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$70,000,000.00
CREDIT AGREEMENT
dated as of
October 25, 2000
among
XXXXXXX FURNITURE INDUSTRIES, INCORPORATED,
The Initial Guarantors Listed Herein,
The Banks Listed Herein
and
BRANCH BANKING AND TRUST COMPANY,
as Agent
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CREDIT AGREEMENT
AGREEMENT dated as of October 25, 2000 among XXXXXXX FURNITURE
INDUSTRIES, INCORPORATED, XXXXXXX FURNITURE INDUSTRIES OF NORTH CAROLINA, INC.,
THE X.X. XXXXXX CORPORATION, BASSETT DIRECT STORES, INC., BASSETT DIRECT NC,
LLC, BASSETT DIRECT SC, LLC, the BANKS listed on the signature pages hereof and
BRANCH BANKING AND TRUST COMPANY, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this Section
1.01 shall, for all purposes of this Agreement and any amendment hereto (except
as herein otherwise expressly provided or unless the context otherwise
requires), have the meanings set forth herein:
"Account Debtor" shall mean the person who is obligated on any
of the Accounts Receivable Collateral or otherwise is obligated as a purchaser
or lessee of any of the Inventory Collateral.
"Accounts Receivable Collateral" shall mean all rights of the
Borrower and the Guarantors to payment for goods sold or leased, or to be sold
or to be leased, or for services rendered or to be rendered, howsoever evidenced
or incurred, including, without limitation, all accounts, instruments, chattel
paper and general intangibles, all returned or repossessed goods and all books,
records, computer tapes, programs and ledger books arising therefrom or relating
thereto, whether now owned or hereafter acquired or arising.
"ACL Agreement" means any credit line sweep services agreement
now or hereafter entered into between the Agent and Borrower and all amendments
and modifications thereto.
"Acquisition" means the acquisition of (i) a controlling equity
interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest at
the time it becomes exercisable by the holder thereof), whether by purchase of
such equity interest or upon exercise of an option or warrant for, or conversion
of securities into, such equity interest, or (ii) assets of another Person which
constitute all or any material part of the assets of such Person or of a line or
lines of business conducted by such Person.
"Adjusted Monthly Libor Index" has the meaning set forth in
Section 2.06(c).
"Advance" shall mean an advance made to the Borrower under this
Agreement pursuant to Article II. An Advance is a "Prime Rate Advance" if such
Advance is part of a Prime Rate Loan or a "Euro-Dollar Advance" if such Advance
is part of a Euro-Dollar Loan.
"Affiliate" of any Person means (i) any other Person which
directly, or indirectly through one or more intermediaries, controls such
Person, (ii) any other Person which directly, or indirectly through one or more
intermediaries, is controlled by or is under common control with such Person, or
(iii) any other Person of which such Person owns, directly or indirectly, 20% or
more of the common stock or equivalent equity interests. As used herein, the
term "control" means possession, directly or indirectly, of the power
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to direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agent" means Branch Banking and Trust Company, in its capacity
as agent for the Banks hereunder, and its successors and permitted assigns in
such capacity.
"Agent's Letter Agreement" means that certain letter agreement,
dated as of August 24, 2000, between the Borrower and the Agent relating to the
structure of the Loan, and certain fees from time to time payable by the
Borrower to the Agent, together with all amendments and modifications thereto.
"Agreement" means this Credit Agreement, together with all
amendments and supplements hereto.
"Anniversary Date" means October 25, 2001 and each anniversary
of the Closing Date thereafter.
"Annual Maintenance Capital Expenditures" shall mean, with
respect to any period of four fiscal quarters the greater of: (1) the actual
Capital Expenditures of the Borrower and its Consolidated Subsidiaries during
such period for maintenance purposes of existing assets; or (2) seventy-five
percent (75%) of Depreciation and Amortization for such period.
"Applicable Margin" has the meaning set forth in Section
2.06(a).
"Assignee" has the meaning set forth in Section 9.07(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 9.07(c) in the form attached hereto as
Exhibit J.
"Assignment of Claims Acts" shall mean The Assignment of Claims
Act of 1940, as may be amended from time to time, and any Federal, State, county
or municipal statute, regulation, ordinance, constitution or charter, now or
hereafter existing, similar in effect thereto, as determined by the Agent in its
sole discretion.
"Authority" has the meaning set forth in Section 8.02.
"Bank" means each bank listed on the signature pages hereof as
having a Commitment and the Swing Line Lender, and their respective successors
and assigns.
"Bassett Asset Fund" means Bassett Industries Alternative Asset
Fund, LP, a Delaware limited partnership.
"Bassett Asset Fund Investment Policy" shall mean the Investment
Policy attached hereto as Schedule 1.01 - Investment Policy.
"BB&T" means Branch Banking and Trust Company, and its
successors.
"BFD Stores" means existing and future retail furniture stores
operating under the "Xxxxxxx Furniture Direct" program of the Borrower or the
"At Home with Bassett" program of the Borrower, as such programs are in effect
on the Closing Date.
"Borrower" means Xxxxxxx Furniture Industries, Incorporated, a
Virginia corporation, and its successors and permitted assigns.
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"Borrowing" means a borrowing hereunder consisting of Advances
made to the Borrower at the same time by the Banks pursuant to Article II.
"Borrowing Base" shall mean, based on the most recent Borrowing
Base Certification Report which as of the date of a determination of the
Borrowing Base has been received by the Agent, the sum of (i) an amount equal to
75% (or such lesser percentage as shall be mutually agreed upon by the Agent and
Borrower from time to time) of the face dollar amount of Eligible Accounts as at
the date of determination; and (ii) an amount equal to: (A) 5% of the LIFO
Reserve, as of the date of the determination of the Borrowing Base, subtracted
from (B) 40% (or such lesser percentage as shall be mutually agreed upon by the
Agent and Borrower from time to time) of the dollar amount of the Eligible
Inventory, valued at the lower of its cost or market value (as determined by the
Agent in its sole discretion), as at the date of determination. The Agent shall
also be entitled to hold and subtract any reserve against the Borrowing Base it
deems necessary as security for payment of the Notes, the obligations of the
Guarantors under Article X of this Agreement, and the obligations of the
Borrower under the Letter of Credit Agreements.
"Borrowing Base Certification Report" means a report in the form
attached hereto as Exhibit E, and otherwise satisfactory to the Agent, certified
by the chief financial officer or other authorized officer of the Borrower and
the Guarantors regarding the Inventory Collateral and the Accounts Receivable
Collateral of the Borrower and the Eligible Guarantors.
"Capital Expenditures" means for any period the sum of all
capital expenditures incurred during such period by the Borrower and its
Consolidated Subsidiaries, as determined in accordance with GAAP.
"Capital Stock" means any nonredeemable capital stock of the
Borrower or any Consolidated Subsidiary (to the extent issued to a Person other
than the Borrower), whether common or preferred.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. and its
implementing regulations and amendments.
"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability Information System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section
8.02.
"Closing Certificate" has the meaning set forth in Section
3.01(e).
"Closing Date" means October 25, 2000.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code. Any reference to any provision of the Code shall
also be deemed to be a reference to any successor provision or provisions
thereof.
"Collateral" shall have the meaning set forth in the Security
Agreement.
"Collateral Documents" means, collectively, the Pledge Agreement
and the Security Agreement.
"Collateral Locations" shall mean the Executive Offices and
those additional locations set forth and described on Schedule 1.01 - Collateral
Locations, under the heading "Collateral Locations."
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"Collateral Reserve Account" shall mean a non-interest bearing,
demand deposit account which the Borrower and Guarantors may be required to open
and maintain with the Agent for the benefit of the Secured Parties pursuant to
the requirements of Section 2.14.
"Committed Contingent BFD Liabilities" shall mean at any date
any and all written commitments or other agreements pursuant to which the
Borrower or any Consolidated Subsidiary has agreed to Guaranty any indebtedness,
liabilities or obligations of any Person as lessee under a lease of a "BFD
Store"; provided, however, Committed Contingent BFD Liabilities shall expressly
exclude obligations arising under any such written commitment or other agreement
under which the Borrower and any Consolidated Subsidiary that is a party thereto
has the unilateral: (1) and unqualified right to terminate such written
commitment or other agreement at any time; or (2) right to terminate such
written commitment or other agreement in the event that the guaranty
contemplated thereby will result in Default or Event of Default under this
Agreement.
"Commitment" means, with respect to each Bank, (i) the amount
set forth opposite the name of such Bank on the signature pages hereof, or (ii)
as to any Bank which enters into an Assignment and Acceptance (whether as
transferor Bank or as Assignee thereunder), the amount of such Bank's Commitment
after giving effect to such Assignment and Acceptance, in each case as such
amount may be reduced from time to time pursuant to Sections 2.08 and 2.09.
"Compliance Certificate" has the meaning set forth in Section
5.01(d).
"Comprehensive Fixed Charge Coverage Ratio" shall be determined
as of the end of each Fiscal Quarter and shall mean the ratio of: (A)(i)
Consolidated Comprehensive EBITDA for the period of four consecutive Fiscal
Quarters most recently ended on or prior to such date, plus all obligations of
the Borrower or any of its Consolidated Subsidiaries as lessee under operating
leases, for the period of four consecutive Fiscal Quarters most recently ended
on or prior to such date, less (ii) the sum of the aggregate taxes on income
paid by the Borrower and its Consolidated Subsidiaries during such period of
four consecutive Fiscal Quarters most recently ended on or prior to such date,
all Dividends paid or declared by the Borrower and its Consolidated Subsidiaries
during such period, plus Annual Maintenance Capital Expenditures during such
period, to (B) the sum of: (i) Consolidated Fixed Charges for the period of four
consecutive fiscal quarters most recently ended on or prior to such date, plus
(ii) all payments during such period by the Borrower or any of its Consolidated
Subsidiaries under Guaranteed BFD Leases.
"Consolidated Comprehensive EBITDA" shall be determined as of
the end of each Fiscal Quarter and shall mean: (1) EBITDA, of the Borrower and
its Consolidated Subsidiaries, for the Fiscal Quarter then ending and the
immediately preceding three Fiscal Quarters, minus (2) non-recurring or non-cash
income of the Borrower and its Consolidated Subsidiaries for the Fiscal Quarter
then ending and the immediately preceding three Fiscal Quarters, all as
determined in accordance with GAAP. For purposes of clarification and not in
limitation of the foregoing, subitem (2) shall include (and thereby the
following shall be subtracted from EBITDA) without limitation to the extent the
following were included in computing Consolidated Net Income for such period:
(i) non-recurring capital gains realized by the Borrower or any Subsidiary of
the Borrower from Investments or the Bassett Asset Fund; and (ii) any other
amounts realized by the Borrower or any Subsidiary that exceeds the actual,
recurring earnings arising from any Investment including without limitation the
Bassett Asset Fund or IHFC. In the event earnings of any Person that is not a
Consolidated Subsidiary of the Borrower are remitted to the Borrower or any
Consolidated Subsidiary of the Borrower such earnings shall not be included in
Consolidated Comprehensive EBITDA until actually paid to the Borrower or such
Consolidated Subsidiary and upon such payment shall be allocated among the
Fiscal Quarter then ended and the immediately preceding three Fiscal Quarters on
the basis that such earnings were reported by the Borrower and its Consolidated
Subsidiary.
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"Consolidated Fixed Charges" for any period means the sum of (i)
Consolidated Interest Expense for such period, (ii) all payments of principal in
respect of Debt (excluding principal payments made with respect to any revolving
line of credit) of the Borrower or any of its Consolidated Subsidiaries for such
period, and (iii) all payment obligations of the Borrower and its Consolidated
Subsidiaries for such period under all operating leases and rental agreements.
"Consolidated Interest Expense" for any period means interest,
whether expensed or capitalized, in respect of Debt of the Borrower or any of
its Consolidated Subsidiaries outstanding during such period.
"Consolidated Net Income" means, for any period, the Net Income
of the Borrower and its Consolidated Subsidiaries determined on a consolidated
basis, but excluding (i) extraordinary items and (ii) any equity interests of
the Borrower or any Subsidiary of the Borrower in the unremitted earnings of any
Person that is not a Subsidiary of the Borrower.
"Consolidated Operating EBITDA" shall be determined as of the
end of each Fiscal Quarter and shall mean the Consolidated Operating Profits,
for the Fiscal Quarter then ending and the immediately preceding three Fiscal
Quarters, plus the Depreciation and Amortization for the Fiscal Quarter then
ending and the immediately preceding three Fiscal Quarters, all as determined in
accordance with GAAP.
"Consolidated Operating Profits" means, for any period, the
Operating Profits of the Borrower and its Consolidated Subsidiaries arising from
their respective wholesale furniture sales.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Borrower in its consolidated and consolidating
financial statements as of such date.
"Consolidated Total Assets" means, at any time, the total assets
of the Borrower and its Consolidated Subsidiaries, determined on a consolidated
basis, as set forth or reflected on the most recent consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries, prepared in accordance with
GAAP.
"Consolidated Total Capitalization" means, at any time, the sum
of (A) the amount equal to: (i) Stockholders' Equity, less (ii) the aggregate
outstanding amount of any and all loans or advances by the Borrower or any
Consolidated Subsidiary to any Person, plus (B) Consolidated Total Debt,
provided, that for purposes of this definition only, in determining Consolidated
Total Debt, clauses (viii), (ix) (but only to the extent clause (ix) includes
Debt that is not a Contingent BFD Liability) and (x) of the definition of Debt
contained in this Agreement shall be disregarded.
"Consolidated Total Debt" means at any date the sum of: (1) all
Debt of the Borrower and its Consolidated Subsidiaries, (2) all obligations
(absolute or contingent) of the Borrower and its Consolidated Subsidiaries to
reimburse any bank or other Person in respect of amounts which are available to
be drawn or have been drawn under a letter of credit or similar instrument, and
(3) all Contingent BFD Liabilities, all as determined in accordance with GAAP.
"Contingent BFD Borrowing Base" shall mean, based on the most
recent Contingent BFD Liabilities Borrowing Base Certification Report which as
of the date of a determination has been received by the Agent, the sum of: (1)
an amount equal to seventy-five percent (75%) (or such lesser percentage as
shall be mutually agreed upon by the Agent and Borrower from time to time) of
the fair market value of Eligible Investment Securities, and (2) an amount equal
to seventy-five percent (75%) (or such lesser percentage as shall be agreed upon
by the Agent and Borrower from time to time) of the fair market value
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(determined in a manner consistent with the practices of the Bassett Asset Fund
on November 27, 1999) of the Borrower's ownership interest in the cash and
investments owned by the Bassett Asset Fund.
"Contingent BFD Liabilities" shall mean at any date, without
duplication: (i) all indebtedness, liabilities and obligations of any Person in
connection with or arising from the acquisition, development, construction or
ownership of a "BFD Store" Guaranteed by the Borrower or any of its Consolidated
Subsidiaries (or with respect to which the Borrower or any Consolidated
Subsidiary has provided a written commitment or agreement to issue such a
Guaranty); (ii) all indebtedness, liabilities and obligations of any Person in
connection with or arising from the initial working capital and purchase of
inventory and fixtures for a BFD Store Guaranteed by the Borrower or any of its
Consolidated Subsidiaries (or with respect to which the Borrower or any
Consolidated Subsidiary has provided a written commitment or agreement to issue
such a Guaranty); and (iii) the Applicable Percentage of all payments scheduled
to be made by any Person, as lessee under a Guaranteed BFD Lease; provided,
however, if the guaranty issued by the Borrower or Consolidated Subsidiary in
connection with a Guaranteed BFD Lease is applicable only during a specified
period of time, the amount included in this subitem (iii) of the definition of
Contingent BFD Liabilities shall be: (1) limited to the Applicable Percentage of
all payments scheduled to be made by any Person as lessee under a Guaranteed BFD
Lease during the period during which such guaranty by the Borrower or
Consolidated Subsidiary, as the case may be, is effective; and (2) shall be
included in the determination of Contingent BFD Liabilities only during the
portion of the lease term that such guaranty by the Borrower or Consolidated
Subsidiary, as the case may be, is effective. As used herein, "Applicable
Percentage" shall mean: (i) 75% if the Person whose obligations under the
Guaranteed BFD Lease are guaranteed is an Affiliate of the Borrower or any
Consolidated Subsidiary; and (ii) 50% if the Person whose obligations under the
Guaranteed BFD Lease are guaranteed is not an Affiliate of the Borrower or any
Consolidated Subsidiary.
"Contingent BFD Liabilities Borrowing Base Certification Report"
shall mean a report in the form attached hereto as Exhibit L, and otherwise
satisfactory to the Agent, certified by the chief financial officer or other
authorized officer of the Borrower and the Guarantors.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Cost of Acquisition" means, with respect to any Acquisition, as
at the date of entering into any agreement therefor, the sum of the following
(without duplication): (i) the value of the capital stock, warrants or options
to acquire capital stock of Borrower or any Subsidiary to be transferred in
connection therewith, (ii) the amount of any cash and fair market value of other
property (excluding property described in clause (i) and the unpaid principal
amount of any debt instrument) given as consideration, (iii) the amount
(determined by using the face amount or the amount payable at maturity,
whichever is greater) of any Debt incurred, assumed or acquired by the Borrower
or any Subsidiary in connection with such Acquisition, (iv) all additional
purchase price amounts in the form of earnouts and other contingent obligations
that should be recorded on the financial statements of the Borrower and its
Subsidiaries in accordance with GAAP, (v) all amounts paid in respect of
covenants not to compete, consulting agreements that should be recorded on
financial statements of the Borrower and its Subsidiaries in accordance with
GAAP, and other affiliated contracts in connection with such Acquisition, (vi)
the aggregate fair market value of all other consideration given by the Borrower
or any Subsidiary in connection with such Acquisition, and (vii) out of pocket
transaction costs for the services and expenses of attorneys, accountants and
other consultants incurred in effecting such transaction, and other similar
transaction costs so incurred. For purposes of determining the Cost of
Acquisition for any transaction, (A) the capital stock of the Borrower shall be
valued (I) in the case of capital stock that is then designated as a national
market system security by the National Association of Securities Dealers, Inc.
("NASDAQ") or is listed on a national securities exchange, the average of the
last reported bid and ask quotations or the last prices reported thereon, and
(II) with respect to any other shares of capital stock, as determined by the
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Board of Directors of the Borrower and, if requested by the Agent, determined to
be a reasonable valuation by the independent public accountants referred to in
Section 5.01(a), (B) the capital stock of any Subsidiary shall be valued as
determined by the Board of Directors of such Subsidiary and, if requested by the
Agent, determined to be a reasonable valuation by the independent public
accountants referred to in Section 5.01(a), and (C) with respect to any
Acquisition accomplished pursuant to the exercise of options or warrants or the
conversion of securities, the Cost of Acquisition shall include both the cost of
acquiring such option, warrant or convertible security as well as the cost of
exercise or conversion.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under capital leases,
(v) all obligations of such Person to reimburse any bank or other Person in
respect of amounts payable under a banker's acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation),
(vii) all obligations (absolute or contingent) of such Person to reimburse any
bank or other Person in respect of amounts which are available to be drawn or
have been drawn under a letter of credit or similar instrument, (viii) all Debt
of others secured by a Lien on any asset of such Person, whether or not such
Debt is assumed by such Person, (ix) all Debt of others Guaranteed by such
Person, (x) all obligations of such Person with respect to interest rate
protection agreements, foreign currency exchange agreements or other hedging
agreements (valued as the termination value thereof computed in accordance with
a method approved by the International Swap Dealers Association and agreed to by
such Person in the applicable hedging agreement, if any); and (xi) the principal
portion of all obligations of such Person under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease under
GAAP.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived in writing, become an Event of Default.
"Default Rate" means, with respect to the Loan or any Swing Line
Advance, on any day, the sum of 2% plus the then highest interest rate
(including the Applicable Margin) which may be applicable to the Loan or any
Swing Line Advance hereunder (irrespective of whether any such type of Loan is
actually outstanding hereunder).
"Defaulted Contingent BFD Liability" means: (1) a default, event
of default or failure to perform any covenant or obligation has occurred and
continues beyond any applicable cure period under any indebtedness, liability or
obligation with respect to which the Borrower or any Consolidated Subsidiary has
executed a guaranty creating a Contingent BFD Liability; or (2) the Borrower or
any Consolidated Subsidiary has made a payment or performed an obligation under
the guaranty provided by such Person in connection with any such Contingent BFD
Liability.
"Depreciation and Amortization" means for any period an amount
equal to the sum of all depreciation and amortization expenses of the Borrower
and its Consolidated Subsidiaries for such period, as determined in accordance
with GAAP.
"Dividends" means for any period the sum of all dividends paid
or declared during such period in respect of any Capital Stock and Redeemable
Preferred Stock (other than dividends paid or payable in the form of additional
Capital Stock).
"Dollars" or "$" means dollars in lawful currency of the United
States of America.
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"Domestic Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in North Carolina are authorized or
required by law to close.
"Domestic Subsidiary" means any Subsidiary which is organized
under the laws of any state or territory of the United States of America.
"EBITDA" means and includes, for any Fiscal Quarter for which
the amount thereof is to be determined, the sum of (i) Consolidated Net Income
for such period; (ii) Consolidated Interest Expense for such period; (iii)
income taxes and other taxes measured by income or profits in respect of the
Borrower and its Consolidated Subsidiaries for such period, but only to the
extent such taxes were deducted in computing Consolidated Net Income for such
period, consolidated in accordance with GAAP; and (iv) Depreciation and
Amortization for such period.
"Eligible Accounts" means those Receivables of the Borrower and
the Eligible Guarantors included in the Accounts Receivable Collateral, each of
which meets the following requirements: (i) such Receivable arose in the
ordinary course of such Borrower's or Eligible Guarantor's business; (ii) the
right to payment is actually owing to a Borrower or Eligible Guarantor by such
Borrower's or Eligible Guarantor's Account Debtors and has been fully earned by
completed performance and, if goods are involved, the goods have been shipped by
such Borrower or Eligible Guarantor, as the case may be; (iii) the Receivable
includes only that portion thereof not subject to any offset, defense,
counterclaim, credit, allowance or adjustment; (iv) such Borrower's or Eligible
Guarantor's, as the case may be, title to such Receivable is absolute and is
subject to no prior assignment, claim, lien or security interest; (v) the full
amount reflected on such Borrower's or Eligible Guarantor's, as the case may be,
books and on any invoice or statement delivered to the Agent related to such
Receivable is owing to such Borrower or Eligible Guarantor, as the case may be,
and no partial payment has been made thereon; (vi) (1) such Receivable is due
and payable not more than 60 days from the original invoice date; (2) no more
than 60 days have elapsed from the due date; and (3) the Receivable is otherwise
consistent with the terms offered by the Borrower and the Eligible Guarantors to
their respective customers on the Closing Date; provided, however, this subitem
(vi) shall not exclude a Receivable from constituting an Eligible Account if
such Receivable (an "Opening Order Receivable") is existing on the Closing Date
and: (1) the Receivable represents the Account Debtor's initial purchase of
inventory for a new retail store; (2) the Receivable is payable in equal monthly
installments, and in full within 15 months from the invoice date; (3) no such
monthly installment applicable to such Receivable is more than 1 day past due;
(4) the amount of such Receivable is less than $600,000; (5) the aggregate
amount of all Opening Order Receivables included within the total Eligible
Accounts does not exceed $4,000,000 (but only Opening Order Receivables in
excess of such amount shall be excluded); and (6) each of the other requirements
of an Eligible Account is satisfied; (vii) such Receivable did not arise out of
a contract or purchase order containing provisions prohibiting assignment
thereof or the creation of a security interest therein, and such Borrower or
Eligible Guarantor, as the case may be, has received no note, trade acceptance,
draft or other instrument with respect to such Receivable or in payment thereof;
(viii) such Borrower or Eligible Guarantor, as the case may be, has received no
notice of the death of the Account Debtor or of the dissolution, termination of
existence, insolvency, bankruptcy, appointment of receiver for any part of the
property of, or assignment for the benefit of creditors made by, the Account
Debtor; (ix) such Receivable is not payable by an Account Debtor affiliated with
any Borrower or any Guarantor or with any shareholder, director, or officer of a
Borrower or Guarantor, as determined by the Agent in its sole discretion (for
purposes of clarification and not in limitation of the foregoing, Receivables
payable by LRG Furniture, LLC shall not constitute Eligible Accounts as a result
of this subitem (ix)); (x) such Receivable is not payable by any Account Debtor
located outside the United States, unless such Receivable is payable in the full
amount of the face value of such Receivable in United States dollars and is
supported by an irrevocable letter of credit in form and substance acceptable to
the Agent, in its sole discretion, and issued by a bank satisfactory to the
Agent, in its sole discretion (and, if requested by the Agent, such letter of
credit or the proceeds thereof, as the Agent in its sole discretion, shall
require, have been assigned to the Agent); (xi) such Receivable is not payable
by the United States of America or any political subdivision or agency thereof,
unless the Agent,
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Banks, the Borrower and the Eligible Guarantors have complied with the
Assignment of Claims Act with respect to such Receivable (including, without
limitation, the execution and delivery of a notice of assignment); (xii) the
Account Debtor for such Receivable is not located in the State of New Jersey
unless the Borrower or Eligible Guarantors, as the case may be, have filed a
Notice of Business Activities Report with the New Jersey Division of Taxation
for the then current year; (xiii) such Receivable is not payable by any Account
Debtor having 50% or more in face value of its then existing accounts with the
Borrower or Eligible Guarantors ineligible hereunder; (xiv) such Receivable is
not payable by any Account Debtor whose total accounts, in face amount, with the
Borrower and Eligible Guarantors exceed 15% or more of the total aggregate
amount of the Eligible Receivables, but only to the extent of such excess; and
(xv) the Receivable has not otherwise been excluded by the Agent, which it
reserves the right to do in its sole discretion. No presumption shall exist that
a Receivable once classified by the Agent as an "Eligible Receivable" shall
continue to be so classified. In no event shall (1) an Opening Order Receivable
created or arising after the Closing Date be included within the Eligible
Accounts; and (2) a Receivable be included within the Eligible Accounts if such
Receivable is not in accordance with the policy of the Borrower and Eligible
Guarantors in existence on the Closing Date as to the extension of 30, 45 and 60
day terms to specified types of customers unless any such change to such policy
is approved in writing by the Required Banks.
