EXHIBIT 4.13
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made on April
14, 2004, by and among THE ▇▇▇▇▇ GROUP, INC. ("Borrower"), a Tennessee
corporation with its chief executive office and principal place of business at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; EACH OF THE SUBSIDIARIES OF
BORROWER as guarantors ("Guarantors"); the various financial institutions listed
on the signature pages hereof and their respective successors and permitted
assigns which become "Lenders" as provided herein; and FLEET CAPITAL
CORPORATION, a Rhode Island corporation with an office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, in its capacity as collateral and
administrative agent for the Lenders pursuant to SECTION 12 hereof (together
with its successors in such capacity, "Agent"). Capitalized terms used in this
Agreement have the meanings assigned to them in Appendix A, General Definitions.
R E C I T A L S:
Borrower, Guarantors, Agent, certain financial institutions ("Original
Lenders") and the other agents named therein are parties to a certain Loan and
Security Agreement dated May 14, 2002 (as at any time amended or modified, the
"Original Loan Agreement"), pursuant to which Original Lenders made certain
revolving credit loans, term loans and letter of credit accommodations to
Borrower.
Borrower and Guarantors have requested that Agent and Lenders amend and
restate the Original Loan Agreement and continue to make available revolving
credit, letter of credit and term loan facilities to Borrower, which shall be
used by Borrower to finance its business of manufacturing and supplying carpet
and rug products.
Guarantors have agreed to reaffirm their guarantee of the obligations
of Borrower under the Original Loan Agreement and to reaffirm and continue to
guarantee the obligations of Borrower under this Agreement and each of the other
Loan Documents.
Agent and Lenders are willing to amend and restate the Original Loan
Agreement on the terms set forth herein, and Lenders are willing to make
available to Borrower the loans and other financial accommodations described
herein, subject to the terms and conditions contained herein.
NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the parties hereto hereby agree as follows:
SECTION 1. CREDIT FACILITIES
Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders severally agree to the extent and in the manner hereinafter
set forth to make their respective Pro Rata shares of the Commitments available
to Borrower, in an aggregate amount up to $60,000,000, as follows:
1.1. REVOLVER COMMITMENT.
1.1.1 Revolver Loans. Each Lender agrees, severally to the
extent of its Revolver Commitment and not jointly with the other Lenders, upon
the terms and subject to the conditions set forth herein, to make Revolver Loans
to Borrower on any Business Day during the period from the date hereof through
the Business Day before the last day of the Original Term, not to exceed in
aggregate principal
amount outstanding at any time such Lender's Revolver Commitment at such time,
which Revolver Loans may be repaid and reborrowed in accordance with the
provisions of this Agreement; provided, however, that Lenders shall have no
obligation to Borrower whatsoever to make any Revolver Loan on or after the
Commitment Termination Date or if at the time of the proposed funding thereof
the aggregate principal amount of all of the Revolver Loans and Pending Revolver
Loans then outstanding exceeds, or would exceed after the funding of such
Revolver Loan, the Borrowing Base. Each Borrowing of Revolver Loans shall be
funded by Lenders on a Pro Rata basis in accordance with their respective
Revolver Commitments (except for Fleet with respect to Settlement Loans). The
Revolver Loans shall bear interest as set forth in SECTION 2.1 hereof. Each
Revolver Loan shall, at the option of Borrower, be made or continued as, or
converted into, part of one or more Borrowings that, unless specifically
provided herein, shall consist entirely of Base Rate Loans or LIBOR Loans.
1.1.2 Out-of-Formula Loans. If the unpaid balance of
Revolver Loans outstanding at any time should exceed the Borrowing Base at such
time (an "Out-of-Formula Condition"), such Revolver Loans shall nevertheless
constitute Obligations that are secured by the Collateral and entitled to all of
the benefits of the Loan Documents. In the event that Lenders are willing to, in
their sole and absolute discretion, make Out-of-Formula Loans, such
Out-of-Formula Loans shall be payable on demand and shall bear interest as
provided in this Agreement for Revolver Loans generally.
1.1.3 Use of Proceeds. The proceeds of the Revolver Loans
shall be used by Borrower solely for one or more of the following purposes: (i)
to pay the fees and transaction expenses associated with the closing of the
transactions described herein; (ii) to pay any of the Obligations; and (iii) to
make expenditures for other lawful corporate purposes of Borrower to the extent
such expenditures are not prohibited by this Agreement or Applicable Law. In no
event may any Revolver Loan proceeds be used by Borrower to make a contribution
to the equity of any Subsidiary, to purchase or to carry, or to reduce, retire
or refinance any Debt incurred to purchase or carry, any Margin Stock or for any
related purpose that violates the provisions of Regulations T, U or X of the
Board of Governors.
1.1.4 Revolver Notes. The Revolver Loans made by each
Lender and interest accruing thereon shall be evidenced by the records of Agent
and such Lender and by the Revolver Note payable to such Lender (or the assignee
of such Lender), which shall be executed by Borrower, completed in conformity
with this Agreement and delivered to such Lender. All outstanding principal
amounts and accrued interest under the Revolver Notes shall be due and payable
as set forth in SECTION 4.2 hereof.
1.1.5 Voluntary Reductions of Revolver Commitments.
Borrower shall have the right to permanently reduce the amount of the Revolver
Commitments in amounts of not less than $5,000,000 and in integral multiples of
$1,000,000 in excess thereof, on a Pro Rata basis for each Lender, at any time
and from time to time upon written notice to Agent of such reduction, which
notice shall specify the amount of such reduction, shall be irrevocable once
given, shall be given at least 3 Business Days prior to the end of the month and
shall be effective only upon Agent's receipt thereof. Agent shall promptly
transmit such notice to each Lender. The effective date of any voluntary
reduction of the Revolver Commitments shall be the last day of the month in
which such notice is timely received by Agent. If, on the effective date of any
such reduction in the Revolver Commitments and after giving effect thereto, an
Out-of-Formula Condition exists, then the provisions of SECTION 4.2.1(iii)
hereof shall apply, except that such repayment shall be due immediately upon
such effective date without further notice to or demand upon Borrower. If the
Revolver Commitments are reduced to zero, then such reduction shall be deemed a
termination of the Revolver Commitments by Borrower pursuant to SECTION 5.2.2
hereof. Borrower shall pay all interest and fees then due on the amount of the
Revolver Commitment reduction accrued to the date of such reduction of the
Revolver Commitments to Agent for the Pro Rata benefit of the Lenders, and if
the Revolver Commitments are reduced by Borrower pursuant to this Section prior
to May 14, 2004, Borrower shall pay to Agent, for the Pro Rata benefit of
Lenders, as
liquidated damages for the loss of the bargain and not as a penalty, an amount
equal to .50% of the total amount of the reduction in the Revolver Commitments.
The Revolver Commitments once reduced may not be reinstated without the prior
written consent of all Lenders.
1.1.6 Agent Advances. Agent shall be authorized by Borrower
and Lenders, from time to time in Agent's sole and absolute discretion, at any
time that a Default or Event of Default exists or any of the conditions
precedent set forth in SECTION 10 hereof have not been satisfied, to make Base
Rate Loans to Borrower on behalf of Lenders in an aggregate amount outstanding
at any time not to exceed the lesser of: (a) $1,000,000, or (b) when added to
the Revolver Loans then outstanding, the Borrowing Base or the aggregate of the
Revolver Commitments, and only to the extent that Agent deems the funding of
such Base Rate Loans to be necessary or desirable (i) to preserve or protect the
Collateral or any portion thereof, (ii) to enhance the likelihood of or the
amount of repayment of the Obligations or (iii) to pay any other amount
chargeable to Borrower pursuant to the terms of this Agreement, including costs,
fees and expenses, all of which Base Rate Loans advanced by Agent shall be
deemed part of the Obligations and secured by the Collateral, shall be treated
as Settlement Loans and shall be settled and paid by Borrower and Lenders as
provided herein for Settlement Loans; provided, however, that the Required
Lenders may at any time revoke Agent's authorization to make any such Base Rate
Loans by written notice to Agent, which shall become effective upon and after
Agent's receipt thereof. Notwithstanding anything to the contrary contained in
this SECTION 1.1.6, nothing contained in this SECTION 1.1.6 shall be construed
to limit Agent's right to incur expenses and pay such expenses after an Event of
Default in connection with any of the matters described in the foregoing clauses
(i), (ii) and (iii).
1.1.7 1995 Bonds.
(a) 1995 Bonds. Each Lender shall have an indivisible
interest in the 1995 Bonds and the 1995 Bond Documents equal to their Pro Rata
share of the Commitments. An Availability Reserve in the amount of $7,000,000
(the "1995 Bond Reserve") shall be established by Agent. Each Lender shall be
entitled to receive its Pro Rata share of any payments of principal or interest
received with respect to the 1995 Bonds.
(b) Agreements Constitutes Guarantor Credit Agreement
under 1995 Bonds. The parties hereby agree that, this Agreement shall constitute
the "Guarantor Credit Agreement" as such term is defined in the Bond Purchase
Agreement and any Event of Default hereunder shall constitute a "Loan Default"
under Section 7.1(e) of the Loan Agreement executed in connection with the 1995
Bonds. Without limiting the generality of the foregoing, the references in the
Bond Purchase Agreement to the "Applicable Margin" and "LIBOR" shall have the
meanings set forth herein for "Applicable Margin" and "LIBOR Rate" for purposes
of the 1995 Bonds, as provided in Section 6(b) of the Bond Purchase Agreement.
If notwithstanding the foregoing, the interest payments for any period remitted
to Agent as holder of the 1995 Bonds yields less interest than Borrower would
have been required to pay Lenders if the 1995 Bonds were outstanding as Revolver
Loans under this Agreement, then Borrower shall promptly pay to Agent, for the
Pro Rata benefit of Lenders the amount of such deficiency.
(c) Funding of Default under 1995 Bonds; Enforcement.
(i) Borrower hereby agrees that upon its failure
of to repay all amounts outstanding pursuant to 1995 Bonds in full upon
maturity, whether due to demand, acceleration, put or otherwise
Borrower shall be deemed to have requested a Base Rate Loan in an
amount equal to such defaulted amount payable to Lenders Pro Rata.
(ii) Each Lender hereby designates, makes,
constitutes, empowers and appoints Agent as its attorney-in-fact, with
this power being coupled with an interest, to enforce
the 1995 Bond Documents as such Lender's agent and attorney-in-fact.
Agent shall, at the direction of the Required Lenders, exercise all
rights and remedies available to the holders of the 1995 Bonds under
the 1995 Bond Documents.
