Exhibit 99(b)(2)
DRAFT OF DECEMBER 13, 1999
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AWS ACQUISITION CORP.
$70,500,000
FORM OF CREDIT AGREEMENT
dated as of December 13, 1999
BANK HAPOALIM B.M., NEW YORK BRANCH
as Administrative Agent
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DRAFT OF DECEMBER 13, 1999
TABLE OF CONTENTS
Page No.
SECTION 1. DEFINITIONS.....................................................................................1
1.1. Defined Terms............................................................................................1
1.2. Other Definitional Provisions:..........................................................................15
SECTION 2. AMOUNT AND TERMS OF CREDIT.....................................................................16
2.1. Commitments.............................................................................................16
(a) Tender Offer Loan....................................................................................16
(b) Term Loan............................................................................................16
(c) Revolving Credit Loans...............................................................................16
2.2. Minimum and Maximum Amount of Each Borrowing............................................................17
2.3. Notice of Borrowing.....................................................................................17
2.4. Disbursement of Funds...................................................................................17
2.5. Register................................................................................................18
2.6. Conversions.............................................................................................18
2.7. Pro Rata Borrowings.....................................................................................19
2.8. Interest................................................................................................19
2.9. Interest Periods........................................................................................19
2.10. Inability to Determine Interest......................................................................21
2.11. Illegality...........................................................................................21
2.12. Requirements of Law..................................................................................21
2.13. Indemnity............................................................................................23
2.14. Change of Lending Office.............................................................................23
2.15. [Reserved]...........................................................................................23
2.16. Voluntary Termination or Reduction of Commitments....................................................23
2.17. Mandatory Termination or Reduction of Commitments....................................................24
SECTION 3. PAYMENTS AND PREPAYMENTS.......................................................................24
3.1. Repayment of Loans......................................................................................24
3.2. Evidence of Debt; Notes.................................................................................25
3.3. Applications of Payments and Prepayments................................................................25
3.4. Voluntary Prepayments...................................................................................26
3.5. Mandatory Prepayments/Repayments........................................................................26
3.6. Method and Place of Payment.............................................................................26
3.7. Net Payments............................................................................................27
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................................................29
4.1. Financial Condition; Financial Statements...............................................................29
4.2. No Change...............................................................................................30
4.3. Disclosure..............................................................................................30
4.4. Corporate Existence; Compliance with Law................................................................31
4.5. Corporate Power, Authorization, Enforceable Obligations.................................................31
4.6. No Legal Bar............................................................................................31
4.7. No Material Litigation..................................................................................31
4.8. No Default..............................................................................................32
4.9. Ownership of Property; Liens............................................................................32
4.10. Intellectual Property................................................................................32
4.11. Taxes................................................................................................32
4.12. ERISA................................................................................................32
4.13. Use of Proceeds; Margin Regulations..................................................................33
4.14. Investment Company Act; Other Regulations............................................................33
4.15. Public Utility Holding Company Act...................................................................34
4.16. Subsidiaries.........................................................................................34
4.17. Environmental Matters................................................................................34
4.18. Guarantees and Tefron Guarantees.....................................................................35
4.19. Security Interests...................................................................................35
4.20. Representations and Warranties in Agreement and Plan of Merger.......................................35
4.21. Merger...............................................................................................35
SECTION 5. CONDITIONS PRECEDENT...........................................................................36
5.1. Conditions Precedent to Tender Offer Loans..............................................................36
(a) No Default; Representations and Warranties...........................................................36
(b) Corporate Proceedings................................................................................36
(c) Tender Offer Documents...............................................................................36
(d) Tender of Shares of Alba.............................................................................37
(e) Adverse Change, etc..................................................................................37
(f) Control of Borrower..................................................................................37
(g) Proxy Materials......................................................................................37
(h) Agreement and Plan of Merger.........................................................................37
(i) Margin Regulations...................................................................................38
(j) Tefron Guarantees Documentation......................................................................38
(k) Opinions of Counsel..................................................................................38
(l) Loan Documents.......................................................................................38
(m) Closing Certificate of Borrower......................................................................38
(n) Corporate Structure..................................................................................38
(o) Tefron Guarantee.....................................................................................39
(p) Parent Equity Contribution...........................................................................39
(q) Tendered Shares......................................................................................39
(r) Account Opening Documentation........................................................................39
(s) Letter of Undertaking................................................................................39
(t) Miscellaneous........................................................................................39
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5.2. Conditions Precedent to Post-Merger Loans...............................................................40
(a) No Default; Representations and Warranties...........................................................40
(b) Opinion of Counsel...................................................................................40
(c) Corporate Proceedings................................................................................40
(d) Bring-Downs..........................................................................................40
(e) Consummation of Merger...............................................................................40
(f) Guarantees...........................................................................................41
(g) Security Documents...................................................................................41
(h) Organizational Documentation, etc....................................................................41
(i) Acknowledgment.......................................................................................41
(j) Notes................................................................................................41
(k) Pledged Stock; Stock Powers..........................................................................42
(l) Actions to Perfect Liens.............................................................................42
(m) Lien Searches........................................................................................42
(n) Review of Operations.................................................................................42
(o) Adverse Change, etc..................................................................................42
(a) Control of Borrower..................................................................................42
(b) Proxy Materials......................................................................................43
(c) Margin Regulations...................................................................................43
(d) Tefron Guarantees Documentation......................................................................43
(e) Closing Certificate of Alba..........................................................................43
(f) Miscellaneous........................................................................................43
SECTION 6. PRE-MERGER COVENANTS...........................................................................43
6.1. Merger..................................................................................................43
6.2. Use of Proceeds.........................................................................................43
6.3. Financial Statements....................................................................................44
6.4. Certificates; Other Information.........................................................................44
6.5. Payment of Obligations..................................................................................45
6.6. Conduct of Business and Maintenance of Existence........................................................45
6.7. Inspection of Property; Books and Records; Discussions..................................................45
6.8. Notices.................................................................................................46
6.9. Environmental Laws......................................................................................46
6.10. Further Assurances...................................................................................47
6.11. Limitation on Indebtedness and Preferred Stock.......................................................47
6.12. Limitation on Liens..................................................................................48
6.13. Limitation on Guarantee Obligations..................................................................49
6.14. Limitation on Fundamental Changes....................................................................49
6.15. Limitation on Sale of Assets.........................................................................49
6.16. Limitation on Dividends..............................................................................50
6.17. Limitation on Investments, Loans and Advances........................................................50
6.18. Limitation on Transactions with Affiliates...........................................................51
6.19. Limitation on Sales and Leasebacks...................................................................51
6.20. Limitation on Changes in Fiscal Year.................................................................51
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6.21. Limitation on Negative Pledge Clauses................................................................51
SECTION 7. POST-MERGER AFFIRMATIVE COVENANTS..............................................................51
7.1. Use of Proceeds.........................................................................................51
7.2. Financial Statements....................................................................................52
7.3. Certificates; Other Information.........................................................................52
7.4. Payment of Obligations..................................................................................53
7.5. Conduct of Business and Maintenance of Existence........................................................53
7.6. Maintenance of Property; Insurance......................................................................53
7.7. Inspection of Property; Books and Records; Discussions..................................................54
7.8. Notices.................................................................................................54
7.9. Environmental Laws......................................................................................55
7.10. Further Assurances...................................................................................56
7.11. Additional Collateral................................................................................56
7.12. UCC Opinions.........................................................................................57
7.13. Insurance............................................................................................57
7.14. Lock-Box Arrangements................................................................................57
SECTION 8. POST-MERGER NEGATIVE COVENANTS.................................................................57
8.1. [Reserved]..............................................................................................58
8.2. Limitation on Indebtedness and Preferred Stock..........................................................58
8.3. Limitation on Liens.....................................................................................58
8.4. Limitation on Guarantee Obligations.....................................................................59
8.5. Limitation on Fundamental Changes.......................................................................59
8.6. Limitation on Sale of Assets............................................................................60
8.7. Limitation on Dividends.................................................................................60
8.8. Limitation on Capital Expenditures......................................................................61
8.9. Limitation on Investments, Loans and Advances...........................................................61
8.10. Limitation on Transactions with Affiliates...........................................................61
8.11. Limitation on Sales and Leasebacks...................................................................62
8.12. Limitation on Changes in Fiscal Year.................................................................62
8.13. Limitation on Negative Pledge Clauses................................................................62
SECTION 9. EVENTS OF DEFAULT..............................................................................62
SECTION 10. THE ADMINISTRATIVE AGENT.......................................................................65
10.1. Appointment..........................................................................................65
10.2. Delegation of Duties.................................................................................65
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10.3. Exculpatory Provisions...............................................................................65
10.4. Reliance by Administrative Agent.....................................................................66
10.5. Notice of Default....................................................................................66
10.6. Non-Reliance on Administrative Agent and Other Lenders...............................................66
10.7. Indemnification......................................................................................67
10.8. Administrative Agent in its Individual Capacity......................................................67
10.9. Successor Administrative Agent.......................................................................68
SECTION 11. MISCELLANEOUS..................................................................................68
11.1. Amendments and Waivers...............................................................................68
11.2. Releases of Collateral Security and Guarantee Obligations............................................69
11.3. Notices..............................................................................................69
11.4. No Waiver; Cumulative Remedies.......................................................................70
11.5. Survival of Representations and Warranties...........................................................70
11.6. Payment of Expenses and Taxes........................................................................70
11.7. Termination..........................................................................................71
11.8. Successors and Assigns; Participations and Assignments...............................................71
11.9. Adjustments; Set-off.................................................................................74
11.10. Counterparts.........................................................................................74
11.11. Severability.........................................................................................74
11.12. Integration..........................................................................................75
11.13. GOVERNING LAW........................................................................................75
11.14. Submission To Jurisdiction; Waivers..................................................................75
11.15. Acknowledgments......................................................................................76
11.16. WAIVERS OF JURY TRIAL................................................................................76
11.17. Confidentiality......................................................................................76
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DRAFT OF DECEMBER 13, 1999
SCHEDULES
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Schedule 4.16 Subsidiaries
Schedule 6.11 Indebtedness
Schedule 6.12 Liens
Schedule 6.13 Guarantees
Schedule 6.17 Investments
EXHIBITS
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Exhibit A-1 Form of Tender Offer Note
Exhibit A-2 Form of Revolving Credit Note
Exhibit A-2 Form of Term Note
Exhibit B Form of Borrower Security Agreement
Exhibit C Form of Borrower Stock Pledge
Exhibit D Form of Parent Stock Pledge
Exhibit E Form of Parent Guarantee
Exhibit F Form of Subsidiaries Guarantee
Exhibit G Form of Subsidiaries Stock Pledge
Exhibit H Form of Subsidiaries Security Agreement
Exhibit I Form of Acknowledgment Agreement
Exhibit J Form of Assignment and Acceptance
Exhibit K Form of Borrower's Counsel Opinion
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of December 13, 1999, among AWS ACQUISITION
CORP., a Delaware corporation (the "AWS"), the banks and other financial
institutions from time to time parties hereto (each a "Lender and collectively,
the "Lenders"); and BANK HAPOALIM B.M., NEW YORK BRANCH as administrative agent
(in such capacity, the "Administrative Agent") for the Lenders hereunder. Unless
otherwise defined herein, all capitalized terms used herein and defined in
subsection 1.1 are used herein as so defined.
WITNESSETH:
WHEREAS, AWS wishes to incur loans up to $70,500,000 in the aggregate
from the Lenders to, inter alia, purchase the Shares of Alba pursuant to the
Offer to Purchase, repay certain existing Indebtedness for borrowed money of
Alba, provide working capital funds to Alba, and pay certain fees and expenses
related to the Offer to Purchase upon the terms, and subject to the conditions,
set forth herein; and
WHEREAS, following the purchase of the Shares pursuant to the Offer to
Purchase, it is contemplated that AWS will merge with, and into, Alba, with ▇▇▇▇
as the surviving corporation, in accordance with the terms of the Agreement and
Plan of Merger; and
WHEREAS, to, inter alia, refinance the loans described in the first
recital and to finance the payment of amounts owing in connection with the
Merger, the Lenders are willing to make available the additional credit
facilities provided for herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms.
As used in this Agreement, the following terms shall have the following
meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the Prime Rate in effect on such day
less 1.5%. Any change in the ABR due to a change in the Prime Rate shall be
effective as of the opening of business on the effective day of such change in
the Prime Rate.
"ABR Loans": Loans the rate of interest applicable to which
is based upon the ABR.
"Acknowledgment Agreement": as defined in Section 5.2(i).
"Acquired Business": any Person, or a business unit or other
asset group of a Person, that has been acquired by the Borrower or a Subsidiary
in a manner permitted hereunder.
"Acquisition": (a) the purchase by AWS for cash of the
outstanding common stock (at a price per share not to exceed $18.50) of Alba
pursuant to the Offer to Purchase, and (b) the Merger.
"Acquisition Documents": shall mean the Tender Offer
Documents, the Additional Tender Offer Documents, the Support Agreement, the
Agreement and Plan of Merger, the certificate of merger, all Proxy Materials, if
any, and any other document or information sent by Tefron, Parent, AWS or Alba
to Alba's stockholders or filed with the SEC under the Securities Exchange Act
of 1934, as amended, in connection with the Acquisition.
"Additional Tender Offer Documents": shall mean all amendments
and exhibits to, and documents related to, the Tender Offer Documents filed with
the SEC under the Securities Exchange Act of 1934, as amended, or distributed to
the stockholders of Alba, in each case to the extent delivered to the Lenders.
"Administrative Agent": as defined in the preamble to this
Agreement.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (a)
vote 5% or more of the securities having ordinary voting power for the election
of directors of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Agreement and Plan of Merger": the Agreement and Plan of
Merger dated as of November 8, 1999, among the Parent, the Borrower and Alba, as
amended, supplemented or otherwise modified from time to time; provided that, no
such amendment, supplement or modification (other than any amendments,
supplements or modifications not affecting the conditions to or any material
term of the Agreement and Plan of Merger) shall be effective for purposes of
references thereto in this Agreement unless approved in writing by the Required
Lenders.
"Alba": Alba-Waldensian, Inc., a Delaware corporation.
"Applicable Margin": for each Type of Loan outstanding
hereunder, 1.375%.
"Asset Sale": shall mean the sale, transfer or other
disposition, to the extent consummated after the date of this Agreement by the
Borrower or any Subsidiary (and including in any event Alba and its
Subsidiaries) to any Person other than the Borrower or any wholly-owned
Subsidiary of the Borrower (or Alba) of any asset of the Borrower or such
Subsidiary (other than sales, transfers or other dispositions in the ordinary
course of business of inventory and/or obsolete or excess equipment), provided
that, any such sale, transfer or disposition shall not constitute an Asset Sale
if the total proceeds (with promissory notes valued at the face amount thereof
and any other assets included in such proceeds valued at the fair market value
thereof) received from such transaction, when taken with the proceeds (valued as
aforesaid) of
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all other related sales, transfers and dispositions by the Borrower and its
Subsidiaries, do not exceed $250,000 in the aggregate during any fiscal year of
the Borrower.
"Assignee": as defined in subsection 11.8(c).
"AWS": as defined in the preamble to this Agreement.
"Borrower": at any time prior to the Merger Date, AWS, and at
any time on and after the Merger Date, ▇▇▇▇.
"Borrower Security Agreement": the Borrower Security Agreement
to be executed and delivered by the Borrower, substantially in the form of
Exhibit B, as the same may be amended, supplemented or otherwise modified from
time to time.
"Borrower Stock Pledge Agreement": the Borrower Stock Pledge
Agreement to be executed and delivered by the Borrower, substantially in the
form of Exhibit C, as the same may be amended, supplemented or otherwise
modified from time to time.
"Borrowing": the incurrence of one Type of Loan pursuant to a
single Facility by the Borrower from all of the Lenders having Commitments with
respect to such Facility on a pro rata basis on a given date (or resulting from
conversions on a given date), having in the case of LIBOR Loans the same
Interest Period; provided that, ABR Loans incurred pursuant to subsection 2.11
shall be considered part of any related Borrowing of LIBOR Loans.
"Business": as defined in subsection 4.17(a).
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or required
by law to close; provided that, with respect to matters relating to LIBOR Loans,
the term "Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York or London, England, are
authorized or required by law to close.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of deposit
and eurodollar time deposits with maturities of one year or less from the date
of acquisition and overnight bank deposits of any Lender or of any commercial
bank having capital and surplus in excess of $100,000,000, (c) repurchase
obligations of any Lender or of any commercial bank or investment bank
satisfying the requirements of clause (b) of this definition, having a term of
not more than 30 days with respect to securities issued or fully guaranteed or
insured by the United States Government or any agency thereof, (d) commercial
paper issued in the United States which is rated at least A-2 by S&P or P-2 by
▇▇▇▇▇'▇, (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United
3
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government are rated at least A by S&P or A by ▇▇▇▇▇'▇, (f) securities
with maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank satisfying
the requirements of clause (b) of this definition or (g) shares of money market
mutual or similar funds which invest substantially exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition.
"Change in Control": the failure of ▇▇▇▇▇▇ to continue to own,
directly or indirectly, free and clear of all Liens except for Liens in favor of
the Administrative Agent, 51% or more of the issued and outstanding voting
shares of the Borrower.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": as defined in each of the Security Documents.
"Commitment": with respect to each Lender, such ▇▇▇▇▇▇'s
Tender Offer Commitment, Term Loan Commitment and Revolving Credit Commitment.
"Commitment Percentage": as to any Lender at any time, its
Tender Offer Commitment Percentage, Term Loan Commitment Percentage or Revolving
Credit Loan Commitment Percentage, as the context shall require.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower, or prior to the
Merger Date, Alba, within the meaning of Section 4001 of ERISA or is part of a
group which includes the Borrower and which is treated as a single employer
under Section 414 of the Code.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Deferred Purchase Consideration": with respect to the
acquisition of any Acquired Business, the amount contractually agreed by the
Borrower or one of its Subsidiaries to be paid to the sellers of such Acquired
Business after the closing of the acquisition thereof, provided that all
Deferred Purchase Consideration shall be subordinated to the obligations of the
Loan Parties hereunder on terms and pursuant to documentation containing other
terms (including interest, amortization, covenants and events of default) in
form and substance satisfactory to the Administrative Agent. Deferred Purchase
Consideration shall not include purchase price adjustments based on net working
capital or net book value required or permitted to be made within six months of
the acquisition of an Acquired Business by the agreements governing such
acquisition.
