then exists, to replace such Lender
in accordance with this SECTION 3.10A. If the Borrower determines to replace
such Lender, the Borrower shall have the right to replace such Lender with an
entity that is an Eligible Assignee (a "Replacement Lender"); provided that such
Replacement Lender, (i) shall obtain the consent of the Agent, such consent not
to be unreasonably withheld, (ii) shall unconditionally offer in writing (with a
copy to the Agent) to purchase all of such Lender's rights and obligations under
this Agreement and the Loan Documents as of the date specified in the Assignment
and Acceptance (including, without limitation, the assigning Lender's Commitment
as then in effect, the assigning Lender's obligations in respect of the Letter
of Credit Facility, the Advances owing to the assigning Lender and the Notes
held by the assigning Lender), in each case without recourse, at the principal
amount thereof plus interest and fees accrued thereon to the date of such
purchase on a date therein specified, (iii) shall execute and deliver to the
Agent an Assignment and Acceptance and (iv) shall comply with all the terms and
conditions set forth in SECTIONS 13.11(B) and 13.11(C), including payment to the
Agent of the amount set forth in SECTION 13.11(B)(IV). Upon satisfaction of the
requirements set forth in the second sentence of this SECTION 3.10A, acceptance
of such offer to purchase by the Lender to be replaced, payment to such Lender
of the purchase price in immediately available funds, and the payment by the
Borrower of all requested costs accruing to the date of purchase which the
Borrower is obligated to pay under SECTIONS 13.1, 13.10(B)(IV) and 13.14 (if
any) and all other amounts owed by the Borrower to such Lender (including any
amounts owing pursuant to SECTION 3.10 but excluding principal of and interest
on the Notes and reimbursement obligations relating to the Letters of Credit of
such Lender purchased by the Replacement Lender) and execution of the Assignment
and Acceptance by all parties thereto in accordance with SECTION 13.11 hereof,
the Replacement Lender shall constitute a "Lender" hereunder with a Commitment
as so specified and the Lender being so replaced shall no longer constitute a
"Lender" hereunder and shall thereupon be released from any and all liabilities
in respect of this Agreement and the other Loan Documents. If, however, (x) a
Lender accepts such an offer and such proposed Replacement Lender fails to
purchase such rights and interests on such specified date in accordance with the
terms of such offer and this SECTION 3.10A and to execute an Assignment and
Acceptance, the Borrower shall continue to be obligated to pay the increased
costs or additional amounts due to such Lender pursuant to SECTION 3.10 or
Eurodollar Advances shall be terminated or not renewed as determined by such
Lender, as the case may be, or (y) the Lender proposed to be replaced fails to
accept such purchase offer, the Borrower shall not be obligated to pay to such
Lender such increased costs or additional amounts pursuant to SECTION 3.10
incurred or accrued from and after the date of such purchase offer but shall be
obligated to and shall pay any such increased costs or additional amounts
incurred or accrued prior to the date of such purchase offer.
SECTION 3.11. Payments Not at End of Interest Period; Failure to Borrow. If
for any reason any payment of principal of Eurodollar Advances is made other
than on the last day of the Interest Period applicable to the Borrowing
comprised of such Advances or the Borrower fails to borrow or to convert or
continue any Borrowing comprised of Eurodollar Advances after giving a Notice of
Borrowing or a Notice of Conversion or Continuation with respect thereto, then
the Borrower shall pay to the Agent for the ratable account of the Lenders an
amount computed pursuant to the following formula:
L = (R - T) x P x D
360
L = amount payable to the Agent
R = interest rate on Eurodollar Advances comprising such Borrowing
T = effective interest rate per annum at which any readily marketable
bond or other obligation of the United States, selected at the Agent's
sole discretion, maturing on or near the last day of the Interest
Period applicable to such Borrowing and in approximately the same
amount as such Borrowing can be purchased by the Agent on the day of
such payment of principal or failure to borrow or convert or continue
P = the amount of principal prepaid or the amount of the requested
Borrowing
D = the number of days remaining in the applicable Interest Period as
of the date of such payment or the number of days of the requested
Interest Period
The Borrower shall pay such amount upon presentation by the Agent of a statement
setting forth the amount and the Agent's calculation thereof pursuant hereto,
which statement shall be deemed true and correct absent manifest error.
SECTION 3.12. Manner of Payment.
(a) Each payment (including prepayments) by the Borrower on account
of the principal of or interest on the Loans or of any other amounts payable to
the Agent or to the Agent for the account of any or all Lenders under this
Agreement or any Note shall be made not later than 12:00 noon (Boston time) on
the date specified for payment under this Agreement to the Agent at the Agent's
Office, in Dollars, in immediately available funds and shall be made without any
setoff, counterclaim or deduction whatsoever. Any payment received on such day
after such time shall be deemed a payment on such date for the purposes of
SECTION 11.1, but for all other purposes shall be deemed to have been made on
the next succeeding Business Day. Settlement among the Agent and the Lenders
will be made in accordance with SECTION 3.13.
(b) The Borrower hereby irrevocably authorizes each Lender and each
Affiliate of each Lender to charge any account of the Borrower maintained with
such Lender or Affiliate with such amounts as may be necessary from time to time
to pay any Secured Obligations (whether or not owed to the Agent or such Lender)
which are not paid when due.
(c) If any payment under this Agreement or any Note shall be
specified to be made on a day which is not a Business Day, it shall be made on
the next succeeding Business Day and such extension of time shall in such case
be included in computing interest, if any, in accordance with such payment,
PROVIDED, that if such payment is a payment of principal of or interest on a
Eurodollar Advance and such extension of time would cause the payment date to
fall in the next calendar month, such payment shall be made on the next
preceding Business Day.
SECTION 3.13. Pro Rata Treatment; Settlement between Agent and Lenders.
(a) Each Borrowing under the Revolving Credit Facility shall be made
pro rata from the Lenders on the basis of their respective Commitment
Percentages. Each payment or prepayment of principal and interest on the Loans
shall be made to the Agent for the account of the Lenders, and shall be applied
by the Agent, pro rata on the basis of the respective Commitment Percentages of
the Lenders in effect immediately prior to such payment or prepayment; PROVIDED,
HOWEVER, that if any Lender shall fail or refuse to make available to the Agent
the Advance to be made by such Lender as part of any Borrowing under the
Revolving Credit Facility and the provisions of SECTION 2.2(C) are not
applicable, then all amounts thereafter received by the Agent for application to
repayment of the principal of or payment of interest on the outstanding
Revolving Credit Loan shall be paid by the Agent (i) as to principal, to the
Lender, if any, the aggregate principal amount of whose outstanding Advances
under the Revolving Credit Facility exceeds such Lender's Commitment Percentage
of the total principal amount of the outstanding Revolving Credit Loan until
such excess is eliminated and (ii) as to interest, to the Lenders ratably in the
same proportion that the Advances under the Revolving Credit Facility
outstanding from each of them bears to the total outstanding Revolving Credit
Loan.
(b) The Agent shall pay to each Lender such Lender's pro rata share
of all payments received by the Agent hereunder in respect of the principal of,
or interest on, the Loans, and such Lender's share of any other Secured
Obligation owed to such Lender, by wire transfer of same day funds not later
than the first Business Day after such payment is received. Any such amount
which is not paid by the Agent to such Lender on the day such payment is
received by the Agent, provided such payment is received by the Agent prior to
12:00 noon (Boston time) on such day, shall bear interest for each day until
paid in full at the Federal Funds Effective Rate in effect on such day, payable
by the Agent.
SECTION 3.14. Loan Account.
(a) Each Lender shall open and maintain on its books a loan account
in the Borrower's name. Such loan account shall show as debits thereto each
Advance made by such Lender under this Agreement and as credits thereto all
payments received by such Lender and applied to repayment or prepayment of the
principal of each such Advance, so that the balance of the loan account at all
times reflects the principal amount due such Lender from the Borrower.
(b) The Agent shall maintain on its books a control account for the
Borrower in which shall be recorded (i) the amount of each disbursement made
hereunder (ii) the amount of any principal or interest due or to become due from
the Borrower hereunder, and (iii) the amount of any sum received by the Agent
hereunder from the Borrower and each Lender's ratable share thereof. The Agent
shall also maintain on its books a control account for the Borrower in which
shall be recorded the amount of any fees due from the Borrower to the Agent and
each Lender hereunder and the amount of any fees received by the Agent from the
Borrower and each Lender's share thereof.
(c) The entries made in the accounts pursuant to SECTIONS 3.14(A) and
(B) shall be PRIMA FACIE evidence, in the absence of manifest error, of the
existence and amounts of the obligations of the Borrower therein recorded and in
case of discrepancy between such accounts, in the absence of manifest error, the
accounts maintained pursuant to SECTION 3.14(B) shall be controlling.
(d) The Agent on behalf of the Lenders will account to the Borrower
monthly with a statement of Borrowings, of the aggregate outstanding principal
balance, if any, of the Loans and of charges and payments made pursuant to this
Agreement, and such account rendered by the Agent shall be deemed final, binding
and conclusive unless the Agent is notified by the Borrower in writing to the
contrary within 20 days after the date the account was so rendered. Such notice
by the Borrower shall be deemed an objection only to those items specifically
objected to therein. Failure of the Agent to render such account shall in no
way affect its or any Lender's rights hereunder.
ARTICLE 4 - CONDITIONS PRECEDENT
SECTION 4.1. Conditions Precedent to Effectiveness. Notwithstanding any other
provision of this Agreement, this Agreement shall not become effective and the
Lenders shall not be obligated to make the Advances under the Term Loan Facility
contemplated by SECTION 2A.1 or under the Revolving Credit Facility until each
of the following conditions has been fulfilled prior to or contemporaneously
with the making of such Advances:
(a) Closing Documents. The Agent shall have received each of the
following documents, all of which shall be satisfactory in form and substance to
the Agent and its special counsel and the Lenders:
(i) certified copies of the certificate of incorporation and
by-laws of the Borrower as in effect on the Effective Date,
(ii) certified copies of all corporate action, including
stockholder or partner approval, if necessary, taken by the Borrower to
authorize the execution, delivery and performance of this Agreement, the
Loan Documents and the Borrowings under this Agreement,
(iii) certificates of incumbency and specimen signatures with
respect to each of the Authorized Officers of the Borrower or other Persons
authorized to execute and deliver this Agreement and the Loan Documents on
behalf of the Borrower or other Person executing any document to be
delivered in connection with this Agreement and to request Borrowings under
this Agreement,
(iv) a certificate evidencing the good standing of the Borrower
in the jurisdiction of its incorporation and in each other jurisdiction in
which it is qualified to transact business,
(v) copies of all the financial statements referred to in SECTION
5.1(N) and meeting the requirements thereof,
(vi) a signed opinion of (A) Xxxxxx & Xxxx, counsel for the
Borrower, substantially in the form of Exhibit C-1, (B) Xxxxxx Xxxxxx
Butowsky Xxxxxxx Xxxxxx & Xxxx, special New York counsel for the Borrower,
substantially in the form of Exhibit C-2, and (C) Xxxxxx & Xxxxxx, special
Tennessee counsel for the Borrower, substantially in the form of Exhibit
C-3, and in each case opining as to such other matters in connection with
this Agreement as the Agent or its special counsel may reasonably request,
(vii) any Financing Statements (including amendments thereto)
necessary or appropriate in connection with the transactions contemplated
by this Agreement, duly executed by the Borrower, and searches of the
Uniform Commercial Code (or equivalent) records of each office in which the
filing of a Financing Statement naming the Borrower as debtor and the Agent
for the benefit of the Lenders as secured party is necessary or appropriate
to perfect the Security Interest as security for the Secured Obligations,
evidencing the filing of such Financing Statements and no others affecting
the Collateral,
(viii) copies of a modification agreement with respect to each
Mortgage, duly executed and delivered by the Borrower and evidence of the
recording of such instrument in the appropriate jurisdiction for the
recording of a mortgage (or equivalent) on the Real Estate subject thereto,
(ix) as to each Mortgage, a fully paid endorsement to each of the
mortgagee title insurance policies issued to the Agent in respect of such
Mortgage, or, in each case, at the option of the Agent, unconditional
commitments for the issuance thereof with all requirements and conditions
to the issuance of the final policy or endorsement, as the case may be,
deleted or marked satisfied, issued by a title insurance company
satisfactory to the Agent, each in an amount equal to not less than the
fair market value of the Real Estate subject to the Mortgage insured
thereby, insuring each Mortgage, as modified, to create a valid first Lien
on, and security title to, all Real Estate described therein with no
exceptions which the Agent shall not have approved in writing and no
survey exceptions,
(x) copies of each of the other Loan Documents duly executed by
the parties thereto, together with evidence satisfactory to the Agent of
the due authorization and binding effect of each such Loan Document on such
party,
(xi) a certification from the Borrower as to such factual matters
as shall be requested by the Agent,
(xii) certificates of insurance relating to (i) each of the
policies of insurance covering any of the Collateral together with loss
payable clauses which comply with the terms of SECTION 7.9(B) and (ii) each
of the policies of insurance required by the Mortgages, in each case
together with loss payable clauses satisfactory to the Agent,
(xiii) a Certificate of the President or Chief Financial Officer
of the Borrower stating that, to the best of his knowledge and based on an
examination sufficient to enable him to make an informed statement,
(A) all of the representations and warranties made or
deemed to be made under this Agreement are true and correct as of the
Effective Date, both with and without giving effect to the Loans to be
made at such time and the application of the proceeds thereof, and
(B) no Default or Event of Default exists,
(xiv) a letter from the Borrower to the Agent requesting the
Advances under the Term Loan Facility and, if any, the Revolving Credit
Facility contemplated to be made on the Effective Date and specifying the
method of disbursement,
(xv) duly executed amendments or modifications to or
confirmations of the Agency Account Agreements, the Patent Assignment, the
Trademark Assignments, and the Pledge Agreement duly executed and delivered
by the Borrower, as the Agent may reasonably request, each in form and
substance satisfactory to the Agent and the Lenders,
(xvi) such assignments of lease and landlord's waiver and consent
agreements, or confirmations thereof, duly executed on behalf of each
landlord of real property on which any Collateral is located, as the Agent
may request,
(xvii) a Borrowing Base Certificate prepared as of the last day
of the month for which the Borrower has available financial information
that immediately precedes the Effective Date, and
(xviii) such other documents and instruments as the Agent or any
Lender may reasonably request.
(b) Notes. Each Lender shall have received a Revolving Credit Note
and Term Note complying with the terms of SECTIONS 2.4 AND 2A.4, respectively,
(c) No Material Adverse Change. As of the Effective Date, no change
shall have occurred which is materially adverse to the assets, liabilities,
businesses, operations, condition (financial or otherwise) or prospects of the
Borrower and its Consolidated Subsidiaries taken as a whole from those presented
by the unaudited financial statements for the Borrower and its Consolidated
Subsidiaries as of June 30, 1995 and for the nine-month period ended on such
date, copies of which have been delivered to Lenders, and the Agent shall be
provided with a certificate of the Chief Financial Officer of the Borrower to
such effect.
(d) No Litigation. As of the Effective Date, no action or
proceeding, excluding those listed on SCHEDULE 5.1(J), shall have been
instituted against the Borrower or any of its Subsidiaries in which an adverse
outcome is likely to have a Materially Adverse Effect on the Borrower and its
Subsidiaries taken as a whole and the Agent shall be provided with a certificate
of the Chief Financial Officer of the Borrower to such effect.
(e) Commitment Percentages. The Lenders shall have taken such
actions and sold or purchased such amounts of the Revolving Credit Loans as
shall satisfy the Agent that the principal amount of the Revolving Credit Loans
outstanding to each Lender is in an amount equal to such Lender's Commitment
Percentage times the aggregate outstanding principal balance of such Revolving
Credit Loans.
SECTION 4.2. Subsequent Borrowings.
(a) At the time of making of each Borrowing:
(i) all of the representations and warranties made or deemed to
be made under SECTIONS 5.1(A) (insofar as it pertains to continued
existence of the Borrower), 5.1(G), 5.1(H), 5.1(J), 5.1(O), 5.1(Q) AND
5.1(S) shall be true and correct at such time both with and without giving
effect to the Borrowing to be made at such time and the application of
the proceeds thereof, and
(ii) the corporate actions of the Borrower referred to in SECTION
4.1(A)(II) shall remain in full force and effect and the incumbency of the
officers or other persons authorized to act on behalf of the Borrower shall
be as stated in the certificates of incumbency delivered pursuant to
SECTION 4.1(A)(III) or as subsequently modified and reflected in a
certificate of incumbency delivered to the Agent.