(iii) Borrower acknowledges and agrees that: (x)
Agent, at the direction of the Required Lenders, shall have the right
to tender the 1995 Bonds if an Event of Default exists, and (y) if not
sooner tendered, the 1995 Bonds shall be due and payable in full on the
Commitment Termination Date. If no Event of Default exists on the date
that the 1995 Bonds are tendered or otherwise become due and payable,
then the ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ shall be released by Agent to pay the 1995
Bonds. If the amount of the ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ is insufficient to pay
the 1995 Bonds in full, then Borrower agrees to immediately pay the
outstanding balance of the 1995 Bonds after application of the ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇.
1.2. TERM LOAN FACILITIES.
1.2.1 Term Loan A. Each Lender severally made to Borrower a
Term Loan A Advance on the Original Closing Date. The outstanding principal
balance of Term Loan A as of the date hereof is $18,520,812.40. The proceeds of
the Term Loan A Advances were used by Borrower solely for purposes for which the
proceeds of the Revolver Loans are authorized to be used. The Term Loan A
Commitment of each Lender expired on the funding by such Lender of its Term Loan
A Advance. Borrower shall not be entitled to reborrow any amounts repaid with
respect to the Term Loan A Advances.
1.2.2 Term Note A. Borrower shall execute and deliver to
Agent on behalf of each Lender a promissory note substantially in the form of
EXHIBIT B attached hereto and made a part hereof (such promissory note together
with any new notes issued pursuant to SECTION 13.3.2 upon the assignment of any
portion of any Lender's Term Loan A Advance, being hereinafter referred to
collectively as the "Term Notes A" and each of such promissory notes being
hereinafter referred to individually as a "Term Note A"), to evidence such
Lender's Term Loan A Advance to Borrower, in original principal amounts equal to
the amount of such Lender's Term Loan A Commitment. Each Term Note A shall
provide for payment of the Term Loan A Advance evidenced thereby as specified in
SECTION 4.3 hereof.
1.2.3 Term Loan B. As of November 12, 2003, that certain
Term Loan B in the original principal amount of $4,550,951.72 that was made by
Lenders to Borrower on March 14, 2003, has been paid in full and the Term Notes
B that were executed in connection therewith have been cancelled.
1.2.4 Term Loan C. Subject to the satisfaction of the terms
and conditions contained herein, on the Closing Date each Lender severally
agrees to make to Borrower a Term Loan C Advance. The proceeds of the Term Loan
C Advances shall be used by Borrower solely for purposes for which the proceeds
of the Revolver Loans are authorized to be used. The Term Loan C Commitment of
each Lender shall expire on the funding by such Lender of its Term Loan C
Advance. Borrower shall not be entitled to reborrow any amounts repaid with
respect to the Term Loan C Advances.
1.2.5 Term Note C. Borrower shall execute and deliver to
Agent on behalf of each Lender a promissory note substantially in the form of
EXHIBIT C attached hereto and made a part hereof (such promissory note together
with any new notes issued pursuant to SECTION 13.3.2 upon the assignment of any
portion of any Lender's Term Loan C Advance, being hereinafter referred to
collectively as the "Term Notes C" and each of such promissory notes being
hereinafter referred to individually as a "Term Note C"), to evidence such
Lender's Term Loan C Advance to Borrower, in original principal amounts equal to
the amount of such Lender's Term Loan C Commitment. Each Term Note C shall
provide for payment of the Term Loan C Advance evidenced thereby as specified in
SECTION 4.3 hereof.
1.3. LC FACILITY.
1.3.1 Procurement of Letters of Credit. During the period
from the date hereof to (but excluding) the 30th day prior to the last day of
the Original Term, and provided no Default or Event of Default then exists,
Fleet agrees to establish the LC Facility pursuant to which Fleet shall procure
from Bank one or more Letters of Credit on Borrower's request therefor from time
to time, subject to the following terms and conditions:
(i) Borrower acknowledges that Bank's
willingness to issue any Letter of Credit is conditioned upon Bank's
receipt of (A) the LC Support duly executed and delivered to Bank by
Fleet, (B) an LC Application with respect to the requested Letter of
Credit and (C) such other instruments and agreements as Bank may
customarily require for the issuance of a letter of credit of
equivalent type and amount as the requested Letter of Credit. Fleet
shall have no obligation to execute any LC Support or to join with
Borrower in executing an LC Application unless (x) Fleet receives an LC
Request from Borrower at least 3 Business Days prior to the date on
which Borrower desires to submit such LC Application to Bank and (y)
each of the LC Conditions is satisfied on the date of Fleet's receipt
of the LC Request and at the time of the requested execution of the LC
Application. In no event shall Fleet or any other Lender have any
liability or obligation to Borrower or any Subsidiary for any failure
or refusal by Bank to issue, for Bank's delay in issuing, or for any
error of Bank in issuing any Letter of Credit.
(ii) Letters of Credit may be requested by
Borrower only if they are to be used (a) to support obligations of
Borrower incurred in the Ordinary Course of Business of Borrower on a
standby basis or (b) for such other purposes as Agent and Lenders may
approve from time to time in writing.
(iii) Borrower shall comply with all of the terms
and conditions imposed on Borrower by Bank, whether such terms and
conditions are contained in an LC Application or in
any agreement with respect thereto, and subject to the rights of Bank,
Fleet shall have the same rights and remedies that Bank has under any
agreements that Borrower may have with Bank in addition to any rights
and remedies contained in any of the Loan Documents. Borrower agrees to
reimburse Bank for any draw under any Letter of Credit as hereinafter
provided, and to pay Bank the amount of all other liabilities and
obligations payable to Bank under or in connection with any Letter of
Credit immediately when due, irrespective of any claim, setoff, defense
or other right that Borrower may have at any time against Bank or any
other Person. If Fleet shall pay any amount under an LC Support with
respect to any Letter of Credit, then Borrower shall be obligated to
pay to Fleet, in Dollars on the first Business Day following the date
on which payment was made by Fleet under such LC Support (the
"Reimbursement Date"), an amount equal to the amount paid by Fleet
under such LC Support (or, if payment thereunder was made by Fleet in a
currency other than Dollars, an amount equal to the Dollar Equivalent
of such currency at the time of Fleet's payment under such LC Support,
in each case) together with interest from and after the Reimbursement
Date until payment in full is made by Borrower at the Default Rate for
Revolver Loans constituting Base Rate Loans. Until Fleet has received
payment from Borrower in accordance with the foregoing provisions of
this clause (iii), Fleet, in addition to all of its other rights and
remedies under this Agreement, shall be fully subrogated to (A) the
rights and remedies of Bank as issuer of the Letter of Credit under any
agreement with the Borrower relating to the issuance of such Letter of
Credit, and (B) the right and remedies of each beneficiary under such
Letter of Credit whose claims against Borrower have been discharged
with the proceeds of such Letter of Credit. Whether or not Borrower
submits any Notice of Borrowing to Agent, Borrower shall be deemed to
have requested from Lenders a Borrowing of Base Rate Loans in an amount
necessary to pay to Fleet all amounts due Fleet on any Reimbursement
Date and each Lender agrees to fund its Pro Rata share of such
Borrowing whether or not any Default or Event of Default has occurred
or exists, the Commitments have been terminated, the funding of the
Borrowing deemed requested by Borrower would result in, or increase the
amount of, any Out-of-Formula Condition, or any of the conditions set
forth in SECTION 10 hereof are not satisfied.
(iv) Borrower assumes all risks of the acts,
omissions or misuses of any Letter of Credit by the beneficiary
thereof. The obligation of Borrower to reimburse Fleet for any payment
made by Fleet under the LC Support shall be absolute, unconditional,
irrevocable and shall be paid without regard to any lack of validity or
enforceability of any Letter of Credit, the existence of any claim,
setoff, defense or other right which Borrower may have at any time
against a beneficiary of any Letter of Credit, or improper honor by
Bank of any draw request under a Letter of Credit. If presentation of a
demand, draft, certificate or other document does not comply with the
terms of a Letter of Credit and Borrower contends that, as a
consequence of such noncompliance it has no obligation to reimburse
Bank for any payment made with respect thereto, Borrower shall
nevertheless be obligated to reimburse Fleet for any payment made under
the LC Support with respect to such Letter of Credit, but without
waiving any claim Borrower may have against Bank in connection
therewith. All disputes regarding any Letter of Credit shall be
resolved by Borrower directly with Bank.
(v) No Letter of Credit shall be extended or
amended in any respect that is not solely ministerial, unless all of
the LC Conditions are met as though a new Letter of Credit were being
requested and issued. With respect to any Letter of Credit that
contains any "evergreen" or automatic renewal provision, each Lender
shall be deemed to have consented to any such extension or renewal,
unless such Lender shall have provided to Agent written notice that it
declines to consent to any such extension or renewal at least 30 days
prior to the date on which the issuer of the Letter of Credit is
entitled to decline to extend or renew the Letter of
Credit. If all of the LC Conditions are met and no Default or Event of
Default has occurred and is continuing, no Lender shall have the right
to decline to consent to any such extension or renewal.
(vi) Borrower hereby authorizes and directs Bank
to deliver to Fleet all instruments, documents and other writings and
Property received by Bank pursuant to or in connection with any Letter
of Credit and to accept and rely upon Fleet's instructions and
agreements with respect to all matters arising in connection with such
Letter of Credit and the related LC Application.
1.3.2 Participations.
(i) Immediately upon the issuance by Bank of any
Letter of Credit, each Lender (other than Fleet) shall be deemed to
have irrevocably and unconditionally purchased and received from Fleet,
without recourse or warranty, an undivided interest and participation
equal to the Pro Rata share of such Lender (a "Participating Lender")
in all LC Obligations arising in connection with such Letter of Credit
and any security therefor or guaranty pertaining thereto, but in no
event greater than an amount which, when added to such Lender's Pro
Rata share of all Revolver Loans and LC Obligations then outstanding,
exceeds such Lender's Revolver Commitment.
(ii) If Fleet makes any payment under an LC
Support and Borrower does not repay or cause to be repaid the amount of
such payment on the Reimbursement Date, Fleet shall promptly notify
Agent, which shall promptly notify each Participating Lender, of such
payment and each Participating Lender shall promptly (and in any event
within 1 Business Day after its receipt of notice from Agent) and
unconditionally pay to Agent, for the account of Fleet, in immediately
available funds, the amount of such Participating Lender's Pro Rata
share of such payment, and Agent shall promptly pay such amounts to
Fleet. If a Participating Lender does not make its Pro Rata share of
the amount of such payment available to Agent, on a timely basis as
herein provided, such Participating Lender agrees to pay to Agent for
the account of Fleet, forthwith on demand, such amount together with
interest thereon at the Federal Funds Rate until paid. The failure of
any Participating Lender to make available to Agent for the account of
Fleet such Participating Lender's Pro Rata share of the LC Obligations
shall not relieve any other Participating Lender of its obligation
hereunder to make available to Agent its Pro Rata share of the LC
Obligations, but no Participating Lender shall be responsible for the
failure of any other Participating Lender to make available to Agent
its Pro Rata share of the LC Obligations on the date such payment is to
be made.
