1
EXHIBIT 10(c)
[EXECUTION COPY]
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REVOLVING CREDIT AGREEMENT
by and between
CROWN CRAFTS, INC.
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION (CAROLINAS),
as Lender
August 25, 1995
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Terms
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.3 UCC Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.2. Payment of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.3. Payment of Principal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.4. Non-Conforming Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.5. Revolving Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.6. Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.7. Conversions and Elections of Subsequent Interest Periods . . . . . . . . . . . . . . . . . . . 21
2.8. Unused Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.9. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.10. Extension of Revolving Credit Termination Date. . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE III
Yield Protection and Illegality
3.1. Additional Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.2. Suspension of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.3. Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4. Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.5. Alternate Loan and Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE IV
Conditions to Making Loans
4.1. Conditions of Initial Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.2. Conditions of All Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE V
Representations and Warranties
5.1. Organization and Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.2. Loan Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.3. Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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5.4. Subsidiaries and Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.5. Ownership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.6. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.7. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.9. Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.10. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.11. Margin Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.12. Investment Company; Public Utility Holding Company. . . . . . . . . . . . . . . . . . . . . . . 33
5.13. Patents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.14. No Untrue Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.15. No Consents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.16. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.17. No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.18. Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.19. Employment Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VI
Affirmative Covenants
6.1. Financial Reports, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.2. Maintain Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.3. Existence, Qualification, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.4. Regulations and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.5. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.6. True Books. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.7. Payment of Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.8. Right of Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.9. Observe all Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.10. Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.11. Covenants Extending to Other Persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.12. Officer's Knowledge of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.13. Suits or Other Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.14. Notice of Discharge of Hazardous Material or Environmental Complaint. . . . . . . . . . . . . . 39
6.15. Environmental Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.16. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.17. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.18. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.19. Termination Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.20. ERISA Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.21. Continued Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.22. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.23. New Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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ARTICLE VII
Negative Covenants
7.1. Consolidated Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.2. Consolidated Fixed Charge Coverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.3. Consolidated Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.4. Consolidated Cash Flow Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.5. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.6. Transfer of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.7. Investments; Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.8. Merger or Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.9. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.10. Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.11. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.12. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.13. Limitations on Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.14. Dissolution, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VIII
Events of Default and Acceleration
8.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.2. Lender to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.3. Cumulative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.4. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.5. Allocation of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE IX
Miscellaneous
9.1. Assignments and Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.3. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.4. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.5. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.6. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.7. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.8. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.9. Headings and References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.10. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.11. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.12. Agreement Controls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.13. Usury Savings Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.14. Governing Law; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
EXHIBIT A Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
EXHIBIT B Form of Assignment and Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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EXHIBIT C Notice of Appointment (or Revocation) of Authorized Representative . . . . . . . . . . . . . . 63
EXHIBIT D Form of Borrowing Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
EXHIBIT E Form of Interest Rate Selection Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
EXHIBIT F Form of Revolving Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
EXHIBIT G Form of Subsidiary Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
EXHIBIT H Form of Opinion of Borrower's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
EXHIBIT I Form of Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Schedule 5.4 Subsidiaries and Ownership Interests . . . . . . . . . . . . . . . . . . . . . . . . . 74
Schedule 5.6 Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Schedule 5.16 ERISA Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Schedule 7.5 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of August 25, 1995 (the
"Agreement"), is made by and among CROWN CRAFTS, INC., a Georgia corporation
having its principal place of business in Atlanta, Georgia (the "Borrower"),
NATIONSBANK, NATIONAL ASSOCIATION (CAROLINAS), a national banking association
organized under the laws of the United States ("NationsBank"), in its capacity
as Lender (the "lender"), and each other lender which may hereafter execute and
deliver an instrument of assignment with respect to this Agreement pursuant to
Section 9.1 hereof (hereinafter such lenders may be referred to individually as
a "Lender" or collectively as the "Lenders");
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lender make available to
the Borrower a revolving credit facility of up to $15,000,000, the proceeds of
such facilities to be used to finance Acquisitions permitted hereunder, general
working capital needs and other general corporate purposes of the Borrower; and
WHEREAS, the Lender is willing to make the revolving credit facility
available to the Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:
ARTICLE I
Definitions and Terms
1.1. Definitions. For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Acquisition" means the non-hostile acquisition of (i) a
controlling equity interest in another Person (including the purchase
of an option, warrant or convertible or similar type security to
acquire such a controlling interest at the time it becomes exercisable
by the holder thereof), whether by purchase of such equity interest or
upon exercise of an option or warrant for, or conversion of securities
into, such equity interest, or (ii) assets of another Person for which
the Cost of Acquisition equals or exceeds two percent (2%) of
Consolidated Total Assets determined as of the last day of the fiscal
quarter of the Borrower immediately preceding the date of the
agreement related to such Acquisition;
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"Advance" means a borrowing under the Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan;
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or
is under common control with the Borrower; or (ii) which beneficially
owns or holds 10% or more of any class of the outstanding voting stock
(or in the case of a Person which is not a corporation, 10% or more of
the equity interest) of the Borrower or any Person described in clause
(i) above; or 10% or more of any class of the outstanding voting stock
(or in the case of a Person which is not a corporation, 10% or more of
the equity interest) of which is beneficially owned or held by the
Borrower. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of
voting stock, by contract or otherwise;
"Applicable Interest Addition" means for each Loan that
percent per annum set forth below, which shall be based upon the
Consolidated Funded Debt Ratio for the most recent Determination Date
as specified below:
Applicable
Interest Addition
-----------------
Consolidated Base Eurodollar
Funded Debt Ratio Rate Rate
----------------- ---------- ----------
(a) Greater than .55
to 1.00 0 .650%
(b) Less than or equal to
.55 to 1.00 and greater
than .50 to 1.00 0 .500%
(c) Less than or equal to
.50 to 1.00 0 .425%
The Applicable Interest Addition shall be established at the end of
each fiscal quarter of the Borrower (the "Determination Date"). Any
change in the Applicable Interest Addition following each
Determination Date shall be determined based upon the computations set
forth in the certificate furnished to the Lender pursuant to Section
6.1(a)(ii) and Section 6.1(b)(ii) hereof, subject to review and
approval of such computations by the Lender and shall be effective (a)
in the case of Base Rate Loans, from the date such certificate is
received (or, if earlier, the date such certificate was required to be
delivered), and (b) in the case of Eurodollar Rate Loans, for all
Interest Periods commencing on or after the date such certificate is
received (or, if earlier, the date such certificate was required to be
delivered), and in
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each case, until the date a new certificate is delivered or is
required to be delivered, whichever shall first occur, and a new
Applicable Interest Addition becomes effective;
"Applicable Unused Fee" means that percent per annum set forth
below, which shall be based upon the Consolidated Funded Debt Ratio
for the Four-Quarter Period most recently ended as specified below:
Applicable
Consolidated Unused
Funded Debt Ratio Fee
----------------- ----------
(a) Greater than .55 to 1.00 .2500%
(b) Less than or equal to .55 to 1.00
and greater than .50 to 1.00 .1875%
(c) Less than or equal
to .50 to 1.00 .1500%
The Applicable Unused Fee shall be established at the end of each
fiscal quarter of the Borrower (the "Determination Date"). Any change
in the Applicable Unused Fee following each Determination Date shall
be determined based upon the computations set forth in the certificate
furnished to the Lender pursuant to Section 6.1(a)(ii) and Section
6.1(b)(ii) hereof, subject to review and approval of such computations
by the Lender and shall be effective from the date such certificate is
received (or, if earlier, the date such certificate was required to be
delivered) until the date a new certificate is delivered or is
required to be delivered, whichever shall first occur, and a new
Applicable Unused Fee becomes effective;
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered to the Lender in connection with an assignment of a
Lender's interest under this Agreement pursuant to Section 9.1 hereof;
"Authorized Representative" means any of the President or
Vice President of the Borrower or, with respect to financial matters,
the chief financial officer of the Borrower or any other person
expressly designated by the Board of Directors of the Borrower (or the
appropriate committee thereof) as an Authorized Representative of the
Borrower, as set forth from time to time in a certificate in the form
attached hereto as Exhibit C;
"Base Rate" means the per annum rate of interest equal to the
sum of (a) the greater of (i) the Prime Rate or (ii) the Federal Funds
Effective Rate plus one-half of one percent (1/2%) plus (b) the
Applicable Interest Addition. Any change in the Base Rate resulting
from a change in the Prime Rate or the Federal Funds Effective Rate
shall become effective as of
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12:01 A.M. of the Business Day on which each such change occurs. The
Base Rate is a reference rate used by Lender in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit to any debtor;
"Base Rate Loan" means a Loan or a Segment of a Loan for which
the rate of interest is determined by reference to the Base Rate;
"▇▇▇▇▇▇▇▇▇ Family" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and his wife, their
children and their children's spouses and their grandchildren;
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body);
"Borrower's Account" means a demand deposit account number
▇▇▇▇▇▇▇▇ or any successor account with the Lender, which may be
maintained at one or more offices of the Lender or an agent of the
Lender;
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving
Credit Facility, in the form attached hereto as Exhibit D and
incorporated herein by reference;
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
State of North Carolina are authorized or obligated by law, executive
order or governmental decree to be closed and, (ii) with respect to
any Eurodollar Rate Loan, any day which is a Business Day, as
described above, and on which the relevant international financial
markets are open for the transaction of business contemplated by this
Agreement in London, England, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇;
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof;
"Closing Date" means the date as of which this Agreement is
executed by the Borrower and the Lender and on which the conditions
set forth in Section 4.1 hereof have been satisfied;
"Code" means the Internal Revenue Code of 1986, as amended,
and any final or temporary regulations promulgated thereunder;
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those
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applied in the preparation of the audited financial statements of the
Borrower first delivered to the Lender hereunder;
"Consolidated Cash Flow" means, with respect to the Borrower
and its Subsidiaries for any Four-Quarter Period, the sum of, without
duplication, (i) Consolidated Net Income, plus (ii) amortization
accrued during such period, plus (iii) without duplication, any
depreciation during such period, plus (iv) all other non-cash charges
or expenses accrued during such period minus (v) all cash
distributions on any capital stock of the Borrower or its
Subsidiaries, minus (vi) all other non-cash gains otherwise included
in Consolidated Net Income during such period, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis;
"Consolidated EBIT" means, with respect to the Borrower and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) taxes on income
and (iv) Consolidated Lease Expense, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis;
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to the Borrower and its Subsidiaries for any Four-Quarter Period
ending on the date of computation thereof, the ratio of (i)
Consolidated EBIT for such period, to (ii) Consolidated Fixed Charges
for such period;
"Consolidated Fixed Charges" means, with respect to Borrower
and its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Interest Expense plus (ii) Consolidated Lease Expense, all determined
on a consolidated basis in accordance with GAAP applied on a
Consistent Basis;
"Consolidated Funded Debt Ratio" means, with respect to the
Borrower and its Subsidiaries, the ratio of (i) Consolidated Funded
Indebtedness, to (ii) the sum of Consolidated Funded Indebtedness plus
Consolidated Shareholders' Equity;
"Consolidated Funded Indebtedness" means the sum of (a) all
Indebtedness for Borrowed Money of the Borrower and its Subsidiaries,
plus (b) all obligations of the Borrower and its Subsidiaries in
connection with Capital Leases, plus (c) all direct and indirect
guaranties by the Borrower or any Subsidiary of Indebtedness of any
Person other than a Guarantor, all determined on a consolidated basis;
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Borrower and its Subsidiaries, including without limitation (i) the
current amortized portion of debt discounts to the extent included in
gross interest expense, (ii) the current amortized portion of all fees
(including, without
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11
limitation, fees payable in respect of a Hedging Agreement) payable in
connection with the incurrence of Indebtedness to the extent included
in gross interest expense and (iii) the portion of any payments made
in connection with Capital Leases allocable to interest expense, all
determined on a consolidated basis in accordance with GAAP applied on
a Consistent Basis;
"Consolidated Lease Expense" means for any period all amounts
paid or accrued by the Borrower and its Subsidiaries during such
period under operating leases (whether or not constituting rental
expense) determined on a consolidated basis;
"Consolidated Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) Consolidated Funded Indebtedness
as of such date to (ii) the sum of Consolidated Tangible Net Worth
plus Consolidated Funded Indebtedness as of such date;
"Consolidated Net Income" means, for any period of computation
thereof, the Net Income of the Borrower and its Subsidiaries
determined on a consolidated basis, but excluding (a) extraordinary
items and (b) any equity interests of the Borrower or any Subsidiary
in the unremitted earnings of any Person that is not a Subsidiary;
"Consolidated Shareholders' Equity " means at any time as of
which the amount thereof is to be determined, the sum of the following
in respect of the Borrower and its Subsidiaries (determined on a
consolidated basis and excluding intercompany items among the Borrower
and its Subsidiaries and any upward adjustment after the Closing Date
due to revaluation of assets): (i) the amount of issued and
outstanding share capital, plus (ii) the amount of additional paid-in
capital and retained income (or, in the case of a deficit, minus the
amount of such deficit), minus (iii) the amount of any treasury stock,
minus (iv) valuation allowances, minus (v) receivables due from the
Crown ESOP and minus (vi) any translation, adjustments for any foreign
currency transactions all as determined in accordance with GAAP
applied on a Consistent Basis;
"Consolidated Tangible Net Worth" means at any time as of
which the amount thereof is to be determined, Consolidated
Shareholders' Equity minus (without duplication of deductions in
respect of items already deducted in arriving at surplus and retained
earnings) the book value of all assets which would be treated as
intangible assets under GAAP, all as determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis;
"Consolidated Total Assets" means, as at any time of
calculation thereof, the net book value of all assets of the Borrower
and its Subsidiaries as determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis;
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12
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation or incurring
thereof, would be required) to be included in the financial statements
(including footnotes) of such Person in accordance with GAAP applied
on a Consistent Basis, including Statement No. 5 of the Financial
Accounting Standards Board, all Rate Hedging Obligations and any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including obligations of such Person however incurred:
(a) to purchase such Indebtedness or other
obligation or any property or assets constituting security
therefor;
(b) to advance or supply funds in any manner (i)
for the purchase or payment of such Indebtedness or other
obligation, or (ii) to maintain a minimum working capital, net
worth or other balance sheet condition or any income statement
condition of the primary obligor;
(c) to grant or convey any lien, security
interest, pledge, charge or other encumbrance on any property
or assets of such Person to secure payment of such
Indebtedness or other obligation;
(d) to lease property or to purchase securities
or other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(e) otherwise to assure the owner of the
Indebtedness or such obligation of the primary obligor against
loss in respect thereof;
"Cost of Acquisition" means, with respect to any Acquisition,
as at the date of entering into any agreement therefor, the sum of the
following (without duplication): (i) the value of the capital stock,
warrants or options to acquire capital stock of Borrower or any
Subsidiary to be transferred in connection therewith, (ii) any cash or
other property (excluding property described in clause (i)) and the
unpaid principal amount of any debt instrument given as consideration,
(iii) any Indebtedness assumed by the Borrower or its Subsidiaries in
connection with such Acquisition, and (iv) out of pocket transaction
costs for the services and expenses of attorneys, accountants and
other consultants incurred in effecting such a transaction, and other
similar transaction costs so incurred (all such costs in excess of
such amount being included as a "Cost of Acquisition" for such
transaction). For purposes of determining the Cost of Acquisition for
any transaction, (A) the capital stock of the Borrower shall be valued
(I) at its market value as reported on the New York Stock Exchange
with respect to shares that are
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13
freely tradeable, and (II) with respect to shares that are not freely
tradeable, as determined by the Board of Directors of the Borrower
and, if requested by the Lender, determined to be a reasonable
valuation by the independent public accountants referred to in Section
6.1(a) hereof, (B) the capital stock of any Subsidiary shall be valued
as determined by the Board of Directors of such Subsidiary and, if
requested by the Lender, determined to be a reasonable valuation by
the independent public accountants referred to in Section 6.1(a)
hereof, and (C) with respect to any Acquisition accomplished pursuant
to the exercise of options or warrants or the conversion of
securities, the Cost of Acquisition shall include both the cost of
acquiring such option, warrant or convertible security as well as the
cost of exercise or conversion;
"Crown ESOP" means that certain employee stock ownership plan
of the Borrower as in effect on the date hereof;
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder;
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United
States of America;
"Eastern Time" means Eastern Standard Time or Eastern Daylight
Time, as applicable;
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Lender:
(a) Government Securities;
(b) obligations of any corporation organized under
the laws of any state of the United States of America or under
the laws of any other nation, payable in the United States of
America, expressed to mature not later than 90 days following
the date of issuance thereof and rated in an investment grade
rating category by S&P and Moody's;
(c) interest bearing demand or time deposits issued
by any bank or certificates of deposit, bankers acceptances
and other "money market instruments" maturing within one
hundred eighty (180) days from the date of issuance thereof
and issued by a bank or trust company organized under the laws
of the United States or of any state thereof having capital
surplus and undivided profits aggregating at least
$400,000,000 and being rated A or better by S&P or A2 or
better by Moody's;
(d) Repurchase Agreements;
(e) Municipal Obligations;
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14
(f) shares of mutual funds which invest exclusively
in obligations described in paragraphs (a) through (e) above,
the shares of which mutual funds are at all times rated "AAA"
by S&P; and
(g) shares of "money market funds," of financial
institutions rated A or better by S&P or A2 or better by
Moody's;
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (a) is maintained for
employees of the Borrower or is assumed by the Borrower in connection
with any Acquisition or any of its ERISA Affiliates or (b) has at any
time during the six (6) years immediately prior the date hereof been
maintained for the employees of the Borrower or any current or former
ERISA Affiliate;
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the
Resource Conservation and Recovery Act, the Toxic Substances Control
Act, as amended, the Clean Air Act, as amended, the Clean Water Act,
as amended, any other "Superfund" or "Superlien" law or any other
federal, or applicable state or local statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any Hazardous Material;
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
final or temporary regulations promulgated thereunder;
"ERISA Affiliate", as applied to the Borrower, means any Person
or trade or business which is a member of a group which is under
common control with the Borrower, who together with the Borrower, is
treated as a single employer within the meaning of Section 414(b) and
(c) of the Code;
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate;
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
-------------------------------- Interest Addition
Rate 1- Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time, as the maximum reserve requirement (including, without
limitation, any basic, supplemental, emergency, special, or marginal
reserves) applicable with respect to Eurocurrency liabilities as that
term is defined in Regulation D or any successor regulation (or
against any other category
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15
of liabilities that includes deposits by reference to which the
interest rate of Eurodollar Rate Loans is determined), whether or not
Lender has any Eurocurrency liabilities subject to such requirements
without benefits of credits or proration, exceptions or offsets that
may be available from time to time to Lender. The Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any
change in the Eurodollar Reserve Percentage;
"Event of Default" means any of the occurrences set forth as
such in Section 8.1 hereof;
"Federal Funds Effective Rate" means, for any day, the rate
per annum (rounded upward to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day, provided that (a)
if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average
rate quoted to the Lender on such day on such transaction as
determined by the Lender;
"Fiscal Year" means the twelve month fiscal period of the
Borrower ending the Sunday nearest March 31 of each calendar year; any
reference to a Fiscal Year immediately followed by a calendar year
shall mean the Fiscal Year ending in such calendar year;
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan;
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrower and its Subsidiaries, taken together
as one accounting period;
"GAAP" means Generally Accepted Accounting Principles, being
those principles of accounting set forth in pronouncements of the
Financial Accounting Standards Board, the American Institute of
Certified Public Accountants or which have other substantial
authoritative support and are applicable in the circumstances as of
the date of a report, as such principles are from time to time
supplemented and amended;
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on
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16
which are fully and unconditionally guaranteed by, the United States
of America;
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, agency or instrumentality or political subdivision
thereof or any entity or officer exercising executive, legislative or
judicial, regulatory or administrative functions of or pertaining to
any government or any court, in each case whether a state of the
United States, the United States or foreign;
"Guaranties" means all obligations of the Borrower or any
Subsidiary directly or indirectly guaranteeing, or in effect
guaranteeing, any Indebtedness or other obligation of any other
Person;
"Guarantors" means on any date the Subsidiaries party to a
Subsidiary Guaranty on such date and shall in any event include all
Material Subsidiaries;
"Hazardous Material" means and includes any hazardous, toxic
or dangerous waste, substance or material, the generation, handling,
storage, disposal, treatment or emission of which is subject to any
Environmental Law;
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property, all indebtedness secured
by any Lien on the property of such Person whether or not such
indebtedness is assumed, all liability of such Person by way of
endorsements (other than for collection or deposit in the ordinary
course of business), all Contingent Obligations, that portion of
obligations with respect to Capital Leases and other items which in
accordance with GAAP is classified as a liability on a balance sheet;
but excluding all accounts payable in the ordinary course of business
so long as payment therefor is due within one year; provided that in
no event shall the term Indebtedness include surplus and retained
earnings, lease obligations (other than pursuant to Capital Leases),
reserves for deferred income taxes and investment credits, other
deferred credits and reserves, and deferred compensation obligations;
"Indebtedness for Money Borrowed" means for any Person all
indebtedness in respect of money borrowed, including without
limitation all Capital Leases and the deferred purchase price of any
property or asset, evidenced by a promissory note, bond, debenture or
similar written obligation for the payment of money, other than trade
payables incurred in the ordinary course of business;
"Interbank Offered Rate" means, with respect to any Eurodollar
Rate Loan for the Interest Period applicable thereto, the average
(rounded upward to the nearest one-sixteenth (1/16) of one percent)
per annum rate of interest
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17
determined by the office of Lender then determining such rate (each
such determination to be conclusive and binding) as of two Business
Days prior to the first day of such Interest Period, as the effective
rate at which deposits in immediately available funds in Dollars are
being, have been, or would be offered or quoted by Lender to major
banks in the applicable interbank market for Eurodollar deposits at
any time during the Business Day which is the second Business Day
immediately preceding the first day of such Interest Period, for a
term comparable to such Interest Period and in the amount of the
Eurodollar Rate Loan;
"Interest Period" for each Eurodollar Rate Loan means a period
commencing on the date such Eurodollar Rate Loan is made or converted
and each subsequent period commencing on the last day of the
immediately preceding Interest Period for such Eurodollar Rate Loan,
and ending, at the Borrower's option, on the date one, two, three or
six months thereafter as notified to the Lender by the Authorized
Representative no later than three (3) Business Days prior to the
beginning of such Interest Period; provided, that,
(i) if the Authorized Representative fails to
notify the Lender of the length of an Interest Period three
(3) Business Days prior to the first day of such Interest
Period, the Loan for which such Interest Period was to be
determined shall be deemed to be a Base Rate Loan as of the
first day thereof;
(ii) if an Interest Period for a Eurodollar Rate
Loan would end on a day which is not a Business Day such
Interest Period shall be extended to the next Business Day
(unless such extension would cause the applicable Interest
Period to end in the succeeding calendar month, in which case
such Interest Period shall end on the next preceding Business
Day);
(iii) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(iv) no Interest Period shall extend past August 25, 1998
or such later date as shall become the scheduled Revolving
Credit Termination Date pursuant to Section 2.12 hereof; and
(v) there shall not be more than four (4) Interest
Periods in effect on any day.