(b) Each Notice of Borrowing shall constitute a certification to the
effect set forth in CLAUSES (A)(I) and (II) above by the Borrower to the Agent
for the benefit of the Lenders and the Agent may, without waiving either
condition, consider the conditions specified in SECTION 4.2(A)(I) and (II)
fulfilled and a certification by the Borrower to such effect made, if no written
notice to the contrary is received by the Agent prior to the making of the
Borrowing then to be made.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BORROWER
SECTION 5.1. Representations and Warranties. The Borrower represents and
warrants to the Agent and each Lender as follows:
(a) Organization; Power; Qualification. The Borrower is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has the power and authority to own its
properties and to carry on its business as now being and hereafter proposed to
be conducted and is duly qualified and authorized to do business in each
jurisdiction in which the failure to be so qualified would have a Materially
Adverse Effect on the Borrower. The jurisdictions in which the Borrower is
qualified to do business are listed on SCHEDULE 5.1(A).
(b) Subsidiaries and Capital Structure. SCHEDULE 5.1(B) correctly
sets forth the name of each Subsidiary of the Borrower, its jurisdiction of
incorporation, the name of its immediate parent or parents, and the percentage
of its issued and outstanding securities owned by the Borrower or any other
Subsidiary of the Borrower and indicating whether such Subsidiary is a
Consolidated Subsidiary. Except as set forth on SCHEDULE 5.1(B),
(i) no Subsidiary of the Borrower has issued any securities
convertible into shares of such Subsidiary's capital stock or any options,
warrants or other rights to acquire any shares or securities convertible
into such shares,
(ii) the outstanding stock and securities of each such Subsidiary
are owned by the Borrower or a Wholly Owned Subsidiary of the Borrower, or
by the Borrower and one or more of its Wholly Owned Subsidiaries, free and
clear of all Liens, warrants, options and rights of others of any kind
whatsoever, and
(iii) the Borrower has no Subsidiaries.
The outstanding capital stock of the Borrower and each of its Subsidiaries has
been duly and validly issued and is fully paid and nonassessable by the issuer,
and the owners of such shares of capital stock of the Borrower and each of its
Subsidiaries are set forth on SCHEDULE 5.1(B). The sole general partner of
Synthetic L.P. is SI Management and the sole general partner of SI Management is
Synthetic Management.
(c) Authorization of Agreement and Loan Documents and Borrowing. Each
Loan Party has the right and power, and has taken all necessary action to autho
rize it, to execute, deliver and perform the Loan Documents to which it is a
party in accordance with their respective terms and to make Borrowings
hereunder. This Agreement and each of the Loan Documents have been duly
executed and delivered by the duly Authorized Officers of the appropriate Loan
Party and each is, or each when executed and delivered in accordance with this
Agreement will be, a legal, valid and binding obligation of such Loan Party,
enforceable in accordance with its terms.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
etc. Except as provided in SCHEDULE 5.1(D), the execution, delivery and
performance of this Agreement and each of the Loan Documents in accordance with
their respective terms and the Borrowings hereunder do not and will not, by the
passage of time, the giving of notice or otherwise,
(i) require any Government Approval or violate any Applicable Law
relating to the Borrower or any Subsidiary of the Borrower,
(ii) conflict with, result in a breach of or constitute a default
under the certificate of incorporation or by-laws of the Borrower or any
Subsidiary of the Borrower, any indenture, agreement or other instrument to
which the Borrower or any Subsidiary of the Borrower is a party or by which
the Borrower or any Subsidiary of the Borrower or any property of the
Borrower or any Subsidiary of the Borrower may be bound or any Governmental
Approval relating to the Borrower or any Subsidiary of the Borrower, or
(iii) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired
by the Borrower or any Subsidiary of the Borrower other than the Security
Interest.
(e) Business. The Borrower is engaged principally in the business of
converting polypropylene resins into woven and non-woven non-apparel products.
(f) Compliance with Law; Governmental Approvals. Except as set forth
in SCHEDULE 5.1(F), the Borrower and each of its Subsidiaries (i) has all
Governmental Approvals required by any Applicable Law for it to conduct its
business, each of which is in full force and effect, is final and not subject to
review on appeal and is not the subject of any pending or threatened attack by
direct or collateral proceeding, except as would not, singly or in the
aggregate, cause a Default or Event of Default or have a Materially Adverse
Effect on the Borrower or such Subsidiary and in respect of which adequate
reserves have been established on the books of the Borrower or such Subsidiary,
and (ii) is in compliance with each Governmental Approval and in compliance with
all other Applicable Law relating to it, except for such noncompliance which
would not, singly or in the aggregate, cause a Default or Event of Default or
have a Materially Adverse Effect on the Borrower or such Subsidiary and in
respect of which adequate reserves have been established on the books of the
Borrower or such Subsidiary.
(g) Titles to Properties. Except as set forth in SCHEDULE 5.1(G),
the Borrower and each Subsidiary has good, marketable and legal title to, or a
valid leasehold interest in, its real properties and valid and legal title to
all personal property and assets, including but not limited to, those reflected
on the balance sheet delivered pursuant to SECTION 5.1(N), except those which
have been disposed of by the Borrower or such Subsidiary subsequent to such date
in the ordinary course of business.
(h) Liens. Except for Permitted Liens (including Existing Liens set
forth on SCHEDULE 5.1(H)), none of the respective properties and assets of the
Borrower or its Subsidiaries is, as of the Agreement Date, subject to any Lien.
No financing statement under the Uniform Commercial Code or other instrument
evidencing a Lien which names the Borrower or any Subsidiary as debtor (other
than the Financing Statements) which has not been terminated has been filed in
any State or other jurisdiction and neither the Borrower nor any Subsidiary has
signed any such financing statement or other instrument or any security
agreement authorizing any secured party thereunder to file any such financing
statement or instrument, except to perfect those Liens listed on SCHEDULE
5.1(H).
(i) Indebtedness and Guarantees. SCHEDULE 5.1(I) is a complete and
correct listing of all (i) Indebtedness for Money Borrowed and (ii) Guarantees
of the Borrower and each of its Subsidiaries as of the Agreement Date. The
Borrower and each Subsidiary has performed and is in compliance with all of the
terms of such Indebtedness and Guarantees and all instruments and agreements
relating thereto, and no default or event of default, or event or condition
which with notice or lapse of time or both would constitute such a default or
event of default, exists as of the Agreement Date with respect to any such
Indebtedness or Guarantee.
(j) Litigation. Except as set forth on SCHEDULE 5.1(J), there are no
actions, suits or proceedings pending (nor, to the knowledge of the Borrower,
are there any actions, suits or proceedings threatened, nor is there any basis
therefor) against or in any other way relating adversely to or affecting the
Borrower or any Subsidiary of the Borrower or any of its respective properties
in any court or before any arbitrator of any kind or before or by any
governmental body, except actions, suits or proceedings of the character
normally incident to the kind of business conducted by the Borrower and such
Subsidiaries which, if adversely determined, would not singly or in the
aggregate (together with those described in SCHEDULE 5.1(J)) have a Materially
Adverse Effect on the Borrower or any such Subsidiary and there are no strikes
or walkouts in progress relating to any labor contracts to which the Borrower or
any such Subsidiary is a party.
(k) Patents and Trademarks. The Borrower owns or possesses all
patents, patent rights or licenses, patent applications, trademarks, trademark
rights, trade names, trade name rights, copyrights and rights with respect to
the foregoing which are required to conduct the business of the Borrower and its
Subsidiaries as now and presently planned to be conducted without conflict with
the rights of others and SCHEDULE 5.1(K) lists all patents and trademarks owned
by the Borrower on the Agreement Date or to be acquired and owned on the
Effective Date.
(l) Tax Returns and Payments. All United States federal, state and
local as well as foreign national, provincial and local, tax returns of the
Borrower and each Subsidiary of the Borrower required by Applicable Law to be
filed have been duly filed, and all federal, state foreign national, provincial
and local taxes, assessments and other governmental charges or levies upon the
Borrower and each Subsidiary of the Borrower and its respective property,
income, profits and assets which are due and payable have been paid, except any
such nonpayment which is at the time permitted under SECTION 8.6. Federal
income tax returns for the Borrower and its Consolidated Subsidiaries have been
examined and reported on by the Internal Revenue Service (or closed by
applicable statutes), and all deficiencies satisfied as reflected on SCHEDULE
5.1(L). Foreign national and provincial tax returns of the Foreign Subsidiaries
have been settled and agreed with the foreign taxing authorities as reflected on
SCHEDULE 5.1(L). The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of federal, state, foreign national,
provincial and local taxes for all fiscal years and portions thereof since the
organization of such companies are in the judgment of the Borrower adequate, and
the Borrower knows of no reason to anticipate any additional assessments for any
of such years which, singly or in the aggregate, might have a Materially Adverse
Effect on the Borrower or its Subsidiaries.
(m) Burdensome Provisions. Except as set forth on SCHEDULE 5.1(M),
neither the Borrower nor any Subsidiary of the Borrower is a party to any
indenture, agreement, lease or other instrument, or subject to any charter or
corporate restriction, Governmental Approval or Applicable Law compliance with
the terms of which might have a Materially Adverse Effect on the Borrower or
such Subsidiary.
(n) Financial Statements. The Borrower has furnished to the Agent and
each Lender copies of the audited Consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of September 30, 1994 and the related audited
Consolidated statements of income, cash flow and shareholders' equity of the
Borrower and its Consolidated Subsidiaries for the fiscal year of the Borrower
ended on such date, certified, without qualification, by Deloitte & Touche. In
addition, the Borrower has furnished to the Agent and each Lender copies of the
unaudited Consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of June 30, 1995 and the related Consolidated statements of
income and cash flow of the Borrower and its Consolidated Subsidiaries for the
nine-month period ended on such date. Such financial statements are complete
and correct, and present fairly in accordance with GAAP the Consolidated
financial position of the Borrower and its Consolidated Subsidiaries as at, and
results of operations of the Borrower and its Consolidated Subsidiaries for the
periods ended on, the respective dates thereof (subject, in the case of such
interim statements, to the absence of notes and to normal year-end audit
adjustments). Except as disclosed or reflected in such financial statements and
except as disclosed in writing to the Lenders prior to the Effective Date, as at
the Effective Date the Borrower had no material liabilities, contingent or
otherwise, and there were no material unrealized or anticipated losses of the
Borrower.
(o) Adverse Change. Since June 30, 1995,
(i) no material adverse change in the business, assets,
liabilities, financial condition, results of operations or business
prospects of the Borrower and its Subsidiaries taken as a whole has
occurred, and
(ii) no event has occurred or failed to occur which has had, or
may have, a Materially Adverse Effect on the Borrower and its Subsidiaries
taken as a whole.
(p) ERISA. Except as set forth on SCHEDULE 5.1(P), as supplemented
from time to time, the Borrower has no Plans. Each Plan is in compliance with
ERISA in all material respects. No material liability to the PBGC or to a Multi
employer Plan has been, or is expected by the Borrower to be, incurred by the
Borrower.
(q) Absence of Defaults. Neither the Borrower nor any Subsidiary of
the Borrower is in default under its certificate of incorporation, charter,
other incorporation documents or by-laws and no event has occurred, which has
not been remedied, cured or waived,
(i) which constitutes a Default or an Event of Default, or
(ii) which constitutes, or which with the passage of time or
giving of notice or both would constitute, a default or event of default
by the Borrower or any Subsidiary of the Borrower under any material
agreement (other than this Agreement) or judgment, decree or order to which
the Borrower or any Subsidiary of the Borrower is a party or by which the
Borrower or any Subsidiary of the Borrower or any of their respective
properties may be bound, except, in the case only of any such agreement,
for alleged defaults which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been
established on the books of the Borrower or the relevant Subsidiary.
(r) Accuracy and Completeness of Information. All written
nformation, reports and other papers and data produced by or on behalf of the
Borrower and furnished to the Agent were, to the best of the Borrower's
knowledge, at the time the same were so furnished, complete and correct in all
material respects, to the extent necessary to give the recipient a true and
accurate knowledge of the subject matter. No fact is known to the Borrower
which has had, or may in the future have (so far as the Borrower can foresee), a
Materially Adverse Effect upon the Borrower and its Subsidiaries taken as a
whole which has not been set forth in the financial statements referred to in
SECTION 5.1(N) or in such information, reports or other papers or data or
otherwise disclosed in writing to the Agent prior to the Agreement Date. No
document furnished or written statement made to the Agent in connection with the
negotiation, preparation or execution of this Agreement or any of the Loan
Documents contains or will contain any untrue statement of a fact material to
the creditworthiness of the Borrower or its Subsidiaries or omits or will omit
to state a material fact necessary in order to make the statement contained
therein not misleading.
(s) Solvency. In each case after giving effect to the Indebtedness
represented by the Loans outstanding and to be incurred, the Senior Subordinated
Debt and the other transactions contemplated by this Agreement, the Borrower is
solvent, having assets of a fair salable value which exceeds the amount required
to pay its debts and the Borrower is able to and anticipates that it will be
able to meet its debts as they mature and has adequate capital to conduct the
business in which it is or proposes to be engaged.
(t) Receivables.
(i) Status. The Borrower has no knowledge of any fact or
circumstance not disclosed to the Agent in writing which would impair the
validity or collectibility of any Receivable.
(ii) Principal Executive Offices. The principal executive office
of the Borrower and the books and records relating to the Receivables are
located at the address or addresses set forth on SCHEDULE 5.1(T) and,
except as shown on such schedule, have been located there for the five
years immediately preceding the Agreement Date or for the duration of such
Person's existence, whichever is less.
(u) Inventory.
(i) Condition. All Inventory is in good condition, meets in all
material respects, all standards imposed by any governmental agency, or
department or division thereof, having regulatory authority over such
goods, their use or sale, and is currently either usable or salable in the
normal course of the Borrower's business, except to the extent reserved
against in the financial statements referred to in SECTION 5.1(N) or
delivered pursuant to ARTICLE 9.
(ii) Location. All Inventory is located on the premises set
forth on SCHEDULE 5.1(U) or is Inventory in transit to one of such
locations, except as otherwise disclosed in writing to the Agent, and has
been so located for the last five years.
(v) Equipment. All Equipment of the Borrower is in good order and
repair in all material respects and is located on the premises set forth on
SCHEDULE 5.1(V) and no Equipment of the Borrower has been located on other
premises during the last five years.
(w) Real Property. The Borrower owns no real property other than the
Real Estate and leases no real property other than that described on SCHEDULE
5.1(W) and, except as otherwise disclosed on SCHEDULE 5.1(W) such Real Property
and leaseholds constitute all of the real property employed in the business of
the Borrower.
(x) Corporate and Fictitious Names. Except as otherwise disclosed on
SCHEDULE 5.1(X), during the five-year period preceding the Agreement Date,
neither the Borrower nor any predecessor thereof has been known as or used any
corporate or fictitious name other than the corporate name on the Effective
Date.
(y) Federal Regulations. Neither the Borrower nor any of its
Subsidiaries is engaged or will engage, principally or as one of its important
activities, in the business of extending credit for the purposes of "purchasing"
or "carrying" any "margin stock" (as each of the quoted terms is defined or used
in Regulations G and U of the Board of Governors of the Federal Reserve System).
No part of the proceeds of any of the Loans will be used for so purchasing or
carrying margin stock or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation G, T, U or X of such Board of
Governors. If requested by any Lender or the Agent, the Borrower will furnish
to the Agent, with a counterpart for each Lender, a statement in conformity with
the requirements of said Regulation G, T, U or X to the foregoing effect.
(z) Investment Company Act. The Borrower is not an "investment
company" or a company "controlled" by an "investment company" (as each of the
quoted terms is defined or used in the Investment Company Act of 1940, as
amended).
(aa) Hazardous Waste and Substances; Environmental Requirements.
Without limiting the generality of SECTION 5.1(F), (i) the Borrower has all
material permits required by any Environmental Laws for it to conduct its
business, each of which is in full force and effect, is final and not subject to
review on appeal and is not the subject of any pending or, to the knowledge of
the Borrower, threatened attack by direct or collateral proceedings and (ii) the
Borrower is in compliance with all Environmental Laws and occupational health
and safety laws applicable to the Borrower or its properties, including the Real
Estate, except for instances of noncompliance which would not, singly or in the
aggregate, cause a Default or Event of Default or have a Materially Adverse
Effect and in respect of which adequate reserves have been established on the
books of the Borrower. The Borrower shall promptly notify the Agent of its
receipt of any notice of a violation of any such law, standard or regulation.
The Borrower hereby agrees to indemnify and hold the Agent and each of the
Lenders harmless from all loss, cost, damage, claim and expense incurred by the
Agent or such Lender on account of the Borrower's failure to perform the
obligations of this subparagraph.
SECTION 5.2. Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this ARTICLE 5 and all statements
contained in any certificate, financial statement, or other instrument,
delivered by or on behalf of the Borrower pursuant to or in connection with this
Agreement or any of the Loan Documents (including but not limited to any such
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall (unless otherwise provided) be
made or deemed to be made at and as of the Agreement Date and at and as of the
Effective Date and to the extent provided in SECTION 4.2(B) as of the date of
each Borrowing made after the Effective Date. All representations and
warranties made or deemed to be made under this Agreement shall survive and not
be waived by the execution and delivery of this Agreement, any investigation
made by or on behalf of the Agent or any Lender, or any Borrowing hereunder.
ARTICLE 6 - SECURITY INTEREST
SECTION 6.1. Security Interest.