(iii) Whenever Fleet receives a payment on account
of the LC Obligations, including any interest thereon, as to which
Agent has previously received payments from any Lender for the account
of Fleet, Fleet shall promptly pay to each Participating Lender which
has funded its participating interest therein, in immediately available
funds, an amount equal to such Participating Lender's Pro Rata share
thereof.
(iv) The obligation of each Participating Lender
to make payments to Agent for the account of Fleet in connection with
Fleet's payment under an LC Support shall be absolute, unconditional
and irrevocable, not subject to any counterclaim, setoff, qualification
or exception whatsoever (other than for Fleet's gross negligence or
willful misconduct), and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances and irrespective
of whether or not Borrower may assert or have any claim for any lack of
validity or unenforceability of this Agreement or any of the other Loan
Documents; the existence of any Default or Event of Default; any draft,
certificate or other document presented under a Letter of
Credit having been determined to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; the existence of any setoff or defense any
Obligor may have with respect to any of the Obligations; or the
termination of the Commitments.
(v) Neither Fleet nor any of its officers,
directors, employees or agents shall be liable to any Participating
Lender for any action taken or omitted to be taken under or in
connection with any of the LC Documents except as the actual result of
gross negligence or willful misconduct on the part of Fleet or such
officers, directors, employees or agents. Fleet does not assume any
responsibility for any failure or delay in performance or breach by
Borrower or any other Person of any of its obligations under any of the
LC Documents. Fleet does not make to Participating Lenders any express
or implied warranty, representation or guaranty with respect to the
Collateral, the LC Documents, or any Obligor. Fleet shall not be
responsible to any Participating Lender for any recitals, statements,
information, representations or warranties contained in, or for the
execution, validity, genuineness, effectiveness or enforceability of
any of the LC Documents; the validity, genuineness, enforceability,
collectibility, value or sufficiency of any of the Collateral or the
perfection of any Lien therein; or the assets, liabilities, financial
condition, results of operations, business, creditworthiness or legal
status of Borrower or any other Obligor or any Account Debtor. In
connection with its administration of and enforcement of rights or
remedies under any of the LC Documents, Fleet shall be entitled to act,
and shall be fully protected in acting upon, any certification, notice
or other communication in whatever form believed by Fleet, in good
faith, to be genuine and correct and to have been signed, sent or made
by a proper Person. Fleet may consult with and employ legal counsel,
accountants and other experts to advise it concerning its rights,
powers and privileges under the LC Documents and shall be entitled to
act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by such experts. Fleet may employ
agents and attorneys-in-fact in connection with any matter relating to
the LC Documents and shall not be liable for the negligence, default or
misconduct of any such agents or attorneys-in-fact selected by Fleet
with reasonable care. Fleet shall not have any liability to any
Participating Lender by reason of Fleet's refraining to take any action
under any of the LC Documents without having first received written
instructions from the Required Lenders to take such action.
(vi) Upon the request of any Participating
Lender, Fleet shall furnish to such Participating Lender copies (to the
extent then available to Fleet) of each outstanding Letter of Credit
and related LC Application and all other documentation pertaining to
such Letter of Credit as may be in the possession of Fleet and
reasonably requested from time to time by such Participating Lender.
1.3.3 Cash Collateral Account. If any LC Obligations,
whether or not then due or payable, shall for any reason be outstanding (i) at
any time when an Event of Default has occurred and is continuing, (ii) on any
date that Availability is less than zero, or (iii) on or at any time after the
Commitment Termination Date, then Borrower shall, on Fleet's or Agent's request,
forthwith deposit with Agent, in cash, an amount equal to the aggregate amount
of LC Obligations. If Borrower fails to make such deposit on the first Business
Day following Agent's or Fleet's demand therefor, Lenders may (and shall upon
direction of the Required Lenders) advance such amount as Revolver Loans
(whether or not an Out-of-Formula Condition is created thereby). Such cash
(together with any interest accrued thereon) shall be held by Agent in the Cash
Collateral Account and may be invested, in Agent's discretion, in Cash
Equivalents. Borrower hereby pledges to Agent and grants to Agent a security
interest in, for the benefit of Agent in such capacity and for the Pro Rata
benefit of Lenders, all Cash Collateral held in the Cash Collateral Account from
time to time and all proceeds thereof, as security for the payment of all
Obligations, whether or not then due or payable. From time to time after cash is
deposited in the
Cash Collateral Account, Agent may apply Cash Collateral then held in the Cash
Collateral Account to the payment of any amounts, in such order as Agent may
elect, as shall be or shall become due and payable by Borrower to Agent or any
Lender with respect to the LC Obligations that may be then outstanding. Neither
Borrower nor any other Person claiming by, through or under or on behalf of
Borrower shall have any right to withdraw any of the Cash Collateral held in the
Cash Collateral Account, including any accrued interest, provided that upon
termination or expiration of all Letters of Credit and the payment and
satisfaction of all of the LC Obligations, any Cash Collateral remaining in the
Cash Collateral Account shall be returned to Borrower unless an Event of Default
then exists (in which event Agent may apply such Cash Collateral to the payment
of any other Obligations outstanding, with any surplus to be turned over to
Borrower).
1.3.4 Indemnifications.
(i) In addition to any other indemnity which
Borrower may have to Agent or any Lender under any of the other Loan
Documents and without limiting such other indemnification provisions,
Borrower hereby agrees to indemnify and defend each of the Agent
Indemnitees and Lender Indemnitees and to hold each of the Agent
Indemnitees and Lender Indemnitees harmless from and against any and
all Claims which any of the Agent Indemnitees or any of the Lender
Indemnitees may (other than as the actual result of their own gross
negligence or willful misconduct) incur or be subject to as a
consequence, directly or indirectly, of (a) the issuance of, payment or
failure to pay or any performance or failure to perform under any
Letter of Credit or LC Support or (b) any suit, investigation or
proceeding as to which Agent or any Lender is or may become a party to
as a consequence, directly or indirectly, of the issuance of any Letter
of Credit or any LC Support or the payment or failure to pay
thereunder.
(ii) Each Participating Lender agrees to
indemnify and defend each of the Fleet Indemnitees (to the extent the
Fleet Indemnitees are not reimbursed by Borrower or any other Obligor,
but without limiting the indemnification obligations of Borrower under
this Agreement), on a Pro Rata basis, from and against any and all
Claims which may be imposed on, incurred by or asserted against any of
the Fleet Indemnitees in any way related to or arising out of Fleet's
administration or enforcement of rights or remedies under any of the LC
Documents or any of the transactions contemplated thereby (including
costs and expenses which Borrower is obligated to pay under SECTION
14.2 hereof), provided that no Participating Lender shall be liable to
any of the Fleet Indemnitees for any of the foregoing to the extent
that they actually result from the willful misconduct or gross
negligence of such Fleet Indemnitees.
SECTION 2. INTEREST, FEES AND CHARGES
2.1. INTEREST.
2.1.1 Rates of Interest. Borrower agrees to pay interest in
respect of all unpaid principal amounts of the Revolver Loans from the
respective dates such principal amounts are advanced until paid (whether at
stated maturity, on acceleration or otherwise) at a rate per annum equal to the
applicable rate indicated below:
(i) for Revolver Loans made or outstanding as
Base Rate Loans, the Applicable Margin for such Loans plus the Base
Rate in effect from time to time; or
(ii) for Revolver Loans made or outstanding as
LIBOR Loans, the Applicable Margin for such Loans plus the relevant
Adjusted LIBOR Rate for the applicable Interest Period selected by
Borrower in conformity with this Agreement.
Borrower agrees to pay interest in respect of all unpaid
principal amounts outstanding with respect to Term Loan Advances from the
respective dates such principal amounts are advanced until paid (whether at
stated maturity, on acceleration, or otherwise) at a rate per annum equal to the
applicable rate indicated below:
(i) for Term Loan Advances made or outstanding
in whole or in part as Base Rate Loans, the Applicable Margin for such
Loans plus the Base Rate in effect from time to time; or
(ii) for Term Loan Advances made or outstanding
in whole or in part as LIBOR Loans, the Applicable Margin for such
Loans plus the relevant Adjusted LIBOR Rate for the applicable Interest
Period selected by Borrower in conformity with this Agreement.
Upon determining the Adjusted LIBOR Rate for any Interest
Period requested by Borrower, Agent shall promptly notify Borrower thereof by
telephone and, if so requested by Borrower, confirm the same in writing. Such
determination shall, absent manifest error, be final, conclusive and binding on
all parties and for all purposes. The applicable rate of interest for all Loans
(or portions thereof) bearing interest based upon the Base Rate shall be
increased or decreased, as the case may be, by an amount equal to any increase
or decrease in the Base Rate, with such adjustments to be effective as of the
opening of business on the day that any such change in the Base Rate becomes
effective. Interest on each Loan shall accrue from and including the date on
which such Loan is made, converted to a Loan of another Type or continued as a
LIBOR Loan to (but excluding) the date of any repayment thereof; provided,
however, that, if a Loan is repaid on the same day made, one day's interest
shall be paid on such Loan. The Base Rate on the date hereof is 4.00% per annum
and, therefore, the rate of interest in effect hereunder on the date hereof,
expressed in simple interest terms, is 4.00% per annum with respect to any
portion of the Revolver Loans bearing interest as a Base Rate Loan and is 4.25%
per annum with respect to any portion of the Term Loan Advances bearing interest
as a Base Rate Loan.
2.1.2 Conversions and Continuations.
(i) Borrower may on any Business Day, subject to
the giving of a proper Notice of Conversion/Continuation as hereinafter
described, elect (A) to continue all or any part of a LIBOR Loan by
selecting a new Interest Period therefor, to commence on the last day
of the immediately preceding Interest Period, or (B) to convert all or
any part of a Loan of one Type into a Loan of another Type; provided,
however, that no outstanding Loans may be converted into or continued
as LIBOR Loans when any Default or Event of Default exists. Any
conversion of a LIBOR Loan into a Base Rate Loan shall be made on the
last day of the Interest Period for such LIBOR Loan. Any conversion or
continuation made with respect to less than the entire outstanding
balance of the Revolver Loans or the Term Loan Advances must be
allocated among Lenders on a Pro Rata basis, and the Interest Period
for Loans converted into or continued as LIBOR Loans shall be
coterminous for each Lender.