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"Delisting Date": the date the Shares are delisted from
trading on the American Stock Exchange and are no longer deemed to be Margin
Stock.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Effective Date": the date on which the conditions precedent
set forth in Section 5.1 shall be satisfied. The Administrative Agent will give
the Borrower and each Lender prompt written notice of the occurrence of the
Effective Date if such date is other than the date of this Agreement.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning Materials
of Environmental Concern or protection of the environment (including protection
of human health from Materials of Environmental Concern), as now or may at any
time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a LIBOR Loan, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such System.
"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Expiration Date": as defined in the Offer to Purchase.
"Facility": the Tender Offer Facility, the Term Loan Facility
or the Revolving Credit Facility.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
5
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counter indemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or other obligations
(the "primary obligations") of any other third Person (the "primary obligor") in
any manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person incurred for the purpose of providing
credit support, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof, provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business and guarantees by Borrower or
any Subsidiary of obligations of Borrower or a Subsidiary to suppliers,
licensers or lessors to the extent the underlying obligation is incurred in the
ordinary course of business and otherwise permitted hereunder. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Administrative
Agent in good faith.
"Guarantees": the collective reference to the Parent
Guarantee, each Subsidiary Guarantee, and each other guaranty from time to time
made in favor of the Lenders to secure all or any part of the obligations of the
Borrower hereunder, other than the Tefron Guarantees.
"Guarantor": any Person delivering a Guarantee.
"Indebtedness": of any Person, at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) the
deferred purchase price of property or services (payable more than six months
after the original purchase date of such property or services), (c) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (d) all obligations of such Person under Financing Leases,
(e) all
6
obligations of such Person in respect of letters of credit and acceptances
and letters of credit issued or created for the account of such
Person, (f) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof, (g) all obligations of such Person in respect of any
payments related to Deferred Purchase Consideration, and (h) all Indebtedness of
the types referred to in clauses (a) through (g) above which is guaranteed
directly or indirectly by such Person.
"Initial Borrowing Date": the date upon which the initial
Borrowing of Tender Offer Loans occurs.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any ABR Loan, the last
Business Day of each calendar month, (b) as to any LIBOR Loan having an Interest
Period of one to six days, or one week, or two weeks, or three weeks, or three
months, the last day of such Interest Period, and (c) as to any LIBOR Loan
having an Interest Period of six months, the day which is three months (or a
whole multiple thereof) after the first day of such Interest Period and the last
day of such Interest Period.
(1) "Interest Period": with respect to (X) (a) any LIBOR Loan
maturing on or prior to the Tender Offer Maturity Date: (X) initially, the
period commencing on the Initial Borrowing Date and ending one to six days or
one week or two weeks or three weeks thereafter, as selected by the Borrower in
its Notice of Borrowing pursuant to subsection 2.3 given with respect thereto,
and (Y) thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such LIBOR Loan and ending, one to six days or one
week or two weeks or three weeks thereafter, as the case may be, as selected by
the Borrower in a Notice of Borrowing pursuant to subsection 2.3, and (b) any
LIBOR Loan maturing after the Tender Offer Maturity Date: (X) initially, the
period commencing on the Merger Borrowing Date and ending three months or six
months thereafter, as selected by the Borrower in its Notice of Borrowing,
pursuant to subsection 2.3 given with respect thereto, and (Y) thereafter, each
period commencing on the last day of the next preceding Interest Period
applicable to such LIBOR Loan and ending, three months or six months thereafter,
as the case may be, as selected by the Borrower in a Notice of Borrowing
pursuant to subsection 2.3 given with respect thereto, provided that, all of the
foregoing provisions relating to Interest Periods are subject to the provisions
of subsection 2.9.
"Lender": as defined in the preamble to this Agreement.
"LIBOR" in relation to an Interest Period shall mean: the rate
per annum determined by the Administrative Agent two working days prior to the
first day of that Interest Period, by applying the following: (i) the British
Bankers Association ("BBA") Interest Settlement Rates for U.S. Dollars, as
defined in the BBA official definitions reflected on the Telerate BBA pages, for
an amount equal to the principal amount of the Loan outstanding from time to
time and for the relevant Interest Period, which rates reflect the offered rates
at which
7
deposits are being quoted to prime banks in the London Interbank Market at 11:00
a.m. London time calculated at set forth in said BBA official definition; or
(ii) such other recognized source of London Eurodollar deposit rates as the
Administrative Agent may determine from time to time. In the event the
applicable BBA page or pages shall be replaced by another Telerate page or other
Telerate pages for quoting London eurocurrency rates, then rates quoted on said
replacement page or pages shall be applied. If the Administrative Agent
determines that London eurocurrency rates are no longer being quoted
(temporarily or permanently) on any Telerate pages or that Telerate is no longer
functioning (temporarily or permanently) in substantially the manner as on the
date hereof, then the Administrative Agent shall notify the Lenders and the
Borrower of a comparable substituted, publicly available reference for the
determination of LIBOR. Notwithstanding the foregoing, with respect to any
Interest Period of less than one week, "LIBOR" shall mean the rate per annum
determined by the Administrative Agent for a one week Interest Period using the
above criteria.
"LIBO Rate": with respect to each day during each Interest
Period pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded, if necessary, upward to the
nearest whole multiple of 1/16th of 1%).
LIBOR
-----------------------------------------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"LIBOR Loans": Loans the rate of interest
applicable to which is based upon the LIBO Rate.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Financing Lease having substantially the same economic effect as any of the
foregoing).
"Loan" and "Loans": as defined in subsection 2.1, and includes
Tender Offer Loans, Term Loans and/or Revolving Credit Loans.
"Loan Documents": this Agreement, the Notes, the Security
Documents and the Guarantees, other than the Tefron Guarantees.
"Loan Parties": at all times prior to the Merger Borrowing
Date, the Borrower and any of its Subsidiaries and Tefron, and at all times
after the Merger Borrowing Date, the Borrower and any of its subsidiaries, the
Parent and Tefron.
"Margin Regulations": Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as amended and in effect from time to
time.
"Margin Stock": shall have the meaning provided in Regulation
U of the Margin Regulations.
8
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property or financial condition of the Loan Parties
taken as a whole, (b) the validity or enforceability of any Loan Document or any
of the other Transaction Documents, or (c) the rights or remedies of the
Administrative Agent or the Lenders hereunder or under any of the other Loan
Documents.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Merger": the "Merger" between AWS and ▇▇▇▇ as described and
defined in the Agreement and Plan of Merger, with Alba being the surviving
corporation.
"Merger Borrowing Date": the Merger Date, provided that, if
such date is not a Business Day, then the Merger Borrowing Date shall be the
first Business Day occurring immediately after the Merger Date.
"Merger Date": the date upon which the Merger shall have been
consummated.
"Minimum Borrowing Amount": with respect to any Borrowing of
Tender Offer Loans or Term Loans, $500,000, and with respect to any Borrowing of
Revolving Credit Loans, $250,000 (or the remainder of the then unutilized
Revolving Credit Commitments of the Lenders).
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Proceeds": with respect to any Net Proceeds Event , (a)
the gross cash consideration, and all cash proceeds (as and when received) of
non-cash consideration (including, without limitation, any such cash proceeds in
the nature of principal and interest payments on account of promissory notes or
similar obligations), received by the Borrower and its Subsidiaries in
connection with such Net Proceeds Event minus (b) the sum, without duplication,
of (i) any taxes which are paid or actually payable to any federal, state, local
or foreign taxing authority by the Borrower and its Subsidiaries and are
directly attributable to the receipt of such Net Proceeds , (ii) the amount of
fees and commissions (including reasonable investment banking fees), legal,
accounting, consulting, survey, title and recording tax expenses and other costs
and expenses directly incident to such Net Proceeds Event which are paid or
payable by the Borrower and its Subsidiaries, (iii) the amount of any reserve
reasonably maintained by the Borrower and its Subsidiaries with respect to
indemnification obligations owing pursuant to the definitive documentation
pursuant to which the Net Proceeds Event is consummated (with any unused portion
of such reserve to constitute Net Proceeds on the date upon which the
indemnification obligation terminates), and (iv) the amount of Indebtedness
(other than intercompany Indebtedness), if any, which is required to be repaid
at the time or as a result of such Net Proceeds Event out of the proceeds
thereof.
9
"Net Proceeds Event":
(a) the incurrence by the Borrower or any of its Subsidiaries
of any Indebtedness to the extent that such Indebtedness is for borrowed money
(other than Indebtedness permitted pursuant to subsections 6.11 and 8.2);
(b) the issuance or sale of any Capital Stock by the Borrower
or any of its Subsidiaries to any Person subsequent to the Merger Date, other
than (i) the issuance or sale of any Capital Stock to the Borrower or any of its
Subsidiaries, (ii) the issuance of Capital Stock upon the grant or exercise of
stock options, (iii) the issuance and sale of Capital Stock under employee stock
purchase plans, or (iv) the issuance and sale of Capital Stock and/or stock
options under employee stock ownership and incentive plans and similar programs
or individual arrangements;
(c) the consummation of any Asset Sale; and
(d) the recovery by the Borrower or any Subsidiary of amounts
owing to it under property insurance policies.
"Non-Excluded Taxes": as defined in subsection 3.7(a).
"Notes": the collective reference to the Tender Offer Notes,
the Term Notes and the Revolving Credit Notes.
"Notice of Borrowing": shall have the meaning provided in
subsection 2.3.
"Offer to Purchase": the Offer to Purchase dated November 12,
1999 pursuant to which the Borrower offers to purchase all outstanding shares of
common stock of Alba at a purchase price of $18.50 per share as more
particularly described therein, as the same may be amended, supplemented or
otherwise modified from time to time; provided that, no such amendment,
supplement or modification (other than (i) any amendment effecting an extension
of the Expiration Date, and (ii) any amendments, supplements or modifications
not affecting the conditions to or any material term of the Offer to Purchase)
shall be effective for purposes of references thereto in this Agreement unless
approved in writing by the Required Lenders.
"Parent": Tefron U.S. Holdings Corp., a Delaware corporation
and wholly owned subsidiary of Tefron.
"Parent Guarantee": the Guarantee to be executed and delivered
by the Parent on the Merger Borrowing Date, substantially in the form of Exhibit
E, as the same may be amended, supplemented or otherwise modified from time to
time.
"Parent Stock Pledge Agreement": the Stock Pledge Agreement to
be executed and delivered by the Parent on or before the date set forth in
subsection 9(k), substantially in the form of Exhibit D, as the same may be
amended, supplemented or otherwise modified from time to time.
"Participant": as defined in subsection 11.8(b).
10
"Payment Office": the office of the Administrative Agent
located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇▇▇▇, or such other office or contact person as the Administrative Agent
may designate in writing to the Borrower and the Lenders from time to time.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other legal entity.
"Plan": at a particular time, any employee benefit plan or
other plan established, maintained or contributed to by the Borrower (or prior
to the Merger Date, Alba) or a Commonly Controlled Entity that is covered by
Title IV of ERISA.
"Post-Merger Loans": means all Loans other than Tender Offer
Loans.
"Prime Rate": the rate of interest per annum publicly
announced from time to time by the Administrative Agent at its office in New
York, New York as its prime rate on a particular day in effect for domestic
(United States) commercial loans; such rate is not necessarily intended to be
the lowest rate of interest charged by the Lenders in connection with extensions
of credit. Each change in the Prime Rate shall be effective on the date such
change is publicly announced.
"Properties": as defined in subsection 4.17(a).
"Proxy Materials": shall mean all proxy materials, if any,
sent by Alba to its stockholders in connection with the Merger.
"Register": as defined in subsection 2.5(a).
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .22, .25, .27 or .28 of PBGC Reg. ss.4043.
"Required Lenders": Lenders the sum of whose outstanding Loans
and Commitments constitute greater than 50% of the sum of (i) the total
outstanding Loans of all Lenders, and (ii) the outstanding Commitments of all
Lenders; provided that, if at any time there are two or more Lenders hereunder,
any action required by Required Lenders shall require the consent of not less
than two Lenders.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
11
"Responsible Officer": the chief executive officer, the
president, any vice president, the chief financial officer or the treasurer of
the Borrower.
"Restricted Payment": as defined in subsections 6.16 and 8.7.
"Revolving Credit Loan" and "Revolving Credit Loans": as
defined in subsection 2.1(c).
"Revolving Credit Commitment": with respect to each Lender,
the amount set forth opposite such ▇▇▇▇▇▇'s name on Annex I hereto directly
below the column entitled "Revolving Credit Commitment", and with respect to
each Assignee who becomes a Lender pursuant to subsection 11.8(c), the amount of
Revolving Credit Commitment thereby assumed by it, in each case as such amount
may be reduced from time to time pursuant to subsections 2.16 and 2.17 or
increased or reduced by reason of an assignment to or by such Lender in
accordance with subsection 11.8(c), and as to all Lenders collectively, the
"Revolving Credit Commitments."
"Revolving Credit Commitment Percentage": as to any Lender at
any date, the percentage which such ▇▇▇▇▇▇'s Revolving Credit Commitment then
constitutes of the aggregate Revolving Credit Commitments of all Lenders.
"Revolving Credit Facility" the Facility evidenced by the
Revolving Credit Commitment of each Lender.
"Revolving Credit Loan Maturity Date": the first anniversary
of the Merger Borrowing Date.
"Revolving Credit Note": as defined in subsection 3.2.
"SEC": the Securities and Exchange Commission, or any
successor thereto.
"Security Agreements": the collective reference to the
Borrower Security Agreement and each Subsidiary Security Agreement.
"Security Documents": the collective reference to the Security
Agreements, the Stock Pledge Agreements, and all other security documents
hereafter delivered to the Administrative Agent for the benefit of the Lenders
granting a Lien on any assets of any Person to secure the obligation and
liabilities of the Borrower under any of the Loan Documents or to secure any
Guarantee (other than the Tefron Guarantees).
"S&P": Standard and Poor's Ratings Group, a division of McGraw
Hill Companies Inc.
"Shares": all of the outstanding shares of common stock, par
value $2.50 per share, of ▇▇▇▇.
12
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Stock Pledge Agreements": the collective reference to each
Borrower Stock Pledge Agreement and each Subsidiary Stock Pledge Agreement.
"Subsidiaries Guarantee": each Guarantee to be executed and
delivered by a Subsidiary of the Borrower, substantially in the form of Exhibit
G, as the same may be amended, supplemented or otherwise modified from time to
time.
"Subsidiaries Security Agreement": each Security Agreement to
be executed and delivered by a Subsidiary of the Borrower in favor of the
Administrative Agent, substantially in the form of Exhibit F, as the same may be
amended, supplemented or otherwise modified from time to time.
"Subsidiaries Stock Pledge Agreement": each Subsidiary Stock
Pledge Agreement to be executed and delivered by a Subsidiary of the Borrower,
substantially in the form of Exhibit G, as the same may be amended, supplemented
or otherwise modified from time to time.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"Tefron": Tefron Ltd., a company organized under the laws of
the State of Israel.
"Tefron Guarantee": the collective reference to: (i) the
guarantee from Tefron in favor of Bank Hapoalim B.M. pursuant to which ▇▇▇▇▇▇
has guaranteed the repayment of all indebtedness of the Borrower owing from time
to time to Bank Hapoalim B.M., New York Branch, as a Lender, under or in
connection with this Agreement, and (ii) the guarantee from Tefron in favor of
Israel Discount Bank of New York pursuant to which ▇▇▇▇▇▇ has guaranteed the
repayment of all indebtedness of the Borrower owing from time to time to Israel
Discount Bank of New York as a Lender, under or in connection with this
Agreement, as each such guarantee may be amended, supplemented or otherwise
modified from time to time..
"Tender Offer": shall mean the tender offer commenced to
effectuate the Acquisition.
"Tender Offer Closing Date": the day on which Shares are
accepted for purchase by AWS pursuant to the terms of the Offer to Purchase,
provided that, in no event shall such date be later than four Business Days
after the Expiration Date.
"Tender Offer Commitment": with respect to each Lender, the
amount set forth opposite such ▇▇▇▇▇▇'s name in Annex I hereto directly below
the column entitled "Tender Offer
13
Commitment", and with respect to each Assignee who becomes a Lender pursuant to
subsection 11.8(c), the amount of Tender Offer Commitment thereby assumed by it,
in each case as such amount may be reduced from time to time pursuant to
subsections 2.16 and 2.17 or increased or reduced by reason of an assignment to
or by such Lender in accordance with subsection 11.8(c), and as to all Lenders
collectively, the "Tender Offer Commitment".
"Tender Offer Commitment Percentage": as to any Lender at any
date, the percentage which such ▇▇▇▇▇▇'s Tender Offer Commitment then
constitutes of the aggregate Tender Offer Commitments of all Lenders.
"Tender Offer Documents": shall mean the Offer to Purchase,
the Schedule 14D-1 filed by ▇▇▇▇▇▇, Parent and AWS, the Schedule 14D-9 filed by
▇▇▇▇, and all exhibits thereto and related documents filed with the SEC or
distributed to the stockholders of Alba, in each case prior to the Initial
Borrowing Date .
"Tender Offer Facility": the Facility evidenced by the Tender
Offer Commitment.
"Tender Offer Loan" and "Tender Offer Loans": as defined in
subsection 2.1(a).
"Tender Offer Maturity Date": the earlier of (i) the Merger
Date, and (ii) the date which occurs 90 days after the Tender Offer Closing
Date.
"Tender Offer Note": as defined in subsection 3.2.
"Term Loan" and "Term Loans": as defined in subsection 2.1(b).
"Term Loan Commitment": with respect to each Lender, the
amount set forth opposite such ▇▇▇▇▇▇'s name in Annex I hereto directly below
the column entitled "Term Loan Commitment," and with respect to each Assignee
who becomes a Lender pursuant to subsection 11.8(c), the amount of Term Loan
Commitment thereby assumed by it, in each case as such amount may be reduced
from time to time pursuant to subsections 2.16 and 2.17 or increased or reduced
by reason of an assignment to or by such Lender in accordance with subsection
11.8(c), and as to all Lenders collectively, the "Term Loan Commitments."
"Term Loan Commitment Percentage": as to any Lender at any
date, the percentage which such ▇▇▇▇▇▇'s Term Loan Commitment then constitutes
of the aggregate Term Loan Commitments of all Lenders.
"Term Loan Facility": the Facility evidenced by the Term Loan
Commitment of each Lender.
"Term Loan Maturity Date": the seventh anniversary of the
Merger Borrowing Date.
"Term Note": as defined in subsection 3.2.
14
"Tranche": the collective reference to LIBOR Loans having then
current Interest Periods which began on the same date and end on the same later
date (whether or not such Loans shall originally have been made on the same
day).
"Transaction Documents": this Agreement, the Notes, the
Security Documents, the Parent Stock Pledge Agreement, the Guarantees, the
Tefron Guarantees and the Acquisition Documents.