"Interest Rate Selection Notice" means the notice delivered by
an Authorized Representative in connection with the election of a
subsequent interest period for any Eurodollar Rate Loan or the
conversion of any Eurodollar Rate Loan into a Base Rate Loan or the
conversion of any Base Rate
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18
Loan into a Eurodollar Rate Loan, in the form of Exhibit E attached
hereto;
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it
has acquired or holds subject to a conditional sale agreement,
financing lease, or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for
security purposes;
"Loan" or "Loans" means any of the Revolving Loans made under
the Revolving Credit Facility;
"Loan Documents" means this Agreement, any Subsidiary
Guaranty, the Notes and all other instruments and documents heretofore
or hereafter executed or delivered to or in favor of the Lender in
connection with the Loans made and transactions contemplated under
this Agreement, as the same may be amended, supplemented or replaced
from the time to time;
"Margin Stock" shall have the meaning given to such term in
Section 5.11 hereof;
"Material Adverse Effect" means with respect to the Borrower
and any Guarantor a material adverse effect (x) on the business,
properties, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole or (y) on the ability
of any party to the Loan Documents to perform, or of the Lender to
enforce, the obligations of such Person under the Loan Documents to
which it is a party;
"Material Subsidiary" means (i) any direct or indirect
Subsidiary of the Borrower which (a) has total assets equal to or
greater than 10% of Consolidated Total Assets (calculated as of the
most recent fiscal period with respect to which the Lender shall have
received financial statements required to be delivered pursuant to
Sections 6.1(a) or (b) (or if prior to delivery of any financial
statements pursuant to such Sections, then calculated with respect to
the Fiscal Year end financial statements referenced in Section 5.6
hereof) (the "Required Financial Information")) or (ii) has net income
equal to or greater than 10% of Consolidated Net Income (each
calculated for the most recent Four-Quarter Period for which the
Lender has received the Required Financial Information); provided,
however, that notwithstanding the foregoing, if the Borrower and the
Material Subsidiaries, as defined above, have less than 90% of
Consolidated Total Assets (calculated as
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described above) or have Net Income of less than 90% of Consolidated
Net Income (as calculated above), then the term "Material
Subsidiaries" shall mean Subsidiaries of the Borrower, as specified by
the Borrower, that together with the Borrower have assets equal to not
less than 90% of Consolidated Total Assets (calculated as described
above) and net income of not less than 90% of Consolidated Net Income
(calculated as described above);
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.;
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) years;
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal corporation or other public body
organized under the laws of any such state which are rated, in their
capacity as issuer of general obligations, in the highest investment
rating category by both S&P and Moody's;
"Net Income" means, as applied to any Person for any period,
the aggregate amount of net income of such Person, after taxes, for
such period, as determined in accordance with GAAP applied on a
Consistent Basis;
"Notes" means, collectively, the Revolving Notes;
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) all liabilities
of Borrower to the Lender which arise under a Swap Agreement and (iii)
the payment and performance of all other obligations, liabilities and
Indebtedness of the Borrower to the Lender hereunder, under any one or
more of the other Loan Documents or with respect to the Loans;
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto;
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of
ERISA or Section 412 of the Code and which is, or was during the six
(6) years immediately prior to the date hereof maintained for
employees of the Borrower or any ERISA Affiliate;
"Permitted Liens" shall have the meaning given to such term in
Section 7.5 hereof;
"Permitted Stock Repurchases" shall have the meaning given to
such term in Section 7.9 hereof;
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20
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof;
"Prime Rate" means the rate of interest per annum announced
publicly by the Lender as its prime rate from time to time. The Prime
Rate is not necessarily the best or the lowest rate of interest
offered by the Lender;
"Principal Office" means the office of the Lender at
Independence Center, 15th Floor, ▇▇▇-▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ or such other office and address as the Lender may from time to
time designate;
"Rate Hedging Obligations" means any and all obligations of
the Borrower or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts,
warrants and those commonly known as interest rate "swap" agreements;
and (ii) any and all cancellations, buybacks, reversals, terminations
or assignments of any of the foregoing;
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time;
"Regulatory Change" means any change effective after the
Closing Date in United States federal or state laws or regulations
(including Regulation D and capital adequacy regulations) or foreign
laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks,
which includes any of the Lenders, under any United States federal or
state or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof or compliance by the
Lender with any request or directive regarding capital adequacy,
including with respect to "highly leveraged transactions," whether or
not having the force of law, whether or not failure to comply
therewith would be unlawful and whether or not published or proposed
prior to the date hereof;
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or Moody's or "A-1" by
S&P or "P-1" by Moody's;
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21
"Restricted Payment" means (a) any redemption, conversion,
exchange, retirement or similar payment, purchase or other acquisition
for value, direct or indirect, of any shares of any class of stock of
Borrower now or hereafter outstanding, other than shares redeemed,
converted, exchanged or retired in connection with the existing
employee stock option plan of the Borrower; and (b) any payment made
to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of
Borrower or any Subsidiary now or hereafter outstanding;
"Revolving Credit Commitment" means, with respect to the
Lender, the obligation of such Lender to make Revolving Loans to the
Borrower up to an aggregate principal amount at any one time
outstanding equal to the Total Revolving Credit Commitment as set
forth on Exhibit A hereto as the same may be increased or decreased
from time to time pursuant to this Agreement;
"Revolving Credit Facility" means the facility described in
Article II hereof providing for Loans to the Borrower by the Lender in
the aggregate principal amount equal to the Total Revolving Credit
Commitment;
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding and all interest accrued and unpaid thereon;
"Revolving Credit Termination Date" means (i) August 25, 1998
or such later date as the Lender, in accordance with Section 2.10
hereof, may determine to be the Revolving Credit Termination Date or
(ii) such earlier date of termination of Lender's obligations pursuant
to Section 8.1 upon the occurrence of an Event of Default, or (iii)
such date as the Borrower may voluntarily and permanently terminate
the Revolving Credit Facility by payment in full of all Revolving
Credit Outstandings and cancellation of the Total Revolving Credit
Commitment pursuant to Section 2.6 hereof;
"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Article II
hereof;
"Revolving Note" means the promissory note of the Borrower
evidencing Revolving Loans executed and delivered to the Lender as
provided in Section 2.5 hereof substantially in the form attached
hereto as Exhibit F;
"S&P" means Standard & Poor's Ratings Group;
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrower is an
"employer" as described in Section 4001(b) of ERISA and which is not a
Multi-employer Plan;
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22
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including, without limitation, Contingent Obligations; and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted;
"Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding voting stock or more than 50% of all
equity interests is owned directly or indirectly by the Borrower
and/or by one or more of the Borrower's Subsidiaries;
"Subsidiary Guaranty" means each guaranty agreement between
one or more of the Subsidiaries and the Lender which is delivered by a
Subsidiary pursuant to Section 6.23 hereof and substantially in the
form of Exhibit G hereof, as the same may be amended, modified or
supplemented;
"Swap Agreement" means one or more agreements between the
Borrower and any Person with respect to Indebtedness evidenced by the
Notes, on terms mutually acceptable to Borrower and such Person and
approved by the Lender, which agreements create Rate Hedging
Obligations;
"Termination Event" means: (a) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(b) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4068(f) of ERISA; or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (d) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (e) any other event or
condition which would constitute grounds under Section 4042(a) of
ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; or (f) the partial or complete
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
Plan; or (g) the imposition of a Lien pursuant to Section 412 of the
Code or Section 302 of ERISA; or (h) any event or condition which
results in the reorganization or insolvency of a Multiemployer Plan
under Section 4241 or Section 4245 of ERISA, respectively; or (i) any
event or condition which results in the termination of a Multiemployer
Plan under Section 4041A of
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ERISA or the institution by the PBGC of proceedings to terminate a
Multiemployer Plan under Section 4042 of ERISA;
"Total Revolving Credit Commitment" means a principal amount
equal to $15,000,000, as reduced from time to time in accordance with
Section 2.7 hereof; and
"Wachovia" means Wachovia Bank of Georgia, N.A., a national
banking association, together with its successors;
"Wachovia Facility" means that certain revolving credit
facility in the aggregate amount of $15,000,000 provided to the
Borrower by Wachovia pursuant to that certain Revolving Credit
Agreement dated as of the date hereof.
1.2 Accounting Terms. All accounting terms not specifically
defined herein shall have the meanings assigned to such terms and shall be
interpreted in accordance with GAAP applied on a Consistent Basis.
1.3 UCC Terms. Each term defined in Article 1 or 9 of the Georgia
Uniform Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code of
another jurisdiction is controlling, in which case such terms shall have the
meaning given in the Uniform Commercial Code of the applicable jurisdiction.
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans.
(a) Commitment. Subject to the terms and conditions of
Article V of this Agreement, the Lender severally agrees to make Advances to
the Borrower under the Revolving Credit Facility from time to time from the
Closing Date until the Revolving Credit Termination Date on a pro rata basis as
to the total borrowing requested by the Borrower on any day up to but not
exceeding the Revolving Credit Commitment of the Lender. Within such limits,
the Borrower may borrow, repay and reborrow under the Revolving Credit Facility
on a Business Day from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolving Credit Termination Date; provided,
however, that (y) no Revolving Loan that is a Eurodollar Rate Loan shall be
made which has an Interest Period that extends beyond the Revolving Credit
Termination Date and (z) each Revolving Loan that is a Eurodollar Rate Loan
may, subject to the provisions of Section 2.7 hereof, be repaid only on the
last day of the Interest Period with respect thereto.
(b) Amounts. Except as otherwise permitted by the
consent of the Lender from time to time, the aggregate unpaid principal amount
of the Revolving Credit Outstandings shall not exceed at any time the Total
Revolving Credit Commitment. The
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Lender shall have no obligation to advance any funds in excess of the Total
Revolving Credit Commitment. Each Revolving Loan hereunder and each conversion
under Section 2.7 hereof shall be in an amount of at least (i) $2,000,000, and,
if greater than $2,000,000, an integral multiple of $1,000,000, if a Eurodollar
Rate Loan and (ii) $250,000, and, if greater than $250,000, an integral
multiple of $100,000, if a Base Rate Loan.
(c) Advances. (i) An Authorized Representative shall
give the Lender (A) at least three (3) Business Days' irrevocable telephonic
notice of each Revolving Loan that is a Eurodollar Rate Loan (whether
representing an additional borrowing hereunder or the conversion of borrowing
hereunder from Base Rate Loans to Eurodollar Rate Loans) prior to 10:00 A.M.
Eastern Time and (B) irrevocable written notice of each Revolving Loan that is
a Base Rate Loan (whether representing an additional borrowing hereunder or the
conversion of borrowing hereunder from Eurodollar Rate Loans to Base Rate
Loans) prior to 10:00 A.M. Eastern Time on the day of such proposed Revolving
Loan. Each such telephonic notice, which shall be effective upon receipt by
the Lender, shall specify the amount of the borrowing, the type of Revolving
Loan (Base Rate or Eurodollar Rate), the date of borrowing and, if a Eurodollar
Rate Loan, the Interest Period to be used in the computation of interest. The
Authorized Representative shall provide the Lender written confirmation of each
such telephonic notice no later than 11:00 A.M. Eastern Time on the same day
received by telefacsimile transmission in the form of a Borrowing Notice for
additional Advances, or in the form of an Interest Rate Selection Notice for
the selection or conversion of interest rates for outstanding Revolving Credit
Loans, in each case with appropriate insertions, but failure to provide such
confirmation shall not affect the validity of such telephonic notice. The
amount of any Advance shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by delivery of the proceeds
thereof to the Borrower's Account or otherwise as shall be directed in the
applicable Borrowing Notice by the Authorized Representative not later than
3:00 P.M., Eastern Time on the day so received.
(ii) The duration of the initial Interest Period for each Revolving
Loan that is a Eurodollar Rate Loan shall be as specified in the initial
Borrowing Notice for such Loan. The Borrower shall have the option to elect
the duration of subsequent Interest Periods and to convert the Loans in
accordance with Section 2.7 hereof. If the Lender does not receive an Interest
Rate Selection Notice giving notice of election of duration of an Interest
Period or conversion by the time prescribed by Section 2.7 hereof, the Borrower
shall be deemed to have elected to convert such Revolving Loan to (or continue
such Revolving Loan as) a Base Rate Loan until the Borrower notifies the Lender
in accordance with Section 2.7 hereof.
2.2. Payment of Interest. (a) The Borrower shall pay interest to
the Lender on the outstanding and unpaid principal amount of each Revolving
Loan made by the Lender for the period commencing on the date of such Revolving
Loan until such Revolving Loan shall be due at the then applicable Base Rate
for Base Rate
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Loans or applicable Eurodollar Rate for Eurodollar Rate Loans, as designated by
the Authorized Representative pursuant to Section 2.1 hereof; provided,
however, that if any amount of principal or interest or fees to the Lender
shall not be paid when due (at maturity, by acceleration or otherwise), or any
Event of Default shall have occurred and be continuing hereunder, all amounts
outstanding hereunder shall bear interest so long as such amount shall remain
unpaid or such Event of Default continues, as applicable, (i) in the case of a
Eurodollar Rate Loan, until the end of the Interest Period with respect to any
Eurodollar Rate Loan at a rate of two percent (2%) above the applicable
Eurodollar Rate for such Eurodollar Rate Loan and thereafter at a rate per
annum which shall be two percent (2%) plus the Base Rate, (ii) with respect to
Base Rate Loans, fees or other amounts owing hereunder, at a rate of interest
per annum which shall be two percent (2%) above the Base Rate, and (iii) in any
case, the maximum rate permitted by applicable law, if lower.
(b) Interest on each Revolving Loan shall be computed on
the basis of a year of 360 days and calculated for the actual number of days
elapsed. Interest on each Revolving Loan shall be paid (i) quarterly in
arrears on the last Business Day of each June, September, December and March,
commencing September 29, 1995 for each Base Rate Loan, (ii) on the last day of
the applicable Interest Period for each Eurodollar Rate Loan and if such
interest period extends for more than three (3) months, at intervals of three
(3) months after the first day of such Interest Period and (iii) upon payment
in full of the principal amount of such Revolving Loan.
