EXHIBIT 10.40
TROPICAL SPORTSWEAR INT'L CORPORATION,
TROPICAL SPORTSWEAR COMPANY, INC.,
SAVANE INTERNATIONAL CORP.,
APPAREL NETWORK CORPORATION,
TSI BRANDS, INC.,
TSIL, INC.,
DUCK HEAD APPAREL COMPANY, LLC, AND
DELTA MERCHANDISING, INC.
as Borrowers
SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Dated: January ___, 2004
$70,000,000.00
THE FINANCIAL INSTITUTIONS
PARTY HERETO FROM TIME TO TIME, as Lenders
and
FLEET CAPITAL CORPORATION, as Agent
TABLE OF CONTENTS
Page
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SECTION 1. CREDIT FACILITIES 4
1.1. REVOLVER COMMITMENT............................................................................. 4
1.2. RESERVED........................................................................................ 5
1.3. LC FACILITY..................................................................................... 5
SECTION 2. INTEREST, FEES AND CHARGES 10
2.1. INTEREST........................................................................................ 10
2.2. FEES............................................................................................ 12
2.3. COMPUTATION OF INTEREST AND FEES................................................................ 13
2.4. REIMBURSEMENT OBLIGATIONS....................................................................... 13
2.5. BANK CHARGES.................................................................................... 14
2.6. ILLEGALITY...................................................................................... 14
2.7. INCREASED COSTS................................................................................. 15
2.8. CAPITAL ADEQUACY................................................................................ 16
2.9. FUNDING LOSSES.................................................................................. 16
2.10. MAXIMUM INTEREST................................................................................ 17
SECTION 3. LOAN ADMINISTRATION 18
3.1. MANNER OF BORROWING AND FUNDING REVOLVER LOANS.................................................. 18
3.2. DEFAULTING LENDER............................................................................... 22
3.3. SPECIAL PROVISIONS GOVERNING LIBOR LOANS........................................................ 22
3.4. BORROWERS' REPRESENTATIVE....................................................................... 23
3.5. ALL LOANS TO CONSTITUTE ONE OBLIGATION.......................................................... 23
SECTION 4. PAYMENTS 23
4.1. GENERAL PAYMENT PROVISIONS...................................................................... 23
4.2. REPAYMENT OF REVOLVER LOANS..................................................................... 23
4.3. RESERVED........................................................................................ 25
4.4. PAYMENT OF OTHER OBLIGATIONS.................................................................... 25
4.5. MARSHALING; PAYMENTS SET ASIDE.................................................................. 25
4.6. AGENT'S ALLOCATION OF PAYMENTS AND COLLECTIONS.................................................. 25
4.7. APPLICATION OF PAYMENTS AND COLLATERAL PROCEEDS................................................. 26
4.8. LOAN ACCOUNTS; THE REGISTER; ACCOUNT STATED..................................................... 26
4.9. GROSS UP FOR TAXES.............................................................................. 27
4.10. WITHHOLDING TAX EXEMPTION....................................................................... 27
SECTION 5. TERM AND TERMINATION OF COMMITMENTS 29
5.1. TERM OF COMMITMENTS............................................................................. 29
5.2. TERMINATION..................................................................................... 30
SECTION 6. COLLATERAL 30
6.1. GRANT OF SECURITY INTEREST...................................................................... 30
6.2. LIEN ON DEPOSIT ACCOUNTS........................................................................ 31
6.3. REAL ESTATE COLLATERAL.......................................................................... 31
6.4. OTHER COLLATERAL................................................................................ 32
6.4.2 COMMERCIAL TORT CLAIMS.......................................................................... 32
6.4.3 CERTAIN AFTER-ACQUIRED COLLATERAL............................................................... 32
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6.5. NO ASSUMPTION OF LIABILITY...................................................................... 32
6.6. LIEN PERFECTION; FURTHER ASSURANCES............................................................. 32
6.7. FOREIGN SUBSIDIARY STOCK........................................................................ 33
SECTION 7. COLLATERAL ADMINISTRATION 33
7.1. GENERAL PROVISIONS.............................................................................. 33
7.2. ADMINISTRATION OF ACCOUNTS...................................................................... 34
7.3. ADMINISTRATION OF INVENTORY..................................................................... 35
7.4. ADMINISTRATION OF EQUIPMENT..................................................................... 36
7.5. BORROWING BASE CERTIFICATES..................................................................... 37
SECTION 8. REPRESENTATIONS AND WARRANTIES 37
8.1. GENERAL REPRESENTATIONS AND WARRANTIES.......................................................... 37
8.2. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES................................................. 43
8.3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES...................................................... 43
SECTION 9. COVENANTS AND CONTINUING AGREEMENTS 44
9.1. AFFIRMATIVE COVENANTS........................................................................... 44
9.2. NEGATIVE COVENANTS.............................................................................. 47
9.3. FINANCIAL COVENANTS............................................................................. 52
MINIMUM EBITDA 53
MINIMUM FIXED CHARGE COVERAGE RATIO 53
MINIMUM EBIT TO INTEREST EXPENSE 53
SECTION 10. CONDITIONS PRECEDENT 54
10.1. CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSIONS............................................... 54
10.2. CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS................................................... 55
10.3. INAPPLICABILITY OF CONDITIONS................................................................... 56
10.4. LIMITED WAIVER OF CONDITIONS PRECEDENT.......................................................... 56
SECTION 11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT 56
11.1. EVENTS OF DEFAULT............................................................................... 56
11.2. ACCELERATION OF OBLIGATIONS; TERMINATION OF COMMITMENTS......................................... 59
11.3. OTHER REMEDIES.................................................................................. 59
11.4. SETOFF.......................................................................................... 60
11.5. REMEDIES CUMULATIVE; NO WAIVER.................................................................. 61
SECTION 12. AGENT 62
12.1. APPOINTMENT, AUTHORITY AND DUTIES OF AGENT...................................................... 62
12.2. AGREEMENTS REGARDING COLLATERAL AND EXAMINATION REPORTS......................................... 63
12.3. RELIANCE BY AGENT............................................................................... 64
12.4. ACTION UPON DEFAULT............................................................................. 64
12.5. RATABLE SHARING................................................................................. 65
12.6. INDEMNIFICATION OF AGENT INDEMNITEES............................................................ 65
12.7. LIMITATION ON RESPONSIBILITIES OF AGENT......................................................... 66
12.8. SUCCESSOR AGENT AND CO-AGENTS................................................................... 67
12.9. CONSENTS, AMENDMENTS AND WAIVERS; OUT-OF-FORMULA LOANS.......................................... 68
12.10. DUE DILIGENCE AND NON-RELIANCE.................................................................. 70
12.11. REPRESENTATIONS AND WARRANTIES OF LENDERS....................................................... 70
12.12. THE REQUIRED LENDERS............................................................................ 70
12.13. SEVERAL OBLIGATIONS............................................................................. 70
12.14. AGENT IN ITS INDIVIDUAL CAPACITY................................................................ 71
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12.15. NO THIRD PARTY BENEFICIARIES.................................................................... 71
12.16. NOTICE OF TRANSFER.............................................................................. 71
12.17. REPLACEMENT OF CERTAIN LENDERS.................................................................. 71
12.18. REMITTANCE OF PAYMENTS AND COLLECTIONS.......................................................... 72
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS 72
13.1. SUCCESSORS AND ASSIGNS.......................................................................... 72
13.2. PARTICIPATIONS.................................................................................. 73
13.3. ASSIGNMENTS..................................................................................... 74
13.4. TAX TREATMENT................................................................................... 75
SECTION 14. MISCELLANEOUS 75
14.1. POWER OF ATTORNEY............................................................................... 75
14.2. GENERAL INDEMNITY............................................................................... 75
14.3. SURVIVAL OF ALL INDEMNITIES..................................................................... 76
14.4. MODIFICATION OF AGREEMENT....................................................................... 76
14.5. SEVERABILITY.................................................................................... 76
14.6. CUMULATIVE EFFECT; CONFLICT OF TERMS............................................................ 76
14.7. EXECUTION IN COUNTERPARTS....................................................................... 77
14.8. CONSENT......................................................................................... 77
14.9. NOTICES......................................................................................... 77
14.10. PERFORMANCE OF BORROWERS' OBLIGATIONS........................................................... 77
14.11. CREDIT INQUIRIES................................................................................ 77
14.12. TIME OF ESSENCE................................................................................. 77
14.13. INDULGENCES NOT WAIVERS......................................................................... 78
14.14. ENTIRE AGREEMENT; APPENDIX A, EXHIBITS AND SCHEDULES............................................ 78
14.15. INTERPRETATION.................................................................................. 78
14.16. OBLIGATIONS OF LENDERS SEVERAL.................................................................. 78
14.17. ADVERTISING AND PUBLICITY....................................................................... 78
14.18. CONFIDENTIALITY................................................................................. 78
14.19. SENIOR DEBT..................................................................................... 79
14.20. GOVERNING LAW; CONSENT TO FORUM................................................................. 79
14.21. WAIVERS BY BORROWERS............................................................................ 80
14.22. TEXAS FINANCE CODE.............................................................................. 80
14.23. WAIVER OF DTPA.................................................................................. 80
14.24. WAIVER OF CERTAIN EVENTS OF DEFAULT............................................................. 80
14.25. RATIFICATION AND REAFFIRMATION.................................................................. 80
14.26. AMENDMENT AND RESTATEMENT....................................................................... 80
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Revolver Note
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Notice of Borrowing
Exhibit E Form of Compliance Certificate
Exhibit F Form of Opinion Contents
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Notice
Exhibit I Letter of Credit Procurement Request
Schedule 7.1.1 Borrowers' Business Locations
Schedule 7.1.2 Borrowers' Insurance
Schedule 8.1.1 Jurisdictions in which Borrowers and each Subsidiary is
Authorized to do Business
Schedule 8.1.4 Capital Structure of Borrowers
Schedule 8.1.5 Corporate Names
Schedule 8.1.12 Surety Obligations
Schedule 8.1.13 Tax Identification Numbers of Borrowers and Subsidiaries
Schedule 8.1.15 Patents, Trademarks, Copyrights and Licenses
Schedule 8.1.18 Contracts Restricting Borrowers' Right to Incur Debts; Surety Obligations
Schedule 8.1.19 Litigation
Schedule 8.1.21 Capitalized and Operating Leases
Schedule 8.1.22 Pension Plans
Schedule 8.1.24 Labor Contracts
Schedule 8.1.29 Deposit Accounts
Schedule 9.2.3 Debt for Money Borrowed
Schedule 9.2.4 Affiliate Transactions
Schedule 9.2.5 Permitted Liens
Schedule 9.2.8 Restrictions on Upstream Payments
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SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made on January
12th, 2004, by and among TROPICAL SPORTSWEAR INT'L CORPORATION, a Florida
corporation (individually and, in its capacity as the representative of the
other Borrowers pursuant to SECTION 3.4 hereof, "Tropical"), TROPICAL SPORTSWEAR
COMPANY, INC., a Delaware corporation ("TSCI"), SAVANE INTERNATIONAL CORP., a
Texas corporation ("Savane"), APPAREL NETWORK CORPORATION, a Florida corporation
("Apparel"), TSI BRANDS, INC., a Delaware corporation ("TSI"), TSIL, INC., a
Delaware corporation ("TSIL"), DUCK HEAD APPAREL COMPANY, LLC, a Georgia limited
liability company ("Duck Head"), and DELTA MERCHANDISING, INC., a South Carolina
corporation ("Delta"; Tropical, TSCI, Savane, Apparel, TSI, TSIL, Duck Head and
Delta collectively referred to hereinafter as "Borrowers" and individually as a
"Borrower"), each with its chief executive office and principal place of
business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇; the various
financial institutions listed on the signature pages hereof and their respective
successors and permitted assigns which become "Lenders" as provided herein; and
FLEET CAPITAL CORPORATION, a Rhode Island corporation with an office at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, in its capacity as
collateral and administrative agent for the Lenders pursuant to SECTION 12
hereof (together with its successors in such capacity, "Agent"). Capitalized
terms used in this Agreement have the meanings assigned to them in Appendix A,
General Definitions.
R E C I T A L S:
Borrowers, Agent and certain financial institutions ("Original Lenders") are
parties to a certain Loan and Security Agreement dated June 10, 1998, as amended
and restated by that certain Amended and Restated Loan and Security Agreement
dated June 6, 2003 (as at any time amended or modified, the "Original Loan
Agreement"), pursuant to which Original Lenders made certain revolving credit
loans and letter of credit accommodations to Borrowers. Borrowers have requested
that Agent and Lenders amend and restate the Original Loan Agreement. Agent and
Lenders are willing to amend and restate the Original Loan Agreement on the
terms set forth herein. Each Borrower has requested that Lenders make available
a revolving credit facility to Borrowers, which shall be used by Borrowers to
finance their mutual and collective enterprise of manufacturing and distributing
apparel. In order to utilize the financial powers of each Borrower in the most
efficient and economical manner, and in order to facilitate the financing of
each Borrower's needs, Lenders will, at the request of any Borrower, make loans
to all Borrowers under the revolving credit facility on a combined basis and in
accordance with the provisions hereinafter set forth. Borrowers' business is a
mutual and collective enterprise and Borrowers believe that the consolidation of
all revolving credit loans under this Agreement will enhance the aggregate
borrowing powers of each Borrower and ease the administration of their revolving
credit loan relationship with Lenders, all to the mutual advantage of Borrowers.
Lenders' willingness to extend credit to Borrowers and to administer each
Borrower's collateral security therefor, on a combined basis as more fully set
forth in this Agreement, is done solely as an accommodation to Borrowers and at
Borrowers' request in furtherance of Borrowers' mutual and collective
enterprise.
Each Borrower has agreed to guarantee the obligations of each of the other
Borrowers under this Agreement and each of the other Loan Documents.
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NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the parties hereto hereby agree as follows:
SECTION 1. CREDIT FACILITIES
Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders severally agree to the extent and in the manner hereinafter
set forth to make their respective Pro Rata shares of the Commitments available
to Borrowers, in an aggregate amount up to $70,000,000, as follows:
1.1. REVOLVER COMMITMENT. Revolver Loans. Each Lender agrees,
severally to the extent of its Revolver Commitment and not jointly with the
other Lenders, upon the terms and subject to the conditions set forth herein, to
make Revolver Loans to Borrowers on any Business Day during the period from the
Closing Date through the Business Day before the last day of the Term, not to
exceed in aggregate principal amount outstanding at any time such Lender's
Revolver Commitment at such time, which Revolver Loans may be repaid and
reborrowed in accordance with the provisions of this Agreement; provided,
however, that Lenders shall have no obligation to Borrowers whatsoever to honor
any request for a Revolver Loan on or after the Commitment Termination Date or
if at the time of the proposed funding thereof the aggregate principal amount of
all of the Revolver Loans then outstanding and Pending Revolver Loans exceeds,
or would exceed after the funding of such Revolver Loan, the Borrowing Base.
Each Borrowing of Revolver Loans shall be funded by Lenders on a Pro Rata basis
in accordance with their respective Revolver Commitments (except for Fleet with
respect to Settlement Loans). The Revolver Loans shall bear interest as set
forth in SECTION 2.1. hereof. Each Revolver Loan shall, at the option of
Borrowers, be made or continued as, or converted into, part of one or more
Borrowings that, unless specifically provided herein, shall consist entirely of
Base Rate Loans or LIBOR Loans.
1.1.2. Out-of-Formula Loans. If the unpaid balance of
Revolver Loans outstanding at any time should exceed the Borrowing Base at such
time (an "Out-of-Formula Condition"), such Revolver Loans shall nevertheless
constitute Obligations that are secured by the Collateral and entitled to all of
the benefits of the Loan Documents. In the event that Lenders are willing in
their sole and absolute discretion to make Out-of-Formula Loans or are required
to do so by SECTIONS 1.1.6 or 12.9.4 hereof, such Out-of-Formula Loans shall be
payable ON DEMAND and shall bear interest as provided in SECTION 2.1.5 of this
Agreement.
1.1.3. Use of Proceeds. The proceeds of the Revolver Loans
shall be used by Borrowers solely for one or more of the following purposes: (i)
to pay the fees and transaction expenses associated with the closing of the
transactions described herein; (ii) to pay any of the Obligations; and (iii) to
make expenditures for other lawful corporate purposes of Borrowers to the extent
such expenditures are not prohibited by this Agreement or Applicable Law. In no
event may any Revolver Loan proceeds be used by any Borrower to make a
contribution to the equity of any Subsidiary, to purchase or to carry, or to
reduce, retire or refinance any Debt incurred to purchase or carry, any Margin
Stock or for any related purpose that violates the provisions of Regulations T,
U or X of the Board of Governors.
1.1.4. Revolver Notes. The Revolver Loans made by each
Lender and interest accruing thereon shall be evidenced by the records of Agent
and such Lender and by the Revolver Note payable to such Lender (or the assignee
of such Lender), which shall be executed by Borrowers, completed in conformity
with this Agreement and delivered to such Lender. All outstanding principal
amounts and accrued interest under the Revolver Notes shall be due and payable
as set forth in SECTION 4.2 hereof.
1.1.5. Reserved
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1.1.6. Agent Advances. Agent shall be authorized by
Borrowers and Lenders, from time to time in Agent's sole and absolute
discretion, at any time that a Default or Event of Default exists or any of the
conditions precedent set forth in SECTION 10 hereof have not been satisfied, to
make Base Rate Loans to Borrowers on behalf of Lenders in an aggregate amount
outstanding at any time not to exceed 5% of the Borrowing Base, but (a) not in
excess of the aggregate of the Commitments (minus all of the Revolver Loans then
outstanding, Pending Revolver Loans and LC Outstandings), and (b) only to the
extent that Agent deems the funding of such Base Rate Loans to be necessary or
desirable (i) to preserve or protect the Collateral or any portion thereof, (ii)
to enhance the likelihood of or the amount of repayment of the Obligations or
(iii) to pay any other amount chargeable to Borrowers pursuant to the terms of
this Agreement, including costs, fees and expenses, all of which Base Rate Loans
advanced by Agent shall be deemed part of the Obligations and secured by the
Collateral, shall be treated as Settlement Loans and shall be settled and paid
by Borrowers and Lenders as provided herein for Settlement Loans; provided,
however, that the Required Lenders may at any time revoke Agent's authorization
to make any such Base Rate Loans by written notice to Agent, which shall become
effective upon and after Agent's receipt thereof.
1.2. RESERVED.
1.3. LC FACILITY.
1.3.1 Procurement of Letters of Credit. Subject to all of
the terms and conditions hereof, Fleet agrees to establish the LC Facility
pursuant to which, during the period from the date hereof to (but excluding) the
30th day prior to the last day of the Term, Fleet shall procure from Bank one or
more Letters of Credit on Borrowers' request therefor from time to time, subject
to the following terms and conditions:
(i) Each Borrower acknowledges that Bank's willingness
to issue any Letter of Credit is conditioned upon Bank's receipt of (A)
the LC Support duly executed and delivered to Bank by Fleet, (B) an LC
Application with respect to the requested Letter of Credit and (C) such
other instruments and agreements as Bank may customarily require for
the issuance of a letter of credit of equivalent type and amount as the
requested Letter of Credit. Fleet shall have no obligation to execute
any LC Support or to join with any Borrower in executing an LC
Application unless (x) Fleet receives an LC Request from such Borrower
at least 5 Business Days prior to the date on which Borrower desires to
submit such LC Application to Bank and (y) each of the LC Conditions is
satisfied on the date of Fleet's receipt of the LC Request and at the
time of the requested execution of the LC Application. In no event
shall Fleet or any other Lender have any liability or obligation to any
or all Borrowers or any Subsidiary for any failure or refusal by Bank
to issue, for Bank's delay in issuing, or for any error of Bank in
issuing any Letter of Credit.
(ii) Letters of Credit may be requested by a Borrower
only if they are to be used (a) to support obligations of Borrower
incurred in the Ordinary Course of Business of such Borrower, or (b)
for such other purposes as Agent and Lenders may approve from time to
time in writing.
(iii) Borrowers shall comply with all of the terms and
conditions imposed on Borrowers by Bank, whether such terms and
conditions are contained in an LC Application or in any agreement with
respect thereto, and subject to the rights of Bank, Fleet shall have
the same rights and remedies that Bank has under any agreements that
Borrowers may have with Bank in addition to any rights and remedies
contained in any of the Loan Documents. Borrowers jointly and severally
agree to reimburse Bank for any draw under any Letter of Credit as
hereinafter
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provided, and to pay Bank the amount of all other liabilities and
obligations payable to Bank under or in connection with any Letter of
Credit immediately when due, irrespective of any claim, setoff, defense
or other right that any or all Borrowers may have at any time against
Bank or any other Person. If Fleet shall pay any amount under a LC
Support with respect to any Letter of Credit, then Borrowers shall be
jointly and severally obligated to pay to Fleet, in Dollars on the
first Business Day following the date on which payment was made by
Fleet under such LC Support (the "Reimbursement Date"), an amount equal
to the amount paid by Fleet under such LC Support (or, if payment
thereunder was made by Fleet in a currency other than Dollars, an
amount equal to the Dollar Equivalent of such currency at the time of
Fleet's payment under such LC Support, in each case) together with
interest from and after the Reimbursement Date until Full Payment is
made by Borrowers at the Default Rate for Revolver Loans constituting
Base Rate Loans. Until Fleet has received payment from Borrowers in
accordance with the foregoing provisions of this clause (iii), Fleet,
in addition to all of its other rights and remedies under this
Agreement, shall be fully subrogated to (A) the rights and remedies of
Bank as issuer of the Letter of Credit under any agreement with
Borrowers relating to the issuance of such Letter of Credit, and (B)
the rights and remedies of each beneficiary under such Letter of Credit
whose claims against Borrowers have been discharged with the proceeds
of such Letter of Credit. Whether or not a Borrower submits any Notice
of Borrowing to Agent, Borrowers shall be deemed to have requested from
Lenders a Borrowing of Base Rate Loans in an amount necessary to pay to
Fleet all amounts due Fleet on any Reimbursement Date and each Lender
agrees to fund its Pro Rata share of such Borrowing whether or not any
Default or Event of Default has occurred or exists, the Commitments
have been terminated, the funding of the Borrowing deemed requested by
Borrowers would result in, or increase the amount of, any
Out-of-Formula Condition, or any of the conditions set forth in SECTION
10 hereof are not satisfied.
(iv) Borrowers assume all risks of the acts, omissions
or misuses of any Letter of Credit by the beneficiary thereof. The
obligation of Borrowers to reimburse Fleet for any payment made by
Fleet under the LC Support shall be absolute, unconditional,
irrevocable and joint and several and shall be paid without regard to
any lack of validity or enforceability of any Letter of Credit, the
existence of any claim, setoff, defense or other right which Borrowers
may have at any time against a beneficiary of any Letter of Credit, or
improper honor by Bank of any draw request under a Letter of Credit. If
presentation of a demand, draft, certificate or other document does not
comply with the terms of a Letter of Credit and Borrowers contend that,
as a consequence of such noncompliance it has no obligation to
reimburse Bank for any payment made with respect thereto, Borrowers
shall nevertheless be obligated to reimburse Fleet for any payment made
under the LC Support with respect to such Letter of Credit, but without
waiving any claim Borrowers may have against Bank in connection
therewith. All disputes regarding any Letter of Credit shall be
resolved by Borrowers directly with Bank.
(v) No Letter of Credit shall be extended or amended in
any respect that is not solely ministerial, unless all of the LC
Conditions are met as though a new Letter of Credit were being
requested and issued. With respect to any Letter of Credit that
contains any "evergreen" or automatic renewal provision, each Lender
shall be deemed to have consented to any such extension or renewal,
unless any such Lender shall have provided to Agent written notice that
it declines to consent to any such extension or renewal at least 30
days prior to the date on which the issuer of the Letter of Credit is
entitled to decline to extend or renew the Letter of Credit. If all of
the LC Conditions are met and no Default or Event of Default exists, no
Lender shall have the right to decline to consent to any such extension
or renewal.
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(vi) Each Borrower hereby authorizes and directs Bank
to deliver to Fleet all instruments, documents and other writings and
Property received by Bank pursuant to or in connection with any Letter
of Credit and to accept and rely upon Fleet's instructions and
agreements with respect to all matters arising in connection with such
Letter of Credit and the related LC Application.
1.3.2. Participations.
(i) Immediately upon the issuance by Bank of any Letter
of Credit, each Lender (other than Fleet) shall be deemed to have
irrevocably and unconditionally purchased and received from Fleet,
without recourse or warranty, an undivided interest and participation
equal to the Pro Rata share of such Lender (a "Participating Lender")
in all LC Outstandings arising in connection with such Letter of Credit
and any security therefor or guaranty pertaining thereto, but in no
event greater than an amount which, when added to such Lender's Pro
Rata share of all Revolver Loans and LC Outstandings then outstanding,
exceeds such Lender's Revolver Commitment; provided, however that if
Fleet shall have received written notice from a Lender on or before the
Business Day immediately prior to the date of Bank's issuance issue of
a Letter of Credit that one or more of the conditions set forth in
SECTION 10 or SECTION 1.3.1 has not been satisfied, Fleet shall have no
obligation to procure, and shall not procure, the requested Letter of
Credit or any other Letter of Credit until such notice is withdrawn in
writing by that Lender or until the Required Lenders shall have
effectively waived such condition in accordance with this Agreement. In
no event shall Fleet be deemed to have notice or knowledge of the
existence of any Default or any Event of Default or the failure of any
conditions in SECTIONS 10 OR 1.3.1 to be satisfied prior to its receipt
of such notice from a Lender or a Borrower.
(ii) If Fleet makes any payment under an LC Support and
Borrowers do not repay or cause to be repaid the amount of such payment
on the Reimbursement Date, Fleet shall promptly notify Agent, which
shall promptly notify each Participating Lender, of such payment and
each Participating Lender shall promptly (and in any event within 1
Business Day after its receipt of notice from Agent) and
unconditionally pay to Agent, for the account of Fleet, in immediately
available funds, the amount of such Participating Lender's Pro Rata
share of such payment, and Agent shall promptly pay such amounts to
Fleet. If a Participating Lender does not make its Pro Rata share of
the amount of such payment available to Agent on a timely basis as
herein provided, such Participating Lender agrees to pay to Agent for
the account of Fleet, forthwith ON DEMAND, such amount together with
interest thereon at the Federal Funds Rate until paid. The failure of
any Participating Lender to make available to Agent for the account of
Fleet such Participating Lender's Pro Rata share of the LC Outstandings
shall not relieve any other Participating Lender of its obligation
hereunder to make available to Agent its Pro Rata share of the LC
Outstandings, but no Participating Lender shall be responsible for the
failure of any other Participating Lender to make available to Agent
its Pro Rata share of the LC Outstandings on the date such payment is
to be made.
(iii) Whenever Fleet receives a payment on account of
the LC Outstandings, including any interest thereon, as to which Agent
has previously received payments from any Participating Lender for the
account of Fleet, Fleet shall promptly pay to each Participating Lender
which has funded its participating interest therein, in immediately
available funds, an amount equal to such Participating Lender's Pro
Rata share thereof.
(iv) The obligation of each Participating Lender to
make payments to Agent for the account of Fleet in connection with
Fleet's payment under a LC Support shall be absolute, unconditional and
irrevocable, not subject to any counterclaim, setoff, qualification or
exception
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whatsoever, and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances and irrespective
of whether or not Borrowers may assert or have any claim for any lack
of validity or unenforceability of this Agreement or any of the other
Loan Documents; the existence of any Default or Event of Default; any
draft, certificate or other document presented under a Letter of Credit
having been determined to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; the existence of any setoff or defense any
Obligor may have with respect to any of the Obligations; or the
termination of the Commitments.
(v) Neither Fleet nor any of its officers, directors,
employees or agents shall be liable to any Participating Lender for any
action taken or omitted to be taken under or in connection with any of
the LC Documents except as a result of actual gross negligence or
willful misconduct on the part of Fleet. Fleet does not assume any
responsibility for any failure or delay in performance or breach by
Borrowers or any other Person of any of its obligations under any of
the LC Documents. Fleet does not make to Participating Lenders any
express or implied warranty, representation or guaranty with respect to
the Collateral, the LC Documents, or any Obligor. Fleet shall not be
responsible to any Participating Lender for any recitals, statements,
information, representations or warranties contained in, or for the
execution, validity, genuineness, effectiveness or enforceability of or
any of the LC Documents; the validity, genuineness, enforceability,
collectibility, value or sufficiency of any of the Collateral or the
perfection of any Lien therein; or the assets, liabilities, financial
condition, results of operations, business, creditworthiness or legal
status of any Borrower or any other Obligor or any Account Debtor. In
connection with its administration of and enforcement of rights or
remedies under any of the LC Documents, Fleet shall be entitled to act,
and shall be fully protected in acting upon, any certification, notice
or other communication in whatever form believed by Fleet, in good
faith, to be genuine and correct and to have been signed, sent or made
by a proper Person. Fleet may consult with and employ legal counsel,
accountants and other experts and to advise it concerning its rights,
powers and privileges under the LC Documents and shall be entitled to
act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by such experts. Fleet may employ
agents and attorneys-in-fact in connection with any matter relating to
the LC Documents and shall not be liable for the negligence, default or
misconduct of any such agents or attorneys-in-fact selected by Fleet
with reasonable care. Fleet shall not have any liability to any
Participating Lender by reason of Fleet's refraining to take any action
under any of the LC Documents without having first received written
instructions from the Required Lenders to take such action.
(vi) Upon the request of any Participating Lender,
Fleet shall furnish to such Participating Lender copies (to the extent
then available to Fleet) of each outstanding Letter of Credit and
related LC Application and all other documentation pertaining to such
Letter of Credit as may be in the possession of Fleet and reasonably
requested from time to time by such Participating Lender.
1.3.3. Cash Collateral Account. If any LC Outstandings,
whether or not then due or payable, shall for any reason be outstanding (i) at
any time when an Event of Default has occurred and is continuing, (ii) on any
date that Availability is less than zero, or (iii) on or at any time after the
Commitment Termination Date, then Borrowers shall, on Agent's request, forthwith
pay to Agent the amount of any LC Outstandings that are then due and payable and
shall Cash Collateralize all outstanding Letters of Credit. If Borrowers fail to
Cash Collateralize any outstanding Letters of Credit on the first Business Day
following Agent's demand therefor, Lenders may (and shall upon direction of the
Required Lenders) advance such amount as Revolver Loans (whether or not an
Out-of-Formula
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Condition is created thereby). Such cash (together with any interest accrued
thereon) shall be held by Agent in the Cash Collateral Account and may be
invested, in Agent's discretion, in Cash Equivalents. Each Borrower hereby
pledges to Agent and grants to Agent a security interest in, for the benefit of
Agent in such capacity and for the Pro Rata benefit of Lenders, all Cash
Collateral held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all Obligations, whether or not
then due or payable. From time to time after cash is deposited in the Cash
Collateral Account, Agent may apply Cash Collateral then held in the Cash
Collateral Account to the payment of any amounts, in such order as Agent may
elect, as shall be or shall become due and payable by Borrowers to Agent or any
Lender with respect to the LC Outstandings. Neither any Borrower nor any other
Person claiming by, through or under or on behalf of Borrowers shall have any
right to withdraw any of the Cash Collateral held in the Cash Collateral
Account, including any accrued interest, provided that upon termination or
expiration of all Letters of Credit and the payment and satisfaction of all of
the LC Outstandings, any Cash Collateral remaining in the Cash Collateral
Account shall be returned to Borrowers unless an Event of Default then exists
(in which event Agent may apply such Cash Collateral to the payment of any other
Obligations outstanding, with any surplus to be turned over to Borrowers).
1.3.4. Indemnifications.
(i) In addition to any other indemnity which Borrowers
may have to Agent or any Lender under any of the other Loan Documents
and without limiting such other indemnification provisions, each
Borrower hereby agrees to indemnify and defend each of the Agent
Indemnitees and Lender Indemnitees and to hold each of the Agent
Indemnitees and Lender Indemnitees harmless from and against any and
all Indemnified Claims which any of the Agent Indemnitees or any of the
Lender Indemnitees may (other than as the actual result of their own
gross negligence or willful misconduct) incur or be subject to as a
consequence, directly or indirectly, of (a) the issuance of, payment or
failure to pay or any performance or failure to perform under any
Letter of Credit or LC Support or (b) any suit, investigation or
proceeding as to which Agent or any Lender is or may become a party to
as a consequence, directly or indirectly, of the issuance of any Letter
of Credit or any LC Support or the payment or failure to pay
thereunder.
(ii) Each Participating Lender agrees to indemnify and
defend each of the Fleet Indemnitees (to the extent the Fleet
Indemnitees are not reimbursed by Borrowers or any other Obligor, but
without limiting the indemnification obligations of Borrowers under
this Agreement), on a Pro Rata basis, from and against any and all
Indemnified Claims which may be imposed on, incurred by or asserted
against any of the Fleet Indemnitees in any way related to or arising
out of Fleet's administration or enforcement of rights or remedies
under any of the LC Documents or any of the transactions contemplated
thereby (including costs and expenses which Borrowers are obligated to
pay under SECTION 14.2 hereof), provided that no Participating Lender
shall be liable to any of the Fleet Indemnitees for any of the
foregoing to the extent that they result solely from the willful
misconduct or gross negligence of such Fleet Indemnitees.
1.4. Bank Products. Borrowers may request and Agent may, in its
sole and absolute discretion, arrange for Borrowers and their Subsidiaries to
obtain from Bank or any Lender, or Bank's or any Lender's Affiliates, Bank
Products. If Bank Products are provided by Bank or an Affiliate of Bank or by a
Lender or an Affiliate of a Lender, Borrowers agree jointly and severally to
indemnify and hold Agent, Bank, and Lenders harmless from any and all costs and
obligations then or thereafter incurred by Agent, Bank or Lenders which arise
from any indemnity given by Bank or any Lender or to their respective Affiliates
related to such Bank Products; provided, however, nothing contained herein is
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intended to limit Borrowers' rights with respect to Bank, any Lender or their
respective Affiliates, if any, under any documents executed by and among
Borrowers, Bank, any Lender or their respective Affiliates relating to Bank
Products. This SECTION 1.4 shall survive termination of this Agreement.
Borrowers acknowledge and agree that the obtaining of Bank Products from Bank,
any Lender, or their respective Affiliates (i) is in the sole and absolute
discretion of Bank or such Lender or their respective Affiliates and (ii) is
subject to all rules and regulations of Bank and such Lender and their
respective Affiliates and to payment of all fees and charges Bank or such Lender
or their respective Affiliates may require in connection with Bank Products.
SECTION 2. INTEREST, FEES AND CHARGES
2.1. INTEREST.
2.1.1. Rates of Interest. Borrowers jointly and severally
agree to pay interest in respect of all unpaid principal amounts of the Revolver
Loans from the respective dates such principal amounts are advanced until paid
(whether at stated maturity, on acceleration or otherwise) at a rate per annum
equal to the applicable rate indicated below:
(i) for Revolver Loans made or outstanding as Base Rate
Loans, the Applicable Margin plus the Base Rate in effect from time to
time; or
(ii) for Revolver Loans made or outstanding as LIBOR
Loans, the Applicable Margin plus the Adjusted LIBOR Rate for the
applicable Interest Period selected by Borrower in conformity with this
Agreement.
Upon determining the Adjusted LIBOR Rate for any Interest
Period requested by Borrowers, Agent shall promptly notify Borrowers thereof by
telephone and, if so requested by Borrowers, confirm the same in writing. Such
determination shall, absent manifest error, be final, conclusive and binding on
all parties and for all purposes. The applicable rate of interest for all Loans
(or portions thereof) bearing interest based upon the Base Rate shall be
increased or decreased, as the case may be, by an amount equal to any increase
or decrease in the Base Rate, with such adjustments to be effective as of the
opening of business on the day that any such change in the Base Rate becomes
effective. Interest on each Loan shall accrue from and including the date on
which such Loan is made, converted to a Loan of another Type or continued as a
LIBOR Loan to (but excluding) the date of any repayment thereof; provided,
however, that, if a Loan is repaid on the same day made, one day's interest
shall be paid on such Loan. The Base Rate on the date hereof is 4.00% per annum
and, therefore, the rate of interest in effect hereunder on the date hereof,
expressed in simple interest terms, is 6.00% per annum with respect to any
portion of the Revolver Loans bearing interest as a Base Rate Loan.
2.1.2. Conversions and Continuations.
(i) Borrowers may on any Business Day, subject to the
giving of a proper Notice of Conversion/Continuation as hereinafter
described, elect (A) to continue all or any part of a LIBOR Loan by
selecting a new Interest Period therefor, to commence on the last day
of the immediately preceding Interest Period, or (B) to convert all or
any part of a Loan of one Type into a Loan of another Type; provided,
however, that no outstanding Loans may be converted into or continued
as LIBOR Loans at any time any Default or Event of Default exists. Any
conversion of a LIBOR Loan into a Base Rate Loan shall be made on the
last day of the Interest Period for such LIBOR Loan. Any conversion or
continuation made with respect to less than the entire outstanding
balance of the Revolver Loans, shall be allocated among Lenders on a
Pro
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Rata basis, and the Interest Period for Loans converted into or
continued as LIBOR Loans shall be coterminous for each Lender.
(ii) Whenever Borrowers desire to convert or continue
Loans under SECTION 2.1.2(i), Tropical shall give Agent written notice
(or telephonic notice promptly confirmed in writing) substantially in
the form of EXHIBIT C, signed by an authorized officer of Tropical, at
least 1 Business Day before the requested conversion date, in the case
of a conversion into Base Rate Loans, and at least 2 Business Days
before the requested conversion or continuation date, in the case of a
conversion into or continuation of LIBOR Loans. Promptly after receipt
of a Notice of Conversion/Continuation, Agent shall notify each Lender
in writing of the proposed conversion or continuation. Each such Notice
of Conversion/Continuation shall be irrevocable and shall specify the
aggregate principal amount of the Loans to be converted or continued,
the date of such conversion or continuation (which shall be a Business
Day) and whether the Loans are being converted into or continued as
LIBOR Loans (and, if so, the duration of the Interest Period to be
applicable thereto and, in the absence of any specification by
Borrowers of the Interest Period, an Interest Period of one month will
be deemed to be specified) or Base Rate Loans. If, upon the expiration
of any Interest Period in respect of any LIBOR Loans, Borrowers shall
have failed to deliver the Notice of Conversion/Continuation, Borrowers
shall be deemed to have elected to convert such LIBOR Loans to Base
Rate Loans.
2.1.3. Interest Periods. In connection with the making or
continuation of, or conversion into, each Borrowing of LIBOR Loans, Borrowers
shall select an interest period (each an "Interest Period") to be applicable to
such LIBOR Loan, which interest period shall commence on the date such LIBOR
Loan is made and shall end on a numerically corresponding day in the first,
second, third or sixth month thereafter; provided, however, that:
(i) the initial Interest Period for a LIBOR Loan shall
commence on the date of such Borrowing (including the date of any
conversion from a Loan of another Type) and each Interest Period
occurring thereafter in respect of such Revolver Loan shall commence on
the date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a
day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day, provided that, if any Interest Period
in respect of LIBOR Loans would otherwise expire on a day that 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;
(iii) any Interest Period that begins on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period shall expire on the last Business
Day of such calendar month; and
(iv) no Interest Period shall extend beyond the last
day of the Term.
2.1.4. Interest Rate Not Ascertainable. If Agent shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that on any date for determining the
Adjusted LIBOR Rate for any Interest Period, by reason of any changes arising
after the date of this Agreement affecting the London interbank market or any
Lender's or Bank's position in such market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided for in the
definition of Adjusted LIBOR Rate, then, and in any such event, Agent shall
forthwith give notice (by telephone confirmed in writing) to Borrowers of such
determination. Until Agent notifies Borrowers that the circumstances giving rise
to the suspension described herein no longer exist, the
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obligation of Lenders to make LIBOR Loans shall be suspended, and such affected
Loans then outstanding shall, at the end of the then applicable Interest Period
or at such earlier time as may be required by Applicable Law, bear the same
interest as Base Rate Loans.
2.1.5. Default Rate Borrowers shall pay interest at a rate
per annum equal to the Default Rate (i) with respect to the principal amount of
any portion of the Obligations (and, to the extent permitted by Applicable Law,
all past due interest) that is not paid on the due date thereof (whether due at
stated maturity, on demand, upon acceleration or otherwise) until paid in full;
(ii) with respect to the principal amount of all of the Obligations (and, to the
extent permitted by Applicable Law, all past due interest) upon the earlier to
occur of (x) Borrowers' receipt of notice from Agent of the Required Lenders'
election to charge the Default Rate based upon the existence of any Event of
Default (which notice Agent shall send only with the consent or at the direction
of the Required Lenders), whether or not acceleration or demand for payment of
the Obligations has been made, or (y) the commencement by or against any
Borrower of an Insolvency Proceeding whether or not under the circumstances
described in clauses (i) or (ii) hereof Lenders elect to accelerate the maturity
or demand payment of any of the Obligations; and (iii) with respect to the
principal amount of any Out-of-Formula Loans, whether or not demand for payment
thereof has been made by Agent. To the fullest extent permitted by Applicable
Law, the Default Rate shall apply and accrue on any judgment entered with
respect to any of the Obligations and to the unpaid principal amount of the
Obligations during any Insolvency Proceeding of a Borrower. Each Borrower
acknowledges that the cost and expense to Agent and each Lender attendant upon
the occurrence of an Event of Default are difficult to ascertain or estimate and
that the Default Rate is a fair and reasonable estimate to compensate Agent and
Lender for such added cost and expense. Interest accrued at the Default Rate
shall be due and payable ON DEMAND.
2.2. FEES. In consideration of Lenders' establishment of the
Commitments in favor of Borrowers, and Agent's agreement to serve as collateral
and administrative agent hereunder, Borrowers jointly and severally agree to pay
the following fees:
2.2.1. Underwriting Fee. Borrowers shall pay to Agent an
underwriting fee in the amount and on the terms set forth in the Fee Letter, of
which fee $700,000 shall be for the Pro Rata benefit of the Lenders, and the
remainder of which shall be for the sole benefit of Agent.
2.2.2. Unused Line Fee. Borrowers shall be jointly and
severally obligated to pay to Agent for the Pro Rata benefit of Lenders a fee
equal to 0.50% per annum of the amount by which the Average Revolver Loan
Balance for any month (or portion thereof that the Commitments are in effect) is
less than the aggregate amount of the Revolver Commitments, such fee to be paid
on the first day of the following month; but if the Commitments are terminated
on a day other than the first day of a month, then any such fee payable for the
month in which termination shall occur shall be paid on the effective date of
such termination.
2.2.3. LC Facility Fees. Borrowers shall be jointly and
severally obligated to pay: (a) to Agent, through its Treasury and International
Services Group, for the Pro Rata account of each Lender for standby Letters of
Credit, the Applicable Margin in effect for LIBOR Loans on a per annum basis
based on the average amount available to be drawn under all standby Letters of
Credit outstanding and all standby Letters of Credit that are paid or expire
during the period of measurement, due and payable upon issuance of each standby
Letter of Credit, and an additional fee equal to the Applicable Margin for LIBOR
Loans, multiplied by the undrawn face amount of such Letter of Credit payable
upon each renewal thereof and each extension thereof; (b) to Agent, through its
Treasury and International Services Group, for the Pro Rata account of each
Lender for documentary Letters of Credit, the Applicable Margin in effect for
LIBOR Loans on a per annum basis based on the average amount available to be
drawn under all documentary Letters of Credit outstanding and all documentary
Letters of Credit that are
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paid or expire during the period of measurement, payable on each renewal or
extension thereof and on the first Business Day of each month; (c) to Agent,
through its Treasury and International Services Group, for its own account a
Letter of Credit fronting fee of 0.125% per annum based on the face amount of
Letters of Credit payable on the date of issuance of any Letter of Credit; and
(d) to Bank for its own account all normal and customary charges associated with
the issuance, amending, negotiating, processing and administration of Letters of
Credit.
2.2.4. Audit and Appraisal Fees. Borrowers shall be jointly
and severally obligated to reimburse Agent and Lenders for all reasonable costs
and expenses incurred by Agent and Lenders in connection with audits and
appraisals of any Obligor's books and records and such other matters pertaining
to any Obligor or any Collateral as Agent shall deem appropriate. Borrower shall
reimburse Agent and Lenders for all reasonable costs and expenses incurred by
Agent or Lenders in connection with appraisals of any Collateral as Agent shall
deem appropriate and shall pay to Agent its standard per diem audit fee
(currently $850 per day) for each day that an employee or agent of Agent shall
be engaged in an examination or review of any Borrower's books and records. On
the Closing Date, Borrowers shall be jointly and severally obligated to pay to
Fleet appraisal fees plus all out-of-pocket expenses incurred by Fleet or
appraisers in connection with appraisals of Borrower's Inventory and Real
Estate.
2.2.5. Agency Fee. In consideration of Fleet's syndication
of the Commitments and service as Agent hereunder, Borrowers shall be jointly
and severally obligated to pay to Agent an agency fee of $50,000 per year, which
fee shall be payable on the Closing Date and on the first day of each Loan Year
thereafter.
2.2.6. General Provisions. All fees shall be fully earned by
the identified recipient thereof pursuant to the foregoing provisions of this
Agreement on the due date thereof (and, in the case of Letters of Credit, upon
each issuance, renewal or extension of such Letter of Credit) and, except as
otherwise set forth herein or required by Applicable Law, shall not be subject
to rebate, refund or proration. All fees provided for in Section 2.2 are and
shall be deemed to be compensation for services and are not, and shall not be
deemed to be, interest or any other charge for the use, forbearance or detention
of money.
2.3. COMPUTATION OF INTEREST AND FEES. All fees and other charges
provided for in this Agreement that are calculated as a per annum percentage of
any amount and all interest shall be calculated daily and shall be computed on
the actual number of days elapsed over a year of 360 days. For purposes of
computing interest and other charges hereunder, all Payment Items and other
forms of payment received by Agent shall be deemed applied by Agent on account
of the Obligations (subject to final payment of such items) on the Business Day
that Agent receives such items in immediately available funds in the Payment
Account, and Agent shall be deemed to have received such Payment Item on the
date specified in Section 4.7 hereof.