"Transferee": as defined in subsection 11.8(f).
"Type": as to any Loan, refers to the determination whether
such Loan is an ABR Loan or a LIBOR Loan.
1.2. Other Definitional Provisions:
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in any Note or any
certificate or other document made or delivered pursuant hereto.
(b) Unless otherwise specified herein, all accounting terms used herein
(and in any other Loan Document and any certificate or other document made or
delivered pursuant hereto or thereto) shall be interpreted, all accounting
determinations shall be made, and all financial statements required to be
delivered hereunder shall be prepared, in accordance with GAAP as in effect from
time to time; provided, however, that if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Section
6, 7 or 8 to eliminate the effect of any change in GAAP on the operation of such
covenant (or if the Administrative Agent notifies the Borrower that the Required
Leaders wish to amend Section 6, 7 or 8 for such purpose), then compliance with
such covenant shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Annex, Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding". Periods of days referred to in
this Agreement shall be counted in calendar days unless Business Days are
expressly prescribed. Any period determined hereunder by reference to a month or
months or year or years shall end on the day in the relevant calendar month in
the relevant year, if applicable, immediately preceding the date numerically
corresponding to the first day of such period, provided that, if such period
commences on the last day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month during which such period is
to end), such period shall, unless otherwise expressly required by the other
provisions of this Agreement, end on the last day of the calendar month.
15
(e) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF CREDIT
2.1. Commitments.
Subject to and upon the terms and conditions herein set forth, each
Lender severally agrees to make a loan (each a "Loan" and collectively, the
"Loans") to the Borrower, which Loans shall be drawn (i) under the Tender Offer
Facility, if drawn on the Tender Offer Closing Date, (ii) under the Term Loan
Facility, if drawn on Merger Borrowing Date, and (iii) under the Revolving
Credit Facility, if drawn on or after the Merger Borrowing Date, as set forth
below.
(a) Tender Offer Loan.
Each Lender agrees to make a Loan under the Tender Offer Facility (a
"Tender Offer Loan"), which (i) shall be made as a single drawing on the Tender
Offer Closing Date, (ii) shall, unless otherwise required pursuant to
subsections 2.9(b), 2.10 or 2.11 and during the continuance of a Default or
Event of Default, be a LIBOR Loan, , (iii) shall mature, and be repayable in
full, on the Tender Offer Maturity Date, (iv) shall not exceed for any Lender at
any time outstanding that aggregate principal amount which equals the Tender
Offer Commitment of such Lender at such time, and (v) shall be utilized by the
Borrower in accordance with subsection 4.13(a). Upon such Borrowing, any
remaining and unutilized Tender Offer Commitment of such Lender shall
immediately terminate. Amounts borrowed under this subsection 2.1(a) and repaid
or prepaid, may not be reborrowed under this subsection 2.1(a).
(b) Term Loan.
Each Lender agrees to make a Loan under the Term Loan Facility (a "Term
Loan"), which (i) shall be made as a single drawing on the Merger Borrowing
Date, (ii) unless otherwise required pursuant to subsections 2.9(b), 2.10 or
2.11 and during the continuance of a Default or Event of Default, be a LIBOR
Loan, , (iii) shall be repayable in accordance with subsection 3.1, (iv) shall
not exceed for any Lender at any time outstanding that aggregate principal
amount which equals the Term Loan Commitment of such Lender at such time, and
(v) shall be utilized by the Borrower in accordance with subsection 4.13(b).
Upon such Borrowing, any remaining and unutilized Term Loan Commitment of such
Lender shall immediately terminate. Amounts borrowed under this subsection
2.1(b) and repaid or prepaid, may not be reborrowed under this subsection
2.1(b).
(c) Revolving Credit Loans.
Each Lender agrees to make Loans under the Revolving Credit Facility
(each a "Revolving Credit Loan" and, collectively, the "Revolving Credit
Loans"), which (i) shall be made at any time and from time to time on and after
the Merger Borrowing Date and prior to the Revolving Credit Loan Maturity Date,
(ii) unless otherwise required pursuant to subsections 2.9(b), 2.10 or 2.11 and
during the continuance of a Default or Event of Default, be a LIBOR Loan,, (iii)
may be repaid and reborrowed in accordance with the provisions hereof, (iv)
shall be repayable in full on the Revolving Credit Loan Maturity Date, (v) shall
not exceed for any
16
Lender at any time outstanding that aggregate principal amount which equals the
Revolving Credit Commitment of such Lender at such time, and (vi) shall be
utilized by the Borrower in accordance with subsection 4.13(b).
2.2. Minimum and Maximum Amount of Each Borrowing.
The aggregate principal amount of each Borrowing under a Facility shall
not be less than the Minimum Borrowing Amount. Except as otherwise stated or
restricted herein, more than one Borrowing may be incurred on any date, provided
that, at no time shall there be outstanding more than six (6) Borrowings of
LIBOR Loans under this Agreement.
2.3. Notice of Borrowing.
Whenever the Borrower desires to incur Loans under any Facility, it
shall give the Administrative Agent prior to 10:00 A.M. (New York time) at least
three (3) Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of LIBOR Loans and at least one (1)
Business Day's prior written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing of ABR Loans to be made hereunder, provided that (X)
with respect to the Initial Borrowing Date, the Borrower may give the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) not later than 10:00 a.m. (New York time) on the Initial Borrowing
Date, and (Y) with respect to any rollover or continuation of a Borrowing, the
required notice set forth in subsection 2.9. Each such notice (each a "Notice of
Borrowing") shall be irrevocable and shall specify (i) the Facility pursuant to
which such Borrowing is to be made, (ii) the aggregate principal amount of the
Loans to be made pursuant to such Borrowing, (iii) the date of Borrowing (which
shall be a Business Day), and (iv) whether the respective Borrowing shall
consist of ABR Loans or LIBOR Loans and, if LIBOR Loans, the Interest Period to
be initially applicable thereto. The Administrative Agent shall as promptly as
practicable give each Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing, of such ▇▇▇▇▇▇'s Commitment
Percentage share thereof and of the other matters covered by the Notice of
Borrowing.
2.4. Disbursement of Funds.
(a) No later than 1:00 P.M. (New York time) on the date specified in
each Notice of Borrowing, each Lender will make available its Commitment
Percentage of each Borrowing requested to be made on such date in the manner
provided below, provided that, the principal amount of Term Loans and Revolving
Credit Loans to be so made available by each Lender on the Merger Borrowing Date
shall be net of the aggregate principal amount of the Tender Offer Loans of such
Lender required to be repaid on such date, with the amount not so made available
to be applied by such Lender to the repayment of such Tender Offer Loans.
(b) All amounts that a Lender is to fund under any Borrowing shall be
made available in U.S. dollars and immediately available funds to the
Administrative Agent at the Payment Office and the Administrative Agent will
make available to the Borrower by depositing to its account with the
Administrative Agent at the Payment Office the aggregate of the amounts so made
available in U.S. dollars and in the type of funds received. Unless the
Administrative
17
Agent shall have been notified by a Lender prior to the date of any Borrowing
that such Lender does not intend to make available to the Administrative Agent
its portion of the Borrowing or Borrowings to be made on such date (other than
with respect to the aggregate principal amount of Tender Offer Loans of such
Lender required to be repaid on such date), the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent on
such date of Borrowing, and the Administrative Agent in reliance upon such
assumption may (in its sole discretion and without any obligation to do so) make
available to the Borrower, subject to the proviso in subsection 2.4(a), a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Lender and the Administrative Agent has made
available same to the Borrower, then the Administrative Agent shall be entitled
to recover such corresponding amount from such Lender. If such Lender does not
pay such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Lender shall promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such Lender or the
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (i) if paid
by such Lender, the then Federal Funds Effective Rate, or (ii) if paid by the
Borrower, the then applicable rate of interest, calculated in accordance with
subsection 2.8, for the respective Loans.
(c) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights that
the Borrower may have against any Lender as a result of any default by such
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
2.5. Register.
(a) The Administrative Agent shall maintain a register (the "Register")
on which it will record the Commitments from time to time of each of the
Lenders, the Loans made by each of the Lenders and each repayment in respect of
the principal amount of the Loans of each Lender. Any such recordation shall be
conclusive, absent manifest error.
(b) Each Lender will record on its internal records the amount of each
Loan made by it and each payment in respect thereof. Failure to make any such
recordation, or any error in such recordation, shall not affect the Borrower's
obligations in respect of such Loans. Any such recordation shall be conclusive,
absent manifest error.
2.6. Conversions.
LIBOR Loans may not be converted into ABR Loans except as required by
subsections 2.9(b), 2.10, 2.11 or this subsection 2.6. The Administrative Agent
shall give each Lender notice as promptly as practicable of any such conversion
affecting any of its Loans. If a Default or Event of Default is in existence at
the time any Interest Period in respect of any Borrowing of LIBOR Loans is to
expire, such Loans may not be continued as LIBOR Loans but instead shall be
automatically converted on the last day of such Interest Period into ABR Loans.
If a Default or Event of Default has been cured or waived to the satisfaction of
the Required Lenders, then any such outstanding ABR Loans may upon the request
of the Borrower be converted into
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LIBOR Loans with such Interest Periods as may be agreed to by the Borrower and
the Required Lenders.
2.7. Pro Rata Borrowings.
All Borrowings of Tender Offer Loans, Term Loans and Revolving Credit
Loans under this Agreement shall be loaned by the Lenders pro rata on the basis
of their Commitments, as the case may be. It is understood that no Lender shall
be responsible for any default by any other Lender in its obligation to make
Loans hereunder, and that each Lender shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any other
Lender to fulfill its commitments hereunder.
2.8. Interest.
(a) The unpaid principal amount of each ABR Loan shall bear interest
from the date of the Borrowing thereof until maturity (whether by acceleration
or otherwise) at a rate per annum which shall at all times be the Applicable
Margin in excess of the ABR in effect from time to time.
(b) The unpaid principal amount of each LIBOR Loan shall bear interest
from the date of the Borrowing thereof until maturity (whether by acceleration
or otherwise) at a rate per annum which shall at all times be the Applicable
Margin in excess of the relevant LIBO Rate.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum equal
to the ABR in effect from time to time, plus the sum of (i) 2% and (ii) the
Applicable Margin, provided that no Loan shall bear interest after maturity
(whether by acceleration or otherwise) at a rate per annum less than 2% in
excess of the rate of interest applicable thereto at maturity.
(d) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof, and shall be payable on each
applicable Interest Payment Date, on the date of any prepayment (on the amount
prepaid), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) All computations of interest hereunder shall be made on the actual
number of days elapsed over a year of 360 days.
(f) The Administrative Agent, upon determining the interest rate for
any Borrowing of LIBOR Loans for any Interest Period, shall promptly notify the
Borrower and the Lenders thereof. Each such determination of an interest rate by
the Administrative Agent shall be conclusive and binding on the Borrower and the
Lenders in the absence of manifest error.
2.9. Interest Periods.
(a) At the time the Borrower gives a Notice of Borrowing in respect of
the making of, a Borrowing of LIBOR Loans (in the case of the initial Interest
Period applicable thereto), or prior to 10:00 A.M. (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of LIBOR Loans, it shall have the right to elect by
19
giving the Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) the Interest Period applicable to such initial or
preceding Borrowing, which Interest Period shall be for the time period set
forth in the definition of "Interest Period" in subsection 1.1. Notwithstanding
anything to the contrary contained above or elsewhere in this Agreement:
(i) the initial Interest Period for any Borrowing of LIBOR Loans
shall commence on the date of such Borrowing (including the
date of any conversion from a Borrowing of ABR Loans) and each
Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next
preceding Interest Period expires;
(ii) if any Interest Period (other than any Interest Period of less
than three months) relating to a Borrowing of LIBOR Loans
begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period relating to a Borrowing of LIBOR Loans
would otherwise expire on a day which is not a Business Day,
such Interest Period of three months or six months shall
expire on the next succeeding Business Day, provided that, if
any Interest Period would otherwise expire on a day which is
not a Business Day, but is a day of the month after which no
further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day;
(iv) no LIBOR Loan may be continued as such (X) when any Event of
Default has occurred and is continuing and the Required
Lenders have determined that such a continuation is not
appropriate, or (Y) after the date that is three months prior
to the Term Loan Maturity Date (in the case of continuations
of Term Loans) or the Revolving Credit Loan Maturity Date (in
the case of continuations of Revolving Credit Loans);
(v) any Interest Period relating to a Borrowing of LIBOR Loans
that would otherwise extend beyond the Tender Offer Maturity
Date (in the case of a Borrowing of Tender Offer Loans) or the
Term Loan Maturity Date (in the case of a Borrowing of Term
Loans) or the Revolving Credit Loan Maturity Date (in the case
of a Borrowing of Revolving Credit Loans) or beyond the date
that final payment is due, thereon, shall end on such dates;
and
(vi) with respect to the expiration of any Interest Period or a
Borrowing expiring on or prior to the Tender Offer Maturity
Date, the Borrower may elect the Interest Period to apply at
the expiration of the then current Interest Period for such
Borrowing by giving the Administrative Agent written notice
(or telephonic notice promptly confirmed in writing) not less
than twenty-four (24) hours prior to the expiration of the
then current Interest Period for such Borrowing.
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(b) If upon the expiration of any Interest Period, the Borrower has
failed to elect a new Interest Period to be applicable to the respective
Borrowing of LIBOR Loans as provided above, such Borrowing shall be deemed
converted into a Borrowing of ABR Loans effective as of the expiration date of
such current Interest Period.
2.10. Inability to Determine Interest.
If prior to the first day of any Interest Period:
(a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower in the absence of manifest
error) that, by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the LIBO Rate for such
Interest Period; or
(b) the Administrative Agent shall have received notice from any Lender
that the LIBO Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period; then the Administrative Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon as practicable
thereafter. If such notice is given (i) any LIBOR Loans requested to be made on
the first day of such Interest Period shall be made as ABR Loans, and (ii) any
outstanding LIBOR Loans shall be converted, on the first day of such Interest
Period, to ABR Loans. Until such notice has been withdrawn by the Administrative
Agent, no further LIBOR Loans shall be made or continued as such.
2.11. Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof, in each case after the date of this Agreement, shall make it unlawful
for any Lender to make or maintain LIBOR Loans as contemplated by this
Agreement, (i) the Commitment of such Lender hereunder to make LIBOR Loans, to
continue LIBOR Loans as such, and to convert ABR Loans to LIBOR Loans shall
forthwith be suspended, and (ii) the Lenders' Loans then outstanding as LIBOR
Loans, if any, shall be converted automatically to ABR Loans on the respective
last days of the then current Interest Periods with respect to such Loans or
within such earlier period as required by law. If any such conversion of a LIBOR
Loan occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Borrower shall pay to such Lender such amounts,
if any, as may be required pursuant to subsection 2.13.
2.12. Requirements of Law.
(a) If the adoption of or any change in any applicable Requirement of
Law or in the interpretation or application thereof or compliance by any Lender
with any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority charged with the interpretation or
administration thereof made subsequent to the date of this Agreement:
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(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Commitment, any Note or
any LIBOR Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by subsection 3.7(a) and changes in
the rate of net income taxes or franchise taxes (imposed in
lieu of net income taxes) of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which
is not otherwise included in the determination of the LIBO
Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining LIBOR Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduced amount receivable within 30 days
after receipt of the notice referred to in paragraph (c) below.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by any corporation
controlling such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law, if compliance therewith is a customary
banking practice) from any Governmental Authority made subsequent to the date
hereof shall have the effect of reducing the rate of return on such Lender's or
such corporation's capital as a consequence of its obligations hereunder to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, the Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction within 30 days after receipt of the notice referred to
in paragraph (c) below.
(c) If any Lender becomes entitled to claim any amounts pursuant to
this subsection 2.12, it shall promptly, but in any event within one year after
such Lender obtains actual knowledge thereof, notify the Borrower (with a copy
to the other Lenders and the Administrative Agent) of the event by reason of
which it has become so entitled, which notice shall set forth the basis of the
calculation of such amounts in reasonable detail. A certificate as to any
additional amounts payable pursuant to this subsection 2.12 submitted by such
Lender to the Borrower (with a copy to the Administrative Agent) shall be
conclusive in the absence of manifest error. If any Lender fails to give such
notice within one year after it obtains actual knowledge of such an event, such
Lender shall, with respect to compensation payable pursuant to this subsection
2.12 in respect of costs resulting from such event, only be entitled to payment
under this subsection 2.12 for costs incurred from and after the date that is
one year prior to the date such Lender does
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give such notice. The agreements in this subsection 2.12 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.13. Indemnity.
The Borrower agrees to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur as a
consequence of (i) failure by the Borrower to make a borrowing of or
continuation of LIBOR Loans after the Borrower has given a notice requesting the
same in accordance with the provisions of this Agreement, (ii) failure by the
Borrower to make any prepayment after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement, or (iii) the making of a
prepayment of LIBOR Loans on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (A) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed or continued, for the period from the
date of such prepayment or of such failure to borrow or continue, to the last
day of such Interest Period (or in the case of the failure to borrow or
continue), the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (B) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
2.14. Change of Lending Office.
Each Lender agrees that if it makes any demand for payment under
subsection 2.12 or 3.7(a), or if any adoption or change of the type described in
subsection 2.11 shall occur with respect to it, it will use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, as determined in its
good faith discretion) to designate a different lending office if the making of
such a designation would reduce or obviate the need for the Borrower to make
payments under subsection 2.12 or 3.7(a), or would eliminate or reduce the
effect of any adoption or change described in 2.11.
2.15. [Reserved].
2.16. Voluntary Termination or Reduction of Commitments.
Upon at least three Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) to the Administrative Agent at the Payment
Office (which notice the Administrative Agent shall promptly transmit to each of
the Lenders), the Borrower shall have the right, without premium or penalty, to
terminate any unutilized Commitment or, from time to time, to reduce the amount
of such Commitment, provided that, no such termination or reduction shall be
permitted (i) with respect to the Revolving Credit Commitments of the Lenders
if, after giving effect thereto and to any prepayments of Revolving Credit Loans
made on the effective date thereof, the aggregate principal amount of the
Revolving Credit Loans then outstanding
23
would exceed the Revolving Credit Commitments of the Lenders then in effect. Any
such termination or reduction shall apply proportionately and permanently to
reduce the Tender Offer Commitment, the Term Loan Commitment or the Revolving
Credit Commitment, as the case may be, of each of the Lenders. Any partial
reduction pursuant to this subsection 2.16 shall be in the amount of at least
$500,000 or a whole multiple of $200,000 in excess thereof.