(a) To secure the payment, observance and performance of the Secured
Obligations, the Borrower hereby confirms the mortgage, pledge and assignment
pursuant to the Existing Credit Agreement and re-mortgages, re-pledges and re-
assigns all of the Collateral to the Agent on behalf, and for the account, of
the Lenders and confirms the grant pursuant to the Existing Credit Agreement and
re-grants to the Agent on behalf, and for the account, of the Lenders a
continuing security interest in, and a continuing Lien upon, all of the
Collateral.
(b) As additional security for all of the Secured Obligations, the
Borrower hereby confirms the grant pursuant to the Existing Credit Agreement and
re-grants to the Agent on behalf, and for the account, of the Lenders a security
interest in, and assigns to the Agent on behalf, and for the account, of the
Lenders all of the Borrower's right, title and interest in and to, any deposits
or other sums at any time credited by or due from each Lender, or Affiliate of
such Lender, to the Borrower, or credited by or due from any participant to the
Borrower, with the same rights therein as if the deposits or other sums were
credited by or due from such Lender. The Borrower hereby authorizes each Lender
and each Affiliate of each Lender and each participant to pay or deliver to the
Agent for the account of the Lenders, without any necessity on the Agent's or
any Lender's part to resort to other security or sources of reimbursement for
the Secured Obligations, at any time upon the occurrence of any Event of Default
or in the event that the Agent on behalf of the Lenders should make demand for
payment hereunder and without further notice to the Borrower (such notice being
expressly waived), any of the aforesaid deposits (general or special, time or
demand, provisional or final) or other sums for application to any Secured
Obligation, irrespective of whether any demand has been made or whether such
Secured Obligation is mature, and the rights given the Agent, the Lenders, their
Affiliates and participants hereunder are cumulative with such Person's other
rights and remedies, including other rights of set-off. The Agent will promptly
notify the Borrower of its receipt of any such funds for application to the
Secured Obligations, but failure to do so will not affect the validity or
enforceability thereof. The Agent may give notice of the above grant of a
security interest in and assignment of the aforesaid deposits and other sums,
and authorization to, and make any suitable arrangements with, any such Lender,
Affiliate or participant of a Lender for effectuation thereof, and the Borrower
hereby irrevocably appoints the Agent as its attorney to collect any and all
such deposits or other sums to the extent any such payment is not made to the
Agent or any Lender by such Lender, Affiliate or participant.
SECTION 6.2. Continued Priority of Security Interest.
(a) The Security Interest granted by the Borrower shall at all times
be valid, perfected and enforceable against the Borrower and all third parties
in accordance with the terms of this Agreement, as security for the Secured
Obligations, and the Collateral shall not at any time be subject to any Liens
that are prior to, on a parity with or junior to the Security Interest, other
than Permitted Liens.
(b) The Borrower shall, at its sole cost and expense, take all action
that may be necessary or desirable, or that the Agent may reasonably request, so
as at all times to maintain the validity, perfection, enforceability and rank of
the Security Interest in the Collateral in conformity with the requirements of
SECTION 6.2(A), or to enable the Agent and the Lenders to exercise or enforce
their rights hereunder, including but not limited to:
(i) paying all taxes, assessments and other claims lawfully
levied or assessed on any of the Collateral, except to the extent that such
taxes, assessments and other claims constitute Permitted Liens,
(ii) obtaining, after the Agreement Date, landlords', mortgagees'
or mechanics' releases, subordinations or waivers,
(iii) delivering to the Agent, endorsed or accompanied by
such instruments of assignment as the Agent may specify, and stamping or
marking, in such manner as the Agent may specify, any and all chattel
paper, instruments, letters and advices of guaranty and documents
evidencing or forming a part of the Collateral, and
(iv) executing and delivering financing statements, pledges,
designations, mortgages, deeds to secure debt, deeds of trust,
hypothecations, notices and assignments, in each case in form and substance
satisfactory to the Agent, relating to the creation, validity, perfection,
maintenance or continuation of the Security Interest under the Uniform
Commercial Code or other Applicable Law.
(c) The Agent is hereby authorized to file one or more financing or
continuation statements or amendments thereto without the signature of or in the
name of the Borrower for any purpose contemplated in this SECTION 6.2. The
Agent will give the Borrower notice of the filing of any such statements or
amendments, which notice shall specify the locations where such statements or
amendments were filed. A carbon, photographic, xerographic or other
reproduction of this Agreement or of any of the Security Documents or of any
financing statement filed in connection with this Agreement is sufficient, to
the extent permitted by law, as a financing statement.
(d) The Borrower shall xxxx its books and records as directed by the
Agent and as may be necessary or appropriate to evidence, protect and perfect
the Security Interest and shall cause its financial statements to reflect the
Security Interest.
ARTICLE 7 - COLLATERAL COVENANTS
Until this Agreement has been terminated and all the Secured Obligations
have been irrevocably paid in full, unless the Majority Lenders shall otherwise
consent in the manner provided in SECTION 13.12:
SECTION 7.1. Collection of Receivables.
(a) The Borrower will cause all moneys, checks, notes, drafts and
other payments relating to or constituting proceeds of Receivables, or of any
other Collateral, to be forwarded to a Lockbox for deposit in an Agency Account
in accordance with the procedures set out in the corresponding Agency Account
Agreement, and in particular the Borrower will:
(i) advise each Account Debtor to address all remittances with
respect to amounts payable on account of any Receivables to a specified
Lockbox, and
(ii) stamp all invoices relating to any such amounts with a
legend satisfactory to the Agent indicating that payment is to be made to
the Borrower via a specified Lockbox.
(b) Each Agency Account Agreement shall provide that all deposits in
each Agency Account be transmitted daily by wire transfer or depository transfer
check in accordance with procedures set forth in such Agency Account Agreement
to the Agent at the Agent's Office:
(i) for credit on account of the Secured Obligations, as provided
in SECTIONS 2.3(C), 11.2 AND 11.4, such credits to be entered as of the
Business Day after receipt and to be conditional upon final payment in cash
or solvent credits of the items giving rise to them, and
(ii) with respect to the balance, so long as no Default or Event
of Default has occurred and is continuing, for transfer by wire transfer or
depository transfer check to the Controlled Disbursement Account or, in the
absence of a Controlled Disbursement Account, to the Designated Deposit
Account.
(c) Any moneys, checks, notes, drafts or other payments referred to in
SUBSECTION (A) of this SECTION 7.1 which are received by or on behalf of the
Borrower will be held in trust for the Agent and will be delivered to a Clearing
Bank, as promptly as possible, in the exact form received, together with any
necessary endorsements for deposit in the Agency Account maintained with such
Clearing Bank and processing in accordance with the terms of the corresponding
Agency Account Agreement.
SECTION 7.2. Verification and Notification. The Agent shall have the right,
(a) at any time and from time to time, in the name of the Agent, the
Lenders or the Borrower, to verify the validity, amount or any other matter
relating to any Receivables by mail, telephone, telegraph or otherwise, and
(b) from and after the occurrence of a Default or Event of Default, to
notify the Account Debtors or obligors under any Receivables of the assignment
of such Receivables to the Agent on behalf of the Lenders and to direct such
Account Debtor or obligors to make payment of all amounts due or to become due
thereunder directly to the Agent on behalf of the Lenders and, upon such
notification and at the expense of the Borrower, to enforce collection of any
such Receivables, and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as the Borrower might have
done.
SECTION 7.3. Disputes, Returns and Adjustments.
(a) In the event any amounts due and owing under any Receivable for an
amount in excess of $500,000 are in dispute between the Account Debtor and the
Borrower, the Borrower shall provide the Agent with prompt written notice
thereof.
(b) The Borrower shall notify the Agent promptly of all material
returns and credits in respect of any Receivables which notice shall specify the
Receivables affected.
(c) The Borrower may, in the ordinary course of business and prior to
a Default or an Event of Default, grant any extension of time for payment of any
Receivable or compromise, compound or settle the same for less than the full
amount thereof, or release wholly or partly any Person liable for the payment
thereof, or allow any credit or discount whatsoever thereon, PROVIDED that
(i) no such action results in the reduction of more than $500,000 in the amount
payable with respect to any Receivable, and (ii) the Agent is promptly notified
of the amount of any such adjustments in excess of $200,000 and the Receivable
affected thereby.
SECTION 7.4. Invoices.
(a) The Borrower will not use any invoices except invoices in the
forms delivered to the Agent prior to the Agreement Date, unless the Borrower
shall have given the Agent 30 days prior notice of their intended use.
(b) Upon the request of the Agent, the Borrower shall deliver to the
Agent copies of customers' invoices or the equivalent, original shipping and
delivery receipts or other proof of delivery, customers' statements, the
original copy of all documents, including, without limitation, repayment
histories and present status reports, relating to Receivables and such other
documents and information relating to the Receivables as the Agent shall
specify.
SECTION 7.5. Delivery of Instruments. In the event any Receivable becomes
evidenced by a promissory note, trade acceptance or any other instrument for the
payment of money, the Borrower will immediately thereafter deliver such
instrument to the Agent, appropriately endorsed to the Agent on behalf of the
Lenders.
SECTION 7.6. Sales of Inventory. All sales of Inventory will be made in
compliance with all requirements of Applicable Law.
SECTION 7.7. Work in Process. The Security Interest in the Inventory shall
continue through all stages of manufacture (to the extent, in the case of goods
being manufactured for the Borrower by others, of the Borrower's interest in
such goods) and shall, without further act, attach to raw materials, to work in
process, to the finished goods and to the proceeds resulting from the sale or
other disposition thereof and to all Inventory which is returned to the Borrower
by customers or is otherwise recovered.
SECTION 7.8. Ownership and Defense of Title.
(a) Except for Permitted Liens, the Borrower shall at all times be the
sole owner of each and every item of Collateral and shall not create any Lien
on, or sell, lease, exchange, assign, transfer, pledge, hypothecate, grant a
security interest or security title in or otherwise dispose of, any of the
Collateral or any interest therein, except for sales of Inventory in the
ordinary course of business, for cash or on open account or on terms of payment
ordinarily extended to its customers, and except for the disposition of
Equipment no longer used or deemed useful in the business of the Borrower in an
amount of up to $250,000 in aggregate fair market value during any 12-month
period in excess of the amount of proceeds of such dispositions applied by the
Borrower to acquire replacement Equipment which, no later than the Borrower's
obtaining possession thereof, will be subject to the Security Interest which
shall be perfected as to such Equipment and shall be subject to no other Lien
(other than Permitted Liens). The inclusion of "proceeds" of the Collateral
under the Security Interest shall not be deemed a consent by the Agent or the
Lenders to any other sale or other disposition of any part or all of the
Collateral.
(b) The Borrower shall defend its title in and to, and the Security
Interest in, the Collateral against the claims and demands of all Persons.
SECTION 7.9. Insurance.
(a) The Borrower shall at all times maintain insurance on the
Inventory and Equipment against loss or damage by fire, theft, burglary,
pilferage, loss in transit and such other hazards as the Agent or any Lender
shall reasonably specify, in amounts and under policies issued by the Borrower's
present insurers or other insurers reasonably acceptable to the Majority
Lenders. All premiums on such insurance shall be paid by the Borrower and
copies of the policies delivered to the Agent. The Borrower will not use or
permit the Inventory or Equipment owned or used by it to be used unlawfully or
outside of any insurance coverage.
(b) All insurance policies required under SECTION 7.9(A) shall
contain loss payable clauses in the form submitted to the Borrower by the Agent
or in other form and substance satisfactory to the Majority Lenders, naming the
Agent, on behalf of the Lenders, as loss payee as their interests may appear,
and providing
(i) that all proceeds thereunder shall be payable to the Agent on
behalf of the Lenders,
(ii) that no such insurance shall be affected by any act or
neglect of the insurer or owner of the property described in such policy,
and
(iii) that such policy and loss payable clauses may not be
canceled, amended or terminated unless at least 30 days' prior written
notice is given to the Agent.
(c) Any proceeds of insurance referred to in this SECTION 7.9 which
are paid to the Agent shall be, at the sole option of the Majority Lenders,
either (i) applied to rebuild, restore or replace the damaged or destroyed
property, or (ii) applied to the payment or prepayment of the Secured
Obligations; PROVIDED, HOWEVER, that if the total loss is $10,000,000 or less,
and at the time no Event of Default has occurred and is continuing, then the
Borrower may reborrow under the terms of this Agreement the amount of any such
proceeds applied to repay Secured Obligations to rebuild, restore or replace the
damaged or destroyed property, subject to reasonable conditions as would
ordinarily be applied by the Lenders in making construction loans.
(d) With respect to the Real Estate, the Borrower shall maintain
insurance as provided in the Mortgages.
SECTION 7.10. Location of Offices and Collateral.
(a) The Borrower will not change the location of its chief executive
office or its books and records relating to the Collateral or change its name,
its identity or corporate structure without giving the Agent 60 days prior
written notice thereof.
(b) All Inventory, other than Inventory in transit, to any such
location, and all Equipment will at all times be kept by the Borrower at the
locations set forth in SCHEDULES 5.1(U) AND 5.1(V), respectively, and shall not,
without the prior written approval of the Agent, be removed therefrom except,
prior to an Event of Default, for sales of Inventory permitted under SECTIONS
7.6 and 7.8.
(c) If any Inventory is in the possession or control of any of the
Borrower's agents or processors, the Borrower shall notify such agents or
processors of the Security Interest and, upon the occurrence of an Event of
Default shall instruct them to hold all such Inventory for the account of the
Lenders, subject to the instructions of the Agent.
SECTION 7.11. Records Relating to Collateral.
(a) The Borrower will at all times
(i) keep complete and accurate records of Inventory on a FIFO
basis, itemizing and describing the kind, type and quantity of Inventory
and the Borrower's cost therefor and a current price list for such
Inventory, and
(ii) keep complete and accurate records of all other Collateral.
(b) The Borrower will take, or cause to be taken, a complete physical
listing of all Inventory, wherever located, at least annually.
SECTION 7.12. Inspection. The Agent and each Lender (by any of its officers,
employees or agents) shall have the right, to the extent that the exercise of
such right shall be within the control of the Borrower, at any reasonable time
or times during normal business hours and at their own expense to inspect the
Collateral, all files relating thereto and the premises upon which any of the
Collateral is located, to discuss the Borrower's affairs and finances, insofar
as the same are reasonably related to the rights of the Agent and each Lender
hereunder or under any of the Loan Documents, with any Person, to verify the
amount, quantity, value and condition of, or any other matter relating to, any
of the Collateral and in this connection to review, audit and make extracts from
all records and files related to any of the Collateral. The Borrower will
deliver to the Agent and each Lender any instrument necessary for it to obtain
records from any service bureau maintaining records on behalf of the Borrower.
SECTION 7.13. Maintenance of Equipment. The Borrower shall maintain all
physical property that constitutes Equipment in good and workable condition in
all material respects, with reasonable allowance for wear and tear, and shall
exercise proper custody over all such property.
SECTION 7.14. Information and Reports.
(a) Schedule of Receivables. The Borrower shall deliver to the Agent
and each Lender by the first day and the 15th day of each month a Schedule of
Receivables which
(i) shall be as of the 15th day and the last Business Day,
respectively, of the immediately preceding accounting month of the Borrower,
(ii) shall, in the case of the Schedule delivered not later than
the 15th day of each calendar month, be reconciled to the Borrowing Base
Certificate as of the last Business Day of the immediately preceding month,
(iii) shall set forth a detailed aged trial balance of all
its then existing Receivables, specifying the names, addresses and balance
due for each Account Debtor obligated on a Receivable so listed, and
(iv) shall set forth a detailed report of balances due from and
rebates owing to Account Debtors, specifying the names and addresses of
each Account Debtor, the balance due on each Account Debtor's Account and
the amount of any rebate owed to that Account Debtor in the ordinary course
of the Borrower's business.
(b) Schedule of Inventory. The Borrower shall deliver to the Agent
and each Lender by the 15th day of each month a Schedule of Inventory as of the
last Business Day of the immediately preceding accounting month of the Borrower,
itemizing and describing the kind, type and quantity of Inventory and the
Borrower's cost thereof together with a current price list for such Inventory.
(c) Schedule of Equipment. The Borrower shall deliver to the Agent
and each Lender on such dates as may be requested by the Agent or any Lender, a
Schedule of Equipment describing each item of Equipment having an original
purchase price in excess of $250,000 and the appraised value, if any, and the
cost thereof.
(d) Borrowing Base Certificate. The Borrower shall deliver to the
Agent and each Lender not later than the 15th day of each calendar month a
Borrowing Base Certificate prepared as of the close of business on the last
Business Day of the immediately preceding month.
(e) Notice of Diminution of Value. The Borrower shall give prompt
notice to the Agent and each Lender of any matter or event which has resulted
in, or may result in, the actual or potential diminution in excess of $200,000
in the value of any of its Collateral.
(f) Other Information. The Agent may in its discretion from time to
time require the Borrower to deliver the schedules described in SECTIONS
7.14(A), (B), (C) and (D) more or less often and on different schedules.