2.3. Payment of Principal. The principal amount of each Revolving
Loan shall be due and payable to the Lender in full on the Revolving Credit
Termination Date, or earlier as specifically provided herein. The principal
amount of any Base Rate Loan may be prepaid in whole or in part on any Business
Day provided the Borrower gives the Lender notice of such prepayment by
telecopy at or prior to 10:00 A.M. Eastern Time on the date of such prepayment.
The principal amount of any Eurodollar Rate Loan may be prepaid only at the end
of the applicable Interest Period unless the Borrower shall pay to the Lender
the amount, if any, required under Section 3.4 hereof. If at any time the
amount of Revolving Credit Outstandings exceeds the Total Revolving Credit
Commitment, a principal amount of the outstanding Revolving Loans equal to such
excess shall be due and payable immediately. All prepayments of Revolving
Loans made by the Borrower shall be in the amount of $250,000 or such greater
amount which is an integral multiple of $100,000, or such other amount as
necessary to comply with this Section 2.3 or with Section 2.7 hereof.
2.4. Non-Conforming Payments. (a) Each payment of principal
(including any prepayment) and payment of interest and fees, and any other
amount required to be paid to the Lender with respect to the Revolving Loans,
shall be made to the Lender at the Principal Office in Dollars and in
immediately available funds before 12:30 P.M. Eastern Time on the date such
payment is due. The Lender may, but shall not be obligated to, debit the
amount of any such payment
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which is not made by such time to any ordinary deposit account, if any, of the
Borrower with the Lender.
(b) The Lender shall deem any payment made by or on
behalf of the Borrower hereunder that is not made both in Dollars and in
immediately available funds and prior to 12:30 P.M. Eastern Time to be a
non-conforming payment. Any such payment shall not be deemed to be received by
the Lender until the later of (i) the time such funds become available funds
and (ii) the next Business Day. Any non-conforming payment may constitute or
become a Default or Event of Default. Interest shall continue to accrue on any
principal as to which a non-conforming payment is made until the later of (x)
the date such funds become available funds or (y) the next Business Day at the
respective rates of interest per annum specified in the proviso to Section 2.2
hereof regarding late payments of interest, from the date such amount was due
and payable.
(c) In the event that any payment hereunder or under the
Revolving Notes becomes due and payable on a day other than a Business Day,
then such due date shall be extended to the next succeeding Business Day unless
provided otherwise under clause (ii) of the definition of "Interest Period";
provided that interest shall continue to accrue during the period of any such
extension and provided further, that in no event shall any such due date be
extended beyond the Revolving Credit Termination Date.
2.5. Revolving Notes. Revolving Credit Loans made by the Lender
shall be evidenced by the Revolving Notes, which Revolving Notes shall be dated
the Closing Date or such later date pursuant to an Assignment and Acceptance
and shall be duly completed, executed and delivered by the Borrower.
2.6. Reductions. The Borrower shall, by notice from an Authorized
Representative, have the right from time to time, upon not less than three (3)
Business Days written notice to the Lender, to reduce the Total Revolving
Credit Commitment. Each such reduction shall be in the aggregate amount of
$2,500,000 or such greater amount which is in an integral multiple of $500,000,
and shall permanently reduce the Total Revolving Credit Commitment. No such
reduction shall result in the payment of any Eurodollar Rate Loan other than on
the last day of the Interest Period of such Eurodollar Rate Loan unless such
prepayment is accompanied by amounts due, if any, under Section 3.4 hereof.
Each reduction of the Total Revolving Credit Commitment shall be accompanied by
payment of the Revolving Notes to the extent that the amount of Revolving
Credit Outstandings exceeds the Total Revolving Credit Commitment after giving
effect to such reduction, together with accrued and unpaid interest on the
amounts prepaid and any fees otherwise due.
2.7. Conversions and Elections of Subsequent Interest Periods.
Provided that no Event of Default shall have occurred and be continuing and
subject to the limitations set forth below and in Sections 3.1(b), 3.2 and 3.3
hereof, the Borrower may:
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(a) upon delivery of a properly completed Interest Rate
Selection Notice to the Lender on or before 11:00 A.M. Eastern Time on any
Business Day, convert all or a part of Eurodollar Rate Loans to Base Rate Loans
on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) upon delivery of a properly completed Interest Rate
Selection Notice to the Lender on or before 11:00 A.M. Eastern Time three (3)
Business Days prior to the date of such election or conversion:
(i) elect a subsequent Interest Period for all or
a portion of Eurodollar Rate Loans to begin on the last day of
the current Interest Period for such Eurodollar Rate Loans;
and
(ii) convert Base Rate Loans to Eurodollar Rate
Loans on any date.
Each election and conversion pursuant to this Section 2.7 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in Sections 2.1, 2.3 and Article IV hereof.
2.8. Unused Fee. For the period beginning on the Closing Date and
ending on the Revolving Credit Termination Date, the Borrower agrees to pay to
the Lender an unused fee equal to the Applicable Unused Fee multiplied by the
average daily amount by which the Total Revolving Credit Commitment exceeds
Revolving Credit Outstandings. Such payments of fees provided for in this
Section 2.8 shall be due in arrears on the last Business Day of each June,
September, December and March, commencing September 29, 1995 to and on the
Revolving Credit Termination Date. Notwithstanding the foregoing, so long as
the Lender fails to make available any of its Revolving Credit Commitment when
required, the Lender shall not be entitled to receive payment of such fee until
the Lender shall make its Revolving Credit Commitment available. Such fee
shall be calculated on the basis of a year of 360 days for the actual number of
days elapsed.
2.9. Use of Proceeds. The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Borrower for
Acquisitions permitted hereunder, general working capital needs and other
corporate purposes, provided, however, that no portion of the Revolving Credit
Facility shall be used, directly or indirectly, in connection with any
financing of a hostile Acquisition.
2.10. Extension of Revolving Credit Termination Date. At the request
of the Borrower the Lender may, in its sole discretion, elect not more than
twice after the Closing Date to extend the Revolving Credit Termination Date
then in effect for one additional period of one year. The Borrower shall
notify the Lender in writing of its request for such an extension of one year
by delivering to the Lender notice of such request signed by an Authorized
Representative not less than ninety (90) days prior to
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the first and second anniversary dates of the Closing Date. If the Lender
shall elect to so extend, the Lender shall notify the Borrower in writing
within thirty (30) days of its receipt of such request for extension of the
decision of the Lender as to whether to extend the Revolving Credit Termination
Date and any conditions applicable to such extension. Failure by the Lender to
respond to a request for an extension shall constitute a refusal of the Lender
to give its consent to such extension.
ARTICLE III
Yield Protection and Illegality
3.1. Additional Costs. (a) The Borrower shall promptly pay to the
Lender from time to time, without duplication, such amounts as such Lender may
reasonably determine to be necessary to compensate it or its parent
corporation, without duplication, for any costs incurred by the Lender or its
parent corporation which it determines are attributable to its making or
maintaining any Loan or its obligation to make any Loans, or any reduction in
any amount receivable by the Lender under this Agreement or the Notes in
respect of any of such Loans, including reductions in the rate of return on a
Lender's capital (such increases in costs and reductions in amounts receivable
and returns being herein called "Additional Costs"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or the Notes in respect of any of
such Loans (other than taxes imposed on or measured by income, revenues or
assets); or (ii) imposes or modifies any reserve, special deposit, or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Lender or its parent corporation
(other than any such reserve, deposit or requirement reflected in the Prime
Rate, the Federal Funds Effective Rate or the Eurodollar Rate, in each case
computed in accordance with the respective definitions of such terms set forth
in Section 1.1 hereof); or (iii) has or would have the effect of reducing the
rate of return on capital of any such Lender to a level below that which the
Lender could have achieved but for such Regulatory Change (taking into
consideration such Lender's policies with respect to capital adequacy); or (iv)
imposes any other condition adversely affecting the Lender or its parent
corporation under this Agreement or the Notes (or any of such extensions of
credit or liabilities). The Lender will notify the Authorized Representative
of any event occurring after the Closing Date which would entitle it to
compensation pursuant to this Section 3.1(a) as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation.
(b) Without limiting the effect of the foregoing
provisions of this Section 3.1, in the event that, by reason of any Regulatory
Change, the Lender or its parent corporation either (i) incurs Additional Costs
based on or measured by the excess above a specified level of the amount of a
category of deposits or other liabilities of the Lender or its parent
corporation which
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includes deposits by reference to which the interest rate on Eurodollar Rate
Loans is determined as provided in this Agreement or a category of extensions
of credit or other assets of the Lender or its parent corporation which
includes Eurodollar Rate Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets which it may hold, then, if
the Lender so elects, the obligation hereunder of the Lender to make, and to
convert Base Rate Loans into, Eurodollar Rate Loans that are the subject of
such restrictions shall be suspended until the date such Regulatory Change
ceases to be in effect and the Borrower shall, on the last day(s) of the then
current Interest Period(s) for outstanding Eurodollar Rate Loans convert such
Eurodollar Rate Loans into Base Rate Loans. In the event that the obligation
of the Lender to make, or to convert Base Rate Loans into, Eurodollar Rate
Loans is suspended, then any request by the Borrower during the pendency of
such suspension for a Eurodollar Rate Loan shall be deemed a request for a Base
Rate Loan from the Lender.
(c) Determinations by the Lender or its parent
corporation for purposes of this Section 3.1 of the effect of any Regulatory
Change on its costs of making or maintaining, or being committed to make Loans,
or the effect of any Regulatory Change on amounts receivable by the Lender in
respect of Loans, and of the additional amounts required to compensate the
Lender in respect of any Additional Costs, shall be made taking into account
such Lender's policies, or the policies of its parent corporation, as to the
allocation of capital, costs and other items and shall be conclusive absent
manifest error. The Lender requesting such compensation shall furnish to the
Authorized Representative within sixty (60) days of the incurrence of any
Additional Costs for which compensation is sought an explanation of the
Regulatory Change and calculations, in reasonable detail, setting forth the
Lender's or its parent corporation's determination of any such Additional
Costs.
3.2. Suspension of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any interest rate for
any Eurodollar Rate Loan for any Interest Period, the Lender determines (which
determination made on a reasonable basis shall be conclusive absent manifest
error) that:
(a) quotations of interest rates for the relevant
deposits referred to in the definition of "Eurodollar Rate" in Section
1.1 hereof are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the rate of interest
for such Eurodollar Rate Loan as provided in this Agreement; or
(b) the relevant rates of interest referred to in the
definition of "Interbank Offered Rate" in Section 1.1 hereof upon the
basis of which the Eurodollar Rate for such Interest Period is to be
determined do not adequately reflect the cost to the Lender of making
or maintaining such Eurodollar Rate Loan for such Interest Period;
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then the Lender shall give the Authorized Representative prompt notice thereof,
and so long as such condition remains in effect, the Lender shall be under no
obligation to make Eurodollar Rate Loans that are subject to such condition, or
to convert Loans into Eurodollar Rate Loans, and the Borrower shall on the last
day(s) of the then current Interest Period(s) for outstanding Eurodollar Rate
Loans, as applicable, convert such Eurodollar Rate Loans into another
Eurodollar Rate Loan if such Eurodollar Rate Loan is not subject to the same or
similar condition, or Base Rate Loans, if available hereunder. The Lender
shall give the Authorized Representative notice describing in reasonable detail
any event or condition described in this Section 3.2 promptly following the
determination by the Lender that the availability of Eurodollar Rate Loans is,
or is to be, suspended as a result thereof.
3.3. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Lender to honor its
obligation to make or maintain Eurodollar Rate Loans hereunder, then the Lender
shall promptly notify the Borrower thereof and the Lender's obligation to make
or continue Eurodollar Rate Loans, or convert Base Rate Loans into Eurodollar
Rate Loans, shall be suspended until such time as the Lender may again make and
maintain Eurodollar Rate Loans, and the Lender's outstanding Eurodollar Rate
Loans shall be converted into Base Rate Loans in accordance with Section 2.7
hereof.
3.4. Compensation. The Borrower shall promptly pay to the Lender,
upon the Lender's request, such amount or amounts as shall be sufficient (in
the reasonable determination of the Lender) to compensate it for any loss, cost
or expense incurred by it as a result of:
(a) any payment, prepayment or conversion of a Eurodollar
Rate Loan on a date other than the last day of the Interest Period for
such Eurodollar Rate Loan, including without limitation any conversion
required pursuant to Section 3.3 hereof; or
(b) any failure by the Borrower to borrow or convert a
Eurodollar Rate Loan on the date for such borrowing or conversion
specified in the relevant Borrowing Notice or Interest Rate Selection
Notice under Article II hereof;
such compensation to include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount so paid, prepaid or converted or not borrowed for the period
from the date of such payment, prepayment or conversion or failure to borrow or
convert to the last day of the then current Interest Period for such Loan (or,
in the case of a failure to borrow or convert, the Interest Period for such
Loan which would have commenced on the date scheduled for such borrowing or
conversion) at the applicable rate of interest for such Eurodollar Rate Loan
provided for herein over (ii) the Interbank Offered Rate (as reasonably
determined by the Lender) for Dollar deposits of amounts comparable to such
principal amount and maturities comparable to such period. A determination of
the
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Lender as to the amounts payable pursuant to this Section 3.4 shall be
conclusive, provided that such determinations are made on a reasonable basis.
The Lender requesting compensation under this Section 3.4 shall promptly
furnish to the Authorized Representative calculations in reasonable detail
setting forth the Lender's determination of the amount of such compensation.
3.5. Alternate Loan and Lender. In the event the Lender suspends
the making of any Eurodollar Rate Loan pursuant to this Article III (herein a
"Restricted Lender"), the Restricted Lender's Commitment Percentage of any
Eurodollar Rate Loan shall bear interest at the Base Rate until the Restricted
Lender once again makes available the applicable Eurodollar Rate Loan.
3.6. Taxes. (a) All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future excise, stamp
or other taxes, fees, duties, levies, imposts, charges, deductions,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding (i) franchise taxes, (ii) any taxes (other than U.S.
withholding taxes) that would not be imposed but for a connection between a
Lender and the jurisdiction imposing such taxes (other than a connection
arising solely by virtue of the activities of the Lender pursuant to or in
respect of this Agreement or any other Loan Document), (iii) any taxes imposed
on or measured by the Lender's assets, net income, receipts or branch profits
and (iv) any taxes arising after the Closing Date solely as a result of or
attributable to Lender changing its designated lending office after the date
such Lender becomes a party hereto (such non-excluded items being collectively
called "Taxes"). In the event that any withholding or deduction from any
payment to be made by the Borrower hereunder is required in respect of any
Taxes pursuant to any applicable law, rule or regulation, then the Borrower
will
(i) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(ii) promptly forward to the Lender an official receipt or
other documentation satisfactory to the Lender evidencing such payment
to such authority; and
(iii) pay to the Lender such additional amount or amounts
as is necessary to ensure that the net amount actually received by the
Lender will equal the full amount the Lender would have received had
no such withholding or deduction been required.
If any such Taxes shall be or become applicable after the date of this
Agreement to such payments by the Borrower to the Lender, the Lender shall use
reasonable efforts to make, fund, or maintain the Loan or Loans, as the case
may be, through another lending office located in another jurisdiction so as to
reduce, to the fullest extent possible, Borrower's liability hereunder, if the
making, funding or maintenance of such Loan or Loans through such other office
does not, in the reasonable judgment of the Lender,
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materially affect the Lender or such Loan. If Borrower is required to make any
additional payment to the Lender pursuant to this Section 3.6, and the Lender
receives, or is entitled to receive, a credit against, remission for, or
repayment of, any tax paid or payable by it in respect of, or calculated with
reference to, the Taxes giving rise to such payment, the Lender shall, within a
reasonable time after it receives such credit, relief, remission or repayment,
reimburse Borrower the amount of any such credit, relief, remission or
repayment.
(b) Prior to the date that a Lender or a participant
organized under the laws of a jurisdiction outside the United States becomes a
party hereto, such Person shall deliver to the Borrower such certificates,
documents or other evidence, as required by the Code or Treasury Regulations
issued pursuant thereto, properly completed, currently effective and duly
executed by such Lender or participant establishing that such payment is (i)
not subject to United States Federal backup withholding tax and (ii) not
subject to United States Federal withholding tax under the Code because such
payment is either effectively connected with the conduct by such Lender or
participant of a trade or business in the United States or totally exempt from
United States Federal withholding tax by reason of the application of the
provisions of a treaty to which the United States is a party or such Lender is
otherwise exempt. The Lender that fails to provide such certificates or forms
that it is required to provide under this Section 3.6(b) shall not be entitled
to the benefits of this Section 3.6 and, to the extent required by law,
Borrower shall be entitled to deduct from, and pay to the applicable taxing
authority, taxes from the payments made by Borrower to such Lender. The Lender
shall, from time to time, complete, execute and deliver such updates or
extensions or renewals or replacements of those forms, certificates and
documents as may be necessary to continue or maintain any such exemption.
(c) If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Lender for any incremental Taxes, interest or penalties that may become
payable by the Lender as a result of any such failure.
ARTICLE IV
Conditions to Making Loans
4.1. Conditions of Initial Advance. The obligation of the Lender
to make the initial Advance is subject to the conditions precedent that:
(a) the Lender shall have received on the Closing Date,
in form and substance satisfactory to the Lender, the following:
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(i) executed originals of each of this Agreement,
the Notes and the other Loan Documents, together with all
schedules and exhibits thereto;
(ii) favorable written opinions of internal
counsel of the Borrower dated the Closing Date, addressed to
the Lender and satisfactory to ▇▇▇▇▇ ▇▇▇▇▇ Mulliss & ▇▇▇▇▇,
L.L.P., special counsel to the Lender, substantially in the
form of Exhibit H attached hereto;
(iii) resolutions of the boards of directors or
other appropriate governing body (or of the appropriate
committee thereof) of the Borrower certified by its secretary
or assistant secretary as of the Closing Date, appointing the
initial Authorized Representative and approving and adopting
the Loan Documents to be executed by such Person, and
authorizing the execution and delivery thereof;
(iv) specimen signatures of officers of the
Borrower executing the Loan Documents on behalf of the
Borrower, certified by the secretary or assistant secretary of
the Borrower;
(v) the charter documents of the Borrower
certified as of a recent date by the Secretary of State of its
state of incorporation;
(vi) the bylaws of the Borrower certified as of
the Closing Date as true and correct by its secretary or
assistant secretary;
(vii) certificates issued as of a recent date by
the Secretary of State of Georgia as to the due existence and
good standing of the Borrower;
(viii) appropriate certificates of qualification to
do business, good standing and, where appropriate, authority
to conduct business under assumed name, issued in respect of
the Borrower as of a recent date by the Secretary of State or
comparable official of each jurisdiction in which the failure
to be qualified to do business or authorized so to conduct
business could have a Material Adverse Effect;
(ix) notice of appointment of the initial
Authorized Representative;
(x) certificate of an Authorized Representative
dated the Closing Date demonstrating compliance with the
financial covenants contained in Sections 7.1 through 7.3 as
of the Closing Date, substantially in the form of Exhibit I
attached hereto;
(xi) an initial Borrowing Notice;
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(xii) copies of all documents executed in
connection with the Wachovia Facility;
(xiii) all fees payable by the Borrower on the
Closing Date to the Lender; and
(xiv) such other documents, instruments,
certificates and opinions as the Lender may reasonably request
on or prior to the Closing Date in connection with the
consummation of the transactions contemplated hereby.