2.4. REIMBURSEMENT OBLIGATIONS.
2.4.1. Borrowers shall reimburse Agent and, during any
period that an Event of Default exists, each Lender, for all legal, accounting,
appraisal, consulting and other fees and expenses incurred by Agent or any
Lender in connection with (i) the negotiation and preparation of any of the Loan
Documents, any amendment or modification thereto, any waiver of any Default or
Event of Default thereunder, or any restructuring or forbearance with respect
thereto; (ii) the administration of the Loan Documents and the transactions
contemplated thereby, to the extent that such fees and expenses are expressly
provided for in this Agreement or any of the other Loan Documents; (iii) action
taken to perfect or maintain the perfection or priority of any of Agent's Liens
with respect to any of the Collateral; (iv) any inspection of or audits
conducted with respect to any Borrower's books and records or any of the
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Collateral; (v) any effort to verify, protect, appraise, preserve, or restore
any of the Collateral or to collect, sell, liquidate or otherwise dispose of or
realize upon any of the Collateral; (vi) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by or against Agent, any Lender, any
Obligor or any other Person) in any way arising out of or relating to any of the
Collateral (or the validity, perfection or priority of any of Agent's Liens
thereon), any of the Loan Documents or the validity, allowance or amount of any
of the Obligations; (vii) the protection or enforcement or any rights or
remedies of Agent or any Lender in any Insolvency Proceeding; and (viii) any
other action taken by Agent or any Lender to enforce any of the rights or
remedies of Agent or such Lender against any Obligor or any Account Debtors to
enforce collection of any of the Obligations or payments with respect to any of
the Collateral. All amounts chargeable to Borrowers under this Section 2.4 shall
constitute Obligations that are secured by all of the Collateral and shall be
payable on demand to Agent. Borrowers shall also reimburse Agent for expenses
incurred by Agent in its administration of any of the Collateral to the extent
and in the manner provided in Section 7 hereof or in any of the other Loan
Documents. The foregoing shall be in addition to, and shall not be construed to
limit, any other provision of any of the Loan Documents regarding the
reimbursement by Borrowers of costs, expenses or liabilities suffered or
incurred by Agent or any Lender.
2.4.2. If at any time Agent or (with the consent of Agent)
any Lender shall agree to indemnify any Person (including Bank) against losses
or damages that such Person may suffer or incur in its dealings or transactions
with Borrowers, or shall guarantee any liability or obligation of Borrowers to
such Person, or otherwise shall provide assurances of Borrowers' payment or
performance under any agreement with such Person, including indemnities,
guaranties or other assurances of payment or performance given by Agent or any
Lender with respect to Banking Relationship Debt, then the Contingent Obligation
of Agent or any Lender providing any such indemnity, guaranty or other assurance
of payment or performance, together with any payment made or liability incurred
by Agent or any Lender in connection therewith, shall constitute Obligations
that are secured by the Collateral and Borrowers shall repay, on demand, any
amount so paid or any liability incurred by Agent or any Lender in connection
with any such indemnity, guaranty or assurance, except that repayment with
respect to any LC Support shall be due on the Reimbursement Date as provided in
Section 1.3.1(iii). Nothing herein shall be construed to impose upon Agent or
any Lender any obligation to provide any such indemnity, guaranty or assurance
except to the extent provided in Section 1.3 hereof. The foregoing agreement of
Borrowers shall apply whether or not such indemnity, guaranty or assurance is in
writing or oral and regardless of any Borrower's knowledge of the existence
thereof, and shall be in addition to any of the provisions of the Loan Documents
regarding reimbursement by Borrowers of costs, expenses or liabilities suffered
or incurred by Agent or any Lender.
2.5. BANK CHARGES. Borrowers shall pay to Agent, on demand, any and
all fees, costs or expenses which Agent or any Lender pays to a bank or other
similar institution (including any fees paid by Agent or any Lender to any
Participant) arising out of or in connection with (i) the forwarding to a
Borrower or any other Person on behalf of a Borrower by Agent or any Lender of
proceeds of Loans made by Lenders to a Borrower pursuant to this Agreement and
(ii) the depositing for collection by Agent or any Lender of any Payment Item
received or delivered to Agent or any Lender on account of the Obligations. Each
Borrower acknowledges and agrees that Agent may charge such costs, fees and
expenses to Borrowers based upon Agent's good faith estimate of such costs, fees
and expenses as they are incurred by Agent or any Lender.
2.6. ILLEGALITY. Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if (i) any change in any law or regulation or in
the interpretation thereof by any Governmental Authority charged with the
administration thereof shall make it unlawful for a Lender to make or maintain a
LIBOR Loan or to give effect to its obligations as contemplated hereby with
respect
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to a LIBOR Loan or (ii) at any time such Lender determines that the making or
continuance of any LIBOR Loan has become impracticable as a result of a
contingency occurring after the date hereof which adversely affects the London
interbank market or the position of such Lender in such market, then after such
determination such Lender shall give Agent and Borrowers notice thereof and may
thereafter (1) declare that LIBOR Loans will not thereafter be made by such
Lender, whereupon any request by a Borrower for a LIBOR Loan from such Lender
shall be deemed a request for a Base Rate Loan unless such Lender's declaration
shall be subsequently withdrawn (which declaration shall be withdrawn promptly
after the cessation of the circumstances described in clause (i) or (ii) above);
and (2) require that all outstanding LIBOR Loans made by such Lender be
converted to Base Rate Loans, under the circumstances of clause (i) or (ii) of
this Section 2.6 insofar as such Lender determines the continuance of LIBOR
Loans to be impracticable, in which event all such LIBOR Loans of such Lender
shall be converted automatically to Base Rate Loans as of the date of any
Borrower's receipt of the aforesaid notice from such Lender.
2.7. INCREASED COSTS. If, by reason of (a) the introduction after
the date hereof of or any change (including any change by way of imposition or
increase of Statutory Reserves or other reserve requirements) in or in the
interpretation of any law or regulation, or (b) the compliance with any
guideline or request from any central bank or other Governmental Authority or
quasi-Governmental Authority exercising control over banks or financial
institutions generally (whether or not having the force of law):
(i) any Lender shall be subject after the date hereof
to any Tax, duty or other charge with respect to any LIBOR Loan or its
obligation to make LIBOR Loans, or a change shall result in the basis
of taxation of payment to any Lender of the principal of or interest on
its LIBOR Loans or its obligation to make LIBOR Loans (except for
changes in the rate of Tax on the overall net income or gross receipts
or franchise tax of such Lender imposed by the jurisdiction in which
such Lender's principal executive office is located); or
(ii) any reserve (including any imposed by the Board
of Governors), special deposits or similar requirement against assets
of, deposits with or for the account of, or credit extended by, any
Lender shall be imposed or deemed applicable or any other condition
affecting its LIBOR Loans or its obligation to make LIBOR Loans shall
be imposed on such Lender or the London interbank market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining LIBOR Loans (except to the
extent already included in the determination of the applicable Adjusted LIBOR
Rate for LIBOR Loans), or there shall be a reduction in the amount received or
receivable by such Lender, then such Lender shall, promptly after determining
the existence or amount of any such increased costs for which such Lender seeks
payment hereunder, give Borrowers notice thereof, and Borrowers shall from time
to time, upon written notice from and demand by such Lender (with a copy of such
notice and demand to Agent), pay to Agent for the account of such Lender, within
5 Business Days after the date specified in such notice and demand, an
additional amount sufficient to indemnify such Lender against such increased
costs. A certificate as to the amount of such increased costs, submitted to
Borrowers by such Lender, shall be final, conclusive and binding for all
purposes, absent manifest error.
If any Lender shall advise Agent at any time that, because of the circumstances
described hereinabove in this SECTION 2.7 or any other circumstances arising
after the date of this Agreement affecting such Lender or the London interbank
market or such Lender's or Bank's position in such market, the Adjusted LIBOR
Rate, as determined by Agent, will not adequately and fairly reflect the cost to
such Lender of funding LIBOR Loans, then, and in any such event:
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(i) Agent shall forthwith give notice (by telephone
confirmed in writing) to Borrowers and Lenders of such event;
(ii) Borrowers' right to request and such Lender's
obligation to make LIBOR Loans shall be immediately suspended and
Borrowers' right to continue a LIBOR Loan as such beyond the then
applicable Interest Period shall also be suspended, until each
condition giving rise to such suspension no longer exists; and
(iii) such Lender shall make a Base Rate Loan as part
of the requested Borrowing of LIBOR Loans, which Base Rate Loan shall,
for all purposes, be considered part of such Borrowing.
For purposes of this SECTION 2.7, all references to a Lender shall be deemed to
include any bank holding company or bank parent of such Lender.
2.8. CAPITAL ADEQUACY. If any Lender determines that after the date
hereof (a) the adoption of any Applicable Law regarding capital requirements for
banks or bank holding companies or the subsidiaries thereof, (b) any change in
the interpretation or administration of any such Applicable Law by any
Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or (c) compliance by such Lender or
its holding company with any request or directive of any such Governmental
Authority, central bank or comparable agency regarding capital adequacy (whether
or not having the force of law), has the effect of reducing the return on such
Lender's capital to a level below that which such Lender could have achieved
(taking into consideration such Lender's and its holding company's policies with
respect to capital adequacy immediately before such adoption, change or
compliance and assuming that such Lender's capital was fully utilized prior to
such adoption, change or compliance) but for such adoption, change or compliance
as a consequence of such Lender's commitment to make the Loans pursuant hereto
by any amount deemed by such Lender to be material:
(i) Agent shall promptly, after its receipt of a
certificate from such Lender setting forth such Lender's determination
of such occurrence, give notice thereof to Borrowers and Lenders; and
(ii) Borrowers shall pay to Agent, for the account of
such Lender, as an additional fee from time to time, ON DEMAND, such
amount as such Lender certifies to be the amount reasonably calculated
to compensate such Lender for such reduction.
A certificate of such Lender claiming entitlement to compensation as set forth
above will be conclusive in the absence of manifest error. Such certificate will
set forth the nature of the occurrence giving rise to such compensation, the
additional amount or amounts to be paid to such Lender (including the basis for
such Lender's determination of such amount), and the method by which such
amounts were determined. In determining such amount, such Lender may use any
reasonable averaging and attribution method. For purposes of this SECTION 2.8,
all references to a Lender shall be deemed to include any bank holding company
or bank parent of such Lender.
2.9. FUNDING LOSSES. If for any reason (other than due to a default
by a Lender or as a result of a Lender's refusal to honor a LIBOR Loan request
due to circumstances described in SECTION 2.6 OR 2.7 hereof) a Borrowing of, or
conversion to or continuation of, LIBOR Loans does not occur on the date
specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation
(whether or not withdrawn), or if any repayment (including any conversions
pursuant to SECTION 2.1.2 hereof) of any of its LIBOR Loans occurs on a date
that is not the last day of an Interest Period applicable thereto, or if for any
reason Borrowers default in their obligation to repay LIBOR Loans when required
by the terms of this Agreement, then Borrowers shall be jointly and severally
obligated to pay to Agent an administrative
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fee of $100 and an additional amount (if a positive number), for the ratable
benefit of the affected Lenders, computed pursuant to the following formula:
L = (R - T) x P x D
---------------
360
where
L = amount payable
R = interest rate applicable to the LIBOR Loan
unborrowed, prepaid or unpaid
T = effective interest rate per annum at which
any readily marketable bond or other
obligations of the United States, selected
at Agent's sole discretion, maturing on or
nearest the last day of the then applicable
or requested Interest Period for such LIBOR
Loan and in approximately the same amount as
such LIBOR Loan, can be purchased by Agent
on the day of such payment or non-payment of
principal or failure to borrow
P = the amount of principal paid or unpaid or
the amount of the LIBOR Loan requested or to
have been continued or converted
D = the number of days remaining in the Interest
Period as of the date of such prepayment or
non-payment or the number of days in the
requested Interest Period
Borrowers shall pay such amount upon presentation by Agent of a statement
setting forth the amount and Agent's calculation thereof pursuant hereto, which
statement shall be deemed true and correct absent manifest error. For purposes
of this SECTION 2.9, all references to a Lender shall be deemed to include any
bank holding company or bank parent of such Lender.
2.10. MAXIMUM INTEREST. Regardless of any provision contained in any
of the Loan Documents, in no contingency or event whatsoever shall the aggregate
of all amounts that are contracted for, charged or received by Agent and Lenders
pursuant to the terms of this Agreement or any of the other Loan Documents and
that are deemed interest under Applicable Law exceed the highest rate
permissible under any Applicable Law. No agreements, conditions, provisions or
stipulations contained in this Agreement or any of the other Loan Documents or
the exercise by Agent of the right to accelerate the payment or the maturity of
all or any portion of the Obligations, or the exercise of any option whatsoever
contained in any of the Loan Documents, or the prepayment by Borrowers of any of
the Obligations, or the occurrence of any contingency whatsoever, shall entitle
Agent or any Lender to charge or receive, in any event, interest or any charges,
amounts, premiums or fees deemed interest by Applicable Law (such interest,
charges, amounts, premiums and fees referred to herein collectively as
"Interest") in excess of the Maximum Rate and in no event shall Borrowers be
obligated to pay Interest exceeding such Maximum Rate; and all agreements,
conditions or stipulations, if any, which may in any event or contingency
whatsoever operate to bind, obligate or compel Borrowers to pay Interest
exceeding the Maximum Rate shall be without binding force or effect, at law or
in equity, to the extent only of the excess of Interest over such Maximum Rate.
If any Interest is charged or received in excess of the Maximum Rate ("Excess"),
each Borrower acknowledges and stipulates that any such charge or receipt shall
be the result of an accident and bona fide error, and such Excess, to the extent
received, shall be applied first to reduce the principal Obligations and the
balance, if any, returned to Borrowers, it being the intent of the parties
hereto not to enter into a usurious or otherwise illegal relationship. The right
to accelerate the maturity of any of the Obligations does not include the right
to accelerate any Interest that has not otherwise accrued on the date of such
acceleration, and Agent and Lenders do not
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intend to collect any unearned Interest in the event of any such acceleration.
Each Borrower recognizes that, with fluctuations in the rates of interest set
forth in SECTION 2.1.1 of this Agreement, and the Maximum Rate, such an
unintentional result could inadvertently occur. All monies paid to Agent or any
Lender hereunder or under any of the other Loan Documents, whether at maturity
or by prepayment, shall be subject to any rebate of unearned Interest as and to
the extent required by Applicable Law. By the execution of this Agreement, each
Borrower covenants that (i) the credit or return of any Excess shall constitute
the acceptance by such Borrower of such Excess, and (ii) such Borrower shall not
seek or pursue any other remedy, legal or equitable, against Agent or any
Lender, based in whole or in part upon contracting for, charging or receiving
any Interest in excess of the Maximum Rate. For the purpose of determining
whether or not any Excess has been contracted for, charged or received by Agent
or any Lender, all Interest at any time contracted for, charged or received from
Borrowers in connection with any of the Loan Documents shall, to the extent
permitted by Applicable Law, be amortized, prorated, allocated and spread in
equal parts throughout the full term of the Obligations. Borrowers, Agent and
Lenders shall, to the maximum extent permitted under Applicable Law, (i)
characterize any non-principal payment as an expense, fee or premium rather than
as Interest and (ii) exclude voluntary prepayments and the effects thereof. The
provisions of this SECTION 2.10 shall be deemed to be incorporated into every
Loan Document (whether or not any provision of this Section is referred to
therein). All such Loan Documents and communications relating to any Interest
owed by Borrowers and all figures set forth therein shall, for the sole purpose
of computing the extent of Obligations, be automatically recomputed by
Borrowers, and by any court considering the same, to give effect to the
adjustments or credits required by this SECTION 2.10.
SECTION 3. LOAN ADMINISTRATION
3.1. MANNER OF BORROWING AND FUNDING REVOLVER LOANS. Borrowings
under the Commitments established pursuant TO SECTION 1.1 hereof shall be made
and funded as follows:
3.1.1. Notice of Borrowing.
(i) Whenever Borrowers desire to make a Borrowing
under SECTION 1.1 of this Agreement (other than a Borrowing resulting
from a conversion or continuation pursuant to SECTION 2.1.2), Borrowers
shall give Agent prior written notice or electronic notice (or
telephonic notice, at Agent's request, promptly confirmed in writing)
of such Borrowing request (a "Notice of Borrowing"), which shall be in
the form of EXHIBIT D annexed hereto and signed by an authorized
officer of Tropical. Such Notice of Borrowing shall be given by
Borrowers no later than 11:00 a.m. at the office of Agent designated by
Agent from time to time (a) on the Business Day of the requested
funding date of such Borrowing, in the case of Base Rate Loans, and (b)
at least 2 Business Days prior to the requested funding date of such
Borrowing, in the case of LIBOR Loans. Notices received after 11:00
a.m. shall be deemed received on the next Business Day. Each Notice of
Borrowing (or telephonic notice thereof) shall be irrevocable and shall
specify (a) the principal amount of the Borrowing, (b) the date of
Borrowing (which shall be a Business Day), (c) whether the Borrowing is
to consist of Base Rate Loans or LIBOR Loans, (d) in the case of LIBOR
Loans, the duration of the Interest Period to be applicable thereto,
and (e) the account of Borrowers to which the proceeds of such
Borrowing are to be disbursed. Borrowers may not request any LIBOR
Loans if a Default or Event of Default exists.
(ii) Unless payment is otherwise timely made by
Borrowers, the becoming due of any amount required to be paid with
respect to any of the Obligations (whether as principal, accrued
interest, fees or other charges, including the repayment of any LC
Outstandings and any amounts owed to any Affiliate of Agent
constituting Obligations) shall be deemed irrevocably to
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be a request (without any requirement for the submission of a Notice of
Borrowing) for Revolver Loans on the due date of, and in an aggregate
amount required to pay, such Obligations, and the proceeds of such
Revolver Loans may be disbursed by way of direct payment of the
relevant Obligation and shall bear interest as Base Rate Loans. Neither
Agent nor any Lender shall have any obligation to Borrowers to honor
any deemed request for a Revolver Loan on or after the Commitment
Termination Date, when an Out-of-Formula Condition exists or would
result therefrom, or when any applicable condition precedent set forth
in SECTION 10 hereof is not satisfied, but may do so in the discretion
of Agent (subject to the provisions of SECTION 12.9.4 if an
Out-of-Formula Condition exists or would result therefrom) (or at the
direction of the Required Lenders) and without regard to the existence
of, and without being deemed to have waived, any Default or Event of
Default and regardless of whether such Revolver Loan is funded after
the Commitment Termination Date.
(iii) If Borrowers elect to establish a Controlled
Disbursement Account with Bank or any Affiliate of Bank, then the
presentation for payment by Bank of any check or other item of payment
drawn on the Controlled Disbursement Account at a time when there are
insufficient funds in such account to cover such check shall be deemed
irrevocably to be a request (without any requirement for the submission
of a Notice of Borrowing) for Revolver Loans on the date of such
presentation and in an amount equal to the aggregate amount of the
items presented for payment, and the proceeds of such Revolver Loans
may be disbursed to the Controlled Disbursement Account and shall bear
interest as Base Rate Loans. Neither Agent nor any Lender shall have
any obligation to honor any deemed request for a Revolver Loan on or
after the Commitment Termination Date or when an Out-of-Formula
Condition exists or would result therefrom or when any condition
precedent in SECTION 10 hereof is not satisfied, but may do so in the
discretion of Agent (subject to the provisions of SECTION 12.9.4 if an
Out-of-Formula Condition exists or would result therefrom) (or at the
direction of the Required Lenders) and without regard to the existence
of, and without being deemed to have waived, any Default or Event of
Default and regardless of whether such Revolver Loan is funded after
the Commitment Termination Date.
(iv) As an accommodation to Borrowers, Agent and
Lenders may permit telephonic requests for Borrowings and electronic
transmittal of instructions, authorizations, agreements or reports to
Agent by Borrowers; provided, however, that Borrowers shall confirm
each such telephonic request for a Borrowing of LIBOR Loans by delivery
of the required Notice of Borrowing to Agent by facsimile or electronic
transmission promptly, but in no event later than 5:00 p.m. on the same
day. Neither Agent nor any Lender shall have any liability to Borrowers
for any loss or damage suffered by Borrowers as a result of Agent's or
any Lender's honoring of any requests, execution of any instructions,
authorizations or agreements or reliance on any reports communicated to
it telephonically or electronically and purporting to have been sent to
Agent or Lenders by any Borrower and neither Agent nor any Lender shall
have any duty to verify the origin of any such communication or the
identity or authority of the Person sending it.
3.1.2. Fundings by Lenders. Subject to its receipt of notice
from Agent of a Notice of Borrowing as provided in SECTION 3.1.1(i) (except in
the case of a deemed request by a Borrower for a Revolver Loan as provided in
SECTIONS 3.1.1(ii) or (iii) or 3.1.3(ii) hereof, in which event no Notice of
Borrowing need be submitted), each Lender shall timely honor its Revolver
Commitment by funding its Pro Rata share of each Borrowing of Revolver Loans
that is properly requested by such Borrower and that such Borrower is entitled
to receive under the Loan Agreement. Agent shall endeavor to notify Lenders of
each Notice of Borrowing (or deemed request for a Borrowing pursuant to
SECTION 3.1.1(ii) or
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(iii) hereof), by 1:00 p.m. on the proposed funding date (in the case of Base
Rate Loans) or by 3:00 p.m. at least 1 Business Day before the proposed funding
date (in the case of LIBOR Loans). Each Lender shall deposit with Agent an
amount equal to its Pro Rata share of the Borrowing requested or deemed
requested by such Borrower at Agent's designated bank in immediately available
funds not later than 3:00 p.m. on the date of funding of such Borrowing, unless
Agent's notice to Lenders is received after 1:00 p.m. on the proposed funding
date of a Loan, in which event Lenders shall deposit with Agent their respective
Pro Rata shares of the requested Borrowing on or before 11:00 a.m. of the next
Business Day. Subject to its receipt of such amounts from Lenders, Agent shall
make the proceeds of the Revolver Loans received by it available to a Borrower
by disbursing such proceeds in accordance with such Borrower's disbursement
instructions set forth in the applicable Notice of Borrowing. Neither Agent nor
any Lender shall have any liability on account of any delay by any bank or other
depository institution in treating the proceeds of any Revolver Loan as
collected funds or any delay in receipt, or any loss, of funds that constitute a
Revolver Loan, the wire transfer of which was initiated by Agent in accordance
with wiring instructions provided to Agent. Unless Agent shall have been
notified in writing by a Lender prior to the proposed time of funding that such
Lender does not intend to deposit with Agent an amount equal such Lender's Pro
Rata share of the requested Borrowing (or deemed request for a Borrowing
pursuant to SECTION 3.1.1(ii) or (iii) hereof), Agent may assume that such
Lender has deposited or promptly will deposit its share with Agent and Agent may
in its discretion disburse a corresponding amount to Borrowers on the applicable
funding date. If a Lender's Pro Rata share of such Borrowing is not in fact
deposited with Agent, then, if Agent has disbursed to a Borrower an amount
corresponding to such share, then such Lender agrees to pay, and in addition
Borrowers agree to repay, to Agent forthwith on demand such corresponding
amount, together with interest thereon, for each day from the date such amount
is disbursed by Agent to or for the benefit of Borrowers until the date such
amount is paid or repaid to Agent, (a) in the case of Borrowers, at the interest
rate applicable to such Borrowing and (b) in the case of such Lender, at the
Federal Funds Rate. If such Lender repays to Agent such corresponding amount,
such amount so repaid shall constitute a Revolver Loan, and if both such Lender
and Borrowers shall have repaid such corresponding amount, Agent shall promptly
return to Borrowers such corresponding amount in same day funds. A notice from
Agent submitted to any Lender with respect to amounts owing under this SECTION
3.1.2 shall be conclusive, absent manifest error.
3.1.3. Settlement and Settlement Loans.
(i) In order to facilitate the administration of the
Revolver Loans under this Agreement, Lenders agree (which agreement
shall be solely between Lenders and Agent and shall not be for the
benefit of or enforceable by any Borrower) that settlement among them
with respect to the Revolver Loans may take place on a periodic basis
on dates determined from time to time by Agent (each a "Settlement
Date"), which may occur before or after the occurrence or during the
continuance of a Default or Event of Default and whether or not all of
the conditions set forth in SECTION 10 of this Agreement have been met.
On each Settlement Date, payment shall be made by or to each Lender in
the manner provided herein and in accordance with the Settlement Report
delivered by Agent to Lenders with respect to such Settlement Date so
that, as of each Settlement Date and after giving effect to the
transaction to take place on such Settlement Date, each Lender shall
hold its Pro Rata share of all Revolver Loans and participations in LC
Outstandings then outstanding. Agent shall request settlement with the
Lenders on a basis not less frequently than once every 5 Business Days.
(ii) Between Settlement Dates, Agent may request
Fleet to advance, and Fleet may, but shall in no event be obligated to,
advance to Borrowers out of Fleet's own funds the entire principal
amount of any Borrowing of Revolver Loans that are Base Rate Loans
requested or deemed requested pursuant to this Agreement (any such
Revolver Loan funded exclusively by
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Fleet being referred to as a "Settlement Loan"). Each Settlement Loan
shall constitute a Revolver Loan hereunder and shall be subject to all
of the terms, conditions and security applicable to other Revolver
Loans, except that all payments thereon shall be payable to Fleet
solely for its own account. The obligation of Borrowers to repay such
Settlement Loans to Fleet shall be evidenced by the records of Fleet
and need not be evidenced by any promissory note. Unless all Lenders
are required to fund a Loan pursuant to SECTIONS 1.1.6 or 12.9.4, Agent
shall not request Fleet to make any Settlement Loan if (A) Agent shall
have received written notice from any Lender or any Borrower that one
or more of the applicable conditions precedent set forth in SECTION 10
hereof will not be satisfied on the requested funding date for the
applicable Borrowing and Agent in good faith has made a determination
(without any liability to any Person) that such condition precedent
will not be satisfied or (B) the requested Borrowing would exceed the
amount of Availability on the funding date or would cause the then
outstanding principal balance of all Settlement Loans to exceed
$5,000,000. Fleet shall not be required to determine whether the
applicable conditions precedent set forth in SECTION 10 hereof have
been satisfied or the requested Borrowing would exceed the amount of
Availability on the funding date applicable thereto prior to making, in
its sole discretion, any Settlement Loan. On each Settlement Date, or,
if earlier, UPON DEMAND by Agent for payment thereof, the then
outstanding Settlement Loans shall be immediately due and payable. As
provided in SECTION 3.1.1(ii), Borrowers shall be deemed to have
requested (without the necessity of submitting any Notice of Borrowing)
Revolver Loans to be made on each Settlement Date in the amount of all
outstanding Settlement Loans and to have Agent cause the proceeds of
such Revolver Loans to be applied to the repayment of such Settlement
Loans and interest accrued thereon. Agent shall notify the Lenders of
the outstanding balance of Revolver Loans prior to 11:00 a.m. on each
Settlement Date and each Lender (other than Fleet) shall deposit with
Agent (without setoff, counterclaim or reduction of any kind) an amount
equal to its Pro Rata share of the amount of Revolver Loans deemed
requested in immediately available funds not later than 2:00 p.m. on
such Settlement Date. Each Lender's obligation to make such deposit
with Agent shall be absolute and unconditional and without regard to
whether any of the conditions precedent set forth in SECTION 10 hereof
are satisfied, any Out-of-Formula Condition exists or the Commitment
Termination Date has occurred. If, as the result of the commencement by
or against Borrowers of any Insolvency Proceeding or otherwise, any
Settlement Loan may not be repaid by the funding by Lenders of Revolver
Loans, then each Lender (other than Fleet) shall be deemed to have
purchased a participating interest in any unpaid Settlement Loan in an
amount equal to such Lender's Pro Rata share of such Settlement Loan
and shall transfer to Fleet, in immediately available funds not later
than the 2nd Business Day after Fleet's request therefor, the amount of
such Lender's participation. The proceeds of Settlement Loans may be
used solely for purposes for which Revolver Loans generally may be used
in accordance with SECTION 1.1.3 hereof. If any amounts received by
Fleet in respect of any Settlement Loans are later required to be
returned or repaid by Fleet to Borrowers or any other Obligor or their
respective representatives or successors-in-interest, whether by court
order, settlement or otherwise, the other Lenders shall, upon demand by
Fleet with notice to Agent, pay to Agent for the account of Fleet, an
amount equal to each other Lender's Pro Rata share of all such amounts
required to be returned by Fleet.
3.1.4. Disbursement Authorization. Each Borrower hereby
irrevocably authorizes Agent to disburse the proceeds of each Revolver Loan
requested by any Borrower, or deemed to be requested pursuant to SECTION 3.1.1
or SECTION 3.1.3(ii), as follows: (i) the proceeds of each Revolver Loan
requested under SECTION 3.1.1(i) shall be disbursed by Agent by wire transfer to
such bank account as may be agreed upon by Borrowers and Agent from time to time
or elsewhere if pursuant to a written direction from any Borrower; and (ii) the
proceeds of each Revolver Loan requested under SECTION 3.1.1(ii) or SECTION
3.1.3(ii) shall be disbursed by Agent by way of direct payment of the
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relevant interest or other Obligation. Any Loan proceeds received by any
Borrower or in payment of any of the Obligations shall be deemed to have been
received by all Borrowers.
3.2. DEFAULTING LENDER. If any Lender shall, at any time, fail to
make any payment to Agent or Fleet that is required hereunder, Agent may, but
shall not be required to, retain payments that would otherwise be made to such
defaulting Lender hereunder and apply such payments to such defaulting Lender's
defaulted obligations hereunder, at such time, and in such order, as Agent may
elect in its sole discretion. With respect to the payment of any funds from
Agent to a Lender or from a Lender to Agent, the party failing to make the full
payment when due pursuant to the terms hereof shall, upon demand by the other
party, pay such amount together with interest on such amount at the Federal
Funds Rate. The failure of any Lender to fund its portion of any Revolver Loan
or payment in respect of an LC Obligation shall not relieve any other Lender of
its obligation, if any, to fund its portion of the Revolver Loan or payment in
respect of an LC Obligation on the date of Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make any Revolver Loan or
payment in respect of an LC Obligation to be made by such Lender on the date of
any Borrowing. Solely as among the Lenders and solely for purposes of voting or
consenting to matters with respect to any of the Loan Documents, Collateral or
any Obligations and determining a defaulting Lender's Pro Rata share of payments
and proceeds of Collateral pending such defaulting Lender's cure of its defaults
hereunder, a defaulting Lender shall not be deemed to be a "Lender" and such
Lender's Commitment shall be deemed to be zero (0). The provisions of this
SECTION 3.2 shall be solely for the benefit of Agent and Lenders and may not be
enforced by Borrowers.
3.3 SPECIAL PROVISIONS GOVERNING LIBOR LOANS.
3.3.1. Number of LIBOR Loans. In no event may the number of
LIBOR Loans outstanding at any time to any Lender exceed 5.
3.3.2. Minimum Amounts. Each Borrowing of LIBOR Loans
pursuant to SECTION 3.1.1(i), and each continuation of or conversion to LIBOR
Loans pursuant to SECTION 2.1.2 hereof, shall be in a minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of that amount.
3.3.3. LIBOR Lending Office. Each Lender's initial LIBOR
Lending Office is set forth opposite its name on the signature pages hereof.
Each Lender shall have the right at any time and from time to time to designate
a different office of itself or of any Affiliate as such Lender's LIBOR Lending
Office, and to transfer any outstanding LIBOR Loans to such LIBOR Lending
Office. No such designation or transfer shall result in any liability on the
part of Borrowers for increased costs or expenses resulting solely from such
designation or transfer (except any such transfer that is made by a Lender
pursuant to SECTION 2.6 or SECTION 2.7 hereof, or otherwise for the purpose of
complying with Applicable Law). Increased costs for expenses resulting from a
change in Applicable Law occurring subsequent to any such designation or
transfer shall be deemed not to result solely from such designation or transfer.
3.3.4. Funding of LIBOR Loans. Each Lender may, if it so
elects, fulfill its obligation to make, continue or convert LIBOR Loans
hereunder by causing one of its foreign branches or Affiliates (or an
international banking facility created by such Lender) to make or maintain such
LIBOR Loans; provided, however, that such LIBOR Loans shall nonetheless be
deemed to have been made and to be held by such Lender, and the obligation of
Borrowers to repay such LIBOR Loans shall nevertheless be to such Lender for the
account of such foreign branch, Affiliate or international banking facility. The
calculation of all amounts payable to Lender under SECTION 2.7 and 2.9 shall be
made as if each Lender had actually funded or committed to fund its LIBOR Loan
through the purchase of an underlying deposit in an amount equal to the amount
of such LIBOR Loan and having a maturity comparable to the relevant
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Interest Period for such LIBOR Loans; provided, however, each Lender may fund
its LIBOR Loans in any manner it deems fit and the foregoing presumption shall
be utilized only for the calculation of amounts payable under SECTION 2.7 and
SECTION 2.9.
3.4. BORROWERS' REPRESENTATIVE. Each Borrower hereby irrevocably
appoints Tropical, and Tropical agrees to act under this Agreement, as the agent
and representative of itself and each other Borrower for all purposes under this
Agreement, including requesting Borrowings, selecting whether any Loan or
portion thereof is to bear interest as a Base Rate Loan or a LIBOR Loan, and
receiving account statements and other notices and communications to Borrowers
(or any of them) from Agent. Agent may rely, and shall be fully protected in
relying, on any Notice of Borrowing, Notice of Conversion/Continuation,
disbursement instructions, reports, information, Borrowing Base Certificate or
any other notice or communication made or given by Tropical, whether in its own
name, on behalf of any Borrower or on behalf of "the Borrowers," and Agent shall
have no obligation to make any inquiry or request any confirmation from or on
behalf of any other Borrower as to the binding effect on such Borrower of any
such Notice of Borrowing, Notice of Conversion Continuation, instruction,
report, information, Borrowing Base Certificate or other notice or
communication, nor shall the joint and several character of Borrowers' liability
for the Obligations be affected, provided that the provisions of this SECTION
3.4 shall not be construed so as to preclude any Borrower from directly
requesting Borrowings or taking other actions permitted to be taken by "a
Borrower" hereunder. Agent may maintain a single Loan Account in the name of
"Tropical Sportswear Int'l Corporation" hereunder, and each Borrower expressly
agrees to such arrangement and confirms that such arrangement shall have no
effect on the joint and several character of such Borrower's liability for the
Obligations.
3.5. ALL LOANS TO CONSTITUTE ONE OBLIGATION. The Loans shall
constitute one general obligation of Borrowers and (unless otherwise expressly
provided in any Security Document) shall be secured by Agent's Lien upon all of
the Collateral; provided, however, that Agent and each Lender shall be deemed to
be a creditor of each Borrower and the holder of a separate claim against each
Borrower to the extent of any Obligations jointly and severally owed by
Borrowers to Agent or such Lender.
SECTION 4. PAYMENTS
4.1. GENERAL PAYMENT PROVISIONS. All payments (including all
prepayments) of principal of and interest on the Loans, LC Outstandings and
other Obligations that are payable to Agent or any Lender shall be made to Agent
in Dollars without any offset or counterclaim and free and clear of (and without
deduction for) any present or future Taxes, and, with respect to payments made
other than by application of balances in the Payment Account, in immediately
available funds not later than 12:00 noon on the due date (and payment made
after such time on the due date to be deemed to have been made on the next
succeeding Business Day). All payments received by Agent shall be distributed by
Agent in accordance with SECTION 4.6 hereof, subject to the rights of offset
that Agent may have as to amounts otherwise to be remitted to a particular
Lender by reason of amounts due Agent from such Lender under any of the Loan
Documents.
4.2. REPAYMENT OF REVOLVER LOANS.
4.2.10. Payment of Principal. The outstanding principal
amounts with respect to the Revolver Loans shall be repaid as follows:
(i) Any portion of the Revolver Loans consisting of
the principal amount of Base Rate Loans shall be paid by Borrowers to
Agent, for the Pro Rata benefit of Lenders (or, in the case of
Settlement Loans, for the sole benefit of Fleet) unless timely
converted to a LIBOR Loan in accordance with this Agreement,
immediately upon (a) each receipt by Agent, any
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Lender or Borrowers of any proceeds of any of the Accounts or
Inventory, to the extent of such proceeds, (b) the Commitment
Termination Date, and (c) in the case of Settlement Loans, the earlier
of Fleet's demand for payment or on each Settlement Date with respect
to all Settlement Loans outstanding on such date.
(ii) Any portion of the Revolver Loans consisting of
the principal amount of LIBOR Loans shall be paid by Borrowers to
Agent, for the Pro Rata benefit of Lenders, unless converted to a Base
Rate Loan or continued as a LIBOR Loan in accordance with the terms of
this Agreement, immediately upon (a) the last day of the Interest
Period applicable thereto and (b) the Commitment Termination Date. In
no event shall Borrowers be authorized to make a voluntary prepayment
with respect to any Revolver Loan outstanding as a LIBOR Loan prior to
the last day of the Interest Period applicable thereto unless (x)
otherwise agreed in writing by Agent or Borrowers are otherwise
expressly authorized or required by any other provision of this
Agreement to pay any LIBOR Loan outstanding on a date other than the
last day of the Interest Period applicable thereto, and (y) Borrowers
pay to Agent, for the Pro Rata benefit of Lenders, concurrently with
any prepayment of a LIBOR Loan, any amount due Agent and Lenders under
SECTION 2.9 hereof as a consequence of such prepayment. Notwithstanding
the foregoing provisions of this SECTION 4.2.1(ii), if, on any date
that Agent receives proceeds of any of the Accounts or Inventory, there
are no Revolver Loans outstanding as Base Rate Loans, Agent may either
hold such proceeds as cash security for the timely payment of the
Obligations or apply such proceeds to any outstanding Revolver Loans
bearing interest as LIBOR Loans as the same become due and payable
(whether at the end of the applicable Interest Periods or on the
Commitment Termination Date).
(iii) Notwithstanding anything to the contrary
contained elsewhere in this Agreement, if an Out-of-Formula Condition
shall exist, Borrowers shall, on the sooner to occur of Agent's demand
or the first Business Day after any Borrower has obtained knowledge of
such Out-of-Formula Condition, repay the outstanding Revolver Loans
that are Base Rate Loans in an amount sufficient to reduce the
aggregate unpaid principal amount of all Revolver Loans by an amount
equal to such excess; and, if such payment of Base Rate Loans is not
sufficient to eliminate the Out-of-Formula Condition, then Borrowers
shall immediately deposit with Agent, for the Pro Rata benefit of
Lenders, for application to any outstanding Revolver Loans bearing
interest as LIBOR Loans as the same become due and payable (whether at
the end of the applicable Interest Periods or on the Commitment
Termination Date) cash in an amount sufficient to eliminate such
Out-of-Formula Condition, and Agent may (a) hold such deposit as cash
security pending disbursement of same to Lenders for application to the
Obligations, or (b) if a Default or Event of Default exists,
immediately apply such proceeds to the payment of the Obligations,
including the Revolver Loans outstanding as LIBOR Loans (in which event
Borrowers shall also pay to Agent for the Pro Rata benefit of Lenders
any and all amounts required by SECTION 2.9 to be paid by reason of the
prepayment of a LIBOR Loan prior to the last day of the Interest Period
applicable thereto).
4.2.2. Payment of Interest. Interest accrued on the Revolver
Loans shall be due and payable on (i) the first calendar day of each month (for
the immediately preceding month), computed through the last calendar day of the
preceding month, with respect to any Revolver Loan (whether a Base Rate Loan or
LIBOR Loan) and (ii) the last day of the applicable Interest Period in the case
of a LIBOR Loan. Accrued interest shall also be paid by Borrowers on the
Commitment Termination Date. With respect to any Base Rate Loan converted into a
LIBOR Loan pursuant to SECTION 2.1.2 on a day when interest would not otherwise
have been payable with respect to such Base Rate Loan, accrued interest to
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the date of such conversion on the amount of such Base Rate Loan so converted
shall be paid on the conversion date.
4.3. RESERVED.
4.4. PAYMENT OF OTHER OBLIGATIONS. The balance of the Obligations
requiring the payment of money, including the LC Outstandings and Extraordinary
Expenses incurred by Agent or any Lender, shall be repaid by Borrowers to Agent
for allocation among Agent and Lenders as provided in the Loan Documents, or, if
no date of payment is otherwise specified in the Loan Documents, ON demand.
4.5. MARSHALING; PAYMENTS SET ASIDE. None of Agent or any Lender
shall be under any obligation to marshal any assets in favor of Borrowers or any
other Obligor or against or in payment of any or all of the Obligations. To the
extent that Borrowers make a payment to Agent or Lenders or Agent or any Lender
receives payment from the proceeds of any Collateral or exercises its right of
setoff, and such payment or the proceeds of such Collateral or setoff (or any
part thereof) are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other Person, then to the extent of any loss by Agent or Lenders, the
Obligations or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor, shall be revived and continued in full force and
effect as if such payment or proceeds had not been made or received and any such
enforcement or setoff had not occurred. The provisions of the immediately
preceding sentence of this SECTION 4.5 shall survive any termination of the
Commitments and Full Payment of the Obligations.
4.6. AGENT'S ALLOCATION OF PAYMENTS AND COLLECTIONS.
4.6.1. Allocation of Payments. All monies to be applied to
the Obligations, whether such monies represent voluntary or mandatory payments
or prepayments by one or more Obligors or are received pursuant to demand for
payment or realized from any disposition of Collateral, shall be allocated among
Agent and such of the Lenders as are entitled thereto (and, with respect to
monies allocated to Lenders, on a Pro Rata basis unless otherwise provided
herein): (i) first, to Agent to pay principal and accrued interest on any
portion of the Revolver Loans which Agent may have advanced on behalf of any
Lender and for which Agent has not been reimbursed by such Lender or Borrowers;
(ii) second, to Fleet to pay the principal and accrued interest on any portion
of the Settlement Loans outstanding, to be shared with Lenders that have
acquired and paid for a participating interest in such Settlement Loans; (iii)
third, to the extent that Fleet has not received from any Participating Lender a
payment as required by SECTION 1.3.2 hereof, to Fleet to pay all such required
payments from each Participating Lender; (iv) fourth, to Agent to pay the amount
of Extraordinary Expenses and amounts owing to Agent pursuant to SECTION 14.10
hereof that have not been reimbursed to Agent by Borrowers or Lenders, together
with interest accrued thereon at the rate applicable to Revolver Loans that are
Base Rate Loans; (v) fifth, to Agent to pay any Indemnified Amount that has not
been paid to Agent by Obligors or Lenders, together with interest accrued
thereon at the rate applicable to Revolver Loans that are Base Rate Loans; (vi)
sixth, to Agent to pay any fees due and payable to Agent; (vii) seventh, to each
Lender for any Indemnified Amount that such Lender has paid to Agent and any
Extraordinary Expenses that such Lender has reimbursed to Agent or such Lender
has incurred, to the extent that such Lender has not been reimbursed by Obligors
therefor; (viii) eighth, to Fleet to pay principal and interest with respect to
LC Outstandings (or to the extent any of the LC Outstandings are contingent and
an Event of Default then exists, deposited in the Cash Collateral Account to
provide security for the payment of the LC Outstandings), which payment shall be
shared with the Participating Lenders in accordance with SECTION 1.3.2(iii)
hereof; (ix) ninth, to Lenders in payment of the unpaid principal and accrued
interest in respect of the Loans (other than settlement Loans) then outstanding;
(x) tenth, to Lenders in payment
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of any unpaid principal and accrued interest with respect to any of the
remaining Obligations (other than the Obligations described in clause (xi)
below) to be shared among Agent and Lenders ratably in proportion to their
respective shares of such Loans and other Obligations (other than the
Obligations described in clause (xi) below), or on such other basis as may be
agreed upon in writing by Agent and Lenders (which agreement or agreements may
be entered into without notice to or the consent or approval of Borrower); and
(xi) eleventh, to Bank, any Lender or any Affiliate thereof in payment of any
Banking Relationship Debt, to be shared among Bank, Lenders and any Affiliates
thereof ratably. The allocations set forth in this SECTION 4.6 are solely to
determine the rights and priorities of Agent and Lenders as among themselves and
may be changed by Agent and Lenders without notice to or the consent or approval
of any Borrower or any other Person.
4.6.2. Erroneous Allocation. Agent shall not be liable for
any allocation or distribution of payments made by it in good faith and, if any
such allocation or distribution is subsequently determined to have been made in
error, the sole recourse of any Lender to which payment was due but not made
shall be to recover from the other Lenders any payment in excess of the amount
to which such other Lenders are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them).
4.7. APPLICATION OF PAYMENTS AND COLLATERAL PROCEEDS. All Payment
Items received by Agent by 12:00 noon, Hartford, Connecticut time, on any
Business Day shall be deemed received on that Business Day. All Payment Items
received by Agent after 12:00 noon, Hartford, Connecticut time, on any Business
Day shall be deemed received on the following Business Day. Each Borrower
irrevocably waives the right to direct the application of any and all payments
and Collateral proceeds at any time or times hereafter received by Agent or any
Lender from or on behalf of Borrowers, and each Borrower does hereby irrevocably
agree that Agent shall have the continuing exclusive right to apply and reapply
any and all such payments and Collateral proceeds received at any time or times
hereafter by Agent or its agent against the Obligations, in such manner as Agent
may deem advisable, notwithstanding any entry by Agent upon any of its books and
records; provided, however, that any payments or proceeds of Collateral received
by Agent on the date that an Event of Default does not exist shall be applied in
accordance with any provisions of this Agreement that govern the application of
such payment or proceeds. If, as the result of Agent's collection of proceeds of
Accounts and other Collateral as authorized by SECTION 7.2.6 a credit balance
exists, such credit balance shall not accrue interest in favor of Borrowers, but
shall be available to Borrowers at any time or times for so long as no Default
or Event of Default exists. Lenders may, at their option, offset such credit
balance against any of the Obligations upon and after the occurrence of an Event
of Default.
4.8. LOAN ACCOUNTS; THE REGISTER; ACCOUNT STATED.
4.8.1. Loan Accounts. Each Lender shall maintain in
accordance with its usual and customary practices an account or accounts (a
"Loan Account") evidencing the Debt of Borrowers to such Lender resulting from
each Loan owing to such Lender from time to time, including the amount of
principal and interest payable to such Lender from time to time hereunder and
under each Note payable to such Lender. Any failure of a Lender to record in the
Loan Account, or any error in doing so, shall not limit or otherwise affect the
obligation of Borrowers hereunder (or under any Note) to pay any amount owing
hereunder to such Lender.
4.8.2. The Register. Agent shall maintain a register (the
"Register") which shall include a master account and a subsidiary account for
each Lender and in which accounts (taken together) shall be recorded (i) the
date and amount of each Borrowing made hereunder, the Type of each Loan
comprising such Borrowing and any Interest Period applicable thereto, (ii) the
effective date and amount of each Assignment and Acceptance delivered to and
accepted by it and the parties thereto,
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(iii) the amount of any principal or interest due and payable or to become due
and payable from Borrowers to each Lender hereunder or under the Notes, and (iv)
the amount of any sum received by Agent from Borrowers or any other Obligor and
each Lender's share thereof. The Register shall be available for inspection by
Borrowers or any Lender at the offices of Agent at any reasonable time and from
time to time upon reasonable prior notice. Any failure of Agent to record in the
Register, or any error in doing so, shall not limit or otherwise affect the
obligation of Borrowers hereunder (or under any Note) to pay any amount owing
with respect to the Loans or provide the basis for any claim against Agent.
4.8.3. Entries Binding. The entries made in the Register and
each Loan Account shall constitute rebuttably presumptive evidence of the
information contained therein; provided, however, that if a copy of information
contained in the Register or any Loan Account is provided to any Person, or any
Person inspects the Register or any Loan Account, at any time or from time to
time, then the information contained in the Register or the Loan Account, as
applicable, shall be conclusive and binding on such Person for all purposes
absent manifest error, unless such Person notifies Agent in writing within 30
days after such Person's receipt of such copy or such Person's inspection of the
Register or Loan Account of its intention to dispute the information contained
therein.