Additionally the Borrower shall furnish to the Agent and each Lender such other
information with respect to the Collateral as the Agent or any Lender may
reasonably request.
SECTION 7.15. Power of Attorney. The Borrower hereby appoints the Agent, as
its attorney, with power
(a) to endorse the name of the Borrower on any checks, notes,
acceptances, money orders, drafts or other forms of payment or security that may
come into the Agent's or a Lender's possession, and
(b) to sign the name of the Borrower on any invoice or xxxx of lading
relating to any Receivables, Inventory or other Collateral, on any drafts
against customers related to letters of credit, on schedules and assignments of
Receivables furnished to the Agent by the Borrower, on notices of assignment,
financing statements and other public records relating to the perfection or
priority of the Security Interest, or verifications of account and on notices to
or from customers.
.16. Leaseholds. The Borrower shall execute and deliver to the Agent
on behalf of the Lenders, promptly after request by the Agent, such duly
executed leasehold mortgages, assignments of leases, financing statements and
landlords consents with respect to real property leased by the Borrower as the
Agent may request, subject however to the ability of the Borrower to obtain
necessary consents from the landlord to such leasehold mortgages, assignments of
leases, financing statements and consents after employing its good faith best
efforts to do so. In addition, the Borrower shall cause to be furnished to the
Agent on behalf of the Lenders, at the Borrower's expense, fully-paid mortgagee
title insurance with respect to the property covered by such leasehold
mortgages, in form, substance and amount and from an insurer satisfactory to the
Agent. The Borrower shall pay all fees, costs, expenses (including, without
limitation, recording and filing fees and fees of counsel) incurred in
connection with the preparation, recording and filing of such leasehold
mortgages, assignments of leases and financing statements.
SECTION 7.17. Motor Vehicle Title Certificates. The Borrower shall deliver to
the Agent promptly after the Agent's request therefor, certificates of title for
each vehicle included in the Equipment, together with duly executed applications
to the appropriate State authorities requesting that each such certificate of
title be reissued with the Security Interest noted thereon.
SECTION 7.18. Title Insurance. In the event that the conditions of SECTION
4.1(A)(IX) are met by the delivery to the Agent on or prior to the Effective
Date of commitments for the issuance of endorsements to mortgagee title
insurance policies, the Borrower agrees that fully-paid endorsements meeting the
requirements set forth in SECTION 4.1(A)(IX) shall be delivered to the Agent
within 45 days after the Effective Date.
ARTICLE 8 - AFFIRMATIVE COVENANTS
Until this Agreement has been terminated and all the Secured Obligations
have been irrevocably paid in full, unless the Majority Lenders shall otherwise
consent in the manner provided for in SECTION 13.12, the Borrower will, and will
cause each of its Subsidiaries to:
SECTION 8.1. Preservation of Legal Existence and Similar Matters. Preserve
and maintain its corporate existence, rights, franchises, licenses and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified as a foreign entity and authorized to do business in each jurisdiction
in which the failure to be so qualified would have a Materially Adverse Effect
on the Borrower or such Subsidiary.
SECTION 8.2. Compliance with Applicable Law.
(a) Comply with all Applicable Law relating to the Borrower or such
Subsidiary where the failure to so comply would have a Materially Adverse Effect
on the Borrower or such Subsidiary.
(b) Whenever, subsequent to the Agreement Date, a material
Governmental Approval shall be required by Applicable Law and is not routine in
nature, deliver to the Agent on behalf of the Lenders a listing of such
Governmental Approval and a copy thereof.
SECTIN 8.3. Maintenance of Property. In addition to, and not in derogation
of, the requirements of SECTION 7.8 and of any of the Security Documents,
(a) protect and preserve all properties material to its business,
including copyrights, patents, trade names and trademarks, and maintain in good
repair, working order and condition in all material respects all tangible
properties, and
(b) from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements and additions to such properties
necessary for the conduct of its business, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times.
SECTION 8.4. Conduct of Business. At all times carry on its business in an
efficient manner and engage only in businesses in substantially the same fields
as the businesses conducted on the Agreement Date.
SECTION 8.5. Insurance. Maintain, in addition to that required by SECTION 7.9
or any of the Security Documents, insurance with responsible insurance companies
against such risks and in such amounts as is customarily maintained by similar
businesses or as may be required by Applicable Law, and from time to time
deliver to the Agent or any Lender upon its request a detailed list of the
insurance then in effect, stating the names of the insurance companies, the
amounts and rates of the insurance, the dates of the expiration thereof and the
properties and risks covered thereby.
SECTION 8.6. Payment of Taxes and Claims. Pay or discharge when due
(a) all taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits or upon any properties belonging to it,
and
(b) all lawful claims of materialmen, mechanics, carriers,
warehousemen and landlords for labor, materials, supplies and rentals before the
same become a Lien on any properties of the Borrower or such Subsidiary;
except that this SECTION 8.6 shall not require the payment or discharge of any
such tax, assessment, charge, levy or claim which is being contested in good
faith by appropriate proceedings and for which adequate reserves have been
established on the appropriate books.
SECTION 8.7. Accounting Methods and Financial Records. Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and
complete), as may be required or as may be necessary to permit the preparation
of financial statements in accordance with GAAP consistently applied and
maintain October 1 - September 30 as its fiscal year unless the Majority Lenders
shall have agreed to a change in the Borrower's fiscal year.
SECTION 8.8. Visits and Inspections. Permit representatives of the Agent or
any Lender, from time to time, as often as may be reasonably requested, but only
during normal business hours and at their own expense, to
(a) visit and inspect its properties,
(b) inspect and make extracts from its relevant books and records,
including but not limited to management letters prepared by independent
accountants, and
(c) discuss with its principal officers and its independent
accountants, its business, assets, liabilities, financial condition, results of
operations and business prospects.
The rights granted the Agent and the Lenders by the Borrower under this Section
are in addition to and not in derogation of the rights of the Agent and the
Lenders under SECTION 7.12 and nothing in this Section shall be construed as
imposing any additional requirement of notice or any other limitation on the
rights of the Agent or the Lenders under SECTIONS 7.2 OR 7.3.
SECTION 8.9. Use of Proceeds.
(a) Use the proceeds of all Advances made on the Effective Date for
the purposes set forth on SCHEDULE 8.9,
(b) use the proceeds of all subsequent Advances only for working
capital and general business purposes of the Borrower, including Capital
Expenditures, and
(c) not use any part of such proceeds to purchase or carry, or to
reduce or retire or refinance any credit incurred to purchase or carry, any
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System) or for any other purpose which would involve a
violation of such Regulation U or Regulations G, T or X of such Board of
Governors, or for any other purpose prohibited by law or by the terms and
conditions of this Agreement.
SECTION 8.10. Hazardous Waste and Substances; Environmental Requirements.
(a) In addition to, and not in derogation of, the requirements of
SECTION 8.2 and of any of the Security Documents, comply with all laws,
governmental standards and regulations applicable to the Borrower, the Real
Estate or any of the Borrower's other assets in respect of occupational health
and safety and Environmental Laws applicable to the Borrower, the Real Estate or
any of the Borrower's other assets, promptly notify the Agent and each Lender of
its receipt of any notice of a violation of any such law, rule, standard or
regulation, and indemnify and hold the Agent and each Lender harmless from all
loss, cost, damage, claim and expense incurred by the Agent or such Lender on
account of the Borrower's failure to perform the obligations of this SECTION
8.10(A).
(b) Whenever the Borrower gives notice to the Lender pursuant to this
SECTION 8.10 with respect to a matter that reasonably could be expected to
result in liability to the Borrower in excess of $500,000 in the aggregate, the
Borrower shall, at the Agent's request and the Borrower's expense, (i) cause an
independent environmental engineer acceptable to the Agent to conduct such tests
of the site where the noncompliance or alleged noncompliance with Environmental
Laws has occurred and prepare and deliver to the Agent and each Lender a report
setting forth the results of such tests, a proposed plan to bring the Borrower
into compliance with such Environmental Laws and an estimate of the costs
thereof, and (ii) provide to the Agent and each Lender a supplemental report of
such engineer whenever the scope of the noncompliance or the response thereto or
the estimated costs thereof shall materially change.
SECTION 8.11. Loans to Foreign Subsidiaries. In the event that the Majority
Lenders consent to the Borrower making any loans to any Foreign Subsidiaries,
require and cause such loans, if requested by the Majority Lenders, to be
secured by a charge against all assets of such Foreign Subsidiary, and assign
and pledge (pursuant to the Pledge Agreement or otherwise) to the Agent on
behalf of the Lenders all such loans and charges as security for the Secured
Obligations together with all instruments and other documents evidencing such
loans and charges.
ARTICLE 9 - INFORMATION
Until this Agreement has been terminated and all the Secured Obligations
have been irrevocably paid in full, unless the Majority Lenders shall otherwise
consent in the manner set forth in SECTION 13.12, the Borrower will furnish to
the Agent at its office then designated for notices pursuant to SECTION 13.1:
SECTION 9.1. Financial Statements.
(a) Monthly Financial Statements. As soon as available after the end
of each month, but in any event within 20 days after the end of each month,
copies of (i) the unaudited Consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at the end of such month and the related unaudited
Consolidated statement of income for the Borrower and its Consolidated
Subsidiaries for such month, for the fiscal quarter of the Borrower then ended
(if such month is the last month in any such fiscal quarter) and for the portion
of the fiscal year of the Borrower through such month, certified by the Chief
Financial Officer as presenting fairly the Consolidated financial condition and
results of operations of the Borrower and its Consolidated Subsidiaries taken as
a whole (subject to normal year-end audit adjustments), (ii) if such month is
the last month in any fiscal quarter of the Borrower, the unaudited Consolidated
statement of cash flow of the Borrower and its Consolidated Subsidiaries for
such fiscal quarter and for the portion of the fiscal year of the Borrower
through such fiscal quarter, certified by the Chief Financial Officer as
presenting fairly the cash flow of the Borrower and its Consolidated
Subsidiaries taken as a whole (subject to normal year-end audit adjustments),
(iii) the unaudited consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries as at the end of such month and the related unaudited
consolidating statement of income for the portion of the fiscal year through
such month, in each case showing intercompany eliminations, certified by the
Chief Financial Officer as being fairly stated in all material respects (subject
to normal year-end adjustments) when considered in relation to the Consolidated
financial statements of the Borrower and its Consolidated Subsidiaries, (iv) a
forecast of cash flow from operations for the ensuing six months, and (v) if
such month is the last month of a fiscal quarter, a forecast of consolidating
and Consolidated sales and operating earnings for the next succeeding fiscal
quarter, which forecast shall be furnished only to the Agent and such of the
Lenders as shall specifically request to be furnished with a copy of thereof;
and
(b) Audited Year-End Statements. As soon as available, but in any
event within 90 days after the end of each fiscal year of the Borrower, copies
of (i) the Consolidated balance sheets of the Borrower and its Subsidiaries as
at the end of such fiscal year and the related Consolidated statements of
income, shareholders' equity and cash flow for such fiscal year, in each case
setting forth in comparative form the figures for the previous year of the
Borrower (unless there is no previous full year), certified, without
qualification as to the scope of the audit, by independent certified public
accountants of nationally recognized standing, whose certificates shall be in
scope and substance satisfactory to the Agent and the Majority Lenders and who
shall have authorized the Borrower to deliver such financial statements and
certifications thereof to the Agent and Lenders pursuant to this Agreement, and
(ii) the consolidating balance sheet of the Borrower and its Consolidated
Subsidiaries as at the end of such fiscal year and the related consolidating
statement of income for such fiscal year, in each case showing intercompany
eliminations, certified by the Chief Financial Officer as being fairly stated in
all material respects when considered in relation to the Consolidated financial
statements of the Borrower and its Consolidated Subsidiaries;
all such financial statements to be complete and correct in all material
respects and, except for forecasts, prepared in accordance with GAAP (except,
with respect to interim financial statements, for the omission of footnotes and
for the effect of normal year-end audit adjustments) applied consistently
throughout the periods reflected therein.
SECTION 9.2. Accountants' Certificate. Together with the financial statements
referred to in SECTION 9.1(B), the Borrower shall deliver a certificate of such
accountants addressed to the Agent
(a) stating that in making the examination necessary for the
certification of such financial statements, nothing has come to their attention
to lead them to believe that any Default or Event of Default exists and, in
particular, they have no knowledge of any Default or Event of Default or, if
such is not the case, specifying such Default or Event of Default and its
nature, and
(b) having attached the calculations, prepared by the Borrower and
reviewed by such accountants, required to establish whether or not the Borrower
is in compliance with the covenants contained in SECTIONS 10.1, 10.2, 10.5,
10.10 and 10.11, as at the date of such financial statements.
SECTION 9.3. Officer Certificate. At the time the financial statements are
furnished pursuant to SECTION 9.1(A), the Borrower shall also furnish a
certificate of its President or Chief Financial Officer in the form of EXHIBIT D
hereto
(a) setting forth as at the end of such month the calculations
required to establish whether or not the Borrower was in compliance with the
requirements of SECTIONS 10.1, 10.2, 10.5, 10.10 and 10.11, as at the end of
each respective period, and
(b) stating that, based on an examination sufficient to enable him to
make an informed statement, no Default or Event of Default exists, or, if such
is not the case, specifying such Default or Event of Default and its nature,
when it occurred, whether it is continuing and the steps being taken by the
Borrower with respect to such event or failure.
SECTION 9.4. Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or any Subsidiary or Affiliate of the Borrower, or
their respective Boards of Directors by their independent public accountants,
including, without limitation, any management report.
(b) As soon as practicable, copies of all financial statements and
reports as the Borrower or any Subsidiary or Affiliate of the Borrower shall
send to its stockholders, and of all registration statements and all regular or
periodic reports which the Borrower or any Subsidiary or Affiliate of the
Borrower shall file with the Securities and Exchange Commission or any successor
commission.
(c) At the same time as the monthly or annual financial statements are
delivered pursuant to SECTIONS 9.1, a statement setting forth the cash flows of
the Borrower and each Consolidated Subsidiary of the Borrower for the period
covered by such statements.
(d) From time to time and promptly upon each request, such forecasts,
data, certificates, reports, statements, opinions of counsel, documents or
further information regarding the business, assets, liabilities, financial
condition, results of operations or business prospects of the Borrower and each
Subsidiary as the Agent or any Lender may request and that the Borrower or any
Subsidiary has or (except in the case of legal opinions relating to the
perfection or priority of the Security Interest) without unreasonable expense
can obtain. The rights of the Agent and each Lender under this SECTION 9.4(D)
are in addition to and not in derogation of its rights under any other provision
of this Agreement or any of the Security Documents.
(e) If requested by the Agent or any Lender, the Borrower will furnish
to the Agent or such Lender statements in conformity with the requirements of
Federal Reserve Form FR G-3 or FR U-1 referred to in Regulations G or U of the
Board of Governors of the Federal Reserve System.
SECTION 9.5. Notice of Litigation and Other Matters. Prompt notice of:
(a) to the extent the Borrower is aware of the same, the commencement
of all proceedings and investigations by or before any governmental or
nongovernmental body and all actions and proceedings in any court or before any
arbitrator against or in any other way relating adversely to, or adversely
affecting, the Borrower or any Subsidiary or Affiliate of the Borrower or any of
their respective property, assets or businesses, which might, singly or in the
aggregate, cause a Default or an Event of Default or have a Materially Adverse
Effect on the Borrower or such Subsidiary,
(b) any amendment of the certificate of incorporation, or the charter
documents, by-laws or partnership certificate or agreement of the Borrower or
any Subsidiary or Affiliate of the Borrower,
(c) any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of the Borrower or any
Subsidiary or Affiliate of the Borrower which has had or may foreseeably have
any Materially Adverse Effect on the Borrower or any such Subsidiary and any
change in the executive officers of the Borrower or any such Subsidiary, and
(d) any Default or Event of Default or any event which constitutes or
which with the passage of time or giving of notice or both would constitute a
default or event or default by the Borrower or any Subsidiary of the Borrower
under any material agreement other than this Agreement to which such Borrower or
any such Subsidiary is a party or by which the Borrower or any such Subsidiary
or any of their respective properties may be bound, including, without
limitation, the Indenture.
SECTION 9.6. ERISA. As soon as possible and in any event within 30 days after
the Borrower knows, or has reason to know, that:
(a) any Termination Event with respect to a Plan has occurred or will
occur, or
(b) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans has increased to an amount in excess of $0, or
(c) the Borrower or any of its Subsidiaries is in "default" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan required by reason of its complete or partial withdrawal (as
described in Section 4203 or 4205 of ERISA) from such Plan, a certificate of the
President or Chief Financial Officer of the Borrower setting forth the details
of such of the events described in CLAUSES (A) through (C) as applicable and the
action which is proposed to be taken with respect thereto, together with any
notice or filing which may be required by the PBGC or other agency of the United
States government with respect to such of the events described in CLAUSES (A)
through (C) as applicable.