(b) In the good faith judgment of the Lender there shall
not have occurred or become known to the Lender any event, condition,
situation or status since the date of the year-end financial
statements for Fiscal Year 1995 delivered to the Lender that has had
or could reasonably be expected to result in a Material Adverse
Effect;
4.2. Conditions of All Revolving Loans. The obligations of the
Lender to make any Revolving Loans hereunder subsequent to the Closing Date are
subject to the satisfaction of the following conditions:
(a) the Lender shall have received a Borrowing Notice in
the form of Exhibit D hereto;
(b) the representations and warranties of the Borrower
and the Guarantor set forth in Article V hereof and in each of the
other Loan Documents shall be true and correct in all material
respects on and as of the date of such Advance, with the same effect
as though such representations and warranties had been made on and as
of such date, except to the extent that such representations and
warranties expressly relate to an earlier date and except that the
financial statements referred to in Section 5.6(a)(i) hereof shall be
deemed to be those financial statements most recently delivered to the
Lender pursuant to Section 6.1 hereof;
(c) at the time of (and after giving effect to) each
Advance, no Default or Event of Default specified in Article VIII
hereof, shall have occurred and be continuing; and
(d) immediately after giving effect to a Revolving Loan,
the aggregate principal balance of all outstanding Revolving Loans for
the Lender and in the aggregate shall not exceed, respectively, (i)
such Lender's Revolving Credit Commitment or (ii) the Total Revolving
Credit Commitment.
ARTICLE V
Representations and Warranties
The Borrower and each Guarantor represents and warrants with respect
to itself and its Material Subsidiaries that:
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5.1. Organization and Authority.
(a) The Borrower and each Material Subsidiary is a
corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation;
(b) The Borrower and each Material Subsidiary (x) has the
requisite power and authority to own its properties and assets and to
carry on its business as now being conducted and as contemplated in
the Loan Documents, and (y) is qualified to do business in every
jurisdiction in which failure so to qualify would have a Material
Adverse Effect;
(c) The Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party; and
(d) Each Guarantor will have the power and authority to
execute, deliver and perform the Subsidiary Guaranty and to execute,
deliver and perform the other Loan Documents to which it becomes a
party;
(e) When executed and delivered, each of the Loan
Documents to which the Borrower or any Guarantor is a party will be
the legal, valid and binding obligation or agreement, as the case may
be, of the Borrower or such Guarantor, enforceable against the
Borrower or such Guarantor in accordance with its terms, subject to
the effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general principles of
equity which may limit the availability of equitable remedies (whether
in a proceeding at law or in equity);
5.2. Loan Documents. The execution, delivery and performance by
the Borrower and each Guarantor of each of the Loan Documents to which it is a
party:
(a) have been duly authorized by all requisite corporate
action (including any required shareholder approval) of the Borrower
and each Guarantor required for the lawful execution, delivery and
performance thereof;
(b) do not violate any provisions of (i) applicable law, rule
or regulation, (ii) any order of any court or other agency of
government binding on the Borrower or any Subsidiary, or properties,
or (iii) the charter documents or bylaws of Borrower or any Material
Subsidiary;
(c) does not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which, with
notice or lapse of time, or both, would constitute an event of
default, under any material indenture, agreement or other instrument
to which Borrower or any Material
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Subsidiary is a party, or by which the properties or assets of
Borrower or any Material Subsidiary are bound;
(d) does not and will not result in the creation or
imposition of any Lien, charge or encumbrance of any nature whatsoever
upon any of the properties or assets of Borrower or any Material
Subsidiary;
5.3. Solvency. The Borrower is Solvent after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents;
5.4. Subsidiaries and Stockholders. The Borrower has no
Subsidiaries other than those listed on Schedule 5.4 hereto and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 6.23 hereof; Schedule 5.4 states as of the date hereof the
organizational form of each Subsidiary, the authorized and issued
capitalization of each Subsidiary listed thereon, the number of shares or other
equity interests of each class of capital stock or interest issued and
outstanding of each such Subsidiary and the number and percentage of
outstanding shares or other equity interest (including options, warrants and
other rights to acquire any interest) of each such class of capital stock or
equity interest owned by Borrower or by any such Subsidiary; the outstanding
shares or other equity interests of each such Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable; and
Borrower and each such Subsidiary owns beneficially and of record all the
shares and other interests it is listed as owning in Schedule 5.4, free and
clear of any Lien;
5.5. Ownership Interests. Borrower owns no interest in any Person
other than the Persons listed in Schedule 5.4 hereto;
5.6. Financial Condition.
(a) The Borrower has heretofore furnished to the Lender
consolidated balance sheets of the Borrower and its Subsidiaries, and
related notes thereto, and the related statements of operations,
stockholders equity and cash flows, and the related notes thereto,
dated April 2, 1995 with respect to Fiscal Year 1995;
(b) since April 2, 1995 there has been no material
adverse change in the condition, financial or otherwise, of the
Borrower or its Subsidiaries or in the businesses, properties and
operations of the Borrower or the Subsidiaries, nor have such
businesses or properties, taken as a whole, been materially adversely
affected as a result of any fire, explosion, earthquake, accident,
strike, lockout, combination of workers, flood, embargo or act of God;
(c) except as set forth on Schedule 5.6 hereto, neither
the Borrower nor any Subsidiary has incurred, other than in the
ordinary course of business, any material indebtedness, obligations,
commitments or other liability contingent or otherwise which remain
outstanding or unsatisfied;
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5.7. Title to Properties. The Borrower and each Material
Subsidiary has good and marketable title to all its real and personal
properties, subject to no transfer restrictions or Liens of any kind, except
for Permitted Liens;
5.8. Taxes. The Borrower and each Material Subsidiary has filed or
caused to be filed all federal, state and local tax returns which are required
to be filed by it and except for taxes and assessments being contested in good
faith by appropriate proceedings diligently conducted and against which
reserves satisfactory to the Borrower's independent certified public
accountants have been established, have paid or caused to be paid all taxes as
shown on said returns or on any assessment received by it, to the extent that
such taxes have become due;
5.9. Other Agreements. Neither the Borrower nor any Subsidiary is
(a) a party to any judgment, order, decree or any
agreement or instrument or subject to restrictions which could
reasonably be likely to have a Material Adverse Effect; or
(b) in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which the Borrower or any Subsidiary is a
party, which default has, or if not remedied within any applicable
grace period could reasonably be likely to have, a Material Adverse
Effect;
5.10. Litigation. There is no action, suit or proceeding at law or
in equity or by or before any governmental instrumentality or agency or
arbitral body pending, or, to the knowledge of the Borrower, threatened by or
against the Borrower or any Subsidiary or affecting the Borrower or any
Subsidiary or any properties or rights of the Borrower or any Subsidiary, which
could reasonably be likely to have a Material Adverse Effect;
5.11. Margin Stock. The Borrower does not own any "margin stock" as
such term is defined in Regulation U, as amended (12 C.F.R. Part 221), of the
Board. The proceeds of the borrowings made pursuant to Article II hereof will
be used by the Borrower only for the purposes set forth in Section 2.9 and
hereof. None of such proceeds will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which might constitute any of
the Loans under this Agreement a "purpose credit" within the meaning of said
Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither the
Borrower nor any agent acting in its behalf has taken or will take any action
which might cause this Agreement or any of the documents or instruments
delivered pursuant hereto to violate any regulation of the Board or to violate
the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933,
as amended, or any state securities laws, in each case as in effect on the date
hereof;
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5.12. Investment Company; Public Utility Holding Company. Neither
the Borrower nor any Subsidiary is (a) an "investment company," or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act
of 1940, as amended (15 U.S.C. Section 80a-1, et seq.) or (b) a "Holding
Company" or a "Subsidiary Company" of a "Holding Company" or an "Affiliate" of
a "Holding Company" or a "Subsidiary Company" of a "Holding Company," as such
terms are defined under the Public Utility Holding Company Act of 1935, as
amended. The application of the proceeds of the Loans and repayment thereof by
the Borrower and the performance by the Borrower and the Guarantors of the
transactions contemplated by this Agreement will not violate any provision of
said Acts, or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder, in each case as in effect on the date hereof;
5.13. Patents, Etc. The Borrower and each Material Subsidiary owns
or has the right to use, under valid license agreements or otherwise, all
material patents, licenses, franchises, trademarks, trademark rights, trade
names, trade name rights, trade secrets and copyrights necessary to the conduct
of its businesses as now conducted, without known conflict with any patent,
license, franchise, trademark, trade secrets and confidential commercial or
proprietary information, trade name, copyright, rights to trade secrets or
other proprietary rights of any other Person;
5.14. No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of the Borrower or any Guarantor in accordance with or pursuant to any Loan
Document nor (b) any statement, representation, or warranty provided to the
Lender in connection with the negotiation or preparation of the Loan Documents
contains any misrepresentation or untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstance under which it
was made, in order to make any such representation or statement contained
therein not misleading;
5.15. No Consents, Etc. Neither the respective businesses or
properties of the Borrower or any Subsidiary, nor any relationship between the
Borrower or any Subsidiary and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated hereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with,
any governmental or other authority or any other Person on the part of the
Borrower or any Subsidiary as a condition to the execution, delivery and
performance of, or consummation of the transactions contemplated by, this
Agreement or the other Loan Documents, which, if not obtained or effected,
would reasonably likely to have a Material Adverse Effect, or if so, such
consent, approval, authorization, filing, registration or qualification has
been obtained or effected, as the case may be;
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5.16. Employee Benefit Plans.
(a) Neither the Borrower nor any ERISA Affiliate maintains
or contributes to, or has any obligation under, any Employee Benefit
Plans other than those identified on Schedule 5.16 hereto;
(b) The Borrower and each ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and
published interpretations thereunder and in compliance with all
Foreign Benefit Laws with respect to all Employee Benefit Plans except
where failure to comply would not result in a Material Adverse Effect
and except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet
expired. Each Employee Benefit Plan that is intended to be qualified
under Section 401(a) of the Code has been determined by the Internal
Revenue Service to be so qualified, and each trust related to such
plan has been determined to be exempt under Section 501(a) of the
Code. No material liability has been incurred by the Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or penalties
with respect to any Employee Benefit Plan or any Multiemployer Plan;
(c) Other than as described on Schedule 5.16 hereto, no
Pension Plan has been terminated within the six year period prior to
the execution of this Agreement, nor has any accumulated funding
deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the IRS been received or requested
with respect to any Pension Plan, nor has the Borrower or any ERISA
Affiliate failed to make any contributions or to pay any amounts due
and owing as required by Section 412 of the Code, Section 202 of ERISA
or the terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 202 of ERISA,
nor has there been any event requiring any disclosure under Section
4041(c)(3)(C), 4063(a) or 4068(f) of ERISA with respect to any Pension
Plan;
(d) Neither the Borrower nor any ERISA Affiliate has:
(i) engaged in a nonexempt prohibited transaction described in Section
406 of ERISA or Section 4975 of the Code, (ii) incurred any liability
to the PBGC which remains outstanding other than the payment of
premiums and there are no premium payments which are due and unpaid,
(iii) failed to make a required contribution or payment to a
Multiemployer Plan or (iv) failed to make a required installment or
other required payment under Section 412 of the Code;
(e) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan;
(f) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Borrower
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after due inquiry, is threatened concerning or involving any Employee
Benefit Plan;
5.17. No Default. No Default or Event of Default exists hereunder;
5.18. Hazardous Materials. To the best of the Borrower's knowledge,
the Borrower and each Subsidiary is in compliance with all applicable
Environmental Laws in all respects except where the failure to comply does not
have a Material Adverse Effect and the Borrower has not been notified of any
action, suit, proceeding or investigation which calls into question compliance
by the Borrower or any Material Subsidiary with any Environmental Laws or which
seeks to suspend, revoke or terminate any license, permit or approval necessary
for the generation, handling, storage, treatment or disposal of any Hazardous
Material;
5.19. Employment Matters. (a) None of the employees of the
Borrower or any Subsidiary is subject to any collective bargaining agreement
and there are no strikes, work stoppages, election or decertification petitions
or proceedings, unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings pending or, to the
best knowledge of the Borrower, threatened against the Borrower or any
Subsidiary or between the Borrower or any Subsidiary and any of its employees,
other than employee grievances arising in the ordinary course of business which
would not in the aggregate have a Material Adverse Effect;
(b) The Borrower and each Material Subsidiary is in compliance in all
respects with all applicable laws, rules and regulations pertaining to labor or
employment matters, including without limitation those pertaining to wages,
hours, occupational safety and taxation and there is neither pending or
threatened any material litigation, administrative proceeding or investigation
in respect of such matters.
ARTICLE VI
Affirmative Covenants
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Lender shall otherwise consent in writing, the Borrower will and, where
applicable, will cause each Subsidiary to:
6.1. Financial Reports, Etc. (a) Annual Reporting. As soon
as practical and in any event within 120 days after the end of each Fiscal Year
of the Borrower, deliver or cause to be delivered to the Lender (i)
consolidated balance sheets of the Borrower and its Subsidiaries, and the notes
thereto, the related statements of operations, stockholders' equity and cash
flows, and the respective notes thereto, for such Fiscal Year, setting forth in
the case of the statements comparative financial statements for the preceding
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Fiscal Year, all prepared in accordance with GAAP applied on a Consistent Basis
and containing, with respect to the consolidated financial reports, opinions of
Deloitte & Touche, L.L.P., or other such independent certified public
accountants of nationally recognized standing, which are unqualified and
without exception (except as may be acceptable to the Lender) and (ii) a
certificate of an Authorized Representative demonstrating compliance with
Sections 7.1, 7.2 and 7.3 hereof, which certificate shall be in the form
attached hereto as Exhibit I hereof;
(b) Quarterly Reporting. As soon as practical and in any
event within 45 days after the end of each quarterly period (except the last
reporting period of the Fiscal Year), deliver to the Lender (i) consolidated
balance sheets of the Borrower and its Subsidiaries as of the end of such
reporting period, the related statements of operations, stockholders' equity
and cash flows for such reporting period and for the period from the beginning
of the Fiscal Year through the end of such reporting period, accompanied by a
certificate of an Authorized Representative to the effect that such financial
statements present fairly the financial position of the Borrower and its
Subsidiaries as of the end of such reporting period and the results of their
operations and the changes in their financial position for such reporting
period, in conformity with GAAP applicable to interim financial information and
the rules and regulations of the Securities and Exchange Commission with
respect to interim financials, and (ii) a certificate of an Authorized
Representative containing computations for such quarter comparable to that
required pursuant to Section 6.1(a)(ii) hereof;
(c) Accountants' Letter. Together with each delivery of
the financial statements required by Section 6.1(a)(i) hereof, deliver to the
Lender a letter from the Borrower's accountants specified in Section 6.1(a)(i)
hereof stating that in performing the audit necessary to render an opinion on
the financial statements delivered under Section 6.1(a)(i) hereof, they
obtained no knowledge of any Default or Event of Default by the Borrower or any
Subsidiary in the fulfillment of the terms and provisions of this Agreement or
the other Loan Documents to which it is a party insofar as they relate to
financial matters (which at the date of such statement remains uncured); and if
the accountants have obtained knowledge of such Default or Event of Default, a
statement specifying the nature and period of existence thereof;
(d) Special Reports. Promptly upon their becoming
available to the Borrower, the Borrower shall deliver to the Lender a copy of
(i) all regular or special reports or effective registration statements which
Borrower or any Subsidiary shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange, and (ii) any
proxy statement distributed by the Borrower or any Subsidiary to its
shareholders, bondholders or the financial community in general;
(e) Acquisition Information. At least 15 days prior to
the closing of any Acquisition with a Cost of Acquisition of $10,000,000 or
more, the Borrower shall deliver to the Lender (i) a copy of the term sheet,
letter of intent, financial projections
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showing the impact of the Acquisition, on the financial results and condition
of the Borrower and its Subsidiaries and general information on the scope of
and the findings relating to the Borrower's "due dilligence" conducted in
connection with such Acquisition, (ii) pro forma historical financial
statements as of the end of the most recently completed Fiscal Year giving
effect to such Acquisition, together with a certificate of an Authorized
Representative demonstrating compliance with Article VII hereof after giving
effect to such Acquisition, and (iii) to the extent other relevant information
regarding any such Acquisition is prepared and distributed to its Board of
Directors, a copy of such other information shall be delivered by the Borrower
to the Lender at the time such information is made available to the Borrower's
Board of Directors;
(f) Other Information. Promptly, from time to time,
deliver or cause to be delivered to the Lender such other information regarding
Borrower's or any Subsidiary's operations, business affairs and financial
condition as the Lender may reasonably request. The Lender is hereby
authorized to deliver a copy of any such financial information delivered
hereunder to the Lender (or any affiliate of the Lender), to any regulatory
authority having jurisdiction over the Lender pursuant to any written request
therefor, or to any other Person who shall acquire or consider the assignment
of or participation in any Loan permitted by this Agreement.
6.2. Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition and make all needed repairs,
replacements and renewals as are reasonably necessary to conduct its business
in accordance with customary business practices.
6.3. Existence, Qualification, Etc. Do or cause to be done all
things necessary to preserve and keep in full force and effect its existence
and all material rights and franchises, trade names, trademarks and permits and
maintain its license or qualification to do business as a foreign corporation
and good standing in each jurisdiction in which its ownership or lease of
property or the nature of its business makes such license or qualification
necessary except where the failure to so qualify would not have a Material
Adverse Effect.
6.4. Regulations and Taxes. Comply in all material respects with
or contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of its
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves have been
established.
6.5. Insurance. (a) Keep all of its insurable properties
adequately insured at all times with responsible insurance carriers against
loss or damage by fire and other hazards to the extent and in the manner as are
customarily insured against by similar
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businesses owning such properties similarly situated, (b) maintain general
public liability insurance at all times with responsible insurance carriers
against liability on account of damage to persons and property having such
limits, deductibles, exclusions and co-insurance and other provisions providing
no less coverages than are maintained by similar businesses that are similarly
situated, such insurance policies to be in form reasonably satisfactory to the
Lender, and (c) maintain insurance under all applicable workers' compensation
laws (or in the alternative, maintain required reserves if self-insured for
workers' compensation purposes) and against loss by reason by business
interruption. Each of the policies of insurance described in this Section 6.5
shall provide that the insurer shall give the Lender not less than thirty (30)
days' prior written notice before any such policy shall be terminated, lapse or
be altered in any manner.