"Eligible Guarantor" means Xxxxxxx Furniture Industries of North
Carolina, Inc. and The X.X. Xxxxxx Corporation.
"Eligible Inventory" means that portion of the Inventory
Collateral consisting of raw material or finished goods (excluding any and all
work in process) in the possession and control of a Borrower or an Eligible
Guarantor which meets the following requirements: (i) such Inventory Collateral
is in good and saleable condition, is not obsolete and is subject to internal
control and management procedures conducted by a Borrower or an Eligible
Guarantor, as the case may be, and satisfactory to the Agent in its sole
discretion; (ii) such Inventory Collateral meets all standards imposed by any
governmental agency, or department or division thereof, having regulatory
authority over such Inventory Collateral, its use and/or sale; (iii) such
Inventory Collateral has not been consigned to any Person; (iv) such Inventory
Collateral is subject to the Agent's perfected security interest and to no other
liens or security interests and is located at the Collateral Locations; (v) such
Inventory Collateral does not bear, incorporate or is otherwise subject to any
trademark, patent or copyright which is not owned by the Borrower or Eligible
Guarantor, unless such trademark, patent or copyright is licensed to the
Borrower or Eligible Guarantor on terms and conditions satisfactory to the
Agent; and (vi) no warehouse receipt has been issued with respect to such
Inventory Collateral unless the warehouseman issuing such warehouse receipt is
satisfactory to the Agent in its sole discretion, the Agent has received and
reviewed such warehouse receipt, and such warehouse receipt has been transferred
or assigned to the Agent in a manner satisfactory to the Agent. No presumption
shall exist that Inventory Collateral once classified by the Agent as "Eligible
Inventory" shall continue to be so classified.
"Eligible Investment Securities" shall mean: (1) marketable
investment securities publicly traded on a national securities exchange and
described on Schedule 4.22-A; and (2) debt instruments which are described on
Schedule 4.22-A or described in Sections 5.13(i) through (iv) inclusive.
"Environmental Authority" means any foreign, federal, state,
local or regional government that exercises any form of jurisdiction or
authority under any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits,
orders, approvals, notices, registrations or other legal prerequisites for
conducting the business of a Loan Party or any Subsidiary of a Loan Party
required by any Environmental Requirement.
"Environmental Judgments and Orders" means all judgments,
decrees or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent
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or written agreements with an Environmental Authority or other entity arising
from or in any way associated with any Environmental Requirement, whether or not
incorporated in a judgment, decree or order.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment, including, without limitation, ambient air, surface water,
groundwater or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"Environmental Liabilities" means any liabilities, whether
accrued, contingent or otherwise, arising from and in any way associated with
any Environmental Requirements.
"Environmental Notices" means notice from any Environmental
Authority or by any other person or entity, of possible or alleged noncompliance
with or liability under any Environmental Requirement, including without
limitation any complaints, citations, demands or requests from any Environmental
Authority or from any other person or entity for correction of any violation of
any Environmental Requirement or any investigations concerning any violation of
any Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or
under any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement
relating to health, safety or the environment and applicable to a Loan Party,
any Subsidiary of a Loan Party or the Properties, including but not limited to
any such requirement under CERCLA or similar state legislation and all federal,
state and local laws, ordinances, regulations, orders, writs, decrees and common
law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law. Any reference to any
provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Euro-Dollar Loan" means the Loan during Interest Periods when
the Loan bears or is to bear interest at a rate based upon the London Interbank
Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.06.
"Event of Default" has the meaning set forth in Section 6.01.
"Executive Offices" shall mean with respect to a Borrower or an
Eligible Guarantor, the address and location corresponding to such Borrower's or
Eligible Guarantor's name set forth on Schedule 1.01 - Collateral Locations
under the heading "Executive Offices."
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"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if the day for which
such rate is to be determined is not a Domestic Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average rate charged to BB&T on such day on such
transactions as determined by the Agent.
"Financing" shall mean (i) any transaction or series of
transactions for the incurrence by a Loan Party of any Debt or for the
establishment of a commitment to make advances which would constitute Debt of a
Loan Party, which Debt is not by its terms subordinate and junior to other Debt
of a Loan Party, (ii) an obligation incurred in a transaction or series of
transactions in which assets of a Loan Party are sold and leased back, or (iii)
a sale of accounts or other receivables or any interest therein, other than a
sale or transfer of accounts or receivables attendant to a sale permitted
hereunder of an operating division.
"Fiscal Month" means any fiscal month of the Borrower.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
"Foreign Subsidiary" means any Subsidiary which is not a
Domestic Subsidiary.
"GAAP" means generally accepted accounting principles applied on
a basis consistent with those which, in accordance with Section 1.02, are to be
used in making the calculations for purposes of determining compliance with the
terms of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guaranteed BFD Leases" means any and all leases of "BFD Stores"
with respect to which the Borrower or any of its Consolidated Subsidiaries have
Guaranteed the indebtedness, liabilities or obligations of any Person as lessee
thereunder.
"Guaranteed Obligations" means any and all liabilities,
indebtedness and obligations of any and every kind and nature, heretofore, now
or hereafter owing, arising, due or payable from the Borrower to the Banks
(including, without limitation, the Swing Line Lender), the Issuing Bank, the
Agent, or any of them, arising under or evidenced by this Agreement, the Notes,
the Letter of Credit Agreements, the Collateral Documents or any other Loan
Document.
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"Guarantors" shall mean collectively: (a) the Initial
Guarantors; and (b) all Material Domestic Subsidiaries acquired, formed or
otherwise in existence after the Closing Date.
"Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. Section 6901 et seq. and its implementing regulations and
amendments, or in any applicable state or local law or regulation, (b) any
"hazardous substance", "pollutant" or "contaminant", as defined in CERCLA, or in
any applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including crude oil or any fraction thereof,
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or regulation and (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.
"IHFC" means International Home Furnishings Center Inc., a North
Carolina corporation.
"Initial Guarantors" shall mean collectively (i) Xxxxxxx
Furniture Industries of North Carolina, Inc., a North Carolina corporation, (ii)
The X.X. Xxxxxx Corporation, a Delaware corporation, (iii) Bassett Direct
Stores, Inc., a Virginia corporation, (iv) Bassett Direct NC, LLC, a Virginia
limited liability company, and (v) Bassett Direct SC, LLC, a Virginia limited
liability company.
"Interest Payment Date" shall mean the first day of each month.
"Interest Period" means a calendar month; provided that: (a) the
initial Interest Period shall mean the period commencing on the Closing Date and
ending on October 31, 2000, provided that the London Interbank Offered Rate
shall be determined as if such Interest Period commenced on October 1, 2000; and
(b) the last Interest Period under this Agreement shall end on the Termination
Date.
"Inventory Collateral" shall mean all inventory of the Borrower
and Guarantors, or in which the Borrower or Guarantor has rights, whether now
owned or hereafter acquired, wherever located, including, without limitation,
all goods of the Borrower and Guarantors held for sale or lease or furnished or
to be furnished under contracts of service, all goods held for display or
demonstration, goods on lease or consignment, returned and repossessed goods,
all raw materials, work-in-process, finished goods and supplies used or consumed
in the business of the Borrower or any Guarantor, together with all documents,
documents of title, dock warrants, dock receipts, warehouse receipts,
intellectual property, bills of lading or orders for the delivery of all, or any
portion, of the foregoing.
"Investment" means any investment in any Person, whether by
means of purchase or acquisition of obligations or securities of such Person,
capital contribution to such Person, loan or advance to such Person, making of a
time deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise.
"Issuing Bank" shall mean BB&T.
"Lending Office" means, as to each Bank, its office located at
its address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Lending Office) or such other office as such Bank
may hereafter designate as its Lending Office by notice to the Borrower and the
Agent.
"Letter of Credit" means the letters of credit issued by the
Issuing Bank pursuant to Section 2.03(a) and "Letter of Credit" means any one of
such Letters of Credit, as any of such letters of credit may be extended,
renewed, replaced or amended from time to time.
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"Letter of Credit Advance" means an advance made by the Issuing
Bank pursuant to Section 2.03(c).
"Letter of Credit Agreement" means any agreement entered into by
the Borrower and the Issuing Bank pursuant to which a Letter of Credit is
issued, as amended, modified or restated from time to time.
"Letter of Credit Commitment" means, with respect to each Bank,
(i) the amount designated as the Letter of Credit Commitment set forth opposite
the name of such Bank on the signature pages hereof, or (ii) as to any Bank
which enters into an Assignment and Acceptance (whether as transferor Bank or as
Assignee thereunder), the amount of such Bank's Letter of Credit Commitment
after giving effect to such Assignment and Acceptance, in each case as such
amount may be reduced from time to time pursuant to Sections 2.08 and 2.09.
"Lien" means, with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title, preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, servitude or encumbrance of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"LIFO Reserve" means, at any time, the LIFO reserve of the
Borrower and its Consolidated Subsidiaries, as set forth on the most recent
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries
prepared in accordance with GAAP.
"Loan" means the aggregate outstanding Advances made by the
Banks to the Borrower under this Agreement. The Loan (excluding Swing Line
Advances) shall at all times be a Euro-Dollar Loan, unless such Loan is to be a
Prime Rate Loan pursuant to Article VIII herein.
"Loan Documents" means this Agreement, the Notes, the Collateral
Documents, the Letter of Credit Agreements, the Letters of Credit, any other
document evidencing, relating to or securing the Loan, the Swing Line Advances
or the Letters of Credit, and any other document or instrument delivered from
time to time in connection with this Agreement, the Notes, the Letter of Credit
Agreements, the Swing Line Advances, the Letters of Credit, the Collateral
Documents or the Loan, as such documents and instruments may be amended or
supplemented from time to time.
"Loan Parties" means collectively the Borrower and each
Guarantor that is now or hereafter a party to any of the Loan Documents.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.06(c).
"Margin Stock" means "margin stock" as defined in Regulations T,
V or X of the Board of Governors of the Federal Reserve System, as in effect
from time to time, together with all official rulings and interpretations issued
thereunder.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other related event or events, act or
acts, condition or conditions, occurrence or occurrences, a material adverse
change in, or a material adverse effect upon, any of (a) the financial
condition, operations, business, properties or prospects of the Borrower and its
Consolidated Subsidiaries, taken as a whole, (b) the rights and remedies of the
Agent or
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the Banks under the Loan Documents, or the ability of the Borrower or any other
Loan Party to perform its obligations under the Loan Documents to which it is a
party, as applicable, or (c) the legality, validity or enforceability of any
Loan Document.
"Material Subsidiary" means collectively each Domestic
Subsidiary that is a member of the Material Subsidiary Group. As used herein,
"Material Subsidiary Group" as at any date means one or more Domestic
Subsidiaries (determined in accordance with this definition) which account for
(or in the case of a recently formed or acquired Domestic Subsidiary would so
account for on a pro forma historical basis), when combined with the Borrower,
at least (A) 90% of Consolidated Total Assets as measured as at the end of the
then most recently ended Fiscal Year or (B) 90% of Consolidated Net Income
(before taxes) for either of the two most recently ended Fiscal Years. A
Domestic Subsidiary shall be a "Material Subsidiary" if such Domestic Subsidiary
is included in any of the following groups: (1) the Domestic Subsidiaries
(determined in accordance with the terms of the following sentence) accounting
for the Consolidated Total Assets measured under part (A) of the preceding
sentence, but not the Consolidated Net Income measured under part (B) of the
preceding sentence; or (2) the Domestic Subsidiaries (determined in accordance
with the terms of the following sentence) accounting for the Consolidated Net
Income measured under part (B) of the preceding sentence, but not the
Consolidated Total Assets measured under part (A) of the preceding sentence; or
(3) the Domestic Subsidiaries (determined in accordance with the terms of the
following sentence) accounting for the Consolidated Net Income measured under
part (B) of the preceding sentence and the Consolidated Total Assets measured
under part (A) of the preceding sentence. The determination of the Domestic
Subsidiaries comprising the Material Subsidiary Group as of any date shall be
made on the basis of a group (selected by the Borrower) consisting of the
smallest number of Domestic Subsidiaries necessary to satisfy groups (1), (2) or
(3), as the case may be, above.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Income" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"Notes" means the Swing Line Note and the promissory notes of
the Borrower, substantially in the form of Exhibit A hereto, evidencing the
obligation of the Borrower to repay the Advances, together with all amendments,
consolidations, modifications, renewals and supplements thereto and "Note" means
any one of such Notes.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Obligations" means the collective reference to all
indebtedness, obligations and liabilities to the Agent, the Issuing Bank, the
Swing Line Lender and the Banks, existing on the date of this Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, of the Loan
Parties under this Agreement, the Letter of Credit Agreement or any other Loan
Document.
"Officer's Certificate" has the meaning set forth in Section
3.01(f).
"Operating Profits" means, as applied to any Person for any
period, the operating income of such Person for such period, as determined in
accordance with GAAP.
"Participant" has the meaning set forth in Section 9.07(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
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"Person" means an individual, a corporation, a limited liability
company, a partnership (including without limitation, a joint venture), an
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which
is covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Pledge Agreement" means that certain Pledge Agreement, executed
by the Pledgors for the benefit of the Agent, as agent for the Secured Parties,
in accordance with Section 5.29.
"Pledgors" means the pledgor(s) under the Pledge Agreement,
either collectively or individually, as the context shall require.
"Prime Rate" refers to that interest rate so denominated and set
by BB&T from time to time as an interest rate basis for borrowings. The Prime
Rate is but one of several interest rate bases used by BB&T. BB&T lends at
interest rates above and below the Prime Rate.
"Prime Rate Loan" means: (1) the Loan during Interest Periods
when the Loan bears or is to bear interest at a rate based upon the Prime Rate;
and (2) the Swing Line Advances.
"Properties" means all real property owned, leased or otherwise
used or occupied by a Loan Party or any Subsidiary of a Loan Party, wherever
located.
"Pro Rata Share" of any amount means, with respect to any Bank
at any time, the product of such amount times a fraction the numerator of which
is the amount of such Bank's Commitment at such time and the denominator of
which is the aggregate amount of the Commitments of all of the Banks at such
time.
"Quarterly Payment Date" means March 31, June 30, September 30
and December 31 of each year.
"Rate Determination Date" has the meaning set forth in Section
2.06(a).
"Receivables" shall have the meaning assigned to the term
"Accounts" in the Security Agreement.
"Redeemable Preferred Stock" of any Person means any preferred
stock issued by such Person which is at any time prior to the Termination Date
either (i) mandatorily redeemable (by sinking fund or similar payments or
otherwise) or (ii) redeemable at the option of the holder thereof.
"Required Banks" means at any time Banks having at least 66 2/3%
of the aggregate amount of the Commitments or, if the Commitments are no longer
in effect, Banks holding at least 66 2/3% of the aggregate outstanding principal
amount of the Notes, Letter of Credit Advances and Undrawn Amounts.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of the Borrower's capital stock (except dividends
payable solely in shares of its capital stock) or (ii) any payment
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on account of the purchase, redemption, retirement or acquisition of (a) any
shares of the Borrower's capital stock (except shares acquired upon the
conversion thereof into other shares of its capital stock) or (b) any option,
warrant or other right to acquire shares of the Borrower's capital stock.
"Secured Parties" shall have the meaning set forth in the
Security Agreement.
"Security Agreement" means that certain General Security
Agreement dated of even date herewith, by and between the Borrower and
Guarantors for the benefit of the Agent, as agent for the Secured Parties.
"Stockholders' Equity" means, at any time, the shareholders'
equity of the Borrower and its Consolidated Subsidiaries, as set forth or
reflected on the most recent consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries prepared in accordance with GAAP, but excluding any
Redeemable Preferred Stock of the Borrower or any of its Consolidated
Subsidiaries. Shareholders' equity generally would include, but not be limited
to (i) the par or stated value of all outstanding Capital Stock, (ii) capital
surplus, (iii) retained earnings, and (iv) various deductions such as (A)
purchases of treasury stock, (B) valuation allowances, (C) receivables due from
an employee stock ownership plan, (D) employee stock ownership plan debt
guarantees, and (E) translation adjustments for foreign currency transactions.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower.
"Swing Line Advance" means an advance made by the Swing Line
Lender pursuant to Section 2.15 hereof.
"Swing Line Lender" means BB&T.
"Swing Line Note" means the promissory note of the Borrower,
substantially in the form of Exhibit M hereto, evidencing the obligation of the
Borrower to repay the Swing Line Advance, together with all amendments,
consolidations, modifications, renewals and supplements thereto.
"Taxes" has the meaning set forth in Section 2.12(c).
"Termination Date" means November 30, 2003.
"Third Parties" means all lessees, sublessees, licensees and
other users of the Properties, excluding those users of the Properties in the
ordinary course of the Borrower's business and on a temporary basis.
"Total Unused Commitments" means at any date, an amount equal
to: (A) the aggregate amount of the Commitments of all of the Banks at such
time, less (B) the sum of: (i) the aggregate outstanding principal amount of the
Advances of all of the Banks at such time; (ii) the aggregate outstanding
principal amount of all Letter of Credit Advances; (iii) the aggregate
outstanding principal amount of all Swing Line Advances; and (iv) the aggregate
Undrawn Amounts.
"Transferee" has the meaning set forth in Section 9.07(d).
"UCC Recording Offices" means those certain locations and
recording offices set forth on Schedule 1.01 - Collateral Locations, under the
heading "UCC Recording Offices".
"Undrawn Amount" means, with respect to any Letter of Credit, at
any time, the
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maximum amount available to be drawn under such Letter of Credit at such time
and "Undrawn Amounts" means, at any time, the sum of all Undrawn Amounts at such
time.
"Unused Commitment" means at any date, with respect to any Bank,
an amount equal to its Commitment less the sum of: (i) aggregate outstanding
principal amount of its Advances; (ii) such Bank's Pro Rata Share of the
aggregate outstanding principal amount of all Letter of Credit Advances; (iii)
such Bank's Pro Rata Share of the aggregate outstanding principal amount of all
Swing Line Advances; and (iv) such Bank's Pro Rata Share of the Undrawn Amounts.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares
of capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all terms of an accounting character used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks, unless with respect to any such change concurred in by the
Borrower's independent public accountants or required by GAAP, in determining
compliance with any of the provisions of this Agreement or any of the other Loan
Documents: (i) the Borrower shall have objected to determining such compliance
on such basis at the time of delivery of such financial statements, or (ii) the
Required Banks shall so object in writing within 30 days after the delivery of
such financial statements, in either of which events such calculations shall be
made on a basis consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have been made (which,
if objection is made in respect of the first financial statements delivered
under Section 5.01 hereof, shall mean the financial statements referred to in
Section 4.04).
SECTION 1.03. Use of Defined Terms. All terms defined in this
Agreement shall have the same meanings when used in any of the other Loan
Documents, unless otherwise defined therein or unless the context shall
otherwise require.
SECTION 1.04. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural and the plural
shall include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 1.05. References. Unless otherwise indicated, references
in this Agreement to "Articles", "Exhibits", "Schedules", and "Sections" are
references to articles, exhibits, schedules and sections hereof.
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ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Make Advances. Each Bank severally
agrees, on the terms and conditions set forth herein, to make Advances to the
Borrower from time to time before the Termination Date; provided that,
immediately after each such Advance is made, the aggregate outstanding principal
amount of Advances by such Bank together with such Bank's Pro Rata Share of the
aggregate outstanding principal amount of all Letter of Credit Advances, Swing
Line Advances and Undrawn Amounts shall not exceed the amount of its Commitment,
provided further that the aggregate principal amount of all Advances, together
with the aggregate principal amount of all Letter of Credit Advances, Swing Line
Advances and Undrawn Amounts, shall not exceed the lesser of: (a) the aggregate
amount of the Commitments of all of the Banks at such time, and (b) the
Borrowing Base. Except as otherwise provided in an ACL Agreement, each Borrowing
under this Section shall be in an aggregate principal amount of $1,000,000 or
any larger multiple of $500,000 (except that any such Borrowing may be in the
aggregate amount of the Unused Commitments less the amount of any outstanding
Swing Line Advances) and shall be made from the several Banks ratably in
proportion to their respective Commitments. Within the foregoing limits, the
Borrower may borrow under this Section, repay or, to the extent permitted by
Section 2.10, prepay Advances and reborrow under this Section at any time before
the Termination Date.
SECTION 2.02. Method of Borrowing Advances. (a) Except as
otherwise provided in an ACL Agreement and Section 2.15 in the case of Swing
Line Advances, the Borrower shall give the Agent notice in the form attached
hereto as Exhibit B (a "Notice of Borrowing") prior to 11:00 A.M.
(Winston-Salem, North Carolina time) on the Domestic Business Day of each
Borrowing, specifying:
(i) the date of such Borrowing; and
(ii) the aggregate amount of such Borrowing.
(b) Except as provided in Section 2.02(d) of this Agreement,
upon receipt of a Notice of Borrowing, the Agent shall promptly notify each Bank
of the contents thereof and of such Bank's ratable share of such Borrowing and
such Notice of Borrowing shall not thereafter be revocable by the Borrower.
(c) Except as provided in Section 2.02(d) of this Agreement,
not later than 1:00 P.M. (Winston-Salem, North Carolina time) on the date of
each Borrowing, each Bank shall (except as provided in subsection (d) of this
Section) make available its ratable share of such Borrowing, in Federal or other
funds immediately available in Winston-Salem, North Carolina, to the Agent at
its address referred to in or specified pursuant to Section 9.01. Unless the
Agent determines that any applicable condition specified in Article III has not
been satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address. Unless the Agent
receives notice from a Bank, at the Agent's address referred to in Section 9.01,
no later than 4:00 P.M. (local time at such address) on the Domestic Business
Day before the date of a Borrowing stating that such Bank will not make an
Advance in connection with such Borrowing, the Agent shall be entitled to assume
that such Bank will make an Advance in connection with such Borrowing and, in
reliance on such assumption, the Agent may (but shall not be obligated to) make
available such Bank's ratable share of such Borrowing to the Borrower for the
account of such Bank. If the Agent makes such Bank's ratable share available to
the Borrower and such Bank does not in fact make its ratable share of such
Borrowing available on such date, the Agent shall be entitled to recover such
Bank's ratable share from such Bank or the Borrower (and for such purpose shall
be entitled to charge such amount to any account of the Borrower maintained with
the Agent), together with interest thereon for each day during the period from
the date of such Borrowing until such sum shall be paid in full at a rate per
annum equal to the rate set forth in Section 2.06 for each such day during such
period, provided that any such payment by the Borrower of such Bank's ratable
share and interest thereon
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shall be without prejudice to any rights that the Borrower may have against such
Bank. If such Bank shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Bank's Advance included in such Borrowing
for purposes of this Agreement.