SECTION 9.7. Accuracy of Information. All written information, reports,
statements and other papers and data furnished to the Agent or any Lender,
whether pursuant to this ARTICLE 9 or any other provision of this Agreement, or
any of the Security Documents, shall be, at the time the same is so furnished,
complete and correct in all material respects to the extent necessary to give
the Agent and the Lenders true and accurate knowledge of the subject matter.
SECTION 9.8. Revisions or Updates to Schedules. Should any of the information
or disclosures provided on any of the Schedules originally attached hereto
become outdated or incorrect in any material respect, Borrower promptly shall
provide to the Agent and each Lender such revisions or updates to such
Schedule(s) as may be necessary or appropriate to update or correct such
Schedule(s), PROVIDED that no such revisions or updates to any Schedule(s) shall
be deemed to have amended, modified or superseded such Schedule(s) as originally
attached hereto, or to have cured any breach of warranty or representation
resulting from the inaccuracy or incompleteness of any such Schedule(s), unless
and until the Majority Lenders, in their sole and absolute discretion, shall
have accepted in writing such revisions or updates to such Schedule(s).
ARTICLE 10 - NEGATIVE COVENANTS
Until this Agreement has been terminated and all the Secured Obligations
have been irrevocably paid in full, unless the Majority Lenders shall otherwise
consent in the manner set forth in SECTION 13.12, the Borrower will not directly
or indirectly, and in the case of SECTION 10.2 through 10.16 will not permit its
Subsidiaries to:
SECTION 10.1. Financial Ratios. Permit:
(a) Working Capital. The ratio of Working Capital Assets of the
Borrower and its Consolidated Subsidiaries to Working Capital Liabilities of the
Borrower and its Consolidated Subsidiaries to be less than 2.00 to 1 at any time
after the Effective Date;
(b) Total Interest Coverage. The ratio of EBITDA to Consolidated
Total Interest Expense (plus capitalized interest in connection with Capital
Expenditures, but excluding therefrom any amortization of bond discount in
connection with the Senior Subordinated Debentures) of the Borrower and its
Consolidated Subsidiaries, for any period of 12 consecutive months ending
(i) on the last day of any month ending after the Effective Date and
on or before August 31, 1996 to be less than 1.75 to 1;
(ii) on the last day of any month ending after August 31, 1996 and on
or before August 31, 1997 to be less than 2.00 to 1;
(iii) on the last day of any month ending after August 31, 1997 and on
or before August 31, 1998 to be less than 2.25 to 1; and
(iv) on the last day of any month ending after August 31, 1998, to be
less than 2.50 to 1.
(c) Total Debt Service Coverage. The ratio of Operating Cash Flow
for any period described below to the sum of the aggregate amount of Total
Interest Expense PLUS principal of Indebtedness for Money Borrowed paid (or
payable as regularly scheduled principal repayments thereof) by the Borrower and
its Consolidated Subsidiaries during the same period, other than principal
amounts of any "Term Loan" (as defined in the Existing Credit Agreement or the
Second Amended and Restated Revolving Credit and Security Agreement dated as of
March 15, 1993, as amended) paid by the Borrower and its Consolidated
Subsidiaries during the same period, to be less than:
(i) 1.40 to 1 for any period of four consecutive fiscal quarters
ending after the Effective Date and on or before March 31, 1996;
(ii) 1.45 to 1 for any period of four consecutive fiscal quarters
ending after March 31, 1996 and on or before March 31, 1997;
(iii) 1.55 to 1 for any period of four consecutive fiscal quarters
ending after March 31, 1997 and on or before March 31, 1999;
(iv) 1.45 to 1 for any period of four consecutive fiscal quarters
ending after March 31, 1999 and on or before March 31, 2000; and
(v) 1.40 to 1 for any period of four consecutive fiscal quarters
ending after March 31, 2000.
(d) Total Debt Coverage. The ratio of Indebtedness for Money Borrowed
to EBITDA of the Borrower and its Consolidated Subsidiaries to be greater than:
(i) 5.75 to 1 for any period of four consecutive fiscal quarters
ending after the Effective Date and on or before June 30, 1996;
(ii) 5.00 to 1 for any period of four consecutive fiscal quarters
ending after June 30, 1996 and on or before June 30, 1998; and
(iii) 4.00 to 1 for any period of four consecutive fiscal quarters
ending after June 30, 1998.
(e) Debt to Worth. The ratio of Consolidated Total Unsubordinated
Debt (other than deferred taxes) of the Borrower and its Consolidated
Subsidiaries to the sum of Consolidated Tangible Net Worth PLUS Subordinated
Indebtedness to be greater than:
(i) 1.15 to 1 at any time after the Effective Date to and including
September 29, 1996;
(ii) 1.10 to 1 at any time after September 29, 1996 to and including
September 29, 1997; and
(iii) 1.00 to 1 at any time after September 29, 1997.
SECTION 10.2. Indebtedness for Money Borrowed. Create, assume, or otherwise
become or remain obligated in respect of, or permit or suffer to exist or to be
created, assumed or incurred or to be outstanding any Indebtedness for Money
Borrowed, except that this SECTION 10.2 shall not apply to:
(a) Indebtedness of the Borrower for Money Borrowed represented by the
Loans and the Senior Subordinated Debentures,
(b) without duplication of such Indebtedness specifically listed in
the foregoing SUBSECTION (A), Existing Indebtedness for Money Borrowed,
(c) Permitted Purchase Money Indebtedness,
(d) Indebtedness for Money Borrowed of any Consolidated Subsidiary
(i) arising under a Foreign Facility Agreement in an aggregate principal amount
not greater than $4,000,000 or the Dollar Equivalent of such amount, or (ii)
which is not secured by any Lien on the assets of such Consolidated Subsidiary
or any of its Affiliates or Subsidiaries or Guaranteed by any Affiliate or
Subsidiary of such Consolidated Subsidiary, and
(e) other Indebtedness of the Borrower and its Subsidiaries for Money
Borrowed, excluding Capitalized Lease Obligations, the aggregate principal
amount of which outstanding at any time does not exceed $250,000.
SECTION 10.3. Guaranties. Become or remain liable with respect to any Guaranty
of any obligation of any other Person, except for Existing Guaranties and the
guaranty of the Borrower under ARTICLE 14.
SECTION 10.4. Investments. Acquire, after the Agreement Date, any Business
Unit or Investment or, after such Agreement Date, permit any Investment to be
outstanding, except that this SECTION 10.4 shall not apply to Permitted
Investments.
SECTION 10.5. Capital Expenditures. Make or incur any Capital Expenditures,
except that this SECTION 10.5 shall not apply to Capital Expenditures in any
fiscal year of the Borrower which, together with all other such Capital
Expenditures by the Borrower and its Subsidiaries made during such fiscal year,
would not exceed, in the aggregate:
(a) for the fiscal year of the Borrower ended September 30, 1995,
$13,100,000;
(b) for the fiscal year of the Borrower ending September 30, 1996,
$42,000,000;
(c) for the fiscal year of the Borrower ending September 30, 1997,
$10,000,000 plus the lesser of $3,000,000 and the amount, if any, by which
$42,000,000 exceeds the actual amount of Capital Expenditures of the Borrower
and its Consolidated Subsidiaries made during the fiscal year of the Borrower
ending September 30, 1996; and
(d) for any fiscal year of the Borrower ending after September 30,
1997, $10,000,000.
SECTION 10.6. Restricted Payments and Purchases, Etc. Declare or make any
Restricted Dividend Payment, Restricted Payment or Restricted Purchase.
SECTION 10.7. Merger, Consolidation and Sale of Assets. Merge or consolidate
with any other Person or sell, lease or transfer or otherwise dispose of all or
a substantial portion of its assets to any Person, except that the provisions of
this SECTION 10.7 shall not apply to sales or other transfers of assets by any
Subsidiary of the Borrower to the Borrower or to any other Subsidiary of the
Borrower.
SECTION 10.8. Transactions with Affiliates. Effect any transaction with any
Affiliate on a basis less favorable to the Borrower or such Subsidiary than
would be the case if such transaction had been effected with a Person not an
Affiliate, except that the provisions of this SECTION 10.8 shall not apply to
transactions entirely between (a) the Borrower and any Subsidiary of the
Borrower or (b) Subsidiaries of the Borrower.
SECTION 10.9. Liens. Create, assume or permit or suffer to exist or to be
created or assumed any Lien on any of the property or assets of the Borrower or
any of its Subsidiaries, real, personal or mixed, tangible or intangible, other
than Permitted Liens.
SECTION 10.10. Capitalized Lease Obligations. Incur after the Agreement Date
any Capitalized Lease Obligation if such Capitalized Lease Obligation when added
to other Capitalized Lease Obligations and Permitted Purchase Money Indebtedness
of the Borrower and its Subsidiaries shall exceed $5,000,000.
SECTION 10.11. Operating Leases. Enter into any Operating Lease if the
aggregate annual rental under all Operating Leases of the Borrower and its
Subsidiaries would exceed $6,000,000 at the Effective Date or at any time
thereafter; PROVIDED, FURTHER, that a purchase of equipment by the Borrower for
which the Borrower is reimbursed by a leasing company shall be deemed to be an
Operating Lease and subject to this SECTION 10.11 and shall not be deemed to be
a sale and leaseback.
SECTION 10.12. Plans. Permit, or take any action which would result in, the
aggregate present value of the Unfunded Vested Accrued Benefits under all Plans
of the Borrower and its Subsidiaries to exceed $-0-.
SECTION 10.13. Sales and Leasebacks. Enter into any arrangement with any Person
providing for its leasing from such Person of real or personal property which
has been or is to be sold or transferred, directly or indirectly, by the
Borrower or any Subsidiary of the Borrower to such Person.
SECTION 10.14. Prepayments of Indebtedness for Money Borrowed. Make any
prepayments (other than regularly scheduled installment or amortization
payments), directly or indirectly, on account of the principal of any
Indebtedness for Money Borrowed (except the Loans and the Foreign Facilities in
accordance with the other provisions of this Agreement or of the applicable
Foreign Facility Agreements, as the case may be), or amend in any way the
interest rate or principal amount or schedule of payments of principal and
interest with respect to any such Indebtedness.
SECTION 10.15. Change in Business. Engage in any line of business other than
that engaged in on the Effective Date.
SECTION 10.16. Issuance of Stock by Subsidiaries. Permit any Subsidiary (either
directly or indirectly by issuance of rights or options for, or securities
convertible into, such shares) to issue, sell or otherwise dispose of any shares
of any class of its capital stock (other than directors' qualifying shares).
SECTION 10.17. No Amendment. Amend in any material respect any term or
provision contained in the Indenture, the Senior Subordinated Debentures, or
consent to or enter into any agreement providing for the designation of any
Indebtedness for Money Borrowed of the Borrower or any of its Subsidiaries,
other than Indebtedness represented by the Loans, the Notes and the Foreign
Facilities, as "Designated Senior Indebtedness," as such term is defined in the
Indenture.
ARTICLE 11 - DEFAULT
SECTION 11.1. Events of Default. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body:
(a) Default in Payment. The Borrower or any Foreign Subsidiary shall
default in any payment of principal of, or interest on, any Loan, Note or any
Foreign Facility when and as due (whether upon demand, at maturity, by reason of
acceleration or otherwise) or in the reimbursement on demand (including by a
Borrowing if permitted hereunder) of any amount drawn under a Letter of Credit.
(b) Other Payment Default. The Borrower or any Foreign Subsidiary
shall default in the payment, as and when due, of principal of or interest on,
any other Secured Obligation or obligation under the Foreign Facilities, and
such default shall continue for a period of five days after written notice
thereof has been given to the Borrower by the Agent on behalf of the Lenders.
(c) Misrepresentation. Any representation or warranty made or deemed
to be made by the Borrower under this Agreement or any Loan Document or by a
Foreign Subsidiary under any Foreign Facility Agreement, or any amendment hereto
or thereto, shall at any time prove to have been incorrect or misleading in any
material respect when made.
(d) Default in Performance. The Borrower shall default in the
performance or observance of any term, covenant, condition or agreement
contained in
(i) ARTICLES 6, 7 OR 10 OR SECTIONS 8.1 (insofar as it requires
the preservation of the corporate existence of the Borrower and the Foreign
Subsidiaries), 8.9, 9.5 OR 9.6, or
(ii) this Agreement (other than any such term, covenant, condition
or agreement a default in the performance or observance of which is dealt
with specifically elsewhere in this SECTION 11.1) and such default shall
continue for a period of 30 days after written notice thereof has been
given to the Borrower by the Agent.
(e) Indebtedness Cross-Default.
(i) There shall have occurred any default or event of default or
other event, including, without limitation, a "Change in Control Triggering
Event" as defined in the Indenture, which then permits any holder or
holders, or any trustee or agent acting on behalf of such holder or
holders, or any other Person to accelerate (without regard to any
subordination or other agreements restricting such right) the maturity of,
or require the purchase of, Indebtedness outstanding under the Senior
Subordinated Debentures, or
(ii) The Borrower or any Subsidiary shall fail to pay when due
and payable the principal of or interest on any Indebtedness for Money
Borrowed in an amount in excess of $500,000 (other than the Loans or Note
and other than as described in CLAUSE (I) above), or
(iii) The maturity of any Indebtedness described in CLAUSE (II)
above shall have (A) been accelerated in accordance with the provisions of
any indenture, contract or instrument providing for the creation of or
concerning such Indebtedness or (B) been required to be prepaid prior to
the stated maturity thereof.
(f) Other Cross-Defaults. The Borrower or any Subsidiary shall
default in the payment when due, or in the performance or observance, of any
material obligation or condition of any material contract or lease (other than
one of the Security Documents or one relating to Indebtedness for Money
Borrowed), unless, but only as long as the existence of any such default is
being contested by the Borrower or such Subsidiary, as the case may be, in good
faith by appropriate proceedings and adequate reserves in respect thereof have
been established on the books of the Borrower or such Subsidiary, as the case
may be.
(g) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary
of the Borrower shall
(i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect),
(ii) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and appropriate
manner any petition filed against it in an involuntary case under such
bankruptcy laws or other laws,
(iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial
part of its property, domestic or foreign,
(v) admit in writing its inability to pay its debts as they
become due,
(vi) make a general assignment for the benefit of creditors, or
(vii) take any formal corporate or partnership action for the
purpose of effecting any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against the Borrower or any Subsidiary of the Borrower in any
court of competent jurisdiction seeking
(i) relief under the federal bankruptcy laws (as now or hereafter
in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts,
or
(ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of the Borrower or any such Subsidiary or of all or
any substantial part of the assets, domestic or foreign, of the Borrower or
any such Subsidiary,
and such case or proceeding shall continue undismissed or unstayed for a period
of 60 consecutive calendar days, or an order granting the relief requested in
such case or proceeding against any Borrower or any such Subsidiary (including,
but not limited to, an order for relief under such federal bankruptcy laws)
shall be entered.
(i) Litigation. Except for good faith disputes regarding the
interpretation of this Agreement, neither the Borrower nor any Subsidiary or any
Affiliate of the Borrower shall challenge or contest in any action, suit or
proceeding in any court or before any arbitrator or governmental body the
validity or enforceability of this Agreement or any Loan Document or the
perfection or priority of the Security Interest or any Lien granted to the Agent
on behalf of the Lenders under any Security Document.
(j) Judgment. A judgment or order for the payment of money shall be
entered against the Borrower or any Subsidiary of the Borrower by any court
which is $500,000 or more in excess of the amount of the insurance proceeds
payable with respect to such judgment and such judgment or order shall continue
undischarged or unstayed for 30 days.
(k) Attachment. A warrant or writ of attachment or execution or
similar process shall be issued against any property of the Borrower or any
Subsidiary of the Borrower which exceeds $100,000 in value and such warrant or
process shall continue undischarged or unstayed for 10 days.
(l) Loan Documents. Any "Event of Default" as defined in any Mortgage
shall occur.
(m) ERISA.
(i) Any Termination Event with respect to a Plan shall occur that
results in an Unfunded Vested Accrued Benefit in excess of $0, or
(ii) any Plan shall incur an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA) for which a
waiver has not been obtained in accordance with the applicable provisions
of the Code and ERISA, or
(iii) the Borrower or any Subsidiary of the Borrower is in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan resulting from the Borrower's or any
Subsidiary's complete or partial withdrawal (as described in Section 4203
or 4205 of ERISA) from such plan.
(n) Cross-default with Foreign Facilities. Any Foreign Subsidiary
shall default in the performance or observance of any terms, covenants,
conditions or agreements contained in, or the payment of any other sums
covenanted to be paid by such Foreign Subsidiary under, any Foreign Facility
Agreement (other than any such default which is specifically provided for
elsewhere in this SECTION 11.1).
(o) Change in Management. Xxxxxxx Chill and Xxx X. Xxxxxxx shall
cease to be the Chief Executive Officer and Chief Financial Officer,
respectively, of the Borrower or to be actively involved in the day-to-day
management of the Borrower.
(p) Change in Ownership. (i) Xxxxxxx Chill, Xxx X. Xxxxxxx, W.