2.17. Mandatory Termination or Reduction of Commitments.
(a) The Tender Offer Commitment, Term Loan Commitment and Revolving
Credit Commitment of each Lender shall terminate on the fifth Business Day after
the Expiration Date unless the Initial Borrowing Date has occurred on or before
such date.
(b) Any remaining and unutilized Tender Offer Commitment of each Lender
shall terminate immediately after giving effect to the initial Borrowing of
Tender Offer Loans of each Lender pursuant to subsection 2.1(a).
(c) Unless sooner terminated in accordance with this Agreement, the
Revolving Credit Commitment of each Lender shall terminate on the Revolving
Credit Loan Maturity Date.
(d) The Revolving Credit Commitment of each Lender shall be reduced at
the time of any payment required to be applied to the reduction of the Revolving
Credit Commitment pursuant to subsection 3.5(b).
(e) The Term Loan Commitment of each Lender shall be reduced at the
time of any payment required to be applied to the reduction of the Term Loan
Commitment pursuant to subsection 3.5(b).
(f) Each termination or reduction of the Tender Offer Commitments, Term
Loan Commitments or the Revolving Credit Commitments, as the case may be,
pursuant to this subsection 2.17, shall be applied proportionately and
permanently to reduce the affected Tender Offer Commitment, the Term Loan
Commitment or the Revolving Credit Commitment, as the case may be, of each of
the Lenders. Reductions of Commitments pursuant to subsection 3.5(b) shall be
applied first, to the Term Loan Commitment, if outstanding, and second, to the
Revolving Credit Commitment then outstanding.
SECTION 3. PAYMENTS AND PREPAYMENTS
3.1. Repayment of Loans.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each applicable Lender the outstanding
principal amount of Tender Offer Loans of such Lender on the Tender Offer
Maturity Date (or such earlier date on which the Tender Offer Loans become due
and payable pursuant to Section 9).
(b) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each applicable Lender (i) the principal
amount of the Term Loans (x) in the event the Merger Borrowing Date occurs on or
before 30 days after the Merger Date, in
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eleven (11) consecutive semi-annual installments, each such installment to be in
an amount equal to 9.09% of the aggregate principal amount of Term Loan of such
Lender outstanding on the Merger Borrowing Date, with the first such installment
commencing on the twenty-fourth month anniversary of the Merger Borrowing Date
or (y) in the event the Merger Borrowing Date occurs more than 30 days after the
Merger Date, in twelve (12) consecutive semi-annual installments, each such
installment to be in an amount equal to 8.3333% of the aggregate principal
amount of Term Loan of such Lender outstanding on the Merger Borrowing Date,
with the first such installment commencing on the eighteenth-month anniversary
of the Merger Borrowing Date, and (ii) the unpaid balance of any then
outstanding Term Loans on the Term Loan Maturity Date (or such earlier date on
which the Term Loans become due and payable pursuant to Section 9).
(c) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each applicable Lender the then unpaid
principal amount of each Revolving Credit Loan on the Revolving Credit Loan
Maturity Date (or such earlier date on which the Revolving Credit Loans become
due and payable pursuant to Section 9).
(d) The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date of
each such Borrowing until payment in full thereof at the rates per annum, and on
the dates, set forth in subsection 2.8.
3.2. Evidence of Debt; Notes.
The Borrower shall execute and deliver to each Lender (i) a promissory
note of the Borrower evidencing the Tender Offer Loan of such Lender,
substantially in the form of Exhibit A-1 with appropriate insertions as to date
and principal amount (a "Tender Offer Note", and collectively for all Lenders,
the "Tender Offer Notes"), (ii) a promissory note of the Borrower evidencing the
Term Loan of such Lender, substantially in the form of Exhibit A-2 with
appropriate insertions as to date and principal amount (a "Term Note", and
collectively for all Lenders, the "Term Notes"), and (iii) a promissory note of
the Borrower evidencing the Revolving Credit Loan of such Lender, substantially
in the form of Exhibit A-3 with appropriate insertions as to date and principal
amount (a "Revolving Note", and collectively for all Lenders, the "Revolving
Notes").
3.3. Applications of Payments and Prepayments.
Any prepayments of the Loans made pursuant to subsections 3.4 or 3.5
shall be applied first, to the prepayment of the installments of principal of
the Term Loans set forth subsection 3.1(b) pro rata according to their
maturities, and second to the Revolving Credit Loans,. All payments and
prepayments of any Tender Offer Loans, Term Loans or Revolving Credit Loans, as
the case may be, of the same Borrowing pursuant to subsections 3.1, 3.4 or 3.5
shall be applied pro rata among Lenders holding such Loans. Unless the Borrower
otherwise elects, the application of prepayments made pursuant to this
subsection 3.3 shall be made, first, to ABR Loans and, second, to LIBOR Loans.
All payments and prepayments of Loans shall be applied first, to accrued fees
and expenses due and owing to the Administrative Agent pursuant to this
Agreement, if any, second, to accrued fees and expenses due and owing to the
Lenders pursuant to this Agreement, third, to all accrued and unpaid interest on
such Loans, and fourth, to the unpaid principal amount of such Loans.
25
3.4. Voluntary Prepayments.
The Borrower shall have the right to prepay Loans in whole or in part
from time to time on the following terms and conditions: (i) the Borrower shall
give the Administrative Agent at the Payment Office written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay the
Loans, specifying the amount, Type and date of such prepayment, and in the case
of LIBOR Loans, the specific Borrowing(s) pursuant to which made, which notice
shall be given by the Borrower at least three Business Days (or, in the case of
prepayments of ABR Loans, one Business Day) prior to the date of such
prepayment, which notice shall promptly be transmitted by the Administrative
Agent to each of the Lenders; (ii) each partial prepayment of any Borrowing
shall be in an aggregate principal amount of at least $500,000 or a whole
multiple of $200,000 in excess thereof, provided that, no partial prepayment of
LIBOR Loans made pursuant to a single Borrowing under a particular Facility
shall reduce the outstanding Loans made pursuant to such Borrowing to an amount
less than the Minimum Borrowing Amount; and (iii) LIBOR Loans may only be
prepaid pursuant to this subsection 3.4 on the last day of an Interest Period
applicable thereto.
3.5. Mandatory Prepayments/Repayments.
(a) If at any time the aggregate principal amount of all Revolving
Credit Loans made by the Lenders then outstanding exceeds the Revolving Credit
Commitments then in effect as may be reduced by Sections 2.16 and 2.17, for such
Lenders, then the Borrower shall immediately repay the Revolving Credit Loans of
the Lenders in the amount of such excess.
(b) On and after the Merger Borrowing Date, the Borrower shall, as
promptly as is practicable (and, in any event, within seven (7) Business Days
following the receipt thereof subject to the proviso in clause (c) below), repay
the Loans and the outstanding Commitments by the amount equal to (X) 50% of the
Net Proceeds received from any event described in clause (b) of the definition
of "Net Proceeds Event," and (Y) the aggregate amount of Net Proceeds received
from any other Net Proceeds Event; provided that no such repayment and reduction
shall be due pursuant to this subsection 3.5(b) with respect to any Net Proceeds
Event:
(i) on account of any Asset Sale, to the extent that the Borrower
or any of its Subsidiaries purchases property within 180 days
of the Net Proceeds Event having a value at least equal to the
amount of such Net Proceeds; or
(ii) on account of the recovery by the Borrower or any of its
Subsidiaries of amounts owing to them under property insurance
policies except, to the extent that (1) such recoveries exceed
the reasonably estimated cost of replacing the property on
account of which amounts were paid to the Borrower or any
Subsidiary, or (2) the Borrower or such Subsidiary is not
diligently proceeding with such replacement.
(c) Any payments of the Loans made pursuant to this subsection 3.5(b)
shall be as set forth in subsection 3.3.
3.6. Method and Place of Payment.
26
(a) Except as otherwise specifically provided herein, all payments
under this Agreement shall be made to the Administrative Agent for the ratable
account of the Lenders entitled thereto, not later than 1:00 P.M. (New York
time) on the date when due and shall be made in immediately available funds and
in lawful money of the United States of America at the Payment Office, it being
understood that written, telex or telecopy notice from the Borrower to the
Administrative Agent to make a payment from the funds in the Borrower's account
at the Payment Office shall constitute the making of such payment to the extent
of such funds held in such account. The Administrative Agent will thereafter
cause to be distributed on the same day (if payment was actually received by the
Administrative Agent prior to 2:00 P.M. (New York time) on such day) like funds
relating to the payment of principal or interest or fees and expenses ratable to
the Lenders entitled to receive any such payment in accordance with the terms of
this Agreement. If and to the extent that any such distribution shall not be so
made by the Administrative Agent in full on the same day (if payment was
actually received by the Administrative Agent prior to 2:00 P.M. (New York time)
on such day), the Administrative Agent shall pay to each Lender its ratable
amount thereof and each such Lender shall be entitled to receive from the
Administrative Agent, upon demand, interest on such amount at the Federal Funds
Effective Rate for each day from the date such amount is paid to the
Administrative Agent until the date the Administrative Agent pays such amount to
such Lender.
(b) Any payments under this Agreement which are made later than 1:00
P.M. (New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
3.7. Net Payments.
(a) All payments made by the Borrower hereunder shall be made without
setoff, counterclaim or other defense. All payments made by the Borrower under
this Agreement and any Note shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Administrative Agent or any
Lender as a result of a present or former connection between the Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the Lenders having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any Note). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to Administrative Agent or any
Lender hereunder or under any Note, the amounts so payable to the Administrative
Agent or such Lender shall be increased to the extent necessary to yield to the
Administrative Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement. Whenever any Non-Excluded Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent
27
for its own account or for the account of such Lender, as the case may be, a
certified copy of an original official receipt received by the Borrower showing
payment thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to
the appropriate taxing authority or fails to remit to the Administrative Agent
the required receipts or other required documentary evidence, then the Borrower
shall indemnify the Administrative Agent and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Administrative Agent
or any Lender as a result of any such failure. The agreements in this subsection
3.7 shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Borrower and the Administrative Agent (A) two
duly completed copies of the United States Internal Revenue
Service Form W-8BEN or W-8ECI, or successor applicable form,
as the case may be, or (B) an Internal Revenue Service Form
W-8BEN or W-9, or successor applicable form, as the case may
be;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before
the date that any such form or certification expires or
becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously
delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent; unless in any such case
an event (including, without limitation, any change in treaty,
law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender
form duly completing and delivering any such form with respect
to it and such Lender so advises the Borrower and the
Administrative Agent. Such Lender shall certify (i) in the
case of a Form W-8BEN or W-8ECI, that it is entitled to
receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii)
in the case of Form W-8BEN or W-9, that it is entitled to an
exemption from United States backup withholding tax. Each
Person that shall become a Lender or a Participant pursuant to
subsection 11.8 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms and
statements required pursuant to this subsection 3.7, provided
that, in the case of a Participant, such Participant shall
furnish all such required forms and statements to the Lender
from which the related participation shall have been
purchased.
(c) If any Lender shall receive a credit or refund from a taxing
authority with respect to, and actually resulting from, an amount of
Non-Excluded Taxes actually paid to or on behalf of such Lender by the Borrower
(a "Tax Credit"), such Lender shall promptly notify the
28
Borrower of such Tax Credit. If such Tax Credit is received by such Lender in
the form of cash, such Lender shall promptly pay to the Borrower the amount so
received with respect to the Tax Credit. If such Tax Credit is not received by
such Lender in the form of cash, such Lender shall pay the amount of such Tax
Credit not later than the time prescribed by applicable law for filing the
return (including extensions of time) for such Lender's taxable period which
includes the period in which such Lender receives the economic benefit of such
Tax Credit. In any event, the amount of any Tax Credit payable by a Lender to
the Borrower pursuant to this clause (c) shall not exceed the actual amount of
cash refunded to, or credits received and usable (in accordance with the actual
practices then in use by such Lender) by, such Lender from a taxing authority.
In determining the amount of any Tax Credit, a Lender may use such apportionment
and attribution rules as such Lender customarily employs in allocating taxes
among its various operations and income sources and such determination shall be
conclusive absent manifest error. The Borrower further agrees promptly to return
to a Lender the amount paid to the Borrower with respect to a Tax Credit by such
Lender if such Lender is required to repay, or is determined to be ineligible
for, a Tax Credit for such amount. Notwithstanding anything to the contrary
contained herein, the Borrower hereby acknowledges and agrees that (i) neither
the Administrative Agent nor any Lender shall be obligated to provide the
Borrower with details of the tax position of the Administrative Agent or such
Lender (as the case may be), and (ii) the Borrower shall have no right to
inspect any records (including tax returns) of the Administrative Agent or such
Lender (as the case may be).[▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ tax comments are under review]
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to make
the Loans provided for herein, the Borrower makes the following representations
and warranties to the Lenders, all of which shall survive the execution and
delivery of this Agreement and the making of the Loans (with the execution and
delivery of this Agreement and the making of each Loan thereafter being deemed
to constitute a representation and warranty that the matters specified in this
Section 4 are true and correct in all materials respects on and as of the date
hereof and as of the date of each Loan, unless such representation and warranty
expressly indicates that it is being made as of any specific date):
4.1. Financial Condition; Financial Statements.
(a) On and as of each of the Tender Offer Closing Date and the Merger
Borrowing Date, on a pro forma basis after giving effect to the Acquisition and
to all Indebtedness incurred, and to be incurred, and ▇▇▇▇▇ created, and to be
created, by each Loan Party in connection therewith, (i) the sum of the assets,
at a fair valuation, of AWS and, at the Merger Borrowing Date, Alba, will exceed
its debts, (ii) the Borrower will not have incurred or intended to, or believes
that it will, incur debts beyond its ability to pay such debts as such debts
mature, and (iii) the Borrower will have sufficient capital with which to
conduct its business. For purposes of this subsection 4.1(a), "debt" means any
liability on a claim, and "claim" means (X) the right to payment whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured,
or unsecured; or (Y) the right to an equitable remedy for breach of performance
if such breach gives rise to a payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured, or unsecured.
29
(b) The consolidated balance sheet of Alba and its Subsidiaries at
December 31, 1998 and June 28, 1999 and the related consolidated statements of
operations, statements of shareholders' equity and statements of cashflow of
Alba for the fiscal year and the six-month period, ended as of said dates, which
have been examined by BDO ▇▇▇▇▇▇▇, LLP, independent certified public
accountants, who delivered an unqualified opinion in respect therewith, copies
of which have heretofore been furnished to each Lender, present fairly the
financial position of Alba and its Subsidiaries at the dates of said statements
and the results of operations for the periods covered thereby. All such
financial statements have been prepared in accordance with generally accepted
accounting principles and practices consistently applied except to the extent
provided in the notes to said financial statements.
(c) The consolidated balance sheet of Tefron and its Subsidiaries at
December 31, 1998 and October 3, 1999 and the related consolidated statements of
operations, statements of shareholders' equity and statements of cashflow of
Tefron and its Subsidiaries for the fiscal year and nine-month period, ended as
of said dates, which have been examined by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, member firm of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, independent certified public accountants, who delivered an
unqualified opinion in respect therewith, copies of which have heretofore been
furnished to each Lender, present fairly the financial position of Tefron and
its Subsidiaries at the dates of said statements and the results of operations
for the periods covered thereby. All such financial statements have been
prepared in accordance with generally accepted accounting principles and
practices consistently applied except to the extent provided in the notes to
said financial statements.
(d) Except as fully reflected in the financial statements and the notes
thereto described in subsection 4.1(b), there were as of the Effective Date, no
liabilities or obligations with respect to Tefron, Parent, AWS or Alba or any of
their Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or in
aggregate, would be material to Tefron, Parent, AWS or Alba and its Subsidiaries
taken as a whole, except as incurred by ▇▇▇▇ in the ordinary course of business
consistent with past practices subsequent to the Effective Date or incurred by
any Loan Party in connection with the Acquisition.
4.2. No Change.
Since December 31, 1998, there has been no development or event that
has had a Material Adverse Effect.
4.3. Disclosure.
No information, schedule, exhibit or report or other document furnished
by the Borrower or any of its Subsidiaries to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or any other
Transaction Document (or pursuant to the terms hereof or thereof), as such
information, schedule, exhibit or report or other document has been amended,
supplemented or superseded by any other information, schedule, exhibit or report
or other document later delivered to the same parties receiving such
information, schedule, exhibit or report or other document, and not Acquisition
Document, contained any material misstatement
30
of fact or omitted to state a material fact or any fact necessary to make the
statements contained therein, in light of the circumstances when made, not
materially misleading.
4.4. Corporate Existence; Compliance with Law.
Each of the Borrower and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification, except to the extent that all failures to
be so qualified could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect, and (d) is in compliance with all Requirements of Law,
except to the extent that all failures to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.5. Corporate Power, Authorization, Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal
right, to execute, deliver and perform the Transaction Documents to which it is
a party, and has taken all necessary corporate action to authorize the
execution, delivery and performance of the Transaction Documents to which it is
a party. No material consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required to authorize the execution, delivery, performance, validity or
enforceability of the Transaction Documents, other than such as have been
obtained and are in full force and effect. This Agreement has been, and each
other Loan Document to which it is a party will be, duly executed and delivered
on behalf of the Borrower. This Agreement constitutes, and each other Loan
Document to which it is a party when executed and delivered will constitute, a
legal, valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
4.6. No Legal Bar.
The execution, delivery and performance of the Transaction Documents to
which the Borrower is a party, will not violate any Requirement of Law or any
material Contractual Obligation of the Borrower or of any of its Subsidiaries,
and will not result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation, other than Liens created pursuant
to the Security Documents.
4.7. No Material Litigation.
No litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective properties or revenues
31
(a) with respect to any of the Transaction Documents or any of the transactions
contemplated hereby or thereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.
4.8. No Default.
Neither the Borrower nor any of its Subsidiaries is in default under or
with respect to any of its Contractual Obligations in any respect that could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
4.9. Ownership of Property; Liens.
Each of the Borrower and its Subsidiaries has good and marketable title
to, or a valid leasehold interest in, all its real property, and good title to a
valid leasehold interest in, or a valid right to use, all its other property,
which is material to the operations of the business of, the Borrower and its
Subsidiaries, taken as a whole, and none of such property is subject to any Lien
except as permitted by subsections 6.12 and 8.3.