4.9. GROSS UP FOR TAXES. If Borrowers shall be required by
Applicable Law to withhold or deduct any Taxes from or in respect of any sum
payable under this Agreement or any of the other Loan Documents, (a) the sum
payable to Agent or such Lender shall be increased as may be necessary so that,
after making all required withholding or deductions, Agent or such Lender (as
the case may be) receives an amount equal to the sum it would have received had
no such withholding or deductions been made, (b) Borrowers shall make such
withholding or deductions, and (c) Borrowers shall pay the full amount withheld
or deducted to the relevant taxation authority or other authority in accordance
with Applicable Law.
4.10. WITHHOLDING TAX EXEMPTION. At least 5 Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Foreign Lender, such Foreign Lender agrees that it will deliver to
Borrowers and Agent 2 duly completed copies of United States Internal Revenue
Service Form W-8BEN or W-8ECI (or any subsequent replacement substitute or form
therefor), certifying in either case that such Lender is entitled to receive
payment under this Agreement and its Note without deduction or withholding of
any United States federal income taxes. Each Foreign Lender which so delivers a
Form W-8BEN or W-8ECI further undertakes to deliver to Borrowers and Agent 2
additional copies of such form (or a successor form) on or before the date that
such form expires (currently, 3 successive calendar years for Form W-8BEN and
one calendar year for Form W-8ECI) or becomes obsolete or after the occurrence
of any event requiring a change in the most recent form so delivered by it, and
such amendments thereto or extensions or renewals thereof as may be reasonably
requested by Borrowers or Agent, in each case certifying that such Foreign
Lender is entitled to receive payments under this Agreement and its Notes
without deduction or withholding of any United States federal income taxes,
unless an event (including any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be required that
renders all such forms inapplicable or that would prevent such Foreign Lender
from duly completing and delivering any such form with respect to it and such
Lender advises Borrowers and Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income taxes.
4.11. NATURE AND EXTENT OF EACH BORROWER'S LIABILITY.
4.11.1. Joint and Several Liability. Each Borrower shall be
liable for, on a joint and several basis, and hereby guarantees the timely
payment by all other Borrowers of, all of the
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Loans and other Obligations, regardless of which Borrower actually may have
received the proceeds of any Loans or other extensions of credit hereunder or
the amount of such Loans received or the manner in which Agent or any Lender
accounts for such Loans or other extensions of credit on its books and records,
it being acknowledged and agreed that Loans to any Borrower inure to the mutual
benefit of all Borrowers and that Agent and Lenders are relying on the joint and
several liability of Borrowers in extending the Loans and other financial
accommodations hereunder. Each Borrower hereby unconditionally and irrevocably
agrees that upon default in the payment when due (whether at stated maturity, by
acceleration or otherwise) of any principal of, or interest owed on, any of the
Loans or any other Obligations, such Borrower shall forthwith pay the same,
without notice or demand.
4.11.2. Unconditional Nature of Liability. Each Borrower's
joint and several liability hereunder with respect to, and guaranty of, the
Loans and other Obligations shall, to the fullest extent permitted by Applicable
Law, be unconditional irrespective of (i) the validity, enforceability,
avoidance or subordination of any of the Obligations or of any promissory note
or other document evidencing all or any part of the Obligations, (ii) the
absence of any attempt to collect any of the Obligations from any other Obligor
or any Collateral or other security therefor, or the absence of any other action
to enforce the same, (iii) the waiver, consent, extension, forbearance or
granting of any indulgence by Agent or any Lender with respect to any provision
of any instrument evidencing or securing the payment of any of the Obligations,
or any other agreement now or hereafter executed by any other Borrower and
delivered to Agent or any Lender, (iv) the failure by Agent to take any steps to
perfect or maintain the perfected status of its security interest in or Lien
upon, or to preserve its rights to, any of the Collateral or other security for
the payment or performance of any of the Obligations or Agent's release of any
Collateral or of its Liens upon any Collateral, (v) Agent's or Lenders'
election, in any proceeding instituted under the Bankruptcy Code, for the
application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or
grant of a security interest by any other Borrower, as debtor-in-possession
under Section 364 of the Bankruptcy Code, (vii) the release or compromise, in
whole or in part, of the liability of any Obligor for the payment of any of the
Obligations, (viii) any amendment or modification of any of the Loan Documents
or any waiver of a Default or Event of Default, (ix) any increase in the amount
of the Obligations beyond any limits imposed herein or in the amount of any
interest, fees or other charges payable in connection therewith, or any decrease
in the same, (x) the disallowance of all or any portion of Agent's or any
Lender's claims against any other Obligor for the repayment of any of the
Obligations under Section 502 of the Bankruptcy Code, or (xi) any other
circumstance that might constitute a legal or equitable discharge or defense of
any Borrower. At any time an Event of Default exists, Agent may proceed directly
and at once, without notice to any Obligor, against any or all of Obligors to
collect and recover all or any part of the Obligations, without first proceeding
against any other Obligor or against any Collateral or other security for the
payment or performance of any of the Obligations, and each Borrower waives any
provision under Applicable Law that might otherwise require Agent to pursue or
exhaust its remedies against any Collateral or Obligor before pursuing another
Obligor. Each Borrower consents and agrees that Agent shall be under no
obligation to marshal any assets in favor of any Obligor or against or in
payment of any or all of the Obligations.
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4.11.3. No Reduction in Liability for Obligations. No payment
or payments made by an Obligor or received or collected by Agent or Lenders from
a Borrower or any other Person by virtue of any action or proceeding or any
setoff or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Borrower under this Agreement,
each of whom shall remain jointly and severally liable for the payment and
performance of all Loans and other Obligations until the Obligations are paid in
full and this Agreement is terminated.
4.11.4. Contribution. Each Borrower is unconditionally
obligated to repay the Obligations as a joint and several obligor under this
Agreement. If, as of any date, the aggregate amount of payments made by a
Borrower on account of the Obligations and proceeds of such Borrower's
Collateral that are applied to the Obligations exceeds the aggregate amount of
Loan proceeds actually used by such Borrower in its business (such excess amount
being referred to as an "Accommodation Payment"), then each of the other
Borrowers (each such Borrower being referred to as a "Contributing Borrower")
shall be obligated to make contribution to such Borrower (the "Paying Borrower")
in an amount equal to (A) the product derived by multiplying the sum of each
Accommodation Payment of each Borrower by the Allocable Percentage of the
Borrower from whom contribution is sought less (B) the amount, if any, of the
then outstanding Accommodation Payment of such Contributing Borrower (such last
mentioned amount which is to be subtracted from the aforesaid product to be
increased by any amounts theretofore paid by such Contributing Borrower by way
of contribution hereunder, and to be decreased by any amounts theretofore
received by such Contributing Borrower by way of contribution hereunder);
provided, however, that a Paying Borrower's recovery of contribution hereunder
from the other Borrowers shall be limited to that amount paid by the Paying
Borrower in excess of its Allocable Percentage of all Accommodation Payments
then outstanding of all Borrowers. As used herein, the term "Allocable
Percentage" shall mean, on any date of determination thereof, a fraction the
denominator of which shall be equal to the number of Borrowers who are parties
to this Agreement on such date and the numerator of which shall be 1; provided,
however, that such percentages shall be modified in the event that contribution
from a Borrower is not possible by reason of insolvency, bankruptcy or otherwise
by reducing such Borrower's Allocable Percentage equitably and by adjusting the
Allocable Percentage of the other Borrowers proportionately so that the
Allocable Percentages of all Borrowers at all times equals 100%.
4.11.5. Subordination. Each Borrower hereby subordinates any
claims, including any right of payment, subrogation, contribution and indemnity,
that it may have from or against any other Obligor, and any successor or assign
of any other Obligor, including any trustee, receiver or debtor-in-possession,
howsoever arising, due or owing or whether heretofore, now or hereafter
existing, to the payment in full of all of the Obligations.
SECTION 5. TERM AND TERMINATION OF COMMITMENTS
5.1. TERM OF COMMITMENTS. Subject to each Lender's right to cease
making Loans and other extensions of credit to Borrowers when any Default or
Event of Default exists (provided, that each Lender's obligation vis-a-vis Agent
shall be governed by SECTION 3.1.2 hereof) or upon termination of the
Commitments as provided in SECTION 5.2 hereof, the Commitments shall be in
effect from the date hereof through the close of business on June 6, 2006 (the
"Term").
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5.2. TERMINATION.
5.2.1. Termination by Agent. Agent may (and upon the
direction of the Required Lenders, shall) terminate the Commitments without
notice at any time an Event of Default exists; provided, however, that the
Commitments shall automatically terminate as provided in SECTION 11.2 hereof.
5.2.2. Termination by Borrowers. Upon at least 60 days prior
written notice to Agent, Borrowers may, at their option, terminate the
Commitments; provided, however, no such termination by Borrowers shall be
effective until Borrowers have satisfied all of the Obligations. Any notice of
termination given by Borrowers shall be irrevocable unless Agent otherwise
agrees in writing. Borrowers may elect to terminate the Commitments in their
entirety only. No section of this Agreement, Type of Loan available hereunder or
Commitment may be terminated by Borrowers singly.
5.2.3. Reserved.
5.2.4. Effect of Termination. On the effective date of
termination of the Commitments by Agent or by Borrowers, all of the Obligations
shall be immediately due and payable and Lenders shall have no obligation to
make any Loans and Fleet shall have no obligation to procure any Letters of
Credit. All undertakings, agreements, covenants, warranties and representations
of Borrowers contained in the Loan Documents shall survive any such termination
and Agent shall retain its Liens in the Collateral and all of its rights and
remedies under the Loan Documents notwithstanding such termination until Full
Payment of the Obligations. Notwithstanding Full Payment of the Obligations,
Agent shall not be required to terminate its security interests in any of the
Collateral unless, with respect to any loss or damage Agent may incur as a
result of the dishonor or return of any Payment Items applied to the
Obligations, Agent shall have received either (i) a written agreement, executed
by Borrowers and any Person deemed financially responsible by Agent whose loans
or other advances to Borrowers are used in whole or in part to satisfy the
Obligations, indemnifying Agent and Lenders from any such loss or damage or (ii)
such monetary reserves and Liens on the Collateral for such period of time as
Agent, in its reasonable discretion, may deem necessary to protect Agent and
Lenders from any such loss or damage. The provisions of SECTIONS 2.4, 2.7, 2.8,
2.9, 4.5, 4.9 and this SECTION 5.2.4 and all obligations of Borrowers to
indemnify Agent or any Lender pursuant to this Agreement or any of the other
Loan Documents shall in all events survive any termination of the Commitments
and Full Payment of the Obligations.
SECTION 6. COLLATERAL
6.1. GRANT OF SECURITY INTEREST. To secure the prompt payment and
performance of all of the Obligations, each Borrower hereby grants to Agent, for
the benefit of Secured Parties, a continuing security interest in and Lien upon
all personal property of such Borrower, including all of the following Property
and interests in Property of such Borrower, whether now owned or existing or
hereafter created, acquired or arising and wheresoever located:
(i) all Accounts Collateral;
(ii) all Goods, including all Inventory and
Equipment;
(iii) all Instruments;
(iv) all Chattel Paper;
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(v) all Documents;
(vi) Commercial Tort Claims;
(vii) all Supporting Obligations;
(viii) all General Intangibles, including Payment
Intangibles and Software;
(ix) all Deposit Accounts;
(x) all Investment Property (but excluding any
portion thereof that constitutes Margin Stock unless otherwise
expressly provided in any Security Documents);
(xi) all Letter-of-Credit Rights;
(xii) all monies now or at any time or times
hereafter in the possession or under the control of Agent or a Lender
or a bailee or Affiliate of Agent or a Lender, including any Cash
Collateral in the Cash Collateral Account;
(xiii) all accessions to, substitutions for and all
replacements, products and cash and non-cash proceeds of (i) through
(xii) above, including proceeds of and unearned premiums with respect
to insurance policies insuring any of the Collateral and claims against
any Person for loss of, damage to or destruction of any of the
Collateral; and
(xiv) all books and records (including customer
lists, files, correspondence, tapes, computer programs, print-outs, and
other computer materials and records) of such Borrower pertaining to
any of (i) through (xiii) above.
6.2. LIEN ON DEPOSIT ACCOUNTS. As additional security for the
payment and performance of the Obligations, each Borrower hereby grants to
Agent, for the benefit of Secured Parties, a continuing security interest in and
Lien upon, and hereby collaterally assigns to Agent, all of such Borrower's
right, title and interest in and to each Deposit Account of such Borrower and in
and to any deposits or other sums at any time credited to each such Deposit
Account, including any sums in any blocked account or any special lockbox
account and in the accounts in which sums are deposited. In connection with the
foregoing, each Borrower hereby authorizes and directs each such bank or other
depository to pay or deliver to Agent upon its written demand therefor made at
any time that an Event of Default exists and without further notice to such
Borrower (such notice being hereby expressly waived), all balances in each
Deposit Account maintained by such Borrower with such depository for application
to the Obligations then outstanding, and the rights given Agent in this Section
shall be cumulative with and in addition to Agent's other rights and remedies in
regard to the foregoing Property as proceeds of Collateral. Each Borrower hereby
irrevocably appoints Agent as such Borrower's attorney-in-fact to collect any
and all such balances to the extent any such payment is not made to Agent by
such bank or other depository after demand thereon is made by Agent pursuant
hereto.
6.3. REAL ESTATE COLLATERAL.
6.3.1. Lien on Real Estate. The due and punctual payment and
performance of the Obligations shall also be secured by the Mortgage.
6.3.2. Collateral Assignment of Leases. To further secure
the prompt payment and performance of the Obligations, each Borrower hereby
grants, transfers and assigns to Agent, for
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the benefit of Secured Parties, and hereby grants to Agent, for the benefit of
Secured Parties, a security interest in and Lien upon all of such Borrower's
right, title and interest in, to and under all now or hereafter existing leases
of real Property to which such Borrower is a party, whether as lessor or lessee,
and all extensions, renewals and modifications thereof.
6.4. OTHER COLLATERAL.
6.4.1. Cash Collateral. In addition to the items of Property
referred to in SECTION 6.1 above, the Obligations shall also be secured by the
Cash Collateral to the extent provided herein and all of the other items of
Property from time to time described in any of the Security Documents as
security for any of the Obligations.
6.4.2 Commercial Tort Claims. Borrowers shall promptly
notify Agent in writing upon any Borrower's obtaining a Commercial Tort Claim
after the Closing Date against any Person and, upon Agent's written request,
promptly enter into an amendment to this Agreement (or any of the other Loan
Documents) and do such other acts or things deemed appropriate by Agent to
confer upon Agent a security interest in each such Commercial Tort Claim.
6.4.3 Certain After-Acquired Collateral. Borrowers shall
promptly notify Agent in writing upon any Borrower's obtaining any Collateral
after the Closing Date consisting of Deposit Accounts, Investment Property,
Letter-of-Credit Rights or Electronic Chattel Paper and, upon Agent's request,
shall promptly execute such documents and do such other acts or things deemed
appropriate by Agent to confer upon Agent control with respect to such
Collateral; promptly notify Agent in writing upon any Borrower's obtaining any
Collateral after the Closing Date consisting of Documents or Instruments and,
upon Agent's request, shall promptly execute such documents and do such other
acts or things deemed appropriate by Agent to deliver to it possession of such
Documents and, with respect to non-negotiable Documents, to have such
non-negotiable Documents issued in the name of Agent; and with respect to
collateral in the possession of a third party, other than certificated
securities and Goods covered by a Document, such Borrower shall obtain an
acknowledgment from the third party that is in possession of such Collateral
that such third party holds the Collateral for the benefit of Agent.
6.5. NO ASSUMPTION OF LIABILITY. The security interest granted
pursuant to this Agreement is granted as security only and shall not subject
Agent or any Lender to, or in any way alter or modify, any obligation of
liability of Borrowers with respect to or arising out of the Collateral.
6.6 LIEN PERFECTION; FURTHER ASSURANCES. Promptly after Agent's
request therefor, Borrowers shall execute or cause to be executed and deliver to
Agent such instruments, assignments, title certificates or other documents as
are necessary under the UCC or other Applicable Law (including any motor vehicle
certificates of title act) to perfect (or continue the perfection of) Agent's
Lien upon the Collateral and shall take such other action as may be requested by
Agent to give effect to or carry out the intent and purposes of this Agreement.
Unless prohibited by Applicable Law, each Borrower hereby irrevocably authorizes
Agent to execute and file in any jurisdiction any financing statement or
amendment thereto on such Borrower's behalf, including financing statements that
indicate the Collateral (i) as all assets or all personal property of such
Borrower or words to similar effect or (ii) as being of equal or lesser scope,
or with greater or lesser detail, than as set forth in this SECTION 6. Each
Borrower also hereby ratifies its authorization for Agent to have filed in any
jurisdiction any like financing statement or amendment thereto if filed prior to
the date hereof. The parties agree that a carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement and
may be filed in any appropriate office in lieu thereof.
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6.7. FOREIGN SUBSIDIARY STOCK. Notwithstanding anything to the
contrary set forth in SECTION 6.1 above, the types or items of Collateral
described in such Section shall include only sixty-six percent (66%) of the
stock of any Foreign Subsidiary.
SECTION 7. COLLATERAL ADMINISTRATION
7.1 GENERAL PROVISIONS.
7.1.1. Location of Collateral. All tangible items of
Collateral, other than Inventory in transit, shall at all times be kept by
Borrowers at one or more of the business locations of Borrowers set forth in
SCHEDULE 7.1.1 hereto and shall not be moved therefrom, without the prior
written approval of Agent, except that in the absence of an Event of Default and
acceleration of the maturity of the Obligations in consequence thereof,
Borrowers may (i) make sales or other dispositions of any Collateral to the
extent authorized by SECTION 9.2.10 hereof, and (ii) move Inventory or Equipment
or any record relating to any Collateral to a location in the United States
other than those shown on SCHEDULE 7.1.1 hereto so long as Borrowers have given
Agent at least 30 Business Days' prior written notice of such new location and
prior to moving any Inventory or Equipment to such location Borrowers have
cooperated with Agent in filing any UCC-1 financing statements or other
appropriate documentation necessary to perfect or continue perfection of Agent's
first priority Liens with respect to such Inventory or Equipment.
Notwithstanding anything to the contrary contained in this Agreement, Borrowers
shall not be permitted to keep, store or otherwise maintain any Collateral at
any location (including any location described in SECTION 7.1.1), unless (i) a
Borrower is the owner of such location, (ii) a Borrower leases such location and
the landlord has executed in favor of Agent a Lien Waiver, or (iii) the
Collateral consists of Inventory placed with a warehouseman, bailee or
processor, Agent has received from such warehouseman, bailee or processor a Lien
Waiver and, to the extent determined necessary by Agent in its sole discretion,
an appropriate UCC-1 financing statement has been filed with the appropriate
Governmental Authority in the jurisdiction where such warehouseman, bailee or
processor is located in order to perfect, or to maintain the uninterrupted
perfection of, Agent's security interest in such Inventory.
7.1.2. Insurance of Collateral; Condemnation Proceeds. Each
Borrower shall maintain and pay for insurance upon all Collateral, wherever
located, covering casualty, hazard, public liability, theft, malicious mischief,
and such other risks in such amounts and with such insurance companies as are
reasonably satisfactory to Agent. SCHEDULE 7.1.2 describes all insurance of
Borrowers in effect on the date hereof. All proceeds payable under each such
policy shall be payable to Agent for application to the Obligations. Borrowers
shall deliver the originals or certified copies of such policies to Agent with
satisfactory lender's loss payable endorsements reasonably satisfactory to Agent
naming Agent as sole loss payee, assignee or additional insured, as appropriate.
Each policy of insurance or endorsement shall contain a clause requiring the
insurer to give not less than 30 days prior written notice to Agent in the event
of cancellation of the policy for any reason whatsoever and a clause specifying
that the interest of Agent shall not be impaired or invalidated by any act or
neglect of any Borrower or the owner of the Property or by the occupation of the
premises for purposes more hazardous than are permitted by said policy. If any
Borrower fails to provide and pay for such insurance, Agent may, at its option,
but shall not be required to, procure the same and charge Borrowers therefor.
Each Borrower agrees to deliver to Agent, promptly as rendered, true copies of
all reports made in any reporting forms to insurance companies. For so long as
no Event of Default exists, each Borrower shall have the right to settle, adjust
and compromise any claim with respect to any insurance maintained by such
Borrower provided that all proceeds thereof are applied in the manner specified
in this Agreement, and Agent agrees promptly to provide any necessary
endorsement to any checks or drafts issued in payment of any such claim. At any
time that an Event of Default exists, only Agent shall be authorized to settle,
adjust and compromise such
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claims, and Agent shall have all rights and remedies with respect to such
policies of insurance as are provided for in this Agreement and the other Loan
Documents. Any condemnation awards in connection with a condemnation of any of
the Collateral shall be promptly turned over to Agent for application to the
Obligations.
7.1.3. Protection of Collateral. All expenses of protecting,
storing, warehousing, insuring, handling, maintaining and shipping any
Collateral, all Taxes imposed under any Applicable Law on any of the Collateral
or in respect of the sale thereof, and all other payments required to be made by
Agent to any Person to realize upon any Collateral shall be borne and paid by
Borrowers. Agent shall not be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto (except
for reasonable care in the custody thereof while any Collateral is in Agent's
actual possession) or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other Person
whomsoever, but the same shall be at Borrowers' sole risk.
7.1.4. Defense of Title to Collateral. Each Borrower shall
at all times defend such Borrower's title to the Collateral and Agent's Liens
therein against all Persons and all claims and demands whatsoever other than
Permitted Liens.
7.2. ADMINISTRATION OF ACCOUNTS.
7.2.1. Records and Schedules of Accounts. Each Borrower
shall provide to Agent on or before the 20th day of each month, a detailed aged
trial balance of all Accounts existing as of the last day of the preceding
month, specifying the names, face value and age of invoices for each Account
Debtor obligated on an Account so listed ("Schedule of Accounts"), and, upon
Agent's request therefor, copies of proof of delivery and a copy of all
documents, including repayment histories and present status reports relating to
the Accounts so scheduled and such other matters and information relating to the
status of then existing Accounts as Agent shall reasonably request. In addition,
if Accounts in an aggregate face amount in excess of $500,000 cease to be
Eligible Accounts in whole or in part, Borrowers shall notify Agent of such
occurrence promptly (and in any event within 2 Business Days) after any
Borrower's having obtained knowledge of such occurrence and the Borrowing Base
shall thereupon be adjusted to reflect such occurrence. Upon Agent's request
therefor, each Borrower shall deliver to Agent copies of invoices or invoice
registers related to all of its Accounts.
7.2.2. Discounts, Disputes and Returns. If any Borrower
grants any discounts, allowances or credits that are not shown on the face of
the invoice for the Account involved, such Borrower shall report such discounts,
allowances or credits, as the case may be, to Agent as part of the next required
Schedule of Accounts. If any amounts due and owing in excess of $250,000 are in
dispute between any Borrower and any Account Debtor, or if any returns are made
in excess of $250,000 with respect to any Accounts owing from an Account Debtor,
such Borrower shall provide Agent with written notice thereof at the time of
submission of the next Schedule of Accounts, explaining in detail the reason for
the dispute or return, all claims related thereto and the amount in controversy.
At any time an Event of Default exists, Agent shall have the right to settle or
adjust all disputes and claims directly with the Account Debtor and to
compromise the amount or extend the time for payment of any Accounts comprising
a part of the Collateral upon such terms and conditions as Agent may deem
advisable, and to charge the deficiencies, costs and expenses thereof, including
attorneys' fees, to Borrowers.
7.2.3. Taxes. If an Account of any Borrower includes a
charge for any Taxes payable to any Governmental Authority, Agent is authorized,
in its sole discretion, to pay the amount thereof to the proper taxing authority
for the account of such Borrower and to charge Borrower therefor; provided,
however, that neither Agent nor Lenders shall be liable for any Taxes that may
be due by Borrowers.
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7.2.4. Account Verification. Whether or not a Default or an
Event of Default exists, Agent shall have the right at any time, in the name of
Agent, any designee of Agent or any Borrower to verify the validity, amount or
any other matter relating to any Accounts of such Borrower by mail, telephone,
telegraph or otherwise. Borrowers shall cooperate fully with Agent in an effort
to facilitate and promptly conclude any such verification process.
7.2.5. Maintenance of Dominion Account. Borrowers shall
maintain a Dominion Account pursuant to a lockbox or other arrangement
acceptable to Agent and, in the case of such Dominion Account and lockbox
arrangement, with such bank as may be selected by Borrowers and be acceptable to
Agent. Borrowers shall issue to each such lockbox bank an irrevocable letter of
instruction directing such bank to deposit all payments or other remittances
received in the lockbox to the Dominion Account. Borrowers shall enter into
agreements, in form satisfactory to Agent, with each bank at which a Dominion
Account is maintained by which such bank shall immediately transfer to the
Payment Account all monies deposited to the Dominion Account. All funds
deposited in each Dominion Account shall be subject to Agent's Lien. Borrowers
shall obtain the agreement (in favor of and in form and content satisfactory to
Agent and Lenders) by each bank at which a Dominion Account is maintained to
waive any offset rights against the funds deposited into such Dominion Account,
except offset rights in respect of charges incurred in the administration of
such Dominion Account. Neither Agent nor Lenders assume any responsibility to
Borrowers for such lockbox arrangement or Dominion Account, including any claim
of accord and satisfaction or release with respect to deposits accepted by any
bank thereunder.
7.2.6. Collection of Accounts and Proceeds of Collateral. To
expedite collection, each Borrower shall endeavor in the first instance to make
collection of such Borrower's Accounts for Agent and Lenders. Borrowers shall
request in writing and otherwise take such reasonable steps to ensure that all
Account Debtors forward payment directly to the Dominion Account (or lockboxes
related to the Dominion Account), and deposit and cause their Subsidiaries to
deposit promptly, and in any event no later than the first Business Day after
the date of receipt thereof, all cash, checks, drafts or other similar items
constituting payments made in respect of any and all Collateral (whether or not
otherwise delivered to a lockbox) into the Dominion Account. Borrowers shall
issue to each lockbox bank an irrevocable letter of instruction directing such
bank to deposit all remittances received in the lockbox to the Dominion Account.
All Payment Items received by any Borrower in respect of its Accounts, together
with the proceeds of any other Collateral, shall be held by such Borrower as
trustee of an express trust for Agent's benefit; such Borrower shall immediately
deposit same in kind in the Dominion Account; and Agent may remit such proceeds
to Lenders for application of such proceeds to the Obligations in the manner
authorized by this Agreement. Agent retains the right at all times that a
Default or an Event of Default exists to notify Account Debtors of any Borrower
that Accounts have been assigned to Agent and to collect Accounts directly in
its own name and to charge to Borrowers the collection costs and expenses
incurred by Agent or Lenders, including reasonable attorneys' fees.
7.3. ADMINISTRATION OF INVENTORY.
7.3.1. Records and Reports of Inventory. Each Borrower shall
keep accurate and complete records of its Inventory and shall furnish Agent and
Lenders inventory reports respecting such Inventory in form and detail
satisfactory to Agent and Lenders at such times as Agent and Lenders may
request, but so long as no Default or Event of Default exists, no more
frequently than once each week. Borrowers shall deliver to Agent and Lenders on
or before the third Business Day of each week an open order report for the
immediately preceding week specifying the dollar amount of orders for
merchandise received but unshipped and the expected gross margin thereon. Each
Borrower shall, at its own expense, conduct a physical inventory (or a cycle
count certified by Borrower's firm of independent certified
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public accountants) no less frequently than annually and periodic cycle counts
consistent with such Borrower's historical practices and shall provide to Agent
and Lenders a report based on each such physical inventory and cycle count
promptly after completion thereof, together with such supporting information as
Agent shall request. Agent may participate in and observe each physical count or
inventory, which participation shall be at Borrowers' expense at any time that
an Event of Default exists.
7.3.2. Returns of Inventory. No Borrower shall return any of
its Inventory to a supplier or vendor thereof, or any other Person, whether for
cash, credit against future purchases or then existing payables, or otherwise,
unless (i) such return is in the Ordinary Course of Business of such Borrower
and such Person; (ii) no Default or Event of Default exists or would result
therefrom; (iii) the return of such Inventory will not result in an
Out-of-Formula Condition; (iv) such Borrower promptly notifies Agent thereof if
the aggregate Value of all Inventory returned in any month exceeds $1,000,000;
and (v) any payments received by such Borrower in connection with any such
return are promptly turned over to Agent for application to the Obligations.
7.3.3. Acquisitions and Sale of Inventory. No Borrower shall
acquire or accept any Inventory on consignment or approval and will use its best
efforts to insure that all Inventory that is produced in the United States of
America will be produced in accordance with the FLSA. No Borrower shall sell any
Inventory to any customer on approval or any other basis upon which the customer
has a right to return or obligates any Borrower to repurchase such Inventory (it
being acknowledged that the foregoing does not include discretionary decisions
on the part of a Borrower to repurchase Inventory).
7.3.4. Maintenance of Inventory. Borrowers shall produce,
use, store and maintain all Inventory with all reasonable care and caution in
accordance with applicable standards of any insurance and in conformity with
Applicable Law (including the requirements of the FLSA) and will maintain
current rent payments (within applicable grace periods provided for in leases)
at all locations at which any Inventory is maintained or stored.
7.4. ADMINISTRATION OF EQUIPMENT.
7.4.1. Records and Schedules of Equipment. Each Borrower
shall keep accurate records itemizing and describing the kind, type, quality,
quantity and cost of its Equipment and all dispositions made in accordance with
SECTION 7.4.2 hereof, and shall furnish Agent and Lenders with a current
schedule containing the foregoing information upon request by Agent. Promptly
after request therefor by Agent, Borrowers shall deliver to Agent and Lenders
any and all evidence of ownership, if any, of any of the Equipment.
7.4.2. Dispositions of Equipment. No Borrower will sell,
lease or otherwise dispose of or transfer any of the Equipment or any part
thereof without the prior written consent of Agent; provided, however, that the
foregoing restriction shall not apply, for so long as no Default or Event of
Default exists, to (i) dispositions of any Equipment that is owned on the
Closing Date by any Foreign Subsidiary, (ii) dispositions of Equipment which, in
the aggregate during any consecutive 12-month period, has a fair market value or
book value, whichever is more, of $500,000 or less, provided that all Net
Disposition Proceeds thereof are remitted to Agent for application to the
Obligations, or (iii) replacements of Equipment that is substantially worn,
damaged or obsolete with Equipment of like kind, function and value, provided
that the replacement Equipment shall be acquired prior to or concurrently with
any disposition of the Equipment that is to be replaced, the replacement
Equipment shall be free and clear of Liens other than Permitted Liens that are
not Purchase Money Liens, and Borrowers shall have given Agent at least 10 days'
prior written notice of such disposition.
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7.4.3. Condition of Equipment. The Equipment is in good
operating condition and repair, and all necessary replacements of and repairs
thereto shall be made so that the value and operating efficiency of the
Equipment shall be maintained and preserved, reasonable wear and tear excepted.
Each Borrower shall ensure that the Equipment shall be mechanically and
structurally sound, capable of performing the functions for which the Equipment
was originally designed, in accordance with the manufacturer's published and
recommended specifications. No Borrower will permit any of the Equipment to
become affixed to any real Property leased to such Borrower so that an interest
arises therein under the real estate laws of the applicable jurisdiction unless
the landlord of such real Property has executed a landlord waiver or leasehold
mortgage in favor of and in form acceptable to Agent, and no Borrower will
permit any of the Equipment to become an accession to any personal Property that
is subject to a Lien unless the Lien is a Permitted Lien.
7.5. BORROWING BASE CERTIFICATES. On the Closing Date and on each
Business Day after the Closing Date, Borrowers shall deliver to Agent (and Agent
shall, on request from a Lender, promptly deliver to such Lender) a Borrowing
Base Certificate prepared as of the close of business of the previous Business
Day. All calculations of Availability in connection with any Borrowing Base
Certificate shall originally be made by Borrowers and certified by a Senior
Officer to Agent, provided that Agent shall have the right to review and adjust,
in the exercise of its reasonable credit judgment, any such calculation (i) to
reflect its reasonable estimate of declines in value of any of the Collateral
described therein and (ii) to the extent that such calculation is not in
accordance with this Agreement or does not accurately reflect the amount of the
Availability Reserve. In no event shall the Borrowing Base be deemed to exceed
the amount of the Borrowing Base shown on the Borrowing Base Certificate last
received by Agent prior to such date, as such Borrowing Base Certificate may be
adjusted by Agent as herein authorized.
SECTION 8. REPRESENTATIONS AND WARRANTIES
8.1. GENERAL REPRESENTATIONS AND WARRANTIES. To induce Agent and
Lenders to enter into this Agreement and to make available the Commitments, each
Borrower warrants and represents to Agent and Lenders that:
8.1.1. Organization and Qualification. Each Borrower and
each of its Subsidiaries is an entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. Each
Borrower and each of its Subsidiaries is duly qualified and is authorized to do
business and is in good standing as a foreign corporation in each state or
jurisdiction listed on SCHEDULE 8.1.1 hereto and in all other states and
jurisdictions in which the failure of such Borrower or any of such Subsidiaries
to be so qualified would have a Material Adverse Effect.
8.1.2. Power and Authority. Each Borrower and each of its
Subsidiaries is duly authorized and empowered to enter into, execute, deliver
and perform this Agreement and each of the other Loan Documents to which it is a
party. The execution, delivery and performance of this Agreement and each of the
other Loan Documents have been duly authorized by all necessary action and do
not and will not (i) require any consent or approval of any of the holders of
the Equity Interests of any Borrower or any of its Subsidiaries; (ii) contravene
the Organization Documents of any Borrower or any of its Subsidiaries; (iii)
violate, or cause any Borrower or any of its Subsidiaries to be in default
under, any provision of any Applicable Law, order, writ, judgment, injunction,
decree, determination or award in effect having applicability to any Borrower or
any of its Subsidiaries; (iv) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other agreement, lease or
instrument to which any Borrower or any of its Subsidiaries is a party or by
which it or its Properties may be bound or affected that involves a dollar
amount of $1,000,000 or more; or (v) result in, or require, the
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creation or imposition of any Lien (other than Permitted Liens) upon or with
respect to any of the Properties now owned or hereafter acquired by any Borrower
or any of its Subsidiaries.
8.1.3. Legally Enforceable Agreement. This Agreement is, and
each of the other Loan Documents when delivered under this Agreement will be, a
legal, valid and binding obligation of each Borrower and each of its
Subsidiaries signatories thereto enforceable against them in accordance with the
respective terms of such Loan Documents, except as the enforceability thereof
may be limited by bankruptcy, insolvency or other similar laws of general
application affecting the enforcement of creditors' rights.
8.1.4. Capital Structure. As of the date hereof, SCHEDULE
8.1.4 hereto states (i) the correct name of each Subsidiary, its jurisdiction of
incorporation and the percentage of its Equity Interests having voting powers
owned by each Person, (ii) the name of each Borrower's corporate Affiliates and
the nature of the affiliation and (iii) the number of authorized and issued
Equity Interests (and treasury shares) of each Borrower and its Subsidiaries.
Each Borrower has good title to all of the shares it purports to own of the
Equity Interests of each of its Subsidiaries, free and clear in each case of any
Lien other than Permitted Liens. All such Equity Interests have been duly issued
and are fully paid and non-assessable. Since the date of the financial
statements of Borrowers referred to in SECTION 8.1.9 hereof, Borrowers have not
made, or obligated itself to make, any Distribution. There are no outstanding
options to purchase, or any rights or warrants to subscribe for, or any
commitments or agreements to issue or sell, or any Equity Interests or
obligations convertible into, or any powers of attorney relating to, shares of
the capital stock of any Borrower or any of its Subsidiaries. Except as set
forth on SCHEDULE 8.1.4 hereto, there are no outstanding agreements or
instruments binding upon the holders of any Borrower's Equity Interests relating
to the ownership of its Equity Interests.
8.1.5. Corporate Names. During the 5-year period preceding
the date of this Agreement, no Borrower nor any of its Subsidiaries has been
known as or used any corporate, fictitious or trade names except those listed on
SCHEDULE 8.1.5 hereto. Except as set forth on SCHEDULE 8.1.5, no Borrower nor
any of its Subsidiaries has been the surviving corporation of a merger or
consolidation or acquired all or substantially all of the assets of any Person.
8.1.6. Business Locations; Agent for Process. As of the date
hereof, the chief executive office and other places of business of each Borrower
and its Subsidiaries are as listed on SCHEDULE 7.1.1 hereto. During the 5-year
period preceding the date of this Agreement, no Borrower nor any of its
Subsidiaries has had an office, place of business or agent for service of
process other than as listed on SCHEDULE 7.1.1. Except as shown on SCHEDULE
7.1.1 on the date hereof, no Inventory of any Borrower or any of its
Subsidiaries is stored with a bailee, warehouseman or similar Person, nor is any
Inventory consigned to any Person.
8.1.7. Title to Properties; Priority of Liens. Each Borrower
and each of its Subsidiaries has good and marketable title to and fee simple
ownership of, or valid and subsisting leasehold interests in, all of its real
Property, and good title to all of its personal Property, including all Property
reflected in the financial statements referred to in SECTION 8.1.9 or delivered
pursuant to SECTION 9.1.3, in each case free and clear of all Liens except
Permitted Liens. Each Borrower has paid or discharged, and has caused each of
its Subsidiaries to pay and discharge, all lawful claims which, if unpaid, might
become a Lien against any Properties of such Borrower or any such Subsidiary
that is not a Permitted Lien. The Liens granted to Agent pursuant to this
Agreement and the other Security Documents are duly perfected, first priority
Liens, subject only to those Permitted Liens that are expressly permitted by the
terms of this Agreement to have priority over the Liens of Agent.
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8.1.8. Accounts. Agent may rely, in determining which
Accounts are Eligible Accounts, on all statements and representations made by
Borrowers with respect to any Account. Unless otherwise indicated in writing to
Agent or excluded by Borrowers in its calculation of the Borrowing Base in any
Borrowing Base Certificate, with respect to each Account, each Borrower warrants
that:
(i) It is genuine and in all respects what it
purports to be, and it is not evidenced by a judgment;
(ii) It arises out of a completed, bona fide sale and
delivery of goods or rendition of services by a Borrower in the
Ordinary Course of Business and substantially in accordance with the
terms and conditions of all purchase orders, contracts or other
documents relating thereto and forming a part of the contract between a
Borrower and the Account Debtor;
(iii) It is for a sum certain maturing as stated in
the duplicate invoice covering such sale or rendition of services, a
copy of which has been furnished or is available to Agent on request;
(iv) Such Account, and Agent's security interest
therein, is not, and will not (by voluntary act or omission of a
Borrower) be in the future, subject to any offset, Lien, deduction,
defense, dispute, counterclaim or any other adverse condition except
for disputes resulting in returned goods where the amount in
controversy is deemed by Agent to be immaterial, and each such Account
is absolutely owing to a Borrower and is not contingent in any respect
or for any reason;
(v) The contract under which such Account arose does
not condition or restrict a Borrower's right to assign to Agent the
right to payment thereunder unless such Borrower has obtained the
Account Debtor's consent to such collateral assignment or complied with
any conditions to such assignment (regardless of whether under the UCC
or other Applicable Law any such restrictions are ineffective to
prevent the grant of a Lien upon such Account in favor of Agent);
(vi) Such Borrower has not made any agreement with
any Account Debtor thereunder for any extension, compromise, settlement
or modification of any such Account or any deduction therefrom, except
discounts or allowances which are granted by a Borrower in the Ordinary
Course of Business for prompt payment and which are reflected in the
calculation of the net amount of each respective invoice related
thereto and are reflected in the Schedules of Accounts submitted to
Agent pursuant to SECTION 7.2.1 hereof;
(vii) To the best of such Borrower's knowledge, there
are no facts, events or occurrences which are reasonably likely to
impair the validity or enforceability of such Account or reduce the
amount payable thereunder from the face amount of the invoice and
statements delivered to Agent with respect thereto;
(viii) To the best of such Borrower's knowledge, the
Account Debtor thereunder (1) had the capacity to contract at the time
any contract or other document giving rise to such Account was executed
and (2) is Solvent; and
(ix) To the best of such Borrower's knowledge, there
are no proceedings or actions which are threatened or pending against
any Account Debtor thereunder and which are reasonably likely to result
in any material adverse change in such Account Debtor's financial
condition or the collectibility of such Account.
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8.1.9. Financial Statements; Fiscal Year. The Consolidated
and consolidating balance sheets of Borrowers and such other Persons described
therein (including the accounts of all Subsidiaries of Borrowers for the
respective periods during which a Subsidiary relationship existed) as of
November 29, 2003, and the related statements of income, changes in
stockholder's equity, and changes in financial position for the periods ended on
such dates, have been prepared in accordance with GAAP, and present fairly the
financial positions of Borrowers and such Persons at such dates and the results
of Borrowers' operations for such periods. Since November 29, 2003, there has
been no material change in the condition, financial or otherwise, of Borrowers
and such other Persons as shown on the Consolidated balance sheet as of such
date and no material change in the aggregate value of Collateral owned by
Borrowers or such other Persons, except for a possible valuation adjustment on
certain real property, fixtures and Equipment with respect to Borrowers' new
building in Tampa, Florida known as ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and
a write-down in value with respect to the account receivable owing to Borrowers
from Swiss Army Brands, Inc., none of which transactions or changes,
individually or in the aggregate, has been materially adverse.
8.1.10. Full Disclosure. The financial statements referred to
in SECTION 8.1.9 hereof do not contain any untrue statement of a material fact
and neither this Agreement nor any other written statement contains or omits any
material fact necessary to make the statements contained herein or therein not
materially misleading. There is no fact or circumstances in existence on the
date hereof which any Borrower has failed to disclose to Agent in writing that
may reasonably be expected to have a Material Adverse Effect.
8.1.11. Solvent Financial Condition. Each Borrower and each
of its Subsidiaries is now Solvent and, after giving effect to the Loans to be
made hereunder, the Letters of Credit to be issued in connection herewith and
the consummation of the other transactions described in the Loan Documents,
Borrower and each of its Subsidiaries will be Solvent.
8.1.12. Surety Obligations. Except as set forth on SCHEDULE
8.1.12 hereto on the date hereof, no Borrower nor any of its Subsidiaries is
obligated as surety or indemnitor under any surety or similar bond or other
contract issued or entered into any agreement to assure payment, performance or
completion of performance of any undertaking or obligation of any Person.
8.1.13. Taxes. The FEIN of each of each Borrower and each of
its Subsidiaries is as shown on SCHEDULE 8.1.13 hereto. Each Borrower and each
of its Subsidiaries has filed all federal, state and local tax returns and other
reports it is required by law to file and has paid, or made provision for the
payment of, all Taxes upon it, its income and Properties as and when such Taxes
are due and payable, except to the extent being Properly Contested. The
provision for Taxes on the books of each Borrower and each of its Subsidiaries
are adequate for all years not closed by applicable statutes, and for its
current Fiscal Year.
8.1.14. Brokers. There are no claims against any Borrower for
brokerage commissions, finder's fees or investment banking fees in connection
with the transactions contemplated by this Agreement or any of the other Loan
Documents.
8.1.15. Intellectual Property. Each Borrower and each of its
Subsidiaries each owns or has the lawful right to use all Intellectual Property
necessary for the present and planned future conduct of its business without any
conflict with the rights of others; there is no objection to, or pending (or, to
Borrower's knowledge, threatened) Intellectual Property Claim with respect to,
any Borrower's or any of its Subsidiaries' right to use any such Intellectual
Property and such Borrower is not aware of any grounds for challenge or
objection thereto; and, except as may be disclosed on SCHEDULE 8.1.15, no
Borrower nor any of its Subsidiaries pays any royalty or other compensation to
any Person for the right to
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use any Intellectual Property. All such patents, trademarks, service marks,
tradenames, copyrights, licenses and other similar rights are listed on SCHEDULE
8.1.15 hereto, to the extent they are registered under any Applicable Law or are
otherwise material to any Borrower's or any of its Subsidiaries' business.
8.1.16. Governmental Approvals. Each Borrower and each of its
Subsidiaries has, and is in good standing with respect to, all Governmental
Approvals necessary to continue to conduct its business as heretofore or
proposed to be conducted by it and to own or lease and operate its Properties as
now owned or leased by it, except for Governmental Approvals the failure to
possess which could not be reasonably expected to have a Material Adverse
Effect.
8.1.17. Compliance with Laws. Each Borrower and each of its
Subsidiaries has duly complied with, and its Properties, business operations and
leaseholds are in compliance in all material respects with, the provisions of
all Applicable Law, including the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act (except to the extent that
any such noncompliance with Applicable Law could not reasonably be expected to
have a Material Adverse Effect) and there have been no citations, notices or
orders of noncompliance issued to any Borrower or any of its Subsidiaries under
any such law, rule or regulation. No Inventory has been produced in violation of
the FLSA. With respect to matters arising under any Environmental Laws, the
representations and warranties contained in the Environmental Certificate are
true and correct on the date hereof.
8.1.18. Burdensome Contracts. No Borrower nor any of its
Subsidiaries is a party or subject to any contract, agreement, or charter or
other corporate restriction which has or could be reasonably expected to have a
Material Adverse Effect. No Borrower nor any of its Subsidiaries is a party or
subject to any Restrictive Agreements, except as set forth on SCHEDULE 8.1.18
hereto. None of such Restrictive Agreements prohibit the execution or delivery
of any of the Loan Documents by any Obligor or the performance by any Obligor of
its obligations under any of the Loan Documents to which it is a party, in
accordance with the terms of such Loan Documents.
8.1.19. Litigation. Except as set forth on SCHEDULE 8.1.19
hereto, there are no actions, suits, proceedings or investigations pending or,
to the knowledge of any Borrower, threatened on the date hereof against or
affecting any Borrower or any of its Subsidiaries, or the business, operations,
Properties, prospects, profits or condition of any Borrower or any of its
Subsidiaries, (i) which relate to any of the Loan Documents or any of the
transactions contemplated thereby or (ii) which, if determined adversely to any
Borrower or any of its Subsidiaries, could reasonably be expected to have a
Material Adverse Effect. To the knowledge of each Borrower, no Borrower nor any
of its Subsidiaries is in default on the date hereof with respect to any order,
writ, injunction, judgment, decree or rule of any court, Governmental Authority
or arbitration board or tribunal.
8.1.20. No Defaults. No event has occurred and no condition
exists which would, upon or after the execution and delivery of this Agreement
or any Borrower's performance hereunder, constitute a Default or an Event of
Default. No Borrower nor any of its Subsidiaries is in default, and no event has
occurred and no condition exists which constitutes or which with the passage of
time or the giving of notice or both would constitute a default, under any
Material Contract or in the payment of any Debt of a Borrower or a Subsidiary to
any Person for Money Borrowed.