(ii) Whenever Borrower desires to convert or
continue Loans under SECTION 2.1.2(i), Borrower shall give Agent
written notice (or telephonic notice promptly confirmed in writing)
substantially in the form of EXHIBIT D, signed by an authorized officer
of Borrower, at least 1 Business Day before the requested conversion
date, in the case of a conversion into Base Rate Loans, and at least 2
Business Days before the requested conversion or continuation date, in
the case of a conversion into or continuation of LIBOR Loans. Promptly
after receipt of a Notice of Conversion/Continuation, Agent shall
notify each Lender in writing of the proposed conversion or
continuation. Each such Notice of Conversion/Continuation shall be
irrevocable and shall specify the aggregate principal amount of
the Loans to be converted or continued, the date of such conversion or
continuation (which shall be a Business Day) and whether the Loans are
being converted into or continued as LIBOR Loans (and, if so, the
duration of the Interest Period to be applicable thereto and, in the
absence of any specification by Borrower of the Interest Period, an
Interest Period of one month will be deemed to be specified) or Base
Rate Loans. If, upon the expiration of any Interest Period in respect
of any LIBOR Loans Borrower shall have failed to deliver the Notice of
Conversion/Continuation, Borrower shall be deemed to have elected to
convert such LIBOR Loans to Base Rate Loans.
2.1.3 Interest Periods. In connection with the making or
continuation of, or conversion into, each Borrowing of LIBOR Loans, Borrower
shall select an interest period (each an "Interest Period") to be applicable to
such LIBOR Loan, which interest period shall commence on the date such LIBOR
Loan is made and shall end on a numerically corresponding day in the first,
second, third or sixth month thereafter; provided, however, that:
(i) the initial Interest Period for a LIBOR Loan
shall commence on the date of such Borrowing (including the date of any
conversion from a Loan of another Type) and each Interest Period
occurring thereafter in respect of such Revolver Loan shall commence on
the date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise
expire on a day that is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day, provided that, if any
Interest Period in respect of LIBOR Loans would otherwise expire on a
day which is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day;
(iii) any Interest Period that begins on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period shall expire on the last Business
Day of such calendar month; and
(iv) no Interest Period with respect to any
portion of principal of a Loan shall extend beyond a date on which
Borrower is required to make a scheduled payment of such portion of
principal; and
(v) no Interest Period shall extend beyond the
last day of the Original Term.
2.1.4 Interest Rate Not Ascertainable. If Agent shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that on any date for determining the
Adjusted LIBOR Rate for any Interest Period, by reason of any changes arising
after the date of this Agreement affecting the London interbank market or any
Lender's or Bank's position in such market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided for in the
definition of Adjusted LIBOR Rate, then, and in any such event, Agent shall
forthwith give notice (by telephone confirmed in writing) to Borrower of such
determination. Until the circumstances giving rise to the suspension described
herein no longer exist, the obligation of Lenders to make LIBOR Loans shall be
suspended, and such affected Loans then outstanding shall, at the end of the
then applicable Interest Period or at such earlier time as may be required by
Applicable Law, bear the same interest as Base Rate Loans.
2.1.5 Default Rate of Interest. Borrower shall pay interest
(before as well as after entry of judgment thereon, to the extent permitted by
Applicable Law) at a rate per annum equal to the Default Rate (i) with respect
to the principal amount of any portion of the Obligations (and, to the extent
permitted by Applicable Law, all past due interest) that is not paid on the due
date thereof (whether due at
stated maturity, on demand, upon acceleration or otherwise) until paid in full;
(ii) with respect to the principal amount of all of the Obligations (and, to the
extent permitted by Applicable Law, all past due interest) upon the earlier to
occur of (x) Borrower's receipt of notice from Agent of the Required Lenders'
election to charge the Default Rate based upon the existence of any Event of
Default (which notice Agent shall send only with the consent or at the direction
of the Required Lenders), whether or not acceleration or demand for payment of
the Obligations has been made, or (y) the commencement by or against Borrower of
an Insolvency Proceeding whether or not under the circumstances described in
clauses (i) or (ii) hereof Agent elects to accelerate the maturity or demand
payment of any of the Obligations; and (iii) with respect to the principal
amount of any Out-of-Formula Loans, whether or not demand for payment thereof
has been made by Agent. To the fullest extent permitted by Applicable Law, the
Default Rate shall apply and accrue on any judgment entered with respect to any
of the Obligations and to the unpaid principal amount of the Obligations during
any Insolvency Proceeding of Borrower. Borrower acknowledges that the costs and
expenses to Agent and each Lender attendant upon the occurrence of an Event of
Default are difficult to ascertain or estimate and that the Default Rate is a
fair and reasonable estimate to compensate Agent and Lender for such added cost
and expense.
2.2. FEES. In consideration of Lenders' establishment of the
Commitments in favor of Borrower, and Agent's agreement to serve as collateral
and administrative agent hereunder, Borrower agrees to pay the following fees:
Seventh Amendment to Loan & Security Agreement 4-14-04 Page 12
2.2.1 Amendment and Restatement Fee. In consideration for
Initial Lender's willingness to enter into this Agreement, Borrower shall pay to
Agent, for the benefit of Initial Lender, a closing fee in the amount of
$50,000, in immediately available funds, which fee shall be paid on the Closing
Date.
2.2.2 Unused Line Fee. Borrower shall be obligated to pay
to Agent for the Pro Rata benefit of Lenders a fee equal to the Applicable
Margin for the unused line fee divided by 360 days multiplied by the number of
days in the month multiplied by the amount by which the Average Revolver Loan
Balance for any month (or portion thereof that the Commitments are in effect) is
less than the aggregate amount of the Revolver Commitments, such fee to be paid
on the first day of the following month; but if the Commitments are terminated
on a day other than the first day of a month, then any such fee payable for the
month in which termination shall occur shall be paid on the effective date of
such termination.
2.2.3 LC Facility Fees. Borrower shall pay: (i) to Agent,
through its Treasury and International Services Group, for the ratable account
of each Lender for Letters of Credit, the Applicable Margin in effect for LIBOR
Loans that constitute Revolver Loans on a per annum basis (and at any time an
Event of Default exists, the Default Rate) based on the face amount of all
Letters of Credit outstanding, payable monthly, in arrears, on the first
Business Day of the following month, and (ii) to Bank for its own account all
normal and customary charges associated with the issuance, amending,
negotiating, processing and administration of each Letter of Credit.
2.2.4 Audit and Appraisal Fees. Borrower shall reimburse
Agent and Lenders for all reasonable costs and expenses incurred by Agent or
Lenders in connection with appraisals and audits of any Collateral as Agent
shall deem appropriate and shall pay to Agent its normal and customary fee per
day (currently $850 per day) for each day that an employee or agent of Agent
shall be engaged in an examination or review of Borrower's books and records;
provided, however, if Availability is greater than or equal to $15,000,000 and
no Event of Default exists, then Borrower shall not be obligated to reimburse
Agent or its agents or designees for more than one appraisal of Borrower's
Inventory more frequently than once every eighteen months; and provided,
further, however, if Availability is less than $15,000,000 or an Event of
Default exists, then Borrower shall be obligated to reimburse Agent for any and
all appraisals of Borrower's Inventory conducted by Agent or its agents or
designees. On the Closing Date, Borrower shall be obligated to pay to Fleet all
out-of-pocket expenses incurred by Fleet in connection with the audit and
appraisal of Borrower's business and Properties prior to the Closing Date.
2.2.5 General Provisions. All fees shall be fully earned by
the identified recipient thereof pursuant to the foregoing provisions of this
Agreement and the Fee Letter on the due date thereof (and, in the case of
Letters of Credit, upon each issuance, renewal or extension of such Letter of
Credit) and, except as otherwise set forth herein or required by Applicable Law,
shall not be subject to rebate, refund or proration. All fees provided for in
SECTION 2.2 are and shall be deemed to be compensation for services and are not,
and shall not be deemed to be, interest or any other charge for the use,
forbearance or detention of money.
2.3. COMPUTATION OF INTEREST AND FEES. All fees and other charges
provided for in this Agreement that are calculated as a per annum percentage of
any amount and all interest shall be calculated daily and shall be computed on
the actual number of days elapsed over a year of 360 days. For purposes of
computing interest and other charges hereunder, all Payment Items and other
forms of payment received by Agent shall be deemed applied by Agent on account
of the Obligations (subject to final payment of such items) on the Business Day
that Agent receives such items in immediately available
funds in the Payment Account, and Agent shall be deemed to have received such
Payment Item on the date specified in SECTION 4.7 hereof.
2.4. REIMBURSEMENT OF OBLIGATIONS.
2.4.1. Borrower shall reimburse Agent and, during any period
that an Event of Default exists, each Lender, for all legal, accounting,
appraisal and other fees and expenses incurred by Agent or any Lender in
connection with (i) the negotiation and preparation of any of the Loan
Documents, any amendment or modification thereto, any waiver of any Default or
Event of Default thereunder, or any restructuring or forbearance with respect
thereto; (ii) the administration of the Loan Documents and the transactions
contemplated thereby, to the extent that such fees and expenses are expressly
provided for in this Agreement or any of the other Loan Documents; (iii) action
taken to perfect or maintain the perfection or priority of any of Agent's Liens
with respect to any of the Collateral; (iv) any inspection of or audits
conducted with respect to Borrower's books and records or any of the Collateral;
(v) any effort to verify, protect, preserve, or restore any of the Collateral or
to collect, sell, liquidate or otherwise dispose of or realize upon any of the
Collateral; (vi) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by or against Agent, any Lender, any Obligor or any other
Person) in any way arising out of or relating to any of the Collateral (or the
validity, perfection or priority of any of Agent's Liens thereon), any of the
Loan Documents or the validity, allowance or amount of any of the Obligations;
(vii) the protection or enforcement or any rights or remedies of Agent or any
Lender in any Insolvency Proceeding; and (viii) any other action taken by Agent
or any Lender to enforce any of the rights or remedies of Agent or such Lender
against any Obligor or any Account Debtors to enforce collection of any of the
Obligations or payments with respect to any of the Collateral. All amounts
chargeable to Borrower under this SECTION 2.4 shall constitute Obligations that
are secured by all of the Collateral and shall be payable ON DEMAND to Agent.
Borrower shall also reimburse Agent for expenses incurred by Agent in its
administration of any of the Collateral to the extent and in the manner provided
in SECTION 7 hereof or in any of the other Loan Documents. The foregoing shall
be in addition to, and shall not be construed to limit, any other provision of
any of the Loan Documents regarding the reimbursement by Borrower of costs,
expenses or liabilities suffered or incurred by Agent or any Lender.