4.10. Intellectual Property.
The Borrower and each of its Subsidiaries owns, or is licensed to use,
all material patents, servicemarks, trademarks, trade names, copyrights,
licenses, technology, know-how and processes necessary for the conduct of its
business as currently conducted, except for those for which the failure to own
or license which could not reasonably be expected to have a Material Adverse
Effect (the "Intellectual Property"). No claim has been asserted and is pending
by any Person challenging or questioning the use of any such Intellectual
Property or the validity or effectiveness of any such Intellectual Property
which, if accurate, could reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Borrower, the use of such Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
4.11. Taxes.
Each of the Borrower and its Subsidiaries has filed or caused to be
filed all material tax returns which, to the knowledge of the Borrower, are
required to be filed and has paid all material taxes shown to be due and payable
on said returns or on any assessments made against it or any of its property and
all other material taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no tax Lien has
been filed, other than Liens permitted by subsections 6.12 and 8.3, and, to the
knowledge of the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.
4.12. ERISA.
Neither a Reportable Event nor an "accumulated funding deficiency"
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has
32
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither the
Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. The
present value (determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees participating)
of the liability of the Borrower and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(l) of ERISA) does
not, in the aggregate, exceed the assets under all such Plans allocable to such
benefits by an amount in excess of $100,000.
4.13. Use of Proceeds; Margin Regulations.
(a) The proceeds of all Tender Offer Loans shall be utilized (i) to pay
for the Shares purchased pursuant to the Offer to Purchase, (ii) to make capital
contributions and/or loans to Alba who shall utilize the proceeds thereof (X) to
repay up to $16 million of its existing Indebtedness for borrowed money, and (Y)
to fund up to $2.5 million of its working capital needs, (iii) to purchase stock
options issued by ▇▇▇▇ (or to make contributions and/or loans to Alba and to
cause Alba to purchase such options), in an aggregate amount not to exceed
$2,500,000, and (iv) to pay fees and expenses arising in connection with the
Acquisition.
(b) The proceeds of all Term Loans and Revolving Credit Loans incurred
on the Merger Borrowing Date shall be utilized (i) to repay the Tender Offer
Loans in full, (ii) to make cash payments, if any, to holders of Shares at the
time of the Merger and (iii) to pay fees and expenses arising in connection with
the Acquisition. The proceeds of Revolving Credit Loans borrowed after the
Merger Borrowing Date shall be utilized for general corporate purposes and to
fund the working capital needs of the Borrower and/or its Subsidiaries. No part
of the proceeds of any Post-Merger Loan will be used to purchase or carry any
Margin Stock or to extend credit for the purpose of purchasing or carrying any
Margin Stock in violation of the Margin Regulations.
(c) At the time of the making of each Post-Merger Loan, not more than
25% of the value of the assets of the Borrower, or of the Borrower and its
Subsidiaries on a consolidated basis, subject to the restrictive arrangements
contained in subsections 8.3 and 8.6 or otherwise, shall constitute Margin
Stock.
33
4.14. Investment Company Act; Other Regulations.
The Borrower is not an "investment company", or a company "controlled"
by an "investment company," within the meaning of the Investment Company Act of
1940, as amended. The Borrower is not subject to regulation under any federal or
state statute or regulation (other than the Margin Regulations) which limits its
ability to incur Indebtedness under this Agreement or the other Loan Documents.
4.15. Public Utility Holding Company Act.
Neither the Borrower nor any Subsidiary 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," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
4.16. Subsidiaries.
Schedule 4.16 hereto sets forth all of the Subsidiaries of the Borrower
and ▇▇▇▇ at the date hereof, together with the ownership and jurisdiction of
each.
4.17. Environmental Matters.
(a) The facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Properties") and all operations at the
Properties are in compliance, and have in the last three years been in
compliance, in all material respects with all applicable Environmental Laws, and
there is no contamination at or under (or, to the knowledge of the Borrower,
about) the Properties or violation of any Environmental Law with respect to the
Properties or the business operated by the Borrower or any of its Subsidiaries
(the "Business") except insofar as such violation or failure to be in compliance
or contamination, or any aggregation thereof, is not reasonably likely to result
in a Material Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding compliance with Environmental Laws with regard to any of the
Properties or the Business, nor does the Borrower have knowledge that any such
notice will be received or is being threatened, except insofar as such notice or
threatened notice, or any aggregation thereof, does not involve a matter or
matters that is or are reasonably likely to result in a Material Adverse Effect.
(c) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or to a location, to the
knowledge of the Borrower, is in violation of any Environmental Law, nor have
any Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under, any
applicable Environmental Law, except insofar as any such violation or liability
referred to in this paragraph, or any aggregation thereof, is not reasonably
likely to result in a Material Adverse Effect.
(d) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any of its Subsidiaries is or, to the
knowledge of the Borrower, will be named as a party with respect to the
Properties or the Business, nor are there any consent decrees or other
34
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
which are binding upon Borrower or any of its Subsidiaries with respect to the
Properties or the Business, except insofar as such proceeding, action, decree,
order or other requirement, or any aggregation thereof, is not reasonably likely
to result in a Material Adverse Effect.
(e) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or in
amounts or in a manner that could reasonably give rise to liability under
Environmental Laws, except insofar as any such violation or liability referred
to in this paragraph, or any aggregation thereof, is not reasonably likely to
result in a Material Adverse Effect.
4.18. Guarantees and Tefron Guarantees.
The provisions of the Guarantees and the Tefron Guarantees are, and
each other Guarantee when executed and delivered will be, effective to create a
legal, valid, binding and enforceable guaranty of the obligations described
therein, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
4.19. Security Interests.
The Security Documents, once executed and delivered to the
Administrative Agent, will create, as security for the obligations purported to
be secured thereby, a valid and enforceable perfected Lien in favor of the
Administrative Agent for the benefit of the Lender in all of the Collateral,
superior to and prior to the rights of all third persons and subject to no other
Liens except as permitted by subsection 8.3 or consented to by the Required
Lenders. The respective pledgor or assignor, as the case may be, on and after
the time it executes the respective Security Document will have, good and
marketable title to all Collateral free and clear of all Liens (except as
permitted by subsection 8.3 or may be consented to by the Required Lenders). No
filings or recordings are required in order to perfect the security interests
created under any Security Document except for filings or recordings required in
connection with any such Security Document which shall have been made prior to
the execution and delivery thereof.
4.20. Representations and Warranties in Agreement and Plan of Merger.
All representations and warranties set forth in the Agreement and Plan
of Merger were true and correct in all material respects as of the time as of
which such representations and warranties were made and, except to the extent
that changes in the facts and conditions on which such representations and
warranties were based are required or permitted under this Agreement, shall be
true and correct in all material respects as of the Tender Offer Closing Date
and the Merger Date as if such representations and warranties were made on and
as of such dates.
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4.21. Merger.
On and as of the Merger Date, all material consents and approvals of,
and filings and registrations with, and all other actions in respect of, all
Governmental Authorities required in order to make or consummate the Merger, or
otherwise required in connection with the Merger, will have been obtained,
given, filed or taken and are or will be in full force and effect (or effective
judicial relief with respect thereto has been obtained). All actions pursuant to
or in furtherance of the Merger have been and will be taken in compliance with
all applicable laws.
SECTION 5. CONDITIONS PRECEDENT
5.1. Conditions Precedent to Tender Offer Loans.
The obligation of the Lenders to make the Tender Offer Loans to the
Borrower is subject to the satisfaction of the following conditions on the
Initial Borrowing Date:
(a) No Default; Representations and Warranties.
At the time of making the Tender Offer Loans and after giving effect
thereto (i) there shall exist no Default or Event of Default, and (ii) all
representations and warranties contained herein or in the other Transaction
Documents in effect at such time shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of the making of such Tender Offer Loans.
(b) Corporate Proceedings.
All corporate and legal proceedings and all instruments and agreements
in connection with the transactions contemplated by this Agreement and the
Transaction Documents (to the extent then in existence) shall be satisfactory in
form and substance to the Administrative Agent, and the Required Lenders shall
have received all information and copies of all certificates, documents and
papers, including records of corporate proceedings and governmental approvals,
if any, which the Administrative Agent reasonably may have requested in
connection therewith, such documents and papers where appropriate to be
certified by proper corporate or governmental authorities. Without limiting the
foregoing, the Administrative Agent shall have received evidence satisfactory to
the Administrative Agent that the Board of Directors of each of the Borrower and
Alba shall have approved and recommended the Acquisition and shall not have
withdrawn such approval or recommendation.
(c) Tender Offer Documents.
There shall have been delivered to the Lenders true and correct copies
of the Tender Offer Documents and the Additional Tender Offer Documents (which
Additional Tender Offer Documents, other than any Additional Tender Offer
Document consisting solely of an amendment extending the Expiration Date, shall
be reasonably satisfactory to the Required Lenders, provided that, any
Additional Tender Offer Document amending the terms or conditions of the Tender
Offer in any material respect, other than any amendment consisting solely of an
extension of the Expiration Date, shall be reasonably satisfactory to the
Required Lenders) and each of the conditions to purchase contained in the Offer
to Purchase shall have been satisfied (and not waived) to the satisfaction of
the Required Lenders.
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(d) Tender of Shares of Alba.
On the Initial Borrowing Date (i) there shall have been validly
tendered to the Borrower and not withdrawn Shares which constitute at least a
majority of the voting shares of Alba stock on a fully diluted basis, and the
price per share paid pursuant to the Offer to Purchase shall not exceed $18.50,
and (ii) the Shares to be purchased on such date shall have been validly
tendered to the Borrower, free and clear of all Liens and restrictions to
purchase imposed by applicable law or otherwise, and such Shares shall not have
been validly withdrawn and shall be available for purchase in accordance with
the terms and conditions set forth in the Offer to Purchase.
(e) Adverse Change, etc.
(i) Nothing shall have occurred which the Required
Lenders or the Administrative Agent shall determine
has, or could reasonably be expected to have, a
Material Adverse Effect on the rights of the Lenders
or the Administrative Agent, or on the ability of any
Loan Party to perform its obligations under the Loan
Documents, since the dates of their respective
financial statements set forth in subsection 4.1.
(ii) All material necessary governmental and third party
approvals in connection with the Acquisition, the
transactions contemplated by the Transaction
Documents (other than the Agreement and Plan of
Merger) and the Offer to Purchase and otherwise
referred to herein and therein to be completed on or
before the Tender Offer Closing Date shall have been
obtained and remain in effect, and all applicable
waiting periods shall have expired without any action
being taken by any competent authority which
restrains, prevents or imposes, in the judgment of
the Required Lenders, materially adverse conditions
upon the consummation of the Acquisition.
(iii) Except to the extent the Required Lenders otherwise
consent, there shall not exist any judgment, order,
injunction or other restraint issued or filed with
respect to the purchase of Shares, the making of the
Loans hereunder or the consummation of the Merger.
(f) Control of Borrower.
Tefron shall own directly all of the outstanding capital stock of
Parent, and Parent shall own directly all of the outstanding capital stock of
AWS.
(g) Proxy Materials.
All Proxy Materials, if any, shall have been delivered to the Lenders,
and such Proxy Materials shall be reasonably satisfactory in form and substance
to the Required Lenders.
(h) Agreement and Plan of Merger.
The Administrative Agent shall have received a copy of the Agreement
and Plan of Merger and all other documentation in connection with the Merger,
and any amendments thereto,
37
all of which shall be satisfactory in form and substance to the Required
Lenders, and the Agreement and Plan of Merger and such other documentation shall
have been duly authorized, executed and delivered by each of the parties thereto
and shall be in full force and effect; it being understood that, by reason of
the Agreement and Plan of Merger, the Lenders are relying in good faith upon the
assets and cash flow to be available from Alba and its Subsidiaries for
repayment of the Loans.
(i) Margin Regulations.
On the Initial Borrowing Date, neither the making of any Tender Offer
Loan nor the use of the proceeds thereof will violate the provisions of the
Margin Regulation.
(j) Tefron Guarantees Documentation.
Each Lender shall have received such opinions, certificates and
security documents relating to its Tefron Guarantee as such Lender may
reasonably require, in form and substance satisfactory to such Lender..
(k) Opinions of Counsel.
The Administrative Agent shall have received the executed opinion, in
form and substance satisfactory to the Required Lenders, addressed to each of
the Lenders and dated the Initial Borrowing Date, of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP,
counsel to the Borrower, which opinion shall cover the matters contained in
Exhibit K hereto, and such other matters as may be reasonably requested by the
Required Lenders, all in form and substance satisfactory to the Required
Lenders. Such legal opinions shall cover such other matters incident to the
transactions contemplated by this Agreement as the Required Lenders may
reasonable request.
(l) Loan Documents.
The Administrative Agent shall have received (i) this Agreement,
executed and delivered by a duly authorized officer of the Borrower and each
Lender, and (ii) a Tender Offer Note of the Borrower for each Lender, completed,
signed and delivered by a duly authorized officer of the Borrower, in the
principal amount of the Tender Offer Loans to be made by each such Lender.
(m) Closing Certificate of Borrower.
The Administrative Agent shall have received a certificate signed by a
duly authorized officer(s) of the Borrower, dated the Initial Borrowing Date,
(i) attaching the charter and by-laws of the Borrower, (ii) attaching the
resolutions of the Board of Directors of the Borrower with respect to the
transactions contemplated hereby, (iii) certifying that such resolutions have
not been amended, modified, revoked or rescinded as of the date of such
certificate, and (iv) certifying as to the incumbency and signature of the
officers of the Borrower executing any Loan Document and any other Transaction
Document to which it is a party; such certificate (and the attachments thereto)
shall be in form and substance satisfactory to the Administrative Agent.
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(n) Corporate Structure.
The Required Lenders shall be satisfied with the corporate and legal
structure and capitalization of the Loan Parties, including the terms and
conditions of the charter, bylaws and each class of Capital Stock of the Loan
Parties and of each agreement or instrument relating to such structure or
capitalization.
(o) Tefron Guarantee.
Each Lender shall have received its Tefron Guarantee, in form and
substance satisfactory to such Lender, executed and delivered, on behalf of
Tefron, by a duly authorized officer of Tefron, and which shall be in full force
and effect.
(p) Parent Equity Contribution.
The Administrative Agent shall have received evidence that the Parent
has made an equity contribution of not less than $15,000,000.
(q) Tendered Shares.
The Administrative Agent shall have received evidence that the Borrower
has received not less than a majority of the outstanding Shares, validly
tendered in accordance with the Acquisition Documents.
(r) Account Opening Documentation.
The Administrative Agent and/or each Lender shall have received account
opening forms and documentation, in accordance with its usual and customary
banking practices, in form and substance satisfactory to the Administrative
Agent and/or such Lender, from the Borrower, as reasonably requested by the
Administrative Agent and/or such Lender.
(s) Letter of Undertaking.
Bank Hapoalim B.M. New York Branch shall have received the letter of
undertaking from Bank Hapoalim B.M., Tel Aviv, in form and substance
satisfactory to Bank Hapoalim B.M. New York Branch.
(t) Miscellaneous.
The Administrative Agent shall have received such other opinions or
documents as the Administrative Agent or the Required Lenders through the
Administrative Agent may reasonably request.
The acceptance of the proceeds of each Borrowing of Tender Offer Loans shall
constitute a representation and warranty by the Borrower to each of the Lenders
that all of the applicable conditions specified above exist as of that time. All
of the certificates, legal opinions and other documents and papers referred to
in this subsection 5.1, unless otherwise specified, shall be delivered to the
Administrative Agent at the Payment Office for the account of each of the
Lenders and in sufficient counterparts for each of the Lenders and shall be
satisfactory in form and substance to the Administrative Agent.
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5.2. Conditions Precedent to Post-Merger Loans.
The obligation of the Lenders to make Post-Merger Loans to the Borrower
is subject, at the time of each such Post-Merger Loan, to the satisfaction of
each of the following conditions:
(a) No Default; Representations and Warranties.
At the time of the making of each Post-Merger Loan and also after
giving effect thereto (i) there shall exist no Default or Event of Default, and
(ii) all representations and warranties contained herein or in the other
Transaction Documents in effect at such time shall be true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of the date of the making of such Post-Merger
Loan.
(b) Opinion of Counsel.
On the Merger Borrowing Date, the Administrative Agent shall have
received an opinion or opinions, addressed to each of the Lenders and dated the
Merger Borrowing Date, from counsel to the Borrower and its Subsidiaries, if
any, acceptable to the Required Lenders, which opinions(s) shall cover the due
authorization, execution, delivery and enforcement of the Security Documents and
Guarantees required to be delivered by such Loan Parties on such date, and such
other matters as the Required Lenders may reasonably request through the
Administrative Agent, all of which shall be in form and substance reasonably
satisfactory to the Required Lenders.
(c) Corporate Proceedings.
All corporate and legal proceedings and all instruments and agreements
in connection with the transactions contemplated by this Agreement and the
Transaction Documents shall be satisfactory in form and substance to the
Required Lenders, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings and governmental approvals, if any, which the
Administrative Agent reasonably may have requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate or
governmental authorities.
(d) Bring-Downs.
On the Merger Borrowing Date, the Administrative Agent shall have
received confirmatory bring-downs, each dated the Merger Borrowing Date, of all
opinions and certificates delivered pursuant to subsection 5.1 which the
Administrative Agent shall reasonably request.
(e) Consummation of Merger.
On the Merger Borrowing Date, the Merger shall have been consummated
and all aspects thereof shall be in material compliance with the Agreement and
Plan of Merger and applicable laws and each of the conditions set forth in the
Agreement and Plan of Merger shall have been satisfied (and not waived) to the
reasonable satisfaction of the Required Lenders (unless the Required Lenders
consent in writing to such waiver) and the Administrative Agent shall have
received a copy of each agreement, document and certificate delivered pursuant
to such provisions.
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(f) Guarantees.
On the Merger Borrowing Date, (X) Parent shall have duly authorized,
executed and delivered a Guarantee in the form of Exhibit E hereto (as modified,
amended or supplemented from time to time in accordance with the terms hereof
and thereof, the "Parent Guarantee"), (Y) the Administrative Agent shall have
received a reaffirmation and confirmation from Tefron that the Tefron Guarantee
is still in full force and effect and fully and unconditionally guarantees all
obligations of Alba, as successor-in-interest by merger with AWS, under this
Agreement and the Notes, and (Z) the Administrative Agent shall have received
any other Guarantees required to be delivered by this Agreement on the Merger
Borrowing Date.
(g) Security Documents.
On the Merger Borrowing Date, (X) the Borrower shall have duly
authorized, executed and delivered a Borrower Security Agreement in the form of
Exhibit B hereto (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Borrower Security
Agreement"), and (Y) the Administrative Agent shall have received any other
Security Documents for the benefit of the Lenders required to be delivered by
this Agreement on the Merger Borrowing Date.
(h) Organizational Documentation, etc.