(d) At the Agent's option and to facilitate the efficient
administration of this Agreement, the Agent shall be entitled to make
settlements and adjustments on a weekly basis provided that: (1) all Borrowings,
Advances and all payments of principal with respect to such Borrowings and
Advances shall be shared by the Banks ratably in proportion to their Commitments
and in accordance with this Agreement; and (2) all funds advanced by the Agent
under this Agreement and all funds received by the Agent under this Agreement
shall be made or received, as the case may be, by the Agent, as agent on behalf
of the Banks and shall not constitute separate loans or advances made by the
Agent. Unless the Agent receives notice from a Bank, at the Agent's address
referred to in Section 9.01, no later than 4:00 P.M. (local time at such
address) on the Domestic Business Day before the date of a Borrowing stating
that such Bank will not make an Advance in connection with such Borrowing, the
Agent may assume that each Bank will make an Advance in connection with each
Borrowing and, in reliance on such assumption, the Agent may make available such
Bank's ratable share of such Borrowing to the Borrower for the account of such
Bank. No later than 11:00 A.M. (Winston-Salem, North Carolina time) on Friday of
each week the Agent shall advise each Bank of its ratable share of the
Borrowings and payments made or received by the Agent for the period ending on
the immediately preceding Wednesday. No later than 2:00 P.M. (Winston-Salem,
North Carolina time) on such Friday the Agent and Banks shall effect payments
(and credits) so that all Borrowings, Advances and payments with respect to the
Borrowings and Letters of Credit are shared by the Banks ratably; provided,
however, at any time, upon the request of the Agent, each Bank shall, make its
ratable share of any Borrowing available to the Agent on demand but in no event
later than one Domestic Business Day following the Agent's demand; and (2) the
Agent shall be entitled to recover such Bank's ratable share of each Borrowing
from such Bank, together with interest thereon for each day during the period
from the date of any such demand until such sum shall be paid in full at a rate
per annum equal to the rate set forth in Section 2.06. Each Bank's obligation
under this Section 2.02(d) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation: (i) any setoff,
counterclaim, recoupment, defense or other right which such Bank or any other
Person may have against the Agent requesting such adjustment or payment or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default or the termination of the Commitment; (iii) any
adverse change in the condition (financial or otherwise) of the Borrower, any
Guarantor or any other Person; (iv) any breach of this Agreement or any of the
other Loan Documents by the Borrower, any Guarantor or any other Bank; or (v)
any other circumstance, happening or event whatsoever whether or not similar to
any of the foregoing.
SECTION 2.03 Letters of Credit.
(a) The Issuing Bank may, from time to time upon request of
the Borrower, in its sole discretion issue Letters of Credit for the account of
the Borrower, subject to satisfaction of the conditions referenced in Section
3.03.
(b) Each Letter of Credit shall be subject to the provisions
of this Agreement and to the provisions set forth in the Letter of Credit
Agreement executed by the Borrower in connection with the issuance of such
Letter of Credit. The Borrower agrees to promptly perform and comply with the
terms and conditions of each Letter of Credit Agreement.
(c) The payment by the Issuing Bank of a draft drawn under
any Letter of Credit shall constitute for all purposes of this Agreement a
Letter of Credit Advance in the amount of such draft. Upon written demand by the
Issuing Bank, with a copy to the Agent, each Bank shall purchase from the
Issuing Bank, and the Issuing Bank shall sell to each Bank, a participation
interest in such Letter of Credit Advance equal to such Bank's Pro Rata Share of
such Letter of Credit Advance as of the date of such purchase, by making
available to the Agent for the account of the Issuing Bank, in Federal or other
funds
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immediately available an amount equal to such Bank's Pro Rata Share of the
outstanding principal amount of such Letter of Credit Advance. Promptly after
receipt thereof, the Agent shall transfer such funds to the Issuing Bank. The
Borrower hereby agrees to each such sale and purchase of participation interests
in Letter of Credit Advances outstanding from time to time. Each Bank agrees to
purchase its participation interest in an outstanding Letter of Credit Advance
on (i) the Domestic Business Day on which demand therefor is made by the Issuing
Bank, provided notice of such demand is given not later than 1:00 P.M.
(Winston-Salem, North Carolina time) on such Domestic Business Day or (ii) the
first Domestic Business Day next succeeding the date of such demand if notice of
such demand is given after 1:00 P.M. (Winston-Salem, North Carolina time) on any
Domestic Business Day. The Issuing Bank makes no representation or warranty and
assumes no responsibility with respect to any sale and purchase of a
participation interest in any Letter of Credit Advance. If and to the extent
that any Bank shall not have so made the amount available to the Agent in
connection with its purchase of a participation interest in any Letter of Credit
Advance, such Bank agrees to pay to the Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Issuing Bank, until the date such amount is paid to the Agent, at the Federal
Funds Rate for the account of the Issuing Bank.
(d) The obligation of each Bank to purchase a participation
interest in any Letter of Credit Advance pursuant to Section 2.03(c) shall be
unconditional and shall not be affected by the existence of any Default, the
failure to satisfy any condition set forth in Section 3.1, 3.2 or 3.3 or the
termination of the Commitments (whether by the Borrower pursuant to Section 2.8
or by the Agent pursuant to Section 6.1 or otherwise).
(e) The Issuing Bank shall furnish (A) to the Agent and each
Bank on the fifth Domestic Business Day of each month a written report
summarizing the issuance and expiration dates of Letters of Credit issued during
the preceding month and (B) to the Agent and each Bank upon request a written
report setting forth the aggregate Undrawn Amounts.
(f) The failure of any Bank to purchase a participation
interest in any Letter of Credit Advance shall not relieve any other Bank of its
obligation hereunder to purchase its participation interest in any Letter of
Credit Advance on such date, but no Bank shall be responsible for the failure of
any other Bank to so purchase a participation interest on such date.
(g) The Borrower shall pay to the Agent for the account of
each Bank that has purchased a participation interest in a Letter of Credit
Advance on the earlier of demand and the Termination Date the outstanding
principal amount of such Letter of Credit Advance. The Agent will promptly
distribute to each Bank its ratable share of any payment of principal of or
interest on any Letter of Credit Advance received by the Agent; provided,
however, that in the event that such payment received by the Agent is required
to be returned, such Bank will return to the Agent any portion thereof
previously distributed by the Agent to it.
(h) The Issuing Bank will notify the Borrower and the Agent
promptly of the presentment for payment of any Letter of Credit (on the date of
presentment, if possible, and otherwise on the next Domestic Business Day, it
being agreed that such notice may be made by phone), together with notice of the
date such payment shall be made, and the Agent promptly will notify the Banks of
such matters.
SECTION 2.04. Notes. (a) The Advances of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the account of
its Lending Office in an amount equal to the original principal amount of such
Bank's Commitment.
(b) The Swing Line Advances made by the Swing Line Lender to
the Borrower shall be evidenced by a single Swing Line Note payable to the order
of the Swing Line Lender.
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(c) Upon receipt of each Bank's Note pursuant to Section
3.01, the Agent shall deliver such Note to such Bank. Each Bank shall record,
and prior to any transfer of its Note shall endorse on the schedule forming a
part thereof appropriate notations to evidence, the date, amount and maturity
of, and effective interest rate for, each Advance made by it, the date and
amount of each payment of principal made by the Borrower with respect thereto
and such schedule shall constitute rebuttable presumptive evidence of the
principal amount owing and unpaid on such Bank's Note; provided that the failure
of any Bank to make, or any error in making, any such recordation or endorsement
shall not affect the obligation of the Borrower hereunder or under the Note or
the ability of any Bank to assign its Note. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Note and to attach to and make a
part of any Note a continuation of any such schedule as and when required.
SECTION 2.05. Maturity of Loans. Each Advance included in any
Borrowing shall mature, and the principal amount thereof shall be due and
payable, subject to Section 6.01, on the Termination Date.
SECTION 2.06. Interest Rates. (a) "Applicable Margin" shall be
determined quarterly based upon the ratio of Consolidated Total Debt (calculated
as of the last day of each Fiscal Quarter) to Consolidated Comprehensive EBITDA
(calculated as of the last day of each Fiscal Quarter for the Fiscal Quarter
then ended and the immediately preceding three Fiscal Quarters), as follows:
Ratio of Consolidated Total
Debt to Consolidated Euro-Dollar Loans and
Comprehensive EBITDA Letters of Credit
Greater than 2.5 but equal
to or less than 3.00 1.375%
Greater than 2.0 but
equal to or less than 2.5 1.125%
Greater than 1.5 but
equal to or less than 2.0 .875%
Less than or equal to 1.5 .625%
The Applicable Margin shall be effective as of the date (herein, the "Rate
Determination Date") which is the first day of the first calendar month after
the day the Agent receives the quarterly financial statements for the Fiscal
Quarter which the foregoing ratio is being determined, and the Applicable Margin
so determined shall remain effective from such Rate Determination Date until the
date which is the first day of the first calendar month after the day the Agent
receives the quarterly financial statements for the Fiscal Quarter in which such
Rate Determination Date falls (which latter date shall be a new Rate
Determination Date); provided that (i) for the period from and including the
Closing Date to but excluding the Rate Determination Date next following the
Closing Date, the Applicable Margin shall be 1.375% for a Euro-Dollar Loan and
Letters of Credit, (ii) in the case of any Applicable Margin determined for the
fourth and final Fiscal Quarter of a Fiscal Year, such Applicable Margin shall
be redetermined based upon the annual audited financial statements for the
Fiscal Year ending on the last day of such final Fiscal Quarter, and if such
Applicable Margin as so redetermined shall be different from the Applicable
Margin for such date determined on the Rate Determination Date for such fourth
Fiscal Quarter, such redetermined Applicable Margin shall be effective
retroactive to the Rate Determination Date, and the Borrower, the Agent and the
Banks, as applicable, shall within 10 days of such redetermination, make a
payment (in the case of amounts owing by the Borrower to the Banks) or provide a
credit applicable to future amounts payable by the Borrower hereunder (in the
case of amounts owing by the Banks to the Borrower) equal to the difference
between the interest and letter of credit fees actually paid under this
Agreement and the interest
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and fees that would have been paid under this Agreement had the Applicable
Margin as originally determined been equal to the Applicable Margin as
redetermined, and (iii) if on any Rate Determination Date the Borrower shall
have failed to deliver to the Bank the financial statements required to be
delivered pursuant to Section 5.01(a) or Section 5.01(b) with respect to the
Fiscal Year or Fiscal Quarter, as the case may be, most recently ended prior to
such Rate Determination Date, then for the period beginning on such Rate
Determination Date and ending on the earlier of (A) the date on which the
Borrower shall deliver to the Bank the financial statements to be delivered
pursuant to Section 5.01(b) with respect to such Fiscal Quarter or any
subsequent Fiscal Quarter, or (B) the date on which the Borrower shall deliver
to the Bank annual financial statements required to be delivered pursuant to
Section 5.01(a) with respect to the Fiscal Year which includes such Fiscal
Quarter or any subsequent Fiscal Year, the Loan shall bear interest at a rate
per annum equal to the Default Rate at all times during such period. Any change
in the Applicable Margin on any Rate Determination Date shall result in a
corresponding change, effective on and as of such Rate Determination Date, in
the interest rate applicable to the Loan and in the fees applicable to each
Letter of Credit outstanding on such Rate Determination Date; provided, that no
Applicable Margin shall be decreased pursuant to this Section 2.06 if a Default
is in existence on the Rate Determination Date.
(b) During each Interest Period in which the Loan (excluding
Swing Line Advances) is a Prime Rate Loan, such Prime Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day during the
applicable Interest Period, at a rate per annum equal to the Prime Rate for such
day plus the Applicable Margin for Euro-Dollar Loans. Any overdue principal of
and, to the extent permitted by applicable law, overdue interest on any Prime
Rate Loan shall bear interest, payable on demand, for each day until paid in
full at a rate per annum equal to the Default Rate.
(c) During each Interest Period in which the Loan is a
Euro-Dollar Loan, such Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of: (1) the Applicable Margin, plus (2) the
applicable Adjusted Monthly Libor Index for such Interest Period. Any overdue
principal of and, to the extent permitted by applicable law, overdue interest on
any Euro-Dollar Loan shall bear interest, payable on demand, for each day until
paid in full at a rate per annum equal to the Default Rate.
The "Adjusted Monthly Libor Index" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable
London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any
Euro-Dollar Loan means for the Interest Period of such Euro-Dollar Loan the rate
per annum determined on the basis of the rate for deposits in Dollars of amounts
equal or comparable to the principal amount of such Euro-Dollar Loan offered for
a term comparable to such Interest Period, which rate appears on the display
designated as Page "3750" of the Telerate Service (or such other page as may
replace page 3750 of that service or such other service or services as may be
nominated by the British Banker's Association for the purpose of displaying
London Interbank Offered Rates for U.S. dollar deposits) determined as of 11:00
a.m. London, England time, on the first day of such Interest Period or on the
immediately preceding Euro-Dollar Business Day if the first day of such Interest
Period is not a Euro-Dollar Business Day.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in respect of "Eurocurrency liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on such Euro-Dollar Loan is determined or
any category of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to United States residents). The Adjusted
Monthly Libor Index shall be adjusted automatically on and as of the effective
date of any change in the Euro-Dollar Reserve Percentage.
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(d) The Loan (excluding the Swing Line Advances) shall at
all times be a Euro-Dollar Loan unless the Loan is to be a Prime Rate Loan
pursuant to Article VIII herein. Interest shall be payable for each Interest
Period on the Interest Payment Date immediately succeeding the last day of the
Interest Period; provided that: (1) all accrued unpaid interest on the Loan
shall be paid in full on the Termination Date; and (2) should the Commitment be
terminated at any time prior to the Termination Date for any reason, any and all
accrued unpaid interest shall be paid on the date of such termination.
(e) Each Letter of Credit Advance shall bear interest on the
outstanding principal amount thereof, payable on demand, for each day from the
date such Letter of Credit Advance is made until paid in full at a rate per
annum equal to the Default Rate.
(f) The Agent shall determine each interest rate applicable
to the Loan hereunder. The Agent shall give prompt notice to the Borrower and
the Banks by telecopy of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) After the occurrence and during the continuance of a
Default, the principal amount of the Loans (and, to the extent permitted by
applicable law, all accrued interest thereon) may, at the election of the
Required Banks, bear interest at the Default Rate; provided, however, that
automatically whether or not the Required Banks elect to do so, any overdue
principal of and, to the extent permitted by law, overdue interest on the Loan
shall bear interest payable on demand, for each day until paid at a rate per
annum equal to the Default Rate.
(h) Each Swing Line Advance shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the Prime Rate. Except as otherwise agreed
upon by the Swing Line Lender and the Borrower, such interest shall be payable
for each Interest Period on the Interest Payment Date immediately succeeding the
last day of the Interest Period. Any overdue principal of and, to the extent
permitted by applicable law, overdue interest on the Swing Line Advances may, at
the election of the Swing Line Lender, bear interest, payable on demand, for
each day until paid at a rate per annum equal to the Default Rate.
SECTION 2.07. Fees. (a) The Borrower shall pay to the Agent for
the ratable account of each Bank a facility fee equal to the product of: (i) the
aggregate of the daily average amounts of such Bank's Commitment, times (ii) a
per annum percentage equal to 0.25%. Such facility fee shall accrue from and
including the Closing Date to and including the Termination Date. Facility fees
shall be payable quarterly in arrears on each Quarterly Payment Date and on the
Termination Date; provided that should the Commitments be terminated at any time
prior to the Termination Date for any reason, the entire accrued and unpaid
facility fee shall be paid on the date of such termination.
(b) The Borrower shall pay to the Agent for the ratable
account of each Bank, with respect to each Letter of Credit, a per annum letter
of credit fee (the "Letter of Credit Fee") equal to the product of: (i) the
aggregate average daily Undrawn Amounts, times (ii) a per annum percentage equal
to the Applicable Margin for Letters of Credit (determined in accordance with
Section 2.13 hereof). Such Letter of Credit Fees shall be payable in arrears for
each Letter of Credit on each Quarterly Payment Date during the term of each
respective Letter of Credit and on the termination thereof (whether at its
stated expiry date or earlier). The "Applicable Margin" for Letters of Credit
shall be as determined in Section 2.06(a).
(c) The Borrower shall pay to the Agent for the account of
the Issuing Bank a facing fee (the " Facing Fee") with respect to each Letter of
Credit equal to the greater of: (1) $125.00, and (2) the product of: (i) the
face amount of such letter of credit, times (ii) one-quarter (1/4th) of one
percent (0.25%). Such Facing Fee shall be due and payable on such date as may be
agreed upon by the Issuing Bank and the Borrower. The Borrower shall pay to the
Issuing Bank, for its own account, transfer fees,
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drawing fees, modification fees, extension fees and such other fees and charges
as may be provided for in any Letter of Credit Agreement or otherwise charged by
the Issuing Bank. No Bank shall be entitled to any portion of the Facing Fees or
any other fees payable by the Borrower to the Issuing Bank pursuant to this
Section 2.07(c).
(d) The Borrower shall pay to the Agent, for the account and
sole benefit of the Agent, such fees and other amounts at such times as set
forth in the Agent's Letter Agreement.
SECTION 2.08. Optional Termination or Reduction of Commitments.
The Borrower may, upon at least 3 Domestic Business Days' notice to the Agent,
terminate at any time, or proportionately reduce from time to time by an
aggregate amount of at least $5,000,000 or any larger multiple of $1,000,000,
the Commitments; provided, however: (1) no such termination or reduction shall
be in an amount greater than the Total Unused Commitments on the date of such
termination or reduction; and (2) if any such reduction pursuant to this Section
2.08 shall result in the aggregate Commitments of all of the Banks to be reduced
to an amount less than $25,000,000, the Borrower shall be required to terminate
the Commitments (including without limitation, the Letter of Credit Commitment)
in their entirety. If the Commitments are terminated in their entirety, all
accrued fees (as provided under Section 2.07) shall be payable on the effective
date of such termination.
SECTION 2.09. Mandatory Reduction and Termination of
Commitments. The Commitments shall terminate on the Termination Date and any
Advances, Swing Line Advances and if demand had not been earlier made Letter of
Credit Advances then outstanding (together with accrued interest thereon) shall
be due and payable on such date.
SECTION 2.10. Optional Prepayments. (a) The Borrower may,
subject to the terms of an applicable ACL Agreement, prepay the Loan in whole at
any time, or from time to time in part in amounts aggregating at least
$1,000,000.00, or any larger multiple of $500,000.00, by paying the principal
amount to be prepaid together with accrued interest thereon to the date of
prepayment. Each such optional prepayment shall be applied first to repay or
prepay Swing Line Advances outstanding on the date of such prepayment and then
ratably to prepay ratably the Advances of the several Banks.
(b) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.11. Mandatory Prepayments. (a) On each date on which
the Commitments are reduced or terminated pursuant to Section 2.08 or Section
2.09, the Borrower shall repay or prepay such principal amount of the
outstanding Advances and Swing Line Advances, if any (together with interest
accrued thereon and any amounts due under Section 8.05(a)), as may be necessary
so that after such payment the aggregate unpaid principal amount of the
Advances, together with the aggregate principal amount of all Swing Line
Advances, Letter of Credit Advances and Undrawn Amounts does not exceed the
aggregate amount of the Commitments as then reduced. Each such payment or
prepayment shall be applied to repay or prepay first to Swing Line Advances
outstanding on the date of such prepayment and then, ratably to the Advances of
the several Banks.
(b) In the event that: (1) the aggregate principal amount of
all Advances, together with the aggregate principal amount of the Swing Line
Advances, Letter of Credit Advances and Undrawn Amounts at any one time
outstanding shall at any time exceed the Borrowing Base; or (2) the aggregate
principal amount of all Advances, together with the aggregate principal amount
of the Swing Line Advances, Letter of Credit Advances and Undrawn Amounts at any
one time outstanding shall at any time exceed the aggregate amount of the
Commitments of all of the Banks at such time, the Borrowers shall immediately
repay so much of the Advances and Swing Line Advances as is necessary in order
that: (1) the aggregate principal amount of the Advances thereafter outstanding,
together with the aggregate
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principal amount of the Swing Line Advances, Letter of Credit Advances and
Undrawn Amounts shall not exceed the Borrowing Base; and (2) the aggregate
principal amount of the Advances thereafter outstanding, together with the
aggregate principal amount of the Swing Line Advances, Letter of Credit Advances
and Undrawn Amounts shall not exceed the aggregate amount of the Commitments of
all of the Banks at such time.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loan and
of fees hereunder, not later than 11:00 A.M. (Winston-Salem, North Carolina
time) on the date when due, in Federal or other funds immediately available in
Winston-Salem, North Carolina, to the Agent at its address referred to in
Section 9.01. Subject to the terms of Section 2.02(d), the Agent will promptly
distribute to each Bank its ratable share of each such payment received by the
Agent for the account of the Banks; provided that payments of interest shall be
distributed by the Agent within three Domestic Business Days of the date such
payment is received by the Agent for the account of the Banks.
(b) Whenever any payment of principal of, or interest on,
the Advances, Swing Line Advances or of fees shall be due on a day which is not
a Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. If the date for any payment of principal
is extended by operation of law or otherwise, interest thereon shall be payable
for such extended time.
(c) All payments of principal, interest and fees and all
other amounts to be made by the Borrower pursuant to this Agreement with respect
to any Advance, Swing Line Advance or fee relating thereto shall be paid without
deduction for, and free from, any tax, imposts, levies, duties, deductions, or
withholdings of any nature now or at anytime hereafter imposed by any
governmental authority or by any taxing authority thereof or therein excluding
in the case of each Bank, taxes imposed on or measured by its net income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Bank is organized or any political subdivision thereof and, in the case of each
Bank, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction of such Bank's applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, imposts, levies, duties,
deductions or withholdings of any nature being "Taxes"). In the event that the
Borrower is required by applicable law to make any such withholding or deduction
of Taxes with respect to any Advance, Swing Line Advance or fee or other amount,
the Borrower shall pay such deduction or withholding to the applicable taxing
authority, shall promptly furnish to any Bank in respect of which such deduction
or withholding is made all receipts and other documents evidencing such payment
and shall pay to such Bank additional amounts as may be necessary in order that
the amount received by such Bank after the required withholding or other payment
shall equal the amount such Bank would have received had no such withholding or
other payment been made. If no withholding or deduction of Taxes are payable in
respect of any Advance, Swing Line Advance or fee relating thereto, the Borrower
shall furnish any Bank, at such Bank's request, a certificate from each
applicable taxing authority or an opinion of counsel acceptable to such Bank, in
either case stating that such payments are exempt from or not subject to
withholding or deduction of Taxes. If the Borrower fails to provide such
original or certified copy of a receipt evidencing payment of Taxes or
certificate(s) or opinion of counsel of exemption, the Borrower hereby agrees to
compensate such Bank for, and indemnify them with respect to, the tax
consequences of the Borrower's failure to provide evidence of tax payments or
tax exemption.
In the event any Bank receives a refund of any Taxes paid by the
Borrower pursuant to this Section 2.12, it will pay to the Borrower the amount
of such refund promptly upon receipt thereof; provided, however, if at any time
thereafter it is required to return such refund, the Borrower shall promptly
repay to it the amount of such refund.
Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.12 shall be applicable with respect
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to any Participant, Assignee or other Transferee, and any calculations required
by such provisions (i) shall be made based upon the circumstances of such
Participant, Assignee or other Transferee, and (ii) constitute a continuing
agreement and shall survive the termination of this Agreement and the payment in
full or cancellation of the Notes.
SECTION 2.13. Computation of Interest and Fees. Interest on the
Loans shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Facility fees, letter of credit fees and any other fees (excluding Facing
Fees) payable hereunder shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day but
excluding the last day).
SECTION 2.14. Collateral Reserve Account. In accordance with and
as more fully set forth in the Security Agreement, the Borrower and each
Guarantor shall: (1) as soon as practicable but in any event before July 1,
2001, establish a lockbox; and (2) upon the request of the Required Banks,
establish and maintain with the Agent a Collateral Reserve Account.