2.4.2. If at any time Agent or (with the consent of Agent)
any Lender shall agree to indemnify any Person (including Bank) against losses
or damages that such Person may suffer or incur in its dealings or transactions
with Borrower arising under or in connection with this Agreement or any of the
other Loan Documents, or shall guarantee any liability or obligation of Borrower
to such Person, or otherwise shall provide assurances of Borrower's payment or
performance under any agreement with such Person, including indemnities,
guaranties or other assurances of payment or performance given by Agent or any
Lender with respect to Cash Management Agreements, Interest Rate Contracts or
Letters of Credit, then the Contingent Obligation of Agent or any Lender
providing any such indemnity, guaranty or other assurance of payment or
performance, together with any payment made or liability incurred by Agent or
any Lender in connection therewith, shall constitute Obligations that are
secured by the Collateral and Borrower shall repay, ON DEMAND, any amount so
paid or any liability incurred by Agent or any Lender in connection with any
such indemnity, guaranty or assurance, except that repayment with respect to any
LC Support shall be due on the Reimbursement Date as provided in SECTION
1.3.1(iii). Nothing herein shall be construed to impose upon Agent or any Lender
any obligation to provide any such indemnity, guaranty or assurance except to
the extent provided in SECTION 1.3 hereof. Agent and Lenders shall use
reasonable efforts to give Borrower notice of any such obligation under this
SECTION 2.4.2 to the extent that Borrower has not expressly requested at such
time that Agent and Lenders provide such indemnification, guarantee or
assurances, but Agent's and Lenders' failure to give Borrower such notice shall
not affect any of Borrower's obligations under this Agreement or any of the
other Loan Documents and shall not impose any liability on Agent or any Lender.
2.5. BANK CHARGES. Borrower shall pay to Agent, ON DEMAND, any and
all fees, costs or expenses which Agent or any Lender pays to a bank or other
similar institution (including any fees paid by Agent or any Lender to any
Participant) arising out of or in connection with (i) the forwarding to Borrower
or any other Person on behalf of Borrower by Agent or any Lender of proceeds of
Loans made by Lenders to Borrower pursuant to this Agreement and (ii) the
depositing for collection by Agent or any Lender of any Payment Item received or
delivered to Agent or any Lender on account of the Obligations. Borrower
acknowledges and agrees that Agent may charge such costs, fees and expenses to
Borrower based upon Agent's good faith estimate of such costs, fees and expenses
as they are incurred by Agent or any Lender.
2.6. ILLEGALITY. Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if (i) any change in any law or regulation or in
the interpretation thereof by any Governmental Authority charged with the
administration thereof shall make it unlawful for a Lender to make or maintain a
LIBOR Loan or to give effect to its obligations as contemplated hereby with
respect to a LIBOR Loan or (ii) at any time such Lender determines that the
making or continuance of any LIBOR Loan has become impracticable as a result of
a contingency occurring after the date hereof which adversely affects the London
interbank market or the position of such Lender in such market, then such Lender
shall give after such determination Agent and Borrower notice thereof and may
thereafter (1) declare that LIBOR Loans will not thereafter be made by such
Lender, whereupon any request by Borrower for a LIBOR Loan shall be deemed a
request for a Base Rate Loan unless such Lender's declaration shall be
subsequently withdrawn (which declaration shall be withdrawn promptly after the
cessation of the circumstances described in clause (i) or (ii) above); and (2)
require that all outstanding LIBOR Loans made by such Lender be converted to
Base Rate Loans, under the circumstances of clause (i) or (ii) of this SECTION
2.6 insofar as such Lender determines the continuance of LIBOR Loans to be
impracticable, in which event all such LIBOR Loans shall be converted
automatically to Base Rate Loans as of the date of Borrower's receipt of the
aforesaid notice from such Lender.
2.7. INCREASED COSTS. If, by reason of (a) the introduction after
the date hereof of or any change (including any change by way of imposition or
increase of Statutory Reserves or other reserve requirements) in or in the
interpretation of any law or regulation, or (b) the compliance with any
guideline or request from any central bank or other Governmental Authority or
quasi-Governmental Authority exercising control over banks or financial
institutions generally (whether or not having the force of law):
(i) any Lender shall be subject after the date hereof, to
any Tax, duty or other charge with respect to any LIBOR Loan or its
obligation to make LIBOR Loans, or a change shall result in the basis
of taxation of payment to any Lender of the principal of or interest on
its LIBOR Loans or its obligation to make LIBOR Loans (except for
changes in the rate of Tax on the overall net income or gross receipts
of such Lender imposed by the jurisdiction in which such Lender's
principal executive office is located); or
(ii) any reserve (including any imposed by the Board of
Governors), special deposits or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender
shall be imposed or deemed applicable or any other condition affecting
its LIBOR Loans or its obligation to make LIBOR Loans shall be imposed
on such Lender or the London interbank market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining LIBOR Loans (except to the
extent already included in the determination of the applicable Adjusted LIBOR
Rate for LIBOR Loans), or there shall be a reduction in the amount received or
receivable by such Lender, then such Lender shall, promptly after determining
the existence or amount of any such increased costs for which such Lender seeks
payment hereunder, give Borrower
notice thereof and Borrower shall from time to time, upon written notice from
and demand by such Lender (with a copy of such notice and demand to Agent), pay
to Agent for the account of such Lender, within 5 Business Days after the date
specified in such notice and demand, an additional amount sufficient to
indemnify such Lender against such increased costs. A certificate as to the
amount of such increased cost, submitted to Borrower by such Lender, shall be
final, conclusive and binding for all purposes, absent manifest error.
If any Lender shall advise Agent at any time that, because of the
circumstances described hereinabove in this SECTION 2.7 or any other
circumstances arising after the date of this Agreement affecting such Lender or
the London interbank market or such Lender's or Bank's position in such market,
the Adjusted LIBOR Rate, as determined by Agent, will not adequately and fairly
reflect the cost to such Lender of funding LIBOR Loans, then, and in any such
event:
(i) Agent shall forthwith give notice (by telephone
confirmed in writing) to Borrower and Lenders of such event;
(ii) Borrower's right to request and such Lender's
obligation to make LIBOR Loans shall be immediately suspended and
Borrower's right to continue a LIBOR Loan as such beyond the then
applicable Interest Period shall also be suspended, until each
condition giving rise to such suspension no longer exists; and
(iii) such Lender shall make a Base Rate Loan as part of
the requested Borrowing of LIBOR Loans, which Base Rate Loan shall, for
all purposes, be considered part of such Borrowing.
For purposes of this SECTION 2.7, all references to a Lender shall be
deemed to include any bank holding company or bank parent of such Lender.
2.8. CAPITAL ADEQUACY. If any Lender determines that after the date
hereof (a) the adoption of any Applicable Law regarding capital requirements for
banks or bank holding companies or the subsidiaries thereof, (b) any change in
the interpretation or administration of any such Applicable Law by any
Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or (c) compliance by such Lender or
its holding company with any request or directive of any such Governmental
Authority, central bank or comparable agency regarding capital adequacy (whether
or not having the force of law), has the effect of reducing the return on such
Lender's capital to a level below that which such Lender could have achieved
(taking into consideration such Lender's and its holding company's policies with
respect to capital adequacy immediately before such adoption, change or
compliance and assuming that such Lender's capital was fully utilized prior to
such adoption, change or compliance) but for such adoption, change or compliance
as a consequence of such Lender's commitment to make the Loans pursuant hereto
by any amount deemed by such Lender to be material:
(i) Agent shall promptly, after its receipt of a
certificate from such Lender setting forth such Lender's determination
of such occurrence, give notice thereof to Borrower and Lenders; and
(ii) Borrower shall pay to Agent, for the account of such
Lender, as an additional fee from time to time, ON DEMAND, such amount
as such Lender certifies to be the amount reasonably calculated to
compensate such Lender for such reduction.
A certificate of such Lender claiming entitlement to compensation as
set forth above will be conclusive in the absence of manifest error. Such
certificate will set forth the nature of the occurrence giving rise to such
compensation, the additional amount or amounts to be paid to such Lender
(including the basis for such Lender's determination of such amount), and the
method by which such amounts were determined. In determining such amount, such
Lender may use any reasonable averaging and attribution method. For purposes of
this SECTION 2.8 all references to a Lender shall be deemed to include any bank
holding company or bank parent of such Lender.
2.9. FUNDING LOSSES. If for any reason (other than due to a default
by a Lender or as a result of a Lender's refusal to honor a LIBOR Loan request
due to circumstances described in SECTION 2.6 or 2.7 hereof) a Borrowing of, or
conversion to or continuation of, LIBOR Loans does not occur on the date
specified therefor in a Notice of Borrowing or Notice of Conversion/
Continuation (whether or not withdrawn), or if any repayment (including any
conversions pursuant to SECTION 2.1.2 hereof) of any of its LIBOR Loans occurs
on a date that is not the last day of an Interest Period applicable thereto, or
if for any reason Borrower defaults in its obligation to repay LIBOR Loans when
required by the terms of this Agreement, then Borrower shall pay to Agent, for
the ratable benefit of the affected Lenders, within 10 days after Agent's or an
affected Lender's demand therefor, an amount (if a positive number) computed
pursuant to the following formula:
L = (R - T) x P x D
---------------
360
where
L = amount payable
R = interest rate applicable hereunder
to the LIBOR Loan unborrowed or
prepaid
T = effective interest rate per annum at
which any readily marketable bond or
other obligations of the United
States, selected at Agent's sole
discretion, maturing on or nearest
the last day of the then applicable
or requested Interest Period for
such LIBOR Loan and in approximately
the same amount as such LIBOR Loan,
can be purchased by Agent on the day
of such payment of principal or
failure to borrow
P = the amount of principal paid or the
amount of the LIBOR Loan requested
or to have been continued or
converted
D = the number of days remaining in the
Interest Period as of the date of
such prepayment or the number of
days in the requested Interest
Period
Borrower shall pay such amount upon presentation by Agent of a statement setting
forth the amount and Agent's calculation thereof pursuant hereto, which
statement shall be deemed true and correct absent manifest error. For purposes
of this SECTION 2.9, all references to a Lender shall be deemed to include any
bank holding company or bank parent of such Lender.