8.1.21. Leases. SCHEDULE 8.1.21 hereto is a complete listing
of each capitalized and operating lease of each Borrower and each of its
Subsidiaries on the date hereof that constitutes a Material Contract. Each
Borrower and each of its Subsidiaries is in substantial compliance with all of
the terms of each of its respective capitalized and operating leases and there
is no basis upon which the
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lessors under any such leases could terminate same or declare Borrower or any of
its Subsidiaries in default thereunder.
8.1.22. Pension Plans. Except as disclosed on SCHEDULE 8.1.22
hereto, no Borrower nor any of its Subsidiaries has any Plan on the date hereof.
Each Borrower and each of its Subsidiaries is in full compliance with the
requirements of ERISA and the regulations promulgated thereunder with respect to
each Plan. No fact or situation that is reasonably likely to result in a
Material Adverse Effect exists in connection with any Plan. No Borrower nor any
of its Subsidiaries has any withdrawal liability in connection with a
Multi-employer Plan.
8.1.23. Trade Relations. There exists no actual or threatened
termination, cancellation or limitation of, or any materially adverse
modification or change in, the business relationship between any Borrower and
any customer or any group of customers whose purchases individually or in the
aggregate are material to the business of such Borrower, or with any material
supplier or group of suppliers, and there exists no condition or state of facts
or circumstances which is reasonably likely to have a Material Adverse Effect or
prevent any Borrower from conducting such business after the consummation of the
transactions contemplated by this Agreement in substantially the same manner in
which it has heretofore been conducted.
8.1.24. Labor Relations. Except as described on SCHEDULE
8.1.24 hereto, no Borrower nor any of its Subsidiaries is on the date hereof a
party to or bound by any collective bargaining agreement, management agreement
or consulting agreement. On the date hereof, there are no material grievances,
disputes or controversies with any union or any other organization of any
Borrower's or any Subsidiary's employees, or, to any Borrower's knowledge, any
threats of strikes, work stoppages or any asserted pending demands for
collective bargaining by any union or organization.
8.1.25. Not a Regulated Entity. No Obligor is (i) an
"investment company" or a "person directly or indirectly controlled by or acting
on behalf of an investment company" within the meaning of the Investment Company
Act of 1940; (ii) 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; or (iii) subject to regulation under the Federal Power Act, the
Interstate Commerce Act, any public utilities code or any other Applicable Law
regarding its authority to incur Debt.
8.1.26. Margin Stock. No Borrower nor any of its Subsidiaries
is engaged, principally or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying any Margin Stock.
8.1.27. Anti-Terrorism Laws.
(a) General. No Borrower nor any Affiliate of such
Borrower is in violation of any Anti-Terrorism Law or
engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law.
(b) Executive Order No. 13224.
(i) No Borrower not any Affiliate of such
Borrower is any of the following (each a
"Blocked Person"):
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(A) a Person that is listed in the
annex to, or is otherwise subject
to the provisions of, Executive
Order No. 13224;
(B) a Person owned or controlled by, or
acting for or on behalf of, any
Person that is listed in the annex
to, or is otherwise subject to the
provisions of, Executive Order No.
13224;
(C) a Person or entity with which any
bank or other financial institution
is prohibited from dealing or
otherwise engaging in any
transaction by any Anti-Terrorism
Law;
(D) a Person or entity that commits,
threatens or conspires to commit or
supports "terrorism" as defined in
Executive Order No. 13224;
(E) a Person or entity that is named as
a "specially designated national"
on the most current list published
by the U.S. Treasury Department
Office of Foreign Asset Control at
its official website or any
replacement website or other
replacement official publication of
such list; or
(F) a Person or entity who is
affiliated with a Person or entity
listed above.
No Borrower nor any Affiliate of such Borrower (i) conducts any business or
engages in making or receiving any contribution of funds, goods or services to
or for the benefit of any Blocked Person or (ii) deals in, or otherwise engages
in any transaction relating to, any property or interests in property blocked
pursuant to Executive Order No. 13224.
8.1.28. Real Estate. None of the Real Estate of any Borrower
that is subject to the Mortgage is located an area that has been identified by
the Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the National
Flood Insurance Act of 1968.
8.1.29. Deposit Accounts. Attached hereto as SCHEDULE 8.1.29
is a true and correct list of all Deposit Accounts of Borrowers existing on the
Closing Date.
8.2. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty contained in this Agreement and the other Loan
Documents shall be deemed to be reaffirmed by each Borrower on each day that any
Obligations are outstanding or that Borrowers request or are deemed to have
requested an extension of credit hereunder, except for changes in the nature of
a Borrower's or, if applicable, any of its Subsidiaries' business or operations
that may occur after the date hereof in the Ordinary Course of Business so long
as Required Lenders have consented to such changes or such changes are not
violative of any provision of this Agreement. Notwithstanding the foregoing,
representations and warranties which by their terms are applicable only to a
specific date shall be deemed made only at and as of such date.
8.3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of Borrowers contained in this Agreement or any
of the other Loan Documents shall survive the execution, delivery and acceptance
thereof by Agent, Lenders and the parties thereto and the closing of the
transactions described therein or related thereto.
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SECTION 9. COVENANTS AND CONTINUING AGREEMENTS
9.1. AFFIRMATIVE COVENANTS. For so long as there are any
Commitments outstanding and thereafter until Full Payment of the Obligations,
each Borrower covenants that, unless the Required Lenders have otherwise
consented in writing, it shall and shall cause each Subsidiary to:
9.1.1. Visits and Inspections. Permit representatives of
Agent, from time to time, as often as may be reasonably requested, but only
during normal business hours and (except when a Default or Event of Default
exists) upon reasonable prior notice to a Borrower, to visit and inspect the
Properties of such Borrower and each of its Subsidiaries, inspect, audit and
make extracts from such Borrower's and each Subsidiary's books and records, and
discuss with its officers, its employees and its independent accountants, such
Borrower's and each Subsidiary's business, financial condition, business
prospects and results of operations. Representatives of each Lender shall be
authorized to accompany Agent on each such visit and inspection and to
participate with Agent therein, but at their own expense, unless a Default or
Event of Default exists. Neither Agent nor any Lender shall have any duty to
make any such inspection and shall not incur any liability by reason of its
failure to conduct or delay in conducting any such inspection.
9.1.2. Notices. Notify Agent and Lenders in writing,
promptly after a Borrower's obtaining knowledge thereof, (i) of the commencement
of any litigation affecting any Obligor or any of its Properties, whether or not
the claims asserted in such litigation are considered by Borrowers to be covered
by insurance, and of the institution of any administrative proceeding, to the
extent that such litigation or proceeding, if determined adversely to such
Obligor, could reasonably be expected to have a Material Adverse Effect; (ii) of
any material labor dispute to which any Obligor may become a party, any strikes
or walkouts relating to any of its plants or other facilities, and the
expiration of any labor contract to which it is a party or by which it is bound;
(iii) of any material default by any Obligor under, or termination of, any
Material Contract or any note, indenture, loan agreement, mortgage, lease, deed,
guaranty or other similar agreement relating to any Debt of such Obligor
exceeding $500,000; (iv) of the existence of any Default or Event of Default;
(v) of any default by any Person under any note or other evidence of Debt
payable to an Obligor in an amount exceeding $500,000; (vi) of any judgment
against any Obligor in an amount exceeding $50,000; (vii) of the assertion by
any Person of any Intellectual Property Claim, the adverse resolution of which
could reasonably be expected to have a Material Adverse Effect; (viii) of any
violation or asserted violation by any Borrower of any Applicable Law (including
ERISA, OSHA, FLSA, or any Environmental Laws), the adverse resolution of which
could reasonably be expected to have a Material Adverse Effect; (ix) of any
Environmental Release by an Obligor or on any Property owned or occupied by an
Obligor; (x) of the discharge of Borrowers' independent accountants or any
withdrawal of resignation by such independent accountants from their acting in
such capacity; and (xi) of any pending or threatened strike, work stoppage,
unfair labor practice claim or other labor dispute affecting any Borrower or any
of its Subsidiaries in a manner that could reasonably be expected to have a
Material Adverse Effect. In addition, Borrowers shall give Agent at least 30
Business Days' prior written notice of any Obligor's opening of any new office
or place of business.
9.1.3. Financial and Other Information. Keep adequate
records and books of account with respect to its business activities in which
proper entries are made in accordance with GAAP reflecting all its financial
transactions; and cause to be prepared and to be furnished to Agent and Lenders
the following (all to be prepared in accordance with GAAP applied on a
consistent basis, unless Borrowers' certified public accountants concur in any
change therein, such change is disclosed to Agent and is consistent with GAAP
and, if required by the Required Lenders, the financial covenants set forth in
SECTION 9.3 are amended in a manner requested by the Required Lenders to take
into account the effects of such change):
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(i) as soon as available, and in any event within 90
days after the close of each Fiscal Year, unqualified audited balance
sheets of Borrowers and their respective Subsidiaries as of the end of
such Fiscal Year and the related statements of income, shareholders'
equity and cash flow, on a Consolidated and consolidating basis,
certified without material qualification by a firm of independent
certified public accountants of recognized national standing selected
by Borrowers but reasonably acceptable to Agent (except for a
qualification for a change in accounting principles with which the
accountant concurs), and setting forth in each case in comparative form
the corresponding Consolidated and consolidating figures for the
preceding Fiscal Year;
(ii) as soon as available, and in any event within 30
days after the end of each month hereafter (but within 60 days after
the last month in a Fiscal Year), including the last month of
Borrowers' Fiscal Year, unaudited balance sheets of Borrowers and its
Subsidiaries as of the end of such month and the related unaudited
Consolidated statements of income and cash flow for such month and for
the portion of Borrowers' Fiscal Year then elapsed, on a Consolidated
and consolidating basis, setting forth in each case in comparative form
the corresponding figures for the year to date and the preceding Fiscal
Year and certified by the principal financial officer of Borrowers as
prepared in accordance with GAAP and fairly presenting the Consolidated
financial position and results of operations of Borrowers and their
Subsidiaries for such month and period subject only to changes from
audit and year-end adjustments and except that such statements need not
contain notes;
(iii) within 20 days after the end of each month
hereafter, a detailed trade payable aging in form acceptable to Agent;
(iv) on or before the third Business Day of each
week, a rolling cash flow forecast that sets forth the projected cash
flow of Borrowers for the immediately following thirteen-week period
and that sets forth in comparative form the forecasted cash flow for
the prior week and the actual cash flow for such week, commencing with
the week ended January 30, 2004; and
(v) promptly after the sending or filing thereof, as
the case may be, copies of any proxy statements, financial statements
or reports which any Borrower has made generally available to its
shareholders and copies of any regular, periodic and special reports or
registration statements which any Borrower files with the SEC or any
Governmental Authority which may be substituted therefor, or any
national securities exchange.
Concurrently with the delivery of the financial statements described in clause
(i) of this SECTION 9.1.3 (or at such later time as issued by Borrower's
accountants), Borrowers shall deliver to Agent and Lenders a copy of the
accountants' report to Borrowers' management that is prepared in connection with
such financial statements and also shall cause to be prepared and shall deliver
to Agent and Lenders a certificate of the aforesaid certified public accountants
stating to Agent and Lenders that, based upon such accountants' audit of the
Consolidated financial statements of Borrowers and their Subsidiaries performed
in connection with their examination of said financial statements, nothing came
to their attention that caused them to believe that Borrowers were not in
compliance with SECTION 9.3 hereof (to the extent such compliance was required
pursuant to SECTION 9.3), or, if they are aware of such noncompliance,
specifying the nature thereof, and acknowledging, in a manner satisfactory to
Agent, that they are aware that Agent and Lenders are relying on such financial
statements in making their decisions with respect to the Loans. Concurrently
with the delivery of the financial statements described in clauses (i) and (ii)
of this SECTION 9.1.3, or more frequently if requested by Agent or any Lender
during any period that a Default or Event of Default exists, Borrowers shall
cause to be prepared and furnished to Agent and Lenders a Compliance Certificate
executed by the chief financial officer of Borrowers.
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Promptly after the sending or filing thereof, Borrowers shall also provide to
Agent copies of any annual report to be filed in accordance with ERISA in
connection with each Plan and such other data and information (financial and
otherwise) as Agent, from time to time, may reasonably request, bearing upon or
related to the Collateral or any Borrower's and any of its Subsidiaries'
financial condition or results of operations.
9.1.4. Landlord and Storage Agreements. Provide Agent with
copies of all existing agreements, and promptly after execution thereof provide
Agent with copies of all future agreements, between any Borrower and any
landlord, warehouseman or bailee which owns any premises at which any Collateral
may, from time to time, be kept.
9.1.5. Projections. No later than 30 days prior to the end
of each Fiscal Year of Borrowers, deliver to Agent and Lenders Projections of
Borrowers by month for the forthcoming Fiscal Year.
9.1.6. Taxes. Pay and discharge all Taxes prior to the date
on which such Taxes become delinquent or penalties attach thereto, except and to
the extent only that such Taxes are being Properly Contested.
9.1.7. Compliance with Laws. Comply with all Applicable Law,
including ERISA, all Environmental Laws, FLSA, OSHA, and all laws, statutes,
regulations and ordinances regarding the collection, payment and deposit of
Taxes, and obtain and keep in force any and all Governmental Approvals necessary
to the ownership of its Properties or to the conduct of its business, to the
extent that any such failure to comply, obtain or keep in force could be
reasonably expected to have a Material Adverse Effect. Without limiting the
generality of the foregoing, if any Environmental Release shall occur at or on
any of the Properties of any Borrower or any of its Subsidiaries, Borrowers
shall, or shall cause the applicable Subsidiary to, act promptly and diligently
to investigate and report to Agent and all appropriate Governmental Authorities
the extent of, and to make appropriate remedial action to eliminate, such
Environmental Release, whether or not ordered or otherwise directed to do so by
any Governmental Authority.
9.1.8. Insurance. In addition to the insurance required
herein with respect to the Collateral, maintain with its current insurers or
with other financially sound and reputable insurers having a rating of at least
A+ or better by Best Rating Guide, (i) insurance with respect to its Properties
and business against such casualties and contingencies of such type (including
product liability, workers' compensation, larceny, embezzlement, or other
criminal misappropriation insurance) and in such amounts and with such
coverages, limits and deductibles as is customary in the business of such
Borrower or such Subsidiary and (ii) business interruption insurance in an
amount not less than $40,000,000.
9.1.9. Intellectual Property. At any time requested by
Agent, and not less frequently than once each year, deliver to Agent, in form
and substance acceptable to Agent and in recordable form, all documents
necessary for Agent to perfect its Lien on any Intellectual Property obtained or
acquired by any Borrower.
9.1.10. In-Transit Inventory. With respect to any Inventory
that is in-transit to the United States and that is backed by a documentary
Letter of Credit issued by Bank, Borrowers shall ensure that (a) it is shipped
FOB shipping point, (b) all documents issued by the shipper or bailee thereof
are negotiable and issued in the name of Borrower or Bank or Agent (as directed
by Agent) and are delivered to Bank, (c) a bailment agreement, in form and
content satisfactory in all respects to Agent, has been duly executed and
delivered to Agent by each carrier, freight forwarder or customs agent with
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respect to such Inventory, or documents of title covering such Inventory, and
(d) it is insured by marine insurance acceptable to Agent, with Agent shown as
sole loss payee thereon, against loss, damage or theft.
9.1.11. License Agreements. Keep each License Agreement in
full force and effect for so long as any Borrower has any Inventory, the
manufacture, sale or distribution of which is in any manner governed by or
subject to such License Agreement.
9.1.12. ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. Comply in all material respects
with the provisions of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and will not use any proceeds of the
Loans directly or indirectly to fund a personal loan to or for the benefit of a
director or executive officer of a Borrower or Guarantor, or otherwise used for
any purpose that is prohibited by Applicable Law.
9.1.13 Additional Security. On the Closing Date, (a) execute
and deliver promptly to Agent any and all documents and instruments necessary,
in Agent's sole discretion, to increase the principal amount secured by the
Mortgage up to an aggregate amount not to exceed $26,000,000, in each case in
appropriate form for recording in the applicable jurisdiction, (b) pay timely
all documentary stamp, non-recurring intangibles and other taxes, fees and
charges which may be payable in connection with the execution, delivery or
recordation of any of the documents and instruments delivered pursuant to clause
(a) above, and (c) furnish promptly to Agent the results of a recent title
examination of the records in which the Mortgage is recorded, which report shall
reflect no Liens other than Permitted Liens.
9.1.14. 2003 Audited Financial Statements Within 5 days after
the date hereof, deliver to Agent the audited financial statements required by
SECTION 9.1.3(i) hereof for the Fiscal Year ending September 27, 2003.
9.1.15. Crisis Consultant Within 15 days after the date
hereof, engage a crisis consultant acceptable to Agent and Lenders in all
respects to review the financial condition and business of Borrowers and to
assess the ongoing viability of Borrowers' business operations and such other
matters as Agent and Lenders may request.
9.2. NEGATIVE COVENANTS. For so long as there are any Commitments
outstanding and thereafter until Full Payment of the Obligations, each Borrower
covenants that, unless the Required Lenders have otherwise consented in writing,
it shall not and shall not permit any Subsidiary to:
9.2.1. Fundamental Changes. Merge, reorganize, consolidate
or amalgamate with any Person, or liquidate, wind up its affairs or dissolve
itself, in each case whether in a single transaction or in a series of related
transactions, except for (i) mergers or consolidations of any Subsidiary with
any Borrower or another Subsidiary; (ii) mergers or consolidations of any
Subsidiary of Tropical into Tropical; and (iii) the winding up of the affairs of
any Foreign Subsidiary, and dispositions expressly authorized by SECTION 9.2.10
hereof; change a Borrower's name or conduct business under any new fictitious
name; or change a Borrower's FEIN, state of organization or organizational
identification number.
9.2.2. Loans. Make any loans or other advances of money to
any Person other than (i) to an officer or employee of a Borrower or a
Subsidiary for salary, travel advances, advances against commissions and other
similar advances in the Ordinary Course of Business; (ii) to Foreign Contractors
of a Borrower in the Ordinary Course of Business, not to exceed, together with
any guaranties permitted under SECTION 9.2.3(vii), $1,000,000 in the aggregate
at any time outstanding; (iii) from TSCI to Tropical; and (iv) to purchasers in
the form of deferred payment in connection with the sale of any Equipment, to
the extent such sale is permitted hereunder. Nothing herein shall be deemed to
override,
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modify or waive any requirement for Borrowers to comply at all times with the
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
9.2.3. Permitted Debt. Create, incur, assume, guarantee or
suffer to exist any Debt, except:
(i) the Obligations;
(ii) accounts payable by such Borrower or a
Subsidiary to trade creditors that are not aged more than 30 days from
the due date, in each case incurred in the Ordinary Course of Business
and paid within such time period, unless the same are being Properly
Contested;
(iii) obligations to pay Rentals permitted by SECTION
9.2.14;
(iv) Permitted Purchase Money Debt;
(v) Debt for accrued payroll, Taxes and other
operating expenses (other than for Money Borrowed) incurred in the
Ordinary Course of Business of such Borrower or such Subsidiary,
including Cash Management Obligations, in each case so long as payment
thereof is not past due and payable unless, in the case of Taxes only,
such Taxes are being Properly Contested;
(vi) Debt for Money Borrowed by such Borrower (other
than the Obligations, Permitted Purchase Money Debt and the Senior
Subordinated Notes) that is listed on SCHEDULE 9.2.3 hereof, but only
to the extent that such Debt is outstanding on the date of this
Agreement;
(vii) Permitted Contingent Obligations; Debt for
Money Borrowed owing by (a) a Borrower to another Borrower or a
Domestic Subsidiary of a Borrower and (b) a Domestic Subsidiary of a
Borrower to any Borrower or any other Domestic Subsidiary of such
Borrower;
(viii) the Senior Subordinated Notes and the
guaranties by Subsidiaries of the Senior Subordinated Notes so long as
such guaranties are subordinated in right of payment to the
Obligations;
(ix) the Term Loan Obligations, not to exceed in
principal amount $9,600,000 after the Closing Date, plus interest and
expenses; provided, however, that repaid Term Loan Obligations may not
be reborrowed nor may new Term Loan Obligations be borrowed;
(x) Debt that is not included in any of the preceding
paragraphs of this SECTION 9.2.3, is not secured by a Lien (unless such
Lien is a Permitted Lien) and does not exceed at any time, in the
aggregate, the sum of $750,000 as to all Borrowers and all of their
Subsidiaries; and
(xi) Refinancing Debt so long as each of the
Refinancing Conditions is met.
None of the provisions of this SECTION 9.2.3 that authorize any Obligor
to incur any Debt shall be deemed to override, modify or waive any of the
provisions of SECTION 9.3, which will constitute an independent and separate
covenant and obligation of each Borrower.
9.2.4. Affiliate Transactions. Enter into, or be a party to
any transaction with any Affiliate or stockholder, except: (i) the transactions
contemplated by the Loan Documents; (ii) payment
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of reasonable compensation to officers and employees for services actually
rendered to Borrowers or their respective Subsidiaries; (iii) payment of
customary directors' fees and indemnities; (iv) transactions with Affiliates
that were consummated prior to the date hereof and have been disclosed on
SCHEDULE 9.2.4 hereof; and (v) transactions with Affiliates in the Ordinary
Course of Business and pursuant to the reasonable requirements of such
Borrower's or such Subsidiary's business and upon fair and reasonable terms that
are fully disclosed to Agent and are no less favorable to such Borrower or such
Subsidiary than such Borrower or such Subsidiary would obtain in a comparable
arm's length transaction with a Person not an Affiliate or stockholder of such
Borrower or such Subsidiary. Nothing herein shall be deemed to override, modify
or waive any requirement for Borrowers to comply at all times with the
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
9.2.5. Limitation on Liens. Create or suffer to exist any
Lien upon any of its Property, income or profits, whether now owned or hereafter
acquired, except the following (collectively, "Permitted Liens"):
(i) Liens at any time granted in favor of Agent;
(ii) Liens for Taxes (excluding any Lien imposed
pursuant to any of the provisions of ERISA) not yet due or being
Properly Contested;
(iii) statutory Liens (excluding any Lien imposed
pursuant to any of the provisions of ERISA) arising in the Ordinary
Course of Business of a Borrower or a Subsidiary, but only if and for
so long as (x) payment in respect of any such Lien is not at the time
required or the Debt secured by any such Liens is being Properly
Contested and (y) such Liens do not materially detract from the value
of the Property of such Borrower or such Subsidiary and do not
materially impair the use thereof in the operation of such Borrower's
or such Subsidiary's business;
(iv) Purchase Money Liens securing Permitted Purchase
Money Debt;
(v) Liens securing Debt of a Subsidiary of any
Borrower to another Borrower or to another such Subsidiary;
(vi) Liens arising by virtue of the rendition, entry
or issuance against such Borrower or any of its Subsidiaries, or any
Property of such Borrower or any of its Subsidiaries, of any judgment,
writ, order, or decree that involves the payment of money in an amount
that exceeds the uncontested insurance available therefore by $500,000
or more for so long as each such Lien (a) is in existence for less than
20 consecutive days after it first arises or is being Properly
Contested and (b) is at all times junior in priority to any Liens in
favor of Agent;
(vii) Liens incurred or deposits made in the Ordinary
Course of Business to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Money Borrowed), statutory
obligations and other similar obligations or arising as a result of
progress payments under government contracts, provided that, to the
extent any such Liens attach to any of the Collateral, such Liens are
at all times subordinate and junior to the Liens upon the Collateral in
favor of Agent;
(viii) easements, rights-of-way, restrictions,
covenants or other agreements of record and other similar charges or
encumbrances on real Property of such Borrower or any of its
Subsidiaries that either (A) were in existence on September 9, 2003,
and disclosed in the final mortgagee title insurance policy delivered
by Tropical to Fleet pursuant to
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the terms of the Term Loan Agreement and accepted by Fleet or (B) do
not secure any monetary obligation and do not interfere with the
ordinary conduct of the business of such Borrower or such Subsidiary;
(ix) normal and customary rights of setoff upon
deposits of cash in favor of banks and other depository institutions
and Liens of a collection bank arising under the UCC on Payment Items
in the course of collection;
(x) Liens securing Indebtedness of a Foreign
Subsidiary that is in existence on the Closing Date;
(xi) Liens in favor of Fleet securing Term Loan
Obligations; provided that any Liens that encumber Collateral, other
than Real Estate, shall be subordinated to the Agent's Liens thereupon
on terms and conditions satisfactory to Agent and Lenders;
(xii) such other Liens as appear on SCHEDULE 9.2.5
hereto, to the extent provided therein; and
(xiii) such other Liens as Agent and the Required
Lenders in their sole discretion may hereafter approve in writing.
The foregoing negative pledge shall not apply to any Margin Stock to the extent
that the application of such negative pledge to such Margin Stock would require
filings or other actions by any Lender under such regulations or otherwise
result in a violation of such regulations.
9.2.6. Subordinated Debt. Make any payment of all or any
part of any Subordinated Debt or take any other action or omit to take any other
action in respect of any Subordinated Debt, except in accordance with the
subordination agreement relative thereto; or amend or modify the terms of any
agreement applicable to any Subordinated Debt, other than to extend the time of
payment thereof or to reduce the rate of interest payable in connection
therewith. To the extent that any payment is permitted to be made with respect
to any Subordinated Debt pursuant to the provisions of the subordination
agreement relative thereto, as a condition precedent to Borrowers' authorization
to make any such payment, Borrowers shall provide to Agent, not less than 5
Business Days prior to the scheduled payment, a certificate from a Senior
Officer of Tropical stating that no Default or Event of Default is in existence
as of the date of the certificate or will be in existence as of the date of such
payment (both with and without giving effect to the making of such payment), and
specifying the amount of principal and interest to be paid.
9.2.7. Distributions. Declare or make any Distributions,
except for Upstream Payments.
9.2.8. Upstream Payments. Create or suffer to exist any
encumbrance or restriction on the ability of a Subsidiary to make any Upstream
Payment, except for encumbrances or restrictions (i) pursuant to the Loan
Documents, (ii) existing under Applicable Law and (iii) identified and fully
disclosed in SCHEDULE 9.2.8.
9.2.9. Capital Expenditures. Make Capital Expenditures
(including expenditures by way of capitalized leases) which in the aggregate, as
to all Borrowers and their Subsidiaries, exceed $3,500,000 during any Fiscal
Year of Borrowers.
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9.2.10. Disposition of Assets. Sell, assign, lease, consign
or otherwise dispose of any of its Properties or any interest therein, including
any disposition of Property as part of a sale and leaseback or synthetic lease
transaction, to or in favor of any Person, except (i) sales of Inventory in the
Ordinary Course of Business (unless restricted by Lenders after the occurrence
of an Event of Default), (ii) dispositions of Equipment to the extent authorized
by SECTION 7.4.2 hereof, (iii) a transfer of Property to a Borrower by a
Subsidiary, (iv) non-exclusive licenses of technology and other Intellectual
Property by and among any Borrower and any of its Subsidiaries, (v) sale of the
Real Estate located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ (provided that
all Net Disposition Proceeds from such sale not required to be remitted in
prepayment of Term Loan Obligations shall be remitted to Agent for application
to the principal amount of the Revolver Loans and then to the other
Obligations), and (vi) other dispositions expressly authorized by other
provisions of the Loan Documents.
9.2.11. Subsidiaries. (i) Form or acquire any Subsidiary
after the Closing Date, (ii) permit any existing Subsidiary to issue any
additional Equity Interests except director's qualifying shares, or (iii) unless
the proceeds thereof are remitted to Agent for application to the Obligations,
issue or permit any Borrower to issue any additional Equity Interests, except
director's qualifying shares.
9.2.12. ▇▇▇▇-and-Hold Sales and Consignments. Make a sale to
any customer on a ▇▇▇▇-and-hold, guaranteed sale, sale and return, sale on
approval or consignment basis, or any sale on a repurchase or return basis.
9.2.13. Restricted Investments. Make or have any Restricted
Investment.
9.2.14. Leases. Become a lessee under any operating lease
(other than a lease under which a Borrower or any of its Subsidiaries is lessor)
of Property if the aggregate Rentals payable during any current or future period
of 12 consecutive months under the lease in question and all other leases under
which such Borrower or any of its Subsidiaries is then lessee would exceed
$7,000,000. The term "Rentals" means, as of the date of determination, all
payments which the lessee is required to make by the terms of any lease.
9.2.15. Tax Consolidation. File or consent to the filing of
any consolidated income tax return with any Person other than a Subsidiary.
9.2.16. Accounting Changes. Make any significant change in
accounting treatment or reporting practices, except as may be required by GAAP,
or establish a fiscal year different from the Fiscal Year.
9.2.17. Organization Documents. Amend, modify or otherwise
change any of the terms or provisions in any of its Organization Documents as in
effect on the date hereof, except for changes that do not affect in any way such
Borrower's or any of its Subsidiaries' rights and obligations to enter into and
perform the Loan Documents to which it is a party and to pay all of the
Obligations and that do not otherwise have a Material Adverse Effect.
9.2.18. Restrictive Agreements. Enter into or become a party
to any Restrictive Agreement; provided that the foregoing shall not apply to (i)
Restrictive Agreements existing on the date hereof and identified on Schedule
8.1.18 (but shall apply to any amendment or modification expanding the scope of
any restriction or condition contained in any such Restrictive Agreement), (ii)
restrictions or conditions imposed by any Restrictive Agreement evidencing or
governing secured Debt that is permitted by this Agreement if such restrictions
or conditions apply only to the Properties securing such Debt, and (iii)
customary provisions in leases and other contracts restricting the assignment
thereof.
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9.2.19. Hedging Agreements. Enter into any Hedging Agreement,
other than Hedging Agreements entered into in the Ordinary Course of Business to
hedge or mitigate risks to which any Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities and not for any
speculative purpose.
9.2.20. Conduct of Business. Engage in any business other
than the business engaged in by it on the Closing Date and any business or
activities which are substantially similar, related or incidental thereto.
9.2.21. Senior Subordinated Notes. (i) Make any payment or
prepayment of principal of or premium or interest on the Senior Subordinated
Notes other than scheduled payments of principal and interest set forth in the
Senior Subordinated Documents as in effect on the Closing Date but only to the
extent that such payment or prepayment would not violate the terms of this
Agreement or the Senior Subordinated Documents as in effect on the Closing Date;
(ii) redeem, retire, purchase, repurchase, or otherwise acquire any Senior
Subordinated Notes; or (iii) make any deposit (including payments into a sinking
fund or other similar fund) for any of the foregoing purposes.
9.2.22. Modification of Senior Subordinated Documents. Enter
into or consent to any amendment, supplement, waiver or other modification of,
or any forbearance from exercising any rights with respect to the terms or
provisions contained in, or applicable to the Senior Subordinated Documents,
other than an amendment, supplement, waiver or modification for which no fee
(other than as reimbursement of out-of-pocket expenses) is payable to holders of
the Senior Subordinated Notes and which (a) extends the date or reduces the
amount of any required repayment, prepayment or redemption of the principal of
such Senior Subordinated Notes, (b) reduces the rate or extends the date for
payment of the interest, premium (if any) or fees payable in respect of such
Senior Subordinated Notes or (c) makes the covenants, events of default or
remedies in such Senior Subordinated Documents less restrictive on Borrowers.
9.2.23. Anti-Terrorism Laws. (i) conduct any business or
engage in any transaction or dealing with any Blocked Person, including the
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person; (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224; or (iii) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in Executive Order No.
13224 or the USA Patriot Act. Borrowers shall deliver to Agent and Lenders any
certification or other evidence requested from time to time by Agent or any
Lender, in their sole discretion, confirming Borrowers' compliance with this
SECTION 9.2.23.
9.3. FINANCIAL COVENANTS. For so long as there are any Commitments
outstanding and thereafter until payment in full of the Obligations, Borrowers
covenant that, unless otherwise consented to by the Required Lenders in writing,
Borrowers shall:
9.3.1. Consolidated EBITDA. Achieve Consolidated EBITDA of
not less than the amounts shown below for the periods corresponding thereto:
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PERIOD MINIMUM EBITDA
------ --------------
Two months ended February 28, 2004 $ 1,800,000
Three months ended April 3, 2004 $ 4,800,000
Four months ended May 1, 2004 $ 6,500,000
Five months ended May 29, 2004 $ 7,100,000
Six months ended July 3, 2004 $ 8,400,000
Seven months ended July 31, 2004 $ 9,000,000
Eight months ended August 28, 2004 $ 9,800,000
Nine months ended October 2, 2004 $ 11,800,000
Ten months ended October 30, 2004 $ 13,400,000
Eleven months ended November 27, 2004 $ 15,000,000
Twelve months ended January 1, 2005 $ 16,500,000
Twelve months ended January 29, 2005 $ 18,100,000
Twelve months ended February 26, 2005 $ 18,300,000
Twelve months ended April 2, 2005 $ 18,500,000
As of the end of each month thereafter for the
immediately preceding 12-month period $ 19,000,000
9.3.2. Consolidated Fixed Charge Coverage Ratio. Maintain a
Consolidated Fixed Charge Coverage Ratio of not less than the ratios shown below
for the periods corresponding thereto:
Period Minimum Fixed Charge Coverage Ratio
------ -----------------------------------
Six months ended April 2, 2005 1.00 to 1.00
Seven months ended April 30, 2005 1.03 to 1.00
Eight months ended May 28, 2005 1.06 to 1.00
Nine months ended July 2, 2005 1.10 to 1.00
Ten months ended July 30, 2005 1.10 to 1.00
Eleven months ended August 27, 2005 1.10 to 1.00
As of the end of each month thereafter for the
immediately preceding 12-month period 1.10 to 1.00
9.3.3. Consolidated EBIT to Consolidated Interest Expense.
Maintain a ratio of Consolidated EBIT to Consolidated Interest Expense of not
less than the ratios shown below for the periods corresponding thereto:
Period MINIMUM EBIT TO INTEREST EXPENSE
------ --------------------------------
Six months ended April 2, 2005 1.10 to 1.00
Seven months ended April 30,2005 1.24 to 1.00
Eight months ended May 28, 2005 1.37 to 1.00
Nine months ended July 2, 2005 1.50 to 1.00
Ten months ended July 30, 2005 1.55 to 1.00
Eleven months ended August 27, 2005 1.55 to 1.00
As of the end of each month thereafter for the
immediately preceding 12-month period 1.60 to 1.00
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SECTION 10. CONDITIONS PRECEDENT
10.1. CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSIONS. Initial
Lenders shall not be required to fund any Loan requested by Borrowers, procure
any Letter of Credit, or otherwise extend credit to Borrowers, unless, on or
before January 12, 2004, each of the following conditions has been satisfied:
10.1.1 Loan Documents. Each of the Loan Documents shall have
been duly executed and delivered to Agent by each of the signatories thereto
(and, with the exception of the Notes, in sufficient counterparts for each
Lender) and accepted by Agent and Initial Lenders and each Obligor shall be in
compliance with all of the terms thereof.
10.1.2. Availability. Agent shall have determined, and
Initial Lenders shall be satisfied that, immediately after Initial Lenders have
made the initial Revolver Loans to be made on the Closing Date, Bank has issued
the Letters of Credit to be issued on the Closing Date and Borrowers have paid
(or made provision for payment of) all closing costs incurred in connection with
the Commitments, Availability is not less than $8,000,000.
10.1.3. Evidence of Perfection and Priority of Liens. Agent
shall have received copies of all filing receipts or acknowledgments issued by
any Governmental Authority to evidence any filing or recordation necessary to
perfect the Liens of Agent in the Collateral and evidence in form satisfactory
to Agent and Initial Lenders that such Liens constitute valid and perfected
security interests and Liens, and that there are no other Liens upon any
Collateral except for Permitted Liens.
10.1.4. Organization Documents. Agent shall have received
copies of the Organization Documents of each Obligor, and all amendments
thereto, certified by the Secretary of State or other appropriate officials of
the jurisdiction of each Borrower's and each other Obligor's states of
organization.
10.1.5. Good Standing Certificates. Agent shall have received
good standing certificates for each Obligor, issued by the Secretary of State or
other appropriate official of such Obligor's jurisdiction of organization and
each jurisdiction where the conduct of such Obligor's business activities or
ownership of its Property necessitates qualification.
10.1.6. Opinion Letters. Agent shall have received a
favorable, written opinion of Akerman, Senterfitt & ▇▇▇▇▇▇, P.A., counsel to
Borrowers, covering, to Agent's satisfaction, the matters set forth on EXHIBIT F
attached hereto.
10.1.7. Insurance. Agent shall have received certified copies
of the property and casualty insurance policies of Borrowers with respect to the
Collateral and a certified copy of Borrowers' business interruption insurance,
or certificates of insurance with respect to such policies in form acceptable to
Agent, and loss payable endorsements on Agent's standard form of loss payee
endorsement naming Agent as loss payee with respect to each such policy, and
certified copies of Borrowers' liability insurance policies, including product
liability policies, together with endorsements naming Agent as an additional
insured, all as required by the Loan Documents.
10.1.8. Lockbox; Dominion and Concentration Accounts. Agent
shall have received the duly executed agreements establishing each lockbox and
each Dominion Account, in each case with a financial institution acceptable to
Agent for the collection or servicing of the Accounts.
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10.1.9. No Litigation; No Labor Disputes. Agent shall have
received assurances satisfactory to it that there is no pending or threatened
litigation against any Obligor or threats of strikes or work stoppages by any
employees, or organization of employees, of any Obligor, other than as set forth
on SCHEDULE 8.1.19 hereof.
10.1.10. Compliance with Laws and Other Agreements. Agent
shall have determined or received assurances satisfactory to it that none of the
Loan Documents or any of the transactions contemplated thereby violate any
Applicable Law, court order or agreement binding upon any Obligor.
10.1.11. Financial Statements; No Material Adverse Change.
Agent shall have received, reviewed and found acceptable interim financial
statements for the monthly period ending nearest to November 30, 2003, and no
material adverse change in the financial condition of any Obligor or in the
quality, quantity or value of any Collateral shall have occurred since November
30, 2003.
10.1.12. Ratification of Lien Subordination. Agent shall have
received a ratification and reaffirmation of the Lien Subordination Agreement
from Fleet with respect to the Term Loan Documents, together with an amendment
of any terms of the Lien Subordination Agreement necessary to give effect to the
transactions contemplated hereby.
10.1.13. Reference Checks. Agent shall have received and found
satisfactory the results of reference checks in regard to Borrowers' top three
customers (measured by annual revenue), as well as reference checks on Mr.
▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇.
10.1.14. Audited Financial Statements. Agent shall have
received confirmation from Ernst & Young, LLP of its intent to issue, promptly
after the Closing Date, an unqualified audit opinion with respect to Borrowers'
audited financial statement for the Fiscal Year ended September, 2003.
10.1.15. Payment of Fees. Borrowers shall have paid, or made
provision for the payment on the Closing Date of, all fees and expenses to be
paid hereunder to Agent and Lenders on the Closing Date.
10.1.16. Syndication Market. There shall not have occurred any
disruption or change that is materially adverse in the market for syndicated
bank credit facilities, or a material disruption of or material adverse change
in financial, banking or capital market conditions, in each case as determined
by Agent in its sole discretion.
10.1.17. LC Conditions. With respect to the procurement of any
Letter of Credit on the Closing Date, each of the LC Conditions is satisfied.
10.1.18. Assignment and Acceptance. Bank of America, N.A.
shall have executed and delivered to Agent an Assignment and Acceptance that
reflects the assignment by Bank of America, N.A. of all of its outstanding Loans
and Commitments to Fleet or one or more other Lenders.
10.1.19. Real Estate Appraisals. Agent shall have received and
found acceptable in all respects to Agent an appraisal of the Real Estate,
prepared by an appraiser acceptable to Agent.
10.2. CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. Lenders shall
not be required to fund any Loans, procure any Letters of Credit, or otherwise
extend any credit to or for the benefit of Borrowers, unless and until each of
the following conditions has been and continues to be satisfied:
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10.2.1. No Defaults. No Default or Event of Default exists at
the time, or would result from the funding, of any Loan or other extension of
credit.
10.2.2. Satisfaction of Conditions in Other Loan Documents.
Each of the conditions precedent set forth in any other Loan Document shall have
been and shall remain satisfied.
10.2.3. No Litigation. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain or
prohibit, or to obtain damages in respect of, or which is related to or arises
out of, this Agreement or any of the other Loan Documents or the consummation of
the transactions contemplated hereby or thereby.
10.2.4. No Material Adverse Effect. No event shall have
occurred and no condition shall exist which has or could be reasonably expected
to have a Material Adverse Effect.
10.2.5. Borrowing Base Certificate. Agent shall have received
each Borrowing Base Certificate required by the terms of this Agreement or
otherwise requested by Agent.
10.2.6. LC Conditions. With respect to the procurement of any
Letter of Credit after the Closing Date, each of the LC Conditions is satisfied.
10.3 INAPPLICABILITY OF CONDITIONS. None of the conditions
precedent set forth in SECTIONS 10.1 or 10.2 shall be conditions to the
obligation of (i) each Participating Lender to make payments to Fleet pursuant
to SECTION 1.3.2, (ii) each Lender to deposit with Agent such Lender's Pro Rata
share of a Borrowing in accordance with SECTION 3.1.2, (iii) each Lender to fund
its Pro Rata share of a Revolver Loan to repay outstanding Settlement Loans to
Fleet as provided in SECTION 3.1.3(ii), (iv) each Lender to pay any amount
payable to Agent or any other Lender pursuant to this Agreement or (v) Agent to
pay any amount payable to any Lender pursuant to this Agreement.
10.4. LIMITED WAIVER OF CONDITIONS PRECEDENT. If Lenders shall make
any Loan, procure any Letter of Credit, or otherwise extend any credit to
Borrowers under this Agreement at a time when any of the foregoing conditions
precedent are not satisfied (regardless of whether the failure of satisfaction
of any such conditions precedent was known or unknown to Agent or Lenders), the
funding of such Loan shall not operate as a waiver of the right of Agent and
Lenders to require the satisfaction of all conditions precedent with respect to
each subsequent Borrowing requested by Borrowers or a waiver of any Default or
Event of Default as a consequence of the failure of any such conditions to be
satisfied, unless Agent, with the prior written consent of the Required Lenders,
in writing waives the satisfaction of any condition precedent, in which event
such waiver shall only be applicable for the specific instance given and only to
the extent and for the period of time expressly stated in such written waiver.
SECTION 11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
11.1. EVENTS OF DEFAULT. The occurrence or existence of any one or
more of the following events or conditions shall constitute an "Event of
Default" (each of which Events of Default shall be deemed to exist unless and
until waived by Agent and Lenders in accordance with the provisions of SECTION
12.9 hereof):
11.1.1. Payment of Obligations. Borrowers shall fail to pay
any of the Obligations on the due date thereof (whether due at stated maturity,
on demand, upon acceleration or otherwise).
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11.1.2. Misrepresentations. Any representation, warranty or
other written statement to Agent or any Lender by or on behalf of any Obligor,
whether made in or furnished in compliance with or in reference to any of the
Loan Documents (including any representation made in any Borrowing Base
Certificate), proves to have been false or misleading in any material respect
when made or furnished or when reaffirmed pursuant to SECTION 8.2 hereof.
11.1.3. Breach of Specific Covenants. Any Borrower shall fail
or neglect to perform, keep or observe any covenant contained in SECTIONS 6.3,
6.5, 6.6, 7.1.1, 7.1.2, 7.2.4, 7.2.5, 7.2.6, 7.5, 9.1.1, 9.1.3, 9.1.6, 9.1.8,
9.1.9, 9.1.11, 9.2 or 9.3 hereof on the date that such Borrower is required to
perform, keep or observe such covenant.
11.1.4. Breach of Other Covenants. Any Borrower shall fail or
neglect to perform, keep or observe any covenant contained in this Agreement
(other than a covenant which is dealt with specifically elsewhere in SECTION
11.1 hereof) and the breach of such other covenant is not cured to Agent's and
the Required Lenders' satisfaction within 30 days after the sooner to occur of
any Senior Officer's receipt of notice of such breach from Agent or the date on
which such failure or neglect first becomes known to any Senior Officer;
provided, however, that such notice and opportunity to cure shall not apply in
the case of any failure to perform, keep or observe any covenant which is not
capable of being cured at all or within such 30-day period or which is a willful
and knowing breach by any Borrower.
11.1.5. Default Under Security Documents/Other Agreements.
Any Borrower or any other Obligor shall default in the due and punctual
observance or performance of any liability or obligation to be observed or
performed by it under any of the Other Agreements or Security Documents.
11.1.6. Other Defaults. There shall occur any default or
event of default on the part of any Borrower or any Subsidiary under any
agreement, document or instrument to which such Borrower or such Subsidiary is a
party or by which such Borrower or such Subsidiary or any of their respective
Properties is bound, creating or relating to any Debt (other than the
Obligations) in excess of $3,000,000 if the payment or maturity of such Debt may
be accelerated in consequence of such event of default or demand for payment of
such Debt may be made.
11.1.7. Uninsured Losses. Any loss, theft, damage or
destruction of any of the Collateral not fully covered (subject to such
deductibles as Agent shall have permitted) by insurance if the amount not
covered by insurance exceeds $1,000,000.
11.1.8. Solvency. Any Obligor shall cease to be Solvent.
11.1.9. Insolvency Proceedings. Any Insolvency Proceeding
shall be commenced by any Obligor; an Insolvency Proceeding is commenced against
any Obligor and any of the following events occur: such Obligor consents to the
institution of the Insolvency Proceeding against it, the petition commencing the
Insolvency Proceeding is not timely controverted by such Obligor, the petition
commencing the Insolvency Proceeding is not dismissed within 30 days after the
date of the filing thereof (provided that, in any event, during the pendency of
any such period, Lenders shall be relieved from their obligation to make Loans
or otherwise extend credit to or for the benefit of Borrowers hereunder), an
interim trustee is appointed to take possession all or a substantial portion of
the Properties of such Obligor or to operate all or any substantial portion of
the business of such Obligor or an order for relief shall have been issued or
entered in connection with such Insolvency Proceeding; or any Obligor shall make
an offer of settlement extension or composition to its unsecured creditors
generally.
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11.1.10. Business Disruption; Condemnation. There shall occur
a cessation of a substantial part of the business of any Obligor for a period
which may be reasonably expected to have a Material Adverse Effect; or any
Obligor shall suffer the loss or revocation of any license or permit now held or
hereafter acquired by such Obligor which is necessary to the continued or lawful
operation of its business; or any Obligor shall be enjoined, restrained or in
any way prevented by court, governmental or administrative order from conducting
all or any material part of its business affairs; or any material lease or
agreement pursuant to which any Obligor leases or occupies any premises on which
any Collateral is located shall be canceled or terminated prior to the
expiration of its stated term and such cancellation or termination has a
Material Adverse Effect or results in an Out-of-Formula Condition; or any
material part of the Collateral shall be taken through condemnation or the value
of such Property shall be materially impaired through condemnation.
11.1.11. Change of Ownership. Tropical shall cease to own all
of the issued and outstanding stock of TSCI, Savane, Apparel, TSI and TSIL
(other than pursuant to transactions permitted by Section 9.2.1 hereof).