To the extent not theretofore delivered in connection with the Initial
Borrowing Date, on the Merger Borrowing Date, the Lenders shall have received
copies of, or amendments to, the Certificate of Incorporation and by-laws of the
Borrower, the Parent and Tefron and each other Loan Party, and any agreements
entered into by any such entities governing the terms and relative rights of its
Capital Stock, in each case certified as true and complete by an appropriate
governmental or corporate official, and the provisions of the foregoing shall be
reasonably satisfactory to the Required Lenders.
(i) Acknowledgment.
▇▇▇▇ shall have acknowledged its assumption of all of AWS's obligations
under this Agreement and the other Loan Documents pursuant to an acknowledgment
agreement in the form of Exhibit I hereto (as modified, amended or supplemented
from time to time in accordance with the terms hereof and thereof, the
"Acknowledgment Agreement").
(j) Notes.
The Administrative Agent shall have received (X) a Term Loan Note of
Alba for each Lender, completed, signed and delivered by a duly authorized
officer of Alba, in the principal amount of the Term Loans to be made by such
▇▇▇▇▇▇, and (Y) a Revolving Credit Note of Alba for each Lender, completed,
signed and delivered by a duly authorized officer of Alba, in the principal
amount of such ▇▇▇▇▇▇'s Revolving Credit Commitment then outstanding.
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(k) Pledged Stock; Stock Powers.
The Administrative Agent shall have received for the benefit of the
Lenders the certificates representing the shares pledged pursuant to any other
Stock Pledge Agreement, other than the Parent Stock Pledge Agreement required to
be delivered by this Agreement on the Merger Borrowing Date, together with an
undated stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof.
(l) Actions to Perfect Liens.
The Administrative Agent shall have received for the benefit of the
Lenders such duly executed financing statements on form UCC-1 as may be
necessary or, in the reasonable opinion of the Administrative Agent, desirable
to perfect the Liens created by the Security Documents.
(m) Lien Searches.
The Administrative Agent shall have received the results of a recent
search by a Person reasonably satisfactory to the Administrative Agent, of the
Uniform Commercial Code, judgment and tax lien filings which may have been filed
with respect to personal property of the Borrower, and the results of such
search shall be reasonably satisfactory to the Required Lenders.
(n) Review of Operations.
The Administrative Agent shall have completed a review of the
operations of the Loan Parties (including, without limitation, an on-site review
of the financial statements, financial reporting and computer systems and
inventory, receivables, and equipment by the Administrative Agent), each in
scope, and with results, satisfactory to the Administrative Agent; without
limiting the generality of the foregoing, the Administrative Agent shall have
been given such access to the management, records, books of account, schedules,
projections, contracts and properties of each Loan Party as it shall have
requested.
(o) Adverse Change, etc.
(i) Nothing shall have occurred which the Required
Lenders or the Administrative Agent shall determine
has, or could reasonably be expected to have, a
Material Adverse Effect on the rights of the Lenders
or the Administrative Agent, or on the ability of any
Loan Party to perform its obligations under the Loan
Documents, since the dates of their respective
financial statements set forth in subsection 4.1.
(ii) Except to the extent the Required Lenders otherwise
consent, there shall not exist any judgment, order,
injunction or other restraint issued or filed with
respect to the purchase of Shares, the making of the
Loans hereunder.
(a) Control of Borrower.
Tefron shall own directly all of the outstanding capital stock of
Parent, and Parent shall own directly all of the outstanding capital stock of
Alba.
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(b) Proxy Materials.
All Proxy Materials, delivered to any shareholder of Alba since the
Tender Offer Closing Date, if any, shall have been delivered to the Lenders, and
such Proxy Materials shall be reasonably satisfactory in form and substance to
the Required Lenders.
(c) Margin Regulations.
On the Merger Borrowing Date, neither the making of any Post-Merger
Loans nor the use of the proceeds thereof will violate the provisions of the
Margin Regulations.
(d) Tefron Guarantees Documentation.
Each Lender shall have received such opinions, certificates, security
documents and/or reaffirmation relating to its Tefron Guarantee as such Lender
may reasonably require, in form and substance satisfactory to such Lender.
(e) Closing Certificate of Alba.
The Administrative Agent shall have received a certificate signed by a
duly authorized officer(s) of ▇▇▇▇, dated the Merger Borrowing Date, (i)
attaching the charter and by-laws of ▇▇▇▇, (ii) attaching the resolutions of the
Board of Directors of Alba with respect to the transactions contemplated hereby,
(iii) certifying that such resolutions have not been amended, modified, revoked
or rescinded as of the date of such certificate, and (iv) certifying as to the
incumbency and signature of the officers of ▇▇▇▇ executing any Loan Document and
any other Transaction Document to which it is a party; such certificate (and the
attachments thereto) shall be in form and substance satisfactory to the
Administrative Agent.
(f) Miscellaneous.
The Administrative Agent shall have received such other opinions or
documents as the Administrative Agent or the Required Lenders through the
Administrative Agent may reasonably request.
SECTION 6. PRE-MERGER COVENANTS
The Borrower covenants and agrees that on and after the date hereof and
prior to the Merger Date, or if the Merger is never consummated for so long as
this Agreement is in effect and until the Commitments have terminated and the
Loans together with interest and other obligations incurred hereunder are paid
in full, it shall and (except in the case of delivery of financial information;
reports and notices) shall cause each of its Subsidiaries to:
6.1. Merger.
Cause the Merger to be consummated as promptly as practical but in no
event later than the Tender Offer Maturity Date.
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6.2. Use of Proceeds.
Use the proceeds of the Tender Offer Loans as provided in Subsection
4.13(a).
6.3. Financial Statements.
Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of the Borrower, a copy of the consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such year and
the related consolidated statements of income and retained earnings and of cash
flows for such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by an independent certified public accountants of nationally recognized
standing; as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower, a copy of the unaudited consolidating balance
sheets of the Borrower and its consolidated Subsidiaries as at the end of such
fiscal year together with consolidating statements of income and retained
earnings and of cash flows of the Borrower and its consolidated Subsidiaries for
such fiscal year as customarily prepared by the management of the Borrower for
internal use.
(b) as soon as available, but in any event not later than 45 days after
the end of each fiscal quarter of the Borrower, the unaudited consolidated and
consolidating balance sheets of the Borrower and its consolidated Subsidiaries
as at the end of such quarter and the related unaudited consolidated and
consolidating statements of income and retained earnings and of cash flows of
the Borrower and its consolidated Subsidiaries for such quarter and the portion
of the Borrower's fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments and the absence of footnote disclosure);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.4. Certificates; Other Information.
Furnish to each Lender:
(a) concurrently with the delivery of the financial statements referred
to in subsection 6.3(a), a certificate of the independent certified public
accountants reporting on such financial statements stating whether in the course
of conducting its annual audit they became aware of any Default or Event of
Default pertaining to accounting matters and, if so, the nature of such Default
or Event of Default;
(b) concurrently with the delivery of the financial statements referred
to in subsections 6.3(a), (b) and (c), a certificate of a Responsible Officer
stating that, to the best of
44
such Officer's knowledge, during such period (A) no Subsidiary has been formed
or acquired (or, if any such Subsidiary has been formed or acquired, the details
of such formation or acquisition), and (B) the Borrower has observed or
performed all of its covenants and other agreements, and satisfied every
condition, contained in this Agreement and the other Loan Documents to be
observed, performed or satisfied by it, and that such Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate;
(c) concurrently with the delivery of the accountants' certificates
referred to in subsection 6.2(a), any comment letter submitted by such
accountants to management;
(d) promptly upon the mailing or filing thereof, copies of supplements
to the Tender Offer Documents and all other information, materials or reports
filed by the Borrower with the Securities and Exchange Commission or any
successor thereto (the "SEC"); and
(e) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.5. Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity in accordance
with customary terms or before they become delinquent or in default, as the case
may be, all of its material obligations of whatever nature, except where the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Borrower or its Subsidiaries, as
the case may be.
6.6. Conduct of Business and Maintenance of Existence.
Cause each Subsidiary to continue to engage in business of the same
general type as now conducted by it, and as to AWS, not to engage in any
business or venture other than to act as a holding company for the stock of Alba
or own any material property or assets other than its stock ownership in Alba,
and preserve, renew and keep in full force and effect its corporate existence
and take all reasonable action to maintain all rights, privileges and franchises
necessary (in the reasonable judgment of the Borrower) in the normal conduct of
such business, except as otherwise permitted pursuant to subsection 6.14; comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to comply therewith could not, in the aggregate, be reasonably
expected to have a Material Adverse Effect.
6.7. Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities; and permit representatives of the Administrative Agent or any Lender
to visit and inspect any of its properties and examine and make abstracts from
any of its books and records at any reasonable time (upon reasonable advance
notice when no Default or Event of Default has occurred and is continuing) and,
with respect to the Administrative Agent, as often as may reasonably be desired
or, with respect to any Lender other than the Administrative Agent, not more
than once per calendar year at the
45
expense of such Lender (or, if an Event of Default has occurred and is
continuing, at any reasonable time and as often as may be desired at the expense
of the Borrower), and to discuss the business, operations, properties and
financial and other condition of the Borrower and its Subsidiaries with officers
and employees of the Borrower and its Subsidiaries and with its independent
certified public accountants.
6.8. Notices.
Promptly after a Responsible Officer of the Borrower obtains knowledge
thereof, give notice to the Administrative Agent (who shall give prompt notice
thereof to the Lenders) of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Borrower or
any of its Subsidiaries and any Governmental Authority, which in either case, if
not cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $100,000 or more and not covered by
insurance or in which injunctive or similar relief is sought which could have a
Material Adverse Effect;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan that is an employee pension benefit plan (as defined in Section 3(2) of
ERISA), a failure to make any required contribution to a Plan, the creation of
any Lien in favor of the PBGC or a Plan that is an employee pension benefit plan
(as defined in Section 3(2) of ERISA) or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the terminating, Reorganization or Insolvency
of, any Plan that is an employee pension benefit plan (as defined in Section
3(2) of ERISA);
(e) the acquisition or creation of any Subsidiary which has Capital
Stock that is directly owned by the Borrower or any Subsidiary;
(f) each Asset Sale consummated prior to the Merger Borrowing Date; and
(g) the occurrence of any development or event which could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this subsection 6.8 shall be accompanied by a
statement of the Borrower setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
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6.9. Environmental Laws.
(a) Comply with, and use reasonable efforts to ensure compliance by all
tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply with and maintain, and use reasonable efforts to ensure that
all tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except to the extent that failure to do so could
not be reasonably expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, except to the extent that failure to so conduct, complete or comply could
not reasonably be expected to have a Material Adverse Effect and except to the
extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to have a Material Adverse Effect.
6.10. Further Assurances.
Upon request of the Administrative Agent or the Required Lenders,
promptly provide such documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby as the Administrative Agent
or the Required Lenders shall reasonably request.
6.11. Limitation on Indebtedness and Preferred Stock.
Not to create, incur, assume or suffer to exist any Indebtedness or
preferred stock (other than preferred stock which is Margin Stock, or by its
terms, does not require the payment of any cash dividends thereon or
redemption/reimbursement obligations or impose any cash penalties (other than
accrual of dividends on unpaid dividends) for the failure to declare cash
dividends thereon), except:
(a) Indebtedness of the Borrower under this Agreement;
(b) current trade liabilities incurred by any Subsidiary in the
ordinary course of business;
(c) Indebtedness of any Subsidiary to the Borrower or any other
Subsidiary,
(d) Indebtedness of any Subsidiary outstanding on the date hereof and
listed on Schedule 6.11 and any refinancings, refundings, renewals or extensions
thereof in an amount not to exceed the then current principal amount thereof;
(e) Indebtedness of a corporation which becomes a Subsidiary, after the
date hereof, provided that (i) such Indebtedness existed at the time such
corporation became a Subsidiary and was not created in anticipation thereof, and
(ii) immediately after giving effect to the acquisition of such corporation by
the Borrower no Default or Event of Default shall have occurred and be
continuing; and
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(f) Guarantee Obligations permitted pursuant to subsection 6.13.
6.12. Limitation on Liens.
Not to create, incur, assume or suffer to exist any Lien upon any of
its properties, assets or revenues, whether now owned or hereafter acquired,
except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or its Subsidiaries, as the
case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business of any Subsidiary
for sums which are not overdue for a period of more than 90 days or which are
being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability of any Subsidiary to insurance carriers under insurance or
self-insurance arrangements;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred by any
Subsidiary in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred by a Subsidiary in the ordinary course of business which,
in the aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or such
Subsidiary;
(f) any interest or title of a licensor, lessor or sublessor under any
license or lease in the property subject to such license or lease;
(g) Liens arising from precautionary UCC financing statements regarding
operating leases permitted for Subsidiaries by this Agreement;
(h) Liens in existence on the date hereof listed on Schedule 6.12 ,
securing Indebtedness of Subsidiaries permitted by subsection 6.11(d), provided
that no such Lien is spread to cover any additional property after the date
hereof and that the amount of Indebtedness secured thereby is not increased;
(i) Liens on the property or assets of a corporation which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by subsection
6.11(e), provided that (X) such Liens existed at the time such corporation
became a Subsidiary and were not created in anticipation thereof, (Y) any such
Lien is not spread to cover any additional property or assets of such
corporation after the time such corporation becomes a Subsidiary, and (Z) the
amount of Indebtedness secured thereby is not increased; and
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(j) Liens on Margin Stock.
6.13. Limitation on Guarantee Obligations.
Create, incur, assume or suffer to exist any Guarantee Obligation,
except:
(a) Guarantee Obligations in existence on the date hereof and listed on
Schedule 6.13;
(b) Guarantee Obligations in favor of the Lenders; and
(c) Guarantee Obligations made by Subsidiaries of the Borrower of
obligations of the Borrower or any of its other Subsidiaries, which obligations
are otherwise permitted under this Agreement.
6.14. Limitation on Fundamental Changes.
Not enter into any merger, consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, assign, transfer or otherwise dispose of, all or
substantially all of its property, business or assets, or amend or modify its
organizational documents in any way materially adverse to the Lenders or enter
into any new agreement governing the terms and relative rights of the Capital
Stock of the Borrower or its Subsidiaries, except:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation except in connection with the Merger) or with or into any
one or more wholly owned Subsidiaries of the Borrower (provided that the wholly
owned Subsidiary or Subsidiaries shall be the continuing or surviving
corporation);
(b) any wholly-owned Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or otherwise) to
the Borrower or any other wholly owned Subsidiary of the Borrower;
(c) the Acquisition and consummation of the Merger; and
(d) sales of or restrictions on Margin Stock.
6.15. Limitation on Sale of Assets.
Not convey, sell, lease, assign, transfer or otherwise dispose of any
of its property, business or assets (including, without limitation, receivables
and leasehold interests), whether now owned or hereafter acquired, or, in the
case of any Subsidiary, issue or sell any shares of such Subsidiary's Capital
Stock to any Person other than the Borrower or any wholly owned Subsidiary,
except:
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(a) the sale or other disposition by any Subsidiary of obsolete,
inoperative, surplus or worn out property (including, without limitation, any
property which is no longer used or useful in the business of such Subsidiary in
the ordinary course of business and for fair market value;
(b) the sale or other disposition by any Subsidiary of any property,
provided that the fair market value of all assets so sold or disposed of (other
than inventory) in any period of twelve consecutive months shall not exceed:
$250,000;
(c) the sale or transfer of inventory by any Subsidiary in the ordinary
course of business;
(d) the sale or transfer discount without recourse by any Subsidiary of
accounts receivable arising in the ordinary course of business in connection
with the compromise or collection thereof;
(e) liquidation of Cash Equivalents and other investments permitted by
this Agreement;
(f) sales of Margin Stock; and
(g) any Asset Sales, the proceeds of which are applied pursuant to
subsection 3.5(b).
6.16. Limitation on Dividends.
Not declare or pay any dividend on, or make any payment on account of,
or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of AWS or Alba or any warrants or options to purchase any
such Stock, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower or any Subsidiary (such declarations,
payments, setting apart, purchases, redemptions, defeasances, retirements,
acquisitions and distributions being herein called "Restricted Payments").
6.17. Limitation on Investments, Loans and Advances.
Not make any advance, loan, extension of credit or capital contribution
to, or purchase any stock, bonds, notes, debentures or other securities of or
any assets constituting a business unit of, or make any other investment in, any
Person, except:
(a) extensions of trade credit in the ordinary course of business of
its Subsidiaries;
(b) investments in Cash Equivalents;
(c) loans and advances to employees of its Subsidiaries for travel,
entertainment and relocation expenses in the ordinary course of business;
(d) investments in existence on the date hereof which are described on
Schedule 6.17 hereof;
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(e) investments and purchases of Shares pursuant to the Acquisition
Documents; and
(f) the Borrower may make intercompany loans and advances to its
Subsidiaries.
6.18. Limitation on Transactions with Affiliates.
Not enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service,
with any Affiliate, unless such transaction is (a) otherwise permitted under
this Agreement, (b) in the ordinary course of the Subsidiary's business, (c)
upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate, (d) the Merger, or
(e) disclosed in the Tender Offer Documents.
6.19. Limitation on Sales and Leasebacks.
Cause any Subsidiary to enter into any arrangement with any Person
providing for the leasing by such Subsidiary of real or personal property which
has been or is to be sold or transferred by such Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of such Subsidiary.
6.20. Limitation on Changes in Fiscal Year.
Permit the fiscal year of the Borrower and its Subsidiaries to end on a
day other than December 31.
6.21. Limitation on Negative Pledge Clauses.
Enter into with any Person any agreement, other than this Agreement,
purchase money mortgages, Financing Leases and other similar fixed asset
financings permitted by this Agreement (in which cases, any prohibition or
limitation shall only be effective against the assets financed thereby), which
prohibits or limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired other than Margin
Stock.
SECTION 7. POST-MERGER AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that on the Merger Borrowing Date (or
if later, on the date set forth herein) and thereafter, so long as this
Agreement is in effect and until the Commitments have terminated and the Loans
together with interest, fees, expenses and other obligations incurred hereunder
are paid in full it shall and (except in the case of delivery of financial
information and reports and notices) shall cause each of its Subsidiaries to:
7.1. Use of Proceeds.
Use the proceeds of the Post-Merger Loans as provided in subsection
4.13(b).
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7.2. Financial Statements.
Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of the Borrower, a copy of the consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such year and
the related consolidated statements of [income and retained earnings] and of
cash flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by an independent certified public accountants of nationally recognized
standing; as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower, a copy of the unaudited consolidating balance
sheets of the Borrower and its consolidated Subsidiaries as at the end of such
fiscal year together with consolidating statements of [income and retained
earnings] and of cash flows of the Borrower and its consolidated Subsidiaries
for such fiscal year as customarily prepared by the management of the Borrower
for internal use.