Xxxxxxx Xxxxxx, Xx., Xxxxx Xxxxxx or W. Xxxxx Xxxxx, together in each case with
all members of such individual's immediate family, shall cease to be the record
and beneficial owners of all of the issued and outstanding capital stock of the
Initial General Partner which bears such individual's last name, (ii) The
Initial General Partners (or any of them) shall cease to be the sole general
partners of Synthetic Management, or (iii) Synthetic Management shall cease to
be the sole general partner of SI Management, or (iv) SI Management shall cease
to be the sole general partner of Synthetic L.P., or (v) Synthetic L.P. shall
cease to be the record and beneficial owner of at least 51% of the issued and
outstanding capital stock of the Borrower (or such ownership shall not entitle
Synthetic L.P. to elect a majority of the directors of the Borrower), EXCEPT (A)
Synthetic L.P. may distribute to the limited and general partners of Synthetic
L.P., shares of the voting capital stock of the Borrower in the same proportion
to the total issued and outstanding voting capital stock of the Borrower that
each such partner's interest in Synthetic L.P. bears to 100% of the partnership
interests in Synthetic L.P., with the result that, the Borrower will be owned
directly by the former partners of Synthetic L.P., or (B) to the extent such
event occurs as a result of a public offering of equity securities of the
Borrower.
SECTION 11.2. Remedies.
(a) Automatic Acceleration and Termination of Facilities. Upon the
occurrence of an Event of Default specified in SECTION 11.1(G) OR (H), (i) the
principal of and the interest on the Loans and the Notes at the time
outstanding, all other amounts owed to the Agent and the Lenders under this
Agreement or any of the Loan Documents and all other Secured Obligations
(including, without limitation, any fees accrued under ARTICLE 3) shall
thereupon become due and payable without presentment, demand, protest, or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or any of the Loan Documents to the contrary notwithstanding, and
(ii) the Commitments and any obligation of the Lenders to make Loans hereunder
shall immediately terminate.
(b) Other Remedies. If any Event of Default shall have occurred,
during the continuance of any such Event of Default, the Agent may, and at the
direction of the Majority Lenders, in their sole and absolute discretion, shall
do any of the following:
(i) declare the principal of and interest on the Loans and the
Notes at the time outstanding, all other amounts owed to the Agent or any
Lender under this Agreement or any of the Loan Documents and all other
Secured Obligations (including, without limitation, any fees accrued under
ARTICLE 3) to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in
this Agreement or the Loan Documents to the contrary notwithstanding;
(ii) terminate the Commitments and any obligation of the
Lenders to make Advances hereunder;
(iii) notify, or request the Borrower to notify, in writing
or otherwise, any Account Debtor or obligor with respect to any one or more
of the Receivables to make payment to the Agent on behalf of the Lenders or
any agent or designee of the Agent, at such address as may be specified by
the Agent (if, notwithstanding the giving of any notice, any Account Debtor
or other such obligor shall make payments to the Borrower, the Borrower
shall hold all such payments it receives in trust for the Agent on behalf
of the Lenders, without commingling the same with other funds or property
of, or held by, the Borrower, and shall deliver the same to the Agent or
any such agent or designee immediately upon receipt by the Borrower in the
identical form received, together with any necessary endorsements);
(iv) settle or adjust disputes and claims directly with Account
Debtors and other obligors on Receivables for amounts and on terms which
the Agent considers advisable and in all such cases only the net amounts
received by the Agent on behalf of the Lenders in payment of such amounts,
after deductions of costs and attorney's fees which the Agent shall be
entitled to apply to such costs and fees and only such net amount shall
constitute Collateral, and the Borrower shall not have any further right to
make any such settlements or adjustments or to accept any returns of
merchandise;
(v) enter upon any premises in which Inventory or Equipment may
be located and, without resistance or interference by the Borrower, take
physical possession of any or all thereof and maintain such possession on
such premises or move the same or any part thereof to such other place or
places as the Agent shall choose, without being liable to the Borrower on
account of any loss, damage or depreciation that may occur as a result
thereof, so long as the Agent shall act in a commercially reasonable
manner and in good faith (as such term is defined in the UCC);
(vi) require the Borrower to and the Borrower shall, without
charge to the Agent or any Lender, assemble the Inventory and Equipment and
maintain or deliver it into the possession of the Agent or any agent or
representative of the Agent at such place or places as the Agent may
designate and as are reasonably convenient to both the Agent and the
Borrower;
(vii) at the expense of the Borrower, cause any of the
Inventory and Equipment to be placed in a public or field warehouse and
neither the Agent nor any Lender shall be liable to the Borrower on account
of any loss, damage or depreciation that may occur as a result thereof, so
long as the Agent or such Lender shall act in a commercially reasonable
manner and in good faith (as such term is defined in the UCC);
(viii) without notice, demand or other process, and without
payment of any rent or any other charge enter any of the Borrower's
premises and, without breach of the peace, until the Agent on behalf of the
Lenders completes the enforcement of its rights in the Collateral, take
possession of such premises or place custodians in exclusive control
thereof, remain on such premises and use the same and any of the Borrower's
equipment, for the purpose of (A) completing any work in process,
preparing any Inventory and Equipment for disposition and disposing thereof
and (B) collecting any Receivable;
(ix) in the exercise of the rights of the Agent or the Lenders
under this Agreement, without payment of compensation of any kind, use any
and all trademarks, trade styles, trade names, patents, patent
applications, licenses, franchises and the like to the extent of the rights
of the Borrower therein, subject, in the case of any federally registered
trademark, to any control over the quality of the goods manufactured,
advertised or sold under such trademark necessary to preserve such
registration, and the Borrower hereby grants a nonexclusive license to the
Agent on behalf of the Lenders for this purpose;
(x) exercise any and all of its rights under any and all of
the Security Documents;
(xi) apply any cash Collateral to the payment of the Secured
Obligations in any order in which the Agent on behalf of the Lenders may
elect or use such cash in connection with the exercise of any of its other
rights hereunder or under any of the Security Documents;
(xii) establish or cause to be established one or more
Lockboxes or other arrangement for the deposit of proceeds of Receivables,
and, in such case, the Borrower shall cause to be forwarded to the Agent at
the Agent's Office, on a daily basis, copies of all checks and other items
of payment and deposit slips related thereto deposited in such Lockboxes,
together with collection reports in form and substance satisfactory to the
Agent; and
(xiii) exercise all of the rights and remedies of a secured
party under the UCC and under any other Applicable Law, including, without
limitation, the right, without notice except as specified below and with or
without taking the possession thereof, to sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any location
chosen by the Agent, for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as the Agent may deem
commercially reasonable. The Borrower agrees that, to the extent notice of
sale shall be required by law, at least 10 days' notice to the Borrower of
the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification, but notice
given in any other reasonable manner or at any other reasonable time shall
constitute reasonable notification. The Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
The Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
SECTION 11.3. Control by Majority Lenders. The Majority Lenders shall have the
right, at any time after the occurrence of and during the continuance of an
Event of Default,
(a) to require the Agent to proceed to enforce the remedies contained
in this Agreement, to the extent permitted by Applicable Law, by the exercise of
the powers hereby conferred on the Agent, and
(b) to direct the time, place and method of conducting any proceeding
for any remedy available to the Agent or exercising any trust or power conferred
upon it under this Agreement.
SECTION 11.4. Application of Proceeds. All proceeds from each sale of, or
other realization upon, all or any part of the Collateral following an Event of
Default shall be applied or paid over as follows:
(a) First: to the payment of all costs and expenses incurred in
connection with such sale or other realization, including attorneys' fees,
(b) Second: to the payment of the Secured Obligations (with the
Borrower remaining liable for any deficiency), ratably in accordance with the
principal amount of Secured Obligations owing to each Lender and otherwise in
any order which the Majority Lenders may elect, and
(c) Third: the balance (if any) of such proceeds shall be paid to the
Borrower, subject to any duty imposed by law or otherwise to whomsoever will be
entitled thereto.
The Borrower shall remain liable and will pay, on demand, any deficiency
remaining in respect of the Secured Obligations, together with interest thereon
at a rate per annum equal to the highest rate then payable hereunder on such
Secured Obligations, which interest shall constitute part of the Secured
Obligations. The principal amounts of all Secured Obligations owing to any
Lender (including those that do not arise under the Notes held by such Lender)
shall be pari passu.
SECTION 11.5. Power of Attorney. In addition to the authorizations granted to
the Agent under SECTION 7.15 or under any other provision of this Agreement or
any of the Loan Documents, upon and after an Event of Default and for so long as
such Event of Default shall be continuing, the Borrower hereby irrevocably
designates, makes, constitutes and appoints the Agent (and all Persons
designated by the Agent from time to time) as the Borrower's true and lawful
attorney, and agent in fact, and the Agent, or any agent of the Agent, may,
without notice to the Borrower, and at such time or times as the Agent or any
such agent in its sole discretion may determine, in the name of the Borrower or
the Agent or the Lenders,
(i) demand payment of the Receivables,
(ii) enforce payment of the Receivables by legal proceedings or
otherwise,
(iii) exercise all of the Borrower's rights and remedies with
respect to the collection of Receivables,
(iv) settle, adjust, compromise, extend or renew any or all of
the Receivables,
(v) settle, adjust or compromise any legal proceedings brought to
collect the Receivables,
(vi) discharge and release the Receivables or any of them,
(vii) prepare, file and sign the name of the Borrower on any
proof of claim in bankruptcy or any similar document against any Account
Debtor,
(viii) prepare, file and sign the name of the Borrower on any
notice of Lien, assignment or satisfaction of Lien, or similar document in
connection with any of the Collateral,
(ix) endorse the name of the Borrower upon any chattel paper,
document, instrument, notice, freight xxxx, xxxx of lading or similar
document or agreement relating to the Receivables, the Inventory or any
other Collateral,
(x) use the stationery of the Borrower and sign the name of the
Borrower to verifications of the Receivables and on any notice to the
Account Debtors,
(xi) open the Borrower's mail,
(xii) notify the post office authorities to change the
address for delivery of the Borrower's mail to an address designated by the
Agent, and
(xiii) use the information recorded on or contained in any
data processing equipment and computer hardware and software relating to
the Receivables, Inventory or other Collateral to which the Borrower has
access.
SECTION 11.6. Miscellaneous Provisions Concerning Remedies.
(a) Rights Cumulative. The rights and remedies of the Agent and the
Lenders under this Agreement and each of the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies which it or they would
otherwise have. In exercising their rights and remedies the Agent and the
Lenders may be selective and no failure or delay by the Agent or any Lender in
exercising any right shall operate as a waiver thereof, nor shall any single or
partial exercise of any power or right preclude its other or further exercise or
the exercise of any other power or right.
(b) Waiver of Marshalling. The Borrower hereby waives any right to
require any marshalling of assets and any similar right.
(c) Limitation of Liability. Nothing contained in this ARTICLE 11 or
elsewhere in this Agreement or in any of the Loan Documents shall be construed
as requiring or obligating the Agent, any Lender or any agent or designee of the
Agent or any Lender to make any demand, or to make any inquiry as to the nature
or sufficiency of any payment received by it, or to present or file any claim or
notice or take any action, with respect to any Receivable, or any other
Collateral or the moneys due or to become due thereunder or in connection
therewith, or to take any steps necessary to preserve any rights against prior
parties, and neither of the Agent, any Lender nor any of their respective agents
or designees shall have any liability to the Borrower for actions taken pursuant
to this ARTICLE 11, any other provision of this Agreement or any of the Loan
Documents so long as the Agent or such Lender shall act in a commercially
reasonable manner and in good faith (as defined in the UCC).
(d) Appointment of Receiver. In any action under this ARTICLE 11,
the Agent shall be entitled to the appointment of a receiver, without notice of
any kind whatsoever, to take possession of all or any portion of the Collateral
and to exercise such power as the court shall confer upon such receiver.
ARTICLE 12 - AGENT
SECTION 12.1. Grant of Authority. Each Lender and each holder of a Note by its
acceptance thereof hereby appoints and authorizes the Agent to take such action
and exercise such powers hereunder as are specifically delegated to the Agent by
the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto.
SECTION 12.2.Action on Instructions. The Agent shall in all cases (including,
without limitation, enforcement or collection of any Notes) be fully protected
in acting or refraining from acting under this Agreement and any of the Loan
Documents upon written instructions signed by the Majority Lenders, and such
instructions and any action taken or any failure to act pursuant thereto shall
be binding on all the Lenders, all holders of the Notes and their respective
successors and assigns. The Agent shall not have any duty to exercise any
right, power or remedy under this Agreement or any of the Loan Documents or to
take any affirmative action hereunder unless directed to do so by the Majority
Lenders. The Agent shall not be required to take any action under ARTICLE 11,
nor shall any other provision of this Agreement be deemed to impose a duty on
the Agent to take any action, if the Agent has been advised by legal counsel
that such action is contrary to the terms of this Agreement or is otherwise
contrary to any Applicable Law or could expose the Agent to liability.
SECTION 12.3. Responsibility of the Agent. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken under or in connection with this Agreement or any of the
other Loan Documents, except for its or their gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the Agent:
(a) shall not be responsible to the Borrower or any other Person as a
result of any failure or delay in performance by, or any breach by, any Lender
of any of its obligations under this Agreement or any of the Loan Documents,
(b) shall not be responsible to any Lender or the holder of any Note
as a result of any failure or delay in performance by, or any breach by, the
Borrower of any of its obligations under this Agreement or any of the Loan
Documents,
(c) shall not be responsible to any Lender for any statements,
representations or warranties in this Agreement or any of the Loan Documents or
for the validity, effectiveness, enforceability or sufficiency of this Agreement
or any of the Loan Documents or any document or instrument delivered in
connection with the transactions contemplated by this Agreement, including,
without limitation, any documents that may be delivered pursuant to ARTICLE 4,
(d) shall not be bound to ascertain or inquire as to the performance
or observance of any of the terms, provisions or conditions of this Agreement or
any of the Loan Documents on the part of the Borrower,
(e) shall be entitled to rely upon any writing, statement or notice or
any telegraphed, telexed or teletyped message believed by it to be genuine and
correct and to have been signed or sent by the proper Person,
(f) may consult with counsel and shall be fully protected in any
action taken or omitted to be taken in accordance with the advice or opinion of
such counsel,
(g) may employ agents and attorneys-in-fact and shall not be liable
for the default or misconduct of any such selected by the Agent with reasonable
care, and
(h) may treat the payee of a Note as the holder thereof until it
receives written notice of the assignment or transfer thereof signed by such
payee and in form satisfactory to the Agent.
SECTION 12.4. Representations by the Lenders. Each Lender hereby represents
and warrants to each other Lender and the Agent that its decision to enter into
this Agreement and to make its Advances was made on the basis of its own credit
judgment and in making such decision it did not rely upon any representation by
the Agent or any other Lender as to the creditworthiness or financial position
of the Borrower. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action under this Agreement.
SECTION 12.5. Expenses and Indemnification. To the extent that the Borrower
fails to do so, each Lender and each subsequent holder of a Note, by its
acceptance thereof, agree to reimburse the Agent upon demand in proportion to
the respective Commitment Percentage of each Lender, or, in the case of any such
subsequent holder, in proportion that the outstanding balance of such holder's
Note bears to the total balance outstanding under all Notes, and to indemnify
and hold the Agent harmless in such proportion against any and all losses,
liabilities or expenses incurred by the Agent arising out of or in connection
with the administration of this Agreement, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers and duties hereunder and of taking any
action hereunder, provided that neither the Lenders nor the holder of any Note
shall be liable for any portion of such losses, liabilities or expenses incurred
by the Agent as a result of the Agent's gross negligence or willful misconduct.
SECTION 12.6. Rights of Agent. The Bank of Boston (or any successor as
"Agent") and any of its Affiliate may accept deposits from, lend money to, and
generally engage in any kind of lending, banking or trust business with, the
Borrower and any of its Subsidiaries and Affiliates as if it were not the Agent
or such Affiliate.
SECTION 12.7. Right to Resign. The Agent may resign at any time by giving 30
days written notice thereof to each Lender and the Borrower. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Majority
Lenders and shall have accepted such appointment within 30 days after any such
notice of resignation, then the retiring entity may, on behalf of the Lenders,
appoint a successor which shall be another Lender, if any other Lender is
willing to serve in such capacity, or, if not, a commercial bank organized under
the laws of the United States of America or any State thereof having a combined
capital and surplus of at least $100,000,000. After any such resignation, the
provisions of this ARTICLE 12 shall continue in effect for the benefit of the
retiring entity with respect to any actions taken or omitted by it while acting
as Agent.
SECTION 12.8. Reliance by Borrower. The Borrower shall not be bound to
ascertain the authority of the Agent to act on behalf of the Lenders in
connection with any of the matters governed or contemplated by this Agreement,
or to inquire as to the satisfaction of any conditions precedent to the exercise
of such authority. The Borrower shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the Agent on behalf
of the Lenders.
ARTICLE 13 - MISCELLANEOUS
SECTION 13.1. Notices.