11.1.12. ERISA. A Reportable Event shall occur which Agent, in
its reasonable discretion, shall determine constitutes grounds for the
termination by the Pension Benefit Guaranty Corporation of any Plan or for the
appointment by the appropriate United States district court of a trustee for any
Plan, or if any Plan shall be terminated or any such trustee shall be requested
or appointed, or if any Borrower, any Subsidiary or any Obligor is in "default"
(as defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan resulting from such Borrower's, such Subsidiary's or such
Obligor's complete or partial withdrawal from such Plan.
11.1.13. Challenge to Loan Documents. Any Obligor or any of
its Affiliates shall challenge or contest in any action, suit or proceeding the
validity or enforceability of any of the Loan Documents, the legality or
enforceability of any of the Obligations or the perfection or priority of any
Lien granted to Agent, or any of the Loan Documents ceases to be in full force
or effect for any reason other than a full or partial waiver or release by Agent
and Lenders in accordance with the terms thereof.
11.1.14. Judgment. One or more judgments or orders for the
payment of money in an amount that exceeds, individually or in the aggregate,
the uncontested insurance available therefor by $500,000 or more shall be
entered against any Borrower or any other Obligor and (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order, (ii) there shall be any period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect or (iii) results in the creation or imposition
of a Lien upon any of the Collateral that is not a Permitted Lien.
11.1.15. Repudiation of or Default Under Guaranty. Any
Guarantor shall revoke or attempt to revoke the Guaranty signed by such
Guarantor, shall repudiate such Guarantor's liability thereunder, or shall be in
default under the terms thereof, or shall fail to confirm in writing, promptly
after receipt of Agent's written request therefor, such Guarantor's ongoing
liability under the Guaranty in accordance with the terms thereof.
11.1.16. Criminal Forfeiture. Any Obligor shall be convicted
under any criminal law that could lead to a forfeiture of any Property of such
Obligor.
11.1.17. Term Loan Documents. A default or event of default
shall occur under, or Tropical shall default in the performance or observance of
any term, covenant, condition or agreement contained in any of the Term Loan
Documents and such default shall continue beyond any applicable grace period.
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11.1.18. Senior Subordinated Notes. Any default or event of
default shall occur under any of the Senior Subordinated Documents and such
default shall continue beyond any applicable grace period.
11.2. ACCELERATION OF OBLIGATIONS; TERMINATION OF COMMITMENTS.
Without in any way limiting the right of Agent to demand payment of any portion
of the Obligations payable on demand in accordance with this Agreement:
11.2.1. Upon or at any time after the occurrence of an Event
of Default (other than pursuant to Section 11.1.9 hereof) and for so long as
such Event of Default shall exist, Agent may in its discretion (and, upon
receipt of written instructions to do so from the Required Lenders, shall) (a)
declare the principal of and any accrued interest on the Loans and all other
Obligations owing under any of the Loan Documents to be, whereupon the same
shall become without further notice or demand (all of which notice and demand
each Borrower expressly waives), forthwith due and payable and Borrowers shall
forthwith pay to Agent the entire principal of and accrued and unpaid interest
on the Loans and other Obligations plus reasonable attorneys' fees, expenses and
court costs if such principal and interest are collected by or through an
attorney-at-law and (b) terminate the Commitments.
11.2.2. Upon the occurrence of an Event of Default specified
in Section 11.1.9 hereof, all of the Obligations shall become automatically due
and payable without declaration, notice or demand by Agent to or upon any
Borrower and the Commitments shall automatically terminate as if terminated by
Agent pursuant to Section 5.2.1 hereof and with the effects specified in Section
5.2.4 hereof; provided, however, that, if Agent or Lenders shall continue to
make Loans or otherwise extend credit to Borrowers pursuant to this Agreement
after an automatic termination of the Commitments by reason of the commencement
of an Insolvency Proceeding by or against Borrowers, such Loans and other credit
shall nevertheless be governed by this Agreement and enforceable against and
recoverable from each Obligor as if such Insolvency Proceeding had never been
instituted.
11.3. OTHER REMEDIES. Upon and after the occurrence of an Event of
Default and for so long as such Event of Default shall exist, Agent may in its
discretion (and, upon receipt of written direction of the Required Lenders,
shall) exercise from time to time the following rights and remedies (without
prejudice to the rights of Agent or any Lender to enforce its claim against any
or all Obligors):
11.3.1. All of the rights and remedies of a secured party
under the UCC or under other Applicable Law, and all other legal and equitable
rights to which Agent may be entitled under any of the Loan Documents, all of
which rights and remedies shall be cumulative and shall be in addition to any
other rights or remedies contained in this Agreement or any of the other Loan
Documents, and none of which shall be exclusive.
11.3.2. The right to collect all amounts at any time payable
to a Borrower from any Account Debtor or other Person at any time indebted to
such Borrower.
11.3.3. The right to take immediate possession of any of the
Collateral, and to (i) require Borrowers to assemble the Collateral, at
Borrowers' expense, and make it available to Agent at a place designated by
Agent which is reasonably convenient to both parties, and (ii) enter any
premises where any of the Collateral shall be located and to keep and store the
Collateral on said premises until sold (and if said premises be the Property of
a Borrower, then such Borrower agrees not to charge Agent for storage thereof).
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11.3.4. The right to sell or otherwise dispose of all or any
Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as may
be required by Applicable Law, in lots or in bulk, for cash or on credit, all as
Agent, in its sole discretion, may deem advisable. Each Borrower agrees that any
requirement of notice to any Borrower or any other Obligor of any proposed
public or private sale or other disposition of Collateral by Agent shall be
deemed reasonable notice thereof if given at least 10 days prior thereto, and
such sale may be at such locations as Agent may designate in said notice. Agent
shall have the right to conduct such sales on any Borrower's or any other
Obligor's premises, without charge therefor, and such sales may be adjourned
from time to time in accordance with Applicable Law. Agent shall have the right
to sell, lease or otherwise dispose of the Collateral, or any part thereof, for
cash, credit or any combination thereof, and Agent may purchase all or any part
of the Collateral at public or, if permitted by law, private sale and, in lieu
of actual payment of such purchase price, may set off the amount of such price
against the Obligations. The proceeds realized from the sale or other
disposition of any Collateral may be applied, after allowing 2 Business Days for
collection, first to any Extraordinary Expenses incurred by Agent, second to
interest accrued with respect to any of the Obligations; and third, to the
principal balance of the Obligations. If any deficiency shall arise, Obligors
shall remain jointly and severally liable to Agent and Lenders therefor.
11.3.5. The right to the appointment of a receiver, without
notice of any kind whatsoever, to take possession of all or any portion of the
Collateral and to exercise such rights and powers as the court appointing such
receiver shall confer upon such receiver.
11.3.6. The right to exercise all of Agent's rights and
remedies under the Mortgage with respect to any Real Estate.
11.3.7. The right to require Borrowers to Cash Collateralize
outstanding Letters of Credit and, if Borrowers fail promptly to make such
deposit, Lenders may (and shall upon the direction of the Required Lenders)
advance such amount as a Revolver Loan (whether or not an Out-of-Formula
Condition exists or is created thereby). Any such deposit or advance shall be
held by Agent as a reserve to fund future payments on any LC Support. At such
time as all LC Supports have been paid or terminated and all Letters of Credit
have been drawn upon or expired, any amounts remaining in the Cash Collateral
Account shall be applied against any outstanding Obligations, or, after Full
Payment of all Obligations, returned to Borrowers.
Agent is hereby granted an irrevocable, non-exclusive license or other right to
use, license or sub-license (exercisable without payment of royalty or other
compensation to any Obligor or any other Person) any or all of each Borrower's
Intellectual Property and all of each Borrower's computer hardware and software
trade secrets, brochures, customer lists, promotional and advertising materials,
labels, and packaging materials, and any Property of a similar nature, in
advertising for sale, marketing, selling and collecting and in completing the
manufacturing of any Collateral, and each Borrower's rights under all licenses
and all franchise agreements shall inure to Agent's benefit.
11.4. SETOFF. In addition to any Liens granted under any of the Loan
Documents and any rights now or hereafter available under Applicable Law, Agent
and each Lender (and each of their respective Affiliates) is hereby authorized
by Borrowers at any time that an Event of Default exists, without notice to
Borrowers or any other Person (any such notice being hereby expressly waived),
to set off and to appropriate and apply any and all deposits, general or special
(including Debt evidenced by certificates of deposit whether matured or
unmatured (but not including trust accounts)) and any other Debt at any time
held or owing by such Lender or any of their Affiliates to or for the credit or
the account of any Borrower against and on account of the Obligations of
Borrowers arising under the Loan Documents to Agent, such Lender or any of their
Affiliates, including all Loans and LC Outstandings and
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all claims of any nature or description arising out of or in connection with
this Agreement, irrespective of whether or not (i) Agent or such Lender shall
have made any demand hereunder, (ii) Agent, at the request or with the consent
of the Required Lenders, shall have declared the principal of and interest on
the Loans and other amounts due hereunder to be due and payable as permitted by
this Agreement and even though such Obligations may be contingent or unmatured
or (iii) the Collateral for the Obligations is adequate. Notwithstanding the
foregoing, each of Agent and Lenders agree with each other that it shall not,
without the express consent of the Required Lenders, exercise its setoff rights
hereunder against any accounts of any Borrower now or hereafter maintained with
Agent, such Lender or any Affiliate of any of them, but no Borrower shall have
any claim or cause of action against Agent or any Lender for any setoff made
without the consent of the Required Lenders and the validity of any such setoff
shall not be impaired by the absence of such consent. If any party (or its
Affiliate) exercises the right of setoff provided for hereunder, such party
shall be obligated to share any such setoff in the manner and to the extent
required by SECTION 12.5.
11.5. REMEDIES CUMULATIVE; NO WAIVER.
11.5.1. All covenants, conditions, provisions, warranties,
guaranties, indemnities, and other undertakings of Borrowers contained in this
Agreement and the other Loan Documents, or in any document referred to herein or
contained in any agreement supplementary hereto or in any schedule or in any
Guaranty given to Agent or any Lender or contained in any other agreement
between Agent or any Lender and Borrowers, heretofore, concurrently, or
hereafter entered into, shall be deemed cumulative to and not in derogation or
substitution of any of the terms, covenants, conditions, or agreements of
Borrowers herein contained. The rights and remedies of Agent and Lenders under
this Agreement and the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies that Agent or any Lender would otherwise
have.
11.5.2. The failure or delay of Agent or any Lender to
require strict performance by Borrowers of any provision of any of the Loan
Documents or to exercise or enforce any rights, Liens, powers or remedies under
any of the Loan Documents or with respect to any Collateral shall not operate as
a waiver of such performance, Liens, rights, powers and remedies, but all such
requirements, Liens, rights, powers, and remedies shall continue in full force
and effect until all Loans and all other Obligations owing or to become owing
from Borrowers to Agent and Lenders shall have been fully satisfied. None of the
undertakings, agreements, warranties, covenants and representations of Borrowers
contained in this Agreement or any of the other Loan Documents and no Event of
Default by any Borrower under this Agreement or any other Loan Documents shall
be deemed to have been suspended or waived by Agent or any Lender, unless such
suspension or waiver is by an instrument in writing specifying such suspension
or waiver and is signed by a duly authorized representative of Agent or such
Lender and directed to Borrowers.
11.5.3. If Agent or any Lender shall accept performance by a
Borrower, in whole or in part, of any obligation that a Borrower is required by
any of the Loan Documents to perform only when a Default or Event of Default
exists, or if Agent or any Lender shall exercise any right or remedy under any
of the Loan Documents that may not be exercised other than when a Default or
Event of Default exists, Agent's or Lender's acceptance of such performance by a
Borrower or Agent's or Lender's exercise of any such right or remedy shall not
operate to waive any such Event of Default or to preclude the exercise by Agent
or any Lender of any other right or remedy, unless otherwise expressly agreed in
writing by Agent or such Lender, as the case may be.
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SECTION 12. AGENT
12.1. APPOINTMENT, AUTHORITY AND DUTIES OF AGENT.
12.1.1. Each Lender hereby irrevocably appoints and
designates Fleet as Agent to act as herein specified. Agent may, and each Lender
by its acceptance of a Note shall be deemed irrevocably to have authorized Agent
to, enter into all Loan Documents to which Agent is or is intended to be a party
and all amendments hereto and all Security Documents at any time executed by any
Borrower, for its benefit and the Pro Rata benefit of Lenders and, except as
otherwise provided in this Section 12, to exercise such rights and powers under
this Agreement and the other Loan Documents as are specifically delegated to
Agent by the terms hereof and thereof, together with such other rights and
powers as are reasonably incidental thereto. Each Lender agrees that any action
taken by Agent or the Required Lenders in accordance with the provisions of this
Agreement or the other Loan Documents, and the exercise by Agent or the Required
Lenders of any of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all Lenders. Without limiting the generality of the foregoing,
Agent shall have the sole and exclusive right and authority to (a) act as the
disbursing and collecting agent for Lenders with respect to all payments and
collections arising in connection with this Agreement and the other Loan
Documents; (b) execute and deliver as Agent each Loan Document and accept
delivery of each such agreement delivered by any or all Borrowers or any other
Obligor; (c) act as collateral agent for Lenders for purposes of the perfection
of all security interests and Liens created by this Agreement or the Security
Documents with respect to all material items of the Collateral and, subject to
the direction of the Required Lenders, for all other purposes stated therein,
provided that Agent hereby appoints, authorizes and directs each Lender to act
as a collateral sub-agent for Agent and the other Lenders for purposes of the
perfection of all security interests and Liens with respect to a Borrower's
Deposit Accounts maintained with, and all cash and Cash Equivalents held by,
such Lender; (d) subject to the direction of the Required Lenders, manage,
supervise or otherwise deal with the Collateral; and (e) except as may be
otherwise specifically restricted by the terms of this Agreement and subject to
the direction of the Required Lenders, exercise all remedies given to Agent with
respect to any of the Collateral under the Loan Documents relating thereto,
Applicable Law or otherwise. The duties of Agent shall be ministerial and
administrative in nature, and Agent shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship with any Lender (or any
Lender's participants). Unless and until its authority to do so is revoked in
writing by Required Lenders, Agent alone shall be authorized to determine
whether any Accounts or Inventory constitute Eligible Accounts or Eligible
Inventory (basing such determination in each case upon the meanings given to
such terms in Appendix A), or whether to impose or release any reserve, and to
exercise its own credit judgment in connection therewith, which determinations
and judgments, if exercised in good faith, shall exonerate Agent from any
liability to Lenders or any other Person for any errors in judgment.
12.1.2. Agent (which term, as used in this sentence, shall
include reference to Agent's officers, directors, employees, attorneys, agents
and Affiliates and to the officers, directors, employees, attorneys and agents
of Agent's Affiliates) shall not: (a) have any duties or responsibilities except
those expressly set forth in this Agreement and the other Loan Documents or (b)
be required to take, initiate or conduct any litigation, foreclosure or
collection proceedings hereunder or under any of the other Loan Documents except
to the extent directed to do so by the Required Lenders during the continuance
of any Event of Default. The conferral upon Agent of any right hereunder shall
not imply a duty on Agent's part to exercise any such right unless instructed to
do so by the Required Lenders in accordance with this Agreement.
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12.1.3. Agent may perform any of its duties by or through its
agents and employees and may employ one or more Agent Professionals and shall
not be responsible for the negligence or misconduct of any such Agent
Professionals selected by it with reasonable care. Borrowers shall promptly (and
in any event, ON DEMAND) reimburse Agent for all reasonable expenses (including
all Extraordinary Expenses) incurred by Agent pursuant to any of the provisions
hereof or of any of the other Loan Documents or in the execution of any of
Agent's duties hereby or thereby created or in the exercise of any right or
power herein or therein imposed or conferred upon it or Lenders (excluding,
however, general overhead expenses), and each Lender agrees promptly to pay to
Agent, ON DEMAND, such Lender's Pro Rata share of any such reimbursement for
expenses (including Extraordinary Expenses) that is not timely made by Borrowers
to Agent.
12.1.4. The rights, remedies, powers and privileges conferred
upon Agent hereunder and under the other Loan Documents may be exercised by
Agent without the necessity of the joinder of any other parties unless otherwise
required by Applicable Law. If Agent shall request instructions from the
Required Lenders with respect to any act or action (including the failure to
act) in connection with this Agreement or any of the other Loan Documents, Agent
shall be entitled to refrain from such act or taking such action unless and
until Agent shall have received instructions from the Required Lenders; and
Agent shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any of the Loan Documents pursuant to or in accordance with
the instructions of the Required Lenders except for Agent's own gross negligence
or willful misconduct in connection with any action taken by it. Notwithstanding
anything to the contrary contained in this Agreement, Agent shall not be
required to take any action that is in its opinion contrary to Applicable Law or
the terms of any of the Loan Documents or that would in its reasonable opinion
subject it or any of its officers, employees or directors to personal liability;
provided, however, that if Agent shall fail or refuse to take action that is not
contrary to Applicable Law or to any of the terms of any of the Loan Documents
even if such action in Agent's opinion would subject it to potential liability,
the Required Lenders may remove Agent and appoint a successor Agent in the same
manner and with the same effects as is provided in this Agreement with respect
to Agent's resignation.
12.1.5. Agent shall promptly, upon receipt thereof, forward
to each Lender (i) copies of any significant written notices, reports,
certificates and other information received by Agent from any Obligor (but only
if and to the extent such Obligor is not required by the terms of the Loan
Documents to supply such information directly to Lenders) and (ii) copies of the
results of any field audits by Agent (or any other Person commissioned by Agent)
with respect to Borrowers. Agent shall (i) conduct not less than 4 field audits
and not less than 4 Orderly Liquidation Value Appraisals of Borrowers' Inventory
every 60 weeks, (ii) conduct not less than 1 Real Estate appraisal every 18
months, and (iii) order tax and judgment lien searches not less than twice each
calendar year for select locations of Borrowers as determined by Agent. Agent
shall have no liability to any Lender for any delays in conducting or errors in
or omissions from any field audit, appraisal or other examination of Borrowers
or the Collateral, unless such delay or error or omission was the direct result
of Agent's willful misconduct or gross negligence.
12.2. AGREEMENTS REGARDING COLLATERAL AND EXAMINATION REPORTS.
12.2.1. Lenders hereby irrevocably authorize Agent, at its
option and in its discretion, to release any Lien upon any Collateral (i) upon
the termination of the Commitments and Full Payment or satisfaction of all of
the Obligations, or (ii) constituting Equipment sold or disposed of in
accordance with the terms of this Agreement if Borrowers certify to Agent that
the disposition is made in compliance with the terms of this Agreement (and
Agent may rely conclusively on any such certificate, without
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further inquiry). Lenders also hereby irrevocably authorize Agent to release any
Lien on any Primary Term Collateral (as defined in the Lien Subordination
Agreement) to the extent required to do so pursuant to the terms of the Lien
Subordination Agreement. Agent shall, if directed to do so by the Required
Lenders, release any Lien upon any Collateral having a value of less than
$1,000,000 in the aggregate during any 12-month period. Except as expressly
authorized or required by this SECTION 12.2.1 or otherwise by this Agreement or
Applicable Law, Agent shall not execute any release or termination of any Lien
upon any of the Collateral without the prior written authorization of all
Lenders. Agent shall have no obligation whatsoever to any of the Lenders to
assure that any of the Collateral exists or is owned by a Borrower or is cared
for, protected or insured or has been encumbered, or that Agent's Liens have
been properly, sufficiently or lawfully created, perfected, protected or
enforced or entitled to any particular priority or to exercise any duty of care
with respect to any of the Collateral.
12.2.2. Agent shall furnish each Lender, promptly after the
same becomes available, a copy of each field audit or examination report (each a
"Report" and collectively, "Reports") prepared by or on behalf of Agent. Each
Lender agrees that neither Fleet nor Agent makes any representation or warranty
as to the accuracy or completeness of any Report and shall not be liable for any
information contained in or omitted from any such Report; agrees that the
Reports are not intended to be comprehensive audits or examinations and that
Fleet or Agent or any other Person performing any audit or examination will
inspect only specific information regarding Borrowers or the Collateral and will
rely significantly upon Borrowers' books and records as well as upon
representations of Borrowers' officers and employees; agrees to keep all Reports
confidential and strictly for its internal use and not to distribute the Reports
to any Person (except to its Participants, attorneys, accountants and other
Persons with whom such Lender has a confidential relationship) or use any Report
in any other manner; and, without limiting the generality of any other
indemnification contained herein, agrees to hold Agent and any other Person
preparing a Report harmless from any action that the indemnifying Lender may
take or conclusion the indemnifying Lender may reach or draw from any Report in
connection with any Loans or other credit accommodations that the indemnifying
Lender has made or may make to Borrowers, or the indemnifying Lender's
participation in, or its purchase of, a loan or loans of Borrowers, and to pay
and protect, and indemnify, defend and hold Agent and each other such Person
preparing a Report harmless from and against all claims, actions, proceedings,
damages, costs, expenses and other amounts (including attorneys' fees incurred
by Agent and any such other Person preparing a Report) as the direct or indirect
result of any third parties who might obtain all or any part of any Report
through the indemnifying Lender.
12.3. RELIANCE BY AGENT. Agent shall be entitled to rely, and shall
be fully protected in so relying, upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram, telecopier
message or cable) believed by it to be genuine and correct and to have been
signed, sent or made by or on behalf of the proper Person or Persons, and upon
advice and statements of Agent Professionals selected by Agent. As to any
matters not expressly provided for by this Agreement or any of the other Loan
Documents, Agent shall in all cases be fully protected in acting or refraining
from acting hereunder and thereunder in accordance with the instructions of the
Required Lenders, and such instructions of the Required Lenders and any action
taken or failure to act pursuant thereto shall be binding upon Lenders.
12.4. ACTION UPON DEFAULT. Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default unless it has
received written notice from a Lender or any or all Borrowers specifying the
occurrence and nature of such Default or Event of Default. If Agent shall
receive such a notice of a Default or an Event of Default or shall otherwise
acquire actual knowledge of any Default or Event of Default, Agent shall
promptly notify Lenders in writing and Agent shall take such action and assert
such rights under this Agreement and the other Loan Documents, or shall refrain
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from taking such action and asserting such rights, as the Required Lenders shall
direct from time to time. If any Lender shall receive a notice of a Default or
an Event of Default or shall otherwise acquire actual knowledge of any Default
or Event of Default, such Lender shall promptly notify Agent and the other
Lenders in writing. As provided in SECTION 12.3 hereof, Agent shall not be
subject to any liability by reason of acting or refraining to act pursuant to
any request of the Required Lenders except for its own willful misconduct or
gross negligence in connection with any action taken by it. Before directing
Agent to take or refrain from taking any action or asserting any rights or
remedies under this Agreement and the other Loan Documents on account of any
Event of Default, the Required Lenders shall consult with and seek the advice of
(but without having to obtain the consent of) each other Lender, and promptly
after directing Agent to take or refrain from taking any such action or
asserting any such rights, the Required Lenders will so advise each other Lender
of the action taken or refrained from being taken and, upon request of any
Lender, will supply information concerning actions taken or not taken. In no
event shall the Required Lenders, without the prior written consent of each
Lender, direct Agent to accelerate and demand payment of the Loans held by one
Lender without accelerating and demanding payment of all other Loans or to
terminate the Commitments of one or more Lenders without terminating the
Commitments of all Lenders. Each Lender agrees that, except as otherwise
provided in any of the Loan Documents or with the written consent of the
Required Lenders, it will not take any legal action or institute any action or
proceeding against any Obligor with respect to any of the Obligations or
Collateral or accelerate or otherwise enforce its portion of the Obligations.
Without limiting the generality of the foregoing, none of Lenders may exercise
any right that it might otherwise have under Applicable Law to credit bid at
foreclosure sales, UCC sales or other similar sales or dispositions of any of
the Collateral except as authorized by the Required Lenders. Notwithstanding
anything to the contrary set forth in this SECTION 12.4 or elsewhere in this
Agreement, each Lender shall be authorized to take such action to preserve or
enforce its rights against any Obligor where a deadline or limitation period is
otherwise applicable and would, absent the taking of specified action, bar the
enforcement of Obligations held by such Lender against such Obligor, including
the filing of proofs of claim in any Insolvency Proceeding.
12.5. RATABLE SHARING. If any Lender shall obtain any payment or
reduction (including any amounts received as adequate protection of a bank
account deposit treated as cash collateral under the Bankruptcy Code) of any
Obligation of Borrowers hereunder (whether voluntary, involuntary, through the
exercise of any right of set-off or otherwise) in excess of its Pro Rata share
of payments or reductions on account of such Obligations obtained by all of the
Lenders, such Lender shall forthwith (i) notify the other Lenders and Agent of
such receipt and (ii) purchase from the other Lenders such participations in the
affected Obligations as shall be necessary to cause such purchasing Lender to
share the excess payment or reduction, net of costs incurred in connection
therewith, on a Pro Rata basis, provided that if all or any portion of such
excess payment or reduction is thereafter recovered from such purchasing Lender
or additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery or such additional costs,
but without interest. Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 12.5 may, to the
fullest extent permitted by Applicable Law, exercise all of its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of Borrowers in the amount of
such participation.
12.6. INDEMNIFICATION OF AGENT INDEMNITEES. Each Lender agrees to
indemnify and defend the Agent Indemnitees (to the extent not reimbursed by
Borrowers under this Agreement, but without limiting the indemnification
obligation of Borrowers under this Agreement), on a Pro Rata basis, and to hold
each of the Agent Indemnitees harmless from and against, any and all Indemnified
Claims which may be imposed on, incurred by or asserted against any of the Agent
Indemnitees in any way related to or arising out of this Agreement or any of the
other Loan Documents or any other document contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby (including the
COSTS
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and expenses which Borrowers are obligated to pay under SECTION 14.2 hereof or
amounts Agent may be called upon to pay in connection with any lockbox or
Dominion Account arrangement contemplated hereby or under any indemnity,
guaranty or other assurance of payment or performance given by Agent with
respect to Cash Management Agreements, Hedging Agreements and Letters of Credit)
or the enforcement of any of the terms hereof or thereof or of any such other
documents, provided that no Lender shall be liable to any Agent Indemnitee for
any of the foregoing to the extent that they result solely from the willful
misconduct or gross negligence of such Agent Indemnitee.
12.6.2. Without limiting the generality of the foregoing
provisions of this SECTION 12.6, if Agent should be sued by any receiver,
trustee in bankruptcy, debtor-in-possession or other Person on account of any
alleged preference or fraudulent transfer received or alleged to have been
received from any Borrower or any other Obligor as the result of any transaction
under the Loan Documents, then in such event any monies paid by Agent in
settlement or satisfaction of such suit, together with all Extraordinary
Expenses incurred by Agent in the defense of same, shall be promptly reimbursed
to Agent by Lenders to the extent of each Lender's Pro Rata share.
12.6.3. Without limiting the generality of the foregoing
provisions of this Section 12.6, if at any time (whether prior to or after the
Commitment Termination Date) any action or proceeding shall be brought against
any of the Agent Indemnitees by an Obligor or by any other Person claiming by,
through or under an Obligor, to recover damages for any act taken or omitted by
Agent under any of the Loan Documents or in the performance of any rights,
powers or remedies of Agent against any Obligor, any Account Debtor, the
Collateral or with respect to any Loans, or to obtain any other relief of any
kind on account of any transaction involving any Agent Indemnitees under or in
relation to any of the Loan Documents, each Lender agrees to indemnify, defend
and hold the Agent Indemnitees harmless with respect thereto and to pay to the
Agent Indemnitees such Lender's Pro Rata share of such amount as any of the
Agent Indemnitees shall be required to pay by reason of a judgment, decree, or
other order entered in such action or proceeding or by reason of any compromise
or settlement agreed to by the Agent Indemnitees, including all interest and
costs assessed against any of the Agent Indemnitees in defending or compromising
such action, together with attorneys' fees and other legal expenses paid or
incurred by the Agent Indemnitees in connection therewith; provided, however,
that no Lender shall be liable to any Agent Indemnitee for any of the foregoing
to the extent that they arise solely from the willful misconduct or gross
negligence of such Agent Indemnitee. In Agent's discretion, Agent may also
reserve for or satisfy any such judgment, decree or order from proceeds of
Collateral prior to any distributions therefrom to or for the account of
Lenders.
12.7. LIMITATION ON RESPONSIBILITIES OF AGENT. Agent shall in all
cases be fully justified in failing or refusing to act hereunder unless it shall
have received further assurances to its satisfaction from Lenders of their
indemnification obligations under SECTION 12.6 hereof against any and all
Indemnified Claims which may be incurred by Agent by reason of taking or
continuing to take any such action. Agent shall not be liable to Lenders (or any
Lender's participants) for any action taken or omitted to be taken under or in
connection with this Agreement or the other Loan Documents except as a result of
actual gross negligence or willful misconduct on the part of Agent. Agent does
not assume any responsibility for any failure or delay in performance or breach
by any Obligor or any Lender of its obligations under this Agreement or any of
the other Loan Documents. Agent does not make to Lenders, and no Lender makes to
Agent or the other Lenders, any express or implied warranty, representation or
guarantee with respect to the Loans, the Collateral, the Loan Documents or any
Obligor. Neither Agent nor any of its officers, directors, employees, attorneys
or agents shall be responsible to Lenders, and no Lender nor any of its agents,
attorneys or employees shall be responsible to Agent or the other Lenders, for:
(i) any recitals, statements, information, representations or warranties
contained in any of the Loan Documents or in any certificate or other document
furnished pursuant to the terms hereof; (ii) the execution, validity,
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genuineness, effectiveness or enforceability of any of the Loan Documents; (iii)
the validity, genuineness, enforceability, collectibility, value, sufficiency or
existence of any Collateral, or the perfection or priority of any Lien therein;
or (iv) the assets, liabilities, financial condition, results of operations,
business, creditworthiness or legal status of any Obligor or any Account Debtor.
Neither Agent nor any of its officers, directors, employees, attorneys or agents
shall have any obligation to any Lender to ascertain or inquire into the
existence of any Default or Event of Default, the observance or performance by
any Obligor of any of the duties or agreements of such Obligor under any of the
Loan Documents or the satisfaction of any conditions precedent contained in any
of the Loan Documents. Agent may consult with and employ legal counsel,
accountants and other experts and shall be entitled to act upon, and shall be
fully protected in any action taken in good faith reliance upon, any advice
given by such experts.
12.8. SUCCESSOR AGENT AND CO-AGENTS.
12.8.1. Subject to the appointment and acceptance of a
successor Agent as provided below, Agent may resign at any time by giving at
least 30 days' written notice thereof to each Lender and Borrowers. Upon receipt
of any notice of such resignation, the Required Lenders, after prior
consultation with (but without having to obtain consent of) each Lender, shall
have the right to appoint a successor Agent which shall be (i) a Lender, (ii) a
United States based Affiliate of a Lender, or (iii) a commercial bank that is
organized under the laws of the United States or of any State thereof and has a
combined capital surplus of at least $200,000,000 and, provided no Default or
Event of Default then exists, is reasonably acceptable to Borrowers (and for
purposes hereof, any successor to Fleet shall be deemed acceptable to
Borrowers). Upon the acceptance by a successor Agent of an appointment to serve
as an Agent hereunder, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Agent without further act, deed or conveyance, and the retiring Agent shall be
discharged from its duties and obligations hereunder but shall continue to enjoy
the benefits of the indemnification set forth in SECTIONS 12.6 and 14.2 hereof.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this SECTION 12 (including the provisions of SECTION 12.6 hereof) shall continue
in effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as Agent. Notwithstanding anything to the contrary
contained in this Agreement, any successor by merger or acquisition of the stock
or assets of Fleet shall continue to be Agent hereunder without further act on
the part of the parties hereto unless such successor shall resign in accordance
with the provisions hereof. If Fleet shall sell all of its Commitment and
Obligations owing to it as part of a sale, transfer or other disposition by
Fleet of substantially all of its loan portfolio, Fleet shall resign as Agent
and such purchaser or transferee shall become the successor Agent hereunder.
12.8.2. It is the purpose of this Agreement that there shall
be no violation of any Applicable Law denying or restricting the right of
financial institutions to transact business as agent or otherwise in any
jurisdiction. It is recognized that, in case of litigation under any of the Loan
Documents, or in case Agent deems that by reason of present or future laws of
any jurisdiction Agent might be prohibited from exercising any of the powers,
rights or remedies granted to Agent or Lenders hereunder or under any of the
Loan Documents or from holding title to or a Lien upon any Collateral or from
taking any other action which may be necessary hereunder or under any of the
Loan Documents, Agent may appoint an additional Person as a separate collateral
agent or co-collateral agent which is not so prohibited from taking any of such
actions or exercising any of such powers, rights or remedies. If Agent shall
appoint an additional Person as a separate collateral agent or co-collateral
agent as provided above, each and every remedy, power, right, claim, demand or
cause of action intended by any of the Loan Documents to be exercised by or
vested in or conveyed to Agent with respect thereto shall be exercisable by and
vested in such separate collateral agent or co-collateral agent, but only to the
extent necessary to enable such separate collateral agent or co-collateral agent
to exercise such powers, rights
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and remedies, and every covenant and obligation necessary to the exercise
thereof by such separate collateral agent or co-collateral agent shall run to
and be enforceable by either of them. Should any instrument from Lenders be
required by the separate collateral agent or co-collateral agent so appointed by
Agent in order more fully and certainly to vest in and confirm to him or it such
rights, powers, duties and obligations, any and all of such instruments shall,
on request, be executed, acknowledged and delivered by Lenders whether or not a
Default or Event of Default then exists. In case any separate collateral agent
or co-collateral agent, or a successor to either, shall die, become incapable of
acting, resign or be removed, all the estates, properties, rights, powers,
duties and obligations of such separate collateral agent or co-collateral agent,
so far as permitted by Applicable Law, shall vest in and be exercised by the
Agent until the appointment of a new collateral agent or successor to such
separate collateral agent or co-collateral agent.
12.9. CONSENTS, AMENDMENTS AND WAIVERS; OUT-OF-FORMULA LOANS.
12.9.1. No amendment or modification of any provision of this
Agreement shall be effective without the prior written agreement of the Required
Lenders and Borrowers, and no waiver of any Default or Event of Default shall be
effective without the prior written consent of the Required Lenders; provided,
however, that (i) without the prior written consent of Agent, no amendment or
waiver shall be effective with respect to any provision in any of the Loan
Documents (including this SECTION 12) to the extent such provision relates to
the rights, duties or immunities or discretion of Agent; (ii) without the prior
written consent of Fleet, no amendment or waiver with respect to the provisions
of SECTIONS 1.3 OR 3.1.3 shall be effective; (iii) without the prior written
consent of all Lenders (except a defaulting Lender as provided in SECTION 3.2 of
this Agreement), no waiver of any Default or Event of Default shall be effective
if the Default or Event of Default relates to any Borrower's failure to observe
or perform any covenant that may not be amended without the unanimous written
consent of Lenders (and, where so provided hereinafter, the written consent of
Agent) as hereinafter set forth in this SECTION 12.9.1; and (iv) written
agreement of all Lenders (except a defaulting Lender as provided in SECTION 3.2
of this Agreement) shall be required to effectuate any amendment, modification
or waiver that would (a) alter the provisions of SECTIONS 2.2, 2.4, 2.6, 2.7,
2.8, 2.9, 4.5, 4.6, 4.7, 4.9, 4.10, 5.1, 9.1.14, 12, 13, 14.2, 14.3 OR 14.14,
(b) amend the definitions of "Pro Rata," "Required Lenders," "Availability
Reserve" or "Borrowing Base" (and the other defined terms used in such
definitions), or any provision of this Agreement obligating Agent to take
certain actions at the direction of the Required Lenders, or any provision of
any of the Loan Documents regarding the Pro Rata treatment or obligations of
Lenders, (c) increase or otherwise modify any of the Commitments (other than to
reduce proportionately each Lender's Commitment in connection with any overall
reduction in the amount of the Commitments), (d) alter or amend (other than to
increase) the rate of interest payable in respect of the Loans (except as may be
expressly authorized by the Loan Documents or as may be necessary, in Agent's
judgment, to comply with Applicable Law), (e) waive or agree to defer collection
of any fee, termination charge or other charge provided for under any of the
Loan Documents or the unused line fee in SECTION 2.2.3 hereof, (f) subordinate
the payment of any of the Obligations to any other Debt or the priority of any
Liens granted to Agent under any of the Loan Documents to Liens granted to any
other Person, except as currently provided in or contemplated by the Loan
Documents in connection with Borrowers' incurrence of Permitted Purchase Money
Debt, and except for Liens granted by an Obligor to financial institutions with
respect to amounts on deposit with such financial institutions to cover returned
items, processing and analysis charges and other charges in the Ordinary Course
of Business that relate to deposit accounts with such financial institutions,
(g) alter the time or amount of repayment of any of the Loans or waive any Event
of Default resulting from nonpayment of the Loans on the due date thereof (or
within any applicable period of grace), (h) amend any provision of the Lien
Subordination Agreement or the definition of "Term Loan Obligations", (i)
forgive any of the Obligations, except any portion of the Obligations held by a
Lender who consents in writing to such forgiveness, or (j) release any Obligor
from
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liability for any of the Obligations or release any material portion of the
Collateral except to the extent expressly provided for herein. No Lender shall
be authorized to amend or modify any Note held by it, unless such amendment or
modification is consented to in writing by all Lenders; provided, however, that
the foregoing shall not be construed to prohibit an amendment or modification to
any provision of this Agreement that may be effected pursuant to this SECTION
12.9.1 by agreement of Borrowers and the Required Lenders even though such an
amendment or modification results in an amendment or modification of the Notes
by virtue of the incorporation by reference in each of the Notes of this
Agreement. The making of any Loans hereunder by any Lender during the existence
of a Default or Event of Default shall not be deemed to constitute a waiver of
such Default or Event of Default. Any waiver or consent granted by Lenders
hereunder shall be effective only if in writing and then only in the specific
instance and for the specific purpose for which it was given.
12.9.2. In connection with any proposed amendment to any of
the Loan Documents or waiver of any of the terms thereof or any Default or Event
of Default thereunder, no Borrower shall solicit, request or negotiate for or
with respect to any such proposed amendment or waiver of any of the provisions
of this Agreement or any of the other Loan Documents unless each Lender shall be
informed thereof by Borrowers or Agent (to the extent known by Agent) and shall
be afforded an opportunity of considering the same and supplied by Borrowers
with sufficient information to enable it to make an informed decision with
respect thereto. No Borrower will, directly or indirectly, pay or cause to be
paid any remuneration or other thing of value, whether by way of supplemental or
additional interest, fee or otherwise, to any Lender (in its capacity as a
Lender hereunder) as consideration for or as an inducement to the consent to or
agreement by such Lender with any waiver or amendment of any of the terms and
provisions of this Agreement or any of the other Loan Documents to the extent
that the agreement of all Lenders to any such waiver or amendment is required,
unless such remuneration or thing of value is concurrently paid, on the same
terms, on a Pro Rata basis to all Lenders; provided, however, that Borrowers may
contract to pay a fee only to those Lenders who actually vote in writing to
approve any waiver or amendment of the terms and provisions of this Agreement or
any of the other Loan Documents to the extent that such waiver or amendment may
be implemented by vote of the Required Lenders and such waiver or amendment is
in fact approved.
12.9.3. Any request, authority or consent of any Person who,
at the time of making such request or giving such a authority or consent, is a
Lender, shall be conclusive and binding upon any Assignee of such Lender.
12.9.4. Unless otherwise directed in writing by the Required
Lenders, Agent may require Lenders to honor requests by Borrowers for
Out-of-Formula Loans (in which event, and notwithstanding anything to the
contrary set forth in SECTION 1.1.1 or elsewhere in this Agreement, Lenders
shall continue to make Revolver Loans up to their Pro Rata share of the
Commitments) and to forbear from requiring Borrowers to cure an Out-of-Formula
Condition, (1) when no Event of Default exists (or if an Event of Default
exists, when the existence of such Event of Default is not known by Agent), if
and for so long as (i) such Out-of-Formula Condition does not continue for a
period of more than 15 consecutive days, following which no Out-of-Formula
Condition exists for at least 15 consecutive days before another Out-of-Formula
Condition exists, (ii) the amount of the Revolver Loans outstanding plus Pending
Revolver Loans plus LC Outstandings at any time does not exceed the aggregate of
the Commitments at such time, and (iii) the Out-of-Formula Condition is not
known by Agent at the time in question to exceed $2,000,000; and (2) regardless
of whether or not an Event of Default exists, if Agent discovers the existence
of an Out-of-Formula Condition not previously known by it to exist, but Lenders
shall be obligated to continue making such Revolver Loans as directed by Agent
only (i) if the amount of the Out-of-Formula Condition is not increased by more
than $1,000,000 above the amount determined by Agent to exist on the date of
discovery thereof (ii) the amount of the Revolver
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Loans outstanding plus Pending Revolver Loans plus LC Outstandings at
any time does not exceed the aggregate of the Commitments at such time, and
(iii) for a period not to exceed 5 Business Days. In no event shall Agent
require Lenders to make Out-of-Formula Loans under clause (1) of this SECTION
12.9.4 more than 7 times per 12-month period. In no event shall any Borrower or
any other Obligor be deemed to be a beneficiary of this SECTION 12.9.4 or
authorized to enforce any of the provisions of this SECTION 12.9.4.
12.10. DUE DILIGENCE AND NON-RELIANCE. Each Lender hereby
acknowledges and represents that it has, independently and without reliance upon
Agent or the other Lenders, and based upon such documents, information and
analyses as it has deemed appropriate, made its own credit analysis of each
Obligor and its own decision to enter into this Agreement and to fund the Loans
to be made by it hereunder and to purchase participations in the LC Outstandings
pursuant to Section 1.3.2 hereof, and each Lender has made such inquiries
concerning the Loan Documents, the Collateral and each Obligor as such Lender
feels necessary and appropriate, and has taken such care on its own behalf as
would have been the case had it entered into the other Loan Documents without
the intervention or participation of the other Lenders or Agent. Each Lender
hereby further acknowledges and represents that the other Lenders and Agent have
not made any representations or warranties to it concerning any Obligor, any of
the Collateral or the legality, validity, sufficiency or enforceability of any
of the Loan Documents. Each Lender also hereby acknowledges that it will,
independently and without reliance upon the other Lenders or Agent, and based
upon such financial statements, documents and information as it deems
appropriate at the time, continue to make and rely upon its own credit decisions
in making Loans and in taking or refraining to take any other action under this
Agreement or any of the other Loan Documents. Except for notices, reports and
other information expressly required to be furnished to Lenders by Agent
hereunder, Agent shall not have any duty or responsibility to provide any Lender
with any notices, reports or certificates furnished to Agent by any Obligor or
any credit or other information concerning the affairs, financial condition,
business or Properties of any Obligor (or any of its Affiliates) which may come
into possession of Agent or any of Agent's Affiliates.
12.11. REPRESENTATIONS AND WARRANTIES OF LENDERS. By its execution of
this Agreement, each Lender hereby represents and warrants to each Borrower and
the other Lenders that it has the power to enter into and perform its
obligations under this Agreement and the other Loan Documents, and that it has
taken all necessary and appropriate action to authorize its execution and
performance of this Agreement and the other Loan Documents to which it is a
party, each of which will be binding upon it and the obligations imposed upon it
herein or therein will be enforceable against it in accordance with the
respective terms of such documents.
12.12. THE REQUIRED LENDERS. As to any provisions of this Agreement
or the other Loan Documents under which action may or is required to be taken
upon direction or approval of the Required Lenders, the direction or approval of
the Required Lenders shall be binding upon each Lender to the same extent and
with the same effect as if each Lender had joined therein. Notwithstanding
anything to the contrary contained in this Agreement, Borrowers shall not be
deemed to be a beneficiary of, or be entitled to enforce, ▇▇▇ upon or assert as
a defense to any of the Obligations, any provisions of this Agreement that
requires Agent or any Lender to act, or conditions their authority to act, upon
the direction or consent of the Required Lenders; and any action taken by Agent
or any Lender that requires the consent or direction of the Required Lenders as
a condition to taking such action shall, insofar as Borrowers are concerned, be
presumed to have been taken with the requisite consent or direction of the
Required Lenders.
12.13. SEVERAL OBLIGATIONS. The obligations and commitments of each
Lender under this Agreement and the other Loan Documents are several and neither
Agent nor any Lender shall be
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responsible for the performance by the other Lenders of its obligations or
commitments hereunder or thereunder. Notwithstanding any liability of Lenders
stated to be joint and several to third Persons under any of the Loan Documents,
such liability shall be shared, as among Lenders, Pro Rata according to the
respective Commitments of Lenders.
12.14. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to lend under this Agreement, the Loans made by it and each Note
issued to it, Agent shall have the same rights and powers hereunder and under
the other Loan Documents as any other Lender or holder of a Note and may
exercise the same as though it were not performing the duties specified herein;
and the terms "Lenders," "Required Lenders," or any similar term shall, unless
the context clearly otherwise indicates, include Agent in its capacity as a
Lender. Agent and its Affiliates may each accept deposits from, maintain
deposits or credit balances for, invest in, lend money to, act as trustee under
indentures of, serve as financial advisor to, and generally engage in any kind
of business with any Borrower or any other Obligor, or any affiliate of any
Borrower or any other Obligor, as if it were any other bank and without any duty
to account therefor (or for any fees or other consideration received in
connection therewith) to the other Lenders. Fleet or its Affiliates may receive
information regarding any Borrower or any of such Borrower's Affiliates and
Account Debtors (including information that may be subject to confidentiality
obligations in favor of Borrowers or any of their Affiliates) and Lenders
acknowledge that neither Agent nor Fleet shall be under any obligation to
provide such information to Lenders to the extent acquired by Fleet in its
individual capacity and not as Agent hereunder.
12.15. NO THIRD PARTY BENEFICIARIES. This SECTION 12 is not intended
to confer any rights or benefits upon Borrowers or any other Person except
Lenders and Agent, and no Person (including any or all Borrowers) other than
Lenders and Agent shall have any right to enforce any of the provisions of this
Section 12 except as expressly provided in SECTION 12.17 hereof. As between
Borrowers and Agent, any action that Agent may take or purport to take on behalf
of Lenders under any of the Loan Documents shall be conclusively presumed to
have been authorized and approved by Lenders as herein provided.
12.16. NOTICE OF TRANSFER. Agent may deem and treat a Lender party to
this Agreement as the owner of such Lender's portion of the Revolver Loans for
all purposes, unless and until a written notice of the assignment or transfer
thereof executed by such Lender has been received by Agent.