6.6. True Books. Keep true books of record and account in which
full, true and correct entries will be made of all of its dealings and
transactions, and set up on its books such reserves as may be required by GAAP
with respect to doubtful accounts and all taxes, assessments, charges, levies
and claims and with respect to its business in general, and include such
reserves in interim as well as year-end financial statements.
6.7. Payment of Other Indebtedness. Pay when due (or within
applicable grace periods) all Indebtedness (for which the failure to pay would
constitute an Event of Default under Section 8.1(e)) due third Persons, except
when the amount thereof is being contested in good faith by appropriate
proceedings diligently conducted and with reserves in form and amount
reasonably acceptable to the Lender therefor being set aside on the books of
the Borrower or the applicable Subsidiary.
6.8. Right of Inspection. Permit any Person designated by the
Lender to visit and inspect any of the properties, corporate books and
financial reports of the Borrower and to discuss its affairs, finances and
accounts with its principal officers and independent certified public
accountants, all at reasonable times, at reasonable intervals and with
reasonable prior notice, provided, that prior to the occurrence and continuance
of a Default or Event of Default, the expenses incurred in connection with such
visits and inspections shall be paid by the Borrower for only one such visit or
inspection each calendar year, and after the occurrence and during continuance
of a Default or an Event of Default, such expenses shall be paid by the
Borrower for all such visits and inspections.
6.9. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of
any regulatory authority with respect to the conduct of its business.
6.10. Governmental Licenses. Obtain and maintain all licenses,
permits, certifications and approvals of all applicable Governmental
Authorities as are required for the conduct of its business as currently
conducted and herein contemplated except
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where the failure to do so is not reasonably likely to result in a Material
Adverse Effect.
6.11. Covenants Extending to Other Persons. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Borrower in this Article VI.
6.12. Officer's Knowledge of Default. Within five (5) days of any
officer of the Borrower obtaining knowledge of any Default or Event of Default
hereunder or under any other obligation of the Borrower or any Subsidiary to
the Lender, cause such officer or an Authorized Representative to notify the
Lender within such five (5) day period of the nature thereof, the period of
existence thereof, and what action the Borrower proposes to take with respect
thereto.
6.13. Suits or Other Proceedings. Upon any officer of the Borrower
or any Subsidiary obtaining knowledge of any litigation or other proceedings
being instituted against the Borrower or any Subsidiary, or any attachment,
levy, execution or other process being instituted against any assets of the
Borrower or any Subsidiary, making a claim or claims in an aggregate amount
greater than $1,000,000 or not otherwise covered by insurance, promptly deliver
to the Lender written notice thereof stating the nature and status of such
litigation, dispute, proceeding, levy, execution or other process.
6.14. Notice of Discharge of Hazardous Material or Environmental
Complaint. Promptly provide to the Lender true, accurate and complete copies
of any and all notices, complaints, orders, directives, claims, or citations
received by the Borrower or any Subsidiary relating to any (a) violation or
alleged violation by the Borrower or any Subsidiary of any applicable
Environmental Laws; (b) release or threatened release by the Borrower or any
Subsidiary, or at any facility or upon any property owned or operated by the
Borrower or any Subsidiary, of any Hazardous Material, except where occurring
legally; or (c) liability or alleged liability of the Borrower or any
Subsidiary for the costs of cleaning up, removing, remediating or responding to
a release of Hazardous Materials.
6.15. Environmental Compliance. If the Borrower or any Subsidiary
shall receive letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or and Subsidiary has violated any Environmental Law
or is liable for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials, the Borrower shall, within the time period
permitted by the applicable Environmental Law or the Governmental Authority
responsible for enforcing such Environmental Law, remove or remedy, or cause
the applicable Subsidiary to remove or remedy, such violation or release or
satisfy such liability, except where the applicability of the Environmental
Law, the fact of such violation or liability or what is required to remove or
remedy such violation is being contested by the Borrower or the applicable
Subsidiary by appropriate proceedings diligently
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conducted and all reserves with respect thereto as may be required under
Generally Accepted Accounting Principles, if any, have been made.
6.16. Indemnification. The Borrower hereby agrees to defend,
indemnify and hold the Lender, its affiliates and its officers, directors,
employees and agents, harmless from and against any and all claims, losses,
penalties, liabilities, damages and expenses (including, without limitation,
assessment and cleanup costs and reasonable attorneys' fees and disbursements)
arising directly or indirectly from, out of or by reason of (a) the violation
of any Environmental Law by the Borrower or any Subsidiary or with respect to
any property owned, operated or leased by the Borrower or any Subsidiary or (b)
the handling, storage, treatment, emission or disposal of any Hazardous
Material by or on behalf of the Borrower or any Subsidiary on or with respect
to property owned or leased or operated by the Borrower or any Subsidiary. The
Borrower shall not be liable under this Section 6.16 for any such amounts
arising solely as a result of the gross negligence or willful misconduct of any
indemnified party. The provisions of this Section 6.16 shall survive repayment
of the Obligations, occurrence of the Revolving Credit Termination Date and
expiration or termination of this Agreement.
6.17. Further Assurances. At the Borrower's cost and expense, upon
request of the Lender, duly execute and deliver or cause to be duly executed
and delivered, to the Lender such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Lender to carry out more effectively the provisions and purposes of this
Agreement and the other Loan Documents.
6.18. Employee Benefit Plans. With reasonable promptness, and in
any event within thirty (30) days thereof, give notice of and/or deliver to
Lender copies of (a) the establishment of any new Employee Benefit Plan, (b)
the commencement of contributions to any plan to which the Borrower or any of
its ERISA Affiliates was not previously contributing, (c) any material increase
in the benefits of any existing Employee Benefit Plan, (d) each funding waiver
request filed with respect to any Employee Benefit Plan and all communications
received or sent by the Borrower or any ERISA Affiliate with respect to such
request and (e) the failure of the Borrower or any ERISA Affiliate to make a
required installment or payment under Section 202 of ERISA or Section 412 of
the Code by the due date.
6.19. Termination Events. Promptly and in any event within fifteen
(15) days of becoming aware of the occurrence of or forthcoming occurrence of
any (a) Termination Event or (b) "prohibited transaction," as such term is
defined in Section 406 of ERISA or Section 4975 of the Code, in connection with
any Pension Plan or any trust created thereunder, deliver to the Lender a
notice specifying the nature thereof, what action the Borrower has taken, is
taking or proposes to take with respect thereto and,
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when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto.
6.20. ERISA Notices. With reasonable promptness but in any event
within fifteen (15) days for purposes of clauses (a), (b) and (c), deliver to
the Lender copies of (a) any unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit Plan under
Section 401(a) of the Code, (b) all notices received by the Borrower or any
ERISA Affiliate of the PBGC's intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (c) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by the
Borrower or any ERISA Affiliate with the Internal Revenue Service with respect
to each Pension Plan and (d) all notices received by the Borrower or any ERISA
Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount
of withdrawal liability pursuant to Section 4202 of ERISA. The Borrower will
notify the Lender in writing within five (5) Business Days of any Borrower
obtaining knowledge or reason to know that the Borrower or any ERISA Affiliate
has filed or intends to file a notice of intent to terminate any Pension Plan
under a distress termination within the meaning of Section 4041(c) of ERISA.
6.21. Continued Operations. Continue at all times (i) to conduct
its business and engage principally in the same line or lines of business
substantially as heretofore conducted and (ii) preserve, protect and maintain
free from Liens, other than Permitted Liens, its material patents, copyrights,
licenses, trademarks, trademark rights, trade names, trade name rights, trade
secrets and know-how necessary or useful in the conduct of its operations.
6.22. Use of Proceeds. Use the proceeds of the Loans solely for
the purposes specified in Section 2.9 hereof.
6.23. New Subsidiaries. Simultaneously with the acquisition or
creation of any Material Subsidiary, cause to be delivered to the Lender each
of the following:
(i) a Subsidiary Guaranty substantially in the form attached
hereto as Exhibit G;
(ii) an opinion of counsel to the Subsidiary dated as of the
date of delivery of the Subsidiary Guaranty provided in the foregoing
clause (i) and addressed to the Lender in form and substance
reasonably acceptable to the Lender (which opinion may include
assumptions and qualifications of similar effect to those contained in
the opinions of counsel delivered pursuant to Section 4.1(a)(iii))
hereof), to the effect that:
(A) such Subsidiary is duly organized, validly
existing and in good standing in the jurisdiction of its
organization, has the requisite power and authority to own its
properties and conduct its business as then owned and then
proposed to be conducted and is duly qualified
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to transact business and is in good standing as a foreign
corporation or partnership in the jurisdictions set forth in
such opinion; and
(B) the execution, delivery and performance of
the Subsidiary Guaranty described in clause (i) of this
Section 6.23 to which such Subsidiary is a signatory have been
duly authorized by all requisite corporate or partnership
action (including any required shareholder or partner
approval), such agreement has been duly executed and
delivered, constitutes the valid and binding obligation of
such Subsidiary, enforceable against such Subsidiary in
accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization
or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general
principles of equity which may limit the availability of
equitable remedies (whether in a proceeding at law or in
equity) and to the actual knowledge of such counsel does not
and will not violate any laws, rules or regulations applicable
to the Subsidiary or violate or constitute a breach of any
contract, agreement, indenture, lease, instrument or other
document, judgment, writ, determination, order or decree to
which the Subsidiary is a party or by which the Subsidiary or
any of its properties are bound and which is set forth on a
schedule to such opinion; and
(iv) current copies of the charter documents, including
partnership agreements and certificate of limited partnership, if
applicable, and bylaws of such Subsidiary, minutes of duly called and
conducted meetings (or duly effected consent actions) of the Board of
Directors, partners, or appropriate committees thereof (and, if
required by such charter documents, bylaws or by applicable laws, of
the shareholders or partners) of such Subsidiary authorizing the
actions and the execution and delivery of documents described in
clause (i) of this Section 6.23 and evidence satisfactory to the
Lender (confirmation of the receipt of which will be provided by the
Lender) that such Subsidiary is Solvent as of such date and after
giving effect to the Subsidiary Guaranty.
ARTICLE VII
Negative Covenants
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Lender shall otherwise consent in writing, the Borrower will not nor permit any
Subsidiary to:
7.1. Consolidated Leverage Ratio. Permit at any time the
Consolidated Leverage Ratio to be greater than .60 to 1.00.
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7.2. Consolidated Fixed Charge Coverage Ratio. Permit at any time
the Consolidated Fixed Charge Ratio of the Borrower to be less than 2.00 to
1.00.
7.3. Consolidated Shareholders' Equity. Permit Consolidated
Shareholders' Equity to be less than (i) the difference of $80,000,000 less the
effect of Permitted Stock Repurchases made subsequent to April 2, 1995 through
the end of the Fiscal Year ended March 31, 1996 and (ii) thereafter at all
times, the sum of (A) the amount of Consolidated Shareholders' Equity required
to be maintained pursuant to this Section 7.3 as at the end of the immediately
preceding Fiscal Year, plus (B) 50% of Net Income (with no reduction for net
losses during any period) for the Fiscal Year of the Borrower ending on such
day, plus (C) 100% of the aggregate amount of all increases in the stated
capital and additional paid-in capital accounts of the Borrower resulting from
the issuance of equity securities, conversion of any debt instruments into
equity or other capital investments.
7.4. Consolidated Cash Flow Ratio. Permit at the end of each
fiscal quarter of the Borrower the ratio of Consolidated Funded Indebtedness to
Consolidated Cash Flow for the Four-Quarter Period then ended to be greater
6.00 to 1.00.
7.5. Liens. Incur, create or permit to exist any pledge, Lien,
charge or other encumbrance of any nature whatsoever with respect to any
property or assets now owned or hereafter acquired by the Borrower or any
Subsidiary, other than the following (collectively, "Permitted Liens"):
(a) Liens existing as of the date hereof and as set forth
in Schedule 7.5 attached hereto;
(b) Liens imposed by law for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which
are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business and in existence less than
90 days from the date of creation thereof for amounts not yet due or
which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(d) Liens incurred or deposits made in the ordinary
course of business (including, without limitation, surety bonds and
appeal bonds) in connection with workers' compensation, unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the
repayment of Indebtedness), statutory obligations and other similar
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obligations or arising as a result of progress payments under
government contracts;
(e) purchase money Liens to secure Indebtedness incurred
to purchase fixed assets, provided the Indebtedness represents not
less than 75% of the purchase price of such assets as of the date of
purchase thereof and no property other than the assets so purchased
secures such Indebtedness; and
(f) Liens granted to the issuer of any documentary
letters of credit upon property shipped under or in connection with
such documentary letters of credit.
7.6. Transfer of Assets. Sell, lease, transfer or otherwise
dispose of all or substantially all of the assets of Borrower or any Material
Subsidiary in a single or series of related transactions.
7.7. Investments; Acquisitions. Make any acquisition or otherwise
purchase, own, invest in or otherwise acquire, directly or indirectly, any
stock or other securities, or make or permit to exist any interest whatsoever
in any other Person or permit to exist any loans or advances to any Person,
except that Borrower or any Subsidiary may maintain investments or invest in:
(a) Eligible Securities;
(b) investments in Subsidiaries existing as of the date
hereof and as set forth in Schedule 5.4 attached hereto;
(c) accounts receivable arising and trade credit granted
in the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof in connection with
accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss;
(d) other loans, advances and investments in an aggregate
principal amount at any time outstanding not to exceed $250,000; and
(e) loans in the ordinary course of business to
employees, affiliates and Subsidiaries who are not Guarantors in an
aggregate principal amount outstanding at any time of $5,000,000; and
(f) loans and advances to and investments in Subsidiaries
who are Guarantors.
Notwithstanding the foregoing, the Borrower and its Subsidiaries may make
Acquisitions so long as: (i) immediately prior to and immediately after the
consummation of such Acquisition, no Default or Event of Default has occurred
and is continuing, (ii) substantially all of the sales and operating profits
generated by such Person (or assets) so acquired or invested are derived from
the same or related line or lines of business as then conducted by the Borrower
and its Subsidiaries, (iii) a certificate of an
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Authorized Representative demonstrating compliance with Article VII hereof
after giving effect to such Acquisition, (iv) the Cost of Acquisition with
respect to any Acquisition entered into during the term of this Agreement shall
not exceed $25,000,000, (v) the aggregate amount of all Cost of Acquisitions
shall not exceed $40,000,000 during the term of this Agreement, and (v) in the
event the Person so acquired is not a Subsidiary, the Borrower's written
strategic plan (as reviewed by the Lender) includes additional investment in
such Person sufficient for it to become a Subsidiary.
7.8. Merger or Consolidation. (a) Consolidate with or merge into
any other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise dispose
of all or a substantial part of its assets (other than sales in the ordinary
course of business); provided, however, any Subsidiary of the Borrower may
merge or transfer all or substantially all of its assets into or consolidate
with the Borrower or any wholly owned Subsidiary of the Borrower, and any
Person may merge with the Borrower if the Borrower shall be the survivor
thereof and such merger shall not cause, create or result in the occurrence of
any Default or Event of Default hereunder.
7.9. Restricted Payments. Make any Restricted Payments or apply or
set apart any of their assets therefor or agree to do any of the foregoing,
other than the negotiated or open market repurchase by the Borrower of up to
1,500,000 shares of its common capital stock for an aggregate purchase price
not to exceed $20,000,000 ("Permitted Stock Repurchases"), providing that at
the time of each repurchase and immediately after giving effect thereto no
Default or Event of Default shall exist or occur and be continuing.
7.10. Transactions with Affiliates. Other than transactions
permitted under Sections 7.7 hereof and transactions among the Borrower and
wholly owned Subsidiaries or among wholly owned Subsidiaries, enter into any
transaction after the Closing Date, including, without limitation, the
purchase, sale, lease or exchange of property, real or personal, or the
rendering of any service, with any Affiliate of the Borrower, except (a) that
such Persons may render services to the Borrower or its Subsidiaries for
compensation at the same rates generally paid by Persons engaged in the same or
similar businesses for the same or similar services, (b) that the Borrower or
any Subsidiary may render services to such Persons for compensation at the same
rates generally charged by the Borrower or such Subsidiary and (c) upon terms
no less favorable to the Borrower (or any Subsidiary) than would be obtained in
a comparable arm's-length transaction with a Person not an Affiliate.
7.11. Compliance with ERISA. With respect to any Pension Plan,
Employee Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which
would result in a liability to the Borrower or any ERISA Affiliate in
excess of $500,000;
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(b) permit the present value of all benefit liabilities
under all Pension Plans to exceed the current value of the assets of
such Pension Plans allocable to such benefit liabilities by more than
$500,000;
(c) permit any accumulated funding deficiency in excess
of $500,000 (as defined in Section 202 of ERISA and Section 412 of the
Code) with respect to any Pension Plan, whether or not waived;
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto which results in or is likely to
result in a liability in excess of $500,000; or
(e) engage, or permit any Borrower or any ERISA Affiliate
to engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to
Section 502(i) of ERISA or a tax pursuant to Section 4975 of the Code
in excess of $500,000 may be imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan which liability or increase, individually or together with all
similar liabilities and increases, is in excess of $500,000; or
(g) fail, or permit the Borrower or any ERISA Affiliate
to fail, to establish, maintain and operate each Employee Benefit Plan
in compliance in all material respects with the provisions of ERISA,
the Code, all applicable Foreign Benefit Loans and all other
applicable laws and the regulations and official published
interpretations thereof.
7.12. Fiscal Year. Change its Fiscal Year.
7.13. Limitations on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower of real
or personal property which has been or is to be sold or transferred by the
Borrower to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of the Borrower ("Sale and Leaseback Transactions").
7.14. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily
or involuntarily) or commence or suffer any proceedings seeking any such
winding up, liquidation or dissolution.