2.10. MAXIMUM INTEREST. Regardless of any provision contained in any
of the Loan Documents, in no contingency or event whatsoever shall the aggregate
of all amounts that are contracted for, charged or received by Agent and Lenders
pursuant to the terms of this Agreement or any of the other Loan Documents and
that are deemed interest under Applicable Law exceed the highest rate
permissible under any Applicable Law. No agreements, conditions, provisions or
stipulations contained in this Agreement or any of the other Loan Documents or
the exercise by Agent of the right to accelerate the payment or the maturity of
all or any portion of the Obligations, or the exercise of any option whatsoever
contained in any of the Loan Documents, or the prepayment by Borrower of any of
the Obligations, or the occurrence of any contingency whatsoever, shall entitle
Agent or any Lender to charge or receive in any event, interest or any charges,
amounts, premiums or fees deemed interest by Applicable Law (such interest,
charges, amounts, premiums and fees referred to herein collectively as
"Interest") in excess of the Maximum Rate and in no event shall Borrower be
obligated to pay Interest exceeding such Maximum Rate, and all agreements,
conditions or stipulations, if any, which may in any event or contingency
whatsoever operate to bind, obligate or compel Borrower to pay Interest
exceeding the Maximum Rate shall be without binding force or effect, at law or
in equity, to the extent only of the excess of Interest over such Maximum Rate.
If any Interest is charged or received in excess of the Maximum Rate ("Excess"),
Borrower acknowledges and stipulates that any such charge or receipt shall be
the result of an accident and bona fide error, and such Excess, to the extent
received, shall be applied first to reduce the principal Obligations and the
balance, if any, returned to Borrower, it being the intent of the parties hereto
not to enter into a usurious or otherwise illegal relationship. The right to
accelerate the maturity of any of the Obligations does not include the right to
accelerate any Interest that has not otherwise accrued on the date of such
acceleration, and Agent and Lenders do not intend to collect any unearned
Interest in the event of any such acceleration. Borrower recognizes that, with
fluctuations in the rates of interest set forth in SECTION 2.1.1 of this
Agreement or in the Notes, and the Maximum Rate, such an unintentional result
could inadvertently occur. All monies paid to Agent or any Lender hereunder or
under any of the other Loan Documents, whether at maturity or by prepayment,
shall be subject to any rebate of unearned Interest as and to the extent
required by Applicable Law. By the execution of this Agreement, Borrower
covenants that (i) the credit or return of any Excess shall constitute the
acceptance by Borrower of such Excess, and (ii) Borrower shall not seek or
pursue any other remedy, legal or equitable, against Agent or any Lender, based
in whole or in part upon contracting for, charging or receiving any Interest in
excess of the Maximum Rate. For the purpose of determining whether or not any
Excess has been contracted for, charged or received by Agent or any Lender, all
Interest at any time contracted for, charged or received from Borrower in
connection with any of the Loan Documents shall, to the extent permitted by
Applicable Law, be amortized, prorated, allocated and spread in equal parts
throughout the full term of the Obligations. Borrower, Agent and Lenders shall,
to the maximum extent permitted under Applicable Law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as Interest and
(ii) exclude voluntary prepayments and the effects thereof. The provisions of
this SECTION 2.10 shall be deemed to be incorporated into every Loan Document
(whether or not any provision of this Section is referred to therein). All such
Loan Documents and communications relating to any Interest owed by Borrower and
all figures set forth therein shall, for the sole purpose of computing the
extent of Obligations, be automatically recomputed by Borrower, and by any court
considering the same, to give effect to the adjustments or credits required by
this SECTION 2.10.
SECTION 3. LOAN ADMINISTRATION
3.1. MANNER OF BORROWING AND FUNDING REVOLVER LOANS. Borrowings
under the Commitments established pursuant to SECTION 1.1 hereof shall be made
and funded as follows:
3.1.1 Notice of Borrowing.
(i) Whenever Borrower desires to make a
Borrowing under SECTION 1.1 of this Agreement (other than a Borrowing
resulting from a conversion or continuation pursuant to SECTION 2.1.2),
Borrower shall give Agent prior written notice (or telephonic notice
promptly confirmed in writing if requested by Agent) of such Borrowing
request (a "Notice of Borrowing"), which shall be in the form of
EXHIBIT E annexed hereto and signed by an authorized officer of
Borrower. Such Notice of Borrowing shall be given by Borrower no later
than 12:00 noon at the office of Agent designated by Agent from time to
time (a) on the Business Day of the requested funding date of such
Borrowing, in the case of Base Rate Loans, and (b) at least 2 Business
Days prior to the requested funding date of such Borrowing, in the case
of LIBOR Loans. Notices received after 12:00 noon shall be deemed
received on the next Business Day. The Revolver Loans made by each
Lender on the Closing Date shall be in excess of $250,000 and shall be
made as Base Rate Loans and thereafter may be made or continued as or
converted into Base Rate Loans or LIBOR Loans. Each Notice of Borrowing
(or telephonic notice thereof) shall be irrevocable and shall specify
(a) the principal amount of the Borrowing, (b) the date of Borrowing
(which shall be a Business Day), (c) whether the Borrowing is to
consist of Base Rate Loans or LIBOR Loans, (d) in the case of LIBOR
Loans, the duration of the Interest Period to be applicable thereto,
and (e) the account of Borrower to which the proceeds of such Borrowing
are to be disbursed. Borrower may not request any LIBOR Loans if a
Default or Event of Default exists.
(ii) Unless payment is otherwise timely made by
Borrower, the becoming due of any amount required to be paid under this
Agreement or any of the other Loan Documents with respect to the
Obligations (whether as principal, accrued interest, fees or other
charges including the repayment of any LC Obligations) shall be deemed
irrevocably to be a request (without any requirement for the submission
of a Notice of Borrowing) for Revolver Loans on the due date of, and in
an aggregate amount required to pay, such Obligations, and the proceeds
of such Revolver Loans may be disbursed by way of direct payment of the
relevant Obligation and shall bear interest as Base Rate Loans. Neither
Agent nor any Lender shall have any obligation to Borrower to honor any
deemed request for a Revolver Loan after the Commitment Termination
Date, when an Out-of-Formula Condition exists or would result therefrom
or when any condition precedent set forth in SECTION 10 hereof is not
satisfied, but may do so in their discretion and without regard to the
existence of, and without being deemed to have waived, any Default or
Event of Default and regardless of whether such Revolver Loan is funded
after the Commitment Termination Date.
(iii) If Borrower elects to establish a Deposit
Account (including a Controlled Disbursement Account) with Bank or any
Affiliate of Bank, or Borrower otherwise incurs Banking Relationship
Debt, then the presentation for payment by Bank of any check or other
item of payment drawn on the Controlled Disbursement Account or the
becoming due of any Banking Relationship Debt at a time when there are
insufficient funds in such Deposit Account to cover such check or
Banking Relationship Debt shall be deemed irrevocably to be a request
(without any requirement for the submission of a Notice of Borrowing)
for Revolver Loans on the date of such presentation or becoming due of
Banking Relationship Debt and in any amount equal to the aggregate
amount of the items presented for payment or the amount of Banking
Relationship Debt that has become due, and the proceeds of such
Revolver Loans may be disbursed to the Controlled Disbursement Account
or other Deposit Account with Bank or any Affiliate of Bank and shall
bear interest as Base Rate Loans. Neither Agent nor any Lender shall
have any obligation to honor any deemed request for a Revolver Loan
after the Commitment Termination Date or when an Out-of-Formula
Condition exists or would result therefrom or when any
condition precedent in SECTION 10 hereof is not satisfied, but may do
so in its discretion and without regard to the existence of, and
without being deemed to have waived, any Default or Event of Default
and regardless of whether such Revolver Loan is funded after the
Commitment Termination Date.
(iv) As an accommodation to Borrower, Agent and
Lenders may permit telephonic requests for Borrowings and electronic
transmittal of instructions, authorizations, agreements or reports to
Agent by Borrower; provided, however, that Borrower shall confirm each
such telephonic request for a Borrowing of LIBOR Loans by delivery of
the required Notice of Borrowing to Agent by facsimile transmission
promptly, but in no event later than 5:00 p.m. on the same day. Neither
Agent nor any Lender shall have any liability to Borrower for any loss
or damage suffered by Borrower as a result of Agent's or any Lender's
honoring of any requests, execution of any instructions, authorizations
or agreements or reliance on any reports communicated to it
telephonically or electronically and purporting to have been sent to
Agent or Lenders by Borrower and neither Agent nor any Lender shall
have any duty to verify the origin of any such communication or the
identity or authority of the Person sending it.
3.1.2 Fundings by Lenders. Subject to its receipt of notice
from Agent of a Notice of Borrowing as provided in SECTION 3.1.1(i) (except in
the case of a deemed request by Borrower for a Revolver Loan as provided in
SECTIONS 3.1.1(ii) OR (iii) or 3.1.3(ii) hereof, in which event no Notice of
Borrowing need be submitted), each Lender shall timely honor its Revolver
Commitment by funding its Pro Rata share of each Borrowing of Revolver Loans
that is properly requested by Borrower and that Borrower is entitled to receive
under this Agreement. Agent shall endeavor to notify Lenders of each Notice of
Borrowing (or deemed request for a Borrowing pursuant to SECTION 3.1.1(ii) OR
(iii) hereof) by 12:00 noon on the proposed funding date (in the case of Base
Rate Loans) or by 3:00 p.m. at least 2 Business Days before the proposed funding
date (in the case of LIBOR Loans). Each Lender shall deposit with Agent an
amount equal to its Pro Rata share of the Borrowing requested or deemed
requested by Borrower at Agent's designated bank in immediately available funds
not later than 3:00 p.m. on the date of funding of such Borrowing, unless
Agent's notice to Lenders is received after 12:00 noon on the proposed funding
date of a Base Rate Loan, in which event Lenders shall deposit with Agent their
respective Pro Rata shares of the requested Borrowing on or before 11:00 a.m. of
the next Business Day. Subject to its receipt of such amounts from Lenders,
Agent shall make the proceeds of the Revolver Loans received by it available to
Borrower by disbursing such proceeds in accordance with Borrower's disbursement
instructions set forth in the applicable Notice of Borrowing. Neither Agent nor
any Lender shall have any liability on account of any delay by any bank or other
depository institution in treating the proceeds of any Revolver Loan as
collected funds or any delay in receipt, or any loss, of funds that constitute a
Revolver Loan, the wire transfer of which was initiated by Agent in accordance
with wiring instructions provided to Agent. Unless Agent shall have been
notified in writing by a Lender prior to the proposed time of funding that such
Lender does not intend to deposit with Agent an amount equal such Lender's Pro
Rata share of the requested Borrowing (or deemed request for a Borrowing
pursuant to SECTION 3.1.1(ii) OR (iii) hereof), Agent may assume that such
Lender has deposited or promptly will deposit its share with Agent and Agent may
in its discretion disburse a corresponding amount to Borrower on the applicable
funding date. If a Lender's Pro Rata share of such Borrowing is not in fact
deposited with Agent, then, if Agent has disbursed to Borrower an amount
corresponding to such share, then such Lender agrees to pay, and in addition
Borrower agrees to repay, to Agent forthwith on demand such corresponding
amount, together with interest thereon, for each day from the date such amount
is disbursed by Agent to or for the benefit of Borrower until the date such
amount is paid or repaid to Agent, (a) in the case of Borrower, at the interest
rate applicable to such Borrowing and (b) in the case of such Lender, at the
Federal Funds Rate. If such Lender repays to Agent such corresponding amount,
such amount so repaid shall constitute a Revolver Loan, and if both such Lender
and Borrower shall have repaid such corresponding amount, Agent shall promptly
return to Borrower such corresponding amount
in same day funds. A notice from Agent submitted to any Lender with respect to
amounts owing under this SECTION 3.1.2 shall be conclusive, absent manifest
error.