(a) Method of Communication. Except as specifically provided in this
Agreement or in any of the Loan Documents, all notices and the communications
hereunder and thereunder shall be in writing or by telephone or facsimile,
subsequently confirmed in writing. Notices in writing shall be delivered
personally (including by any reputable overnight courier) or sent by certified
or registered mail postage pre-paid or by telegraph or telex and shall be deemed
received in the case of personal delivery, when delivered, in the case of
mailing, on the third day after mailing, in the case of telegraph, on the day
after delivery to the telegraph office and in the case of telex, upon
transmittal, provided that in the case of notices to the Agent, notice shall be
deemed to have been given only when such notice is actually received by the
Agent. A telephonic notice to the Agent, as understood by the Agent, will be
deemed to be the controlling and proper notice in the event of a discrepancy
with or failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it
at the following addresses, or any other address of which all the other parties
are notified in writing
If to the Borrower: Synthetic Industries, Inc.
000 XxXxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
If to the Agent: The First National Bank of Boston
Suite 500
115 Perimeter Center Place, N.E.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Xxxxxxx X. XxXxxxx
Telecopier No.: (000) 000-0000
If to a Lender: At the address of such Lender set
forth on ANNEX A hereto.
(c) Agent's Office. The Agent hereby designates its office located at
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or any subsequent office which
shall have been specified for such purpose by written notice to the Borrower, as
the office to which payments due are to be made and at which Advances will be
disbursed.
SECTION 13.2. Expenses. The Borrower will pay all reasonable out-of-pocket
expenses of the Agent and any Affiliate of the Agent in connection with
(a) the preparation, execution and delivery of this Agreement and each
of the Loan Documents and each of the Foreign Facility Agreements, whenever the
same shall be executed and delivered, including appraisers' fees, fees in
connection with environmental site assessments, search fees, recording fees,
taxes, title insurance premium and the fees and disbursements of special counsel
for the Agent and of each local counsel retained by the Agent,
(b) the preparation, execution and delivery of any waiver, amendment
or consent relating to this Agreement, the Notes or any of the Loan Documents or
any Foreign Facility Agreements or the process of a Person becoming a Lender
hereunder, including reasonable attorneys' fees and disbursements, search fees,
recording fees, taxes and title insurance premiums,
(c) consulting with one or more Persons, including appraisers,
accountants and lawyers, concerning or related to the nature, scope or value of
any right or remedy hereunder or under any of the Loan Documents or under any of
the Foreign Facility Documents, including any review of factual matters in
connection therewith, which expenses shall include the fees and disbursements of
such Persons, and
(d) prosecuting or defending any claim in any way arising out of,
related to, or connected with, or enforcing any provision of, this Agreement or
any of the Loan Documents or any of the Foreign Facility Documents, which
expenses shall include the fees and disbursements of counsel and of experts and
other consultants retained by the Agent.
SECTION 13.3. Stamp and Other Taxes. The Borrower will pay any and all stamp,
registration, recordation and similar taxes, fees or charges and shall indemnify
the Agent and the Lenders against any and all liabilities with respect to or
resulting from any delay in the payment or omission to pay any such taxes, fees
or charges, which may be payable or determined to be payable in connection with
the execution, delivery, performance or enforcement of this Agreement and any of
the Loan Documents or the perfection of any rights or security interest
thereunder.
SECTION 13.4. Setoff. In addition to any rights now or hereafter granted under
Applicable Law and not by way of limitation of any such rights, upon and after
the occurrence of any Default or Event of Default, each Lender and any
participant with any Lender in the Loans are hereby authorized by the Borrower
at any time or from time to time, without notice to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness at any time held or owing by
such Lender or any Affiliate of such Lender, or any participant to or for the
credit or the account of the Borrower against and on account of the Secured
Obligations irrespective or whether or not
(a) the Agent or such Lender shall have made any demand under this
Agreement or any of the Loan Documents, or
(b) the Agent or such Lender shall have declared any or all of the
Secured Obligations to be due and payable as permitted by SECTION 11.2 and
although such Secured Obligations shall be contingent or unmatured.
SECTION 13.5. Pro-Rata Participation.
(a) Each Lender agrees that
(i) if it or any of its Affiliates shall exercise any right of
counterclaim, set-off, banker's lien or similar right, or if under any
applicable bankruptcy, insolvency or other similar law it receives a
secured claim the security for which is a debt owed by it to the Borrower,
it shall apportion the amount thereof, on a pro rata basis, between (A) the
amount at the time owed to it by the Borrower under this Agreement, and (B)
amounts otherwise owed to it by the Borrower, and
(ii) if, as a result of the exercise of a right or the receipt of
a secured claim and the apportionment thereof described in CLAUSE (I) of
this SECTION 13.5(A) or otherwise, it shall receive payment of a proportion
of the aggregate amount of principal and interest due with respect to the
Secured Obligations and any other Indebtedness owed to it under this
Agreement (for purposes of this SECTION 13.5(B), "Agreement Debt") such
that the proportion of the aggregate remaining amount of such Lender's
Agreement Debt as compared to the total Agreement Debt of all the Lenders
is less than the proportion of Agreement Debt of any other Lender as
compared to the total Agreement Debt of all the Lenders,
such Lender shall purchase participations (which it shall be deemed to have
purchased simultaneously upon the receipt of such payment) in the Agreement
Debt of the other Lenders so that after giving effect to all such purchases
the amount of Agreement Debt of each Lender shall bear the same relation to
the total amount of Agreement Debt that each Lender's Agreement Debt bore
to the total amount of Agreement Debt immediately prior to the receipt of
the subject non-ratable payment (but after completion of any purchases
pursuant to this SECTION 13.5 from the proceeds of any earlier received
non-ratable payment), PROVIDED that if all or part of such payment received
by such purchasing Lender is thereafter recovered by or on behalf of the
Borrower from such Lender, such purchases shall be rescinded and the
purchase prices paid for such participations shall be returned to such
Lender to the extent of such recovery, but without interest.
(b) Each Lender which receives such a secured claim shall exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this SECTION 13.5 to share in the benefits of any
recovery on such secured claim.
(c) The Borrower expressly consents to the foregoing arrangements and
agrees that any holder of a participation in any indebtedness so purchased or
otherwise acquired may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by the borrower to such
holder as fully as if such holder were a holder of such indebtedness in the
amount of the participation held by such holder.
SECTION 13.6. Litigation. EACH OF THE BORROWER, THE AGENT AND EACH LENDER
HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN
ANY COURT IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST THE BORROWER, THE
AGENT OR ANY LENDER ARISING OUT OF THIS AGREEMENT, THE COLLATERAL OR ANY
ASSIGNMENT THEREOF OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN
THE BORROWER AND THE AGENT OR ANY LENDER OF ANY KIND OR NATURE. THE BORROWER
AND THE AGENT AND THE LENDERS HEREBY AGREE THAT THE FEDERAL COURT OF THE
NORTHERN DISTRICT OF GEORGIA OR, AT THE OPTION OF THE AGENT OR ANY LENDER, ANY
COURT IN WHICH THE AGENT OR ANY LENDER SHALL INITIATE LEGAL OR EQUITABLE
PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN
CONTROVERSY, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
OR DISPUTES BETWEEN THE BORROWER AND THE AGENT OR ANY LENDER, PERTAINING
DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR THE LOAN DOCUMENTS OR TO ANY MATTER
ARISING THEREFROM. THE BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS, HEREBY
WAIVING PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR
PAPERS ISSUED THEREIN, AND AGREEING THAT SERVICE OF SUCH SUMMONS AND COMPLAINT,
OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED
TO THE BORROWER AT THE ADDRESS OF THE BORROWER SET FORTH ABOVE. SHOULD THE
BORROWER FAIL TO APPEAR OR ANSWER ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO
SERVED WITHIN THIRTY (30) DAYS AFTER THE MAILING THEREOF, IT SHALL BE DEEMED IN
DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED AGAINST IT AS DEMANDED OR
PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE EXCLUSIVE CHOICE
OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION
UNDER THIS AGREEMENT TO ENFORCE THE SAME IN ANY APPROPRIATE JURISDICTION.
__JPB____ (Initial)
SECTION 13.7. Consent to Advertising and Publicity. The Borrower hereby
consents and agrees that the Agent on behalf of the Lenders may issue and
disseminate to the public, subject to the Borrower's approval, information
describing the credit accommodation entered into pursuant to this Agreement,
including the names and addresses of the Borrower and its Subsidiaries and
Affiliates, the amount, interest rate, maturity, collateral, and a general
description of the Borrower's and its Subsidiaries' business.
SECTION 13.8. Reversal of Payments. The Agent and each Lender shall have the
continuing and exclusive right to apply, reverse, and reapply any and all
payments to any portion of the Secured Obligations. To the extent the Borrower
makes a payment or payments to the Agent on behalf of the Lenders or to a Lender
or the Agent or a Lender receives any payment or proceeds of the Collateral for
the Borrower's benefit, which payment(s) or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the Secured Obligations or part
thereof intended to be satisfied shall be revived and continued in full force
and effect, as if such payment or proceeds had not been received by the Agent or
such Lender.
SECTION 13.9. Injunctive Relief. The Borrower recognizes that, in the event
the Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Agent and the Lenders; therefore, the Borrower agrees that the
Agent or any Lender, if the Agent or such Lender so requests, shall be entitled
to temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
SECTION 13.10. Accounting Matters. All financial and accounting calculations,
measurements and computations made for any purpose relating to this Agreement,
including, without limitation, all computations utilized by the Borrower in
complying with any covenant contained herein, shall, unless there is an express
agreement among the parties to the contrary, be performed in accordance with
GAAP consistently applied.
SECTION 13.11. Participations; Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Agent, all future holders of the Notes, and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Subject to the consent of the Agent and the Borrower, which
consent shall not be unreasonably withheld, each Lender may assign to one or
more Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Loans at the time owing to it and the Notes held by it);
PROVIDED, HOWEVER, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Lender's rights and obligations under
this Agreement, (ii) the amount of the Commitment of the assigning Lender that
is subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Agent) shall in
no event be less than $5,000,000, (iii) in the case of a partial assignment, the
amount of the Commitment that is retained by the assigning Lender (determined as
of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Agent) shall in no event be less than $5,000,000, (iv) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register (as hereinafter defined) an Assignment
and Acceptance, together with any Note or Notes subject to such assignment, and
a processing and recording fee in an amount equal to $2,500, (v) such assignment
shall not, without the consent of the Borrower, require the Borrower to file a
registration statement with the Securities and Exchange Commission or apply to
or qualify the Loans or the Notes under the blue sky laws of any state, and
(vi) the representation contained in SECTION 12.4 hereof shall be true with
respect to any such proposed assignee. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five Business
Days after the execution thereof, (x) the assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder, and (y) the Lender assignor
thereunder shall, to the extent provided in such assignment, be released from
its obligations under this Agreement, from and after the effective date of such
assignment.
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; (ii) such Lender assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or the performance or observance by
the Borrower of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in SECTION 5.1(N) and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such Lender assignor or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Agent shall maintain a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Lenders and the Commitment Percentage of, and principal amount of the Loans
owing to, each Lender from time to time (the "Register"). The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Lenders may treat each person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Eligible Assignee together with any Note or Notes
subject to such assignment and the written consent to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in the form
of EXHIBIT H, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, (iii) give prompt notice thereof
to the Lenders and the Borrower, and (iv) promptly deliver a copy of such
Acceptance and Assignment to the Borrower. Within five Business Days after
receipt of notice, the Borrower shall execute and deliver to the Agent in
exchange for the surrendered Note or Notes a new Note or Notes to the order of
such Eligible Assignee in amounts equal to the Commitment Percentage assumed by
such Eligible Assignee pursuant to such Assignment and Acceptance and a new Note
or Notes to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of the assigned
Notes delivered to the assignor Lender. Each surrendered Note or Notes shall be
canceled and returned to the Borrower.
(f) Each Lender may, without the consent of the Borrower or the Agent,
sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment hereunder and the Loans owing to
it and the Notes held by it); PROVIDED, HOWEVER, that (i) each such
participation shall be in an amount not less than $5,000,000, (ii) such Lender's
obligations under this Agreement (including, without limitation, its Commitment
hereunder) shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iv) such Lender shall remain the holder of the Notes held by it for all
purposes of this Agreement, (v) the Borrower, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement; PROVIDED, that such
Lender may agree with any participant that such Lender will not, without such
participant's consent, agree to or approve any waivers or amendments which would
reduce the principal of or the interest rate on any Loans, extend the term or
increase the amount of the commitments of such participant, reduce the amount of
any fees to which such participant is entitled, extend any scheduled payment
date for principal or release Collateral securing the Loans (other than
Collateral disposed of pursuant to SECTION 7.8 hereof or otherwise in accordance
with the terms of this Agreement or the Security Documents), and (vi) any such
disposition shall not, without the consent of the Borrower, require any Borrower
to file a registration statement with the Securities and Exchange Commission to
apply to qualify the Loans or the Notes under the blue sky law of any state.
The Lender selling a participation to any bank or other entity that is not an
Affiliate of such Lender shall give prompt notice thereof to the Borrower, the
Agent and the other Lenders.
(g) Any Lender may, in connection with any assignment, proposed
assignment, participation or proposed participation pursuant to this SECTION
13.11, disclose to the assignee, participant, proposed assignee or proposed
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; PROVIDED that, prior to any such disclosure,
each such assignee, proposed assignee, participant or proposed participant shall
agree with the Borrower or such Lender (which in the case of an agreement with
only such Lender, the Borrower shall be recognized as a third party beneficiary
thereof) to preserve the confidentiality of any confidential information
relating to the Borrower received from such Lender.
SECTION 13.12. Amendments. No amendment or waiver of any provision of this
Agreement or the Notes, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing signed by
the Majority Lenders and, in the case of an amendment, by the Borrower, and then
such waiver or consent shall be effective only in the specified instance and for
the specific purpose for which given; PROVIDED, HOWEVER, that no amendment,
waiver or consent shall, unless in writing and signed by all the Lenders and, in
the case of an amendment, by the Borrower, do any of the following: (a) waive
any of the conditions specified in ARTICLE 4, (b) increase the Commitments or
Commitment Percentages of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, or rate of interest
applicable to, the Notes or reduce any fees or other amounts payable to the
Lenders hereunder, (d) postpone any date fixed for any payment of principal of,
or interest on, the Notes or of any fees or other amounts payable to the Lenders
hereunder, (e) release any material Collateral or any Real Estate, other than in
accordance with the provisions of this Agreement or the applicable Mortgage, as
the case may be, (f) change the percentage of the aggregate unpaid principal
amount of the Loans or the Commitments which shall be required for the Lenders
or any of them to take any action hereunder, (g) amend the definition "Borrowing
Base" or increase any advance rate thereunder or (h) amend the provisions of
SECTION 2C.2, SECTION 11.4, SECTION 13.5, SECTION 13.11(B) or this
SECTION 13.12; and PROVIDED, FURTHER, that no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the Agent
under this Agreement or any Note or any other Loan Document.
SECTION 13.13. Performance of Borrower's Duties.
(a) The Borrower's obligations under this Agreement and each of the
Loan Documents shall be performed by the Borrower at its sole cost and expense.
(b) If the Borrower shall fail to do any act or thing which it has
covenanted to do under this Agreement or any of the Loan Documents, the Agent on
behalf of the Lenders may (but shall not be obligated to) do the same or cause
it to be done either in the name of the Agent or the Lenders or in the name and
on behalf of the Borrower and the Borrower hereby irrevocably authorizes the
Agent so to act.
SECTION 13.14. Indemnification. The Borrower agrees to reimburse the Agent and
each Lender and their respective directors, officers, employees, agents and
representatives for all costs and expenses, including counsel fees and disburse
ments, incurred, and to indemnify, defend and hold the Agent and each Lender
harmless from and against all losses suffered by, the Agent or any Lender in
connection with
(a) the exercise by the Agent or any Lender of any right or remedy
granted to it under this Agreement or any of the Loan Documents,
(b) any claim, and the prosecution or defense thereof, arising out of
or in any way connected with this Agreement or any of the Loan Documents, and
(c) the collection or enforcement of the Secured Obligations or any
of them;
except that the Borrower shall not be required to indemnify the Agent or any
Lender, respectively, for any losses resulting from the gross negligence or
willful misconduct on the part of the Agent or such Lender, respectively.
SECTION 13.15. All Powers Coupled with Interest. All powers of attorney and
other authorizations granted to the Agent and the Lenders and any Persons
designated by the Agent or any Lender pursuant to any provisions of this
Agreement or any of the Loan Documents shall be deemed coupled with an interest
and shall be irrevocable so long as any of the Secured Obligations remain unpaid
or unsatisfied or any Lender has any obligation to extend any financial
accommodation to the Borrower hereunder.