SECTION 2.15. Swing Line Advances. (a) The Borrower may prior to
the Termination Date, as set forth in this Section, request the Swing Line
Lender to make, and the Swing Line Lender may in its sole and absolute
discretion prior to the Termination Date make, Swing Line Advances to the
Borrower, in an aggregate principal amount at any one time outstanding, not
exceeding $5,000,000 (the "Swing Line Cap"), provided that the aggregate
principal amount of all Swing Line Advances, together with the aggregate
principal amount of all outstanding Advances, Undrawn Amounts and Letter of
Credit Advances, at any one time outstanding shall not exceed the aggregate
amount of the Commitments of all of the Banks at such time.
(b) Except as may otherwise be agreed upon by the Swing Line
Lender and the Borrower, when the Borrower wishes to request a Swing Line
Advance, it shall give the Agent notice substantially in the form of Exhibit N
hereto (a "Swing Line Advance Request") so as to be received no later than 11:00
A.M. (Winston-Salem, North Carolina time) on or before the date of the proposed
Swing Line Advance proposed therein (or such other time and date as the Borrower
and the Swing Line Lender may agree), specifying:
(i) the proposed date of such Swing Line Advance, which
shall be a Domestic Business Day (the "Borrowing Date"); and
(ii) the aggregate amount of such Swing Line Advance, which
shall be at least $50,000 (or in larger multiples of $10,000) but shall
not cause the limits specified in Section 2.15(a) to be violated.
(c) The Swing Line Lender shall make the amount of such
Swing Line Advance available to the Borrower on such date by depositing the
same, in immediately available funds, in an account of the Borrower maintained
with the Swing Line Lender.
(d) Subject to the limitations contained in this Agreement,
the Borrower may borrow under this Section 2.15, prepay and reborrow under this
Section 2.15 at any time before the Termination Date.
(e) At any time, upon the request of the Swing Line Lender,
each Bank other than the Swing Line Lender shall, on the Domestic Business Day
after such request is made, purchase a participating interest in Swing Line
Advances in an amount equal to its ratable share (based upon its respective
Commitment) of such Swing Line Advances. On such Domestic Business Day, each
Bank will immediately transfer to the Swing Line Lender, in immediately
available funds, the amount of its participation. Whenever, at any time after
the Swing Line Lender has received from any such Bank its
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participating interest in a Swing Line Loan, the Agent receives any payment on
account thereof, the Agent will distribute to such Bank its participating
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Bank's participating
interest was outstanding and funded); provided, however, that in the event that
such payment received by the Agent is required to be returned, such Bank will
return to the Agent any portion thereof previously distributed by the Agent to
it. Each Bank's obligation to purchase such participating interests shall be
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation: (i) any set-off, counterclaim, recoupment,
defense or other right which such Bank or any other Person may have against the
Swing Line Lender requesting such purchase or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default or the termination of the Revolving Credit Commitments; (iii) any
adverse change in the condition (financial or otherwise) of any Borrower, any
Guarantor or any other Person; (iv) any breach of this Agreement by the
Borrower, any Guarantor or any other Bank; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
(f) Notwithstanding anything contained in this Agreement to
the contrary, the Swing Line facility contained in this Section 2.15 shall
terminate immediately upon: (i) BB&T's removal or resignation as Agent; or (ii)
termination of the Commitments (whether at maturity or otherwise).
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to First Borrowing. The obligation of
each Bank to make an Advance on the occasion of the first Borrowing is subject
to the satisfaction of the conditions set forth in Section 3.02 and the
following additional conditions:
(a) receipt by the Agent from each of the parties hereto of
a duly executed counterpart of this Agreement signed by such party;
(b) receipt by the Agent of a duly executed Note for the
account of each lender complying with the provisions of Section 2.04;
(c) receipt by the Agent of an opinion (together with any
opinions of local counsel relied on therein) of McGuire, Woods, Battle & Xxxxxx,
LLP., counsel for the Borrower and Guarantors, dated as of the Closing Date,
substantially in the form of Exhibit C hereto and covering such additional
matters relating to the transactions contemplated hereby as the Agent or any
Bank may reasonably request;
(d) receipt by the Agent of an opinion of Xxxxxx Xxxxxxx
Xxxxxxxxx & Xxxx, PLLC, special counsel for the Agent, dated as of the Closing
Date, substantially in the form of Exhibit D hereto and covering such additional
matters relating to the transactions contemplated hereby as the Agent may
reasonably request;
(e) receipt by the Agent of a certificate (the "Closing
Certificate"), dated the date of the first Borrowing, substantially in the form
of Exhibit G hereto, signed by a principal financial officer of each Loan Party,
to the effect that (i) no Default has occurred and is continuing on the date of
the first Borrowing and (ii) the representations and warranties of the Loan
Parties contained in Article IV are true on and as of the date of the first
Borrowing hereunder;
(f) receipt by the Agent of all documents which the Agent or
any Bank may reasonably request relating to the existence of each Loan Party,
the authority for and the validity of this Agreement, the Notes and the other
Loan Documents, and any other matters relevant hereto, all in form and substance
satisfactory to the Agent, including without limitation a certificate of
incumbency of each
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Loan Party (the "Officer's Certificate"), signed by the Secretary or an
Assistant Secretary of the respective Loan Party, substantially in the form of
Exhibit H hereto, certifying as to the names, true signatures and incumbency of
the officer or officers of the respective Loan Party, authorized to execute and
deliver the Loan Documents, and certified copies of the following items: (i) the
Loan Party's Certificate of Incorporation or Articles of Organization, as the
case may be, (ii) the Loan Party's Bylaws or Operating Agreement, as the case
may be, (iii) a certificate of the Secretary of State of such Loan Party's State
of organization as to the good standing of such Loan Party, and (iv) the action
taken by the Board of Directors of the Loan Party authorizing the Loan Party's
execution, delivery and performance of this Agreement, the Notes and the other
Loan Documents to which the Loan Party is a party;
(g) receipt by the Agent of a Notice of Borrowing;
(h) the Security Agreement shall have been duly executed by
the Borrower and Guarantors and shall have been delivered to the Agent and shall
be in full force and effect and each document (including each Uniform Commercial
Code financing statement) required by law or reasonably requested by the Agent
to be filed, registered or recorded in order to create in favor of the Agent for
the benefit of the Secured Parties a valid, legal and perfected first-priority
security interest in and lien on the Collateral described in the Security
Agreement shall have been delivered to the Agent;
(i) the Agent shall have received the results of a search of
the Uniform Commercial Code filings (or equivalent filings) made with respect to
the Borrower and Guarantors in the states (or other jurisdictions) in which the
chief executive office of each such person is located, any offices of such
persons in which records have been kept relating to Accounts Receivable
Collateral and the other jurisdictions in which Uniform Commercial Code filings
(or equivalent filings) are to be made pursuant to the preceding paragraph,
together with copies of the financing statements (or similar documents)
disclosed by such search, and accompanied by evidence satisfactory to the Agent
that the Liens indicated in any such financing statement (or similar document)
have been released;
(j) receipt by the Agent of a Borrowing Base Certification
Report and Contingent BFD Liabilities Borrowing Base Certification Report, dated
as of the last day of the calendar month immediately preceding the Closing Date;
(k) receipt by the Agent and approval by the Banks of the
insurance required under this Agreement;
(l) receipt by the Agent of a fully executed amendment
pursuant to which the Borrower shall have amended that certain Limited
Partnership Agreement dated July 1, 1998 by and among Private Advisors, LLC as
general partner, and the Borrower as limited partner, to permit the Borrower to
take the actions set forth in Section 6.04 without consent of Private Advisors,
LLC (or any other general partner) under the Xxxxxxx Asset Fund; and
(m) such other documents or items as the Agent, the Banks or
their counsel may reasonably request.
SECTION 3.02. Conditions to All Borrowings. The obligation of
each Bank to make an Advance on the occasion of each Borrowing (including,
without limitation, the obligation of the Swing Line Lender to make a Swing Line
Advance) is subject to the satisfaction of the following conditions:
(a) receipt by the Agent of Notice of Borrowing as required
by Section 2.02 (or in the case of a Swing Line Advance, compliance with Section
2.15);
(b) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;
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(c) the fact that the representations and warranties of the
Loan Parties contained in Article IV of this Agreement shall be true, in all
material respects, on and as of the date of such Borrowing, except to the extent
explicitly relating to a specified date; and
(d) the fact that, immediately after such Borrowing (i) the
aggregate outstanding principal amount of the Advances of each Bank together
with such Bank's Pro Rata Share of the aggregate outstanding principal amount of
all Swing Line Advances, Letter of Credit Advances and Undrawn Amounts, will not
exceed the amount of its Commitment and (ii) the aggregate outstanding principal
amount of the Advances together with the aggregate outstanding principal amount
of all Swing Line Advances, Letter of Credit Advances and Undrawn Amounts, will
not exceed the lesser of: (A) the aggregate amount of the Commitments of all of
the Banks as of such date; and (B) the Borrowing Base.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Loan Parties on the date of such Borrowing as to the truth and accuracy of
the facts specified in clauses (b), (c) and (d) of this Section.
SECTION 3.03 Conditions to Issuance of Letters of Credit. The
issuance by the Issuing Bank of each Letter of Credit shall be subject to
satisfaction of the conditions set forth in the related Letter of Credit
Agreement and satisfaction of the following conditions:
(a) the fact that, immediately before and after the issuance
of such Letter of Credit, no Default shall have occurred and be continuing;
(b) the fact that the representations and warranties of the
Loan Parties contained in Article IV of this Agreement shall be true, in all
material respects, on and as of the date of issuance of such Letter of Credit,
except to the extent explicitly relating to a specified date;
(c) the fact that, immediately after the issuance of such
Letter of Credit: (i) the sum of (A) the entire outstanding principal amount of
the Advances, (B) the aggregate outstanding principal amount of the Letter of
Credit Advances, (C) the aggregate outstanding principal amount of Swing Line
Advances, and (D) the aggregate Undrawn Amounts, will not exceed the lesser of:
(1) the aggregate amount of the Commitments of all of the Banks at such time;
and (2) the Borrowing Base;
(d) the fact that immediately after the issuance of such
Letter of Credit the sum of: (i) the aggregate outstanding principal amount of
the Letter of Credit Advances, plus (ii) the aggregate Undrawn Amounts, will not
exceed $15,000,000; and
(e) no Letter of Credit shall have an expiry date or
termination date on or after the earlier of: (1) the date twelve months after
the date of the issuance of such Letter of Credit; or (2) the date two Domestic
Business Days prior to the Termination Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Loan Parties represent and warrant that:
SECTION 4.01. Existence and Power. Each Loan Party is a
corporation or limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization, as the case may be, is duly qualified to transact business in
every jurisdiction where, by the nature of its business, such qualification is
necessary, and has all organizational
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powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 4.02. Organizational and Governmental Authorization; No
Contravention. The execution, delivery and performance by each Loan Party of
this Agreement, the Notes, the Collateral Documents and the other Loan Documents
(i) are within each Loan Party's organizational powers, (ii) have been duly
authorized by all necessary organizational action, (iii) require no action by or
in respect of, or filing with, any governmental body, agency or official, (iv)
do not contravene, or constitute a default under, any provision of applicable
law or regulation or of the certificate of incorporation, articles of
organization, operating agreement or by-laws of each Loan Party or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
each Loan Party or any of its Subsidiaries, and (v) do not result in the
creation or imposition of any Lien on any asset of the Loan Parties or any of
their respective Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Loan Parties enforceable in accordance with its
terms, and the Notes, the Collateral Documents and the other Loan Documents,
when executed and delivered in accordance with this Agreement, will constitute
valid and binding obligations of the Loan Parties enforceable in accordance with
their respective terms, provided that the enforceability hereof and thereof is
subject in each case to general principles of equity and to bankruptcy,
insolvency and similar laws affecting the enforcement of creditors' rights
generally.
SECTION 4.04. Financial Information. (a) The consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of November
27, 1999 and the related consolidated statements of income, shareholders' equity
and cash flows for the Fiscal Year then ended, reported on by Xxxxxx Xxxxxxxx,
LLP., copies of which have been delivered to each of the Banks, and the
unaudited but reviewed consolidated financial statements of the Borrower for the
interim period ended August 26, 2000, copies of which have been delivered to
each of the Banks, fairly present, in conformity with GAAP, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
dates and their consolidated results of operations and cash flows for such
periods stated.
(b) Since August 26, 2000 there has been no event, act,
condition or occurrence having a Material Adverse Effect.
SECTION 4.05. Litigation. There is no action, suit or proceeding
pending, or to the knowledge of the Loan Parties threatened, against or
affecting the Loan Parties or any of their respective Subsidiaries before any
court or arbitrator or any governmental body, agency or official which could
have a Material Adverse Effect or which in any manner draws into question the
validity or enforceability of, or could impair the ability of the Loan Parties
to perform their respective obligations under, this Agreement, the Notes, the
Collateral Documents or any of the other Loan Documents.
SECTION 4.06. Compliance with ERISA. (a) The Loan Parties and
each member of the Controlled Group have fulfilled their obligations under the
minimum funding standards of ERISA and the Code with respect to each Plan and
are in compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.
(b) Neither the Loan Parties nor any member of the
Controlled Group is or ever has been obligated to contribute to any
Multiemployer Plan.
SECTION 4.07. Taxes. There have been filed on behalf of the Loan
Parties and their respective Subsidiaries all Federal, state and local income,
excise, property and other tax returns which are required to be filed by them
and all taxes due pursuant to such returns or pursuant to any assessment
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received by or on behalf of the Loan Parties or any Subsidiary have been paid.
The charges, accruals and reserves on the books of the Loan Parties and their
respective Subsidiaries in respect of taxes or other governmental charges are,
in the opinion of the Loan Parties, adequate. United States income tax returns
of the Loan Parties and their respective Subsidiaries have been examined and
closed through the Fiscal Year ended November 30, 1996.
SECTION 4.08. Subsidiaries. Each of the Loan Party's
Subsidiaries is a corporation or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, as the case may be, is duly qualified to transact
business in every jurisdiction where, by the nature of its business, such
qualification is necessary, and has all organizational powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. No Loan Party has any Subsidiaries except
those Subsidiaries listed on Schedule 4.08, which accurately sets forth each
such Subsidiary's complete name and jurisdiction of incorporation.
SECTION 4.09. Not an Investment Company. No Loan Party nor any
Subsidiary of a Loan Party is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 4.10 Public Utility Holding Company Act. No Loan Party
nor any Subsidiary of a Loan Party is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property; Liens. Each of the Loan
Parties and their respective Subsidiaries has title to its properties sufficient
for the conduct of its business, and none of such property is subject to any
Lien except as permitted in Section 5.14.
SECTION 4.12. No Default. No Loan Party nor any of their
respective Subsidiaries is in default under or with respect to any agreement,
instrument or undertaking to which it is a party or by which it or any of its
property is bound which could have or cause a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
SECTION 4.13. Full Disclosure. All information heretofore
furnished by any Loan Party to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by any Loan Party to the Agent or any
Bank will be, true, accurate and complete in every material respect or based on
reasonable estimates on the date as of which such information is stated or
certified. Each Loan Party has disclosed to the Banks in writing any and all
facts which could have or cause a Material Adverse Effect.
SECTION 4.14. Environmental Matters. (a) No Loan Party nor any
Subsidiary of a Loan Party is subject to any Environmental Liability which could
have or cause a Material Adverse Effect and no Loan Party nor any Subsidiary of
a Loan Party has been designated as a potentially responsible party under CERCLA
or under any state statute similar to CERCLA which could have or cause a
Material Adverse Effect. None of the Properties has been identified on any
current or proposed (i) National Priorities List under 40 C.F.R. Section 300,
(ii) CERCLIS list or (iii) any list arising from a state statute similar to
CERCLA.
(b) No Hazardous Materials have been or are being used,
produced, manufactured, processed, treated, recycled, generated, stored,
disposed of, managed or otherwise handled at, or shipped or transported to or
from the Properties or are otherwise present at, on, in or under the Properties,
or, to the best of the knowledge of the Loan Parties, at or from any adjacent
site or facility, except for Hazardous Materials, such as cleaning solvents,
pesticides and other materials used, produced, manufactured,
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processed, treated, recycled, generated, stored, disposed of, and managed or
otherwise handled in the ordinary course of business in compliance with all
applicable Environmental Requirements.
(c) The Loan Parties, and each of their respective
Subsidiaries and Affiliates, has procured all Environmental Authorizations
necessary for the conduct of its business, and is in compliance with all
Environmental Requirements in connection with the operation of the Properties
and the Loan Party's, and each of their respective Subsidiary's and Affiliate's,
respective businesses.
SECTION 4.15. Compliance with Laws. Each Loan Party and each
Subsidiary of a Loan Party is in compliance with all applicable laws, including,
without limitation, all Environmental Laws, except where any failure to comply
with any such laws would not, alone or in the aggregate, have a Material Adverse
Effect.
SECTION 4.16. Capital Stock. All Capital Stock, debentures,
bonds, notes and all other securities of each Loan Party and their respective
Subsidiaries presently issued and outstanding are validly and properly issued in
accordance with all applicable laws, including, but not limited to, the "Blue
Sky" laws of all applicable states and the federal securities laws. The issued
shares of Capital Stock of the Loan Party's respective Wholly Owned Subsidiaries
are owned by the Loan Parties free and clear of any Lien or adverse claim. At
least a majority of the issued shares of capital stock of each of the other
Subsidiaries of the Loan Parties (other than Wholly Owned Subsidiaries) is owned
by the respective Loan Parties free and clear of any Lien or adverse claim.
SECTION 4.17. Margin Stock. No Loan Party nor any of their
respective Subsidiaries is engaged principally, or as one of its important
activities, in the business of purchasing or carrying any Margin Stock, and no
part of the proceeds of any Advance or Swing Line Advance will be used to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock, or be used for any purpose which
violates, or which is inconsistent with, the provisions of Regulation X.
SECTION 4.18. Insolvency. After giving effect to the execution
and delivery of the Loan Documents and the making of the Advances and Swing Line
Advances under this Agreement, no Loan Party will be "insolvent," within the
meaning of such term as defined in Section 101 of Title 11 of the United States
Code or Section 2 of the Uniform Fraudulent Transfer Act, or any other
applicable state law pertaining to fraudulent transfers, as each may be amended
from time to time, or be unable to pay its debts generally as such debts become
due, or have an unreasonably small capital to engage in any business or
transaction, whether current or contemplated.
SECTION 4.19. Security Documents. (a) Upon execution by the
Pledgors, the Pledge Agreement shall be effective to create in favor of the
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral (as defined in the Pledge
Agreement) and, when the Collateral is delivered to the Agent, the Pledge
Agreement shall constitute a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the Pledgors thereunder
in such Collateral and the proceeds thereof, in each case prior and superior in
any right to any other Person.
(b) The Security Agreement is effective to create in favor
of the Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when financing statements in appropriate form are filed in the
UCC Recording Offices, the Security Agreement shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Borrower
and Guarantors in such Collateral and the proceeds thereof, in each case prior
and superior in right to any other Person.
SECTION 4.20. Labor Matters. There are no significant strikes,
lockouts, slowdowns or other labor disputes against any Loan Party or any
Subsidiary of any Loan Party pending or, to the
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knowledge of any Loan Party, threatened, that could reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect. The hours
worked by and payment made to employees of the Loan Parties and each Subsidiary
of any Loan Party have not been in violation of the Fair Labor Standards Act or
any other applicable federal, state or foreign law dealing with such matters,
where such violations could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
SECTION 4.21. Patents, Trademarks, Etc. To the best of their
knowledge, the Loan Parties and each Subsidiary of a Loan Party owns, or is
licensed to use, all patents, trademarks, trade names, copyrights, technology,
know-how and processes, service marks and rights with respect to the foregoing
that are (a) used in or necessary for the conduct of their respective businesses
as currently conducted and (b) material to the businesses, assets, operations,
properties, prospects or condition (financial or otherwise) of the Loan Parties
and their respective Subsidiaries taken as a whole. To the best of their
knowledge, the use of such patents, trademarks, trade names, copyrights,
technology, know-how, processes and rights with respect to the foregoing by the
Loan Parties and their respective Subsidiaries, does not infringe on the rights
of any Person. The Loan Parties have delivered to the Agent and Banks a schedule
setting forth all registered patents, trademarks and copyrights owned by, or
licensed to, the Loan Parties.
SECTION 4.22. Loans and Investments. (a) No Loan Party nor any
of their respective Subsidiaries has made a loan, advance or Investment which is
outstanding or existing on the Closing Date except as set forth on Schedule
4.22-A (a copy of which has been delivered by the Borrower to the Agent and
Banks but is not attached hereto).
(b) Schedule 4.22-B (a copy of which has been delivered by
the Borrower to the Agent and Banks but is not attached hereto) sets forth any
and all Contingent BFD Liabilities and any and all Committed Contingent BFD
Liabilities in existence on the Closing Date. As to each guaranty included
within the Contingent BFD Liabilities on the Closing Date, Schedule 4.22-B sets
forth the name of each Person with respect to which the Borrower or any
Consolidated Subsidiary has issued a guaranty, the amount, commencement date,
termination date, monthly payments and the aggregate payments corresponding to
such guarantees.