3.1.3 Settlement and Settlement Loans.
(i) In order to facilitate the administration of
the Revolver Loans under this Agreement, Lenders agree (which agreement
shall be solely between Lenders and Agent and shall not be for the
benefit of or enforceable by Borrower) that settlement among them with
respect to the Revolver Loans may take place on a periodic basis on
dates determined from time to time by Agent (each a "Settlement Date"),
which may occur before or after the occurrence or during the
continuance of a Default or Event of Default and whether or not all of
the conditions set forth in SECTION 10 of this Agreement have been met.
On each Settlement Date, payment shall be made by or to each Lender in
the manner provided herein and in accordance with the Settlement Report
delivered by Agent to Lenders with respect to such Settlement Date so
that, as of each Settlement Date and after giving effect to the
transaction to take place on such Settlement Date, each Lender shall
hold its Pro Rata share of all Revolver Loans and participations in LC
Obligations then outstanding.
(ii) Between Settlement Dates, Agent may request
Fleet to advance, and Fleet may, but shall in no event be obligated to,
advance to Borrower out of Fleet's own funds the entire principal
amount of any Borrowing of Revolver Loans that are Base Rate Loans
requested or deemed requested pursuant to this Agreement (any such
Revolver Loan funded exclusively by Fleet being referred to as a
"Settlement Loan"). Each Settlement Loan shall constitute a Revolver
Loan hereunder, shall accrue interest as a Base Rate Loan, and shall be
subject to all of the terms, conditions and security applicable to
other Revolver Loans, except that all payments thereon shall be payable
to Fleet solely for its own account. The obligation of Borrower to
repay such Settlement Loans to Fleet shall be evidenced by the records
of Fleet. Agent shall not request Fleet to make any Settlement Loan if
the requested Borrowing would exceed the amount of Availability on the
funding date. Fleet shall not be required to determine whether the
applicable conditions precedent set forth in SECTION 10 hereof have
been satisfied or the requested Borrowing would exceed the amount of
Availability on the funding date applicable thereto prior to making, in
its sole discretion, any Settlement Loan; provided, that if any Lender
determines that an Event of Default exists and as a result thereof, it
does not intend to fund its Pro Rata share of any Settlement Loan, then
such Lender shall give written notice to Fleet and Agent at least 1
Business Day prior to the funding of such Settlement Loan. On each
Settlement Date, or, if earlier, upon demand by Agent for payment
thereof, the then outstanding Settlement Loans shall be immediately due
and payable. As provided in SECTION 3.1.1(ii), Borrower shall be deemed
to have requested (without the necessity of submitting any Notice of
Borrowing) Revolver Loans to be made on each Settlement Date in the
amount of all outstanding Settlement Loans and to have Agent cause the
proceeds of such Revolver Loans to be applied to the repayment of such
Settlement Loans and interest accrued thereon. Agent shall notify the
Lenders of the outstanding balance of Revolver Loans prior to 11:00
a.m. on each Settlement Date and each Lender (other than Fleet) shall
deposit with Agent (without setoff, counterclaim or reduction of any
kind) an amount equal to its Pro Rata share of the amount of Revolver
Loans deemed requested in immediately available funds not later than
2:00 p.m. on such Settlement Date, and without regard to whether any of
the conditions precedent set forth in SECTION 10 hereof are satisfied
or the Commitment Termination Date has occurred. If as the result of
the commencement by or against Borrower of any Insolvency Proceeding or
otherwise any Settlement Loan may not be repaid by the funding by
Lenders of Revolver Loans, then each Lender (other than Fleet) shall be
deemed to have purchased as a participating interest in any unpaid
Settlement Loan in an amount equal to such Lender's Pro Rata share of
such Settlement Loan and shall transfer to Fleet, in immediately
available funds, not later than the second Business Day after Fleet's
request therefor, the amount of such Lender's participation. The
proceeds of Settlement Loans may be used solely for purposes for which
Revolver Loans generally may be used in accordance with SECTION 1.1.3
hereof. If any amounts received by Fleet in respect of any Settlement
Loans are later required to be returned or repaid by Fleet to Borrower
or any other Obligor or their respective representatives or
successors-in-interest, whether by court order, settlement or
otherwise, the other Lenders shall, upon demand by Fleet with notice to
Agent, pay to Agent for the account of Fleet, an amount equal to each
other Lender's Pro Rata share of all such amounts required to be
returned by Fleet.
3.1.4 Disbursement Authorization. Borrower hereby
irrevocably authorizes Agent to disburse the proceeds of each Revolver Loan
requested by Borrower, or deemed to be requested pursuant to SECTION 3.1.1 or
SECTION 3.1.3(ii), as follows: (i) the proceeds of each Revolver Loan requested
under SECTION 3.1.1(i) shall be disbursed by Agent in accordance with the terms
of the written disbursement letter from Borrower in the case of the initial
Borrowing, and, in the case of each subsequent Borrowing, by wire transfer to
such bank account as may be agreed upon by Borrower and Agent from time to time
or elsewhere if pursuant to a written direction from Borrower; and (ii) the
proceeds of each Revolver Loan requested under SECTION 3.1.1(ii) or SECTION
3.1.3(ii) shall be disbursed by Agent by way of direct payment of the relevant
interest or other Obligation.
3.2. DEFAULTING LENDER. If any Lender shall, at any time, fail to
make any payment to Agent or Fleet that is required hereunder, Agent may, but
shall not be required to, retain payments that would otherwise be made to such
defaulting Lender hereunder and apply such payments to such defaulting Lender's
defaulted obligations hereunder, at such time, and in such order, as Agent may
elect in its sole discretion. With respect to the payment of any funds from
Agent to a Lender or from a Lender to Agent, the party failing to make the full
payment when due pursuant to the terms hereof shall, upon demand by the other
party, pay such amount together with interest on such amount at the Federal
Funds Rate. The failure of any Lender to fund its portion of any Revolver Loan
shall not relieve any other Lender of its obligation, if any, to fund its
portion of the Revolver Loan on the date of Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make any Revolver Loan to be
made by such Lender on the date of any Borrowing. Solely as among the Lenders
and solely for purposes of voting or consenting to matters with respect to any
of the Loan Documents, Collateral or any Obligations and determining a
defaulting Lender's Pro Rata share of payments and proceeds of Collateral
pending such defaulting Lender's cure of its defaults hereunder, a defaulting
Lender shall not be deemed to be a "Lender" and such Lender's Commitment shall
be deemed to be zero (0). The provisions of this SECTION 3.2 shall be solely for
the benefit of Agent and Lenders and may not be enforced by Borrower.
3.3. SPECIAL PROVISIONS GOVERNING LIBOR LOANS.
3.3.1 Number of LIBOR Loans. In no event may the number of
LIBOR Loans outstanding at any time to any Lender exceed 8.
3.3.2 Minimum Amounts. Each Borrowing of LIBOR Loans
pursuant to SECTION 3.1.1(i), and each continuation of or conversion to LIBOR
Loans pursuant to SECTION 2.1.2 hereof, shall be in a minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of that amount.
3.3.3 LIBOR Lending Office. Each Lender's initial LIBOR
Lending Office is set forth opposite its name on the signature pages hereof.
Each Lender shall have the right at any time and from time to time to designate
a different office of itself or of any Affiliate as such Lender's LIBOR Lending
Office, and to transfer any outstanding LIBOR Loans to such LIBOR Lending
Office. No such designation or transfer shall result in any liability on the
part of Borrower for increased costs or expenses
resulting solely from such designation or transfer (except any such transfer
that is made by a Lender pursuant to SECTION 2.6 or SECTION 2.7 hereof, or
otherwise for the purpose of complying with Applicable Law). Increased costs or
expenses resulting from a change in Applicable Law occurring subsequent to any
such designation or transfer shall be deemed not to result solely from such
designation or transfer.
3.3.4 Funding of LIBOR Loans. Each Lender may, if it so
elects, fulfill its obligation to make, continue or convert LIBOR Loans
hereunder by causing one of its foreign branches or Affiliates (or an
international banking facility created by such Lender) to make or maintain such
LIBOR Loans; provided, however, that such LIBOR Loans shall nonetheless be
deemed to have been made and to be held by such Lender, and the obligation of
Borrower to repay such LIBOR Loans shall nevertheless be to such Lender for the
account of such foreign branch, Affiliate or international banking facility. The
calculation of all amounts payable to Lender under SECTION 2.7 and 2.9 shall be
made as if each Lender had actually funded or committed to fund its LIBOR Loan
through the purchase of an underlying deposit in an amount equal to the amount
of such LIBOR Loan and having a maturity comparable to the relevant Interest
Period for such LIBOR Loans; provided, however, each Lender may fund its LIBOR
Loans in any manner it deems fit and the foregoing presumption shall be utilized
only for the calculation of amounts payable under SECTION 2.7 and SECTION 2.9.
3.4. ALL LOANS TO CONSTITUTE ONE OBLIGATION. The Loans shall
constitute one general Obligation of Borrower and (unless otherwise expressly
provided in any Security Document) shall be secured by Agent's Lien upon all of
the Collateral; provided, however, that Agent and each Lender shall be deemed to
be a creditor of Borrower and the holder of a separate claim against Borrower to
the extent of any Obligations owed by Borrower to Agent or such Lender.
SECTION 4. PAYMENTS
4.1. GENERAL REPAYMENT PROVISIONS. All payments (including all
prepayments) of principal of and interest on the Loans, LC Obligations and other
Obligations that are payable to Agent or any Lender shall be made to Agent in
Dollars without any offset or counterclaim and free and clear of (and without
deduction for) any present or future Taxes, and, with respect to payments made
other than by application of balances in the Payment Account, in immediately
available funds not later than 12:00 noon on the due date (and payment made
after such time on the due date to be deemed to have been made on the next
succeeding Business Day). All payments received by Agent shall be distributed by
Agent in accordance with SECTION 4.6 hereof, subject to the rights of offset
that Agent may have as to amounts otherwise to be remitted to a particular
Lender by reason of amounts due Agent from such Lender under any of the Loan
Documents.