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ARTICLE VIII
Events of Default and Acceleration
8.1. Events of Default. If any one or more of the following events
("Events of Default") shall occur for any reason whatsoever (and whether such
occurrence shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) if default shall be made in the due and punctual
payment of the principal of any Loan or other Obligation, when and as
the same shall be due and payable whether pursuant to any provision of
Article II hereof, at maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual
payment of any amount of interest on any Loan or of any fees or other
amounts payable to the Lender under the Loan Documents on the date on
which the same shall be due and payable; or
(c) if default shall be made in the performance or
observance of any covenant set forth in Sections 6.8, 6.12, 6.22, 6.23
or Article VII hereof;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement, the Notes or the other Loan
Documents (other than as described in clauses (a), (b) or (c) above)
or any other agreement between the Borrower and the Lender creating or
relating to any Indebtedness between the Borrower and the Lender and
such default shall continue for 30 or more days after the earlier of
receipt of notice of such default by the Authorized Representative
from the Lender or an officer of the Borrower becomes aware of such
default, or if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in any of the other Loan Documents (beyond any
applicable grace period, if any, contained therein) or in any
instrument or document evidencing or creating any obligation,
guaranty, or Lien in favor of the Lender or delivered to the Lender in
connection with or pursuant to this Agreement or any of the
Obligations, or if any Loan Document ceases to be in full force and
effect (other than by reason of any action by the Lender), or if
without the written consent of the Lender this Agreement or any other
Loan Document shall be disaffirmed or shall terminate, be terminable
or be terminated or become void or unenforceable for any reason
whatsoever (other than in accordance with its terms in the absence of
default or by reason of any action by the Lender); or
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(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of Indebtedness outstanding (other than the Notes)
when due or within any applicable grace period; or
(f) any event or condition shall occur which results in
the acceleration of the maturity of Indebtedness outstanding of the
Borrower or any Subsidiary or the mandatory prepayment or purchase of
such Indebtedness by the Borrower (or its designee) or such Subsidiary
(or its designee) prior to the scheduled maturity thereof, or enables
(or, with the giving of notice or lapse of time or both, would enable)
the holders of such Indebtedness or any Person acting on such holders'
behalf to accelerate the maturity thereof or require the mandatory
prepayment or purchase thereof prior to the scheduled maturity
thereof, without regard to whether such holders or other Person shall
have exercised or waived their right to do so; or
(g) if any material representation, warranty or other
statement of fact contained herein or any other Loan Document or in
any writing, certificate, report or statement at any time furnished to
the Lender by or on behalf of the Borrower or any Guarantor pursuant
to or in connection with this Agreement or the other Loan Documents,
or otherwise, shall be false or misleading in any material respect
when given; or
(h) if the Borrower or any Guarantor shall be unable to
pay its debts generally as they become due; file a petition to take
advantage of any insolvency statute; make an assignment for the
benefit of its creditors; commence a proceeding for the appointment of
a receiver, trustee, liquidator or conservator of itself or of the
whole or any substantial part of its property; file a petition or
answer seeking reorganization or arrangement or similar relief under
the federal bankruptcy laws or any other applicable law or statute; or
(i) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or any Guarantor or of the
whole or any substantial part of its properties and such order,
judgment or decree continues unstayed and in effect for a period of
thirty (30) days, or approve a petition filed against the Borrower or
any Guarantor seeking reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state, which petition
is not dismissed within thirty (30) days; or if, under the provisions
of any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of the Borrower
or any Guarantor or of the whole or any substantial part of its
properties, which control is not relinquished within thirty (30) days;
or if there is commenced against the Borrower any proceeding or
petition seeking reorganization, arrangement or similar relief under
the federal bankruptcy laws or any other applicable law or statute of
the United States of America or any state which
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proceeding or petition remains undismissed for a period of thirty (30)
days; or if the Borrower or any Guarantor takes any action to indicate
its consent to or approval of any such proceeding or petition; or
(j) if (i) any judgment where the amount not covered by
insurance (or the amount as to which the insurer denies liability) is
in excess of $500,000 is rendered against the Borrower or any
Guarantor, or (ii) there is any attachment, injunction or execution
against any of the properties of the Borrower or any Guarantor for any
amount in excess of $500,000; and such judgment, attachment,
injunction or execution remains unpaid, unstayed, undischarged,
unbonded or undismissed for a period of thirty (30) days; or
(k) if the Borrower or any Guarantor shall suspend all or
any part of its operations material to the conduct of the business of
the Borrower for a period of more than 120 days; or
(l) if the Borrower shall breach any of the material
terms or conditions of any Swap Agreement with the Lender and such
breach shall continue beyond any grace period, if any, relating
thereto pursuant to its terms; or
(m) if the Borrower shall cause, suffer or permit (i) any
"person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), other than the ▇▇▇▇▇▇▇▇▇ Family or the
Crown ESOP to own or control, directly or indirectly, more than thirty
percent (30%) of the capital stock of the Borrower having voting
rights in the election of directors, or any other equity security or a
security convertible into or exchangeable or redeemable for any equity
security or (ii) individuals who at the Closing Date constituted the
Board of Directors (together with any new directors whose election by
the Board of Directors or whose nomination for election by the
stockholders of the Borrower was approved by a vote of a majority of
the directors of the Borrower then still in office who were either
directors at the Closing Date or whose election or nomination for
election was previously so approved) to cease for any reason to
constitute at least a majority of the Board of Directors then in
office;
then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall have not been waived,
(A) either or both of the following actions may
be taken: (i) the Lender may declare any obligation of the
Lender to make further Revolving Loans terminated, whereupon
the obligation of the Lender to make further Revolving Loans
hereunder shall terminate immediately, and (ii) the Lender
may, at its option, declare by notice to the Borrower any or
all of the Obligations to be immediately due and payable, and
the same, including all interest accrued thereon and all other
obligations of the
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Borrower to the Lender shall forthwith become immediately due
and payable without presentment, demand, protest, notice or
other formality of any kind, all of which are hereby expressly
waived, anything contained herein or in any instrument
evidencing the Obligations to the contrary notwithstanding;
provided, however, that notwithstanding the above, if there
shall occur an Event of Default under clause (h) or (i) above,
then the obligation of the Lender to make Revolving Loans
hereunder shall automatically terminate and any and all of the
Obligations shall be immediately due and payable without the
necessity of any action by the Lender; and
(B) the Lender shall have all of the rights and
remedies available under the Loan Documents or under any
applicable law.
8.2. Lender to Act. In case any one or more Events of Default
shall occur and not have been waived, the Lender may proceed to protect and
enforce its rights or remedies either by suit in equity or by action at law, or
both, whether for the specific performance of any covenant, agreement or other
provision contained herein or in any other Loan Document, or to enforce the
payment of the Obligations or any other legal or equitable right or remedy.
8.3. Cumulative Rights. No right or remedy herein conferred upon
the Lender is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or
remedy contained herein and therein or now or hereafter existing at law or in
equity or by statute, or otherwise.
8.4. No Waiver. No course of dealing between the Borrower and the
Lender or any failure or delay on the part of the Lender in exercising any
rights or remedies under any Loan Document or otherwise available to it shall
operate as a waiver of any rights or remedies and no single or partial exercise
of any rights or remedies shall operate as a waiver or preclude the exercise of
any other rights or remedies hereunder or of the same right or remedy on a
future occasion.
8.5. Allocation of Proceeds. If an Event of Default has
occurred and not been waived, and the maturity of the Notes has been
accelerated pursuant to Article VIII hereof, all payments received by the
Lender hereunder, in respect of any principal of or interest on the Obligations
or any other amounts payable by the Borrower hereunder shall be applied by the
Lender in the following order:
(a) amounts due to the Lender pursuant to Sections 2.8
and 9.5 hereof;
(b) payments of interest on Loans;
(c) payments of principal of Loans;
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(d) amounts due to the Lender pursuant to Sections 6.16
and 9.9 hereof;
(e) payments of all other amounts due under this
Agreement;
(f) amounts due to the Lender in respect of Obligations
consisting of liabilities under any Swap Agreement with the Lender;
and
(g) any surplus remaining after application as provided
for herein, to the Borrower or otherwise as may be required by
applicable law.
ARTICLE IX
Miscellaneous
9.1. Assignments and Participations. (a) At any time after the
Closing Date the Lender may, with the prior written consent of the Borrower
provided no Event of Default has occurred and is continuing, assign to one or
more banks or financial institutions all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Note payable to its order); provided, that (i) each such
assignment shall be of a constant and not a varying percentage of all of the
assigning Lender's rights and obligations under the Revolving Credit Facility
of this Agreement, (ii) for each assignment involving the issuance and transfer
of a Note, the assigning Lender shall execute an Assignment and Acceptance and
the Borrower hereby consents to execute a replacement Note to give effect to
the assignment, (iii) the minimum Revolving Credit Commitment which shall be
assigned is $5,000,000 or, if less, its total Revolving Credit Commitment, (iv)
such assignee shall have an office located in the United States, and (v) no
consent of the Borrower shall be required in connection with any assignment by
the Lender to an affiliate of the Lender. Upon such execution, delivery,
approval and acceptance, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder or under such Note
have been assigned or negotiated to it pursuant to such Assignment and
Acceptance have the rights and obligations of a Lender hereunder and a holder
of such Note and (y) the assignor thereunder shall, to the extent that rights
and obligations hereunder or under such Note have been assigned or negotiated
by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement.
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) the
assignment made under such Assignment and Acceptance is made under such
Assignment and
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57
Acceptance without recourse; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under any Loan Document or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements delivered pursuant to Section 5.6 or Section 6.1, as the case may
be, and such other Loan Documents and other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; and (v) such assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of this Agreement
are required to be performed by it as a Lender and a holder of such Notes.
(c) Nothing herein shall prohibit the Lender from
pledging or assigning, without notice or consent, any Note to any Federal
Reserve Bank in accordance with applicable law.
(d) The Lender may sell participations at its expense to
one or more banks or other financial institutions as to all or a portion of its
rights and obligations under this Agreement; provided, that (i) the Lender's
obligations under this Agreement shall remain unchanged, (ii) the Lender shall
remain solely responsible to the Borrower for the performance of such
obligations, (iii) the Lender shall remain the holder of any Note issued to it
for the purpose of this Agreement, (iv) such participations shall be in a
minimum amount of $5,000,000 or, if less, its total Revolving Credit
Commitment, and (v) the Borrower shall continue to deal solely and directly
with the Lender in connection with the Lender's rights and obligations under
this Agreement and with regard to any and all payments to be made under this
Agreement; provided, that the participation agreement between the Lender and
its participants may provide that the Lender will obtain the approval of such
participant prior to the Lender's agreeing to any amendment or waiver of any
provisions of this Agreement which would (A) extend the maturity of any Note,
(B) reduce the interest rates hereunder or (C) increase the Revolving Credit
Commitment of the Lender granting the participation, and (vi) the sale of any
such participations which require Borrower to file a registration statement
with the United States Securities and Exchange Commission or under the
securities regulations or laws of any state shall not be permitted.
(e) The Borrower may not assign any rights, powers,
duties or obligations under this Agreement or the other Loan Documents without
the prior written consent of the Lender.
9.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the
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58
address set forth below or such other address as such party shall specify to
the other parties in writing (or, in the case of notice by telecopy, telegram
or telex (where the receipt of such message is verified by return) expressly
provided for hereunder, when received at such telecopy or telex number as may
from time to time be specified in written notice to the other parties hereto or
otherwise received), or if sent prepaid by certified or registered mail return
receipt requested on the fifth Business Day after the day on which mailed,
addressed to such party at said address:
(a) if to the Borrower:
Crown Crafts, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Lender:
NationsBank, National Association (Carolinas)
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
NationsBank, National Association (Carolinas)
Corporate Textile & Apparel Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. J. ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
9.3. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lender of the Loans and
the execution and delivery to the Lenders of this Agreement and the Notes and
shall continue in full force and effect so long as any of the Obligations
remain outstanding or the Lender has any commitment hereunder or the Borrower
has continuing obligations hereunder unless otherwise provided herein.
Whenever in this Agreement, any of the parties hereto is referred to, such
reference shall be deemed to include the successors and permitted assigns of
such party and all covenants, provisions and agreements by or on behalf of the
Borrower which are contained in this Agreement, the Notes and the other Loan
Documents shall inure to the benefit of the successors and permitted assigns of
the Lender or any of them.
9.4. Expenses. The Borrower agrees prior to and after the
occurrence of an Event of Default (a) to pay or reimburse the
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59
Lender for all its reasonable out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation and execution of, and any
amendment, supplement or modification to, this Agreement or any of the other
Loan Documents (including travel expenses relating to closing), and the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Lender, (b) to pay or reimburse the Lender for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement and the other Loan Documents, including without limitation, the
reasonable fees and disbursements of its counsel and (c) to pay, indemnify and
hold the Lender harmless from any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any failure to pay or delay
in paying, documentary, stamp, excise and other similar taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of this Agreement or any other Loan Documents, or consummation of any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement or any other Loan Documents.
9.5. Amendments. No amendment, modification or waiver of any
provision of this Agreement or any of the Loan Documents and no consent by the
Lender to any departure therefrom by the Borrower shall be effective unless
such amendment, modification or waiver shall be in writing and signed by the
Lender and the same shall then be effective only for the period and on the
conditions and for the specific instances and purposes specified in such
writing.
9.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
9.7. Termination. The termination of this Agreement shall not
affect any rights of the Borrower or the Lender or any obligation of the
Borrower or the Lender arising prior to the effective date of such termination,
and the provisions hereof shall continue to be fully operative until all
transactions entered into or rights created or obligations incurred prior to
such termination have been fully disposed of, concluded or liquidated and the
Obligations arising prior to or after such termination have been irrevocably
paid in full. The rights granted to the Lender hereunder and under the other
Loan Documents shall continue in full force and effect, notwithstanding the
termination of this Agreement, until all of the Obligations have been paid in
full after the termination hereof (other than Obligations in the nature of
continuing indemnities or expense reimbursement obligations not yet due and
payable) or the Borrower has furnished the Lender with an indemnification
satisfactory to the Lender with respect thereto. All representations,
warranties, covenants, waivers and agreements contained herein shall survive
termination hereof until payment in full of the Obligations unless otherwise
provided herein. Notwithstanding the foregoing, if after receipt of any
payment of all or any part of the Obligations the Lender is for any reason
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60
compelled to surrender such payment to any Person because such payment is
determined to be void or voidable as a preference, impermissible setoff, a
diversion of trust funds or for any other reason, this Agreement shall continue
in full force and the Borrower shall be liable to, and shall indemnify and hold
the Lender harmless for, the amount of such payment surrendered until the
Lender shall have been finally and irrevocably paid in full. The provisions of
the foregoing sentence shall be and remain effective notwithstanding any
contrary action which may have been taken by the Lender in reliance upon such
payment, and any such contrary action so taken shall be without prejudice to
the Lender's rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
9.8. Indemnification. In consideration of the execution and
delivery of this Agreement by the Lender and the extension of the Revolving
Credit Commitments, the Borrower hereby indemnifies, exonerates and holds the
Lender and its officers, directors, employees and agents (collectively, the
"Indemnified Parties") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to the execution, delivery,
enforcement performance or administration of this Agreement and the other Loan
Documents, or any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan, except for any such
Indemnified Liabilities arising for the account of a particular Indemnified
Party by reason of the bad faith, gross negligence or willful misconduct of, or
breach of the Loan Documents by, such Indemnified Party or an officer,
co-officer, director, co-director, employee, co-employee, agent or co-agent of
such Indemnified Party, and if and to the extent that the foregoing undertaking
may be unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The indemnification and
hold harmless provisions of this Section 9.9 shall survive repayment of the
Obligations, occurrence of the Revolving Credit Termination Date and expiration
or termination of this Agreement.
9.9. Headings and References. The headings of the Articles and
Sections of this Agreement are inserted for convenience of reference only and
are not intended to be a part of, or to affect the meaning or interpretation of
this Agreement. Words such as "hereof", "hereunder", "herein" and words of
similar import shall refer to this Agreement in its entirety and not to any
particular Section or provisions hereof, unless so expressly specified. As
used herein, the singular shall include the plural, and the masculine shall
include the feminine or a neutral gender, and vice versa, whenever the context
requires.
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61
9.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more
of the parties hereto, then such provision shall remain in effect with respect
to all parties, if any, as to whom such provision is neither illegal nor
invalid, and in any event all other provisions hereof shall remain effective
and binding on the parties hereto.
9.11. Entire Agreement. This Agreement, together with the other
Loan Documents, constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all previous proposals,
negotiations, representations, commitments and other communications between or
among the parties, both oral and written, with respect thereto.
9.12. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
9.13. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under North Carolina or Georgia law, shall not exceed the Highest Lawful Rate
(as such term is defined below). If the rate of interest (determined without
regard to the preceding sentence) under this Agreement at any time exceeds the
Highest Lawful Rate (as defined below), the outstanding amount of the Loans
made hereunder shall bear interest at the Highest Lawful Rate until the total
amount of interest due hereunder equals the amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect. In addition, if when the Loans made hereunder
are repaid in full the total interest due hereunder (taking into account the
increase provided for above) is less than the total amount of interest which
would have been due hereunder if the stated rates of interest set forth in this
Agreement had at all times been in effect, then to the extent permitted by law,
the Borrower shall pay to the Lender an amount equal to the difference between
the amount of interest paid and the amount of interest which would have been
paid if the Highest Lawful rate had at all times been in effect.
Notwithstanding the foregoing, it is the intention of the Lender and the
Borrower to conform strictly to any applicable usury laws. Accordingly, if any
lender contracts for, charges, or receives any consideration which constitutes
interest in excess of the Highest Lawful rate, then any such excess shall be
cancelled automatically and, if previously paid, shall at the Lender's option
be applied to the outstanding amount of the Loans made hereunder or be refunded
to the Borrower. As used in this paragraph, the term "Highest Lawful Rate"
means the maximum lawful interest rate, if any, that at any time or from time
to time may be contracted for, charged, or received under the laws applicable
to such Lender which are presently in effect or, to the extent allowed by law,
under such applicable laws which may hereafter be in effect and which allow a
higher maximum nonusurious interest rate than applicable laws now allow.
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62
9.14. GOVERNING LAW; ETC..
(a) THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
(b) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES
AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY
OF ▇▇▇▇▇▇, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND DELIVERY
OF THIS AGREEMENT, THE BORROWER EXPRESSLY WAIVES ANY OBJECTION THAT IT
MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE OR TO THE
JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND IRREVOCABLY
SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE
MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR
OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE
BORROWER PROVIDED IN Section 9.2 HEREOF, OR BY ANY OTHER METHOD OF
SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE
OF GEORGIA.