ARTICLE V
COVENANTS
The Loan Parties agree, jointly and severally, that, so long as
any Bank has any Commitment hereunder or any amount payable under any Note
remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of
the Banks:
(a) as soon as available and in any event within 90 days
after the end of each Fiscal Year, a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of the end of such Fiscal Year and the
related consolidated statements of income, shareholders' equity and cash flows
for such Fiscal Year, setting forth in each case in comparative form the figures
for the previous fiscal year, all certified by Xxxxxx Xxxxxxxx, LLP. or other
independent public accountants of nationally recognized standing, with such
certification to be free of exceptions and qualifications not acceptable to the
Required Banks;
(b) as soon as available and in any event within 45 days
after the end of each of the four Fiscal Quarters of each Fiscal Year, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such Fiscal Quarter and the related statement of income and
statement of cash flows for such Fiscal Quarter and for the portion of the
Fiscal Year ended at the end of such Fiscal Quarter, setting forth in each case
in comparative form the figures for the corresponding Fiscal
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Quarter and the corresponding portion of the previous Fiscal Year, all reviewed
by the accountants referenced in (a) above and certified (subject to normal
year-end adjustments) as to fairness of presentation, GAAP and consistency by
the Vice President - Chief Accounting Officer or the Vice President - Finance of
the Borrower;
(c) commencing for the Fiscal Month ending October 28, 2000,
and continuing for each Fiscal Month thereafter, as soon as available and in any
event within 30 days after the end of each Fiscal Month thereafter, a
consolidated and consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such month and the related statements
of income and statements of cash flows for such period and for the portion of
the Fiscal Year ended at the end of such month, setting forth in each case in
comparative form the figures for the corresponding fiscal period and the
corresponding portion of the previous Fiscal Year, all certified (subject to
normal year-end adjustments) as to fairness of presentation, conformity with
GAAP and consistency by the Vice President - Chief Accounting Officer or the
Vice President - Finance of the Borrower;
(d) simultaneously with the delivery of each set of
financial statements referred to in clauses (a), (b) and (c) above, a
certificate, substantially in the form of Exhibit I (a "Compliance
Certificate"), of the Vice President - Chief Accounting Officer or the Vice
President - Finance of the Borrower (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in compliance with
the requirements of Sections 5.03 through 5.14, inclusive, 5.17, 5.32 and 5.34
on the date of such financial statements, (ii) setting forth in reasonable
detail the calculations establishing the identities of the Material Subsidiaries
on the date of such financial statements, and (iii) stating whether any Default
exists on the date of such certificate and, if any Default then exists, setting
forth the details thereof and the action which the Loan Parties are taking or
propose to take with respect thereto;
(e) simultaneously with the delivery of each set of annual
financial statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements to the effect
that nothing has come to their attention to cause them to believe that any
Default existed on the date of such financial statements;
(f) within 5 Domestic Business Days after the Borrower
becomes aware of the occurrence of any Default, a certificate of the Vice
President - Chief Accounting Officer or the Vice President - Finance of the
Borrower setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(g) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(h) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and annual, quarterly or monthly
reports which the Borrower shall have filed with the Securities and Exchange
Commission;
(i) if and when the Borrower or any member of the Controlled
Group (i) gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan which
might constitute grounds for a termination of such Plan under Title IV of ERISA,
or knows that the plan administrator of any Plan has given or is required to
give notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of ERISA, a copy of
such notice; or (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate or appoint a trustee to administer any Plan, a copy of
such notice;
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(j) promptly after the Borrower knows of the commencement
thereof, notice of any litigation, dispute or proceeding involving a claim
against a Loan Party and/or any Subsidiary of a Loan Party for $1,000,000.00 or
more in excess of amounts covered in full by applicable insurance; and
(k) as soon as available and in any event by the 15th
Domestic Business Day of each Fiscal Month, an aging of payables, showing the
age of such payables, identifying the Persons who are the creditors for such
payables (specifying the amount and age of the payables, owing to each such
creditor) and containing such other information and accompanied by such
supporting documents as the Agent, in its sole discretion may from time to time
prescribe, dated as of the last day of such period the statements in which, in
each instance, shall be certified as to truth and accuracy by the Vice President
- Chief Accounting Officer, Vice President - Finance or other authorized officer
of the Borrower and each Guarantor;
(l) as soon as available and in any event by the 15th
Domestic Business Day of each Fiscal Month, an aging of Receivables, showing the
age of such Receivables, identifying the Persons who are the account debtors for
such Receivables (specifying the amount and age of the Receivables owing from
each such Account Debtor) and containing such other information and accompanied
by such supporting documents as the Agent, in its sole discretion may from time
to time reasonably prescribe, dated as of the last day of such period the
statements in which, in each instance, shall be certified as to truth and
accuracy by the Vice President - Chief Accounting Officer, Vice President -
Finance or other authorized officer of the Borrower and each Guarantor;
(m) as soon as available and in any event by the 15th
Domestic Business Day of each succeeding month, a Borrowing Base Certification
Report and Contingent BFD Liabilities Borrowing Base Certification Report, in
form and content reasonably satisfactory to the Agent, dated as of the last day
of the immediately preceding month, the statements which, in each instance,
shall be certified as to truth and accuracy by the Vice President - Chief
Accounting Officer, Vice President - Finance or other authorized officer of the
Borrower and each Guarantor;
(n) at reasonable intervals but no less frequently than
quarterly: (i) financial statements more fully described on Schedule 5.01(n)
showing the financial condition and results of the operations of any and all
Affiliates of the Borrower or any Consolidated Subsidiary which are included
within subitem (iii) of the definition of Affiliates; and (ii) financial
statements showing the financial condition and results of the operations of any
and all operators and lessees of a Guaranteed BFD Lease, together with: (A) a
consolidated balance sheet of such operator or lessee and their respective
consolidated subsidiaries as of the end of such fiscal period and the related
statement of income and statement of cash flows for such fiscal period and for
the portion of the fiscal year ended at the end of such fiscal period; and (B)
such other financial information as the Agent or any Bank may reasonably
request; provided, however, that: (1) with regard to any operator or lessee of a
Guaranteed BFD Lease existing on the Closing Date or any operator or lessee
under a Committed Contingent BFD Liability existing on the Closing Date, the
Borrower shall be obligated to provide only such financial information with
respect to such operator or lessee as the Borrower is permitted to receive or
receives after written request by the Borrower and is not contractually
precluded from furnishing to the Agent and the Banks; and (2) neither the
Borrower nor any Consolidated Subsidiary shall create, assume or incur any
Contingent BFD Liability unless the Guaranteed BFD Lease corresponding thereto
requires the operator or lessee to provide the Borrower the information
described in (ii) above and authorizes the Borrower to disclose such information
to the Agent and Banks; and
(o) from time to time such additional information regarding
the financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
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SECTION 5.02. Inspection of Property, Books and Records. The
Borrower will (i) keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries in conformity with
GAAP shall be made of all dealings and transactions in relation to its business
and activities; (ii) permit, and will cause each Subsidiary of the Borrower and
Guarantors to permit the Agent or its designee, at the expense of the Borrower
and Guarantors, to perform periodic field audits and investigations of the
Borrower, the Guarantors and the Collateral; and (iii) permit, and will cause
each Subsidiary to permit, with reasonable prior notice which notice shall not
be required in the case of an emergency, representatives of any Bank at such
Bank's expense prior to the occurrence of an Event of Default and at the
Borrower's expense after the occurrence of an Event of Default to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants. The Borrower agrees to cooperate and assist in
such visits and inspections, in each case at such reasonable times and as often
as may reasonably be desired.
SECTION 5.03. Ratio of Consolidated Total Debt to Consolidated
Comprehensive EBITDA. At the end of each Fiscal Quarter, commencing with the
Fiscal Quarter ending November 25, 2000, the ratio of Consolidated Total Debt to
Consolidated Comprehensive EBITDA for the Fiscal Quarter then ending and the
immediately preceding three Fiscal Quarters will not at any time exceed 3.00 to
1.00.
SECTION 5.04. Ratio of Consolidated Total Debt to Consolidated
Operating EBITDA. At the end of each Fiscal Quarter, commencing with the Fiscal
Quarter ending November 25, 2000, the ratio of Consolidated Total Debt to
Consolidated Operating EBITDA for the Fiscal Quarter then ending and the
immediately preceding three Fiscal Quarters shall at no time be more than the
ratio corresponding to such Fiscal Quarter in the following table:
-------------------------------------------------------------------------------
Consolidated Total Debt
to Consolidated Operating
EBITDA Period
-------------------------------------------------------------------------------
less than or equal to 4.25 Closing Date through the last day of Fiscal
Year 2000
-------------------------------------------------------------------------------
less than or equal to 4.0 The last day of the First Fiscal Quarter of
Fiscal Year 2001 through the last day of
the Third Fiscal Quarter of Fiscal Year 2001
-------------------------------------------------------------------------------
less than or equal to 3.5 The last day of Fiscal Year 2001 through
the last day of the third Fiscal Quarter of
Fiscal Year 2002
-------------------------------------------------------------------------------
less than or equal to 3.0 The last day of Fiscal Year 2002 through
the Termination Date
-------------------------------------------------------------------------------
SECTION 5.05. Ratio of Consolidated Total Debt to Consolidated
Total Capitalization. At the end of each Fiscal Quarter commencing with the
Fiscal Quarter ending November 25, 2000, the ratio of Consolidated Total Debt to
Consolidated Total Capitalization will not exceed 0.40.
SECTION 5.06. Acquisitions. No Loan Party nor any Subsidiary of
a Loan Party shall enter into any agreement, contract, binding commitment or
other arrangement providing for any Acquisition, or take any action to solicit
the tender of securities or proxies in respect thereof in order to effect any
Acquisition, unless (i) the Person to be (or whose assets are to be) acquired
does not oppose such Acquisition and the line or lines of business of the Person
to be acquired are substantially the same or related as one or more line or
lines of business conducted by the Borrower and its Subsidiaries, (ii) no
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Default or Event of Default shall have occurred and be continuing either
immediately prior to or immediately after giving effect to such Acquisition and
the Borrower shall have furnished to the Agent (A) pro forma historical
financial statements as of the end of the most recently completed Fiscal Year of
the Borrower and most recent interim Fiscal Quarter, if applicable giving effect
to such Acquisition and (B) a certificate in the form of Exhibit I prepared on a
historical pro forma basis as of the most recent date for which financial
statements have been furnished pursuant to Section 5.01 giving effect to such
Acquisition, which certificate shall demonstrate that no Default of Event or
Default would exist immediately after giving effect thereto, (iii) the Person
acquired shall be a Subsidiary, or be merged into the Borrower or a Wholly Owned
Subsidiary, immediately upon consummation of the Acquisition (or if assets are
being acquired, the acquiror shall be the Borrower or a Subsidiary of the
Borrower), and (iv) after giving effect to such Acquisition, the aggregate Costs
of Acquisition incurred in any Fiscal Year (on a noncumulative basis, with the
effect that amounts not incurred in any Fiscal Year may not be carried forward
to a subsequent period) shall not exceed $10,000,000.
SECTION 5.07. Contingent BFD Liabilities. (a) Neither the
Borrower nor any Consolidated Subsidiary shall, directly or indirectly, issue,
assume, create, incur or suffer to exist any Contingent BFD Liability except for
Contingent BFD Liabilities, the aggregate outstanding principal amount of which
shall not at any time exceed $40,000,000, in the aggregate.
(b) Neither the Borrower nor any Consolidated Subsidiary
shall, directly or indirectly, issue, assume, create, incur or suffer to exist
any Committed Contingent BFD Liability except Committed Contingent BFD
Liabilities corresponding to or arising from no more than twelve prospective
"BFD Stores"; provided that: (1) in calculating the number of prospective BFD
Stores that correspond to Committed Contingent BFD Liabilities: (a) a guaranty
issued by the Borrower or Consolidated Subsidiary applicable for a term less
than or equal to 5 years shall be included as one store; and (b) a guaranty
issued by the Borrower or Consolidated Subsidiary applicable for a term in
excess of five years shall be included as the number of Stores (and fraction
thereof) equal to such term expressed in years divided by five; and (2) neither
the Borrower nor any Consolidated Subsidiary shall, directly or indirectly,
issue, assume, create, incur or suffer to exist a Committed Contingent BFD
Liability if after giving pro forma effect to the execution of the guaranty
contemplated thereby and a good faith estimate of the Contingent BFD Liabilities
to exist thereunder (based on the Borrower's good faith estimate of the
commencement date of the underlying lease which date shall in no event be more
than eighteen months after the date such Committed Contingent BFD Liability is
assumed, created or incurred) plus a good faith estimate of the other Contingent
BFD Liabilities to be in effect at the time the Committed Contingent BFD
Liability becomes a Contingent BFD Liability, a Default or Event of Default will
occur or exist.
SECTION 5.08. Ratio of Contingent BFD Liabilities to Contingent
BFD Liabilities Borrowing Base. The Contingent BFD Liabilities will not at any
time exceed the Contingent BFD Liabilities Borrowing Base.
SECTION 5.09. Restricted Payments. The Borrower will not declare
or make any Restricted Payment during any Fiscal Year unless, after giving
effect thereto: (1) the aggregate of all Dividends declared or made during (a)
the Fiscal Year ending November 25, 2000 does not exceed Ten Million Dollars
($10,000,000), and (b) any Fiscal Year thereafter does not exceed Nine Million
Five Hundred Thousand Dollars ($9,500,000); (2) no Default shall have occurred
and be continuing; (3) the aggregate of all payments on account of the purchase,
redemption, retirement or acquisition of any shares of the Borrower's capital
stock (including, without limitation, any option, warrant, or other right to
acquire shares of the Borrower's capital stock): (a) during the Fiscal Year
ending November 25, 2000 shall not exceed $7,000,000; (b) during Fiscal Year
2001, shall not exceed $6,500,000, plus any amounts permitted under (3)(a) but
not paid during the Fiscal Year ending November 25, 2000; and (c) during Fiscal
Year 2002, shall not exceed $6,000,000 plus any amounts permitted under (3)(a)
or (b) above but not paid during the Fiscal Year ending November 25, 2000 or
Fiscal Year 2001; and (4) if the aggregate of all payments made during the
applicable period under Section 5.09(3) above are included, on a pro-forma
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basis, in the computation of subitem (B) in the definition of Comprehensive
Fixed Charge Coverage Ratio, the Comprehensive Fixed Charge Coverage Ratio (for
the Fiscal Quarter during which a payment described in (3) above is proposed)
shall not be less than the amount determined by deducting 0.5 from the amount
set forth in Section 5.10 for such period.
SECTION 5.10. Fixed Charge Coverage. At the end of each Fiscal
Quarter, commencing with the Fiscal Quarter ending November 25, 2000, the
Comprehensive Fixed Charge Coverage Ratio shall not be less than the ratio
corresponding to such Fiscal Quarter in the following table:
-------------------------------------------------------------------------------
Comprehensive Fixed
Charge Coverage Ratio Period
-------------------------------------------------------------------------------
greater than or equal to 1.5 Closing Date through the last day of the
third Fiscal Quarter of Fiscal Year 2001
-------------------------------------------------------------------------------
greater than or equal to 2.0 The last day of Fiscal Year 2001 through
the last day of the third Fiscal Quarter of
Fiscal Year 2002
-------------------------------------------------------------------------------
greater than or equal to 3.0 The last day of Fiscal Year 2002 through
the Termination Date
-------------------------------------------------------------------------------
SECTION 5.11. Capital Expenditures. Capital Expenditures will
not exceed in the aggregate in any Fiscal Year the sum of $25,000,000; provided
that after giving effect to the incurrence of any Capital Expenditures permitted
by this Section, no Default shall have occurred and be continuing (with the
effect that amounts not incurred in any Fiscal Year may not be carried forward
to a subsequent period).
SECTION 5.12. Loans or Advances. No Loan Party nor any
Subsidiary of a Loan Party shall make loans or advances to any Person except:
(i) loans or advances to employees of a Loan Party or an Affiliate of a Loan
Party do not exceed One Million and No/100 Dollars ($1,000,000) in the aggregate
outstanding made in the ordinary course of business and consistently with
practices existing on November 27, 1999; (ii) deposits required by government
agencies or public utilities; (iii) loans or advances to the Borrower or any
Guarantor that is a Consolidated Subsidiary; (iv) Loans and Advances outstanding
on the Closing Date and set forth on Schedule 4-22A; and (v) loans or advances
not otherwise permitted under this Section 5.12, which when aggregated with the
total Investments made under Section 5.13(viii) do not exceed Seven Million Five
Hundred Thousand Dollars ($7,500,000) in the aggregate outstanding; provided
that after giving effect to the making of any loans, advances or deposits
permitted by clause (i), (ii), (iii), (iv) or (v) of this Section, no Default
shall have occurred and be continuing.
SECTION 5.13. Investments. No Loan Party nor any Subsidiary of a
Loan Party shall make Investments in any Person except as permitted by Section
5.12 and except Investments in (i) direct obligations of the United States
Government maturing within one year, (ii) certificates of deposit issued by a
commercial bank whose credit is satisfactory to the Agent, (iii) commercial
paper rated A-1 or the equivalent thereof by Standard & Poor's Corporation or
P-1 or the equivalent thereof by Xxxxx'x Investors Service, Inc. and in either
case maturing within 6 months after the date of acquisition, (iv) tender bonds
the payment of the principal of and interest on which is fully supported by a
letter of credit issued by a United States bank whose long-term certificates of
deposit are rated at least AA or the equivalent thereof by Standard & Poor's
Corporation and Aa or the equivalent thereof by Xxxxx'x Investors Service, Inc.,
(v) Investments by the Borrower in a Guarantor that is a Consolidated Subsidiary
made in the ordinary course of business and consistently with practices existing
on November 27, 1999, (vi) Investments existing on the Closing Date and set
forth on Schedule 4.22-A, (vii) Eligible Investment Securities, other marketable
investment securities publicly traded on a national securities exchange of a
quality consistent with the equity investments made by the Borrower on the
Closing Date and an Investment in the Xxxxxxx Asset Fund, made on or before
February 28, 2001 with up to 50% of the net after tax proceeds of the dividend
(if
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any) received by the Borrower from IHFC on or before February 28, 2001 (the
"IHFC Dividend"); provided that no less 50% of the net after tax proceeds of the
IHFC Dividend shall be applied by the Borrower as repayment of the Loan; and
(viii) Investments not otherwise permitted under this Section 5.13, made in the
ordinary course of business and consistently with practices existing on November
27, 1999, which when aggregated with the aggregate outstanding loans and
advances made under Section 5.12(v) do not exceed $7,500,000.00.
SECTION 5.14. Negative Pledge. No Loan Party nor any Subsidiary
of a Loan Party will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement encumbering
assets other than Collateral securing Debt outstanding on the date of this
Agreement in an aggregate principal amount not exceeding $5,000,000, all of
which are set forth on Schedule 5.14;
(b) any Lien existing on any asset of any corporation at the
time such corporation becomes a Consolidated Subsidiary and not created in
contemplation of such event;
(c) any Lien on any asset (other than Collateral) securing
Debt incurred or assumed for the purpose of financing all or any part of the
cost of acquiring or constructing such asset and permitted under Section
5.32(c), provided that such Lien attaches to such asset concurrently with or
within 18 months after the acquisition or completion of construction thereof;
(d) any Lien on any asset of any corporation existing at the
time such corporation is merged or consolidated with or into the Borrower or
another Loan Party and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or another Loan Party and not created in contemplation
of such acquisition;
(f) Liens encumbering assets (other than Collateral)
securing Debt owing by any Loan Party to the Borrower;
(g) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that (i) such Debt is not secured by
any additional assets, and (ii) the amount of such Debt secured by any such Lien
is not increased;
(h) Liens incidental to the conduct of its business or the
ownership of its assets which (i) do not secure Debt and (ii) do not in the
aggregate materially detract from the value of its assets or materially impair
the use thereof in the operation of its business;
(i) any Lien on Margin Stock;
(j) Liens securing the Agent and the Banks created or
arising under the Loan Documents; and
(k) Liens not otherwise permitted by the foregoing clauses
of this Section securing Debt (other than indebtedness represented by the Notes)
in an aggregate principal amount at any time outstanding not to exceed
$7,500,000. Notwithstanding anything contained in this Section 5.14 to the
contrary, no Loan Party or any Subsidiary of a Loan Party will create, assume or
suffer to exist any Lien on the Collateral or on the Borrower's ownership
interests in the Bassett Asset Fund.
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SECTION 5.15. Maintenance of Existence. Each Loan Party shall,
and shall cause each Subsidiary of a Loan Party to, maintain its organizational
existence and carry on its business in substantially the same manner and in
substantially the same fields as such business is now carried on and maintained;
provided that a Subsidiary of a Loan Party may be dissolved with the Agent's
prior written consent if: (1) such Subsidiary is not a Loan Party; and (2) the
total assets of such Subsidiary are less than $50,000.
SECTION 5.16. Dissolution. No Loan Party nor any Subsidiary of a
Loan Party shall suffer or permit dissolution or liquidation either in whole or
in part or redeem or retire any shares of its own stock or that of any
Subsidiary of a Loan Party, except: (1) through corporate reorganization to the
extent permitted by Section 5.17; and (2) Restricted Payments permitted by
Section 5.09.
SECTION 5.17. Consolidations, Mergers and Sales of Assets. No
Loan Party will, nor will it permit any Subsidiary of a Loan Party to,
consolidate or merge with or into, or sell, lease or otherwise transfer all or
any substantial part of its assets to, any other Person, or discontinue or
eliminate any business line or segment, provided that (a) a Loan Party may merge
with another Person if (i) such Person was organized under the laws of the
United States of America or one of its states, (ii) the Loan Party is the
corporation surviving such merger, (iii) immediately after giving effect to such
merger, no Default shall have occurred and be continuing, and (iv) if the
Borrower merges with another Loan Party, the Borrower is the corporation
surviving such merger, (b) Subsidiaries of a Loan Party (excluding Loan Parties)
may merge with one another, (c) a Loan Party (other than the Borrower or an
Eligible Guarantor) may transfer all or any part of its assets to another Loan
Party, (d) a Loan Party may sell Inventory in the ordinary course of business
and for fair value, (e) a sale of the real property and improvements commonly
known as the "Thomasville Showroom" located on Business (Interstate) 85 in
Thomasville, NC, and (f) the foregoing limitation on the sale, lease or other
transfer of assets and on the discontinuation or elimination of a business line
or segment shall not prohibit, during any Fiscal Quarter, a transfer of assets
or the discontinuance or elimination of a business line or segment (in a single
transaction or in a series of related transactions) unless the aggregate assets
to be so transferred or utilized in a business line or segment to be so
discontinued, when combined with all other assets transferred (excluding assets
transferred under Sections 5.17(d) and (e)), and all other assets utilized in
all other business lines or segments discontinued, during such Fiscal Quarter
and the immediately preceding three Fiscal Quarters constituted more than
$5,000,000 in the aggregate.
SECTION 5.18. Use of Proceeds. No portion of the proceeds of the
Loan will be used by the Borrower or any Subsidiary (i) in connection with,
either directly or indirectly, any tender offer for, or other acquisition of,
stock of any corporation with a view towards obtaining control of such other
corporation, (ii) directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any Margin Stock, or (iii) for
any purpose in violation of any applicable law or regulation. Except as
otherwise provided herein, the proceeds of the Loan shall be used for general
corporate purposes and working capital.
SECTION 5.19. Compliance with Laws; Payment of Taxes. Each Loan
Party will, and will cause each Subsidiary of a Loan Party and each member of
the Controlled Group to, comply with applicable laws in all material respects
(including but not limited to ERISA), regulations and similar requirements of
governmental authorities (including but not limited to PBGC), except where the
necessity of such compliance is being contested in good faith through
appropriate proceedings diligently pursued. Each Loan Party will, and will cause
each Subsidiary of a Loan Party to, pay promptly when due all taxes,
assessments, governmental charges, claims for labor, supplies, rent and other
obligations which, if unpaid, might become a lien against the property of a Loan
Party or any Subsidiary of a Loan Party, except liabilities being contested in
good faith by appropriate proceedings diligently pursued and against which, if
requested by the Agent, the Borrower shall have set up reserves in accordance
with GAAP.
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SECTION 5.20. Insurance. Each Loan Party will maintain, and will
cause each Subsidiary of a Loan Party to maintain (either in the name of such
Loan Party or in such Subsidiary's own name), with financially sound and
reputable insurance companies, insurance on all its Property in at least such
amounts and against at least such risks as are usually insured against in the
same general area by companies of established repute engaged in the same or
similar business.
SECTION 5.21. Change in Fiscal Year. Each Loan Party will not
change its Fiscal Year without the consent of the Required Banks.
SECTION 5.22. Maintenance of Property. Each Loan Party shall,
and shall cause each Subsidiary of a Loan Party to, maintain all of its
properties and assets (excluding assets that are obsolete or no longer useful in
such Loan Party's business) in good condition, repair and working order,
ordinary wear and tear excepted.
SECTION 5.23. Environmental Notices. Each Loan Party shall
furnish to the Banks and the Agent prompt written notice of all material
Environmental Liabilities, pending, threatened or anticipated Environmental
Proceedings, Environmental Notices, Environmental Judgments and Orders, and
Environmental Releases at, on, in, under or in any way affecting the Properties
or any adjacent property, and all facts, events, or conditions that could lead
to any of the foregoing.
SECTION 5.24. Environmental Matters. No Loan Party or any
Subsidiary of a Loan Party will, nor will any Loan Party permit any Third Party
to, use, produce, manufacture, process, treat, recycle, generate, store, dispose
of, manage at, or otherwise handle or ship or transport to or from the
Properties any Hazardous Materials except for Hazardous Materials such as
cleaning solvents, pesticides and other similar materials used, produced,
manufactured, processed, treated, recycled, generated, stored, disposed, managed
or otherwise handled in the ordinary course of business in compliance with all
applicable Environmental Requirements.
SECTION 5.25. Collateral. With respect to the Collateral, each
Borrower and Guarantor hereby represents, warrants and covenants to the Agent
and each of the Banks as set forth in Section 5.25.1 through 5.25.14, inclusive.
5.25.1 Sale of Collateral. No Borrower or Guarantor will sell,
lease, exchange, or otherwise dispose of any of the Collateral without
the prior written consent of the Agent; provided, however Inventory
Collateral may be sold in the ordinary course of business for cash or on
open account or on terms of payment ordinarily extended to its
customers. Upon the sale, exchange or other disposition of the Inventory
Collateral, the security interest and lien created and provided for
herein, without break in continuity and without further formality or
act, shall continue in and attach to any proceeds thereof, including,
without limitation, accounts, contract rights, shipping documents,
documents of title, bills of lading, warehouse receipts, dock warrants,
dock receipts and cash or non-cash proceeds, and in the event of any
unauthorized sale, shall continue in the Inventory Collateral itself.