12.17. REPLACEMENT OF CERTAIN LENDERS. If a Lender ("Affected
Lender") shall have (i) failed to fund its Pro Rata share of any Revolver Loan
requested (or deemed requested) by Borrowers which such Lender is obligated to
fund under the terms of this Agreement and which such failure has not been
cured, (ii) requested compensation from Borrowers under SECTION 2.7 to recover
increased costs incurred by such Lender (or its parent or holding company) which
are not being incurred generally by the other Lenders (or their respective
parents or holding companies), or (iii) delivered a notice pursuant to Section
2.6 hereof claiming that such Lender is unable to extend LIBOR Loans to
Borrowers for reasons not generally applicable to the other Lenders, then, in
any such case and in addition to any other rights and remedies that Agent, any
other Lender or any Borrower may have against such Affected Lender, any Borrower
or Agent may make written demand on such Affected Lender (with a copy to Agent
in the case of a demand by Borrowers and a copy to Borrowers in the case of a
demand by Agent) for the Affected Lender to assign, and such Affected Lender
shall assign pursuant to one or more duly executed Assignment and Acceptances
within 5 Business Days after the date of such demand, to one or more Lenders
willing to accept such assignment or assignments, or to one or more Eligible
Assignees designated by Agent, all of such Affected Lender's rights and
obligations under this Agreement (including its Commitments and all Loans owing
to it) in accordance with SECTION 13 hereof. Agent is hereby irrevocably
authorized to execute one or more Assignment and Acceptances as attorney-in-fact
for any Affected Lender which fails or refuses to execute and deliver the same
within 5 Business Days
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after the date of such demand. The Affected Lender shall be entitled to receive,
in cash and concurrently with execution and delivery of each such Assignment and
Acceptance, all amounts owed to the Affected Lender hereunder or under any other
Loan Document, including the aggregate outstanding principal amount of the
Revolver Loans owed to such Lender, together with accrued interest thereon
through the date of such assignment. Upon the replacement of any Affected Lender
pursuant to this SECTION 12.17, such Affected Lender shall cease to have any
participation in, entitlement to, or other right to share in the Liens of Agent
in any Collateral and such Affected Lender shall have no further liability to
Agent, any Lender or any other Person under any of the Loan Documents (except as
provided in SECTION 12.6 hereof as to events or transactions which occur prior
to the replacement of such Affected Lender), including any commitment to make
Loans or purchase participations in LC Outstandings.
12.18. REMITTANCE OF PAYMENTS AND COLLECTIONS.
12.18.1. All payments by any Lender to Agent shall be made not
later than the time set forth elsewhere in this Agreement on the Business Day
such payment is due; provided, however, that if such payment is due on demand by
Agent and such demand is made on the paying Lender after 12:00 noon on such
Business Day, then payment shall be made by 12:00 noon on the next Business Day.
Payment by Agent to any Lender shall be made by wire transfer, promptly
following Agent's receipt of funds for the account of such Lender and in the
type of funds received by Agent; provided, however, that if Agent receives such
funds at or prior to 12:00 noon, Agent shall pay such funds to such Lender by
2:00 p.m. on such Business Day, but if Agent receives such funds after 12:00
noon, Agent shall pay such funds to such Lender by 2:00 p.m. on the next
Business Day.
12.18.2. With respect to the payment of any funds from Agent
to a Lender or from a Lender to Agent, the party failing to make full payment
when due pursuant to the terms hereof shall, on demand by the other party, pay
such amount together with interest thereon at the Federal Funds Rate. In no
event shall Borrowers be entitled to receive any credit for any interest paid by
Agent to any Lender, or by any Lender to Agent, at the Federal Funds Rate as
provided herein.
12.18.3. If Agent pays any amount to a Lender in the belief or
expectation that a related payment has been or will be received by Agent from an
Obligor and such related payment is not received by Agent, then Agent shall be
entitled to recover such amount from each Lender that receives such amount. If
Agent determines at any time that any amount received by it under this Agreement
or any of the other Loan Documents must be returned to an Obligor or paid to any
other Person pursuant to any Applicable Law, court order or otherwise, then,
notwithstanding any other term or condition of this Agreement or any of the
other Loan Documents, Agent shall not be required to distribute such amount to
any Lender.
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
13.1. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of Borrowers, Agent and Lenders and their respective
successors and assigns (which, in the case of Agent, shall include any successor
Agent appointed pursuant to Section 12.8 hereof), except that (i) no Borrower
shall have the right to assign its rights or delegate performance of any of its
obligations under any of the Loan Documents and (ii) any assignment by any
Lender must be made in compliance with Section 13.3 hereof. Agent may treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
such payee complies with Section 13.3 in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the transfer is filed
with Agent. Any assignee or transferee of a Note agrees by acceptance thereof to
be bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the holder of a Note, shall be conclusive
and binding on any
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subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
13.2. PARTICIPATIONS.
13.2.1. Permitted Participants; Effect. Any Lender may, in
the ordinary course of its business and in accordance with Applicable Law, at
any time sell to one or more banks or other financial institutions (each a
"Participant") a participating interest in any of the Obligations owing to such
Lender, any Commitment of such Lender or any other interest of such Lender under
any of the Loan Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the holder of any Note for all purposes under the Loan
Documents, all amounts payable by Borrowers under this Agreement and any of the
Notes shall be determined as if such Lender had not sold such participating
interests, and Borrowers and Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents. If a Lender sells a participation to a Person other than an
Affiliate of such Lender, then such Lender shall give prompt written notice
thereof to Borrowers and the other Lenders. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
SECTION 4.9 unless Borrowers are notified of the participation sold to
Participant and such Participant agrees, for the benefit of Borrowers, to comply
with SECTION 4.10 as though such Participant were a Lender.
13.2.2. Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than an
amendment, modification or waiver with respect to any Loans or Commitment in
which such Participant has an interest which forgives principal, interest or
fees or reduces the stated interest rate or the stated rates at which fees are
payable with respect to any such Loan or Commitment, postpones the Commitment
Termination Date, or any date fixed for any regularly scheduled payment of
interest or fees on such Revolver Loan or Commitment, or releases from liability
any Borrower or any Guarantor or releases any substantial portion of any of the
Collateral.
13.2.3. Benefit of Set-Off. Each Borrower agrees that each
Participant shall be deemed to have the right of set-off provided in SECTION
11.4 hereof in respect of its participating interest in amounts owing under the
Loan Documents to the same extent and subject to the same requirements under
this Agreement (including SECTION 12.5) as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents,
provided that each Lender shall retain the right of set-off provided in SECTION
11.4 hereof with respect to the amount of participating interests sold to each
Participant. Lenders agree to share with each Participant, and each Participant
by exercising the right of set-off provided in SECTION 11.4 agrees to share with
each Lender, any amount received pursuant to the exercise of its right of
set-off, such amounts to be shared in accordance with SECTION 12.5 hereof as if
each Participant were a Lender.
13.2.4. Notices. Each Lender shall be solely responsible for
notifying its Participants of any matters relating to the Loan Documents to the
extent that any such notice may be required, and neither Agent nor any other
Lender shall have any obligation, duty or liability to any Participant of any
other Lender. Without limiting the generality of the foregoing, neither Agent
nor any Lender shall have any obligation to give notices or to provide documents
or information to a Participant of another Lender.
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13.3. ASSIGNMENTS.
13.3.1. Permitted Assignments. Subject to its compliance with
SECTION 13.3.2, a Lender may, in accordance with Applicable Law, at any time
assign to any Eligible Assignee all or any part of its rights and obligations
under the Loan Documents, so long as (i) each assignment is of a constant, and
not a varying, ratable percentage of all of the transferor Lender's rights and
obligations under the Loan Documents with respect to the Loans and the LC
Outstandings and, in the case of a partial assignment, is in a minimum principal
amount of $5,000,000 (unless otherwise agreed by Agent in its sole discretion)
and integral multiples of $1,000,000 in excess of that amount; (ii) except in
the case of an assignment in whole of a Lender's rights and obligations under
the Loan Documents or an assignment by one original signatory to this Agreement
to another such signatory, immediately after giving effect to any assignment,
the aggregate amount of the Commitments retained by the transferor Lender shall
in no event be less than $5,000,000 (unless otherwise agreed by Agent in its
sole discretion); (iii) the parties to each such assignment shall execute and
deliver to Agent, for its acceptance and recording, an Assignment and
Acceptance; and (iv) so long as no Event of Default exists, Borrowers shall have
consented to the assignment in writing prior to such assignment (which consent
shall not be unreasonably withheld or delayed). Nothing contained herein shall
limit in any way the right of a Lender to assign all or any portion of the
Obligations owing to it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors and any Operating Circular issued by such Federal Reserve Bank,
provided that any payment by Borrowers to the assigning Lender in respect of
such assigned Obligations in accordance with the terms of this Agreement shall
satisfy Borrowers' obligations hereunder in respect of such assigned Obligations
to the extent of such payment, and no such assignment shall release the
assigning Lender from its obligations hereunder.
13.3.2. Effect; Effective Date. Upon (i) delivery to Agent of
a notice of assignment substantially in the form attached as EXHIBIT H hereto,
together with any consents required by SECTION 13.3.1, and (ii) payment of a
$5,000 fee to the Agent for processing any assignment to an Eligible Assignee
that is not an Affiliate of the transferor Lender, such assignment shall become
effective on the effective date specified in such notice of assignment. On and
after the effective date of such assignment, such Eligible Assignee shall for
all purposes be a Lender party to the Agreement and any other Loan Document
executed by the Lenders and shall have all the rights and obligations of the
Lender under the Loan Documents to the same extent as if it were an original
party thereto, and no further consent or action by Borrowers, Lenders or Agent
shall be required to release the transferor Lender with respect to the
Commitment (or portion thereof) of such Lender and Obligations assigned to such
Eligible Assignee. Upon the consummation of any assignment to an Eligible
Assignee pursuant to this SECTION 13.3, the transferor Lender, Agent and
Borrowers shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate, replacement
Notes, are issued to such Eligible Assignee, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such
assignment. If the transferor Lender shall have assigned all of its interests,
rights and obligations under this Agreement pursuant to SECTION 13.3.1 hereof,
such transferor Lender shall no longer have any obligation to indemnify Agent
with respect to any transactions, events or occurrences that transpire after the
effective date of such assignment, and each Eligible Assignee to which such
transferor shall make an assignment shall be responsible to Agent to indemnify
Agent in accordance with this Agreement with respect to transactions, events and
occurrences transpiring on and after the effective date of such assignment to
it.
13.3.3. Dissemination of Information. Each Borrower
authorizes each Lender and Agent to disclose to any Participant, any Eligible
Assignee or any other Person acquiring an interest in the Loan Documents by
operation of law (each a "Transferee"), and any prospective Transferee, any and
all information in Agent's or such Lender's possession concerning each Borrower,
the Subsidiaries of
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each Borrower or the Collateral, subject to appropriate confidentiality
undertakings on the part of such Transferee.
13.4. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee that is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of SECTION 4.10 hereof.
SECTION 14. MISCELLANEOUS
14.1 POWER OF ATTORNEY. Each Borrower hereby irrevocably
designates, makes, constitutes and appoints Agent (and all Persons designated by
Agent) as such Borrower's true and lawful attorney (and agent-in-fact) and
Agent, or Agent's designee, may, without notice to such Borrower and in either
such Borrower's or Agent's name, but at the cost and expense of Borrowers:
14.1.1. At such time or times as Agent or said designee, in
its sole discretion, may determine, endorse such Borrower's name on any Payment
Item or proceeds of the Collateral which come into the possession of Agent or
under Agent's control.
14.1.2. At any time that an Event of Default exists : (i)
demand payment of the Accounts from the Account Debtors, enforce payment of the
Accounts by legal proceedings or otherwise, and generally exercise all of such
Borrower's rights and remedies with respect to the collection of the Accounts;
(ii) settle, adjust, compromise, discharge or release any of the Accounts or
other Collateral or any legal proceedings brought to collect any of the Accounts
or other Collateral; (iii) sell or assign any of the Accounts and other
Collateral upon such terms, for such amounts and at such time or times as Agent
deems advisable; (iv) take control, in any manner, of any item of payment or
proceeds relating to any Collateral; (v) prepare, file and sign such Borrower's
name to a proof of claim in bankruptcy or similar document against any Account
Debtor or to any notice of Lien, assignment or satisfaction of Lien or similar
document in connection with any of the Collateral; (vi) receive, open and
dispose of all mail addressed to such Borrower and to notify postal authorities
to change the address for delivery thereof to such address as Agent may
designate; (vii) endorse the name of such Borrower upon any of the items of
payment or proceeds relating to any Collateral and deposit the same to the
account of Agent on account of the Obligations; (viii) endorse the name of such
Borrower upon any chattel paper, document, instrument, invoice, freight ▇▇▇▇,
▇▇▇▇ of lading or similar document or agreement relating to any Accounts or
Inventory of any Obligor and any other Collateral; (ix) use such Borrower's
stationery and sign the name of such Borrower to verifications of the Accounts
and notices thereof to Account Debtors; (x) use the information recorded on or
contained in any data processing equipment and computer hardware and software
relating to the Accounts, Inventory, Equipment or any other Collateral; (xi)
make and adjust claims under policies of insurance; (xii) sign the name of such
Borrower on any proof of claim in bankruptcy against Account Debtors and on
notices of Liens, claims of mechanic's Liens or assignments or releases of
mechanic's Liens securing any Accounts; (xiii) take all action as may be
necessary to obtain the payment of any letter of credit or banker's acceptance
of which such Borrower is a beneficiary; and (xiv) do all other acts and things
necessary, in Agent's determination, to fulfill such Borrower's obligations
under this Agreement.
14.2. GENERAL INDEMNITY. Each Borrower hereby agrees to indemnify
and defend the Indemnitees against and to hold the Indemnitees harmless from any
Indemnified Claim that may be instituted or asserted against or incurred by any
of the Indemnitees and that either (i) arises out of or relates to this
Agreement or any of the other Loan Documents (including any transactions entered
into pursuant to any of the Loan Documents, Agent's Lien upon the Collateral, or
the performance by Agent or Lenders of their duties or the exercise of any of
their rights or remedies under this Agreement or any
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of the other Loan Documents) or (ii) results from Borrowers' failure to observe,
perform or discharge any of Borrowers' covenants or duties hereunder. Without
limiting the generality of the foregoing, this indemnity shall extend to any
Indemnified Claims instituted or asserted against or incurred by any of the
Indemnitees by any Person under any Environmental Laws or similar laws by reason
of any Borrower's or any other Person's failure to comply with laws applicable
to solid or hazardous waste materials or other toxic substances. Additionally,
if any Taxes (excluding Taxes imposed upon or measured solely by the net income
of Agent and Lenders, but including any intangibles tax, stamp tax, recording
tax or franchise tax) shall be payable by Agent or any Obligor on account of the
execution or delivery of this Agreement, or the execution, delivery, issuance or
recording of any of the other Loan Documents, or the creation or repayment of
any of the Obligations hereunder, by reason of any Applicable Law now or
hereafter in effect, Borrowers will pay (or will promptly reimburse Agent and
Lenders for the payment of) all such Taxes, including any interest and penalties
thereon, and will indemnify and hold Indemnitees harmless from and against all
liability in connection therewith. The foregoing indemnities shall not apply to
Indemnified Claims incurred by any Indemnitee that result solely from its own
gross negligence or willful misconduct or that arise out of any disputes between
the Lenders or between the Agent and any Lender.
14.3. SURVIVAL OF ALL INDEMNITIES. Notwithstanding anything to the
contrary in this Agreement or any of the other Loan Documents, the obligation of
each Borrower and each Lender with respect to each indemnity given by it in this
Agreement, whether given by any or all Borrowers to Agent Indemnitees, Lender
Indemnitees or Fleet Indemnitees or by any Lender to any Agent Indemnitees or
Fleet Indemnitees, shall survive the Full Payment of the Obligations and the
termination of any of the Commitments and the resignation of Agent.
14.4 MODIFICATION OF AGREEMENT. This Agreement may not be modified,
altered or amended, except by an agreement in writing signed by Borrowers and
Agent and Lenders (or, where otherwise expressly allowed by SECTION 12 hereof,
the Required Lenders in lieu of Agent and Lenders); provided, however, that no
consent, written or otherwise, of Borrowers shall be necessary or required in
connection with any amendment of any of the provisions OF SECTIONS 1.3.2, 3.1.3,
4.6, or 12 (other than SECTION 12.17), or any other provision of this Agreement
that affects only the rights, duties and responsibilities of Lenders and Agent
as among themselves so long as no such amendment imposes any additional
obligations on Borrowers.
14.5 SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
14.6. CUMULATIVE EFFECT; CONFLICT OF TERMS. The provisions of the
Other Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Without limiting the generality of the foregoing,
the parties acknowledge that this Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the same or
similar matters and that such limitations, tests and measures are cumulative and
each must be performed, except as may be expressly stated to the contrary in
this Agreement. Except as otherwise provided in any of the other Loan Documents
by specific reference to the applicable provision of this Agreement, if any
provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
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14.7. EXECUTION IN COUNTERPARTS. This Agreement and any amendments
hereto may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which counterparts taken together
shall constitute but one and the same instrument.
14.8. CONSENT. Whenever Agent's, Lenders' or Required Lenders'
consent is required to be obtained under this Agreement or any of the other Loan
Documents as a condition to any action, inaction, condition or event, Agent and
each Lender shall be authorized to give or withhold its consent in its sole and
absolute discretion and to condition its consent upon the giving of additional
collateral security for the Obligations, the payment of money or any other
matter.
14.9. NOTICES. All notices, requests and demands to or upon a party
hereto shall be in writing and shall be sent by certified or registered mail,
return receipt requested, personal delivery against receipt or by telecopier or
other facsimile transmission and shall be deemed to have been validly served,
given or delivered when delivered against receipt or, in the case of facsimile
transmission, when received (if on a Business Day and, if not received on a
Business Day, then on the next Business Day after receipt) at the office where
the noticed party's telecopier is located, in each case addressed to the noticed
party at the address shown for such party on the signature page hereof or, in
the case of a Person who becomes a Lender after the date hereof, at the address
shown on the Assignment and Acceptance by which such Person became a Lender.
Notwithstanding the foregoing, no notice to or upon Agent pursuant to SECTIONS
1.3, 2.1.2, 3.1 or 5.2.2 shall be effective until after actually received by the
individual to whose attention at Agent such notice is required to be sent. Any
written notice, request or demand that is not sent in conformity with the
provisions hereof shall nevertheless be effective on the date that such notice,
request or demand is actually received by the individual to whose attention at
the noticed party such notice, request or demand is required to be sent.
14.10. PERFORMANCE OF BORROWERS' OBLIGATIONS. If any Borrower shall
fail to discharge any covenant, duty or obligation hereunder or under any of the
other Loan Documents, Agent may, in its sole discretion at any time or from time
to time, for such Borrower's account and at Borrowers' expense, pay any amount
or do any act required of Borrowers hereunder or under any of the other Loan
Documents or otherwise lawfully requested by Agent to (i) enforce any of the
Loan Documents or collect any of the Obligations, (ii) preserve, protect, insure
or maintain or realize upon any of the Collateral, or (iii) preserve, defend,
protect or maintain the validity or priority of Agent's Liens in any of the
Collateral, including the payment of any judgment against any Borrower, any
insurance premium, any warehouse charge, any finishing or processing charge, any
landlord claim or any other Lien upon or with respect to any of the Collateral
(whether or not a Permitted Lien). All payments that Agent may make under this
Section and all out-of-pocket costs and expenses (including Extraordinary
Expenses) that Agent pays or incurs in connection with any action taken by it
hereunder shall be reimbursed to Agent by Borrowers on demand with interest from
the date such payment is made or such costs or expenses are incurred to the date
of payment thereof at the Default Rate applicable for Revolver Loans that are
Base Rate Loans. Any payment made or other action taken by Agent under this
Section shall be without prejudice to any right to assert, and without waiver
of, an Event of Default hereunder and to without prejudice to Agent's right
proceed thereafter as provided herein or in any of the other Loan Documents.
14.11 CREDIT INQUIRIES. Each Borrower hereby authorizes and permits
Agent and Lenders (but Agent and Lenders shall have no obligation) to respond to
usual and customary credit inquiries from third parties concerning such Borrower
or any of its Subsidiaries.
14.12. TIME OF ESSENCE. Time is of the essence of this Agreement, the
Other Agreements and the Security Documents.
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14.13. INDULGENCES NOT WAIVERS. Agent's or any Lender's failure, at
any time or times hereafter, to require strict performance by Borrowers of any
provision of this Agreement shall not waive, affect or diminish any right of
Agent or any Lender thereafter to demand strict compliance and performance
therewith.
14.14. ENTIRE AGREEMENT; APPENDIX A, EXHIBITS AND SCHEDULES. This
Agreement and the other Loan Documents, together with all other instruments,
agreements and certificates executed by the parties in connection therewith or
with reference thereto, embody the entire understanding and agreement between
the parties hereto and thereto with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings and inducements,
whether express or implied, oral or written. Appendix A, each of the Exhibits
and each of the Schedules attached hereto are incorporated into this Agreement
and by this reference made a part hereof.
14.15. INTERPRETATION. No provision of this Agreement or any of the
other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having, or being deemed to have, structured,
drafted or dictated such provision.
14.16. OBLIGATIONS OF LENDERS SEVERAL. The obligations of each Lender
hereunder are several, and no Lender shall be responsible for the obligations or
Commitment of any other Lender. Nothing contained in this Agreement and no
action taken by Lenders pursuant hereto shall be deemed to constitute the
Lenders to be a partnership, association, joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled, to the extent
not otherwise restricted hereunder, to protect and enforce its rights arising
out of this Agreement and any of the other Loan Documents and it shall not be
necessary for Agent or any other Lender to be joined as an additional party in
any proceeding for such purpose.
14.17. ADVERTISING AND PUBLICITY. With the prior consent of Borrowers
(which shall not be unreasonably withheld or delayed), Agent, on behalf of
Lenders, may issue and disseminate to the public (by advertisement or otherwise)
information describing the credit accommodations made available by Lenders
pursuant to this Agreement, including the name and address of each Borrower, the
amount and security for the credit accommodations and the general nature of each
Borrower's business, provided that detail regarding terms (such as interest
rate) may be provided only to industry publications, such as the "LPC Gold
Sheets."
14.18. CONFIDENTIALITY. Agent and Lenders each agrees to take normal
and reasonable precautions to maintain the confidentiality of any confidential
information that is delivered or made available by Borrowers to it and that is
marked or otherwise identified by Borrowers as confidential, (including
information made available to Agent or any Lender in connection with a visit or
investigation by any Person contemplated in Section 9.1.1 hereof), for a period
of 24 months following the Commitment Termination Date, except that Agent and
any Lender may disclose such information (i) to their respective Affiliates and
individuals employed or retained by Agent or such Lender who are or are expected
to become engaged in evaluating, approving, structuring, administering or
otherwise giving professional advice with respect to any of the Loans or
Collateral, including any of their respective legal counsel, auditors or other
professional advisors; (ii) to any party to this Agreement from time to time or
any Participant, (iii) pursuant the order of any court or administrative agency,
(iv) upon the request or demand of any regulatory agency or authority having
jurisdiction over Agent or such Lender, (v) which has ceased to be confidential
other than by an act or omission of Agent or any Lender except as permitted
herein or which becomes available to Agent or any Lender on a nonconfidential
basis from a source other than Obligors, (vi) to the extent reasonably required
in connection with any litigation (with respect to any
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of the Loan Documents or any of the transactions contemplated thereby) to which
Agent, any Lender or their respective Affiliates may be a party, (vii) to the
extent reasonably required in connection with the exercise of any remedies
hereunder, (viii) to any Agent Professionals or any Lender's legal counsel or
auditors, (ix) to any actual or proposed Participant, Assignee, counterparty or
advisors to any swap or derivative transactions relating to Obligors and the
Obligations, or any other Transferee of all or part of a Lender's rights
hereunder so long as such Person has agreed in writing to be bound by the
provisions of this Section, (x) to the National Association of Insurance
Commissioners or any similar organization or to any nationally recognized rating
agency that requires access to information about a Lender's portfolio in
connection with ratings issued with respect to such Lender, (xi) to the extent
required (on the advice of Agent's or such Lender's counsel) by Applicable Law
or (xii) with the consent of Borrowers. Notwithstanding the foregoing, the
obligations of confidentiality contained herein or in any of the other Loan
Documents shall not apply to any information with respect to the "tax treatment"
and "tax structure" (in each case, within the meaning of Treasury Regulation
Section 1.6011-4) of the transactions contemplated hereby and all materials of
any kind (including opinions or other tax analyses) that are provided to Agent
or such Lender relating to such tax treatment and tax structure; provided that
with respect to any document or similar item that in either case contains
information concerning the tax treatment or tax structure of the transactions as
well as other information, this sentence shall only apply to such portions of
the document or similar item that relate to the tax treatment or tax structure
of the Loans, Letters of Credit and transactions contemplated hereby.
14.19. SENIOR DEBT. Borrowers acknowledge and agree and confirm to
Agent and Lenders that this Agreement constitutes the "Senior Credit Facility"
and the Obligations constitute "Senior Debt", each as defined in the Senior
Subordinated Indenture.
14.20. GOVERNING LAW; CONSENT TO FORUM. This Agreement has been
negotiated, executed and delivered at and shall be deemed to have been made in
Atlanta, Georgia. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia; provided, however, that, if
any of the Collateral shall be located in any jurisdiction other than Georgia,
the laws of such jurisdiction shall govern the method, manner and procedure for
foreclosure of Agent's Lien upon such Collateral and the enforcement of Agent's
other remedies in respect of such Collateral to the extent that the laws of such
jurisdiction are different from or inconsistent with the laws of the State of
Georgia. As part of the consideration for new value received, and regardless of
any present or future domicile or principal place of business of any Borrower,
any Lender or Agent, each Borrower hereby consents and agrees that the Superior
Court of ▇▇▇▇ County, Georgia, or, at Agent's option, the United States District
Court for the Northern District of Georgia, Atlanta Division, shall have
jurisdiction to hear and determine any claims or disputes among any or all
Borrowers, Agent and Lenders pertaining to this Agreement or to any matter
arising out of or related to this Agreement. Each Borrower expressly submits and
consents in advance to such jurisdiction in any action or suit commenced in any
such Court, and each Borrower hereby waives any objection that such Borrower may
have based upon lack of personal jurisdiction, improper venue or forum non
conveniens and hereby consents to the granting of such legal or equitable relief
as is deemed appropriate by such Court. Each Borrower hereby waives personal
service of the summons, complaint and other process issued in any such action or
suit and agrees that service of such summons, complaint and other process may be
made by certified mail addressed to such Borrower at the address set forth in
this Agreement and that service so made shall be deemed completed upon the
earlier of such Borrower's actual receipt thereof or 3 days after deposit in the
U.S. mails, proper postage prepaid. Nothing in this Agreement shall be deemed or
operate to affect the right of Agent to serve legal process in any other manner
permitted by law, or to preclude the enforcement by Agent of any judgment or
order obtained in such forum or the taking of any action under this Agreement to
enforce same in any other appropriate forum or jurisdiction.
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14.21. WAIVERS BY BORROWERS. To the fullest extent permitted by
Applicable Law, each Borrower waives (i) the right to trial by jury (which Agent
and each Lender hereby also waives) in any action, suit, proceeding or
counterclaim of any kind arising out of or related to any of the Loan Documents,
the Obligations or the Collateral; (ii) presentment, demand and protest and
notice of presentment, protest, default, non payment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Agent on which such Borrower may in any way be liable and
hereby ratifies and confirms whatever Agent may do in this regard; (iii) notice
prior to taking possession or control of the Collateral or any bond or security
which might be required by any court prior to allowing Agent to exercise any of
Agent's remedies; (iv) the benefit of all valuation, appraisement and exemption
laws; (v) any claim against Agent or any Lender, on any theory of liability, for
special, indirect, consequential, exemplary or punitive damages (as opposed to
direct or actual damages) arising out of, in connection with, or as a result of,
any of the Loan Documents, any transaction thereunder or the use of the proceeds
of any Loans; and (vi) notice of acceptance hereof. Each Borrower acknowledges
that the foregoing waivers are a material inducement to Agent's and Lenders'
entering into this Agreement and that Agent and Lenders are relying upon the
foregoing waivers in its future dealings with Borrowers. Each Borrower warrants
and represents that it has reviewed the foregoing waivers with its legal counsel
and has knowingly and voluntarily waived its jury trial rights following
consultation with legal counsel. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the Court.
14.22. TEXAS FINANCE CODE. Borrowers, Agent and Lenders hereby agree
that the provisions of Chapter 346 of the Texas Finance Code, as amended
(regulating certain revolving credit and revolving tri-party accounts) shall not
apply to the Loan Documents.
14.23 WAIVER OF DTPA. Each Borrower waives all provisions of the
Texas Deceptive Trade Practices-Consumer Protection Act, Texas Business and
Commerce Code Section 17.41, et seq. ("DTPA"), other than Section 17.555
(pertaining to contribution and indemnity) of the DPTA, and warrants and
represents that it (i) has assets having a value of $5,000,000 or more, (ii) has
knowledge and experience in financial and business matters that enable it to
evaluate the merits and risks of the transactions contemplated by this Agreement
and the other Loan Documents, (iii) is not in a significantly disparate
bargaining position relative to Agent and Lenders and (iv) has been represented
by legal counsel in connection with the transactions contemplated by this
Agreement and the other Loan Documents.
14.24. WAIVER OF CERTAIN EVENTS OF DEFAULT. Events of Default have
occurred and currently exist under the Original Loan Agreement as a result of
Borrowers failure to comply with the Consolidated Fixed Charge Coverage Ratio
and the Consolidated Funded Debt to Consolidated EBITDA financial covenants that
are contained in Section 9.3 of the Original Loan Agreement for the period ended
January 3, 2004 (the "Designated Defaults"). Agent and Lenders hereby waive the
Designated Defaults as in effect on the date hereof.
14.25. RATIFICATION AND REAFFIRMATION. Each Borrower hereby ratifies
and reaffirms all of its debts, obligations and duties under the existing Loan
Documents, as existing on the Closing Date or, if amended or amended and
restated on the Closing Date, as amended and restated by this Agreement and as
modified by such other Loan Documents executed on the Closing Date.
14.26. AMENDMENT AND RESTATEMENT. This Agreement amends and restates
the Original Loan Agreement, and is not intended to be or operate as a novation
or an accord and satisfaction of the Original Loan Agreement or the Obligations
evidenced or secured thereby or provided for thereunder.
In consideration therefor and to induce Agent and Lenders to enter into
this Agreement, each Borrower hereby releases, acquits and forever discharges
Agent, each Lender, and all of their respective
-78-
officers, directors, agents, employees, successors and assigns, from any and all
liabilities, claims, demands, actions or causes of action of any kind or nature
(if there be any), whether absolute or contingent, disputed or undisputed, at
law or in equity, or known or unknown, that such Borrower now has or ever had
against Agent or such Lender arising under or in connection with any of the Loan
Documents or otherwise from the beginning of time until January 12, 2004. Each
Borrower represents and warrants to Agent and Lenders that no Borrower has
transferred or assigned to any Person any claim that such Borrower ever had or
claimed to have against Agent or any Lender.
[Remainder of page intentionally left blank]
-79-
IN WITNESS WHEREOF, this Agreement has been duly executed in Atlanta,
Georgia, on the day and year specified at the beginning of this Agreement.
BORROWERS:
TROPICAL SPORTSWEAR INT'L
ATTEST: CORPORATION
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Treasurer
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: TROPICAL SPORTSWEAR COMPANY, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President,
and Chief Financial Officer
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: SAVANE INTERNATIONAL CORP.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Treasurer
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-80-
ATTEST: APPAREL NETWORK CORPORATION
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Treasurer
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: TSI BRANDS, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: TSIL, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-81-
ATTEST: DUCK HEAD APPAREL COMPANY, LLC
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Treasurer
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: DELTA MERCHANDISING, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Treasurer
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
LENDERS:
FLEET CAPITAL CORPORATION
Revolver
Commitment: $30,000,000.00 By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Title: Senior Vice President
Address and LIBOR Lending Office:
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Office Head
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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WACHOVIA BANK, NATIONAL
ASSOCIATION
Revolver Commitment: $20,000,000.00 By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Title: Director
Address and LIBOR Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Accounting
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ FARGO FOOTHILL, INC.
Revolver Commitment: $20,000,000.00 By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Title: Vice President
Address and LIBOR Lending Office:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Business Finance Manager
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
AGENT:
FLEET CAPITAL CORPORATION,
as Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Title: Senior Vice President
Address and LIBOR Lending Office:
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Office Head
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
-83-
APPENDIX A
GENERAL DEFINITIONS
When used in the Second Amended and Restated Loan and Security Agreement dated
January 12, 2004 (as at any time amended, the "Agreement"), by and among
TROPICAL SPORTSWEAR INT'L CORPORATION, a Florida corporation ("Tropical"),
TROPICAL SPORTSWEAR COMPANY, INC., a Delaware corporation ("TSCI"), SAVANE
INTERNATIONAL CORP., a Texas corporation ("Savane"), APPAREL NETWORK
CORPORATION, a Florida corporation ("Apparel"), TSI BRANDS, INC., a Delaware
corporation ("TSI"), TSIL, INC., a Delaware corporation ("TSIL"), DUCK HEAD
APPAREL COMPANY, LLC, a Georgia limited liability company ("Duck Head"), and
DELTA MERCHANDISING, INC., a South Carolina corporation ("Delta"; Tropical,
TSCI, Savane, Apparel, TSI, TSIL, Duck Head and Delta collectively referred to
hereinafter as "Borrowers" and individually as a "Borrower"), each financial
institution listed on the signature pages attached thereto and its successors
and assigns which become "Lenders" as provided therein (such financial
institutions and their respective successors and assigns referred to
collectively herein as "Lenders" and individually as a "Lender"), and FLEET
CAPITAL CORPORATION ("Agent"), in its capacity as collateral and administrative
agent for itself and the Lenders, the following terms shall have the following
meanings (terms defined in the singular to have the same meaning when used in
the plural and vice versa):
Account - shall have the meaning ascribed to "account" in the
UCC and shall include any and all rights of a Borrower to payment for
goods sold or leased or for services rendered that are not evidenced by
an Instrument or Chattel Paper, whether or not they have been earned by
performance.
Account Debtor - a Person who is or becomes obligated under or
on account of an Account.
Accounts Collateral - all Accounts of a Borrower and all
right, title and interest of such Borrower in or to any returned Goods
the sale or other disposition of which gave rise to an Account,
together with all rights, titles, securities and guarantees with
respect to any Account, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security or Liens,
whether voluntary or involuntary, in each case whether now existing or
owned or hereafter created, arising or acquired.
Accounts Formula Amount - on any date of determination
thereof, an amount equal to the lesser of (i) the Revolver Commitments
on such date or (ii) 85%, or such lesser percentage as Agent may in its
sole credit judgment determine from time to time, of the net amount of
Eligible Accounts on such date. As used herein, the phrase "net amount
of Eligible Accounts" shall mean the face amount of such Accounts on
any date less any and all returns, rebates, discounts (which may, at
Agent's option, be calculated on shortest terms), credits, allowances
or Taxes (including sales, excise or other taxes) at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in
connection with, or any interest accrued on the amount of, such
Accounts at such date.
Adjusted LIBOR Rate - with respect to each Interest Period for
a LIBOR Loan, an interest rate per annum (rounded upwards, to the next
1/16th of 1%) equal to the quotient of (a) the LIBOR Rate in effect for
such Interest Period divided by (b) a percentage (expressed as a
decimal) equal to 100% minus Statutory Reserves.
Affiliate - a Person (other than a Subsidiary): (i) which
directly or indirectly through one or more intermediaries controls, or
is controlled by, or is under common control with, another Person; (ii)
which beneficially owns or holds 10% or more of any class of the Equity
Interests of a Person; or (iii) 10% or more of the Equity Interests
with power to vote of which is beneficially owned or held by another
Person or a Subsidiary of another Person. For purposes hereof,
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
Person, whether through the ownership of any Equity Interest, by
contract or otherwise.
Agent Indemnitees - Agent in its capacity as collateral and
administrative agent for the Lenders under the Loan Documents and all
of Agent's present and future officers, directors, agents and
attorneys.
Agent Professionals - attorneys, accountants, appraisers,
business valuation experts, environmental engineers or consultants,
turnaround consultants and other professionals or experts retained by
Agent.
Agreement - the Second Amended and Restated Loan and Security
Agreement referred to in the first sentence of this Appendix A, all
Exhibits and Schedules thereto and this Appendix A.
Anti-Terrorism Laws - shall mean any laws relating to
terrorism or money laundering, including Executive Order No. 13224 and
the USA Patriot Act.
Applicable Law - all laws, rules and regulations applicable to
the Person, conduct, transaction, covenant, Loan Document or Material
Contract in question, including all applicable common law and equitable
principles; all provisions of all applicable state, federal and foreign
constitutions, statutes, rules, regulations and orders of Governmental
Authorities; and all orders, judgments and decrees of all courts and
arbitrators.
Applicable Margin - a percentage equal to 2.00% with respect
to Revolver Loans that are Base Rate Loans, 3.75% with respect to
Revolver Loans that are LIBOR Loans; provided, that, commencing upon
receipt of Borrowers' financial statements covering Borrowers' Fiscal
Quarter ended on or about December 31, 2004, the Applicable Margin
shall be increased or (if no Default or Event of Default exists)
decreased, based upon Average Availability for the immediately
preceding Fiscal Quarter of Borrowers, as follows:
Average Availability for the immediately Revolver Loans
preceding Fiscal Quarter Outstanding as:
----------------------------------------------------------------------------------
Base Rate Loans LIBOR Loans
----------------------------------------------------------------------------------
>$20,000,000 1.00% 2.75%
>$15,000,000 and < = $20,000,000 1.25% 3.00%
>$10,000,000 and < = $15,000,000 1.50% 3.25%
>$ 5,000,000 and < = $10,000,000 1.75% 3.50%
<=$5,000,000 2.00% 3.75%
-2-
The Applicable Margin shall be subject to reduction or increase, as
applicable and as set forth in the table above, on a quarterly basis
according to Average Availability for the immediately preceding Fiscal
Quarter of Borrowers.
Assignment and Acceptance - an assignment and acceptance
entered into by a Lender and an Eligible Assignee and accepted by
Agent, in the form of EXHIBIT G.
Availability - on any date, the amount that Borrowers are
entitled to borrow as Revolver Loans on such date, such amount being
the difference derived when the sum of the principal amount of Revolver
Loans then outstanding (including any amounts that Agent or Lenders may
have paid for the account of Borrowers pursuant to any of the Loan
Documents and that have not been reimbursed by Borrowers and any
outstanding Settlement Loans) is subtracted from the Borrowing Base on
such date. If the amount outstanding is equal to or greater than the
Borrowing Base, Availability is zero.
Availability Reserve - on any date of determination thereof,
an amount equal to the sum of the following (without duplication): (i)
$10,000,000; (ii) the Inventory Reserve; (iii) the Rent Reserve; (iv)
any amounts which any Obligor is obligated to pay pursuant to the
provisions of any of the Loan Documents that Agent or any Lender elects
to pay for the account of such Obligor in accordance with authority
contained in any of the Loan Documents; (v) the LC Reserve; (vi) any
amount received by Agent from the Business Interruption Insurance
Assignment and applied to the Revolver Loans; (vii) the aggregate
amount of reserves established by Agent in its reasonable discretion in
respect of ACH (automated clearinghouse) transfers or obligations of
Borrowers; (viii) the Dilution Reserve; (ix) the Duty and Freight
Reserve; (x) the Hedging Agreement Reserve; and (xi) such additional
reserves, in such amounts and with respect to such matters, as Agent in
its reasonable credit judgment may elect to impose from time to time.
Average Availability - for any period, an amount equal to the
sum of the actual amount of Availability on each day during such
period, as determined by Agent, divided by the number of days in such
period.
Average Revolver Loan Balance - for any period, the amount
obtained by adding the aggregate of the unpaid balance of Revolver
Loans and LC Outstandings at the end of each day for the period in
question and by dividing such sum by the number of days in such period.
Bank - Fleet National Bank.
Bank Products - any one or more of the following types of
services or facilities extended to any Borrower by any Lender, Bank or
any Affiliate thereof: (i) credit cards; (ii) merchant card services;
(iii) Cash Management Agreements; (iv) Hedging Agreements; and (v) such
other banking products or services provided by any Lender, Bank or any
Affiliate thereof as may be requested by any Borrower (on behalf of
itself or its Subsidiaries).
Banking Relationship Debt - debt or other obligations of a
Borrower to Bank or any Lender (or any Affiliate of Bank or any Lender)
arising out of or relating to Bank Products.
Bankruptcy Code - title 11 of the United States Code.
-3-
Base Rate - the rate of interest announced or quoted by Bank
from time to time as its prime rate. The prime rate announced by Bank
is a reference rate and does not necessarily represent the lowest or
best rate charged by Bank. Bank may make loans or other extensions of
credit at, above or below its announced prime rate. If the prime rate
is discontinued by Bank as a standard, a comparable reference rate
designated by Bank as a substitute therefor shall be the Base Rate.
Base Rate Loan - a Loan, or portion thereof, during any period
in which it bears interest at a rate based upon the Base Rate.
Board of Governors - the Board of Governors of the Federal
Reserve System.
Borrowing - a borrowing consisting of Loans of one Type made
on the same day by Lenders (or by Fleet in the case of a Borrowing
funded by Settlement Loans) or a conversion of a Loan or Loans of one
Type from Lenders on the same day.
Borrowing Base - on any date of determination thereof, an
amount equal to the lesser of: (a) the aggregate amount of the Revolver
Commitments on such date minus the LC Outstandings on such date, or (b)
an amount equal to (i) the sum of the Accounts Formula Amount plus the
Inventory Formula Amount on such date minus (ii) the Availability
Reserve on such date.
Borrowing Base Certificate - a certificate, in the form
requested by Agent, by which Borrowers shall certify to Agent and
Lenders, with such frequency as Agent may request, the amount of the
Borrowing Base as of the date of the certificate (which date shall be
not more than one Business Day earlier than the date of submission of
such certificate to Agent) and the calculation of such amount.
Business Day - any day excluding Saturday, Sunday and any
other day that is a legal holiday under the laws of the State of
Georgia or is a day on which banking institutions located in such state
are closed; provided, however, that when used with reference to a LIBOR
Loan (including the making, continuing, prepaying or repaying of any
LIBOR Loan), the term "Business Day" shall also exclude any day on
which banks are not open for dealings in Dollar deposits on the London
interbank market.
Business Interruption Insurance Assignment - the Collateral
Assignment of Business Interruption Insurance executed by Borrowers on
June 10, 1998, in favor of Agent as security for the payment of the
Obligations.
Capital Expenditures - expenditures made or liabilities
incurred for the acquisition of any fixed assets or improvements,
replacements, substitutions or additions thereto which have a useful
life of more than one year, including the total principal portion of
Capitalized Lease Obligations.
Capitalized Lease Obligation - any Debt represented by
obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
Cash Collateral - cash or Cash Equivalents, and any interest
earned thereon, that is deposited with Agent in accordance with the
Agreement for the Pro Rata benefit of Lenders as security for the
Obligations.
-4-
Cash Collateralize - with respect to a Letter of Credit
outstanding on any date, the deposit of immediately available funds
into the Cash Collateral Account in an amount equal to 105% of the
Stated Amount of such Letter of Credit plus all related fees and other
amounts due or to become due in connection with such Letter of Credit.
Cash Collateral Account - a demand deposit, money market or
other account established by Agent at such financial institution as
Agent may select in its discretion, which account shall be in Agent's
name and subject to Agent's Liens for the Pro Rata benefit of Lenders.
Cash Equivalents - (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed
by the full faith and credit of the United States government having
maturities of not more than 12 months from the date of acquisition;
(ii) domestic certificates of deposit and time deposits having
maturities of not more than 12 months from the date of acquisition,
bankers' acceptances having maturities of not more than 12 months from
the date of acquisition and overnight bank deposits, in each case
issued by any commercial bank organized under the laws of the United
States, any state thereof or the District of Columbia, which at the
time of acquisition are rated A-1 (or better) by S&P or P-1 (or better)
by ▇▇▇▇▇'▇, and (unless issued by a Lender) not subject to offset
rights in favor of such bank arising from any banking relationship with
such bank; (iii) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clauses (i)
and (ii) entered into with any financial institution meeting the
qualifications specified in clause (ii) above; and (iv) commercial
paper having at the time of investment therein or a contractual
commitment to invest therein a rating of A-1 (or better) by S&P or P-1
(or better) by ▇▇▇▇▇'▇, and having a maturity within 9 months after the
date of acquisition thereof.
Cash Management Agreements - any agreement entered into from
time to time between any Borrower or any of its Subsidiaries, on the
one hand, and Bank or any of its Affiliates or any other banking or
financial institution, on the other, in connection with cash management
services for operating, collections, payroll and trust accounts of such
Borrower or its Subsidiaries provided by such banking or financial
institution, including automatic clearinghouse services, controlled
disbursement services, electronic funds transfer services, information
reporting services, lockbox services, stop payment services and wire
transfer services.
CERCLA - the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. Section 9601 et seq. and its implementing
regulations.
Chattel Paper - shall have the meaning given to "chattel
paper" in the UCC.
CIT - The CIT Group/Commercial Services, Inc.
Closing Date - the date on which all of the conditions
precedent in SECTION 10 of the Agreement are satisfied or waived and
the initial Loans are made under the Agreement.
Collateral - all of the Property and interests in Property
described in SECTION 6 of the Agreement; all Property described in any
of the Security Documents as security for the payment or performance of
any of the Obligations; and all other Property and interests in
Property that now or hereafter secure (or are intended to secure) the
payment and performance of any of the Obligations.
-5-
Commitment - at any date for any Lender, the aggregate amount
of such Lender's Revolver Commitment, and "Commitments" means the
aggregate amount of all Revolver Commitments.
Commitment Termination Date - the date that is the soonest to
occur of (i) the last day of the Term; (ii) the date on which either
Borrowers or Agent terminates the Commitments pursuant to SECTION 5.2
of the Agreement; or (iii) the date on which the Commitments are
automatically terminated pursuant to SECTION 11.2 of the Agreement.
Compliance Certificate - a Compliance Certificate to be
provided by Borrowers to Agent in accordance with, and in the form
annexed as EXHIBIT E to, the Agreement, and the supporting schedules to
be annexed thereto.
Consolidated - the consolidation in accordance with GAAP of
the accounts or other items as to which such term applies.
Consolidated EBIT - for any fiscal period, Borrowers' (i)
income (or loss) before interest and taxes, minus (ii) to the extent
deducted in determining such income (or loss), extraordinary gains,
plus (iii) to the extent deducted in determining such income (or loss),
(a) extraordinary losses, (b) any charge for a write-down in value with
respect to Borrowers' real property located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇, (▇) any charge for a write-down in value with respect
to the account receivable owing to Borrowers from Swiss Army Brands,
Inc., and (d) charges (not to exceed $1,000,000 in the aggregate)
incurred prior to October 2, 2004 related to closing Borrowers' fabric
cutting facility in Tampa, Florida.