SECTION 13.16. Survival. Notwithstanding any termination of this Agreement,
(a) until all Secured Obligations have been irrevocably paid in full
or otherwise satisfied and the Commitment of each Lender has been terminated,
the Agent on behalf of the Lenders shall retain its Security Interest and shall
retain all rights under this Agreement and each of the Security Documents with
respect to such Collateral as fully as though this Agreement had not been
terminated, and
(b) the indemnities to which the Agent and the Lenders are entitled
under the provisions of this ARTICLE 13 and any other provision of this
Agreement and the Loan Documents shall continue in full force and effect and
shall protect the Agent and the Lenders against events arising after such
termination as well as before.
SECTION 13.17. Titles and Captions. Titles and captions of Articles, Sections
and subsections in this Agreement are for convenience only, and neither limit
nor amplify the provisions of this Agreement.
SECTION 13.18. Severability of Provisions. Any provision of this Agreement or
any Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remainder of such
provision or the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 13.19. Governing Law. This Agreement and the Notes shall be construed
in accordance with and governed by the law of the State of Georgia (without
regard to conflicts of law principles) other than the provisions of SECTION 13.6
as to waiver of jury trial which shall be governed by the internal laws (without
regard to conflicts of law principles) of the jurisdiction in which suit is
brought.
SECTION 13.20. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.
SECTION 13.21. Reproduction of Documents. This Agreement, each of the Loan
Documents and all documents relating thereto, including, without limitation, (a)
consents, waivers and modifications that may hereafter be executed, (b)
documents received by the Agent or the Lenders and (c) financial statements,
certificates and other information previously or hereafter furnished to the
Agent or the Lenders, may be reproduced by the Agent or any Lender by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and such Person may destroy any original document so produced.
Each party hereto stipulates that, to the extent permitted by Applicable Laws,
any such reproduction shall be as admissible in evidence as the original itself
in any judicial or administrative proceeding (whether or not the original shall
be in existence and whether or not such reproduction was made by such Lender in
the regular course of business), and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 13.22. Term of Agreement. This Agreement shall remain in effect from
the Effective Date through the Termination Date and thereafter until all Secured
Obligations shall have been irrevocably paid and satisfied in full and the
Commitment of each Lender has terminated. No termination of this Agreement
shall affect the rights and obligations of the parties hereto arising prior to
such termination.
SECTION 13.23. Effect of Effectiveness of Agreement.
(a) From and after the Effective Date, all references in this
Agreement or in any other Loan Document (whether delivered pursuant to this
Agreement or pursuant to the Existing Credit Agreement) to this Agreement or the
"Credit Agreement," and the words "herein," "hereof" and words of like import
referring to this Agreement, shall mean and be references to the Existing Credit
Agreement as amended and restated in its entirety by this Agreement, and all
references in this Agreement, in any other Loan Document (whether delivered
pursuant to this Agreement or pursuant to the Existing Credit Agreement) or in
any Revolving Credit Note or Term Note to a "Revolving Credit Note" or to a
"Term Note," and the words "herein," "hereof" and words of like import referring
to any such Note, shall mean and be references to the Fourth Amended and
Restated Revolving Credit Notes and the Amended, Restated and Consolidated Term
Notes, respectively, in the forms attached hereto as EXHIBITS A and B,
respectively, appropriately completed and duly executed and delivered by the
Borrower.
(b) Without limiting the generality of the foregoing, from and after
the Effective Date, the Commitments and the Commitment Percentages of the
Lenders shall be as set forth on Annex A attached hereto.
ARTICLE 14 - GUARANTY OF FOREIGN FACILITY DEBT
SECTION 14.1. Guaranty. In consideration of the Foreign Facilities provided by
the Lenders or their Affiliates, the Borrower, as primary obligor and not as
surety merely, hereby irrevocably guarantees absolutely and unconditionally to
each Lender and each Affiliate thereof the due and punctual payment, when and as
due (whether upon demand, at maturity, by reason of acceleration or otherwise)
and performance, of the Foreign Facility Debt and all other obligations arising
under the Foreign Facility Agreements (collectively, the Guaranteed Obligations)
and agrees to pay any and all expenses (including, but not limited to,
reasonable legal fees and disbursements) which may be incurred by the Agent or
such Lender in collecting any or all of such amounts or in enforcing any rights
under this Guaranty or any of the Foreign Facility Agreements. The liability of
the Borrower under this Guaranty shall be unlimited and unconditional, and this
Guaranty shall be a continuing guaranty of all obligations of the Foreign
Subsidiaries under the Foreign Facility Debt and Foreign Facility Agreements.
ARTICLE 14.2. Payment by Borrower. If any Foreign Subsidiary shall fail to
pay, when due and payable, any amount due to any Lender or any Affiliate of such
Lender under any Foreign Facility, the Borrower will, without demand or notice,
immediately pay the same to the Agent for the account of such Lender or
Affiliate. If any Foreign Facility would be subject to acceleration, but such
acceleration is enjoined or stayed, the Borrower will to the extent permitted by
Applicable Law, purchase such Foreign Facility for a price equal to the
outstanding principal amount thereof, plus such accrued interest and other
amounts as would have been payable had such Foreign Facility been paid or
prepaid at the time of such purchase. All payments by the Borrower under this
Guaranty shall be made without any setoff, counterclaim, or deduction
whatsoever, and in the same currency and funds as are required to be paid by the
Foreign Subsidiaries.
ARTICLE 14.3. Waiver. The Borrower, to the extent permitted by Applicable Law,
(a) waives (i) diligence, presentment, demand, protest and notice of
any kind whatsoever, (ii) any requirement that the Agent or any Lender or any
Affiliate of any Lender exhaust any right or remedy or take any action against
any Foreign Subsidiary or any other Person which may be or become liable in
respect of all or any part of such amounts or obligations, or against any assets
of any Foreign Subsidiary or collateral security or guaranty therefor or right
of offset with respect thereto, and (iii) the benefit of all principles or provi
sions of Applicable Law which are or might be in conflict with the terms of this
Guaranty, including, without limitation, Section 10-7-24 of the Official Code of
Georgia Annotated, and
(b) consents that the time of payment of any Foreign Facility may be
extended or any provision of the Foreign Facility Agreements may be amended,
waived or modified without notice to or further assent from the Borrower and the
Borrower will remain bound under this Guaranty notwithstanding such changes,
extensions, amendments, waivers or modifications or any other circumstances,
whether or not referred to above, which might otherwise constitute a legal or
equitable discharge of a guaranty.
ARTICLE 14.4. Absolute Obligation. To the extent permitted by law, the
obligations of the Borrower hereunder are irrespective of and shall not be depen
dent upon or affected by
(a) the validity, legality, regularity or enforceability of the
Foreign Facility Agreements or any of the obligations in respect thereof or any
collateral security or guaranty thereof,
(b) the existence, value or condition of any of the assets of any
Foreign Subsidiary,
(c) the validity, perfection or priority of any charge on or security
interest in the assets of any Foreign Subsidiary,
(d) any action or failure to take action by the Agent, any Lender or
any Affiliate of any Lender under, or with respect to, any of the Foreign
Facility Agreements,
(e) any right of offset with respect to Foreign Subsidiary Debt or
other obligations under the Foreign Facilities at any time or from time to time
held by the Agent or any Lender or any Affiliate thereof and without regard to
any defense, setoff or counterclaim which may at any time be available to or be
asserted by the Borrower or any of the Foreign Subsidiaries against the Agent or
any Lender or any Affiliate thereof,
(f) any other dealings among the Agent, the Lenders, any Affiliate
thereof, the Borrower and the Foreign Subsidiaries,
(g) any present or future law or order of any government agency
thereof purporting to reduce, amend or otherwise affect any obligations of the
Foreign Subsidiaries, or
(h) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrower or any Foreign Subsidiary) which constitutes, or might
be construed to constitute, an equitable or legal discharge of the Borrower or
such Foreign Subsidiary for any Foreign Subsidiary Debt or other obligations of
such Foreign Subsidiary under any Foreign Facility Agreements, in bankruptcy or
in any other instance.
SECTION 14.5. Payments Free and Clear of Taxes, Etc.
(a) All payments under this Guaranty shall be made free and clear of
and without deduction for any and all present and future taxes, levies, imposts,
deductions, charges, withholdings, and all liabilities with respect thereto,
excluding income and franchise taxes of the United States and of the
jurisdiction of the lending office of the appropriate Lender or Affiliate and
any political subdivision of either thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). Within 10 days after the date of each such
payment hereunder, the Borrower will also furnish to the appropriate Lender or
Affiliate the original or a certified copy of either a receipt for payment of
each of the Taxes payable in respect of such payment hereunder or, if no Taxes
are payable in respect of such payment, a certificate from each appropriate
taxing authority, or an opinion of counsel acceptable to such Lender or
Affiliate, in either case stating that such payment is exempt from or not
subject to Taxes.
(b) In addition, the Borrower will pay any United States taxes on the
acquisition of debt obligations of a Foreign Subsidiary and any stamp or other
taxes of any jurisdiction with respect to the execution, delivery, registration,
performance and enforcement of this Guaranty, Taxes specified in CLAUSE (A)
above and taxes of all jurisdictions with respect to any amounts paid under this
CLAUSE (B). If any Taxes specified in CLAUSE (A) above or any taxes mentioned
in this CLAUSE (B) are paid by a Lender or such Lender's Affiliate, the Borrower
will, upon demand of such Lender or Affiliate, and whether or not such Taxes or
taxes shall be correctly or legally asserted, indemnify such Lender or Affiliate
for such payments, together with any interest, penalties and expenses in
connection therewith plus interest thereon at the rate specified in SECTION 3.1
of this Agreement (calculated as if such payments constituted overdue amounts of
principal as of the date of the making of such payments).
SECTION 14.6. Currency Changes. The Borrower shall be liable to pay any amount
due hereunder in the currency in which, and at the place where, the Foreign
Subsidiaries are to pay that amount under the terms of the respective Foreign
Facility Agreement. If for the purposes of obtaining judgment in any court in
any country it becomes necessary to convert into any other currency (the
"Judgment Currency"), any amount in the currency due hereunder (the "Guaranteed
Currency"), then the conversion shall be made at the rate of exchange prevailing
either on the date when the guaranteed obligation shall have become due or on
the Business Day before the day on which judgment is given, whichever shall be
the more favorable to Lender or its Affiliate. In the event that there is a
change in the rate of exchange prevailing between the date when the guaranteed
obligation became due (or, as the case may be, the Business Day before the day
on which the judgment is given) and the date of payment of the guaranteed
obligation, whether such payment is by the Foreign Subsidiary or by the
Borrower, the Borrower will pay such additional amount (if any, but in any event
not a lesser amount) as may be necessary to insure that the amount paid on such
date is the amount in the Judgment Currency which, when converted at the rate of
exchange prevailing on the date of payment, is the amount then due in accordance
with this Guaranty in the Guaranteed Currency. Any amount due from the Borrower
under this SECTION 14.6 will be due as a separate debt and shall not be affected
by a judgment's being obtained for any other sums due under or in respect of
this Guaranty. For purposes of this SECTION 14.6, the rate of exchange shall be
the rate at which a Lender or its Affiliate is able on the relevant date to
purchase the Guaranteed Currency with the Judgment Currency and includes any
premiums and costs of exchange.
SECTION 14.7. Recovery of Payments. In the event that any or all of the
amounts guaranteed by the Borrower are or were paid by a Foreign Subsidiary or
are or were paid or reduced by application of the proceeds of any assets of the
Foreign Subsidiary, and all or any part of such payment is rescinded or must
otherwise be restored or recovered from any Lender or any Affiliate of a Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
any of the Foreign Subsidiaries, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, such
Foreign Subsidiary or any substantial part of its property, or otherwise, then
all as though such payment had not been made, the liability of the Borrower
under this Guaranty shall continue, or be reinstated, and shall remain in full
force and effect to the extent permitted by law.
SECTION 14.8. Subrogation. Any and all rights of subrogation or similar rights
which the Borrower may have against any Foreign Subsidiary or any assets of any
Foreign Subsidiary or against any other guarantor or any collateral security
held by the Agent or any Lender or any Affiliate of a Lender for the payment of
the obligations in respect of any Foreign Facility or otherwise shall be
subordinate to any and all rights which the Agent or any Lender or any such
Affiliate may have against such Foreign Subsidiary or any assets of such Foreign
Subsidiary or against such other guarantor or collateral security pursuant to
any Foreign Facility Agreement or otherwise and the Borrower will not enforce
any such right of subrogation or any similar right until all amounts guaranteed
by it hereunder have been paid in full.
SECTION 14.9. Consent to Amendments, Etc. The Borrower hereby consents that,
without the necessity of any reservation of rights against the Borrower and
without notice to or further assent by the Borrower, any demand for payment of
any of the obligations in respect of any Foreign Facility made by the Agent or
any Lender or any Affiliate thereof may be rescinded and any of such obligations
continued and such obligations, or the liability of any of the Foreign
Subsidiaries in respect thereof or any other Person upon or for any part
thereof, or any collateral security or guaranty therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Agent or any Lender or any Affiliate thereof and any obligation
under any Foreign Facility, Foreign Facility Debt or Foreign Facility Agreement,
any collateral security documents or guaranties or documents in connection
herewith or therewith may be amended, modified, supplemented or terminated, in
whole or in part, in accordance with the terms thereof, as the Agent and the
Lenders and their respective Affiliates may deem advisable from time to time,
and any collateral security or guaranty or right of offset at any time held by
the Agent or any Lender or any such Affiliate for the payment of such
obligations may be sold, exchanged, waived, surrendered or released, all without
the necessity of any reservation of rights against the Borrower and without
notice to or further assent by the Borrower, which will remain bound under this
SECTION 14.9, notwithstanding any such renewal, extension, modification,
acceleration, compromise, amendment, supplement, termination, sale, exchange,
waiver, surrender or release. Neither the Agent nor any Lender nor any of their
respective Affiliates shall have any obligation to protect, secure, perfect or
insure any other collateral security documents or property subject thereto at
any time held as security for such obligations. The Borrower waives any and all
notice of the creation, renewal, extension or accrual of any of the obligations
and notice of or proof of reliance by the Agent or any Lender or any such
Affiliate upon this SECTION 14.9, and such obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred in reliance
upon this SECTION 14.9, and all dealings between such Foreign Subsidiary, the
Borrower, the Agent, the Lenders and such Affiliates shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
SECTION 14.9.
SECTION 14.10. Binding Nature of Certain Adjudications. Upon written notice of
the institution by the Agent or any Lender of any action or proceedings, legal
or otherwise, for the adjudication of any controversy with any Foreign
Subsidiary, the Borrower will be conclusively bound by the adjudication in any
such action or proceedings and by any judgment, award or decree entered therein.
The Borrower waives the right to assert in any action or proceeding brought by
the Agent or any Lender or any Affiliate thereof, upon any of the Foreign
Facility Agreements, any offsets or counterclaims which the Borrower may have
with respect thereto; provided, however, that this SECTION 14.10 shall not
prohibit the Borrower from bringing any action in its own name under any Foreign
Facility Agreement or from asserting any mandatory counterclaim required to be
asserted by Applicable Law.
SECTION 14.11. Validity and Enforceability of Guaranty. The Borrower agrees
that at any time and from time to time upon the written request of the Agent or
any Lender, the Borrower will execute and deliver such further documents and do
such further acts and things as the Agent or such Lender may reasonably request
in order to effect the purposes of this ARTICLE 14 and will take all action
required so that this Guaranty will at all times be a binding obligation of the
Borrower enforceable in accordance with its terms.
[NEXT PAGE IS A SIGNATURE PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers in several counterparts all as of the
day and year first written above.
BORROWER:
SYNTHETIC INDUSTRIES, INC.
By: ______Leonard Chill________
[Corporate Seal] Name: Xxxxxxx Chill
Title: President
Attest: Xxx X. Beckkman____
Name: Xxx X. Xxxxxxx
Title: Secretary
AGENT:
THE FIRST NATIONAL BANK OF BOSTON
By: XXXXXXX X. Purinton_____
Xxxxxxx X. Xxxxxxxx
Vice President
LENDERS:
THE FIRST NATIONAL BANK OF BOSTON
By: Xxxxxxx X. Purinton____
Xxxxxxx X. Xxxxxxxx
Vice President
SANWA BUSINESS CREDIT CORPORATION
By: __Peter L. Skavla_____
Name: Xxxxx X. Xxxxxx
Title: Vice President
SOUTHTRUST BANK OF GEORGIA, N.A.
By: __Melinda M. Bergbom____
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
ANNEX A
PROPORTIONATE
SHARE OF PROPORTIONATE
COMMITMENT REVOLVING SHARE OF
LENDER PERCENTAGE COMMITMENT CREDIT FACILITY TERM LOAN
The First
National Bank
of Boston 35.2942% $30,000,070 $14,117,680 $15,882,390
Sanwa Business
Credit Corporation 35.2941% $29,999,985 $14,117,640 $15,882,345
SouthTrust Bank
of Georgia, N.A. 29.4117% $24,995,945 $11,764,680 $13,235,265
TOTALS 100.000% $85,000,000 $40,000,000 $45,000,000
_______________________________
* This Table of Contents is included for reference purposes only and does not
constitute part of the Fourth Amended and Restated Revolving Credit
and Security Agreement.