(b) as soon as available, but in any event not later than 45 days after
the end of each fiscal quarter of the Borrower, the unaudited consolidated and
consolidating balance sheets of the Borrower and its consolidated Subsidiaries
as at the end of such quarter and the related unaudited consolidated and
consolidating statements of [income and retained earnings] and of cash flows of
the Borrower and its consolidated Subsidiaries for such quarter and the portion
of the Borrower's fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments and the absence of footnote disclosure);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
7.3. Certificates; Other Information.
Furnish to each Lender:
(a) concurrently with the delivery of the financial statements referred
to in subsection 7.2(a), a certificate of the independent certified public
accountants reporting on such financial statements stating whether in the course
of conducting its annual audit they became aware of any Default or Event of
Default pertaining to accounting matters and, if so, the nature of such Default
or Event of Default;
(b) concurrently with the delivery of the financial statements referred
to in subsections 7.2(a) and (b), a certificate of a Responsible Officer (i)
stating that, to the best of such Officer's knowledge, during such period (A) no
Subsidiary has been formed or acquired (or, if any such Subsidiary has been
formed or acquired, the Borrower has complied with the requirements of
subsection 7.11 with respect thereto), (B) neither the Borrower nor any of its
Subsidiaries has changed its name, its principal place of business, its chief
executive office or the
52
location of any material item of tangible Collateral without complying with the
requirements of this Agreement and the Security Documents with respect thereto,
and (C) the Borrower has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that such
Officer has obtained no knowledge of any Default or Event of Default except as
specified in such certificate, and (iii) setting forth the computations used by
the Borrower in determining (as of the end of such fiscal period) compliance
with the covenants contained in subsection 8.1;
(c) concurrently with the delivery of the accountants' certificates
referred to in subsection 7.3(a), any comment letter submitted by such
accountants to management;
(d) concurrently with the delivery of the projections referred to in
subsection 7.3(c) the consolidated financial plan and financial forecasts as
customarily prepared by the management of the Borrower for internal use; and
(e) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
7.4. Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity in accordance
with customary terms or before they become delinquent or in default, as the case
may be, all of its material obligations of whatever nature, except where the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Borrower or its Subsidiaries, as
the case may be.
7.5. Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now
conducted by it, and preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all rights,
privileges and franchises necessary (in the reasonable judgment of the Borrower)
in the normal conduct of its business except as otherwise permitted pursuant to
subsection 8.5; comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, be reasonably expected to have a Material Adverse Effect.
7.6. Maintenance of Property; Insurance.
(a) Keep all material property useful and necessary in its business in
good working order and condition; maintain with financially sound and reputable
insurance companies insurance policies insuring all its material property
(including, in any event, all material Collateral) against loss by fire,
explosion, theft and such other casualties as may be reasonably satisfactory to
the Administrative Agent such policies to be in at least such form amounts and
having coverage against at least such risks as are customarily insured against
in the same general area by companies engaged in the same or a similar business
as may be reasonably satisfactory to
53
the Administrative Agent with losses payable to the Borrower and the
Administrative Agent for the benefit of the Lenders, as their respective
interests may appear;
(b) Each insurance policy described in subsection 7.6(a) shall (i)
contain endorsements, in form satisfactory to each Lender, (ii) name the
Administrative Agent for the benefit of the Lenders, as an insured party, (iii)
provide that no cancellation, material reduction in amount or material change in
coverage thereof shall be effective until at least thirty (30) days after
receipt by the Administrative Agent of written notice thereof, and (iv) be
reasonably satisfactory in all other respect to the Administrative Agent. In the
event of any termination or notice of non-payment by any insurer with respect to
any policy or any lapse in the coverage thereunder, the Borrower shall cause
such insurer to give prompt written notice to each Lender of the occurrence of
such termination, nonpayment or lapse.
(c) The Borrower shall deliver to the Administrative Agent a report of
a reputable insurance broker with respect to such insurance in each calendar
year and such supplemental reports with respect thereto as the Administrative
Agent may from time to time reasonably request.
7.7. Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities; and permit representatives of the Administrative Agent or any Lender
to visit and inspect any of its properties and examine and make abstracts from
any of its books and records at any reasonable time (upon reasonable advance
notice when no Default or Event of Default has occurred and is continuing) and,
with respect to the Administrative Agent, as often as may reasonably be desired
or, with respect to any Lender other than the Administrative Agent, not more
than once per calendar year at the expense of such Lender (or, if an Event of
Default has occurred and is continuing, at any reasonable time and as often as
may be desired at the expense of the Borrower), and to discuss the business,
operations, properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants.
7.8. Notices.
Promptly after a Responsible Officer of ▇▇▇▇▇▇▇▇ obtains knowledge
thereof, give notice to the Administrative Agent (who shall give prompt notice
thereof to the Lenders) of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Borrower or
any of its Subsidiaries and any Governmental Authority, which in either case, if
not cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
54
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $100,000 or more and not covered by
insurance or in which injunctive or similar relief is sought which could have a
Material Adverse Effect;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan that is an employee pension benefit plan (as defined in Section 3(2) of
ERISA), a failure to make any required contribution to a Plan, the creation of
any Lien in favor of the PBGC or a Plan that is an employee pension benefit plan
(as defined in Section 3(2) of ERISA) or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the terminating, Reorganization or Insolvency
of, any Plan that is an employee pension benefit plan (as defined in Section
3(2) of ERISA);
(e) the acquisition or creation of any Subsidiary which has Capital
Stock that is directly owned by the Borrower or any Subsidiary;
(f) any Lien (other than Liens created by the Security Documents or
Liens permitted under this Agreement) on any of the Collateral and the
occurrence of any other event which could reasonably be expected to have a
Material Adverse Effect on the aggregate value of the Collateral or on the Liens
created by the Security Documents or this Agreement; and
(g) the occurrence of any development or event which could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this subsection 7.8 shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto.
7.9. Environmental Laws.
(a) Comply with, and use reasonable efforts to ensure compliance by all
tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply with and maintain, and use reasonable efforts to ensure that
all tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except to the extent that failure to do so could
not be reasonably expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, except to the extent that failure to so conduct, complete or comply could
not reasonably be expected to have a Material Adverse Effect and except to the
extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to have a Material Adverse Effect.
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7.10. Further Assurances
(a) Upon the request of the Administrative Agent for the benefit of the
Lenders, promptly perform or cause to be performed any and all acts and execute
or cause to be executed any and all documents (including, without limitation,
financing statements and continuation statements) for filing under the
provisions of the Uniform Commercial Code or any other Requirement of Law which
are necessary or reasonably advisable to maintain in favor of the Administrative
Agent, for the benefit of the Lenders, Liens on the Collateral that are duly
perfected in accordance with all applicable Requirements of Law.
(b) Upon request of the Administrative Agent for the benefit of the
Lenders, promptly provide such documents and legal opinions in respect of any
aspect or consequence of the transactions contemplated hereby as the
Administrative Agent for the benefit of the Lenders shall reasonably request.
7.11. Additional Collateral.
(a) With respect to any assets (other than assets having a de minimis
value) acquired after the Merger Borrowing Date by the Borrower or any of its
Subsidiaries that are intended to be subject to the Lien created by any of the
Security Documents but which are not so subject (other than immaterial assets a
Lien on which cannot be perfected by filing UCC-1 financing statements),
promptly (and in any event within 30 days after the acquisition thereof): (i)
execute and deliver to the Administrative Agent such amendments to the relevant
Security Documents or such other documents as the Administrative Agent may deem
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a Lien on such assets, (ii) take all actions necessary or advisable
to cause such Lien to be duly perfected in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be requested by the Administrative
Agent, and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described in clauses
(i) and (ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(b) With respect to any Person that, subsequent to the Effective Date,
becomes a Subsidiary promptly (i) cause such new Subsidiary to become a party to
a Subsidiary Security Agreement pursuant to documentation which is in form and
substance satisfactory to the Administrative Agent, and (ii) if so requested by
the Administrative Agent, deliver to the Administrative Agent, legal opinions
relating to due authorization, execution, delivery of such Subsidiary Security
Agreement by such new Subsidiary and the enforceability against it of such
Subsidiary Security Agreement, which opinions shall be in form and substance,
and from counsel reasonably satisfactory to the Administrative Agent.
(c) With respect to any Person that, subsequent to the Merger Borrowing
Date, becomes a Subsidiary promptly (i) cause such new Subsidiary to become a
party to a Subsidiary Guarantee pursuant to documentation which is in form and
substance satisfactory to the Administrative Agent, and (ii) if so requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to due authorization, execution, delivery of such Subsidiary Guarantee
by such new Subsidiary and the enforceability against it of such
56
Subsidiaries Guarantee, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
(d) With respect to any Person that, subsequent to the Merger Borrowing
Date, becomes a Subsidiary, promptly cause such new Subsidiary to (i) execute
and deliver to the Administrative Agent a new stock pledge agreement or such
amendments to the relevant Stock Pledge Agreement as the Administrative Agent
shall deem necessary or reasonably advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a Lien on the Capital Stock of such
Subsidiary which is owned by the Borrower or any of its Subsidiaries, (ii)
deliver to the Administrative Agent the certificates representing such Capital
Stock, together with undated stock powers executed and delivered in blank by a
duly authorized officer of the Borrower or such Subsidiary, as the case may be,
(iii) cause such new Subsidiary to take all actions necessary or advisable to
cause the Lien created by the relevant Subsidiary Security Agreement to be duly
perfected in accordance with all applicable Requirements of Law, including,
without limitation, the filing of financing statements in such jurisdictions as
may be requested by the Required Lenders, and (iv) deliver to the Administrative
Agent legal opinions relating to the matters described in clauses (i), (ii) and
(iii) immediately preceding, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Administrative Agent.
7.12. UCC Opinions.
The Administrative Agent shall have received within 30 days of the
Merger Borrowing Date an opinion or opinions address to each of the Lenders from
counsel to the Borrower and its Subsidiaries, if any, acceptable to the Required
Lenders, which opinion shall cover the perfection of the Administrative Agent's
Liens for the benefit of the Lenders in the Collateral described in such
Security Documents and such other matters relating thereto.
7.13. Insurance.
The Administrative Agent shall have received for the benefit of the
Lenders within 30 days of the Merger Borrowing Date, evidence in form and
substance satisfactory to the Administrative Agent of the existence of the
insurance required under subsection 7.6.
7.14. Lock-Box Arrangements.
The Borrower shall enter into such lock-box arrangements covering the
Receivables and certain other collateral as the Administrative Agent may
reasonably request, which lock-box arrangements shall be in form and substance
satisfactory to the Required Lenders.
SECTION 8. POST-MERGER NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that as of the Merger
Borrowing Date, and thereafter for so long as this Agreement is in effect and
until the Commitments have terminated and the Loans, together with all accrued
interest thereon and all other obligations incurred hereunder are paid in full,
it shall not, and (except with respect to subsection 8.1) shall not permit any
of its Subsidiaries to, directly or indirectly:
8.1. [Reserved]
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8.2. Limitation on Indebtedness and Preferred Stock.
Create, incur, assume or suffer to exist any Indebtedness or preferred
stock (other than preferred stock which, by its terms, does not require the
payment of any cash dividends thereon or redemption/reimbursement obligations or
impose any cash penalties (other than accrual of dividends on unpaid dividends)
for the failure to declare cash dividends thereon), except:
(a) Indebtedness of the Borrower under this Agreement;
(b) current trade liabilities incurred in the ordinary course of
business;
(c) Indebtedness of any Subsidiary to the Borrower or any other
Subsidiary, which has executed the following: Subsidiary Security Agreement,
Subsidiary Guarantee and Subsidiary Stock Pledge Agreement pursuant to
subsection 7.10 of this Agreement;
(d) Indebtedness outstanding on the date hereof and listed on Schedule
6.11 and any refinancings, refundings, renewals or extensions thereof in an
amount not to exceed the then current principal amount thereof;
(e) Indebtedness of a corporation which becomes a Subsidiary, after the
date hereof, provided that, (i) such Indebtedness existed at the time such
corporation became a Subsidiary and was not created in anticipation thereof, and
(ii) immediately after giving effect to the acquisition of such corporation by
the Borrower no Default or Event of Default shall have occurred and be
continuing; and
(f) Guarantee Obligations permitted pursuant to subsection 8.4;
8.3. Limitation on Liens.
Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, except
for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or its Subsidiaries, as the
case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business for sums which
are not overdue for a period of more than 90 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
58
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower or such Subsidiary;
(f) any interest or title of a licensor, lessor or sublessor under any
license or lease in the property subject to such license or lease;
(g) Liens arising from precautionary UCC financing statements regarding
operating leases permitted by this Agreement;
(h) Liens in existence on the date hereof listed on Schedule 6.12,
securing Indebtedness permitted by subsection 8.2(d), provided that no such Lien
is spread to cover any additional property after the date hereof and that the
amount of Indebtedness secured thereby is not increased;
(i) Liens on the property or assets of a corporation which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by subsection
8.2(e), provided that (X) such Liens existed at the time such corporation became
a Subsidiary and were not created in anticipation thereof, (Y) any such Lien is
not spread to cover any additional property or assets of such corporation after
the time such corporation becomes a Subsidiary, and (Z) the amount of
Indebtedness secured thereby is not increased; and
(j) Liens created pursuant to the Security Documents.
8.4. Limitation on Guarantee Obligations.
Create, incur, assume or suffer to exist any Guarantee Obligation,
except:
(a) Guarantee Obligations in existence on the date hereof and listed on
Schedule 6.13;
(b) Guarantee Obligations in favor of the Lenders;
(c) Guarantee Obligations made by the Borrower of obligations of any of
its Subsidiaries, which obligations are otherwise permitted under this
Agreement;
(d) Guarantee Obligations made by Subsidiaries of the Borrower of
obligations of the Borrower or any of its other Subsidiaries, which obligations
are otherwise permitted under this Agreement.
8.5. Limitation on Fundamental Changes.
Enter into any merger, consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, assign, transfer or otherwise dispose of, all or
substantially all of its property, business or assets, except:
59
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any one or more wholly owned Subsidiaries
of the Borrower (provided that the wholly owned Subsidiary or Subsidiaries shall
be the continuing or surviving corporation); and
(b) any wholly owned Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or otherwise) to
the Borrower or any other wholly owned Subsidiary of the Borrower.
8.6. Limitation on Sale of Assets.
Convey, sell, lease, assign, transfer or otherwise dispose of any of
its property, business or assets (including, without limitation, receivables and
leasehold interests but, in the case of the Borrower, excluding the sale of
Capital Stock or other securities of the Borrower), whether now owned or
hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares
of such Subsidiary's Capital Stock to any Person other than the Borrower or any
wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete, inoperative, surplus or
worn out property (including, without limitation, any property which is no
longer used or useful in the business of the Borrower and its Subsidiaries) in
the ordinary course of business and for fair market value;
(b) the sale or other disposition of any property, provided that the
fair market value of all assets so sold or disposed of (other than inventory) in
any period of twelve consecutive months shall not exceed $250,000;
(c) the sale or transfer of inventory in the ordinary course of
business;
(d) the sale or transfer discount without recourse of accounts
receivable arising in the ordinary course of business in connection with the
compromise or collection thereof;
(e) liquidation of Cash Equivalents and other investments permitted by
this Agreement; and
(f) any Asset Sales, the proceeds of which are applied pursuant to
subsection 3.5(b).
8.7. Limitation on Dividends.
Declare or pay any dividend on, or make any payment on account of, or
set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of the Borrower or any warrants or options to purchase
any such Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary (such
declarations, payments, setting apart, purchases, redemptions, defeasances,
retirements, acquisitions and distributions being herein called "Restricted
Payments"), provided; however, that any Subsidiary may declare, make or pay
dividends, payments or other distributions to the Borrower.
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8.8. Limitation on Capital Expenditures.
Make or commit to make (by way of the acquisition of securities of a
Person or otherwise) any expenditure in respect of the purchase or other
acquisition of fixed or capital assets (excluding any such asset acquired in
connection with normal replacement and maintenance programs properly charged to
current operations), except for:
(a) expenditures in the ordinary course of business;
(b) expenditures made to repair or replace assets which are damaged or
destroyed, in an aggregate amount not to exceed the amount (if any) of any
proceeds of insurance received on account of such damage or destruction; and
(c) expenditures on account of the making of any investment permitted
pursuant to subsection 8.9.
8.9. Limitation on Investments, Loans and Advances.
Make any advance, loan, extension of credit or capital contribution to,
or purchase any stock, bonds, notes, debentures or other securities of or any
assets constituting a business unit of, or make any other investment in, any
Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) loans and advances to employees of the Borrower or its Subsidiaries
for travel, entertainment and relocation expenses in the ordinary course of
business;
(d) investments in existence on the date hereof which are described on
Schedule 6.17 hereof; and
(e) the Borrower may make intercompany loans and advances to its wholly
owned Subsidiaries.
8.10. Limitation on Transactions with Affiliates.
Enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service,
with any Affiliate, unless such transaction is (a) otherwise permitted under
this Agreement, (b) in the ordinary course of the Borrower's or such
Subsidiary's business, and (c) upon fair and reasonable terms no less favorable
to the Borrower or such Subsidiary, as the case may be, than it would obtain in
a comparable arm's length transaction with a Person which is not an Affiliate.
8.11. Limitation on Sales and Leasebacks.
Enter into any arrangement with any Person providing for the leasing by
the Borrower or any Subsidiary of real or personal property which has been or is
to be sold or transferred by the
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Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary.
8.12. Limitation on Changes in Fiscal Year.
Permit the fiscal year of the Borrower and its Subsidiaries to end on a
day other than December 31.