(d) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF
SHALL PRECLUDE THE SECURED PARTY FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS IN THE COURTS OF ANY PLACE WHERE THE BORROWER OR ANY OF
THE BORROWER'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE
EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, THE BORROWER
HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY AND THE BORROWER HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
CROWN CRAFTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
ATTEST: Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Title: Treasurer
------------------------
Secretary
[CORPORATE SEAL]
NATIONSBANK, NATIONAL ASSOCIATION
(CAROLINAS), as Lender
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
Lending Office:
NationsBank, NAtional Association
(Carolinas)
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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EXHIBIT A
Commitment
Loan
Lender Commitment
------ ----------
NationsBank, National $15,000,000
Association (Carolinas)
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EXHIBIT B
Form of Assignment and Acceptance
DATED _______________, ____
Reference is made to the Revolving Credit Agreement dated as of August
25, 1995 (the "Agreement") between Crown Crafts, Inc., a Georgia corporation
(the "Borrower") and NationsBank, National Association (Carolinas), as Lender
("Lender"). Unless otherwise defined herein, terms defined in the Agreement
are used herein with the same meanings.
________________________ (the "Assignor") and _______________________
_______________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a
_______% (1) interest in and to all of the Assignor's rights and obligations
under the Agreement as of the Effective Date (as defined below), including,
without limitation, such percentage interest in the Loans owing to the Assignor
on the Effective Date and evidenced by the Revolving Note held by the Assignor.
2. The Assignor (i) represents and warrants that, as of the date
hereof, the aggregate principal amount of Revolving Loans owing to it (without
giving effect to the assignments thereof which have not yet become effective)
is $__________ under a Revolving Note dated ____________, 19__ in the aggregate
principal amount of $_________; (ii) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Agreement or any of the Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Agreement or any of
the Loan Documents or any other instrument or document furnished pursuant
thereto; (iv) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Agreement or any
of the Loan Documents or any other instrument or document furnished pursuant
thereto and (v) attaches hereto the Revolving Note referred to in paragraph 1
above and requests that the Lender exchange such Note for Notes as follows: a
Revolving Note dated _____________, 19__ in the principal amount of
$________________, payable to the order of the Assignor, and a Revolving Note,
dated ____________________________ 19__, in the principal amount of
$_________________ payable to the order of the Assignee.
____________________
(1) Specify percentage in no more than 4 decimal points.
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3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the most recent financial statements
referred to in Section 7.1 thereof and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (ii) agrees that it will, independently
and without reliance upon the Lender, the Assignor, or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Agreement; (iii) will perform all of the obligations which by the
terms of the Agreement are required to be performed by the Lender; and (v)
specifies as its address for notices the office set forth beneath its name on
the signature pages hereof.
4. The effective date for this Assignment and Acceptance shall be
_____________________________ (the "Effective Date").
5. Upon such acceptance and recording, as of the Effective Date,
(i) the Assignee shall be a party to the Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Loan Documents and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with, the laws of the State of Georgia.
[NAME OF ASSIGNOR]
By:
------------------------------------------
Name:
Title:
Notice Address:
------------------------------
------------------------------
------------------------------
After the Effective Date
Outstanding Revolving Loans:$
----------------
[NAME OF ASSIGNEE]
By:
------------------------------------------
Name:
Title:
Notice Address/Lending Office
-------------------
-------------------
Wire transfer Instructions:
----------------------------
----------------------------
After the Effective Date
Outstanding Revolving Loans:$
----------------
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Consented to:
CROWN CRAFTS, INC.
By:____________________________
Name:__________________________
Title:_________________________
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EXHIBIT C
Notice of Appointment (or Revocation) of Authorized
Representative
Reference is hereby made to the Revolving Credit Agreement dated as of
August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and NationsBank, National Association
(Carolinas), as Lender ("Lender"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.
The Borrower hereby appoints each individual named below as an
Authorized Representative under the Loan Documents, and hereby represents and
warrants that (i) set forth opposite each such individual's name is a true and
correct statement of such individual's office (to which such individual has
been duly elected or appointed), a genuine specimen signature of such
individual and an address for the giving of notice, and (ii) each such
individual has been duly authorized by the Borrower to act as Authorized
Representative under the Loan Documents:
Name and Address Office Specimen Signature
----------------- ------------------- -------------------
-----------------
-----------------
-----------------
-----------------
----------------- ------------------- -------------------
Borrower hereby revokes (effective upon receipt hereof by the Lender) the prior
appointment of ________________ as an Authorized Representative.
This the ___ day of __________________, 19__.
CROWN CRAFTS, INC.
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
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EXHIBIT D
Form of Borrowing Notice
To: NationsBank, National Association (Carolinas)
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Reference is hereby made to the Revolving Credit Agreement dated as
of August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and NationsBank, National Association
(Carolinas), as Lender ("Lender"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Lender that Loans of the type and amount set forth below be made on the
date indicated:
Type of Loan Interest Aggregate
(check one) Period (1) Amount (2) Date of Loan (3)
--------- ------ ------ ------------
Base Rate Loan
---------- ----------- ------------
Eurodollar Rate Loan
---------- ----------- ------------
_______________________
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $2,000,000 or, if greater, an integral multiple of $1,000,000
if a Eurodollar Rate Loan, and $250,000 or, if greater, an integral
multiple of $100,000 if a Base Rate Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
The Borrower hereby requests that the proceeds of Loans described in
this Borrowing Notice be made available to the Borrower as follows: [insert
transmittal instructions] .
The undersigned hereby certifies, solely in his/her corporate and not
in his/her individual capacity, that:
1. No Default or Event of Default exists either now or after
giving effect to the borrowing described herein; and
2. All the representations and warranties set forth in Article V
of the Agreement and in the Loan Documents (other than those expressly stated
to refer to a particular date) are true and correct as of the date hereof
except that the reference to the financial statements in Section 5.6(a) of the
Agreement are to those financial statements most recently delivered to you
pursuant to Section 6.1 of the Agreement (it being understood that any
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financial statements delivered pursuant to Section 6.1(b) have not been
certified by independent public accountants) and attached hereto are any
changes to the Schedules referred to in connection with such representations
and warranties.
3. After giving effect to Loans requested hereby, the principal
amount of outstanding Loans will not exceed the Total Revolving Credit
Commitment.
CROWN CRAFTS, INC.
BY: ___________________________________
Authorized Representative
DATE: _________________________________
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EXHIBIT E
Form of Interest Rate Selection Notice
To: NationsBank, National Association (Carolinas)
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Reference is hereby made to the Revolving Credit Agreement dated as
of August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and NationsBank, National Association
(Carolinas), as Lender ("Lender"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Lender of the following selection of a type of Loan and Interest Period:
Type of Loan Interest Aggregate
(check one) Period (1) Amount (2) Date of Loan (3)
--------- ------ ------ ------------
Base Rate Loan
---------- ----------- ------------
Eurodollar Rate Loan
---------- ----------- ------------
_______________________
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $2,000,000 or, if greater, an integral multiple of $1,000,000
if a Eurodollar Rate Loan, and $250,000 or, if greater, an integral
multiple of $100,000 if a Base Rate Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
CROWN CRAFTS, INC.
BY: _________________________
Authorized Representative
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EXHIBIT F
Form of Revolving Note
PROMISSORY NOTE
$15,000,000 Atlanta, Georgia
August 25, 1995
FOR VALUE RECEIVED, CROWN CRAFTS, INC., a Georgia corporation having
its principal place of business located in Atlanta, Georgia (the "Borrower"),
hereby promises to pay to the order of NATIONSBANK, NATIONAL ASSOCIATION
(CAROLINAS) (the "Lender"), in its individual capacity, at the office of the
Lender located at Independence Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (or at such other place or places as the Lender may
designate in writing) at the times set forth in the Revolving Credit Agreement
dated as of August 25, 1995 among the Borrower and the Lender (the "Agreement"
-- all capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement), in lawful money of the United
States of America, in immediately available funds, the principal amount of
FIFTEEN MILLION DOLLARS ($15,000,000) or, if less than such principal amount,
the aggregate unpaid principal amount of all Revolving Loans made by the Lender
to the Borrower pursuant to the Agreement on the Revolving Credit Termination
Date or such earlier date as may be required pursuant to the terms of the
Agreement, and to pay interest from the date hereof on the unpaid principal
amount hereof, in like money, at said office, on the dates and at the rates
provided in Article II of the Agreement. All or any portion of the principal
amount of Loans may be prepaid as provided in the Agreement.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and accrued
but unpaid interest shall bear interest which shall be payable on demand at the
rates per annum set forth in the proviso to Section 2.2 of the Agreement.
Further, in the event of such acceleration, this Revolving Note shall become
immediately due and payable, without presentation, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest due hereunder, all costs of collection, including reasonable
attorneys' fees, and interest thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Credit
Agreement.
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This Revolving Note is one of the Revolving Notes referred to in the
Agreement and is issued pursuant to and entitled to the benefits and security
of the Agreement to which reference is hereby made for a more complete
statement of the terms and conditions upon which the Revolving Loans evidenced
hereby were or are made and are to be repaid. This Revolving Note is subject
to certain restrictions on transfer or assignment as provided in the Agreement.
Protest, notice of protest, notice of dishonor, diligence or any other
formality are hereby waived by all parties bound hereon.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.
CROWN CRAFTS, INC.
WITNESS:
______________________ By: _________________________________
_____________________ Name: _______________________________
Title: ______________________________
[CORPORATE SEAL]
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EXHIBIT G
Form of Subsidiary Guaranty Agreement
THIS SUBSIDIARY GUARANTY AGREEMENT (the "Guaranty Agreement" or the
"Guaranty"), dated as of ________________, _______, is made by each of the
undersigned (each a "Guarantor" and collectively the "Guarantors") to
NATIONSBANK, NATIONAL ASSOCIATION (CAROLINAS), a national banking association,
as Lender (the "Lender").
W I T N E S S E T H:
WHEREAS, the Lender has agreed to provide to CROWN CRAFTS, INC., a
Georgia corporation (the "Borrower"), a revolving credit facility pursuant to
the terms of that certain Revolving Credit Agreement dated as of August 25,
1995 between the Borrower and the Lender (as from time to time amended,
modified or supplemented, the "Credit Agreement"); and
WHEREAS, each Guarantor is a Material Subsidiary of the Borrower and
is required pursuant to Section 6.23 of the Credit Agreement to guarantee to
the Lender payment of the Borrower's Liabilities (as hereinafter defined) in
accordance with the terms of this Agreement; and
WHEREAS, each Guarantor will materially benefit from the loans and
advances made and to be made, under the Credit Agreement, and each Guarantor is
willing to enter into this Guaranty to provide an inducement for the Lender to
make loans and advances thereunder.
NOW, THEREFORE, as required under the Credit Agreement and in order to
induce the Lender to make and continue loans and advances to the Borrower,
thereunder, each Guarantor agrees as follows:
1. DEFINITIONS. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
2. GUARANTY. Each Guarantor hereby jointly and severally,
unconditionally, absolutely, continually and irrevocably guarantees to the
Lender the payment and performance in full of the Borrower's Liabilities (as
defined below). For all purposes of this Guaranty Agreement, "Borrower's
Liabilities" means (a) the Borrower's obligation to promptly pay in full, when
due or declared due, all Obligations and all other amounts pursuant to the
terms of the Credit Agreement, the Notes, and all other Loan Documents executed
in connection with the Credit Agreement heretofore, now or at any time
hereafter owing, arising, due or payable from the Borrower to the Lender,
including without limitation principal, interest, premium or fee (including,
but not limited to, loan fees and attorneys' fees and expenses), and (b) the
Borrower's prompt, full and faithful performance, observance and discharge of
each and every agreement, undertaking, covenant and provision to be performed,
observed or discharged by the Borrower under the Credit Agreement and all other
Loan Documents executed in connection
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therewith. Each Guarantor's obligations to the Lender under this Guaranty
Agreement are hereinafter collectively referred to as the "Guarantors'
Obligations"; provided, however, that the liability of each Guarantor with
respect to the Guarantors' Obligations shall not exceed at any time the Maximum
Amount (as hereinafter defined). The "Maximum Amount" means 95% of (i) the
fair salable value of the assets of a Guarantor as of the date hereof minus
(ii) the total liabilities of such Guarantor (including contingent liabilities,
but excluding liabilities of such Guarantor under this Guaranty and any other
Loan Documents executed by such Guarantor) as of the date hereof; provided
further, however, that if the calculation of the Maximum Amount in the manner
provided above as of the date payment is required of such Guarantor pursuant to
this Guaranty would result in a greater positive number, then the Maximum
Amount shall be deemed to be such greater positive number.
Each Guarantor agrees that it is jointly and severally, directly and
primarily liable for the Borrower's Liabilities.
3. PAYMENT. If the Borrower shall default in payment or
performance of any Borrower's Liabilities, whether principal, interest,
premium, fee (including, but not limited to, loan fees and attorneys' fees and
expenses), or otherwise, when and as the same shall become due, whether
according to the terms of the Credit Agreement, by acceleration, or otherwise,
or upon the occurrence of any other Event of Default under the Credit Agreement
that has not been cured or waived, then each Guarantor, upon demand thereof by
the Lender or its successors or assigns, will AS OF THE DATE OF THE LENDER'S
DEMAND fully pay to the Lender, subject to any restriction set forth in Section
2 hereof, an amount equal to all Guarantor's Obligations then due and owing.
4. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and
not of collection. The Guarantors' Obligations under this Guaranty Agreement
shall be joint and several, absolute and unconditional irrespective of the
validity, legality or enforceability of the Credit Agreement, the Notes or any
other Loan Document or any other guaranty of the Borrower's Liabilities, and
shall not be affected by any action taken under the Credit Agreement, the Notes
or any other Loan Document, any other guaranty of the Borrower's Liabilities,
or any other agreement between the Lender and the Borrower or any other person,
in the exercise of any right or power therein conferred, or by any failure or
omission to enforce any right conferred thereby, or by any waiver of any
covenant or condition therein provided, or by any acceleration of the maturity
of any of the Borrower's Liabilities, or by the release or other disposal of
any security for any of the Borrower's Liabilities, or by the dissolution of
the Borrower or the combination or consolidation of the Borrower into or with
another entity or any transfer or disposition of any assets of the Borrower, or
by any extension or renewal of, or increase of the amounts available or
advanced under, the Credit Agreement, any of the Notes or any other Loan
Document, in whole or in part, or by any modification, alteration, amendment or
addition of or to the Credit Agreement, any of the Notes or any other Loan
Document, any other guaranty of the Borrower's Liabilities, or any other
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agreement between the Lender and the Borrower or any other Person, or by any
other circumstance whatsoever (with or without notice to or knowledge of any
Guarantor) which may or might in any manner or to any extent vary the
obligations of any Guarantor, or might otherwise constitute a legal or
equitable discharge of a surety or guarantor; it being the purpose and intent
of the parties hereto that this Guaranty Agreement and the Guarantors'
Obligations hereunder shall be absolute and unconditional under any and all
circumstances and shall not be discharged except by payment as herein provided.
5. CURRENCY AND FUNDS OF PAYMENT. Each Guarantor hereby
covenants and agrees that the Guarantors' Obligations will be paid in full as
herein provided in lawful currency of the United States of America and in
immediately available funds, regardless of any law, regulation or decree now or
hereafter in effect that might in any manner affect the Borrower's Liabilities
or the Guarantors' Obligations, or the rights of the Lender with respect
thereto as against the Borrower or any Guarantor, or cause or permit to be
invoked any alteration in the time, amount or manner of payment by the
Guarantor of any or all of the Borrower of any or all of the Borrower's
Liabilities or the Guarantors' Obligations.
6. EVENTS OF DEFAULT. In the event that (a) any Guarantor shall
file a petition to take advantage of any insolvency statute; (b) any Guarantor
shall commence or suffer to exist a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole or
substantially all of its property; (c) any Guarantor shall file a petition or
answer seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country; (d) a court
of competent jurisdiction shall enter an order, judgment or decree appointing a
custodian, receiver, trustee, liquidator or conservator of any Guarantor or of
the whole or substantially all of its properties, or approve a petition filed
against any Guarantor seeking reorganization or arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state or similar law of any other country, or
if, under the provisions of any other law for the relief or aid of debtors, a
court of competent jurisdiction shall assume custody or control of any
Guarantor or of the whole or substantially all of its properties and such
order, judgment, decree, approval or assumption remains unstayed or undismissed
for a period of thirty (30) days; (e) there is commenced against any Guarantor
any proceeding or petition seeking reorganization, arrangement or similar
relief under the Federal bankruptcy laws or any other applicable law or statute
of the United States of America or any state, which proceeding or petition
remains unstayed or undismissed for a period of thirty (30) days; (f) there
shall occur an Event of Default under the Credit Agreement; (g) any default
shall occur in the payment of amounts due hereunder; or (h) any other default
shall occur hereunder which remains uncured or unwaived for a period of thirty
(30) days (each of the foregoing being an "Event of Default" hereunder); then
notwithstanding any collateral that the Lender may
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possess from Borrower or any Guarantor or any other guarantor of the Borrower's
Liabilities, or any other party, at the Lender's election and without notice
thereof or demand therefor, the Guarantors' Obligations shall immediately
become due and payable.
7. SUITS. Each Guarantor from time to time shall pay to the
Lender, on demand, at the Lender's place of business set forth in the Credit
Agreement, the Guarantors' Obligations as they become or are declared due, and
in the event such payment is not made when due, the Lender may proceed to suit
against any one or more or all of the Guarantors. At the lender's election,
one or more and successive or concurrent suits may be brought hereon by the
Lender against any one or more or all of the Guarantors, whether or not suit
has been commenced against the Borrower, any other guarantor of the Borrower's
Liabilities, or any other Person and whether or not the Lender has taken or
failed to take any other action to collect all or any portion of the Borrower's
Liabilities.
8. SET-OFF AND WAIVER. Each Guarantor waives any right to assert
against the Lender as a defense, counterclaim, set-off or cross claim, any
defense (legal or equitable) or other claim which such Guarantor may now or at
any time hereafter have against the Borrower, the Lender, without waiving any
additional defenses, set-offs, counterclaims or other claims otherwise
available to such Guarantor. If at any time hereafter the Lender employs
counsel for advice or other representation to enforce the Guarantors'
Obligations that arise out of an Event of Default, then, in any of the
foregoing events, all of the attorneys' fees arising from such services and all
expenses, costs and charges in any way or respect arising in connection
therewith or relating thereto shall be paid by the Guarantors to the Lender on
demand and shall constitute part of the Guarantors' Obligations hereunder.
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9. WAIVER; SUBROGATION.