Consolidated EBITDA - for any fiscal period, Borrowers' (i)
income (or loss) before interest and taxes, plus (ii) to the extent
deducted in determining such income (or loss), depreciation and
amortization, minus (iii) to the extent recognized in determining such
income (or loss), extraordinary gains plus (iv) to the extent deducted
in determining such income (or loss), (a) extraordinary losses, (b) any
charge for a write-down in value with respect to Borrowers' real
property located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, (▇) any
charge for a write-down in value with respect to the account receivable
owing to Borrowers from Swiss Army Brands, Inc., and (d) charges (not
to exceed $1,000,000 in the aggregate) incurred prior to October 2,
2004 related to closing Borrowers' fabric cutting facility in Tampa,
Florida.
Consolidated Fixed Charge Coverage Ratio - with respect to any
fiscal period, the ratio of (a) Consolidated EBITDA minus Capital
Expenditures minus income tax expense for such period to (b) the sum of
Consolidated Fixed Charges for such period.
Consolidated Fixed Charges - with respect to any fiscal
period, the sum of Borrowers' (a) Consolidated Interest Expense plus
(b) principal payments of Debt for Money Borrowed, plus (c) cash
Distributions whether declared or paid.
Consolidated EBIT/Consolidated Interest Expense - for any
date, the ratio of (i) Consolidated EBIT to (ii) Consolidated Interest
Expense.
Consolidated Interest Expense - for any period, the total
interest expense of Borrowers during such period, determined on a
Consolidated basis in accordance with GAAP.
-6-
Contingent Obligation - with respect to any Person, any
obligation of such Person arising from any guaranty, indemnity or other
assurance of payment or performance of any Debt, lease, dividend or
other obligation ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including (i) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the Ordinary Course of Business),
co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (ii) the obligation to
make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement, (iii) any
obligation of such Person, whether or not contingent, (A) to purchase
any such primary obligation or any Property constituting direct or
indirect security therefor, (B) to advance or supply funds (1) for the
purchase or payment of any such primary obligations 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, (C) to
purchase Property, Securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (D)
otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the
term "Contingent Obligation" shall not include any product warranties
extended in the Ordinary Course of Business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to
which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such Person may be liable
pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability with respect thereto (assuming such Person is
required to perform thereunder), as determined by such Person in good
faith.
Controlled Disbursement Account - a demand deposit account at
any time maintained by Borrowers at Bank and to which proceeds of Loans
may be wired from time to time.
Current Assets - at any date, the amount at which all of the
current assets of a Person would be properly classified as current
assets shown on a balance sheet at such date in accordance with GAAP
except that amounts due from Affiliates and investments in Affiliates
shall be excluded therefrom.
CWA - the Clean Water Act (33 U.S.C. Sections 1251 et seq.).
Debt - as applied to a Person means, without duplication: (i)
all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a
balance sheet of such Person as of the date as of which Debt is to be
determined, including Capitalized Lease Obligations; (ii) all
Contingent Obligations of such Person; (iii) all reimbursement
obligations in connection with letters of credit or letter of credit
guaranties issued for the account of such Person; and (iv) in the case
of a Borrower (without duplication), the Obligations. The Debt of a
Person shall include any recourse Debt of any partnership or joint
venture in which such Person is a general partner or joint venturer.
Debt Subordination Agreement - the Debt Subordination
Agreement dated June 10, 1998, among TSCI, Tropical and Agent, pursuant
to which TSCI has agreed to subordinate all indebtedness owing by
Tropical to TSCI to the prior payment in full of the Obligations.
Default - an event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, become an
Event of Default.
-7-
Default Rate - on any date, a rate per annum that is equal to
(i) in the case of each Loan outstanding on such date, 2% in excess of
the rate otherwise applicable to such Loan on such date, and (ii) in
the case of any of the other Obligations outstanding on such date, 2%
plus the highest Applicable Margin for Base Rate Loans in effect on
such date.
Deposit Account Assignment - the Collateral Assignment of
Deposit Accounts executed by each Borrower on June 10, 1998 in favor of
Agent for itself and the Pro Rata benefit of Lenders, as security for
the Obligations.
Deposit Accounts - all of a Person's demand, time, savings,
passbook, money market or other depository accounts, and all
certificates of deposit, maintained by such Person with any bank,
savings and loan association, credit union or other depository
institution.
Dilution - for the 12-month period preceding the date of
determination, the average of the percentage each month of gross
Accounts offset by discounts, returned items, credits, rebates,
concessions, contractual adjustments and similar items.
Dilution Reserve - a reserve equal to the product of the
Dilution Reserve Percentage multiplied by the face value of all
Eligible Accounts.
Dilution Reserve Percentage - at any time, the percentage (or
portion thereof) by which Dilution exceeds 7%.
Distribution - in respect of any entity, (i) any payment of
any dividends or other distributions on Equity Interests of the entity
(except distributions in such Equity Interests) and (ii) any purchase,
redemption or other acquisition or retirement for value of any Equity
Interests of the entity or any Affiliate of the entity unless made
contemporaneously from the net proceeds of the sale of Equity
Interests.
Document - shall have the meaning given to" document" in the
UCC.
Dollar Equivalent - with respect to any monetary amount in any
foreign currency at any date for the determination thereof, the amount
of Dollars obtained by converting such foreign currency into Dollars at
the spot rate for the purchase of Dollars with such foreign currency as
quoted by Bank at approximately 11:00 a.m. (Atlanta, Georgia time) on
the date of determination thereof.
Dollars and the sign $ - lawful money of the United States of
America.
Domestic Subsidiary - a Subsidiary of a Borrower (other than a
Subsidiary that is a Borrower) that is incorporated under the laws of a
state of the United States or the District of Columbia.
Dominion Account - a special account of Agent established by
Borrowers at a bank selected by Borrowers, but acceptable to Agent and
Lenders in their discretion, and over which Agent shall have sole and
exclusive access and control for withdrawal purposes.
Duty and Freight Reserve - such reserve as may be established
from time to time by Agent in its sole discretion in an amount
approximately equal to Borrowers' obligations for duty and freight
related to Inventory purchased under Letters of Credit.
-8-
Electronic Chattel Paper - shall have the meaning given to
"electronic chattel paper" in the UCC.
Eligible Account - an Account which arises in the Ordinary
Course of Business of a Borrower from the sale of goods, is payable in
Dollars, is subject to Agent's duly perfected Lien, and is deemed by
Agent, in its sole credit judgment, to be an Eligible Account. Without
limiting the generality of the foregoing, no Account shall be an
Eligible Account if: (i) it arises out of a sale made by a Borrower to
a Subsidiary or an Affiliate of any Borrower or to a Person controlled
by an Affiliate of any Borrower; (ii) it is unpaid for more than 60
days after the original due date shown on the invoice; (iii) it is due
or unpaid more than 90 days after the original invoice date; (iv) 50%
or more of the Accounts from the Account Debtor are not deemed Eligible
Accounts hereunder; (v) the total unpaid Accounts of the Account Debtor
exceed 20% (or for the period from the Closing Date through April 10,
2004, 60% for Wal-Mart Stores, Inc. and its Affiliates and after April
10, 2004, 50% for Wal-Mart Stores, Inc. and its Affiliates) of the
aggregate amount of all Eligible Accounts or exceed a credit limit
established by Agent for such Account Debtor, in each case, to the
extent of such excess; (vi) any covenant, representation or warranty
contained in the Agreement with respect to such Account has been
breached; (vii) the Account Debtor is also such Borrower's creditor or
supplier, or the Account Debtor has disputed liability with respect to
such Account, or the Account Debtor has made any claim with respect to
any other Account due from such Account Debtor to such Borrower, or the
Account otherwise is or may become subject to any right of setoff,
counterclaim, recoupment, reserve or chargeback, provided that, the
Accounts of such Account Debtor shall be ineligible only to the extent
of such offset, counterclaim, disputed amount, reserve or chargeback;
(viii) an Insolvency Proceeding has been commenced by or against the
Account Debtor or the Account Debtor has failed, suspended business or
ceased to be Solvent; (ix) it arises from a sale to an Account Debtor
with its principal office, assets or place of business outside the
United States, unless the sale is backed by an irrevocable letter of
credit issued or confirmed by a bank acceptable to Agent and that is in
form and substance acceptable to Agent and payable in the full amount
of the Account in freely convertible Dollars at a place of payment
within the United States and, if requested by Agent, such letter of
credit, or amounts payable thereunder, is assigned to Agent (with such
assignment acknowledged by the issuing or confirming bank); (x) it
arises from a sale to the Account Debtor on a ▇▇▇▇-and-hold, guaranteed
sale, sale-or-return, sale-on-approval, consignment or any other
repurchase or return basis; (xi) the Account Debtor is the United
States of America or any department, agency or instrumentality thereof,
unless the applicable Borrower is not prohibited from assigning the
Account and does assign its right to payment of such Account to Agent,
in a manner satisfactory to Agent, so as to comply with the Assignment
of Claims Act of 1940 (31 U.S.C. Section 3727 and 41 U.S.C. Section
15), or is a state, county or municipality, or a political subdivision
or agency thereof and Applicable Law disallows or restricts an
assignment of Accounts on which it is the Account Debtor; (xii) the
Account Debtor is located in any state which imposes conditions on the
right of a creditor to collect accounts receivable unless the
applicable Borrower has either qualified to transact business in such
state as a foreign entity or filed a Notice of Business Activities
Report or other required report with the appropriate officials in those
states for the then current year; (xiii) the Account Debtor is located
in a state in which such Borrower is deemed to be doing business under
the laws of such state and which denies creditors access to its courts
in the absence of qualification to transact business in such state or
of the filing of any reports with such state, unless such Borrower has
qualified as a foreign entity authorized to transact business in such
state or has filed all required reports; (xiv) the Account is subject
to a Lien other than a Permitted Lien; (xv) the goods giving rise to
such Account have not been delivered to and accepted by the Account
Debtor or the services giving rise to such Account have not been
performed by such Borrower and accepted by the Account Debtor or the
Account
-9-
otherwise does not represent a final sale; (xvi) the Account is
evidenced by Chattel Paper or an Instrument of any kind, or has been
reduced to judgment; (xvii) the Account represents a progress billing
or a retainage; (xviii) such Borrower has made any agreement with the
Account Debtor for any deduction therefrom, except for discounts or
allowances which are made in the Ordinary Course of Business for prompt
payment and which discounts or allowances are reflected in the
calculation of the face value of each invoice related to such Account;
(xix) such Borrower has made an agreement with the Account Debtor to
extend the time of payment thereof; (xx) the Account represents, in
whole or in part, a billing for interest, fees or late charges,
provided that such Account shall be ineligible only to the extent of
the amount of such billing; (xxi) the Account Debtor has made a partial
payment with respect to such Account; (xxii) it arises from the sale of
any Inventory that is not Eligible Inventory pursuant to clause (ii) of
the definition of "Eligible Inventory"; or (xxiii) it arises from a
retail sale of Inventory to a Person who is purchasing the same
primarily for personal, family or household purposes.
Eligible Assignee - a Person that is a Lender or a U.S. based
Affiliate of a Lender; a commercial bank, finance company, insurance
company or other financial institution, in each case that is organized
under the laws of the United States or any state, has total assets in
excess of $5 billion, extends credit of the type contemplated herein in
the Ordinary Course of Business and whose becoming an assignee would
not constitute a prohibited transaction under Section 4975 of ERISA or
any other Applicable Law and is acceptable to Agent and, unless a
Default or an Event of Default exists, Borrowers (such approval by
Borrowers, when required, not to be unreasonably withheld or delayed
and to be deemed given by Borrowers if no objection is received by the
assigning Lender and Agent from Borrowers within 2 Business Days after
notice of such proposed assignment has been provided by the assigning
Lender as set forth in SECTION 13.3 of the Agreement); and, at any time
that an Event of Default exists, any other Person acceptable to Agent
in its sole discretion.
Eligible Inventory - Inventory which is owned by a Borrower
(other than packaging materials, samples, bags and supplies), held for
sale by such Borrower in the Ordinary Course of Business of such
Borrower and which Agent, in its sole credit judgment, deems to be
Eligible Inventory. Without limiting the generality of the foregoing,
no Inventory shall be Eligible Inventory unless: (i) it is raw
materials or finished goods; (ii) it is owned by a Borrower and it is
not held by such Borrower on consignment from or subject to any
guaranteed sale, sale-or-return, sale-on-approval or repurchase
agreement with any supplier; (iii) it is in good, new and saleable
condition and is not damaged or defective; (iv) it is not slow-moving,
obsolete or unmerchantable and is not goods returned to such Borrower
by or repossessed from an Account Debtor; (v) it meets all standards
imposed by any Governmental Authority; (vi) it conforms in all respects
to the warranties and representations set forth in the Agreement and is
fully insured in the manner required by the Agreement; (vii) it is at
all times subject to Agent's duly perfected, first priority security
interest and no other Lien except a Permitted Lien; (viii) it is in
such Borrower's possession and control at a location in compliance with
the Agreement and is not in transit or outside the continental United
States, and it is not consigned to any Person; (ix) it is not the
subject of a negotiable warehouse receipt or other negotiable Document;
(x) it has not been sold or leased and such Borrower has not received
any deposit or down payment in respect thereof in anticipation of a
sale; (xi) it is not subject to any License Agreement or other
agreement that limits, conditions or restricts such Borrower's or
Agent's right to sell or otherwise dispose of such Inventory unless the
Licensor has entered into a Licensor/Lender Agreement with Agent; (xii)
it is not the subject of an Intellectual Property Claim; and (xiii) it
is not the subject of a store closing, liquidation, going-out-of
business or similar sale.
-10-
Environmental Certificate - the Certificate Regarding
Environmental Matters executed by a Senior Officer on June 10, 1998,
and containing representations and warranties concerning each
Borrower's and its Subsidiaries' compliance with Environmental Laws.
Environmental Laws - all federal, state, local and foreign
laws, rules, regulations, codes, ordinances, orders and consent decrees
(together with all programs, permits and guidance documents promulgated
by regulatory agencies, to the extent having the force of law), now or
hereafter in effect, that relate to public health (but excluding
occupational safety and health, to the extent regulated by OSHA) or the
protection or pollution of the environment, whether new or hereafter in
effect, including CERCLA, RCRA and CWA.
Environmental Release - a release as defined in CERCLA or
under any other applicable Environmental Laws.
Equipment - all of a Borrower's machinery, apparatus,
equipment, fittings, furniture, fixtures, motor vehicles and other
tangible personal Property (other than Inventory) of every kind and
description, whether now owned or hereafter acquired by such Borrower
and wherever located, and all parts, accessories and special tools
therefor, all accessions thereto, and all substitutions and
replacements thereof.
Equity Interest - the interest of (i) a shareholder in a
corporation, (ii) a partner (whether general or limited) in a
partnership (whether general, limited or limited liability), (iii) a
member in a limited liability company, or (iv) any other Person having
any other form of equity security or ownership interest.
ERISA - the Employee Retirement Income Security Act of 1974
and all rules and regulations from time to time promulgated thereunder.
Event of Default - as defined in SECTION 11 of the Agreement.
Exchange Note - a note or other similar security that is
registered under the Securities Act of 1933 and that is exchanged for a
Senior Subordinated Note.
Executive Order ▇▇. ▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ on
Terrorist Financing, effective September 24, 2001, as the same has
been, or shall hereafter be, renewed, extended, amended or replaced.
Extraordinary Expenses - all costs, expenses, fees (including
fees incurred to Agent Professionals) or advances that Agent or any
Lender may suffer or incur, whether prior to or after the occurrence of
an Event of Default, and whether prior to, after or during the pendency
of an Insolvency Proceeding of an Obligor, on account of or in
connection with (i) the audit, inspection, repossession, storage,
repair, appraisal, insuring, completion of the manufacture of,
preparing for sale, advertising for sale, selling, collecting or
otherwise preserving or realizing upon any Collateral; (ii) the defense
of Agent's Lien upon any Collateral or the priority thereof or any
adverse claim with respect to the Loans, the Loan Documents or the
Collateral asserted by any Obligor, any receiver or trustee for any
Obligor or any creditor or representative of creditors of any Obligor;
(iii) the settlement or satisfaction of any Liens upon any Collateral
(whether or not such Liens are Permitted Liens); (iv) the collection or
enforcement of any of the Obligations; (v) the negotiation,
documentation, and closing of any restructuring or forbearance
agreement with respect to the Loan Documents or Obligations; (vi)
amounts advanced by Agent pursuant to
-11-
SECTION 7.1.3 of the Agreement; (vii) the enforcement of any of the
provisions of any of the Loan Documents; or (viii) any payment under a
guaranty, indemnity or other payment agreement provided by Agent or
(with Agent's consent) any Lender, which is reimbursable to Agent or
such Lender by Borrowers pursuant to SECTION 2.4.2 of the Agreement.
Such costs, expenses and advances may include transfer fees, taxes,
storage fees, insurance costs, permit fees, utility reservation and
standby fees, legal fees, appraisal fees, brokers' fees and
commissions, auctioneers' fees and commissions, accountants' fees,
environmental study fees, wages and salaries paid to employees of any
Borrower or independent contractors in liquidating any Collateral,
travel expenses, all other fees and expenses payable or reimbursable by
Borrowers or any other Obligor under any of the Loan Documents, and all
other fees and expenses associated with the enforcement of rights or
remedies under any of the Loan Documents, but excluding compensation
paid to employees (including inside legal counsel who are employees) of
Agent.
Factor Intercreditor Agreement - the Assignment Agreement for
Proceeds of Credit Approved Receivables Purchase Agreement dated on or
about the date hereof among Tropical, CIT and Agent.
Federal Funds Rate - for any period, a fluctuating interest
rate per annum equal for each date during such period to the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) in Atlanta, Georgia by the
Federal Reserve Bank of Atlanta, or if such rate is not so published
for any day which is a Business Day, the average of the quotations for
such day on such transactions received by Agent from 3 federal funds
brokers of recognized standing selected by Agent.
Fee Letter - the fee letter agreement between Agent and
Borrowers dated December 24, 2003.
FEIN - with respect to any Person, the Federal Employer
Identification Number of such Person.
Fiscal Quarter - each consecutive period of 13 weeks beginning
on the first day of a Fiscal Year (and, in the case of any Fiscal Year
of 53 weeks, the 14-week period occurring at the end thereof).
Fiscal Year - the fiscal year of Borrowers and their
Subsidiaries for accounting and tax purposes, which ends on the
Saturday nearest September 30th of each year.
Fleet - Fleet Capital Corporation, a Rhode Island corporation.
Fleet Indemnitees - Fleet and all of its present and future
officers, directors and agents.
FLSA - the Fair Labor Standards Act of 1938.
Foreign Contractor - a Person that processes Inventory of a
Borrower and that is located outside of the United States.
Foreign Lender - any Lender that is organized under the laws
of a jurisdiction other than the laws of the United States, any state
thereof or the District of Columbia.
-12-
Foreign Subsidiary - a Subsidiary that is not a Domestic
Subsidiary.
Full Payment - with respect to any of the Obligations the
full, final and indefeasible payment in full of all of such
Obligations, which, in the case of contingent obligations owing by
Obligors to Fleet or any other Lender with respect to outstanding
Letters of Credit, shall not be deemed to have occurred until Obligors
shall Cash Collateralize each such outstanding Letter of Credit or
obtained a "back-to-back" letter of credit in respect thereof in an
amount equal to 105% of the face amount of such outstanding Letter of
Credit from a bank reasonably acceptable to Agent.
GAAP - generally accepted accounting principles in the United
States of America in effect from time to time.
General Intangibles - all general intangibles of a Borrower,
whether now owned or hereafter created or acquired by such Borrower,
including all choses in action, causes of action, company or other
business records, inventions, blueprints, designs, patents, patent
applications, trademarks, trademark applications, trade names, trade
secrets, service marks, goodwill, brand names, copyrights,
registrations, licenses, franchises, customer lists, permits, tax
refund claims, computer programs, operational manuals, internet
addresses and domain names, insurance refunds and premium rebates, all
claims under guaranties, security interests or other security held by
or granted to such Borrower to secure payment of any of any of such
Borrower's Accounts by an Account Debtor, all rights to indemnification
and all other intangible property of such Borrower of every kind and
nature (other than Accounts).
Goods - shall have the meaning given to "goods" in the UCC.
Governmental Approvals - all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with,
and reports to, all Governmental Authorities.
Governmental Authority - any federal, state, municipal,
national, foreign or other governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision
thereof or any entity or officer exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
any government or any court, in each case whether associated with a
state of the United States, the District of Columbia or a foreign
entity or government.
Guarantors - each Domestic Subsidiary and each other Person
who guarantees payment or performance of the whole or any part of the
Obligations.
Guaranty - each guaranty agreement now or hereafter executed
by a Guarantor in favor of Agent with respect to any of the
Obligations.
Hedging Agreement - any interest rate protection agreement,
foreign currency exchange agreement, forward contract, currency swap
agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging arrangement.
Hedging Agreement Reserve - on any date, a reserve imposed by
Agent in its discretion, or at the direction of the Required Lenders,
equal to the aggregate amount of the estimated liability of Borrowers
and their respective Subsidiaries under all Hedging Agreements with
Bank, any Lender or any of their respective Affiliates.
-13-
Indemnified Amount - in the case of Agent Indemnitees, the
amount of any loss, cost, expenses or damages suffered or incurred by
Agent Indemnitees and against which Lenders or any Obligor have agreed
to indemnify Agent Indemnitees pursuant to the terms of the Agreement
or any of the other Loan Documents; in the case of Lender Indemnitees,
the amount of any loss, cost, expenses or damages suffered or incurred
by Lender Indemnitees and against which Lender or any Obligor have
agreed to indemnify Lender Indemnitees pursuant to the terms of the
Agreement or any of the other Loan Documents; and, in the case of Fleet
Indemnitees, the amount of any loss, cost, expenses or damages suffered
or incurred by Fleet Indemnitees and against which Lenders or any
Obligor have agreed to indemnify Fleet Indemnitees pursuant to the
terms of the Agreement or any of the other Loan Documents.
Indemnified Claim - any and all claims, demands, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
awards, remedial response costs, expenses or disbursements of any kind
or nature whatsoever (including reasonable attorneys', accountants',
consultants' or paralegals' fees and expenses), whether arising under
or in connection with the Loan Documents, any Applicable Law (including
any Environmental Laws) or otherwise, that may now or hereafter be
suffered or incurred by any Indemnitee and whether suffered or incurred
in or as a result of any investigation, litigation, arbitration or
other judicial or non-judicial proceeding or any appeals related
thereto.
Indemnitees - the Agent Indemnitees, the Lender Indemnitees
and the Fleet Indemnitees.
Initial Lenders - Fleet, Wachovia Bank, National Association
and ▇▇▇▇▇ Fargo Foothill, Inc., each in its capacity as a Lender under
the Agreement on the Closing Date.
Insolvency Proceeding - any action, case or proceeding
commenced by or against a Person, or any agreement of such Person, for
(i) the entry of an order for relief under any chapter of the
Bankruptcy Code or other insolvency or debt adjustment law (whether
state, federal or foreign), (ii) the appointment of a receiver,
trustee, liquidator or other custodian for such Person or any part of
its Property, (iii) an assignment or trust mortgage for the benefit of
creditors of such Person, or (iv) the liquidation, dissolution or
winding up of the affairs of such Person.
Instrument - shall have the meaning ascribed to the term
"instrument" in the UCC.
Intellectual Property - all intellectual and similar Property
of a Person of every kind and description, including inventions,
designs, patents, patent applications, copyrights, trademarks, service
marks, tradenames, mask works, trade secrets, confidential or
proprietary information, know-how, software and databases and all
embodiments or fixations thereof and related documentation,
registrations and franchises, all books and records describing or used
in connection with the foregoing and all licenses, or other rights to
use any of the foregoing.
Intellectual Property Claim - the assertion by any Person of a
claim (whether asserted in writing, by action, suit or proceeding or
otherwise) that any Borrower's ownership, use, marketing, sale or
distribution of any Inventory, Equipment, Intellectual Property or
other Property is violative of any ownership or right to use any
Intellectual Property of such Person.
Interest Period - shall have the meaning ascribed to it in
SECTION 2.1.3 of the Agreement.
Inventory - shall have the meaning ascribed to the term
"inventory" in the UCC and shall include all goods intended for sale or
lease by a Borrower, or for display or demonstration; all
-14-
work in process, all raw materials and other materials and supplies of
every nature and description used or which might be used in connection
with the manufacture, printing, packing, shipping, advertising,
selling, leasing or furnishing such goods or otherwise used or consumed
in such Borrower's business (but excluding Equipment).
Inventory Formula Amount - on any date of determination
thereof, an amount equal to the lesser of (i) $40,000,000 or (ii) 85%,
or such lesser percentage as Agent may in its sole credit judgment
determine from time to time, of the Net Orderly Liquidation Value of
Eligible Inventory (provided, however, that in no event shall the
Qualified In-Transit Inventory Advance exceed $10,000,000 in the
aggregate).
Inventory Reserve - such reserves as may be established from
time to time by Agent with respect to reflect changes in the
saleability of any Eligible Inventory in the Ordinary Course of
Business or such other factors as may negatively impact the Value of
any Eligible Inventory. Without limiting the generality of the
foregoing, such reserves may include reserves based on obsolescence,
seasonality, theft or other shrinkage, imbalance, change in composition
or mix, or markdowns.
Inverse Inventory Percentage - 100% minus the product of (i)
85%, multiplied by (ii) the Net Orderly Liquidation Value Percentage.
Investment Property - shall have the meaning given to
"investment property" in the UCC and shall include all Securities
(whether certificated or uncertificated), security entitlements,
securities accounts, commodity contracts and commodity accounts.
LC Application - an application by any or all Borrowers to
Bank (on which Fleet may be a co-applicant), pursuant to a form
approved by Bank, for the issuance of a Letter of Credit, that is
submitted to Bank at least 3 Business Days prior to the requested
issuance of such Letter of Credit.
LC Conditions - the following conditions, the satisfaction of
each of which is required before Fleet shall be obligated to provide
any LC Support to Bank for the issuance of a Letter of Credit: (i) each
of the conditions set forth in SECTION 10 of the Agreement has been and
continues to be satisfied, including the absence of any Default or
Event of Default; (ii) after giving effect to the issuance of the
requested Letter of Credit and all other unissued Letters of Credit for
which an LC Application has been signed by Fleet, the LC Outstandings
would not exceed $50,000,000 with respect to documentary Letters of
Credit and $5,000,000 with respect to standby Letters of Credit and no
Out-of-Formula Condition would exist, and, if no Revolver Loans are
outstanding, the LC Outstandings do not, and would not upon the
issuance of the requested Letter of Credit, exceed the Borrowing Base;
(iii) such Letter of Credit has an expiration date that is no more than
365 days from the date of issuance in the case of standby letters of
credit and no more than 180 days from the date of issuance in the case
of documentary letters of credit and, in either event, such expiration
date is at least 10 days prior to the last Business Day of the Term;
and (iv) the currency in which payment is to be made under the Letter
of Credit is Dollars.
LC Documents - any and all agreements, instruments and
documents (other than an LC Application or an LC Support) required by
Bank or other issuer of a Letter of Credit to be executed by Borrowers
or any other Person and delivered to Bank or such issuer for the
issuance of a Letter of Credit.
-15-
LC Facility - a subfacility of the Revolver Facility
established pursuant to SECTION 1.3 of the Agreement.
LC Outstandings - on any date of determination thereof, an
amount (in Dollars) equal to the sum of (i) all amounts then due and
payable by any Obligor on such date by reason of any payment that is
made by Bank under a Letter of Credit and that has not been repaid to
Bank by Fleet under an LC Support, (ii) all amounts then due and
payable by any Obligor on such date by reason of any payment that is
made on or before such date by Fleet under any LC Support plus (iii)
the aggregate undrawn amount of all Letters of Credit which are then
outstanding or for which an LC Application has been delivered to and
accepted by Bank under an LC Application theretofore submitted to Bank
and (if) all fees and other amounts due or to become due in respect of
Letters of Credit outstanding on such date.
LC Request - a Letter of Credit Procurement Request from
Borrowers to Fleet in the form of EXHIBIT I annexed hereto.
LC Reserve - at any date, the sum of (i) the Inverse Inventory
Percentage of the face amount of all documentary Letters of Credit that
are outstanding on such date, plus (ii) 100% of the face amount of all
standby Letters of Credit outstanding on such date.
LC Support - a guaranty or other support agreement from Fleet
in favor of Bank pursuant to which Fleet shall guarantee or otherwise
assure the payment or performance by the parties (other than Fleet, if
a party) to an LC Application of such parties' obligations with respect
to such Letter of Credit, including the obligation of such parties to
reimburse Bank for any payment made by Bank under such Letter of
Credit.
Lender Indemnitee - a Lender in its capacity as a lender under
the Agreement and its present and future officers, directors, agents
and attorneys.
Lenders - shall have the meaning given to it in the preamble
to the Agreement and shall include Fleet (whether in its capacity as a
provider of Loans under SECTION 1 of the Agreement, as the provider of
Settlement Loans under SECTION 3.1.3 of the Agreement, or as the
procurer of Letters of Credit under SECTION 1.3 of the Agreement) and
any other Person who may from time to time become a "Lender" under the
Agreement.
Letter of Credit - any standby letter of credit or documentary
letter of credit issued by Bank for the account of Borrowers.
Letter-of-Credit Right - a right of a Borrower to payment or
performance under a letter of credit (whether the letter of credit is
written or electronic), whether or not such Borrower has demanded or is
at the time entitled to demand payment or performance.
LIBOR Lending Office - with respect to a Lender, the office
designated as a LIBOR Lending Office for such Lender on the signature
page hereof (or on any Assignment and Acceptance, in the case of an
assignee) and such other office of such Lender or any of its Affiliates
that is hereafter designated by written notice to Agent.
LIBOR Loan - a Loan, or portion thereof, during any period in
which it bears interest at a rate based upon the applicable Adjusted
LIBOR Rate.
-16-
LIBOR Rate - with respect to an Interest Period, the rate per
annum reported to Agent by Bank as the rate at which deposits of U.S.
Dollars approximately equal in principal amount to or comparable to the
amount of the LIBOR Loan to which such Interest Period relates and for
a term comparable to such Interest Period are offered to Bank by prime
banks in the London interbank foreign currency deposits market at
approximately 11:00 a.m., London time, 2 Business Days prior to the
commencement of such Interest Period. Each determination by Agent of
any LIBOR Rate shall, in the absence of any manifest error, be
conclusive.
License Agreement - any agreement between a Borrower and a
Licensor pursuant to which such Borrower is authorized to use any
Intellectual Property in connection with the manufacturing, marketing,
sale or other distribution of any Inventory of such Borrower.
Licensor - any Person from whom a Borrower obtains the right
to use (whether on an exclusive or non-exclusive basis) any
Intellectual Property in connection with such Borrower's manufacture,
marketing, sale or other distribution of any Inventory.
Licensor/Lender Agreement - an agreement between Agent and a
Licensor by which Agent is given the unqualified right, vis-a-vis such
Licensor, to enforce Agent's Liens with respect to and to dispose of a
Borrower's Inventory with the benefit of any Intellectual Property
applicable thereto, irrespective of such Borrower's default under any
License Agreement with such Licensor and which is otherwise in form and
substance satisfactory to Agent.
Lien - any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on common law, statute or contract. The
term "Lien" shall also include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases
and other title exceptions and encumbrances affecting Property. For the
purpose of the Agreement, a Borrower shall be deemed to be the owner of
any Property which it has acquired or holds subject to a conditional
sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for
security purposes.
Lien Subordination Agreement - the Lien Subordination
Agreement dated September 9, 2003, between Agent and Fleet, and
acknowledged by Borrowers and Lenders, as the same may be amended,
restated, supplemented or modified from time to time with the consent
of all Lenders.
Lien Waiver - an agreement duly executed in favor of Agent, in
form and content acceptable to Agent, by which (i) for locations leased
by an Obligor, an owner or mortgagee of premises upon which any
Property of an Obligor is located agrees to waive or subordinate any
Lien it may have with respect to such Property in favor of Agent's Lien
therein and to permit Agent to enter upon such premises and remove such
Property or to use such premises to store or dispose of such Property,
or (ii) for locations at which any Obligor places Inventory with a
warehouseman or a processor, such warehouseman or processor agrees to
waive or subordinate any Lien it may have with respect to such Property
in favor of Agent's Lien therein and to permit Agent to enter upon such
premises and remove such Property or to use such premises to store or
dispose of such Property.
Loan - a Revolver Loan (and each Base Rate Loan and LIBOR Loan
comprising such Loan).
-17-
Loan Account - the loan account established by each Lender on
its books pursuant to SECTION 4.8 of the Agreement.
Loan Documents - the Agreement, the Other Agreements and the
Security Documents.
Loan Year - a period commencing each calendar year on the same
month and day as the date of the Agreement and ending on the same month
and day in the immediately succeeding calendar year, with the first
such period (i.e. the first Loan Year) to commence on the date of the
Agreement.
Margin Stock - shall have the meaning ascribed to it in
Regulation U and of the Board of Governors.
Material Adverse Effect - the effect of any event, condition,
action, omission or circumstance, which, alone or when taken together
with other events, conditions, actions, omissions or circumstances
occurring or existing concurrently therewith, (i) has a material
adverse effect upon the business, operations, Properties or condition
(financial or otherwise) of any Obligor; (ii) has or could be
reasonably expected to have any material adverse effect whatsoever upon
the validity or enforceability of the Agreement or any of the other
Loan Documents; (iii) has any material adverse effect upon the value of
the whole or any material part of the Collateral, the Liens of Agent
with respect to the Collateral or the priority of any such Liens; (iv)
materially impairs the ability of any other Obligor to perform its
obligations under this Agreement or any of the other Loan Documents,
including repayment of any of the Obligations when due; or (v)
materially impairs the ability of Agent or any Lender to enforce or
collect the Obligations or realize upon any of the Collateral in
accordance with the Loan Documents and Applicable Law.
Material Contract - an agreement to which an Obligor is a
party (other than the Loan Documents) (i) which is deemed to be a
material contract as provided in Regulation S-K promulgated by the SEC
under the Securities Act of 1933 or (ii) for which breach, termination,
cancellation, nonperformance or failure to renew could reasonably be
expected to have a Material Adverse Effect.
Maximum Rate - the maximum non-usurious rate of interest
permitted by Applicable Law that at any time, or from time to time, may
be contracted for, taken, reserved, charged or received on the Debt in
question or, to the extent that at any time Applicable Law may
thereafter permit a higher maximum non-usurious rate of interest, then
such higher rate. Notwithstanding any other provision hereof, the
Maximum Rate shall be calculated on a daily basis (computed on the
actual number of days elapsed over a year of 365 or 366 days, as the
case may be).
Money Borrowed - as applied to any Obligor, without
duplication, (i) Debt arising from the lending of money by any other
Person to such Obligor; (ii) Debt, whether or not in any such case
arising from the lending of money by another Person to such Obligor,
(A) which is represented by notes payable or drafts accepted that
evidence extensions of credit, (B) which constitutes obligations
evidenced by bonds, debentures, notes or similar instruments, or (C)
upon which interest charges are customarily paid (other than accounts
payable) or that was issued or assumed as full or partial payment for
Property; (iii) Debt that constitutes a Capitalized Lease Obligation;
and (iv) Debt of such Obligor under any guaranty of obligations that
would constitute Debt for Money Borrowed under clauses (i) through
(iii) hereof, if owed directly by such
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Obligor; but excluding reimbursement obligations with respect to
letters of credit or guaranties of letters of credit.
▇▇▇▇▇'▇ - ▇▇▇▇▇'▇ Investors Services, Inc.
Mortgage - the mortgage executed by Tropical in favor of Agent on
September 9, 2003 by which Tropical granted and conveyed to Agent Liens
upon the Real Estate, as security for payment of the Obligations.
Multiemployer Plan - has the meaning set forth in Section
4001(a)(3) of ERISA.
Net Disposition Proceeds - with respect to a disposition of
any Collateral, proceeds (including cash receivable (when received) by
way of deferred payment) received by a Borrower in cash from the sale,
lease, transfer or other disposition of Collateral, including insurance
proceeds and awards of compensation received with respect to the
destruction or condemnation of all or part of the Collateral, net of:
(i) the reasonable and customary costs and expenses of such sale,
lease, transfer or other disposition (including legal fees and sales
commissions); (ii) amounts applied to repayment of Debt (other than the
Obligations) secured by a Permitted Lien on such Collateral disposed of
that is senior to Agent's Liens; and (iii) in connection with any sale
of Collateral, a reasonable reserve (not to exceed 5% of the total
purchase price) for post-closing adjustments to the purchase price,
provided that upon the expiration of not more than 90 days after the
sale any remaining reserve balance is remitted to Agent for application
to the Obligations.
Net Orderly Liquidation Value - at any time, with respect to
any Inventory means, as determined by the most recent Orderly
Liquidation Value Appraisal, a net dollar amount expected to be
realized at an orderly negotiated sale of such Inventory held within a
reasonable period of time.
Net Orderly Liquidation Value Percentage - on any date of
determination thereof, a fraction the numerator of which shall be the
Net Orderly Liquidation Value and the denominator of which shall be the
book value of Borrower's Inventory as of the date of the most recent
Orderly Liquidation Value Appraisal.
Notes - each Revolver Note and any other promissory note
executed by Borrowers at Agent's request to evidence any of the
Obligations.
Notice of Borrowing - as defined in SECTION 3.1.1(i) of the
Agreement.
Notice of Conversion/Continuation - as defined in SECTION
2.1.2(ii) of the Agreement.
Obligations - in each case, whether now in existence or
hereafter arising, (i) the principal of, and interest and premium, if
any, on, the Loans; (ii) all LC Outstandings and all other obligations
of any Obligor to Agent, Fleet or Bank arising in connection with the
issuance of any Letter of Credit; and (iii) all other Debts, covenants,
duties and obligations (including Contingent Obligations) now or at any
time or times hereafter owing by any Obligor to Agent or any Lender
under or pursuant to the Agreement or any of the other Loan Documents
or owing by any Obligor to Agent, Fleet, Bank, any Lender or any of
their respective Affiliates with respect to Banking Relationship Debt,
whether evidenced by any note or other writing, whether arising from
any extension of credit, opening of a letter of credit, acceptance,
loan, guaranty, indemnification or otherwise and whether direct or
indirect, absolute or contingent, due or to become due, primary or
secondary, or joint or several, including all interest, charges,
expenses, fees or other
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sums (including Extraordinary Expenses) chargeable to any or all
Obligors under the Agreement or under any of the other Loan Documents.
Obligor - each Borrower and each Guarantor, and any other
Person that is at any time liable for the payment of the whole or any
part of the Obligations or that has granted in favor of Agent a Lien
upon any of any of such Person's assets to secure payment of any of the
Obligations.
Orderly Liquidation Value Appraisal - an appraisal, in form
and substance satisfactory to Agent, conducted by The Ozer Group or
such other appraisal company of similar qualifications and standing
acceptable to Agent pursuant to which such appraisal company determines
the expected dollar amount to be realized at an orderly negotiated sale
of the Inventory held within a reasonable period of time.
Ordinary Course of Business - with respect to any transaction
involving any Person, the ordinary course of such Person's business, as
conducted by such Person in accordance with past practices and
undertaken by such Person in good faith and not for the purpose of
evading any covenant or restriction in any Loan Document.
Organization Documents - with respect to any Person, its
charter, certificate or articles of incorporation, bylaws, articles of
organization, operating agreement, members agreement, partnership
agreement, voting trust, or similar agreement or instrument governing
the formation or operation of such Person.
OSHA - the Occupational Safety and Hazard Act of 1970.
Other Agreements - the Notes, each LC Support, the Agreement
Regarding Environmental Matters dated September 9, 2003, between
Tropical and Agent, the Environmental Certificate, the Factor
Intercreditor Agreement, and any and all agreements, instruments and
documents (other than the Agreement and the Security Documents),
heretofore, now or hereafter executed by any Borrower, any Obligor or
any other Person and delivered to Agent or any Lender in respect of the
transactions contemplated by the Agreement.
Out-of-Formula Condition - as defined in SECTION 1.1.2 of the
Agreement.
Out-of-Formula Loan - a Revolver Loan made or existing when an
Out-of-Formula Condition exists or the amount of any Revolver Loan
which, when funded, results in an Out-of-Formula Condition.
Participant - as defined in SECTION 13.2.1.
Participating Lender - as defined in SECTION 1.3.2(i).
Patent Assignment - each Patent Collateral Assignment and
Security Agreement executed by Borrowers in favor of Agent on June 10,
1998 and by which Borrowers have assigned to Agent, for its benefit as
Agent and for the Pro Rata benefit of Lenders, as security for the
Obligations, all of Borrowers' right, title and interest in and to the
patents described therein.
Payment Account - an account maintained by Agent to which all
monies from time to time deposited to a Dominion Account shall be
transferred and all other payments shall be sent in immediately
available federal funds.
-20-
Payment Intangibles - shall have the meaning ascribed to
"payment intangible" in the UCC.
Payment Items - all checks, drafts, or other items of payment
payable to a Borrower, including proceeds of any of the Collateral.
Pending Revolver Loans - at any date, the aggregate principal
amount of all Revolver Loans which have been requested in any Notice of
Borrowing received by Agent but which have not theretofore been
advanced by Agent or Lenders.
Permitted Contingent Obligations - Contingent Obligations
arising from endorsements of Payment Items for collection or deposit in
the Ordinary Course of Business; Contingent Obligations arising from
Hedging Agreements entered into in the Ordinary Course of Business
pursuant to this Agreement or with Agent's prior written consent;
Contingent Obligations of any Borrower and its Subsidiaries existing as
of the Closing Date, including extensions and renewals thereof that do
not increase the amount of such Contingent Obligations as of the date
of such extension or renewal; Contingent Obligations incurred in the
Ordinary Course of Business with respect to surety bonds, appeal bonds,
performance bonds and other similar obligations; Contingent Obligations
arising under indemnity agreements to title insurers to cause such
title insurers to issue to Agent title insurance policies; Contingent
Obligations with respect to customary indemnification obligations in
favor of purchasers in connection with dispositions of Equipment
permitted under SECTION 7.4.2 of the Agreement; Contingent Obligations
consisting of reimbursement obligations from time to time owing by any
Borrower to Bank with respect to Letters of Credit (but in no event to
include reimbursement obligations at any time owing by a Borrower to
any other Person that may issue letters of credit for the account of
Borrowers); and other Contingent Obligations not to exceed $500,000 in
the aggregate at any time.
Permitted Lien - a Lien of a kind specified in SECTION 9.2.5
of the Agreement.
Permitted Purchase Money Debt - Purchase Money Debt of
Borrowers and their Subsidiaries that is secured by no Lien or only by
a Purchase Money Lien, provided that the aggregate amount of Purchase
Money Debt outstanding at any time does not exceed $1,000,000 and the
incurrence of such Purchase Money Debt does not violate any limitation
in the Loan Documents regarding Capital Expenditures. For the purposes
of this definition, the principal amount of any Purchase Money Debt
consisting of capitalized leases shall be computed as a Capitalized
Lease Obligation.
Person - an individual, partnership, corporation, limited
liability company, limited liability partnership, joint stock company,
land trust, business trust, or unincorporated organization, or a
Governmental Authority.
Plan - an employee benefit plan now or hereafter maintained
for employees of a Borrower that is covered by Title IV of ERISA.
Pledge Agreements - each Stock Pledge Agreement executed by a
Borrower in favor of Agent and by which such Borrower has pledged to
Agent, for its benefit as Agent and for the Pro Rata benefit of
Lenders', as security for the Obligations, 66% of the capital stock of
each Foreign Subsidiary of such Borrower and all of the capital stock
of each Domestic Subsidiary of such Borrower.
-21-
Pro Rata - a share of or in all Loans, participations in LC
Outstandings, liabilities, payments, proceeds, collections, Collateral
and Extraordinary Expenses, which share for any Lender on any date
shall be a percentage (expressed as a decimal, rounded to the ninth
decimal place) arrived at by dividing the amount of the Commitment of
such Lender on such date by the aggregate amount of the Commitments of
all Lenders on such date (provided, that, if the Commitments have been
terminated, solely for purposes of this definition and the calculations
herein, the Commitments shall be deemed to survive).
Projections - Borrowers' and their Subsidiaries' forecasted
Consolidated balance sheets, profit and loss statements and cash flow
statements, all prepared on a consistent basis with Borrowers' and
their Subsidiaries' historical financial statements, together with
appropriate supporting details and a statement of underlying
assumptions; and prior to the Closing Date and thereafter until Agent
and Lenders receive new projections pursuant to SECTION 9.1.5 hereof,
the projections of Borrowers delivered to Agent on December 11, 2003.
Properly Contested - in the case of any Debt of an Obligor
(including any Taxes) that is not paid as and when due or payable by
reason of such Obligor's bona fide dispute concerning its liability to
pay same or concerning the amount thereof, (i) such Debt is being
properly contested in good faith by appropriate proceedings promptly
instituted and diligently conducted; (ii) such Obligor has established
appropriate reserves as shall be required in conformity with GAAP;
(iii) the non-payment of such Debt will not have a Material Adverse
Effect and will not result in a forfeiture of any assets of such
Obligor; (iv) no Lien is imposed upon any of such Obligor's assets with
respect to such Debt unless such Lien is at all times junior and
subordinate in priority to the Liens in favor of Agent (except only
with respect to property taxes that have priority as a matter of
applicable state law) and enforcement of such Lien is stayed during the
period prior to the final resolution or disposition of such dispute;
(v) if the Debt results from, or is determined by the entry, rendition
or issuance against an Obligor or any of its assets of a judgment,
writ, order or decree, enforcement of such judgment, writ, order or
decree is stayed pending a timely appeal or other judicial review; and
(vi) if such contest is abandoned, settled or determined adversely (in
whole or in part) to such Obligor, such Obligor forthwith pays such
Debt and all penalties, interest and other amounts due in connection
therewith.
Property - any interest in any kind of property or asset,
whether real, personal or mixed and whether tangible or intangible.
Purchase Money Debt - means and includes (i) Debt (other than
the Obligations) for the payment of all or any part of the purchase
price of any fixed assets, (ii) any Debt (other than the Obligations)
incurred at the time of or within 10 days prior to or after the
acquisition of any fixed assets for the purpose of financing all or any
part of the purchase price thereof, and (iii) any renewals, extensions
or refinancings (but not any increases in the principal amounts)
thereof outstanding at the time.
Purchase Money Lien - a Lien upon fixed assets which secures
Purchase Money Debt, but only if such Lien shall at all times be
confined solely to the fixed assets acquired through the incurrence of
the Purchase Money Debt secured by such Lien and such Lien constitutes
a purchase money security interest under the UCC.
Qualified In-Transit Inventory - Inventory that is in-transit
outside of the United States to a location in the United States and for
which a documentary Letter of Credit has been issued by Bank.
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Qualified In-Transit Inventory Advance - the face amount of
outstanding documentary Letters of Credit times the product of (i) 85%
multiplied by (ii) the Net Orderly Liquidation Value Percentage, less
the Duty and Freight Reserve.
RCRA - the Resource Conservation and Recovery Act (42 U.S.C.
Sections 6991-6991i) and all rules and regulations promulgated pursuant
thereto.