5.25.2 Accounts. All existing and future Accounts included in
the Collateral are or will be bona fide existing obligations created by
the sale and delivery of merchandise or the rendering of services to
customers and arose or will arise in the ordinary course of business;
and that such Accounts are not and will not be subject to defense,
set-off or counterclaim which in the aggregate would materially impair
the value of such Accounts as collateral for the Obligations (as defined
in the Security Agreement). Neither the Borrower nor any Guarantor will,
without the Agent's prior written consent, grant any extension of the
time of payment of any of the Accounts, compromise, compound or settle
the same for less than the full amount thereof, release, wholly or
partly, any person liable for the payment thereof or allow any credit or
discount whatsoever thereon, other
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than extensions, credits, discounts, compromises or settlements granted
or made in the ordinary course of business or otherwise in accordance
with prudent and reasonable business practices.
5.25.3 Good Title; No Existing Encumbrances. The Borrower and
Guarantors own the Collateral free and clear of any prior Lien, and no
financing statements or other evidences of the grant of a security
interest respecting the Collateral exist on the public records.
5.25.4 Right to Grant Security Interest; No Further
Encumbrances. The Borrower and Guarantors have the right to grant a
security interest in the Collateral. The Borrower and Guarantors will
pay all taxes and other charges against the Collateral (including,
without limitation, property, use and sales taxes), and neither the
Borrower nor any Guarantor will use the Collateral illegally or allow
the Collateral to be encumbered except for the security interest in
favor of the Agent granted herein.
5.25.5 Location of Collateral. The Borrower and Guarantors
hereby represent and warrant to the Agent and the Banks that, as of the
date hereof, the Collateral is situated only at one or more of the
Collateral Locations and the Borrower and Guarantors covenant with the
Agent not to locate the Collateral at any location other than a
Collateral Location without at least 30 days prior written notice to the
Agent. In addition, to the extent the Borrower or Guarantors should
warehouse any of the Inventory Collateral at any time hereafter, the
Borrower and Guarantors acknowledge and agree that such warehousing may
be conducted only by warehousemen who have been pre-approved by the
Agent and who, in any event, shall issue non-negotiable warehouse
receipts in the Agent's name to evidence any such warehousing of goods
constituting Inventory Collateral. If the Borrower or Guarantors consign
any of the Inventory Collateral, it will comply with Section 2-326 of
the Uniform Commercial Code of any state where such Inventory Collateral
is located with respect thereto, by filing in the appropriate public
office or offices UCC-1 financing statements showing such Borrower or
Guarantor, as the case may be, as consignor and the Agent as assignee of
consignor, and will furnish copies thereof to the Agent. If any of the
Inventory Collateral or any records concerning the Collateral are at any
time to be located on premises leased by the Borrower or a Guarantor or
on premises owned by the Borrower or a Guarantor subject to a mortgage
or other lien, such Borrower or Guarantor shall so notify the Agent and
shall if requested by the Agent obtain and deliver or cause to be
delivered to the Agent, prior to delivery of any Inventory Collateral or
records concerning the Collateral to said premises, an agreement, in
form and substance satisfactory to the Agent, waiving the landlord's or
mortgagee's or lienholder's right to enforce any claim against the
Borrower or Guarantor, as the case may be, for monies due under the
landlord's lien, mortgage or other lien by levy or distraint or other
similar proceedings against the Inventory Collateral or records
concerning the Collateral and assuring the Agent's ability to have
access to the Inventory Collateral and records concerning the Collateral
in order to exercise its right hereunder to take possession thereof.
5.25.6 Collateral Status. The Borrowers and Guarantors will
promptly notify the Agent if there is any adverse change in the status
of the Collateral that materially impairs its value or collectibility,
or if any defenses, set-offs or counterclaims are asserted by Account
Debtors which in the aggregate materially impair the value or
collectibility of the Accounts.
5.25.7 Delivery of Certain Collateral. The Borrowers and
Guarantors have delivered all agreements, letters of credit, promissory
notes, certificates of deposit, chattel paper or anything else, the
physical possession of which is necessary in order for the Agent, on
behalf of the Secured Parties, to perfect or preserve the priority of
its security interest therein.
5.25.8 Purchase of Collateral. Neither the Borrower nor any
Guarantor has purchased any of the Collateral in a bulk transfer or in a
transaction which was outside the ordinary course of the business of the
seller to the Borrower or such Guarantor.
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5.25.9 Possession of Franchises, Licenses, Etc. The Borrower,
the Guarantors and the Subsidiaries of the Borrower and Guarantors
possess all franchises, certificates, licenses, permits and other
authorizations from governmental political subdivisions or regulatory
authorities, and all patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome
restrictions, that are necessary for the ownership, maintenance and
operation of any of their respective property and assets, and neither
the Borrower, any Guarantor nor any of their respective Subsidiaries are
in violation of any term or condition thereof which would or might have
a Material Adverse Effect. The Borrower and Guarantors have furnished
the Agent and Banks an accurate and complete description of all
copyrights, patents, trademarks and other intellectual property of the
Borrower and Guarantors.
5.25.10 Records Respecting Collateral. The Borrower and
Guarantors shall keep complete and accurate books and records and make
all necessary entries thereon to reflect the transactions and facts
giving rise to the Collateral and payments, credit and adjustments
applicable thereto. All books and records of the Borrower and Guarantors
with respect to the Collateral will be kept at the Executive Offices (as
they may be changed pursuant to Section 5.25.5) and will not be removed
from such address without the prior written consent of the Agent.
5.25.11 Further Assurances. The Borrower and each Guarantor
shall duly execute and/or deliver (or cause to be duly executed and/or
delivered) to the Agent and Secured Parties any instrument, invoice,
document, document of title, dock warrant, dock receipt, warehouse
receipt, xxxx of lading, order, financing statement, assignment, waiver,
consent or other writing which may be reasonably necessary to the Agent
or any Secured Parties to carry out the terms of this Agreement and any
of the other Loan Documents and to perfect its security interest in and
facilitate the collection of the Collateral, the proceeds thereof, and
any other property at any time constituting security to the Secured
Parties. The Borrower and each Guarantor shall perform or cause to be
performed such acts as the Agent or any Secured Party may request to
establish and maintain for the Agent and the Secured Parties a valid and
perfected security interest in and security title to the Collateral,
free and clear of any Liens other than in favor of the Agent and the
Secured Parties.
5.25.12 Maintenance of Insurance. In addition to and cumulative
with any other requirements herein imposed on the Borrower and
Guarantors with respect to insurance, the Borrower, Guarantors and the
Subsidiaries of the Borrower and Guarantors shall maintain insurance
with insurance companies satisfactory to the Agent on such of their
respective properties and assets, in such amounts and against such risks
as is customarily maintained by similar businesses operating in the same
vicinity, but in any event to include public liability, worker's
compensation, business interruption, malicious mischief, errors and
omissions, loss, damage, flood, windstorm, fire, theft, extended
coverage and product liability insurance in amounts satisfactory to the
Agent, which insurance shall not be cancellable or altered (or the
coverage thereunder reduced or restricted) by the Borrower, Guarantor or
any Subsidiary of the Borrower and Guarantors, unless with the prior
written consent of the Agent, or by the insurer of the Borrower and
Guarantors, unless with at least 30 days advance written notice to the
Agent thereof. The Borrower and Guarantors shall deliver to the Agent on
the Closing Date and at such other times as the Agent may request, a
detailed list of such insurance then in effect stating the names of the
insurance companies, the amounts and rates of insurance, the date of
expiration thereof, the properties and risks covered thereby and the
insured with respect thereto, and, within 30 days after notice in
writing from the Agent, obtain such additional insurance as the Agent,
at the request of the Required Banks, may reasonably request. The
Borrower and Guarantors will pay all premiums on the insurance referred
to herein as and when they become due and shall do all things necessary
to maintain the insurance in effect. The Agent may act as the agent of
the Borrower and Guarantors in adjusting or compromising any loss under
any such insurance policy and in collecting and
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receiving the proceeds from any such policy. In the event of any loss
under any such policy of insurance, the insurer named therein is hereby
authorized and directed by the Borrower and Guarantors to make payment
for such loss to the Agent, for the benefit of the Secured Parties, as
their interests may appear, rather than to the Borrower and Guarantors
and the Agent jointly. If the Borrower or any Guarantor shall default in
its obligation hereunder to insure the Collateral in a manner
satisfactory to the Agent, then the Agent shall have the right (but not
the obligation) to procure such insurance and to charge the costs of
same to the Borrower and Guarantors, which costs shall be added to and
become a part of the unpaid principal amount of the Obligations (as
defined in the Security Agreement), shall bear interest at the Default
Rate or the highest contract rate permitted by applicable law whichever
is less; such interest shall be payable on demand by the Agent and shall
be secured by the Collateral.
5.25.13 Change of Principal Place of Business. The Borrower and
Guarantors hereby understand and agree that if, at any time hereafter,
the Borrower or Guarantor elects to move its Executive Office, or if the
Borrower or Guarantor elects to change its name, identity, any trade
name used to identify it in the conduct of its business or in the
ownership of its properties, or its structure to other than a corporate
structure, the Borrower and Guarantors will notify the Agent in writing
at least 30 days prior thereto.
5.25.14 Waivers. With respect to each of the Collateral
Locations, the Borrower and Guarantors will obtain such waivers of lien,
estoppel certificates or subordination agreements as the Required Banks
may reasonably require to insure the priority of its security interest
in that portion of the Collateral situated at such locations.
SECTION 5.26. Environmental Release. Each Loan Party agrees that
upon the occurrence of an Environmental Release at or on any of the Properties
it will act immediately to investigate the extent of, and to take appropriate
remedial action to eliminate, such Environmental Release, whether or not ordered
or otherwise directed to do so by any Environmental Authority.
SECTION 5.27 Additional Covenants, Etc. In the event that at any
time this Agreement is in effect or any Note remains unpaid any Loan Party shall
enter into any agreement, guarantee, indenture or other instrument governing,
relating to, providing for commitments to advance or guaranteeing any Financing
or to amend any terms and conditions applicable to any Financing, which
agreement, guarantee, indenture or other instrument includes covenants,
warranties, representations, defaults or events of default (or any other type of
restriction which would have the practical effect of any of the foregoing,
including, without limitation, any "put" or mandatory prepayment of such debt)
or other terms or conditions not substantially as, or in addition to those,
provided in this Agreement or any other Loan Document, or more favorable to the
lender or other counterparty thereunder than those provided in this Agreement or
any other Loan Document, the Loan Party shall promptly so notify the Agent and
the Banks. Thereupon, if the Agent shall request by written notice to the Loan
Party (after a determination has been made by the Required Banks that any of the
above referenced documents or instruments contain any provisions which either
individually or in the aggregate are more favorable than one of the provisions
set forth herein), the Loan Parties, the Agent and the Banks shall enter into an
amendment to this Agreement providing for substantially the same such covenants,
warranties, representations, defaults or events of default or other terms or
conditions as those provided for in such agreement, guarantee, indenture or
other instrument, to the extent required and as may be selected by the Agent,
such amendment to remain in effect, unless otherwise specified in writing by the
Agent, for the entire duration of the stated term to maturity of such Financing
(to and including the date to which the same may be extended at the option of
the Loan Party), notwithstanding that such Financing might be earlier terminated
by prepayment, refinancing, acceleration or otherwise, provided that if any such
agreement, guarantee, indenture or other instrument shall be modified,
supplemented, amended or restated so as to modify, amend or eliminate from such
agreement, guarantee, indenture or other instrument any such covenant, warranty,
representation, default or event of default or other term or condition so made a
part of this Agreement, then unless required by the Agent
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pursuant to this Section, such modification, supplement or amendment shall not
operate to modify, amend or eliminate such covenant, warranty, representation,
default or event of default or other term or condition as so made a part of this
Agreement.
SECTION 5.28. Transactions with Affiliates. No Loan Party nor
any Subsidiary of a Loan Party shall enter into, or be a party to, any
transaction with any Affiliate of a Loan Party or such Subsidiary (which
Affiliate is not a Loan Party or a Subsidiary of a Loan Party), except: (1)
Existing Affiliate Transactions; and (2) as permitted by law and in the ordinary
course of business and pursuant to reasonable terms which are fully disclosed to
the Agent and the Banks, consented to in writing by the Required Banks, and are
no less favorable to the Loan Party or such Subsidiary than would be obtained in
a comparable arm's length transaction with a Person which is not an Affiliate.
As used herein, "Existing Affiliate Transactions" shall mean: (1) any loan or
advance permitted under Section 5.12(i); and (2) transactions between the
Borrower or any Consolidated Subsidiary and one or more of LRG Furniture, LLC,
Zenith Freightlines, LLC, The Accessory Group, Ltd., the Bassett Asset Fund and
IHFC, which transactions are in accordance with applicable laws, in the ordinary
course of business, consistent with the practices of the Borrower and the
Consolidated Subsidiaries on the Closing Date and pursuant to reasonable terms
no less favorable to the Borrower or such Consolidated Subsidiary than would be
obtained in a comparable arm's length transaction with a person which is not an
Affiliate.
SECTION 5.29 Material Subsidiaries. (a) The Loan Parties shall
cause any Person which becomes a Material Subsidiary after the Closing Date to
become a party to, and agree to be bound by the terms of, this Agreement and the
Security Agreement pursuant to a Joinder Agreement, in the form attached hereto
as Exhibit F satisfactory to the Agent in all respects and executed and
delivered to the Agent within ten (10) Domestic Business Days after the day on
which such Person became a Material Subsidiary. The Borrower shall also cause
the items specified in Section 3.01(c), (f), (h), (i) and (l) to be delivered to
the Agent concurrently with the instrument referred to above, modified
appropriately to refer to such instrument and such Material Subsidiary.
(b) The Borrower shall, or shall cause any Subsidiary (the
"Pledgor Subsidiary") to, pledge the lesser of 65% or the entire interest owned
by the Borrower and such Pledgor Subsidiary, of the shares of Capital Stock or
equivalent equity interests in any Person which becomes a Foreign Subsidiary
after the Closing Date pursuant to a pledge agreement in the form attached
hereto as Exhibit K executed and delivered by the Borrower or such Pledgor
Subsidiary to the Agent within ten (10) Domestic Business Days after the day on
which such Person became a Foreign Subsidiary and shall deliver to the Agent
such shares of capital stock together with stock powers executed in blank. The
Borrower shall also cause the items specified in Section 3.01(c), (f) and (l) to
be delivered to the Agent concurrently with the pledge agreement referred to
above, modified appropriately to refer to such pledge agreement, Pledgor and
such Foreign Subsidiary.
(c) Once any Subsidiary becomes a Material Subsidiary and
therefore becomes a party to this Agreement in accordance with Section 5.29(a)
or any shares of capital stock of a Foreign Subsidiary are pledged to the Agent
in accordance with Section 5.29(b), such Subsidiary (including, without
limitation, all Initial Guarantors) thereafter shall remain a party to this
Agreement and the shares of capital stock in such Foreign Subsidiary (including,
without limitation, all initial Foreign Subsidiaries) shall remain subject to
the pledge to the Agent, as the case may be, even if: (i) such Material
Subsidiary ceases to be a Material Subsidiary; or (ii) such Foreign Subsidiary
ceases to be a Foreign Subsidiary; provided that if a Material Subsidiary or
Foreign Subsidiary ceases to be a Subsidiary of the Borrower as a result of the
Borrower's transfer or sale of one hundred percent (100%) of the capital stock
of such Subsidiary in accordance with and to the extent permitted by the terms
of Section 5.17, the Agent and the Banks agree to release such Subsidiary from
the Guaranty and release the shares of capital stock of such Subsidiary from the
Pledge Agreement.
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SECTION 5.30. No Restrictive Agreement. No Loan Party will, nor
will any Loan Party permit any of its Subsidiaries to, enter into, after the
date of this Agreement, any indenture, agreement, instrument or other
arrangement that, directly or indirectly, prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse conditions
upon, any of the following by the Loan Party or any such Subsidiary: the
incurrence or payment of Debt, the granting of Liens, the declaration or payment
of Restricted Payments or other distributions in respect of Capital Stock of the
Loan Party or any Subsidiary, the making of loans, advances or Investments or
the sale, assignment, transfer or other disposition of property, real, personal
or mixed, tangible; provided, that Debt incurred under Section 5.32 and secured
by a Lien permitted under Section 5.14(c) may prohibit the granting of a Lien on
any asset acquired or constructed with the proceeds of such Debt.
SECTION 5.31. Subsidiaries, Partnerships and Joint Ventures. No
Loan Party shall: (1) create, acquire, form or otherwise permit to exist, any
Subsidiary other than Subsidiaries that are Subsidiaries existing on the date
hereof and described on Schedule 4.08; or (2) become a general partner in any
general or limited partnership or joint venture; provided that: (1) so long as
Schedule 4.08 is revised within fifteen (15) Domestic Business Days after the
date that a Subsidiary is created, acquired or formed, a Loan Party may create,
acquire or form a Subsidiary so long as after giving pro forma effect to such
creation, acquisition or formation no Default or Event of Default shall occur or
exist (including, without limitation, any breach of the limitations set forth in
Section 5.13); and (2) a Subsidiary of a Loan Party that is a corporation or
limited liability company may become a general partner in a general or limited
partnership or joint venture so long as the sole assets of such Subsidiary
consist of its interest in such partnership or joint venture and after giving
pro-forma effect to such action, no Default or Event of Default (including,
without limitation, a breach of any limitation set forth in Section 5.13) shall
occur or exist.
SECTION 5.32. Additional Debt. No Loan Party or Subsidiary of a
Loan Party shall directly or indirectly issue, assume, create, incur or suffer
to exist any Debt or the equivalent (including obligations under Capital
Leases), except for: (a) the Debt owed to the Banks, Swing Line Lender and
Issuing Bank; and (b) the Debt existing and outstanding on the Closing Date
described on Schedule 5.32; (c) Debt incurred or assumed for the purpose of
financing all or any part of the cost of acquiring or constructing an asset
provided that the aggregate outstanding principal amount of the Debt of the Loan
Parties and their respective Subsidiaries incurred under this Section 5.32(c)
shall not exceed, at any time, $7,500,000; (d) Contingent BFD Liabilities and
Committed Contingent BFD Liabilities permitted under Section 5.10; provided that
neither the Borrower nor any of its Consolidated Subsidiaries shall incur any
Contingent BFD Liability or Committed Contingent BFD Liability after the date on
which a Defaulted Contingent BFD Liability has occurred with respect to five BFD
Stores; and (e) Debt not otherwise permitted under this Section 5.32, the
aggregate outstanding principal amount of which shall not, at any time, exceed
$5,000,000.00.
SECTION 5.33. Bassett Asset Fund. No Loan Party nor any
Subsidiary of a Loan Party shall permit the Bassett Asset Fund to: (i) create,
assume or suffer to exist any Lien on any asset now owned or hereafter acquired
by the Bassett Asset Fund; (ii) make Investments except in accordance with the
Bassett Asset Fund Investment Policy; (iii) make loans or advances to any Person
except as set forth in the Bassett Asset Fund Investment Policy; (iv)
consolidate or merge with or into, or except as permitted under Section 5.33(ii)
sell, lease or otherwise transfer any of its assets; (v) make or declare any
dividend or distribution except to the Borrower in accordance with the Bassett
Asset Fund Investment Policy; (vi) directly or indirectly, issue, assume,
create, incur or suffer to exist any Debt or the equivalent (including
obligations under Capital Leases); or (vii) after the Closing Date, amend or
modify the limited partnership agreement pursuant to which the Bassett Asset
Fund is formed. The Borrower shall not make any withdrawal from the Bassett
Asset Fund unless after giving effect to such withdrawal the Borrower shall be
able to fully perform its obligations under Section 6.04. In furtherance and not
in limitation of the foregoing in connection with any such withdrawal, the
Borrower shall obtain the acknowledgment and agreement of the general partner
under the Bassett Asset Fund that such withdrawal shall not limit the Borrower's
right to withdraw funds in the future from the Bassett Asset Fund.
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SECTION 5.34. Operating Leases. No Loan Party nor any Subsidiary
of a Loan Party shall create, assume or suffer to exist any operating lease
except operating leases which: (1) are entered into in the ordinary course of
business, and (2) the aggregate indebtedness, liabilities and obligations of the
Loan Parties under all such operating leases during any period of four (4)
consecutive Fiscal Quarters shall at no time exceed $5,000,000, plus in the
event LRG Furniture, LLC becomes a Consolidated Subsidiary, the aggregate
indebtedness, liabilities and obligations of LRG Furniture, LLC under operating
leases in existence on the date LRG Furniture, LLC becomes a Consolidated
Subsidiary, provided further that no such operating lease is created in
contemplation of such event.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of
the Loan (including, without limitation, any Advance or Swing Line Advance) or
shall fail to pay any interest on the Loan (including, without limitation, any
Advance or Swing Line Advance) within five Domestic Business Days after such
interest shall become due, or any Loan Party shall fail to pay any fee or other
amount payable hereunder within five Domestic Business Days after such fee or
other amount becomes due; or
(b) any Loan Party shall fail to observe or perform any
covenant contained in Sections 5.02(ii), 5.03 to 5.18, inclusive, or Section
5.21, 5.32, 5.33 or 5.34; or
(c) any Loan Party shall fail to observe or perform any
covenant or agreement contained or incorporated by reference in this Agreement
(other than those covered by clause (a) or (b) above) for thirty days after the
earlier of (i) the first day on which any Loan Party has knowledge of such
failure or (ii) written notice thereof has been given to the Borrower by the
Agent at the request of any Bank; or
(d) any representation, warranty, certification or statement
made or deemed made by the Loan Parties in Article IV of this Agreement or in
any financial statement, material certificate or other material document
delivered pursuant to this Agreement shall prove to have been incorrect or
misleading in any material respect when made (or deemed made); or
(e) any Loan Party or any Subsidiary of a Loan Party shall
fail to make any payment in respect of Debt in an aggregate amount outstanding
in excess of $1,000,000 (other than the Notes) when due or within any applicable
grace period; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt outstanding of any Loan Party or any
Subsidiary of a Loan Party in an aggregate amount in excess of $1,000,000 or the
mandatory prepayment or purchase of such Debt by any Loan Party (or its
designee) or such Subsidiary of a Loan Party (or its designee) prior to the
scheduled maturity thereof, or enables (or, with the giving of notice or lapse
of time or both, would enable) the holders of such Debt or any Person acting on
such holders' behalf to accelerate the maturity thereof or require the mandatory
prepayment or purchase thereof prior to the scheduled maturity thereof, without
regard to whether such holders or other Person shall have exercised or waived
their right to do so; or
(g) any Loan Party or any Subsidiary of a Loan Party shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the
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appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail
generally, or shall admit in writing its inability, to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing; or
(h) an involuntary case or other proceeding shall be
commenced against any Loan Party or any Subsidiary of a Loan Party seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against any Loan
Party or any Subsidiary of a Loan Party under the federal bankruptcy laws as now
or hereafter in effect; or
(i) any Loan Party or any member of the Controlled Group
shall fail to pay when due any material amount which it shall have become liable
to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans shall be filed under Title IV of ERISA by any Loan
Party, any member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any such Plan or Plans or a proceeding shall be instituted by a
fiduciary of any such Plan or Plans to enforce Section 515 or 4219(c)(5) of
ERISA and such proceeding shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or
(j) one or more judgments or orders for the payment of money
in an aggregate amount in excess of $1,000,000 shall be rendered against any
Loan Party or any Subsidiary of a Loan Party and such judgment or order shall
continue unsatisfied and unstayed for a period of 30 days; or
(k) a federal tax lien shall be filed against any Loan Party
or any Subsidiary of a Loan Party under Section 6323 of the Code or a lien of
the PBGC shall be filed against any Loan Party or any Subsidiary of a Loan Party
under Section 4068 of ERISA and in either case such lien shall remain
undischarged for a period of 25 days after the date of filing; or
(l) (i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding shares of the voting stock of the
Borrower; or (ii) as of any date a majority of the Board of Directors of the
Borrower consists of individuals who were not either (A) directors of the
Borrower as of the corresponding date of the previous year, (B) selected or
nominated to become directors by the Board of Directors of the Borrower of which
a majority consisted of individuals described in clause (A), or (C) selected or
nominated to become directors by the Board of Directors of the Borrower of which
a majority consisted of individuals described in clause (A) and individuals
described in clause (B); or
(m) there shall have occurred material uninsured damage to,
or loss, theft or destruction of, any material part of the Collateral; or
(n) a default or event of default shall occur and be
continuing under any of the Collateral Documents or Letter of Credit Agreements
or any Borrower, Pledgor Subsidiary or Guarantor shall fail to observe or
perform any obligation to be observed or performed by it under any Collateral
Document or Letter of Credit Agreements, and such default, event of default or
failure to perform or observe any obligation continues beyond any applicable
cure or grace period provided in such Collateral Document or Letter of Credit
Agreement; or
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(o) the Borrower shall at any time fail to own 99% of the
outstanding partnership interests of the Bassett Asset Fund; or
(p) the occurrence of any event, act or condition which the
Required Banks determine either does or has a reasonable probability of causing
a Material Adverse Effect.
then, and in every such event, the Agent shall (i) if requested by the Required
Banks, by notice to the Borrower terminate the Commitments and they shall
thereupon terminate, (ii) if requested by the Swing Line Lender, by notice to
the Borrower terminate the Swing Line facility set forth in Section 2.15, (iii)
if requested by the Required Banks, by notice to the Issuing Bank, instruct the
Issuing Bank to declare an Event of Default under the Letter of Credit
Agreements, and (iv) if requested by the Required Banks, by notice to the
Borrower declare the Notes (together with accrued interest thereon) and all
other amounts payable hereunder and under the other Loan Documents to be, and
the Notes (together with all accrued interest thereon) and all other amounts
payable hereunder and under the other Loan Documents shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Loan Parties; provided that
if any Event of Default specified in clause (g) or (h) above occurs with respect
to any Loan Party, without any notice to any Loan Party or any other act by the
Agent or the Banks, the Commitments and the Swing Line facility set forth in
Section 2.15 shall thereupon automatically terminate and the Notes (together
with accrued interest thereon) and all other amounts payable hereunder and under
the other Loan Documents shall automatically become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Loan Parties. Notwithstanding the foregoing, the Agent
shall have available to it all other remedies at law or equity, and shall
exercise any one or all of them at the request of the Required Banks.