8.13. Limitation on Negative Pledge Clauses.
Enter into with any Person any agreement, other than this Agreement,
purchase money mortgages, Financing Leases and other similar fixed asset
financings permitted by this Agreement (in which cases, any prohibition or
limitation shall only be effective against the assets financed thereby), which
prohibits or limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan when due
in accordance with the terms hereof or any other Loan Document, or the Borrower
shall fail to pay any interest under any Loan or any other amount payable
hereunder or any other Loan Document within five Business Days after any such
interest or other non-principal amount becomes due in accordance with the terms
hereof or thereof; or
(b) Any representation or warranty made or deemed made by the Borrower
or any other Loan Party herein or in any other Loan Document or in any Tefron
Guarantee, or which is contained in any certificate, document or financial or
other statement furnished by it at any time under or in connection with this
Agreement or any such other Loan Document or any Tefron Guarantee shall prove to
have been incorrect in any material respect on or as of the date made or deemed
made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in subsections 6.11 through
6.21 or Section 8 or any negative covenant contained in any other Loan Document
or any Tefron Guarantee; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this Agreement or
any other Loan Document or any Tefron Guarantee (other than as provided in
paragraphs (a) through (c) of this Section 9), and such default shall continue
unremedied for a period of 30 days after the earlier of (i) the date upon which
an executive officer of the Borrower or such other Loan Party, has actual
knowledge thereof and (ii) the date upon which the Administrative Agent or any
Lender gives notice to the Borrower and such other Loan Party thereof; or
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(e) Any Loan Party shall (i) default in any payment of principal of or
interest of any Indebtedness (other than the Loans) or in the payment of any
Guarantee Obligation, including the Tefron Guarantee, beyond the period of grace
(not to exceed 60 days), if any, provided in the instrument or agreement under
which such Indebtedness or Guarantee Obligation was created; or (ii) default in
the observance or performance of any other agreement or condition relating to
any such Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
Administrative Agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice or the passage of time if
required, such Indebtedness to become due prior to its stated maturity or such
Guarantee Obligation to become payable; provided, however, that no Default or
Event of Default shall exist under this paragraph unless the aggregate amount of
Indebtedness and/or Guarantee Obligations in respect of which any default or
other event or condition referred to in this paragraph shall have occurred shall
be equal to at least $50,000 for any fiscal year; or
(f) (i) Any Loan Party shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or such Loan Party shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against such Loan Party any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment (which order,
adjudication or appointment has not been stayed) or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against such Loan Party any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof, or (iv)
such Loan Party shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) such Loan Party shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) Any Loan Party shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of
63
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other adverse event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events or
conditions, if any, could reasonably be expected to involve an aggregate amount
of liability to such Loan Party in excess of $50,000 for any fiscal year; or
(h) One or more judgments or decrees shall be entered against any Loan
Party involving in the aggregate a liability (not paid or fully covered by
insurance) of $100,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 60 days from
the entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any reason
(other than a partial or full release in accordance with the terms thereof), to
be in full force and effect with respect to Collateral, (ii) the Lien created by
any of the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby, or (iii) any Guarantee
shall cease, for any reason, to be in full force and effect or any Guarantor
shall so assert; or (iv) any Tefron Guarantee shall cease, for any reason, to be
in full force and effect or any Tefron shall so assert; or
(j) Any Change in Control shall have occurred; or
(k) The Delisting Date does not occur on or before the date which is
ten (10) Business Days after the Merger Borrowing Date, and the Administrative
Agent shall not have received on or prior to such date (x) a duly authorized,
executed and delivered Parent Stock Pledge Agreement covering all of the issued
and outstanding voting common stock of Alba, and (y) the certificate(s)
representing all of the issued and outstanding voting common stock pledged
pursuant to such Parent Stock Pledge Agreement, together with an undated stock
power for each such certificate executed in blank by a duly authorized officer
of the Parent, and (z) a legal opinion or opinions, addressed to each of the
Lenders and dated within ten (10) Business Days after the Merger Borrowing Date,
from counsel to the Parent acceptable to the Required Lenders, which opinion(s)
shall cover the due authorization, execution, delivery and enforcement of such
Parent Stock Pledge Agreement and the due perfection of the Administrative
Agent's Liens, for the benefit of the Lenders, in the Collateral described
therein, and such other matters or documents as the Required Lenders may
reasonably request through the Administrative Agent, all of which shall be in
form and substance reasonably satisfactory to the Required Lenders;
then, and in any such event, (i) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section 9 with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (ii) if such
event is any other Event of Default, either or both of the following actions may
be taken: (A) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately
64
terminate; and (B) with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
Except as expressly provided above in this Section 9, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
SECTION 10. THE ADMINISTRATIVE AGENT
10.1. Appointment.
(a) Each Lender hereby irrevocably designates and appoints Bank
Hapoalim B.M. as the Administrative Agent of such Lender under this Agreement
and the other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
10.2. Delegation of Duties.
The Administrative Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
10.3. Exculpatory Provisions.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except for its or
such Person's own gross negligence or willful misconduct) or (ii) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by the Borrower or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
the Borrower to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of
65
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Borrower.
10.4. Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Borrower), independent accountants and other experts selected by the
Administrative Agent. Without limiting the foregoing or the obligation of the
Borrower to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent may prior to receipt of written confirmation
act without liability upon the basis of such telephonic notice, believed by the
Administrative Agent in good faith to be from a Responsible Officer or Borrower.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
10.5. Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that unless and until the Administrative Agent shall have
received such directions, the Administrative 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 Lenders.
10.6. Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates has made any representations or warranties to it and that no act
by the Administrative Agent hereinafter taken, including any review of the
affairs of the Borrower, shall be deemed to constitute any
66
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower which
may come into the possession of the Administrative Agent or any of its officers,
directors, employees, Administrative Agents, attorneys-in-fact or Affiliates.
10.7. Indemnification.
The Lenders agree to indemnify the Administrative Agent in its capacity
as such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect (or, if not then in effect, their respective
aggregate principal outstanding Loans) on the date on which indemnification is
sought, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of, the
Commitments of the Lenders, this Agreement, any of the other Loan Documents or
any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent under or in connection with any of the foregoing;
provided that, no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
subsection 10.7 shall survive the payment of the Loans and all other amounts
payable hereunder.
10.8. Administrative Agent in its Individual Capacity.
The Administrative Agent and each of its respective Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower and its subsidiaries as though the Administrative Agent were not
the Administrative Agent hereunder and under the other Loan Documents. With
respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it
67
were not the Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its respective individual capacity.
10.9. Successor Administrative Agent.
The Administrative Agent may resign as Administrative Agent upon 10
days' notice to the Lenders and ▇▇▇▇▇▇▇▇. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the other Loan
Documents, then the Required Lenders shall appoint from among the Lenders a
successor Administrative Agent for the Lenders, which successor Administrative
Agent (provided that it shall have been approved by the Borrower), shall succeed
to the rights, powers and duties of the Administrative Agent hereunder.
Effective upon such appointment and approval, the term "Administrative Agent"
shall mean such successor Administrative Agent, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Loans. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
SECTION 11. MISCELLANEOUS
11.1. Amendments and Waivers.
Neither this Agreement nor any other Loan Document, nor any terms
hereof or thereof, may be amended, supplemented or modified except in accordance
with the provisions of this subsection 11.1. The Required Lenders may, or, with
the written consent of the Required Lenders, the Administrative Agent may, from
time to time, (a) enter into with the Borrower written amendments, supplements
or modifications hereto and to the other Loan Documents for the purpose of
adding any provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of the Lenders or of the Borrower hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders,
may specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall:
(i) reduce the amount or extend the scheduled date of maturity of
any Loan or of any installment thereof, or reduce the stated
rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof or increase the amount or
extend the expiration date of any Lender's Commitments, in each
case without the consent of each Lender directly affected
thereby;
(ii) amend, modify or waive any provision of this subsection 11.1 or
reduce the percentage specified in the definition of Required
Lenders, or consent to the assignment or transfer by the
Borrower of any of its rights and
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obligations under this Agreement and the other Loan Documents,
in each case without the written consent of all the Lenders;
(iii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement and the other
Loan Documents (other than in connection with the Merger), in
each case without the written consent of all the Lenders;
(iv) subject to subsection 11.2, take any action having the effect of
releasing any of the material collateral or material guarantee
obligations provided for in any Guarantee or Security Document,
in each case without all written consent of the Lenders; or
(v) amend, modify or waive any provision of Section 10 without the
written consent of the then Administrative Agent.
Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Borrower, the Lenders and the
Administrative Agent shall be restored to their former positions and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
11.2. Releases of Collateral Security and Guarantee Obligations.
Notwithstanding anything to the contrary contained herein or in any
Security Document, upon request of the Borrower, the Administrative Agent shall
(without any notice to or vote or consent of any Lender) take any action which
has the effect of releasing any collateral security and/or guarantee obligations
provided for in any Loan Document to the extent necessary to permit the
consummation of any Net Proceeds Event or any asset dispositions permitted by
subsections 6.15 and 8.6; provided that (unless the Required Lenders shall
otherwise consent) the Net Proceeds of any Net Proceeds Event are applied in the
manner contemplated by subsection 3.5 (if so required).
11.3. Notices.
Unless otherwise expressly provided herein, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by facsimile transmission) and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made (a) in the case
of delivery by hand, when delivered, (b) in the case of delivery by mail, five
Business Days after being deposited in the mails, postage prepaid, or (c) in the
case of delivery by facsimile transmission, when sent and receipt has been
confirmed, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in Annex II in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
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The Borrower: AWS Acquisition Corp.
c/o Tefron Ltd.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: Bank Hapoalim B.M., New York Branch
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇, Vice President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
pursuant to subsection 2.3, 2.6, 2.16 or 3.4 shall not be effective until
received.
11.4. No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder or under the other Loan Documents shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.5. Survival of Representations and Warranties.
All representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the making of the Loans hereunder.
11.6. Payment of Expenses and Taxes.
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The Borrower agrees (a) to pay or reimburse the Administrative Agent
for all of its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent, (b) to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the other
Loan Documents and any such other documents, including, without limitation, the
reasonable fees and disbursements of counsel to each Lender and of counsel to
the Administrative Agent, (c) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and similar documentary taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents or the use of the proceeds of the Loans and
any such other documents, including, without limitation, any of the foregoing
relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower, any of its
Subsidiaries or any of the Properties (all the foregoing in this clause (d),
collectively, the "indemnified liabilities"), provided that the Borrower shall
have no obligation hereunder to the Administrative Agent or any Lender with
respect to (i) indemnified liabilities to the extent arising from the gross
negligence, bad faith or willful misconduct of the Administrative Agent or such
Lender, or (ii) the fees and disbursements of counsel to the Administrative
Agent in connection with the preparation, execution and delivery of this
Agreement. The agreements in this subsection 11.6 shall survive repayment of the
Loans and all other amounts payable hereunder.
11.7. Termination.
This Agreement shall terminate upon the termination of all Term Loan
Commitments and the irrevocable repayment in full of the aggregate outstanding
principal amount of the Loans, accrued interest thereon, and all fees and
expenses and other amounts due and payable at such time under any of the Loan
Documents; provided that all indemnities set forth herein including, without
limitation, in subsections 2.12, 2.13, 3.7, 10.7 and 11.6 shall survive such
termination.
11.8. Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Administrative Agent and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement (other than in connection with
the Merger) without the prior written consent of each Lender.
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(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other financial institutions ("Participants") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all purposes under this Agreement
and the other Loan Documents, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such ▇▇▇▇▇▇'s rights and obligations under this Agreement and the other Loan
Documents. No Lender shall be entitled to create in favor of any Participant, in
the participation agreement pursuant to which such Participant's participating
interest shall be created or otherwise, any right to vote on, consent to or
approve any matter relating to this Agreement or any other Loan Document except
for those specified in clauses (i) and (ii) of the proviso to subsection 11.1.
The Borrower agrees that if amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of subsections 2.12, 2.13 and 3.7 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of subsection 3.7, such Participant shall
have complied with the requirements of said subsection and provided, further,
that no Participant shall be entitled to receive any greater amount pursuant to
any such subsection than the Lenders would have been entitled to receive in
respect of the amount of the participation transferred by such Lender to such
Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or any affiliate thereof or, with the consent of the
Borrower and the Administrative Agent (which in each case shall not be
unreasonably withheld), to an additional bank or financial institution (an
"Assignee") all or any part of its rights and obligations under this Agreement
and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit , executed by such Assignee, such assigning
Lender (and, in the case of an Assignee that is not then a Lender or an
affiliate thereof, by the Borrower and the Administrative Agent) and delivered
to the Administrative Agent for its acceptance and recording, provided that, in
the case of any such assignment to an additional bank or financial institution,
(x) the sum of the aggregate principal amount of the Loans and/or Commitments
being assigned are not less than $5,000,000 (or such lesser amount as may be
agreed to by the Borrower and the Administrative Agent), and (y) if such
assignment is of less than all of the rights and obligations of the assigning
Lender, then the sum of the aggregate principal amount of the Loans and the
aggregate amount of the Commitments remaining with the assigning Lender are each
not less than $5,000,000 (or such lesser amount as may be agreed to by the
Borrower and the Administrative Agent) and provided further that no Assignee
shall be entitled to receive any greater amount pursuant to Section 3.7
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than the assigning ▇▇▇▇▇▇ would have been entitled to receive in respect of the
loans and Commitments assigned. Upon such execution, delivery, acceptance and
recording (and the payment of the registration and processing fee described in
clause (e) below), from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment as set forth therein,
and (y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of the Lenders' rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto). Notwithstanding any
provision of this paragraph (c) of this subsection, the consent of the Borrower
shall not be required for any assignment which occurs at any time when a Default
or Event of Default has occurred or is continuing.
(d) The Administrative Agent, on behalf of the Borrower, shall maintain
at the address of the Administrative Agent referred to in subsection 11.3 a copy
of each Assignment and Acceptance delivered to it, and shall record such
assignment in the Register. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower and the Administrative
Agent), together with payment to the Administrative Agent of a registration and
processing fee of $2,500, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance, and (ii) on the effective date determined
pursuant thereto, record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Borrower;
provided that no such fee shall be payable with respect to any assignment from
an assigning Lender to an affiliate thereof.
(f) The Borrower authorizes each Lender to disclose to any Participant
or Assignee (each, a "Transferee") and any prospective Transferee any and all
financial information in such Lenders' possession concerning the Borrower and
its Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lenders' credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection 11.8 concerning assignments of Loans and
Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security
73
interests, including, without limitation, any pledge or assignment by a Lender
of any Loan or Note to any Federal Reserve Bank in accordance with applicable
law.
11.9. Adjustments; Set-off.
If any Lender (a "Benefited Lender") at any time shall receive any
payment of all or part of its Loans, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans,
or interest thereon, such Benefited Lender shall purchase for cash from the
other Lenders such portion of each such other Lender's Loan, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such Benefited Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders, and if after taking into account such sharing the Benefited Lender
continues to have access to additional funds of or collateral granted by the
Borrower for application on account of its debt, then the Benefited Lender shall
use such funds or collateral to reduce Indebtedness of the Borrower held by it
and share such payments and the benefits of such collateral with the other
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Loans may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion. In
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, without prior notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent permitted by applicable
law, upon any amount becoming due and payable by the Borrower hereunder (whether
at the stated maturity, by acceleration or otherwise) to set-off and appropriate
and apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch, agency or (to the extent permitted by
applicable law) banking affiliate thereof to or for the credit or the account of
the Borrower (other than the Shares or the proceeds thereof while such Shares
constitute Margin Stock). Each Lender agrees promptly to notify the Borrower and
the Administrative Agent or any Lender after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of the set-off and application.
11.10. Counterparts.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by facsimile
transmission), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
11.11. Severability.
74
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11.12. Integration.
This Agreement and the other Loan Documents represent the agreement of
the Borrower, the Administrative Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
11.13. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
11.14. Submission To Jurisdiction; Waivers.
The Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof,
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in subsection 11.3 or at such other address of which the
Lenders shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to sue
in any other jurisdiction; and
(e) waives, except in the case of extreme bad faith (and otherwise to
the maximum extent not prohibited by law), any right it may have to claim or
recover in any legal action or proceeding referred to in this subsection 11.14
any special, exemplary, punitive or consequential damages.
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11.15. Acknowledgments.
The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
Administrative Agent and Lenders, on the one hand, and the Borrower, on the
other hand, in connection herewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Borrower and the Lenders.
11.16. WAIVERS OF JURY TRIAL.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.17. Confidentiality.
Each of the Administrative Agent and the Lenders agrees that it will
use reasonable efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors, counsel or other professional advisors,
affiliates, or the Administrative Agent or other Lenders, if the disclosing
Person reasonably determines that such other Person is required to have access
to such information) any information with respect to the Borrower or any
Subsidiary which is furnished pursuant to this Agreement or any other Loan
Document that is identified by such Person as being confidential at the time the
same is delivered to the Administrative Agent or the Lender; provided that the
Administrative Agent or Lender may disclose any such information (a) as has
become generally available to the public, (b) as may be required or appropriate
in any report, statement or testimony submitted to or in connection with any
examination conducted by any Governmental Authority having or claiming to have
jurisdiction over such Administrative Agent or Lender (including the Federal
Reserve Board and the Federal Deposit Insurance Corporation or any similar
organization (whether in the United States or elsewhere) and their respective
successors), (c) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation, (d) to comply with any
Requirement of Law applicable to it, (e) in connection with any litigation to
which the Administrative Agent or any of the Lenders is a party or in connection
with the enforcement of rights or remedies hereunder or under any Loan Document,
(f) to any prospective Transferee which is not at the time the Administrative
Agent or a Lender, if such prospective Transferee has agreed in writing to be
bound by the provisions of this Section 11.17 to the same extent as the
disclosing Person or (g) pursuant to Standard Credit References in conformity
with the Code of Ethics for the Exchange of Commercial Credit Information
between Banks as established by the
76
▇▇▇▇▇▇ ▇▇▇▇▇▇ Associates. The Borrower acknowledges and agrees that the
Administrative Agent or any Lender may share with any of its affiliates any
information related to the Borrower or any Subsidiary (including, without
limitation, nonpublic information regarding the creditworthiness of the Borrower
or any Subsidiary), so long as such affiliate is subject to the provisions of
this Section 11.17 to the same extent as the Administrative Agent or such
Lender.
[THE REMINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BANK HAPOALIM B.M., NEW YORK BRANCH
as Administrative Agent and a Lender
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
AWS ACQUISITION CORP.
as Borrower
By:__________________________
Name:
Title:
ISRAEL DISCOUNT
BANK OF NEW YORK,
as Lender
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
78
ANNEX II
▇▇▇▇▇▇▇; ADDRESSES FOR NOTICES
▇▇▇▇▇▇ ADDRESS
------ -------
BANK HAPOALIM B.M., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
ISRAEL DISCOUNT
BANK OF NEW YORK ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX I
LOAN COMMITMENTS AND COMMITMENT PERCENTAGES
Tender Offer Loans: Post-Merger Loans
----------------------------- ------------------------------------------------------
Tender Offer Commitment Term Loan Revolving Credit Commitment
Lender Commitment Percentage Commitment Commitment Percentage
------ ---------- ---------- ---------- ---------- ----------
Bank Hapoalim B.M.,
New York Branch
$42,300,000 60% $40,800,000 $1,500,000 60%
Israel Discount Bank of
New York
$28,200,000 40% $27,200,000 $1,000,000 40%
----------- --- ----------- ---------- ---
Total: $70,500,000 100% $68,000,000 $2,500,000 100%