Real Estate - the real Property of Tropical located at (i) ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, (ii) ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇ and (iii) ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇.
Refinancing Conditions - the following conditions, each of
which must be satisfied before Refinancing Debt shall be permitted
under SECTION 9.2.3 of the Agreement: (i) the Refinancing Debt is in an
aggregate principal amount that does not exceed the aggregate principal
amount of the Debt being extended, renewed or refinanced, (ii) the
Refinancing Debt has a later or equal final maturity and a longer or
equal weighted average life than the Debt being extended, renewed or
refinanced, (iii) the Refinancing Debt does not bear a rate of interest
that exceeds a market rate (as determined in good faith by a Senior
Officer) as of the date of such extension, renewal or refinancing, (iv)
if the Debt being extended, renewed or refinanced is subordinate to the
Obligations, the Refinancing Debt is subordinated to the same extent,
(v) the covenants contained in any instrument or agreement relating to
the Refinancing Debt are no less favorable to Borrowers than those
relating to the Debt being extended, renewed or refinanced, and (vi) at
the time of and after giving effect to such extension, renewal or
refinancing, no Default or Event of Default shall exist.
Refinancing Debt - Debt for Money Borrowed that is permitted
by SECTION 9.2.3 and that is the subject or the result of an extension,
renewal or refinancing.
Regulation D - Regulation D of the Board of Governors.
Register - the register maintained by Agent in accordance with
SECTION 4.8.2 of the Agreement.
Reimbursement Date - as defined in SECTION 1.3.1(iii) of the
Agreement.
Rent Reserve - such reserve as may be established from time to
time by Agent in its reasonable credit judgment in an amount
approximately equal to three (3) times the aggregate monthly rent
charges and fees payable by Borrowers for leased locations at which
Borrowers keep, store or maintain any Collateral and for which Agent
has not received a Lien Waiver.
Rentals - as defined in SECTION 9.2.13 of the Agreement.
Reportable Event - any of the events set forth in Section
4043(b) of ERISA.
Required Lenders - at any date of determination thereof,
Lenders having Commitments representing at least 66% of the aggregate
Commitments at such time; provided, however, that if any Lender shall
be in breach of any of its obligations hereunder to Borrowers or Agent,
including any breach resulting from its failure to honor its Commitment
in accordance with the terms of this Agreement, then, for so long as
such breach continues, the term "Required Lenders" shall mean Lenders
(excluding each Lender that is in breach of its obligations under the
Agreement) having Commitments representing at least 66% of the
aggregate Commitments
-23-
(excluding the Commitments of each Lender that is in breach of its
obligations under the Agreement) at such time; provided further,
however, that if the Commitments have been terminated, the term
"Required Lenders" shall mean Lenders (excluding each Lender that is in
breach of its obligations hereunder) holding Loans (including
Settlement Loans) representing at least 66% of the aggregate principal
amount of Loans (including Settlement Loans) outstanding at such time.
Restricted Investment - any acquisition of Property by a
Borrower or any of its Subsidiaries in exchange for cash or other
Property, whether in the form of an acquisition of Equity Interests or
Debt, or the purchase or acquisition by such Borrower or any of its
Subsidiary of any other Property, or a loan, advance, capital
contribution or subscription, except acquisitions of the following: (i)
fixed assets to be used in the Ordinary Course of Business of such
Borrower or any of its Subsidiaries so long as the acquisition costs
thereof constitute Capital Expenditures permitted hereunder; (ii) goods
held for sale or lease or to be used in the manufacture of goods or the
provision of services by such Borrower or any of its Subsidiaries in
the Ordinary Course of Business; (iii) Current Assets arising from the
sale or lease of goods or the rendition of services in the Ordinary
Course of Business of such Borrower or any of its Subsidiaries; (iv)
investments in Subsidiaries to the extent such investments are existing
on the Closing Date; and (v) Cash Equivalents to the extent they are
not subject to rights of offset in favor of any Person other than Agent
or a Lender; (vi) loans and other advances of money to the extent not
prohibited by SECTION 9.2.2.
Restrictive Agreement - an agreement (other than any of the
Loan Documents) that, if and for so long as an Obligor or any
Subsidiary of such Obligor is a party thereto, would prohibit,
condition or restrict such Obligor's or Subsidiary's right to incur or
repay Debt for Money Borrowed (including any of the Obligations); grant
Liens upon any of such Obligor's or Subsidiary's assets (including
Liens granted in favor of Agent pursuant to the Loan Documents);
declare or make Distributions; amend, modify, extend or renew any
agreement evidencing Debt for Money Borrowed (including any of the Loan
Documents); or repay any Debt owed to another Obligor.
Revolver Commitment - at any date for any Lender, the
obligation of such Lender to make Revolver Loans and to purchase
participations in LC Outstandings pursuant to the terms and conditions
of the Agreement, which shall not exceed the principal amount set forth
opposite such Lender's name under the heading "Revolver Commitment" on
the signature pages of the Agreement or the signature page of the
Assignment and Acceptance by which it became a Lender, as modified from
time to time pursuant to the terms of the Agreement or to give effect
to any applicable Assignment and Acceptance; and "Revolver Commitments"
means the aggregate principal amount of the Revolver Commitments of all
Lenders, the maximum amount of which shall be $70,000,000.
Revolver Loan - a loan made by Lenders as provided in SECTION
1.1 of the Agreement (including any Out-of-Formula Loan) or a
Settlement Loan funded solely by Fleet.
Revolver Note - a Revolver Note to be executed by Borrowers in
favor of each Lender in the form of EXHIBIT A attached hereto, which
shall be in the face amount of such Lender's Revolver Commitment and
which shall evidence all Revolver Loans (other than Settlement Loans)
made by such Lender to Borrowers pursuant to the Agreement.
S&P - Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.
-24-
Schedule of Accounts - as defined in SECTION 7.2.1 of the
Agreement.
SEC - Securities and Exchange Commission.
Secured Parties - Agent, Lenders, Fleet as the procurer of
Letters of Credit, Fleet as the provider of Settlement Loans, Bank as
the issuer of Letters of Credit, or Bank, Lenders or any of their
respective Affiliates as the obligee with respect to any Banking
Relationship Debt.
Security Documents - the Patent Assignment, each Guaranty, the
Trademark Security Agreement, the Deposit Account Assignment, the
Business Interruption Insurance Assignment, the Mortgage, the Pledge
Agreements and all other instruments and agreements now or at any time
hereafter securing the whole or any part of the Obligations.
Senior Officer - the chairman of the board of directors, the
president or the chief financial officer of, or in-house legal counsel
to, a Borrower.
Senior Subordinated Documents - the Senior Subordinated
Indenture, the Senior Subordinated Notes and all documents, agreements
and instruments entered into in connection therewith or related
thereto.
Senior Subordinated Indenture - the Indenture dated June 10,
1998, among Tropical, certain of its Subsidiaries and the Trustee.
Senior Subordinated Notes - the Senior Subordinated Unsecured
Notes, issued by Tropical pursuant to the Senior Subordinated Indenture
in the aggregate amount of $100,000,000, and payable in 2008, together
with any Exchange Notes at any time issued with respect thereto.
Settlement Date - as defined in SECTION 3.1.3(i) of the
Agreement.
Settlement Loan - as defined in SECTION 3.1.3(ii) of the
Agreement.
Settlement Report - a report delivered by Agent to Lenders
summarizing the amount of the outstanding Revolver Loans as of the
Settlement Date and the calculation of the Borrowing Base as of such
Settlement Date.
Software - shall have the meaning ascribed to the term
"software" in the UCC.
Solvent - as to any Person, such Person (i) owns Property
whose fair salable value is greater than the amount required to pay all
of such Person's debts (including contingent, subordinated, unmatured
and unliquidated liabilities), (ii) owns Property whose present fair
salable value (as defined below) is greater than the probable total
liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such borrower as they become absolute and
matured, (iii) is able to pay all of its debts as such debts mature,
(iv) has capital that is not unreasonably small for its business and is
sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage, (v) is not "insolvent"
within the meaning of Section 101(32) of the Bankruptcy Code, and (vi)
has not incurred (by way of assumption or otherwise) any obligations or
liabilities (contingent or otherwise) under any of the Loan Documents,
or made any conveyance pursuant to in connection therewith, with actual
intent to hinder, delay or defraud either present or future creditors
of such Person or any of its Subsidiaries. As used herein, the term
"fair salable value" of a Person's assets means the
-25-
amount that may be realized within a reasonable time, either through
collection or sale of such assets at the regular market value, based
upon the amount that could be obtained for such assets within such
period by a capable and diligent seller from an interested buyer who is
willing (but is under no compulsion) to purchase under ordinary selling
conditions.
Stated Amount - on any date with respect to a Letter of
Credit, the total amount then available to be drawn in Dollars.
Statutory Reserves - on any date, the percentage (expressed as
a decimal) established by the Board of Governors which is the then
stated maximum rate for all reserves (including all basic, emergency,
supplemental or other marginal reserve requirements and taking into
account any transitional adjustments or other scheduled in reserve
requirements) applicable to any member bank of the Federal Reserve
System in respect to Eurocurrency Liabilities (or any successor
category of liabilities under Regulation D). Such reserve percentage
shall include those imposed pursuant to said Regulation D. The
Statutory Reserve shall be adjusted automatically on and as of the
effective date of any change in such percentage.
Subordinated Debt - unsecured Debt incurred by a Borrower that
is expressly subordinated and made junior to the payment and
performance in full of the Obligations and contains terms and
conditions (including terms relating to interest, fees, repayment and
subordination) satisfactory to Agent and Required Lenders, including
the Senior Subordinated Notes.
Subsidiary - any Person in which more than 20% of its
outstanding Voting Securities or more than 20% of all Equity Interests
is owned directly or indirectly by a Borrower, by one or more other
Subsidiaries of such Borrower or by a Borrower and one or more other
Subsidiaries.
Supporting Obligations - shall have the meaning given to
"supporting obligations" in the UCC.
Taxes - any present or future taxes, levies, imposts, duties,
fees, assessments, deductions, withholdings or other charges of
whatever nature, including income, receipts, excise, property, sales,
use, transfer, license, payroll, withholding, social security and
franchise taxes now or hereafter imposed or levied by the United States
or any other Governmental Authority and all interest, penalties,
additions to tax and similar liabilities with respect thereto, but
excluding, in the case of each Lender, taxes imposed on or measured by
the net income or overall gross receipts of such Lender.
Term - as defined in SECTION 5.1 of the Agreement.
Term Loan Agreement - the Amended and Restated Loan and
Security Agreement dated as of September 9, 2003, between Fleet and
Tropical, as the same may be amended, restated, supplemented or
modified from time to time.
Term Loan Documents - the Term Loan Agreement and all other
agreements, documents or instruments now or at any time evidencing,
securing, guaranteeing or otherwise executed and delivered in
connection with the Term Loan Agreement, as the same may be amended,
restated, supplemented or modified from time to time.
Term Loan Obligations - Debt of Borrowers (or any of them) at
any time outstanding
-26-
under the Term Loan Documents.
Trademark Security Agreement - the Trademark Security
Agreement executed by Borrowers in favor of Agent on June 10, 1998 and
by which Borrowers assigned to Agent, for its benefit as Agent and for
the Pro Rata benefit of Lenders, as security for the Obligations, all
of Borrowers' right, title and interest in and to all of its trademarks
described therein.
Transferee - as defined in SECTION 13.3.3 of the Agreement.
Trustee - SunTrust Bank, a Georgia banking corporation.
Type - any type of a Loan determined with respect to the
interest option applicable thereto, which shall be either a LIBOR Loan
or a Base Rate Loan.
UCC - the Uniform Commercial Code (or any successor statute)
as adopted and in force in the State of Georgia or, when the laws of
any other state govern the method or manner of the perfection or
enforcement of any security interest in any of the Collateral, the
Uniform Commercial Code (or any successor statute) of such state.
Upstream Payment - a payment or distribution of cash or other
Property by a Subsidiary of a Borrower to such Borrower, whether in
repayment of Debt owed by such Subsidiary to such Borrower, as a
dividend or distribution on account of such Borrower's ownership of
Equity Interests or otherwise.
USA Patriot Act - the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).
Value - with reference to the value of Eligible Inventory,
value determined on the basis of the lower of cost or market of such
Eligible Inventory, with the cost thereof calculated on a first-in,
first-out basis determined in accordance with GAAP.
Voting Securities - Equity Interests of any class or classes
of a corporation or other entity the holders of which are ordinarily,
in the absence of contingencies, entitled to elect a majority of the
corporate directors or Persons performing similar functions.
ACCOUNTING TERMS. Unless otherwise specified herein, all terms
of an accounting character used in the Agreement shall be interpreted, all
accounting determinations under the Agreement shall be made, and all financial
statements required to be delivered under the Agreement shall be prepared in
accordance with GAAP, applied on a basis consistent with the most recent audited
Consolidated financial statements of Borrowers and their Subsidiaries heretofore
delivered to Agent and Lenders and using the same method for inventory valuation
as used in such audited financial statements, except for any change required by
GAAP; provided, however, that for purposes of determining Borrowers' compliance
with financial covenants contained in SECTION 9.3 of the Agreement, all
accounting terms shall be interpreted and all accounting determinations shall be
made in accordance with GAAP as in effect on the date of the Agreement and
applied on a basis consistent with the application used in the financial
statements referred to in SECTION 8.1.9 of the Agreement, unless (i ) Borrowers
shall have objected to determining such compliance on such basis at the time of
delivery of such financial statements or (ii) Agent or any Lender shall so
object in writing within 30 days after the delivery of such financial
statements, in either of which events such calculations shall be made on a basis
consistent with
-27-
those used in the preparation of the latest financial statements as to which
such objection shall not have been made. In the event of any change in GAAP that
occurs after the date of the Agreement and that is material to Borrowers, Agent
and Lenders shall have the right to require either that conforming adjustments
be made to any financial covenants set forth in the Agreement, or the components
thereof, that are affected by such change or that Borrowers report its financial
condition based on GAAP as in effect immediately prior to the occurrence of such
change.
OTHER TERMS. All other terms contained in the Agreement shall
have, when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.
CERTAIN MATTERS OF CONSTRUCTION. The terms "herein," "hereof"
and "hereunder" and other words of similar import refer to the Agreement as a
whole and not to any particular section, paragraph or subdivision. Any pronoun
used shall be deemed to cover all genders. 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 means "to but excluding." The
section titles, table of contents and list of exhibits appear as a matter of
convenience only and shall not affect the interpretation of the Agreement. All
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations; to any agreement, instrument or
other documents (including any of the Loan Documents) shall include any and all
modifications and supplements thereto and any and all restatements, extensions
or renewals thereof to the extent such modifications, supplements, restatements,
extensions or renewals of any such documents are permitted by the terms thereof;
to any Person (including Agent, a Borrower, a Lender or Fleet) shall mean and
include the successors and permitted assigns of such Person; to "including" and
"include" shall be understood to mean "including, without limitation" (and, for
purposes of the Agreement and each other Loan Document, the parties agree that
the rule of ejusdem generis shall not be applicable to limit a general
statement, which is followed by or referable to an enumeration of specific
matters to matters similar to the matters specifically mentioned); or to the
time of day shall mean the time of day on the day in question in Atlanta,
Georgia, unless otherwise expressly provided in the Agreement. A Default or an
Event of Default shall be deemed to exist at all times during the period
commencing on the date that such Default or Event of Default occurs to the date
on which such Default or Event of Default is waived in writing by Agent pursuant
to the Agreement or, in the case of a Default, is cured within any period of
cure expressly provided in this Agreement; and an Event of Default shall
"continue" or be "continuing" until such Event of Default has been waived in
writing by Lender. All calculations of Value shall be in Dollars, all Loans
shall be funded in Dollars and all Obligations shall be repaid in Dollars.
Whenever the phrase "to the best of a Borrower's knowledge" or words of similar
import relating to the knowledge or the awareness of a Borrower are used in the
Agreement or other Loan Documents, such phrase shall mean and refer to (i) the
actual knowledge of a Senior Officer of any Borrower or (ii) the knowledge that
a Senior Officer would have obtained if they had engaged in good faith and
diligent performance of his duties, including the making of such reasonably
specific inquiries as may be necessary of the employees or agents of a Borrower
and a good faith attempt to ascertain the existence or accuracy of the matter to
which such phrase relates. Any Lien referred to in the Agreement or any of the
other Loan Documents as having been created in favor of Agent, any agreement
entered into by Agent pursuant to the Agreement or any of the other Loan
Documents, any payment made by or to, or funds received by, Agent pursuant to or
as contemplated by any of the Loan Documents, or any other act taken or omitted
to be taken by Agent shall, unless otherwise expressly provided, be created,
entered into, made or received, or taken or omitted for the benefit or account
of the Agent and the Lenders.
-28-
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-29-
IN WITNESS WHEREOF, this Appendix has been duly executed in Atlanta,
Georgia, on January 9, 2004.
BORROWERS:
TROPICAL SPORTSWEAR INT'L CORPORATION
ATTEST:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Treasurer
ATTEST: TROPICAL SPORTSWEAR COMPANY, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
and Chief Financial Officer
ATTEST: SAVANE INTERNATIONAL CORP.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Treasurer
ATTEST: APPAREL NETWORK CORPORATION
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Treasurer
ATTEST: TSI BRANDS, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
ATTEST: TSIL, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-30-
ATTEST: DUCK HEAD APPAREL COMPANY, LLC
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Treasurer
ATTEST: DELTA MERCHANDISING, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Treasurer
LENDERS:
FLEET CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Title: Senior Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Title: Director
▇▇▇▇▇ FARGO FOOTHILL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Title: Vice President
AGENT:
FLEET CAPITAL CORPORATION,
as Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Title: Senior Vice President
-31-
EXHIBIT A
FORM OF REVOLVER NOTE
January ___, 2004
U.S. $__________.__
Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, TROPICAL SPORTSWEAR INT'L CORPORATION, a
Florida corporation ("Tropical"), TROPICAL SPORTSWEAR COMPANY, INC., a Delaware
corporation ("TSCI"), SAVANE INTERNATIONAL CORP., a Texas corporation
("Savane"), APPAREL NETWORK CORPORATION, a Florida corporation ("Apparel"), TSI
BRANDS, INC., a Delaware corporation ("TSI"), TSIL, INC., a Delaware corporation
("TSIL"), DUCK HEAD APPAREL COMPANY, LLC, a Georgia limited liability company
("Duck Head"), and DELTA MERCHANDISING, INC., a South Carolina corporation
("Delta"; Tropical, TSCI, Savane, Apparel, TSI, TSIL, Duck Head and Delta
collectively referred to hereinafter as "Borrowers" and individually as a
"Borrower"), hereby unconditionally, and jointly and severally, promise to pay
to the order of ___________ (herein, together with any subsequent holder hereof,
called the "Holder") the principal sum of $_______________ or such lesser sum as
may constitute Holder's Pro Rata share of the outstanding principal amount of
all Revolver Loans pursuant to the terms of the Loan Agreement (as defined
below) on the date on which such outstanding principal amounts become due and
payable pursuant to SECTION 4 of the Loan Agreement, in strict accordance with
the terms thereof. Borrowers likewise unconditionally, and jointly and
severally, promise to pay to Holder interest from and after the date hereof on
Holder's Pro Rata share of the outstanding principal amount of Revolver Loans at
such interest rates, payable at such times, and computed in such manner as are
specified in SECTION 2.1 of the Loan Agreement, in strict accordance with the
terms thereof.
This Revolver Note ("Note") is issued pursuant to, and is one of the "Revolver
Notes" referred to in, the Second Amended and Restated Loan and Security
Agreement dated January __, 2004 (as the same may be amended from time to time,
the "Loan Agreement"), among Borrowers, Fleet Capital Corporation, as collateral
and administrative agent (in such capacity, "Agent") for itself and the
financial institutions from time to time parties thereto as lenders ("Lenders"),
and such Lenders, and Holder is and shall be entitled to all benefits thereof
and of all Loan Documents executed and delivered in connection therewith. This
Note is subject to certain restrictions on transfer or assignment as provided in
the Loan Agreement. All capitalized terms used herein, unless otherwise defined
herein, shall have the meanings ascribed to such terms in the Loan Agreement.
The repayment of the principal balance of this Note is subject to the provisions
of SECTION 4 of the Loan Agreement. The entire unpaid principal balance and all
accrued interest on this Note shall be due and payable immediately upon the
termination of the Commitments as set forth in SECTION 5.2 of the Loan
Agreement.
All payments of principal and interest shall be made in Dollars in immediately
available funds as specified in the Loan Agreement.
Upon or after the occurrence of an Event of Default and for so long as such
Event of Default exists, the principal balance and all accrued interest of this
Note may be declared (or shall become) due and payable in the manner and with
the effect provided in the Loan Agreement, and the unpaid principal balance
hereof shall bear interest at the Default Rate as and when provided in SECTION
2.1.5 of the Loan Agreement. Borrowers jointly and severally agree to pay, and
save Holder harmless against, any liability for the payment of, all costs and
expenses, including, but not limited to, reasonable attorneys' fees, if this
Note is collected by or through an attorney-at-law.
All principal amounts of Revolver Loans made by Holder to Borrowers pursuant to
the Loan Agreement, and all accrued and unpaid interest thereon, shall be deemed
outstanding under this Note and shall continue to be owing by Borrowers until
paid in accordance with the terms of this Note and the Loan Agreement.
In no contingency or event whatsoever, whether by reason of advancement of the
proceeds hereof or otherwise, shall the amount paid or agreed to be paid to
Holder for the use, forbearance or detention of money advanced hereunder exceed
the highest lawful rate permissible under any law which a court of competent
jurisdiction may deem applicable hereto; and, in the event of any such payment
inadvertently paid by Borrowers or inadvertently received by Holder, such excess
sum shall be, at Borrowers' option, returned to Borrowers forthwith or credited
as a payment of principal, but shall not be applied to the payment of interest.
It is the intent hereof that Borrowers not pay or
contract to pay, and that Holder not receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by Borrowers under Applicable Law.
Time is of the essence of this Note. To the fullest extent permitted by
Applicable Law, each Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
Wherever possible each provision of this Note shall be interpreted in such a
manner as to be effective and valid under Applicable Law, but if any provision
of this Note shall be prohibited or invalid under Applicable Law, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or remaining provisions of this
Note. No delay or failure on the part of Holder in the exercise of any right or
remedy hereunder shall operate as a waiver thereof, nor as an acquiescence in
any default, nor shall any single or partial exercise by Holder of any right or
remedy preclude any other right or remedy. Holder, at its option, may enforce
its rights against any Collateral securing this Note without Agent or Holder
enforcing its rights against any Borrower, any Guarantor of the indebtedness
evidenced hereby or any other property or indebtedness due or to become due to
any Borrower. Each Borrower agrees that, without releasing or impairing any
Borrower's liability hereunder, Holder or Agent may at any time release,
surrender, substitute or exchange any Collateral securing this Note and may at
any time release any party primarily or secondarily liable for the indebtedness
evidenced by this Note.
The rights of Holder and obligations of Borrowers hereunder shall be construed
in accordance with and governed by the laws (without giving effect to the
conflict of law principles thereof) of the State of Georgia. This Note is
intended to take effect as an instrument under seal under Georgia law.
-2-
IN WITNESS WHEREOF, Borrowers have caused this Note to be executed under seal
and delivered by its duly authorized officers on the date first above written.
BORROWERS:
ATTEST: TROPICAL SPORTSWEAR INT'L CORPORATION
_______________________________ By: _______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: TROPICAL SPORTSWEAR COMPANY, INC.
_______________________________ By: _______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: SAVANE INTERNATIONAL CORP.
_______________________________ By: _______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: APPAREL NETWORK CORPORATION
_______________________________ By: _______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: TSI BRANDS, INC.
_______________________________ By: _______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
-3-
ATTEST: TSIL, INC.
_______________________________ By: _______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: DUCK HEAD APPAREL MERCHANDISING, INC.
_______________________________ By: _______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: DELTA MERCHANDISING, INC.
_______________________________ By: _______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
-4-
EXHIBIT C
FORM OF NOTICE OF CONVERSION/CONTINUATION
Date ______________,______
Fleet Capital Corporation, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration Officer
Re: Second Amended and Restated Loan and Security Agreement dated
January ___, 2004, by and among Tropical Sportswear Int'l
Corporation, a Florida corporation ("Tropical"), Tropical
Sportswear Company, Inc., a Delaware corporation ("TSCI"),
Savane International Corp., a Texas corporation ("Savane"),
Apparel Network Corporation, a Florida corporation
("Apparel"), TSI Brands, Inc., a Delaware corporation ("TSI"),
TSIL, Inc., a Delaware corporation ("TSIL"), Duck Head Apparel
Company, LLC, a Georgia limited liability company ("Duck
Head"), and Delta Merchandising, Inc., a South Carolina
corporation ("Delta"; Tropical, TSCI, Savane, Apparel, TSI,
TSIL, Duck Head and Delta collectively referred to hereinafter
as "Borrowers" and individually as a "Borrower"), Fleet
Capital Corporation, as collateral and administrative agent
for certain Lenders from time to time parties thereto, and
such Lenders (as at any time amended, the "Loan Agreement")
Gentlemen:
This Notice of Conversion/Continuation is delivered to you pursuant to Section
2.1.2 of the Loan Agreement. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings attributable thereto in the Loan Agreement.
Borrowers hereby give notice of its request as follows:
Check as applicable:
: A conversion of Loans from one Type to another, as follows:
(i) The requested date of the proposed conversion is
______________, 20__ (the "Conversion Date");
(ii) The Type of Loans to be converted pursuant hereto are
presently __________________ [select either LIBOR
Loans or Base Rate Loans] in the principal amount of
$_____________ outstanding as of the Conversion Date;
(iii) The portion of the aforesaid Loans to be converted on
the Conversion Date is $_____________ (the
"Conversion Amount");
(iv) The Conversion Amount is to be converted into a
____________ [select either a LIBOR Loan or a Base
Rate LOAN] (the "Converted Loan") on the Conversion
Date.
(v) [In the event a Borrower selects a LIBOR Loan:]
Borrowers hereby request that the Interest Period for
such Converted Loan be for a duration of _____
[insert length of Interest Period].
: A continuation of LIBOR Loans for new Interest Period, as follows:
(i) The requested date of the proposed continuation is
_______________, 20__ (the "Continuation Date");
(ii) The aggregate amount of the LIBOR Loans subject to
such continuation is $__________________;
(iii) The duration of the selected Interest Period for the
LIBOR Loans which are the subject of such
continuation is: _____________ [select duration of
applicable Interest Period];
Each Borrower hereby ratifies and reaffirms all of its liabilities and
obligations under the Loan Documents and certifies that no Default or Event of
Default exists on the date hereof.
Borrowers have caused this Notice of Conversion/Continuation to be executed and
delivered by their duly authorized representative, this _______ day of
______________, 20__.
TROPICAL SPORTSWEAR INT'L CORPORATION
By:____________________________________
Title:______________________________
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EXHIBIT D
FORM OF NOTICE OF BORROWING
Date ______________, 20__
Fleet Capital Corporation, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration Officer
Re: Second Amended and Restated Loan and Security Agreement dated
January ___, 2004, by and among Tropical Sportswear Int'l
Corporation, a Florida corporation ("Tropical"), Tropical
Sportswear Company, Inc., a Delaware corporation ("TSCI"),
Savane International Corp., a Texas corporation ("Savane"),
Apparel Network Corporation, a Florida corporation
("Apparel"), TSI Brands, Inc., a Delaware corporation ("TSI"),
TSIL, Inc., a Delaware corporation ("TSIL"), Duck Head Apparel
Company, LLC, a Georgia limited liability company ("Duck
Head"), and Delta Merchandising, Inc., a South Carolina
corporation ("Delta"; Tropical, TSCI, Savane, Apparel, TSI,
TSIL, Duck Head and Delta collectively referred to hereinafter
as "Borrowers" and individually as a "Borrower"), Fleet
Capital Corporation, as collateral and administrative agent
for certain Lenders from time to time parties thereto, and
such Lenders (as at any time amended, the "Loan Agreement")
Gentlemen:
This Notice of Borrowing is delivered to you pursuant to Section 3.1.1 of the
Loan Agreement. Unless otherwise defined herein, capitalized terms used herein
shall have the meanings attributable thereto in the Loan Agreement. Borrowers
hereby request a Revolver Loan in the aggregate principal amount of
$______________, to be made on _____________, _____, and to consist of:
Check as applicable: Base Rate Loans in the aggregate principal amount of
$_____________
LIBOR Loans in the aggregate principal amount of $___________, with Interest
Periods as follows:
(i) As to $_____________, an Interest Period of ______
month(s);
(ii) As to $_____________, an Interest Period of ______
months;
(iii) As to $_____________, an Interest Period of ______
months.
Each Borrower hereby ratifies and reaffirms all of its liabilities and
obligations under the Loan Documents and hereby certifies that no Default or
Event of Default exists on the date hereof.
Borrowers have caused this Notice of Borrowing to be executed and delivered by
their duly authorized representative, this ______ day of _____________, 20__.
TROPICAL SPORTSWEAR INT'L CORPORATION
By:____________________________________
Title:______________________________
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EXHIBIT E
COMPLIANCE CERTIFICATE
[Letterhead of Borrower]
__________________, 20__
Fleet Capital Corporation, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned, the chief financial officer of Tropical Sportswear Int'l
Corporation, a Florida corporation ("Tropical"), Tropical Sportswear Company,
Inc., a Delaware corporation ("TSCI"), Savane International Corp., a Texas
corporation ("Savane"), Apparel Network Corporation, a Florida corporation
("Apparel"), TSI Brands, Inc., a Delaware corporation ("TSI"), TSIL, Inc., a
Delaware corporation ("TSIL"), Duck Head Apparel Company, LLC, a Georgia limited
liability company ("Duck Head"), and Delta Merchandising, Inc., a South Carolina
corporation ("Delta"; Tropical, TSCI, Savane, Apparel, TSI, TSIL, Duck Head and
Delta collectively referred to hereinafter as "Borrowers" and individually as a
"Borrower"), gives this certificate to Fleet Capital Corporation ("Agent") in
accordance with the requirements of Section 9.1.3 of that certain Second Amended
and Restated Loan and Security Agreement dated January ___, 2004, among
Borrowers, Agent and the Lenders referenced therein ("Loan Agreement").
Capitalized terms used in this Certificate, unless otherwise defined herein,
shall have the meanings ascribed to them in the Loan Agreement.
1. Based upon my review of the balance sheets and statements
of income of Borrowers and their Subsidiaries for the [Fiscal Year] [quarterly
period] ending __________________, 20__, copies of which are attached hereto, I
hereby certify that:
(a) Average Availability for the period commencing on
__________, 20___ and ending on _____________, 20___, was
$________________;
(b) Consolidated Fixed Charge Coverage Ratio is ____ to 1.0;
(c) Consolidated EBITDA is $_______;
(d) Consolidated EBIT to Consolidated Interest Expense is
____to 1.0:
(e) Capital Expenditures during the period and for the Fiscal
Year to date total $_________ for Borrowers;
2. No Default exists on the date hereof, other than:
__________________________________________________________________ [if none, so
state]; and
3. No Event of Default exists on the date hereof, other than
______________________________________________________________ [if none, so
state].
4. As of the date hereof, each Borrower is current in its
payment of all accrued rent and other charges to Persons who own or lease any
premises where any of the Collateral is located, and there are no pending
disputes or claims regarding any Borrower's failure to pay or delay in payment
of any such rent or other charges.
5. Attached hereto is a schedule showing the calculations that
support Borrowers' compliance [non-compliance] with the financial covenants, as
shown above.
Very truly yours,
______________________________
Chief Financial Officer
-2-
EXHIBIT F
OPINION LETTER REQUIREMENTS
With respect to each Borrower and each Guarantor, Borrowers' and such
Guarantor's counsel's opinion letter should address the following in a manner
satisfactory to Agent:
1. Each Borrower's and each Guarantor's due incorporation, valid
existence, good standing and qualification as a foreign corporation.
2. Corporate name of each Borrower and each Guarantor.
3. Each Borrower's and each Guarantor's corporate power to execute,
deliver and perform the Loan Documents to which it is a signatory.
4. Each Borrower's and each Guarantor's due authorization to execute,
deliver and perform the Loan Documents to which it is a signatory, and its due
execution and delivery thereof.
5. Each Borrower's and each Guarantor's execution, delivery and
performance of the Loan Documents do not (a) violate the articles or bylaws, (b)
cause a breach or default by such Borrower or such Guarantor under any
agreement, (c) violate any law, regulation, judgment or order, or (d) result in
or require a Lien or other encumbrance other than in favor of Agent.
6. The number of issued and outstanding shares of stock of each Borrower.
7. The Loan Documents as legal, valid and binding obligations, enforceable
against all Obligors in accordance with their respective terms, subject to
standard bankruptcy and other creditor's rights and equity exceptions.
8. Counsel's lack of knowledge of pending or threatened litigation or
other proceedings, except as disclosed in Loan Agreement.
9. Absence of any registration, filing, consent or approval requirement of
a Governmental Authority in connection with the execution, delivery and
performance of the Loan Documents.
10. Non-violation by the Loan Documents of any Applicable Law relating to
interest or usury.
11. Due payment of all applicable taxes and fees required to be paid in
connection with the Loans, the Loan Documents, UCC-1 financing statements and
other Security Documents.
12. Creation in favor of Agent of a duly perfected security interest in the
Collateral described in the Loan Agreement and the Security Documents.
13. Absence of violation of Section 7 of the Securities Exchange Act of
1934, as amended, any regulations issued pursuant thereto, or Regulations T, U
and X of the Board of Governors of the Federal Reserve System, by the
transactions contemplated by the Loan Documents.
14. Absence of requirement under the laws of applicable states for Agent or
Lenders to qualify in such states to enter into or enforce the provisions of the
Loan Documents.
EXHIBIT G
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated as of ______, 20__
Reference is made to that certain Second Amended and Restated Loan and Security
Agreement dated January ___, 2004, by and among TROPICAL SPORTSWEAR INT'L
CORPORATION, a Florida corporation ("Tropical"), TROPICAL SPORTSWEAR COMPANY,
INC., a Delaware corporation ("TSCI"), SAVANE INTERNATIONAL CORP., a Texas
corporation ("Savane"), APPAREL NETWORK CORPORATION, a Florida corporation
("Apparel"), TSI BRANDS, INC., a Delaware corporation ("TSI"), TSIL, INC., a
Delaware corporation ("TSIL"), DUCK HEAD APPAREL COMPANY, LLC, a Georgia limited
liability company ("Duck Head"), and DELTA MERCHANDISING, INC., a South Carolina
corporation ("Delta"; Tropical, TSCI, Savane, Apparel, TSI, TSIL, Duck Head and
Delta collectively referred to hereinafter as "Borrowers" and individually as a
"Borrower"), FLEET CAPITAL CORPORATION, in its capacity as collateral and
administrative agent ("Agent") for the financial institutions from time to time
party to the Loan Agreement ("Lenders"), and such Lenders. Capitalized terms
used herein and not otherwise defined shall have the meanings assigned to such
terms in the Loan Agreement.
________________________________ (the "Assignor") and
____________________________ (the "Assignee") agree as follows:
1. [(A)] Assignor hereby assigns to Assignee and Assignee hereby
purchases and assumes from Assignor (i) a principal amount of $________ of the
outstanding Revolver Loans held by Assignor and $___________ of participations
of Assignor in LC Outstandings (which amount[s], according to the records of
Agent, represent[s] _______% of the total principal amount of outstanding
Revolver Loans and LC Outstandings) and (ii) a principal amount of $__________
of Assignor's Revolver Commitment (which amount includes Assignor's outstanding
Revolver Loans being assigned to Assignee pursuant to clause [A] (i) above and
which, according to the records of Agent, represents (____%) of the total
Revolver Commitments of Lenders under the Loan Agreement) (the "Assigned
Interest"), together with an interest in the Loan Documents corresponding to the
Assigned Interest. This Agreement shall be effective from the date (the
"Assignment Effective Date") on which Assignor receives both (x) the principal
amount of the Assigned Interest in the Loans on the Assignment Effective Date,
if any, (y) a copy of this Agreement duly executed by Assignee, and (z) the
Notice of Assignment relating thereto executed by all necessary parties. From
and after the Assignment Effective Date, Assignee hereby expressly assumes, and
undertakes to perform, all of Assignor's obligations in respect of Assignor's
Commitments to the extent, and only to the extent, of Assignee's Assigned
Interest, and all principal, interest, fees and other amounts which would
otherwise be payable to or for Assignor's account in respect of the Assigned
Interest shall be payable to or for Assignee's account, to the extent such
amounts have accrued subsequent to the Assignment Effective Date.
2. Assignor (i) represents that as of the date hereof, the
aggregate of its Commitments under the Loan Agreement (without giving effect to
assignments thereof, which have not yet become effective) is $__________, and
the outstanding balance of its Loans and participations in LC Outstandings
(unreduced by any assignments thereof, which have not yet become effective) is
$__________; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or any other instrument or document furnished pursuant thereto, other
than that Assignor is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse
claim; [and] (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrowers, the
performance or observance by Borrowers of any of their obligations under the
Loan Agreement or any of the Loan Documents[; and (iv) attaches the Notes
held by it and requests that Agent exchange such Notes for new Notes payable to
Assignee and the Assignor in the principal amounts set forth on Schedule A
hereto].
3. Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Loan Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 9.1.3 thereof, and
copies of such other Loan Documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (iii) agrees that it shall, independently and without reliance upon
the Assignor and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Agreement; (iv) confirms that it is eligible to
become an Assignee; (v) appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Agreement as are
delegated to Agent by the terms thereof, together with such powers as are
incidental thereto; (vi) agrees that it will strictly observe and perform all
the obligations that are required to be performed by it as a "Lender" under the
terms of the Loan Agreement and the other Loan Documents; and (vii) agrees that
it will keep confidential all information with respect to Borrowers furnished to
it by Borrowers or the Assignor to the extent provided in the Loan Agreement.
4. Assignor acknowledges and agrees that it will not sell or
otherwise dispose of the Assigned Interest or any portion thereof, or grant any
participation therein, in a manner which, or take any action in connection
therewith which, would violate the terms of any of the Loan Documents.
5. This Agreement and all rights and obligations shall be
interpreted in accordance with and governed by the laws of the State of Georgia.
If any provision hereof would be invalid under Applicable Law, then such
provision shall be deemed to be modified to the extent necessary to render it
valid while most nearly preserving its original intent; no provision hereof
shall be affected by another provision's being held invalid.
6. Each notice or other communication hereunder shall be in
writing, shall be sent by messenger, by telecopy or facsimile transmission or by
first-class mail, shall be deemed given when sent and shall be sent as follows:
(a) If to Assignee, to the following address (or to
such other address as Assignee may designate from
time to time):
__________________________
__________________________
__________________________
(b) If to Assignor, to the following address (or to
such other address as Assignor may designate from
time to time):
__________________________
__________________________
__________________________
__________________________
Payments hereunder shall be made by wire transfer of immediately available
Dollars as follows: If to Assignee, to the following account (or to such other
account as Assignee may designate from time to time):
__________________________
ABA No.___________________
__________________________
Account No._______________
Reference: ______________________
If to Assignor, to the following account (or to such other account as Assignor
may designate from time to time):
-2-
__________________________
__________________________
__________________________
ABA No.___________________
For Account of:___________
Reference: _______________
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed and delivered by their respective duly authorized
officers, as of the date first above written.
__________________________________
("Assignor")
By: ______________________________
Title: ___________________________
__________________________________
("Assignee")
By: ______________________________
Title: ___________________________
-3-
SCHEDULE A TO ASSIGNMENT AND ACCEPTANCE
-4-
EXHIBIT H
FORM OF NOTICE
Reference is made to (i) the Second Amended and Restated Loan and Security
Agreement dated January ___, 2004 (as at any time amended, the "Loan Agreement")
among TROPICAL SPORTSWEAR INT'L CORPORATION, a Florida corporation ("Tropical"),
TROPICAL SPORTSWEAR COMPANY, INC., a Delaware corporation ("TSCI"), SAVANE
INTERNATIONAL CORP., a Texas corporation ("Savane"), APPAREL NETWORK
CORPORATION, a Florida corporation ("Apparel"), TSI BRANDS, INC., a Delaware
corporation ("TSI"), TSIL, INC., a Delaware corporation ("TSIL"), DUCK HEAD
APPAREL COMPANY, LLC, a Georgia limited liability company ("Duck Head"), and
DELTA MERCHANDISING, INC., a South Carolina corporation ("Delta"; Tropical,
TSCI, Savane, Apparel, TSI, TSIL, Duck Head and Delta collectively referred to
hereinafter as "Borrowers" and individually as a "Borrower"), FLEET CAPITAL
CORPORATION in its capacity as collateral and administrative agent ("Agent") for
the financial institutions from time to time party to the Loan Agreement
("Lenders"), and such Lenders, and (ii) the Assignment and Acceptance dated as
of ____________, 20__ (the "Assignment Agreement") between __________________
(the "Assignor") and ____________________ (the "Assignee"). Except as otherwise
defined herein, capitalized terms used herein which are defined in the Loan
Agreement are used herein with the respective meanings specified therein.
The Assignor hereby notifies Borrowers and Agent of Assignor's intent to assign
to Assignee pursuant to the Assignment Agreement a principal amount of (i)
$________ of the outstanding Revolver Loans and participations in LC
Outstandings held by Assignor, (ii) $___________ of Assignor's Revolver
Commitment (which amount includes the Assignor's outstanding Revolver Loans
being assigned to Assignee pursuant to clause (i) above), together with an
interest in the Loan Documents corresponding to the interest in the Loans and
Commitment so assigned. Pursuant to the Assignment Agreement, Assignee has
expressly assumed all of Assignor's obligations under the Loan Agreement to the
extent of the Assigned Interest (as defined in the Assignment Agreement).
For purposes of the Loan Agreement, Agent shall deem Assignor's share of the
Revolver Commitment to be reduced by $_________, and Assignee's share of the
Revolver Commitment to be increased by $_________.
The address of the Assignee to which notices, information and payments are to be
sent under the terms of the Loan Agreement is:
__________________________
__________________________
__________________________
__________________________
Assignee's LIBOR Lending Office address is as follows:
__________________________
__________________________
__________________________
__________________________
This Notice is being delivered to Borrowers and Agent pursuant to Section 13.3
of the Loan Agreement. Please acknowledge your receipt of this Notice by
executing and returning to Assignee and Assignor a copy of this Notice.
IN WITNESS WHEREOF, the undersigned have caused the execution of this Notice, as
of _________________, 20__.
_______________________________
("Assignor")
By:___________________________
Title:_______________________
__________________________________
("Assignee")
By:_____________________________
Title:_______________________
ACKNOWLEDGED AND AGREED TO
AS OF THE DATE SET FORTH ABOVE:
*BORROWERS:
ATTEST: TROPICAL SPORTSWEAR INT'L CORPORATION
_______________________________ By: ____________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: TROPICAL SPORTSWEAR COMPANY, INC.
_______________________________ By: ____________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: SAVANE INTERNATIONAL CORP.
_______________________________
Secretary By: ____________________________
[CORPORATE SEAL] Title: ________________________
-2-
ATTEST: APPAREL NETWORK CORPORATION
_______________________________ By: ____________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: TSI BRANDS, INC.
_______________________________ By: ______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: TSIL, INC.
_______________________________ By: _____________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: DUCK HEAD APPAREL MERCHANDISING, INC.
_______________________________
Secretary By: _____________________________
[CORPORATE SEAL] Title: ________________________
ATTEST: DELTA MERCHANDISING, INC.
_______________________________
Secretary By: ______________________________
[CORPORATE SEAL] Title: ________________________
* No signature required by any Borrower when an Event of Default exists.
FLEET CAPITAL CORPORATION,
as Agent
-3-
By:_______________________________
Title:__________________________
-4-
EXHIBIT I
LETTER OF CREDIT PROCUREMENT REQUEST
Fleet Capital Corporation, as Agent
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: _____________________
This Letter of Credit Procurement Request is delivered to you pursuant to the
Second Amended and Restated Loan and Security Agreement dated January ___, 2004,
among Tropical Sportswear Int'l Corporation, a Florida corporation ("Tropical"),
Tropical Sportswear Company, Inc., a Delaware corporation ("TSCI"), Savane
International Corp., a Texas corporation ("Savane"), Apparel Network
Corporation, a Florida corporation ("Apparel"), TSI Brands, Inc., a Delaware
corporation ("TSI"), TSIL, Inc., a Delaware corporation ("TSIL"), Duck Head
Apparel Company, LLC, a Georgia limited liability company ("Duck Head"), and
Delta Merchandising, Inc., a South Carolina corporation ("Delta"; Tropical,
TSCI, Savane, Apparel, TSI, TSIL, Duck Head and Delta collectively referred to
hereinafter as "Borrowers" and individually as a "Borrower"), various financial
institutions as are, or may become, parties thereto (collectively, the
"Lenders"), Fleet Capital Corporation as collateral and administrative agent (in
such capacity, the "Agent") (as the same may be amended, supplemented, restated
or otherwise modified from time to time, the "Loan Agreement"). Unless otherwise
defined herein, terms used herein have the meanings assigned to them in the Loan
Agreement.
Borrowers hereby request Fleet to provide an LC Support to induce Bank to issue
a Letter of Credit, as follows:
(1) Borrower's/Account Party's Name _________________
(2) Amount of Letter of Credit: $____________
(3) Issuance Date: _____________________
(4) Beneficiary's Name: ___________________
(5) Beneficiary's Address: ________________
____________
___________________
___________________
(6) Expiry Date: _____________________
(7) Draw Conditions: _____________________ ____________
___________________
___________________
___________________
___________________
(8) Single draw : or Multiple draw :
(9) Purpose of Letter of Credit: ______________________
___________________
___________________
___________________
___________________
Attached hereto is the Bank's form of LC Application, completed with the details
of the Letter of Credit requested herein.
Each Borrower hereby certifies that each of the LC Conditions is now, and will
on the date of issuance of the Letter of Credit, be satisfied in all respects
and that no Default or Event of Default exists. Each Borrower hereby ratifies
and reaffirms all of the Loan Documents and Obligations arising thereunder.
IN WITNESS WHEREOF, each Borrower has caused this Letter of Credit Procurement
Request to be executed and delivered by its duly authorized officer, this ___
day of _________________, 20__.
BORROWERS:
ATTEST: TROPICAL SPORTSWEAR INT'L CORPORATION
_______________________________ By: ______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: TROPICAL SPORTSWEAR COMPANY, INC.
_______________________________ By: _______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: SAVANE INTERNATIONAL CORP.
_______________________________ By: ______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: APPAREL NETWORK CORPORATION
_______________________________ By: ______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: TSI BRANDS, INC.
_______________________________ By: ______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: TSIL, INC.
_______________________________ By: ______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: DUCK HEAD APPAREL MERCHANDISING, INC.
_______________________________ By: ______________________________
Secretary Title: ________________________
[CORPORATE SEAL]
ATTEST: DELTA MERCHANDISING, INC.
_______________________________ By: ______________________________
Secretary Title: ________________________
[CORPORATE SEAL]