Notwithstanding the foregoing, the Agent shall have available to it all rights
and remedies provided under the Loan Documents (including, without limitation,
the Collateral Documents) and in addition thereto, all other rights and remedies
at law or equity, and the Agent shall exercise any one or all of them at the
request of the Required Banks.
SECTION 6.02. Notice of Default. The Agent shall give notice to
the Borrower of any Default under Section 6.01(c) promptly upon being requested
to do so by any Bank and shall thereupon notify all the Banks thereof.
SECTION 6.03 Cash Cover. If any Event of Default shall have
occurred and be continuing, the Borrower shall, if requested by the Agent, pay
to the Agent, for the benefit of the Banks an amount in immediately available
funds (which funds shall be held as collateral pursuant to arrangements
satisfactory to the Agent) equal to the aggregate Undrawn Amounts, provided
that, if any Event of Default specified in clause (g) or (h) above occurs, the
Borrower shall be obligated to pay such amount to the Agent forthwith without
any notice to the Borrower or any other act by the Agent.
SECTION 6.04. Bassett Asset Fund. In furtherance and not in
limitation of any right or remedy of the Agent, the Issuing Bank, the Swing Line
Lender or the Banks, the Borrower agrees that upon the occurrence of an Event of
Default: (1) without any notice to the Borrower or other act by the Agent, the
Issuing Bank, the Swing Line Lender or the Banks, the Borrower shall immediately
(and shall continue during the continuance of such Event of Default) withdraw
from the Bassett Asset Fund the maximum amount of cash, cash equivalents and
other distributions which may be withdrawn in accordance with the terms of that
certain Limited Partnership Agreement dated July 1, 1998 by and among Private
Advisors, LLC as general partner and the Borrower as limited partner, as amended
by amendments dated December 1, 1998 and Second Amendment to Limited Partnership
Agreement dated February 23, 2000 and that certain Third Amendment to Limited
Partnership Agreement dated October 25, 2000 which funds shall be held as
collateral pursuant to arrangements satisfactory to the Agent and shall be in an
amount no less than $15,000,000 if such withdrawal is made during the first
three fiscal quarters of the Bassett Asset Fund; and (2) grant to the Agent for
the benefit of the Secured Parties a first priority lien on and security
interest upon all of the Borrower's right, title and interest in and to the
Bassett Asset Fund including, without
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limitation, any and all rights of the Borrower as a limited partner in the
Bassett Asset Fund together with any and all payments, distributions and other
amounts payable to the Borrower. In connection with such liens, the Borrower
shall immediately execute security agreements, financing statements and such
other agreements, documents and certificates as the Agent shall reasonably
request.
SECTION 6.05. Allocation of Proceeds. If an Event of Default has
occurred and not been waived, and the maturity of the Notes has been accelerated
pursuant to Article VI hereof, all payments received by the Agent hereunder, in
respect of any principal of or interest on the Obligations or any other amounts
payable by the Borrower or any other Loan Party hereunder, shall be applied by
the Agent in the following order:
(a) the reasonable expenses incurred in connection with
retaking, holding, preserving, processing, maintaining or preparing for sale,
lease or other disposition of, any Collateral, including reasonable attorney's
fees and legal expenses pertaining thereto;
(b) amounts due to the Banks, Agent and the Issuing Bank
pursuant to Sections 2.7(a), 2.7(b), 2.7(c), 2.7(d) and 9.03(a);
(c) payments of interest on Advances, Swing Line Advances
and Letter of Credit Advances, to be applied for the ratable benefit of the
Banks (with amounts payable in respect of Swing Line Advances being included in
such calculation and paid to the Swing Line Lender);
(d) payments of principal of Advances, Swing Line Advances
and Letter of Credit Advances, to be applied for the ratable benefit of the
Banks (with amounts payable in respect of Swing Line Advances being included in
such calculation and paid to the Swing Line Lender);
(e) payments of cash amounts to the Agent in respect of
outstanding Letters of Credit pursuant to Section 6.03;
(f) amounts due to the Issuing Bank, the Agent and the Banks
pursuant to Sections 7.05 and 9.03(b) and (c);
(g) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the Secured Parties;
(h) any surplus remaining after application as provided for
herein, to the Borrower or otherwise as may be required by applicable law.
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ARTICLE VII
THE AGENT
SECTION 7.01. Appointment, Powers and Immunities. Each Bank
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms hereof and thereof, together
with such other powers as are reasonably incidental thereto. The Agent: (a)
shall have no duties or responsibilities except as expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee for any Bank; (b) shall not be
responsible to the Banks for any recitals, statements, representations or
warranties contained in this Agreement or any other Loan Document, or in any
certificate or other document referred to or provided for in, or received by any
Bank under, this Agreement or any other Loan Document, or for the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document referred to or provided for herein
or therein or for any failure by any Loan Party to perform any of its
obligations hereunder or thereunder; (c) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder or under any other
Loan Document except to the extent requested by the Required Banks, and then
only on terms and conditions satisfactory to the Agent, and (d) shall not be
responsible for any action taken or omitted to be taken by it hereunder or under
any other Loan Document or any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The provisions of this Article VII are solely for the benefit
of the Agent and the Banks, and no Loan Party shall have any rights as a third
party beneficiary of any of the provisions hereof. In performing its functions
and duties under this Agreement and under the other Loan Documents, the Agent
shall act solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for the Loan Parties. The duties of the Agent shall be ministerial and
administrative in nature, and the Agent shall not have by reason of this
Agreement or any other Loan Document a fiduciary relationship in respect of any
Bank.
SECTION 7.02. Reliance by Agent. The Agent shall be entitled to
rely upon any certification, notice or other communication (including any
thereof by telephone, telefax, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement or any other Loan Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks in any action taken or
failure to act pursuant thereto shall be binding on all of the Banks.
SECTION 7.03. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default (other than the
non-payment of principal of or interest on the Loans) unless the Agent has
received notice from a Bank or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Agent receives such a notice of the occurrence of a Default or an Event of
Default, the Agent shall give prompt notice thereof to the Banks. The Agent
shall give each Bank prompt notice of each non-payment of principal of or
interest on the Loan, whether or not it has received any notice of the
occurrence of such non-payment. The Agent shall (subject to Section 9.05) take
such action with respect to such Default or Event of Default as shall be
directed by the Required Banks, provided that, unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Banks.
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SECTION 7.04. Rights of Agent and its Affiliates as a Bank. With
respect to any Advance made by BB&T or an Affiliate of BB&T, such Affiliate and
BB&T in their capacity as a Bank hereunder shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though it were not an
Affiliate of BB&T (or in BB&T's case, acting as the Agent), and the term "Bank"
or "Banks" shall, unless the context otherwise indicates, include such Affiliate
of BB&T or BB&T in its individual capacity. Such Affiliate and BB&T may (without
having to account therefor to any Bank) accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with any Loan
Party (and any of the Affiliates of any Loan Party) as if they were not an
Affiliate of the Agent or the Agent, respectively; and such Affiliate and BB&T
may accept fees and other consideration from any Loan Party (in addition to any
agency fees and arrangement fees heretofore agreed to between the Borrower and
BB&T) for services in connection with this Agreement or any other Loan Document
or otherwise without having to account for the same to the Banks.
SECTION 7.05. Indemnification. Each Bank severally agrees to
indemnify the Agent, to the extent the Agent shall not have been reimbursed by
the Borrower, ratably in accordance with its Commitment, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided, however, that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
SECTION 7.06. CONSEQUENTIAL DAMAGES. THE AGENT SHALL NOT BE
RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY
FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 7.07. Payee of Note Treated as Owner. The Agent may deem
and treat the payee of any Note as the owner thereof for all purposes hereof
unless and until a written notice of the assignment or transfer thereof shall
have been filed with the Agent and the provisions of Section 9.07(c) have been
satisfied. Any requests, authority or consent of any Person who at the time of
making such request or giving such authority or consent is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of that Note or of any Note or Notes issued in exchange therefor or
replacement thereof.
SECTION 7.08. Non-Reliance on Agent and Other Banks. Each Bank
agrees that it has, independently and without reliance on the Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own credit analysis of the Loan Parties and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Agent shall not be required to keep itself (or any Bank) informed
as to the performance or observance by the Loan Parties of this Agreement or any
of the other Loan Documents or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Borrower or any
other Person. Except for notices, reports and other documents and information
expressly
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required to be furnished to the Banks by the Agent hereunder or under the other
Loan Documents, the Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the affairs, financial
condition or business of the Loan Parties or any other Person (or any of their
Affiliates) which may come into the possession of the Agent.
SECTION 7.09. Failure to Act. Except for action expressly
required of the Agent hereunder or under the other Loan Documents, the Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction by
the Banks of their indemnification obligations under Section 7.05 against any
and all liability and expense which may be incurred by the Agent by reason of
taking, continuing to take, or failing to take any such action.
SECTION 7.10. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Banks and the Borrower and
the Agent may be removed at any time with or without cause by the Required
Banks. Upon any such resignation or removal, the Required Banks shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Banks and shall have accepted such appointment within
30 days after the retiring Agent's notice of resignation or the Required Banks'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent. Any successor Agent shall be a bank which has
a combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period:
(a) the Agent determines that deposits in Dollars (in the
applicable amounts) are not being offered in the relevant market for such
Interest Period, or
(b) the Required Banks advise the Agent that the London
Interbank Offered Rate as determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding the Advances for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
Euro-Dollar Loans shall be suspended. Unless the Borrower notifies the Agent at
least 2 Domestic Business Days before the date of any Borrowing for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date, such Borrowing shall instead be made as a Prime Rate Borrowing.
SECTION 8.02. Illegality. If, after the date hereof, the
adoption of any applicable law, rule or regulation, or any change in any
existing or future law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof (any
such authority, bank or agency being referred to as an "Authority" and any such
event being referred to as a "Change of Law"), or compliance by any
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Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any Authority shall make it unlawful or impossible
for any Bank (or its Lending Office) to make, maintain or fund its Euro-Dollar
Loan and such Bank shall so notify the Agent, the Agent shall forthwith give
notice thereof to the other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Bank to make its portion of
the Euro-Dollar Loan shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall designate a different Lending Office
if such designation will avoid the need for giving such notice and will not, in
the judgment of such Bank, be otherwise disadvantageous to such Bank. If such
Bank shall determine that it may not lawfully continue to maintain and fund any
of its portion of the outstanding Euro-Dollar Loan to maturity and shall so
specify in such notice, the Borrower shall immediately prepay in full the then
outstanding principal amount of the Euro-Dollar Loan of such Bank, together with
accrued interest thereon and any amount due such Bank pursuant to Section
8.05(a). Concurrently with prepaying such Euro-Dollar Loan, the Borrower shall
borrow a Prime Rate Loan in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Prime
Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If after
the date hereof, a Change of Law or compliance by any Bank (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any Authority:
(i) shall subject any Bank (or its Lending Office)
to any tax, duty or other charge with respect to its Euro-Dollar
Loan, its Notes or its obligation to make a Euro-Dollar Loan, or
shall change the basis of taxation of payments to any Bank (or
its Lending Office) of the principal of or interest on its
Euro-Dollar Loan or any other amounts due under this Agreement
in respect of its Euro-Dollar Loan or its obligation to make a
Euro-Dollar Loan (except for changes in the rate of tax on the
overall net income of such Bank or its Lending Office imposed by
the jurisdiction in which such Bank's principal executive office
or Lending Office is located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding any such
requirement included in an applicable Euro-Dollar Reserve
Percentage) against assets of, deposits with or for the account
of, or credit extended by, any Bank (or its Lending Office); or
(iii) shall impose on any Bank (or its Lending Office)
or on the United States market for certificates of deposit or
the London interbank market any other condition affecting its
Euro-Dollar Loan, its Notes or its obligation to make a
Euro-Dollar Loan;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined that after the date
hereof the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any existing or future law, rule or regulation, or
any change in the interpretation or administration thereof, or compliance by any
Bank (or its Lending Office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any Authority, has or would
have the effect of reducing the rate of return on such Bank's capital as a
consequence of its obligations hereunder to a level below that which such Bank
could have
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achieved but for such adoption, change or compliance (taking into consideration
such Bank's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within 15 days after demand by
such Bank, the Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank for such reduction.
(c) Each Bank will promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section and setting forth the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(d) The provisions of this Section 8.03 shall be applicable
with respect to any Participant, Assignee or other Transferee, and any
calculations required by such provisions shall be made based upon the
circumstances of such Participant, Assignee or other Transferee.
SECTION 8.04. Prime Rate Loans Substituted for Affected
Euro-Dollar Loans. If (i) the obligation of any Bank to make or maintain a
Euro-Dollar Loan has been suspended pursuant to Section 8.02 or (ii) any Bank
has demanded compensation under Section 8.03, and the Borrower shall, by at
least 5 Euro-Dollar Business Days' prior notice to such Bank through the Agent,
have elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer apply:
(a) all Advances which would otherwise be made by such Bank
as part of a Euro-Dollar Loan shall be made instead as a Prime Rate Loan, and
(b) after its portion of the Euro-Dollar Loan has been
repaid, all payments of principal which would otherwise be applied to repay such
Euro-Dollar Loan shall be applied to repay its Prime Rate Loan instead.
In the event that the Borrower shall elect that the provisions of this Section
shall apply to any Bank, the Borrower shall remain liable for, and shall pay to
such Bank as provided herein, all amounts due such Bank under Section 8.03 in
respect of the period preceding the date of conversion of such Bank's portion of
the Loan resulting from the Borrower's election.
SECTION 8.05. Compensation. Upon the request of any Bank,
delivered to the Borrower and the Agent, the Borrower shall pay to such Bank
such amount or amounts as shall compensate such Bank for any loss, cost or
expense incurred by such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.09,
Section 2.10, Section 8.02 or otherwise) of a Euro-Dollar Loan on a date other
than the last day of an Interest Period for such Euro-Dollar Loan;
(b) any failure by the Borrower to prepay a Euro-Dollar Loan
on the date for such prepayment specified in the relevant notice of prepayment
hereunder; or
(c) any failure by the Borrower to borrow a Euro-Dollar Loan
on the date for the Borrowing specified in the applicable Notice of Borrowing
delivered pursuant to Section 2.02.
such compensation to include, without limitation, an amount equal to the excess,
if any, of (x) the amount of interest which would have accrued on the amount so
paid or prepaid or not prepaid or borrowed for the
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period from the date of such payment, prepayment or failure to prepay or borrow
to the last day of the then current Interest Period for such Euro-Dollar Loan
(or, in the case of a failure to prepay or borrow, the Interest Period for such
Euro-Dollar Loan which would have commenced on the date of such failure to
prepay or borrow) at the applicable rate of interest for such Euro-Dollar Loan
provided for herein over (y) the amount of interest (as reasonably determined by
such Bank) such Bank would have paid on deposits in Dollars of comparable
amounts having terms comparable to such period placed with it by leading banks
in the London interbank market.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party at its address
or telecopy number set forth on the signature pages hereof or such other address
or telecopy number as such party may hereafter specify for the purpose by notice
to each other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopy number specified in this Section and the telecopy machine used by the
sender provides a written confirmation that such telecopy has been so
transmitted or receipt of such telecopy transmission is otherwise confirmed,
(ii) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid, and (iii) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Agent under Article II or Article VIII
shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or
any Bank in exercising any right, power or privilege hereunder or under any Note
or other Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a)
The Loan Parties shall, jointly and severally, pay (i) all expenses of the
Agent, including fees and disbursements of the Agent in connection with any
field audits and investigations and fees and disbursements of special counsel
for the Agent, in connection with the preparation of this Agreement and the
other Loan Documents, any waiver or consent hereunder or thereunder or any
amendment hereof or thereof or any Default or alleged Default hereunder or
thereunder and (ii) if a Default occurs, all out-of-pocket expenses incurred by
the Agent or any Bank, including fees and disbursements of counsel, in
connection with such Default and collection and other enforcement proceedings
resulting therefrom, including out-of-pocket expenses incurred in enforcing this
Agreement and the other Loan Documents.
(b) The Loan Parties shall, jointly and severally, indemnify
the Agent and each Bank against any transfer taxes, documentary taxes,
assessments or charges made by any Authority by reason of the execution and
delivery of this Agreement or the other Loan Documents.
(c) The Loan Parties shall, jointly and severally, indemnify
the Agent, the Banks and each Affiliate thereof and their respective directors,
officers, employees and agents from, and hold each of them harmless against, any
and all losses, liabilities, claims or damages to which any of them may become
subject, insofar as such losses, liabilities, claims or damages arise out of or
result from any actual or proposed use by the Borrower of the proceeds of any
extension of credit by any Bank hereunder or breach by any Loan Party of this
Agreement or any other Loan Document or from investigation, litigation
(including, without limitation, any actions taken by the Agent or any of the
Banks to enforce this Agreement or any of the other Loan Documents) or other
proceeding (including, without limitation, any threatened investigation or
proceeding) relating to the foregoing, and the Loan Parties shall reimburse the
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Agent and each Bank, and each Affiliate thereof and their respective directors,
officers, employees and agents, upon demand for any expenses (including, without
limitation, legal fees) incurred in connection with any such investigation or
proceeding; but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified.
SECTION 9.04. Setoffs; Sharing of Set-Offs. (a) Each Loan Party
hereby grants to each Bank, as security for the full and punctual payment and
performance of the obligations of each Loan Party under this Agreement, a
continuing lien on and security interest in all deposits and other sums credited
by or due from such Bank to such Loan Party or subject to withdrawal by such
Loan Party; and regardless of the adequacy of any collateral or other means of
obtaining repayment of such obligations, each Bank may at any time upon or after
the occurrence of any Event of Default, and without notice to any Loan Party,
set off the whole or any portion or portions of any or all such deposits and
other sums against such obligations, whether or not any other Person or Persons
could also withdraw money therefrom.
(b) Each Bank agrees that if it shall, by exercising any
right of set-off or counterclaim or otherwise, receive payment of a proportion
of the aggregate amount of principal and interest owing with respect to the
Letter of Credit Advances and Notes held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of all
Letter of Credit Advances and principal and interest owing with respect to the
Notes held by such other Bank, the Bank receiving such proportionately greater
payment shall purchase such participations in the Letter of Credit Advances and
Notes held by the other Banks owing to such other Banks, and/or such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Letter of Credit Advances and Notes
held by the Banks owing to such other Banks shall be shared by the Banks pro
rata; provided that (i) nothing in this Section shall impair the right of any
Bank to exercise any right of set-off or counterclaim it may have and to apply
the amount subject to such exercise to the payment of indebtedness of the Loan
Parties other than its indebtedness under the Letter of Credit Advances and
Notes, and (ii) if all or any portion of such payment received by the purchasing
Bank is thereafter recovered from such purchasing Bank, such purchase from each
other Bank shall be rescinded and such other Bank shall repay to the purchasing
Bank the purchase price of such participation to the extent of such recovery
together with an amount equal to such other Bank's ratable share (according to
the proportion of (x) the amount of such other Bank's required repayment to (y)
the total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Loan Parties agree, to the fullest extent they may effectively do
so under applicable law, that any holder of a participation in the Letter of
Credit Advances or Notes, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a participation
were a direct creditor of the Loan Parties in the amount of such participation.
SECTION 9.05. Amendments and Waivers. (a) Any provision of this
Agreement, the Notes or any other Loan Documents may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Borrower and the Required Banks (and, if the rights or duties of the Agent are
affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by all the Banks, (i) change the Commitment of any Bank or
subject any Bank to any additional obligation, (ii) change the principal of or
decrease the rate of interest on any Advance or decrease any fees (excluding
Facing Fees and other fees payable solely to the Issuing Bank for its own
account) hereunder, (iii) change the date fixed for any payment of principal of
or interest on any Advance or any fees (excluding Facing Fees and other fees
payable solely to the Issuing Bank for its own account) hereunder, (iv) change
the amount of principal, decrease the amount of interest or decrease the amount
of fees (excluding Facing Fees and other fees payable solely to the Issuing Bank
for its own account) due on any date fixed for the payment thereof, (v) change
the percentage of the Commitments or of the aggregate unpaid principal amount of
the Notes, or the percentage of Banks, which shall be required for the Banks or
any of them to take any action under this Section or any other provision of this
Agreement, (vi) change the manner of application of any payments made under this
Agreement or the other Loan Documents, (vii)
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release or substitute all or any substantial part of the Collateral held as
security for the Obligations, (viii) change or modify the definitions of
"Borrowing Base", "Eligible Accounts" or "Eligible Inventory", or (ix) release
any guaranty given to support payment of the Guaranteed Obligations and provided
further that: (I) no amendment or waiver shall, unless signed by the Swing Line
Lender, (A) modify or amend Section 2.15; or (B) change in any manner, any term
or condition applicable to the Swing Line Advances; and (II) no amendment or
waiver shall, unless signed by the Issuing Bank, (A) modify or amend Section
2.03; or (B) change in any manner, any term or condition applicable to the
Letters of Credit or the Letter of Credit Agreements. The amount of Facing Fees
and other fees payable solely to the Issuing Bank for its own account may be
amended, from time to time, by the Borrower and the Issuing Bank, without the
approval of any of the Banks by the Borrower and the Issuing Bank.
(b) No Loan Party will solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions of
this Agreement unless each Bank shall be informed thereof by the Borrower and
shall be afforded an opportunity of considering the same and shall be supplied
by the Borrower with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any waiver
or consent effected pursuant to the provisions of this Agreement shall be
delivered by the Borrower to each Bank forthwith following the date on which the
same shall have been executed and delivered by the requisite percentage of
Banks. No Loan Party will, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Bank (in its capacity as such) as consideration for or as an
inducement to the entering into by such Bank of any waiver or amendment of any
of the terms and provisions of this Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to all such Banks.
SECTION 9.06. Margin Stock Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it in good faith is
not, directly or indirectly (by negative pledge or otherwise), relying upon any
Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.07. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that no Loan Party may
assign or otherwise transfer any of its rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons
(each a "Participant") participating interests in any Advance owing to such
Bank, any Note held by such Bank, any Commitment hereunder or any other interest
of such Bank hereunder. In the event of any such sale by a Bank of a
participating interest to a Participant, such Bank's obligations under this
Agreement shall remain unchanged, such Bank shall remain solely responsible for
the performance thereof, such Bank shall remain the holder of any such Note for
all purposes under this Agreement, and the Borrower and the Agent shall continue
to deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of principal of or interest on the related
Advance or Advances, (ii) the change of the amount of any principal, interest or
fees due on any date fixed for the payment thereof with respect to the related
Advance or Advances, (iii) the change of the principal of the related Advance or
Advances, (iv) any change in the rate at which either interest is payable
thereon or (if the Participant is entitled to any part thereof) facility fee is
payable hereunder from the rate at which the Participant is entitled to receive
interest or facility fee (as the case may be) in respect of such participation,
(v) the release or substitution of all or any substantial part of the collateral
(if any) held as security for the Obligations, or (vi) the release of any
guaranty given to support payment of the Guaranteed Obligations. Each Bank
selling a participating interest in any Advance, Note, Commitment or other
interest under this Agreement shall, within 10 Domestic Business Days of such
sale, provide the Borrower and the Agent with written notification stating
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that such sale has occurred and identifying the Participant and the interest
purchased by such Participant. The Loan Parties agree that each Participant
shall be entitled to the benefits of Article VIII with respect to its
participation in Loans outstanding from time to time.