(a) Each Guarantor hereby waives notice of the following events or
occurrences: (i) the Lender's acceptance of this Guaranty Agreement; (ii) the
Lender's heretofore, now or from time to time hereafter loaning monies or
giving or extending credit to or for the benefit of the Borrower, whether
pursuant to the Credit Agreement or the Notes or any amendments, modifications,
or supplements thereto, or replacements or extensions thereof; (iii) the Lender
or the Borrower heretofore, now or at any time hereafter, obtaining, amending,
substituting for, releasing, waiving or modifying the Credit Agreement, the
Notes or any other Loan Documents; (iv) presentment, demand, notices of
default, non-payment, partial payment and protest; (v) the Lender heretofore,
now or at any time hereafter granting to the Borrower (or any other party
liable to the Lender on account of the Borrower's Liabilities) any indulgence
or extensions of time of payment of the Borrower's Liabilities; and (vi) the
Lender heretofore, now or at any time hereafter accepting from the Borrower or
any other person, any partial payment or payments on account of the Borrower's
Liabilities or any collateral securing the payment thereof or the Agent
settling, subordinating, compromising, discharging or releasing the same. Each
Guarantor agrees that the Lender may heretofore, now or at any time hereafter
do any or all of the foregoing in such manner, upon such terms and at such
times as the Lender, in its sole and absolute discretion, deems advisable,
without in any way or respect impairing, affecting, reducing or releasing such
Guarantor from the Guarantors' Obligations, and each Guarantor hereby consents
to each and all of the foregoing events or occurrences.
(b) Each Guarantor hereby agrees that payment or performance by
such Guarantor of the Guarantors' Obligations under this Guaranty Agreement may
be enforced by the Lender upon demand by the Lender to such Guarantor without
the Lender being required, each Guarantor expressly waiving any right it may
have to require the Lender, to (i) prosecute collection or seek to enforce or
resort to any remedies against the Borrower or any other Guarantor or any other
guarantor of the Borrower's Liabilities, IT BEING EXPRESSLY UNDERSTOOD,
ACKNOWLEDGED AND AGREED TO BY EACH GUARANTOR THAT DEMAND UNDER THIS GUARANTY
AGREEMENT MAY BE MADE BY THE LENDER, AND THE PROVISIONS HEREOF ENFORCED BY THE
LENDER, EFFECTIVE AS OF THE FIRST DATE ANY EVENT OF DEFAULT OCCURS AND IS
CONTINUING UNDER THE CREDIT AGREEMENT, or (ii) seek to enforce or resort to any
remedies with respect to any security interests, Liens or encumbrances granted
to the Lender by the Borrower or any other Person on account of the Borrower's
Liabilities or any guaranty thereof. The Lender shall not have any obligation
to protect, secure or insure any of the foregoing security interests, Liens or
encumbrances on the properties or interests in properties subject thereto. The
Guarantors' Obligations shall in no way be impaired, affected, reduced, or
released by reason of the Lender's failure or delay to do or take any of the
acts, actions or things described in this Guaranty Agreement including, without
limiting the generality of the foregoing, those acts, actions and things
described in this Section 9.
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(c) Each Guarantor further agrees that to the extent the ruling in
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Financial Corp. (In re V.N. ▇▇▇▇▇▇▇▇ Construction
Co.), 874 F.2d 1186 (7th Cir. 1989), is found applicable by a court of
competent jurisdiction to the transactions contemplated by the Loan Documents
or any payments thereunder, no Guarantor shall have any right of subrogation,
reimbursement or indemnity, nor any right of recourse to security for the
Borrower's Liabilities. This waiver is expressly intended to prevent the
existence of any claim in respect to such reimbursement by the Guarantor
against the estate of Borrower within the meaning of Section 101 of the
Bankruptcy Code, and to prevent the Guarantor from constituting a creditor of
Borrower in respect of such reimbursement within the meaning of Section 547(b)
of the Bankruptcy Code in the event of a subsequent case involving the
Borrower.
10. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall
be effective as of the date of the initial Advance under the Credit Agreement
and shall continue in full force and effect until the Borrower's Obligations
are fully paid and the Credit Agreement has terminated. The Lender shall give
each Guarantor written notice of such termination at each Guarantor's address
set forth in the Credit Agreement. This Guaranty Agreement shall be binding
upon and inure to the benefit of each Guarantor, the Lender and their
respective successors and assigns. Notwithstanding the foregoing, no Guarantor
may, without the prior written consent of the Lender, assign any rights,
powers, duties or obligations hereunder. Any claim or claims that the Lender
may at any time hereafter have against any Guarantor under this Guaranty
Agreement may be asserted by the Lender by written notice directed to any one
or more or all of the Guarantors at the address specified in the Credit
Agreement.
11. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents and
warrants to the Lender that it is duly authorized to execute, deliver and
perform this Guaranty Agreement, that this Guaranty Agreement is legal, valid,
binding and enforceable against such Guarantor in accordance with its terms
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles; and that such
Guarantor's execution, delivery and performance of this Guaranty Agreement do
not violate or constitute a breach of its certificate of incorporation or other
documents of corporate governance or any agreement to which such Guarantor is a
party, or any applicable laws.
12. EXPENSES. Each Guarantor agrees to be liable for the payment
of all reasonable fees and expenses, including attorney's fees, incurred by the
Lender in connection with the enforcement of this Guaranty Agreement.
13. REINSTATEMENT. Each Guarantor agrees that this Guaranty
Agreement shall continue to be effective or be reinstated, as the case may be,
at any time payment received by the Lender under the
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Credit Agreement or this Guaranty Agreement is rescinded or must be restored
for any reason.
14. COUNTERPARTS. This Guaranty Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
constitute one and the same instrument.
15. RELIANCE. Each Guarantor represents and warrants to the
Lender that (a) such Guarantor has adequate means to obtain from Borrower, on a
continuing basis, information concerning Borrower and Borrower's financial
condition and affairs and has full and complete access to Borrower's books and
records, (b) such Guarantor is not, nor in the future will it be, relying on
the Lender, or its employees, agents or other representatives, to provide such
information, (c) such Guarantor is executing this Guaranty Agreement freely and
deliberately, and understands the obligations and financial risk undertaken by
providing this Guaranty, (d) such Guarantor has relied solely on the
Guarantor's own independent investigation, appraisal and analysis of Borrower
and Borrower's financial condition and affairs in deciding to provide this
Guaranty and is fully aware of the same, and (e) such Guarantor has not
depended or relied on the Lender, its employees, agents or representatives, for
any information whatsoever concerning Borrower or Borrower's financial
condition and affairs or other matters material to such Guarantor's decision to
provide this Guaranty or for any counselling, guidance, or special
consideration or any promise therefor with respect to such decision. Each
Guarantor agrees that the Lender has no duty or responsibility whatsoever, now
or in the future, to provide to any Guarantor any information concerning
Borrower or Borrower's financial condition and affairs, and that, if such
Guarantor receives any such information from the Lender or its employees,
agents or other representatives, such Guarantor will independently verify the
information and will not rely on the Lender or its employees, agents or other
representatives, with respect to such information.
16. TERMINATION. This Guaranty Agreement and all obligations of
the Guarantors hereunder shall terminate without delivery of any instrument or
performance of any act by any party on the date when all of the Obligations
have been fully paid and the Credit Agreement has terminated.
17. GOVERNING LAW; WAIVERS OF TRIAL BY JURY, ETC.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
(b) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES
AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE STATE
OF GEORGIA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT,
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EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO
THE LAYING OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING.
(c) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE
BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER
LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED
OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH PARTY
PROVIDED IN SECTION 10.2 OF THE CREDIT AGREEMENT OR BY ANY OTHER
METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN
THE STATE OF GEORGIA.
(d) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF
SHALL PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY OTHER PARTY OR ANY OF
SUCH PARTY'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE
EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT
AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH PARTY
HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY AND EACH PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first written above.
GUARANTORS:
_______________________________
By: ___________________________
Name: _________________________
Title: ________________________
_______________________________
By: ___________________________
Name: _________________________
Title: ________________________
LENDER:
NATIONSBANK, NATIONAL ASSOCIATION (CAROLINAS)
By:_____________________________
Name:___________________________
Title:__________________________
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EXHIBIT H
Form of Opinion of Borrower's Counsel
[Date]
NationsBank, National Association (Carolinas)
Corporate Textile & Apparel Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: $15,000,000 Revolving Credit Agreement between NationsBank, National
Association (Carolinas), as Lender, and Crown Crafts, Inc., as
Borrower
Ladies and Gentlemen:
I have acted as internal counsel to Crown Crafts, Inc., a Georgia
corporation (the "Company"), in connection with the Revolving Loan in the
amount of $15,000,000 (the ("Loan") being made available to the Company by you
on this date pursuant to the Revolving Credit Agreement of even date herewith
among you and the Company (the "Credit Agreement").
This opinion is being delivered in accordance with the condition set
forth in section 4.1(a)(ii) of the Credit Agreement. All capitalized terms not
otherwise defined herein shall have the meanings provided therefor in the
Credit Agreement.
As such counsel, I have reviewed the Credit Agreement and the
revolving Note. The foregoing documents are collectively referred to
hereinafter as the "Loan Documents."
For purposes of the opinions expressed below, I have assumed that all
natural persons executing the Loan Documents have legal capacity to do so, all
signatures (other than those of the Company) on all documents submitted to us
are genuine, all documents submitted to us as originals are authentic, and all
documents submitted to us as certified copies or photocopies conform to the
original documents, which themselves are authentic.
In addition, for purposes of giving this opinion, I have examined
corporate records of the Company, certificates of public officials,
certificates of appropriate officials of the Company and such other documents
or made such inquiries as I have deemed appropriate. However, as used herein,
the phrase "to the best of my knowledge" means my actual knowledge, without
further investigation.
Based upon and subject to the foregoing, it is my opinion that:
84
NationsBank, National Association (Carolinas)
[Date]
Page 2
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of its state of Georgia and is duly
qualified to transact business as a foreign corporation and is in good standing
in all other jurisdictions in which the nature of its business requires such
qualification and the failure to be so qualified would reasonably be likely to
result in a Material Adverse Effect. The Company has full corporate power and
authority to own its assets and conduct the businesses in which it is now
engaged and has full corporate power and authority to enter into each of the
Loan Documents to which it is a party and to perform its obligations
thereunder.
2. Each of the Loan Documents to which the Company is a party has
been duly authorized by the Board of Directors of the Company, duly executed
and delivered by the Company, and constitutes the legal, valid and binding
obligation, agreement, instrument or conveyance, as the case may be, of the
Company, enforceable against the Company in accordance with its respective
terms, except (i) as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization and other similar laws relating to or
affecting creditors' rights generally and (ii) as the enforceability of the
remedial provisions thereof may be limited by general equitable principles:
provided, however, the application of such equitable principles or limitations
of law does not materially interfere with the practical realization of the
benefits and security, if any, intended to be conferred under the Loan
Documents.
3. Neither the execution or delivery of, nor performance by the
Company of its obligations under, the Loan Documents (a) does or will conflict
with, violate or constitute a breach of (i) the charter or bylaws of the
Company,(ii) any laws, rules or regulations applicable to the Company
("Applicable Law"), or (iii) any contract, agreement, indenture, lease,
instrument, other document, judgment, writ, determination, order or decree to
which the Company is a party or by which the Company or any of its properties
is bound, (b) requires the prior consent of, notice to or filing with any court
or governmental authority, or (c) to the best of my knowledge, does or will
result in the creation or imposition of any lien, pledge, charge or encumbrance
of any nature upon or with respect to any of the properties of the Company,
where such breach would reasonably be likely to result in a Material Adverse
Effect.
4. There is no pending or, to the best of my knowledge,
threatened, action, suit, investigation or proceeding, nor is there any basis
therefor, before or by any court, or governmental department, commission board,
bureau, instrumentality, agency or arbitral authority, (i) which calls into
question the validity or enforceability of any of the Loan Documents, or the
titles to their
85
NationsBank, National Association (Carolinas)
[Date]
Page 3
respective officers or authority of any officers of the Company or (ii) an
adverse result in which would reasonably be likely to have a Material Adverse
Effect, including, without limitation, any action, suit, investigation, or
proceeding under the environmental or labor law.
I am not expressing any opinion as to any mater relating to any
jurisdiction other than the laws of the State of Georgia and the laws of the
United States of America and I assume no responsibility as to the applicability
of the laws of any other jurisdiction as to the subject transaction or the
effect of such laws thereon.
The opinions contained herein are rendered only as of the date hereof
and I undertake no obligation to update such opinions after the date hereof.
The opinions contained herein are rendered solely for your information
in connection with the transactions contemplated under the Loan Documents and
may not be relied upon in any manner by any other person, entity or agency, or
by you for any other purpose. The opinions herein shall not be quoted or
otherwise included, summarized or referred to in any publication or document,
in whole or in part, for any purposes whatsoever, or furnished to any person,
entity or agency, except as may be required by you by applicable law or
regulation or request of regulatory agencies to which you are subject.
Very truly yours,
86
EXHIBIT I
Form of Compliance Certificate
To: NationsBank, National Association (Carolinas)
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Reference is hereby made to the Revolving Credit Agreement dated as of
August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and NationsBank, National Association
(Carolinas), as Lender ("Lender"). Capitalized terms used but not otherwise
defined herein shall have the respective meanings therefor set forth in the
Agreement. The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as of __________ (the "Determination
Date") as follows:
1. Applicable Interest Addition/Applicable Unused Fee.
A. Based on the calculation set forth below, the
Applicable Interest Addition as of the latest Determination
Date is ___%.
B. Based on the calculation set forth below, the
Applicable Unused Fee as of the latest Determination Date is
___%.
2. Covenant Calculations:
A. Compliance with Section 7.1: Consolidated Leverage Ratio
1. Consolidated Funded Indebtedness
a. Indebtedness for
Borrowed Money $_________
b. Capital Leases $_________
c. Guaranties $_________
d. a. + b. + c. $__________
2. Consolidated Tangible Net Worth $__________
3. A.1. + A.2. $__________
4. Ratio of A.1. to A.3. ___________
REQUIRED: Line A.4. must not be greater
than .60 to 1.00.
B. Compliance with Section 7.2: Consolidated Fixed Charge
Coverage Ratio
1. Consolidated EBIT
79
87
a. Consolidated Net
Income $_________
b. Consolidated
Interest Expense $_________
c. taxes $_________
d. Consolidated
Lease Expense $_________
e. a. + b. + c. + d. $__________
2. Consolidated Fixed Charges
a. Consolidated
Interest Expense $_________
b. Consolidated
Lease Expense $_________
d. a. + b. $__________
6. Ratio of B.1. to B.2. ___________
REQUIRED: Line B.6. must not be less
than 2.00 to 1.00.
C. Compliance with Section 10.3: Consolidated Shareholders' Equity
1. Consolidated Shareholders' Equity $__________
REQUIRED: Line C.1. must not be less than (1) $80,000,000,
less Permitted Stock Repurchases, at the Closing Date and (2)
thereafter, line d. below
a. Consolidated Net
Worth for immediately
preceding Fiscal Year $__________
b. Consolidated Net Income
for then ending fiscal quarter
(no deduction for net loss) $__________
c. Multiply Line b. by 50% $__________
d. Increases in stated capital
and additional paid-in
capital accounts from equity
issuances, etc. $__________
e. a. + c. + d. $__________
D. Compliance with Section 7.4: Cash Flow Ratio:
1. Consolidated Funded Indebtedness $__________
2. Consolidated Cash Flow
a. Consolidated Net
Income $_________
80
88
b. amortization $_________
c. depreciation $_________
d. non-cash charges
and expenses $_________
e. cash distributions
on capital stock $_________
f. other non-cash
gains $_________
g. a. + b. + c. + d. - e. - f. $__________
3. Ratio of D.1. to D.2. ___________
REQUIRED: Line D.3. must not be greater than 6.00 to
1.00.
3. No Default
A. Since __________ (the date of the last
similar certification), (a) the Borrower has not defaulted in
the keeping, observance, performance or fulfillment of its
obligations pursuant to any of the Loan Documents; and (b) no
Default or Event of Default specified in Article VIII of the
Agreement has occurred and is continuing.
B. If a Default or Event of Default has occurred
since __________ (the date of the last similar certification),
the Borrowers propose to take the following action with
respect to such Default or Event of Default:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_________________________________________________________.
(Note, if no Default or Event of Default has
occurred, insert "Not Applicable").
The Determination Date is the date of the last required financial
statements submitted to the Lender in accordance with Section 6.1 of the
Agreement.
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
By:________________________________
Authorized Representative
Name:______________________________
Title:_____________________________
81
89
SCHEDULE 5.4
SUBSIDIARIES AND OWNERSHIP INTERESTS
PERCENT OF
OWNERSHIP
----------
▇▇▇▇ Corp, a North Carolina corporation 100%
Crown Crafts Home Furnishings, Inc., a New York corporation 100%
Crown Crafts Home Furnishings of Illinois, Inc., a Delaware corporation 100%
Crown Crafts Home Furnishings of California, Inc., a California corporation 100%
Crown Crafts International, Inc., a Georgia corporation 100%
G.W. Stores, Inc., a North Carolina corporation 100%
Textile, Inc., a North Carolina corporation 100%
▇▇▇▇ ▇▇▇▇▇▇▇▇ Furniture, Inc., a South Carolina corporation 51%
90
Schedule 5.6
Liabilities
None
91
SCHEDULE 5.16
ERISA MATTERS
Employee Benefit Plan
Crown Crafts, Inc. Employee Stock Ownership Plan
Crown Crafts, Inc. Health Benefit Plan
Crown Crafts, Inc. Group Term Life Insurance Plan
Crown Crafts, Inc. Executive Life Insurance Plan
Crown Crafts, Inc. Dental Insurance Plan
Blue Cross/Blue Shield Health Benefit Plan maintained for employees of ▇▇▇▇▇▇▇
Weavers Division
Textile, Inc.:
Principal Mutual Life Insurance Co. - Health Benefit Plan
Principal Mutual Life Insurance Co. - Group Term Life Insurance Plan
Employee Benefit Plan Terminations
The Blowing Rock Crafts, Inc. Profit Sharing Plan (the Plan)
was terminated on September 30, 1992 and 100% of the Plan assets
were distributed to the Plan participants in October 1992. The Plan
participants still employed by Blowing Rock Crafts, Inc. On March
28, 1993 were enrolled in The Crown Crafts, Inc. Employee Stock
Ownership Plan on March 28, 1993. Blowing Rock Crafts, Inc.
Received a favorable determination letter from the Internal Revenue
Service on the termination of this plan.
92
SCHEDULE 7.5
LIENS
=================================================================================================
TEXTILE, INC. LOAN BALANCE
CREDITOR SECURITY AT 7/31/95
-------------------------------------------------------------------------------------------------
F.E.W. Partners Real Property $273,623.95
Somet of America Five (5) Somet rapier weaving $156,644.61
machines
Somet of America Six (6) Somet rapier weaving $198,520.06
machines
Staubli Five (5) jacquard heads $168,795.78
Staubli Six (6) jacquard heads $286,057.95
Yadkin Valley Bank & Trust Machinery - second lien $184,443.67
=================================================================================================