(c) Any Bank may at any time assign to one or more banks or
financial institutions (each an "Assignee") all, or a proportionate part of all,
of its rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume all such rights and obligations,
pursuant to an Assignment and Acceptance in the form attached hereto as Exhibit
J, executed by such Assignee, such transferor Bank and the Agent (and, in the
case of: (i) an Assignee that is not then a Bank or an Affiliate of a Bank; and
(ii) an assignment not made during the existence of a Default or an Event of
Default, by the Borrower); provided that (i) no interest may be sold by a Bank
pursuant to this paragraph (c) unless the Assignee shall agree to assume ratably
equivalent portions of the transferor Bank's Commitment, (ii) the amount of the
Commitment of the assigning Bank being assigned pursuant to such assignment
(determined as of the effective date of the assignment) shall be equal to
$5,000,000 (or any larger multiple of $1,000,000), (iii) no interest may be sold
by a Bank pursuant to this paragraph (c) to any Assignee that is not then a Bank
or an Affiliate of a Bank without the consent of the Borrower, which consent
shall not be unreasonably withheld, provided that the Borrower's consent shall
not be necessary with respect to any assignment made during the existence of a
Default or an Event of Default; (iv) a Bank may not have more than two Assignees
that are not then Banks at any one time, and (v) no interest may be sold by a
Bank pursuant to this paragraph (c) to any Assignee that is not then a Bank or
an Affiliate of a Bank, without the consent of the Agent, which consent shall
not be unreasonably withheld, provided, that although the Agent's consent may
not be necessary with respect to an Assignee that is then a Bank or an Affiliate
of a Bank, no such assignment shall be effective until the conditions set forth
in the following sentence are satisfied. Upon (A) execution of the Assignment
and Acceptance by such transferor Bank, such Assignee, the Agent and (if
applicable) the Borrower, (B) delivery of an executed copy of the Assignment and
Acceptance to the Borrower and the Agent, (C) payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, and (D) payment by the assigning Bank of a
processing and recordation fee of $3,500 to the Agent if the Assignee is not a
Bank or Affiliate of a Bank and $1,000 if the Assignee is a Bank or Affiliate of
a Bank, such Assignee shall for all purposes be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank under this Agreement to
the same extent as if it were an original party hereto with a Commitment as set
forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by the Borrower, the Banks or the Agent shall be
required. Upon the consummation of any transfer to an Assignee pursuant to this
paragraph (c), the transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to each of
such Assignee and such transferor Bank.
(d) Subject to the provisions of Section 9.08, the Loan
Parties authorize each Bank to disclose to any Participant, Assignee or other
transferee (each a "Transferee") and any prospective Transferee any and all
financial and other information in such Bank's possession concerning the Loan
Parties which has been delivered to such Bank by the Loan Parties pursuant to
this Agreement or which has been delivered to such Bank by the Loan Parties in
connection with such Bank's credit evaluation prior to entering into this
Agreement.
(e) No Transferee shall be entitled to receive any greater
payment under Section 8.03 than the transferor Bank would have been entitled to
receive with respect to the rights transferred, unless such transfer is made
with the Borrower's prior written consent or by reason of the provisions of
Section 8.02 or 8.03 requiring such Bank to designate a different Lending Office
under certain circumstances or at a time when the circumstances giving rise to
such greater payment did not exist.
(f) Anything in this Section 9.07 to the contrary
notwithstanding, any Bank may assign and pledge all or any portion of the Loan
and/or obligations owing to it to any Federal Reserve
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Bank or the United States Treasury as collateral security pursuant to Regulation
A of the Board of Governors of the Federal Reserve System and Operating Circular
issued by such Federal Reserve Bank, provided that any payment in respect of
such assigned Loan and/or obligations made by the Borrower to the assigning
and/or pledging Bank in accordance with the terms of this Agreement shall
satisfy the Borrower's obligations hereunder in respect of such assigned Loan
and/or obligations to the extent of such payment. No such assignment shall
release the assigning and/or pledging Bank from its obligations hereunder.
SECTION 9.08. Confidentiality. Each Bank agrees to exercise its
best efforts to keep any information delivered or made available by the Loan
Parties to it which is clearly indicated to be confidential information,
confidential from anyone other than persons employed or retained by such Bank
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loan; provided, however, that nothing herein shall prevent
any Bank from disclosing such information (i) to any other Bank, (ii) upon the
order of any court or administrative agency, (iii) upon the request or demand of
any regulatory agency or authority having jurisdiction over such Bank, (iv)
which has been publicly disclosed, (v) to the extent reasonably required in
connection with any litigation to which the Agent, any Bank or their respective
Affiliates may be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vii) to such Bank's legal counsel
and independent auditors and (viii) to any actual or proposed Participant,
Assignee or other Transferee of all or part of its rights hereunder which has
agreed in writing to be bound by the provisions of this Section 9.08.
SECTION 9.09. Representation by Banks. Each Bank hereby
represents that it is a commercial lender or financial institution which makes
loans in the ordinary course of its business and that it will make its Advances
hereunder for its own account in the ordinary course of such business; provided,
however, that, subject to Section 9.07, the disposition of the Note or Notes
held by that Bank shall at all times be within its exclusive control.
SECTION 9.10. Obligations Several. The obligations of each Bank
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and
no action taken by the Banks pursuant hereto shall be deemed to constitute the
Banks to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document and
it shall not be necessary for any other Bank to be joined as an additional party
in any proceeding for such purpose.
SECTION 9.11. Survival of Certain Obligations. Sections 8.03(a),
8.03(b), 8.05 and 9.03, and the obligations of the Loan Parties thereunder,
shall survive, and shall continue to be enforceable notwithstanding, the
termination of this Agreement, the Swing Line facility described in Section 2.15
and the Commitments and the payment in full of the principal of and interest on
all Advances and Swing Line Advances.
SECTION 9.12. North Carolina Law. This Agreement and each Note
shall be construed in accordance with and governed by the law of the State of
North Carolina.
SECTION 9.13. Severability. In case any one or more of the
provisions contained in this Agreement, the Notes or any of the other Loan
Documents should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby and
shall be enforced to the greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount of interest
due or payable hereunder or under the Notes exceed the maximum rate of interest
allowed by applicable law, and in the
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event any such payment is inadvertently made to any Bank by the Borrower or
inadvertently received by any Bank, then such excess sum shall be credited as a
payment of principal, unless the Borrower shall notify such Bank in writing that
it elects to have such excess sum returned forthwith. It is the express intent
hereof that the Borrower not pay and the Banks not receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may
legally be paid by the Borrower under applicable law.
SECTION 9.15. Interpretation. No provision of this Agreement or
any of the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 9.16. Consent to Jurisdiction. The Loan Parties (a)
submit to personal jurisdiction in the State of North Carolina, the courts
thereof and the United States District Courts sitting therein, for the
enforcement of this Agreement, the Notes and the other Loan Documents, (b)
waives any and all personal rights under the law of any jurisdiction to object
on any basis (including, without limitation, inconvenience of forum) to
jurisdiction or venue within the State of North Carolina for the purpose of
litigation to enforce this Agreement, the Notes or the other Loan Documents, and
(c) agrees that service of process may be made upon it in the manner prescribed
in Section 9.01 for the giving of notice to the Borrower. Nothing herein
contained, however, shall prevent the Agent from bringing any action or
exercising any rights against any security and against the Loan Parties
personally, and against any assets of the Loan Parties, within any other state
or jurisdiction.
SECTION 9.17. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
ARTICLE X
GUARANTY
SECTION 10.01. Unconditional Guaranty. Each Guarantor hereby
irrevocably, unconditionally and jointly and severally guarantees, each as a
primary obligor and not merely as a surety, to the Agent, the Issuing Bank and
the Banks (including, without limitation, the Swing Line Lender) the due and
punctual payment of the principal of and the premium, if any, and interest on
the Guaranteed Obligations and any and all other amounts due under or pursuant
to the Loan Documents, when and as the same shall become due and payable
(whether at stated maturity or by optional or mandatory prepayment or by
declaration, redemption or otherwise) in accordance with the terms of the Loan
Documents. The Guarantors' guaranty under this Section is an absolute, present
and continuing guarantee of payment and not of collectibility, and is in no way
conditional or contingent upon any attempt to collect from the Borrower, any of
the Guarantors or any other guarantor of the Guaranteed Obligations (or any
portion thereof) or upon any other action, occurrence or circumstances
whatsoever. In the event that the Borrower or any Guarantor shall fail so to pay
any such principal, premium, interest or other amount to the Agent, the Issuing
Bank or a Bank, the Guarantors will pay the same forthwith, without demand,
presentment, protest or notice of any kind (all of which are waived by the
Guarantors to the fullest extent permitted by law), in lawful money of the
United States, at the place for payment specified in Loan Documents or specified
by such Agent in writing, to such Agent. The Guarantors further agree, promptly
after demand, to pay to the Agent, the Issuing Bank and Banks the costs and
expenses incurred by such Agent, Issuing Bank or Bank in connection with
enforcing the rights of such Agent, Issuing Bank and Banks against the Borrower
and any or all of the Guarantors (whether in a bankruptcy proceeding or
otherwise) following any default in payment of any of the Guarantied Obligations
or the obligations of the Guarantors hereunder, including, without limitation,
the fees and expenses of counsel to the Agent, Issuing Bank and such Banks.
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SECTION 10.02. Obligations Absolute. The obligations of the
Guarantors hereunder are and shall be absolute and unconditional, irrespective
of the validity, regularity or enforceability of this Agreement, any of the
Guaranteed Obligations or any of the Loan Documents, shall not be subject to any
counterclaim, set-off, deduction or defense based upon any claim any of the
Guarantors may have against the Borrower, any other Guarantor or the Agent,
Issuing Bank or any Bank hereunder or otherwise, and shall remain in full force
and effect without regard to, and shall not be released, discharged or in any
way affected by, to the fullest extent permitted by law, any circumstance or
condition whatsoever (whether or not any of the Guarantors shall have any
knowledge or notice thereof), including, without limitation:
(a) any amendment or modification of or supplement to any of
the Loan Documents or any other instrument referred to herein or therein, or any
assignment or transfer of any thereof or of any interest therein, or any
furnishing or acceptance of additional security for any of the Guaranteed
Obligations;
(b) any waiver, consent or extension under any Loan Document
or any such other instrument, or any indulgence or other action or inaction
under or in respect of, or any extensions or renewals of, any Loan Document, any
such other instrument or any Guaranteed Obligation;
(c) any failure, omission or delay on the part of the Agent
to enforce, assert or exercise any right, power or remedy conferred on or
available to the Agent, the Issuing Bank or any Bank against the Borrower or any
Guarantor, any Subsidiary of the Borrower or any other Guarantor;
(d) any bankruptcy, insolvency, readjustment, composition,
liquidation or similar proceeding with respect to the Borrower, any Subsidiary
of the Borrower or any Guarantor or any property of the Borrower or any such
Subsidiary or any unavailability of assets against which the Guaranteed
Obligations, or any of them, may be enforced;
(e) any merger or consolidation of the Borrower, any
Subsidiary of the Borrower or any Guarantor or any of the Guarantors into or
with any other Person or any sale, lease or transfer of any or all of the assets
of any of the Guarantors, the Borrower or any Subsidiary of the Borrower to any
Person;
(f) any failure on the part of the Borrower or any
Subsidiary of the Borrower or any Guarantor for any reason to comply with or
perform any of the terms of any agreement with any of the Guarantors;
(g) any exercise or non-exercise by the Agent, the Issuing
Bank or any Bank, of any right, remedy, power or privilege under or in respect
of any of the Loan Documents or the Guaranteed Obligations, including, without
limitation, under this Section;
(h) any default, failure or delay, willful or otherwise, in
the performance or payment of any of the Guaranteed Obligations;
(i) any furnishing or acceptance of security, or any
release, substitution or exchange thereof, for any of the Guaranteed
Obligations;
(j) any failure to give notice to any of the Guarantors of
the occurrence of any breach or violation of, or any event of default or any
default under or with respect to, any of the Loan Documents or the Guaranteed
Obligations;
(k) any partial prepayment, or any assignment or transfer,
of any of the Guaranteed Obligations; or
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(l) any other circumstance (other than indefeasible payment
in full) which might otherwise constitute a legal or equitable discharge or
defense of a guarantor or which might in any manner or to any extent vary the
risk of such Guarantor.
The Guarantors covenant that their respective obligations hereunder will not be
discharged except by complete performance of the obligations contained in the
Loan Documents and this Agreement and the final and indefeasible payment in full
of the Guaranteed Obligations. The Guarantors unconditionally waive, to the
fullest extent permitted by law (A) notice of any of the matters referred to in
this Section, (B) any and all rights which any of the Guarantors may now or
hereafter have arising under, and any right to claim a discharge of the
Guarantor's obligations hereunder by reason of the failure or refusal by the
Agent, the Issuing Bank or any Bank to take any action pursuant to a notice
given under, Sections 26-7, 26-8 or 26-9 of the North Carolina General Statutes
or any similar or successor provisions, (C) all notices which may be required by
statute, rule of law or otherwise to preserve any of the rights of the Agent,
the Issuing Bank or any Bank against the Guarantors, including, without
limitation, presentment to or demand of payment from the Borrower, any of the
Borrower's Subsidiaries or any of the other Guarantors with respect to any Loan
Document or this agreement, notice of acceptance of the Guarantors' guarantee
hereunder and/or notice to the Borrower, any of the Borrower's Subsidiaries or
any Guarantor of default or protest for nonpayment or dishonor, (D) any
diligence in collection from or protection of or realization upon all or any
portion of the Guaranteed Obligations or any security therefor, any liability
hereunder, or any party primarily or secondarily liable for all or any portion
of the Guaranteed Obligations, and (E) any duty or obligation of the Agent, the
Issuing Bank or any Bank to proceed to collect all or any portion of the
Guaranteed Obligations from, or to commence an action against, the Borrower, any
Guarantor or any other Person, or to resort to any security or to any balance of
any deposit account or credit on the books of the Agent, the Issuing Bank or any
Bank in favor of the Borrower, any Guarantor or any other Person, despite any
notice or request of any of the Guarantors to do so.
SECTION 10.03. Continuing Obligations; Reinstatement. The
obligations of the Guarantors under this Article X are continuing obligations
and shall continue in full force and effect until such time as all of the
Guaranteed Obligations (and any renewals and extensions thereof) shall have been
finally and indefeasibly paid and satisfied in full. The obligations of the
Guarantors under this Article X shall continue to be effective or be
automatically reinstated, as the case may be, if any payment made by the
Borrower, any Guarantor or any Subsidiary of the Borrower or any Guarantor on,
under or in respect of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by the recipient upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower, any
Guarantor or any such Subsidiary, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Borrower, any Guarantor or any such Subsidiary or any substantial part of
the property of the Borrower, any Guarantor or any such Subsidiary, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of all or any portion of the Guaranteed Obligations shall at
any time have occurred and be continuing, and such acceleration shall at such
time be stayed, enjoined or otherwise prevented for any reason, including
without limitation because of the pendency of a case or proceeding relating to
the Borrower, any Guarantor or any Subsidiary of the Borrower or any Guarantor
under any bankruptcy or insolvency law, for purposes of this Article X and the
obligations of the Guarantors hereunder, such Guaranteed Obligations shall be
deemed to have been accelerated with the same effect as if such Guaranteed
Obligations had been accelerated in accordance with the terms of the applicable
Loan Documents or of this Agreement.
SECTION 10.04. Additional Security, Etc. The Guarantors
authorize the Agent on behalf of the Issuing Bank and Banks without notice to or
demand on the Guarantors and without affecting their liability hereunder, from
time to time (a) to obtain additional or substitute endorsers or guarantors; (b)
to exercise or refrain from exercising any rights against, and grant indulgences
to, the Borrower, any Subsidiary of the Borrower, any other Guarantor or others;
and (c) to apply any sums, by whomsoever paid or however realized, to the
payment of the principal of, premium, if any, and interest on, and other
obligations consisting of, the Guaranteed Obligations. The Guarantors waive any
right to require the
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Agent, the Issuing Bank or any Bank to proceed against any additional or
substitute endorsers or guarantors or the Borrower or any of their Subsidiaries
or any other Person or to pursue any other remedy available to the Agent, the
Issuing Bank or any such Bank.
SECTION 10.05. Information Concerning the Borrowers. The
Guarantors assume all responsibility for being and keeping themselves informed
of the financial condition and assets of the Borrower, the other Guarantors and
their respective Subsidiaries, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks which the Guarantors assume and insure hereunder, and agree
that neither the Agent, the Issuing Bank nor any Bank shall have any duty to
advise the Guarantors of information known to the Agent, the Issuing Bank or any
such Bank regarding or in any manner relevant to any of such circumstances or
risks.
SECTION 10.06. Guarantors' Subordination. The Guarantors hereby
absolutely subordinate, both in right of payment and in time of payment, any
present and future indebtedness of the Borrower or any Subsidiary of the
Borrower or any Guarantor to any or all of the Guarantors to the indebtedness of
the Borrower or any such Subsidiary to the Issuing Bank or the Banks (or any of
them), provided that the Guarantors may receive scheduled payments of principal,
premium (if any) and interest in respect of such present or future indebtedness
so long as there is no Event of Default then in existence.
SECTION 10.07. Waiver of Subrogation. Notwithstanding anything
herein to the contrary, the Guarantors hereby waive any right of subrogation
(under contract, Section 509 of the Bankruptcy Code or otherwise) or any other
right of indemnity, reimbursement or contribution and hereby waive any right to
enforce any remedy that the Agent, the Issuing Bank or any Bank now has or may
hereafter have against the Borrower, any Guarantor or any endorser or any other
guarantor of all or any part of the Guaranteed Obligations, and the Guarantors
hereby waive any benefit of, and any right to participate in, any security or
collateral given to the Agent, the Issuing Bank or any Bank to secure payment or
performance of the Guaranteed Obligations or any other liability of the Borrower
to the Agent, the Issuing Bank or any Bank. The waiver contained in this Section
shall continue and survive the termination of this Agreement and the final and
indefeasible payment in full of the Guaranteed Obligations.
SECTION 10.08. Enforcement. In the event that the Guarantors
shall fail forthwith to pay upon demand of the Agent, the Issuing Bank or any
Bank any amounts due pursuant to this Article X or to perform or comply with or
to cause performance or compliance with any other obligation of the Guarantors
under this Agreement, the Agent, the Issuing Bank or any Bank shall be entitled
and empowered to institute any action or proceeding at law or in equity for the
collection of the sums so due and unpaid or for the performance of or compliance
with such terms, and may prosecute any such action or proceeding to judgment or
final decree and may enforce such judgment or final decree against the
Guarantors and collect in the manner provided by law out of the property of the
Guarantors, wherever situated, any monies adjudged or decreed to be payable. The
obligations of the Guarantors under this Agreement are continuing obligations
and a fresh cause of action shall arise in respect of each default hereunder.
SECTION 10.09. Miscellaneous. Except as may otherwise be
expressly agreed upon in writing, the liability of the Guarantors under this
Article X shall neither affect nor be affected by any prior or subsequent
guaranty by the Guarantors of any other indebtedness to the Agent, the Issuing
Bank or the Banks. Notwithstanding anything in this Article X to the contrary,
the maximum liability of each Guarantor hereunder shall in no event exceed the
maximum amount which could be paid out by such Guarantor without rendering such
Guarantor's obligations under this Article X, in whole or in part, void or
voidable under applicable law, including, without limitation, (i) the Bankruptcy
Code of 1978, as amended, and (ii) any applicable state or federal law relative
to fraudulent conveyances.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, under seal, by their respective authorized
officers as of the day and year first above written.
XXXXXXX FURNITURE INDUSTRIES, INCORPORATED
(SEAL)
By:
----------------------------
Title:
c/o Bassett Furniture Industries, Incorporated
0000 Xxxxxxxxxx Xxxx Xxxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
XXXXXXX FURNITURE INDUSTRIES OF NORTH CAROLINA,
INC.
By:
----------------------------
Title:
c/o Bassett Furniture Industries, Incorporated
0000 Xxxxxxxxxx Xxxx Xxxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
THE X.X. XXXXXX CORPORATION
By:
----------------------------
Title:
c/o Bassett Furniture Industries, Incorporated
0000 Xxxxxxxxxx Xxxx Xxxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
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BASSETT DIRECT STORES, INC.
By:
----------------------------
Title:
c/o Bassett Furniture Industries, Incorporated
0000 Xxxxxxxxxx Xxxx Xxxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
BASSETT DIRECT NC, LLC
By:
----------------------------
Title:
c/o Bassett Furniture Industries, Incorporated
0000 Xxxxxxxxxx Xxxx Xxxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
XXXXXXX DIRECT SC, LLC
By:
----------------------------
Title:
c/o Bassett Furniture Industries, Incorporated
0000 Xxxxxxxxxx Xxxx Xxxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
COMMITMENTS BRANCH BANKING AND TRUST COMPANY, as Agent,
----------- Issuing Bank and as a Bank
$35,000,000.00
(Letter of Credit
67
69
Commitment: $7,500,000) By: (SEAL)
---------------------------
Title:
Lending Office
--------------
Branch Banking and Trust Company
000 Xxxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
68
70
$15,000,000.00 COMPASS BANK
(Letter of Credit
Commitment: $3,214,000)
By: (SEAL)
---------------------------
Title:
Lending Office
--------------
Compass Bank
00 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: T. Xxx Xxxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
69
71
$10,000,000.00 FIFTH THIRD BANK
(Letter of Credit
Commitment: $2,143,000)
By: (SEAL)
---------------------------
Title:
Lending Office
--------------
Fifth Third Bank
00 Xxxxxxxx Xxxxxx Xxxxx
XX 00000X
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
70
72
$10,000,000.00 FIRST TENNESSEE BANK NATIONAL ASSOCIATION
(Letter of Credit
Commitment: $2,143,000)
By: (SEAL)
---------------------------
Title:
Lending Office
--------------
First Tennessee Bank National Association
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxxx 00000
Attention: J. Xxxxxxx Xxxxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
TOTAL COMMITMENTS:
$70,000,000.00
71
73
SCHEDULE 4.08
Existing Subsidiaries
Name of Subsidiary Jurisdiction of Incorporation
------------------ -----------------------------
Xxxxxxx Furniture Industries of North Carolina,
Inc. North Carolina
The X.X. Xxxxxx Corporation Delaware
Bassett Direct Stores, Inc. Xxxxxxxx
Xxxxxxx Direct NC, LLC Xxxxxxxx
Xxxxxxx Direct SC, LLC Virginia
74
Schedule 5.01(n)
The Borrower shall deliver the following financial statements
with regard to the following parties under Section 5.01(n):
1. With regard to IHFC: (i) Internally prepared, quarterly
statement of operations; and (ii) an audited, annual financial statement;
2. With regard to the Basset Asset Fund: (i) Internally
prepared, monthly statement of the fund balance; and (ii) an audited, annual
financial statement; and
3. With respect to LRG Group, LLC: (i) Internally prepared,
quarterly statement of operations; and (ii) an unaudited (or if available,
audited) annual financial statement; and
4. With respect to all other Affiliates of the Borrower or any
Consolidated Subsidiary: (i) an internally prepared, quarterly statement of
operations; and (ii) an unaudited annual financial statement; and
5. Such other information as the Agent or any Bank may
reasonably request. All of the foregoing shall include a consolidated balance
sheet as of the end of the applicable fiscal period, the related statement of
income and statement of cash flows for such fiscal period and for the portion of
the fiscal year then ended.