4.2. REPAYMENT OF REVOLVER LOANS.
4.2.1 Payment of Principal. The outstanding principal
amounts with respect to the Revolver Loans shall be repaid as follows:
(i) Any portion of the Revolver Loans consisting
of the principal amount of Base Rate Loans shall be paid by Borrower to
Agent, for the Pro Rata benefit of Lenders (or, in the case of
Settlement Loans, for the sole benefit of Fleet) unless timely
converted to a LIBOR Loan in accordance with this Agreement,
immediately upon (a) each receipt by Agent, any Lender or Borrower of
any proceeds of any of the Accounts or Inventory, to the extent of such
proceeds, (b) the Commitment Termination Date, and (c) in the case of
Settlement Loans, the earlier of Fleet's demand for payment or on each
Settlement Date with respect to all Settlement Loans outstanding on
such date.
(ii) Any portion of the Revolver Loans consisting
of the principal amount of LIBOR Loans shall be paid by Borrower to
Agent, for the Pro Rata benefit of Lenders, unless converted to a Base
Rate Loan or continued as a LIBOR Loan in accordance with the terms of
this Agreement, immediately upon (a) the last day of the Interest
Period applicable thereto and (b) the Commitment Termination Date. In
no event shall Borrower be authorized to make a voluntary prepayment
with respect to any Revolver Loan outstanding as a LIBOR Loan prior to
the last day of the Interest Period applicable thereto unless (x)
otherwise agreed in writing by Agent or Borrower is otherwise expressly
authorized or required by any other provision of this Agreement to pay
any LIBOR Loan outstanding on a date other than the last day of the
Interest Period applicable thereto, and (y) Borrower pays to Agent, for
the Pro Rata benefit of Lenders, concurrently with any prepayment of a
LIBOR Loan, any amount due Agent and Lenders under SECTION 2.9 hereof
as a consequence of such prepayment.
(iii) Notwithstanding anything to the contrary
contained elsewhere in this Agreement, if an Out-of-Formula Condition
shall exist, Borrower shall, on the sooner to occur of Agent's demand
or the first Business Day after Borrower has obtained knowledge of such
Out-of-Formula Condition, repay the outstanding Revolver Loans that are
Base Rate Loans in an amount sufficient to reduce the aggregate unpaid
principal amount of all Revolver Loans by an amount equal to such
excess; and, if such payment of Base Rate Loans is not sufficient to
eliminate the Out-of-Formula Condition, then Borrower shall immediately
either (a) deposit with Agent, for the Pro Rata benefit of Lenders, for
application to any outstanding Revolver Loans bearing interest as LIBOR
Loans as the same become due and payable (whether at the end of the
applicable Interest Periods or on the Commitment Termination Date) cash
in an amount sufficient to eliminate such Out-of-Formula Condition, to
be held by Agent pending disbursement of same to Lenders, but subject
to Agent's Lien thereon and rights of offset with respect thereto, or
(b) pay the Revolver Loans outstanding as LIBOR Loans to the extent
necessary to eliminate such Out-of-Formula Condition and also pay to
Agent for the Pro Rata benefit of Lenders any and all amounts required
by SECTION 2.9 hereof to be paid by reason of the prepayment of a LIBOR
Loan prior to the last day of the Interest Period applicable thereto.
4.2.2 Payment of Interest. Interest accrued on the Revolver
Loans shall be due and payable on (i) the first calendar day of each month (for
the immediately preceding month), computed through the last calendar day of the
preceding month, with respect to any Revolver Loan (whether a Base Rate Loan or
LIBOR Loan) and (ii) any unpaid interest on the last day of the applicable
Interest Period in the case of a LIBOR Loan. Accrued interest shall also be paid
by Borrower on the Commitment Termination Date. With respect to any Base Rate
Loan converted into a LIBOR Loan pursuant to SECTION 2.1.2 on a day when
interest would not otherwise have been payable with respect to such Base Rate
Loan, accrued interest to the date of such conversion on the amount of such Base
Rate Loan so converted shall be paid on the conversion date.
4.3. REPAYMENT OF TERM LOAN ADVANCES.
4.3.1 Payment of Principal. The principal amounts of Term
Loan A and Term Loan C shall be paid in aggregate consecutive quarterly
installments of $715,000 each on the first day of each June, September, December
and March (which amount shall be distributed by Agent to each holder of a Term
Note based upon their Pro Rata shares of such amount), and the final
installments of which shall be in an amount equal to such holder's Pro Rata
share of the remaining principal balance of the Term Loans and shall be payable
on the Commitment Termination Date. The quarterly principal installments shall
be applied first, to the outstanding principal balance of Term Loan C until paid
in full and then, to the outstanding principal balance of Term Loan A until paid
in full. The Term Loans, if not sooner paid, shall be due and payable in full on
the Commitment Termination Date.
4.3.2 Payment of Interest. Interest accrued on each Term
Loan Advance shall be due and payable on (i) the first calendar day of each
month for the immediately preceding month, computed through the last calendar
day of the preceding month, whether all or any portion of the Term Loan Advance
bears interest as a Base Rate Loan or a LIBOR Loan, (ii) the last day of the
applicable Interest Period in the case of any portion of such Term Loan Advance
that is a LIBOR Loan and (iii) the date of any prepayment of Term Loan Advances.
Accrued interest shall also be paid by Borrower as and when payable in SECTIONS
4.3.3 and 4.3.4 in connection with any prepayment of Term Loan Advances and on
the Commitment Termination Date. With respect to any Base Rate Loan converted
into a LIBOR Loan pursuant to SECTION 2.1.2 on a day when interest would not
otherwise have been payable with respect to such Base Rate Loan, accrued
interest to the date of such conversion on the amount of such Base Rate Loan so
converted shall be paid on the conversion date.
4.3.3 Mandatory Prepayment of Term Loan Advances. Borrower
shall be obligated to prepay the entire unpaid principal balance of the Term
Loan Advances, and all accrued but unpaid interest thereon, upon the Commitment
Termination Date. Borrower shall also be required to prepay the Term Loan
Advances from the Net Proceeds of insurance or condemnation awards paid in
respect of any Real Estate or Equipment unless Borrower is authorized to use
such Net Proceeds pursuant to SECTION 7.1.2(ii). Notwithstanding the foregoing,
if no Event of Default exists, Net Proceeds arising from a Permitted Asset
Disposition shall be applied first to the outstanding principal amount of the
Revolver Loans, second to the outstanding principal amount of the Term Loans and
then to such other Obligations as Agent may determine.
4.3.4 Optional Prepayments of Term Loan Advances. Borrower
may, at its option, prepay any portion of the Term Loan Advances in whole at any
time or in part from time to time, in amounts aggregating $200,000 or any
greater integral multiple of $50,000, by paying the principal amount to be
prepaid together with interest accrued or unpaid thereon to the date of
prepayment and any applicable prepayment premium set forth below and any
applicable charges pursuant to SECTION 2.9. Borrower shall give written notice
(or telephonic notice confirmed in writing) to the Agent of any intended
prepayment not less than 1 Business Day prior to any prepayment of Base Rate
Loans and not less than 2 Business Days prior to any prepayment of LIBOR Loans.
Such notice, once given, shall be irrevocable and, upon receipt of any such
notice of optional prepayment, Agent shall promptly notify each Lender of the
contents thereof and of such Lender's share of the prepayment. If Borrower shall
prepay any of the Term Loan Advances pursuant to this SECTION 4.3.4 (other than
in connection with a Permitted Asset Disposition), then Borrower shall be
obligated to pay a prepayment premium equal to .50% of the principal amount
prepaid if prepayment occurs prior to May 14, 2004. In no event shall any
prepayment premium be due or payable under this SECTION 4.3.4 in connection with
any prepayment of the Term Loan Advances on the effective date of termination of
the Commitments, and the provisions of SECTION 5.2.3 shall govern in lieu of any
prepayment premium.
4.3.5 Application of Prepayments. Each prepayment of Term
Loan Advances shall be remitted by Borrower to Agent to be allocated in
accordance with the provisions of SECTION 4.6.1 hereof and, to the extent
allocable thereunder to any of the Loans, allocated first to the Term Loans and
distributed by Agent to each Lender on a Pro Rata basis. Each Lender shall apply
its share of each prepayment, first to accrued but unpaid interest, and the
balance to installments of principal in the inverse order of their maturities,
until such Lender's Term Loan Advance is paid in full; PROVIDED, HOWEVER, that,
if no Event of Default exists at the time of a Lender's receipt of any optional
prepayment made pursuant to SECTION 4.3.4, such Lender shall apply the portion
of such prepayment remaining after payment of accrued but unpaid interest to the
remaining installments of principal owing with respect to such Term Loan Advance
on a pro rata basis. Each Lender shall apply the portion of a prepayment that is
to be applied to principal installments first to outstanding Base Rate Loans and
then to any outstanding LIBOR Loans with the shortest Interest Periods
remaining; but if application to any LIBOR Loans would cause
the same to be paid prior to the end of an applicable Interest Period, then, by
prior written notice to Agent, Borrower may elect as to such LIBOR Loan (i) to
deliver cash to Agent in the amount of the required prepayment, to be held by
Agent as Cash Collateral until the end of the applicable Interest Period, at
which time Agent shall disburse such Cash Collateral to Lenders on a Pro Rata
basis for application to such LIBOR Loans or (ii) to apply such prepayment to
the outstanding principal amount of the Revolver Loans and to have Agent
establish an Availability Reserve in equal amount, which Availability Reserve
will be released and applied to pay such LIBOR Loan at the end of the applicable
Interest Period.
4.4. PAYMENT OF OTHER OBLIGATIONS. The balance of the Obligations
requiring the payment of money, including the LC Obligations and Extraordinary
Expenses incurred by Agent or any Lender shall be repaid by Borrower to Agent
for allocation among Agent and Lenders as provided in the Loan Documents, or, if
no date of payment is otherwise specified in the Loan Documents, ON DEMAND.
4.5. MARSHALING; PAYMENTS SET ASIDE. None of Agent or any Lender
shall be under any obligation to marshal any assets in favor of Borrower or any
other Obligor or against or in payment of any or all of the Obligations. To the
extent that Borrower makes a payment or payments to Agent or Lenders or any of
such Persons receives payment from the proceeds of any Collateral or exercises
its right of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other Person, then to the extent of any loss by Agent
or Lenders, the Obligations or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor, shall be revived and continued in
full force and effect as if such payment or proceeds had not been made or
received and any such enforcement or setoff had not occurred. The provisions of
the immediately preceding sentence of this SECTION 4.5 shall survive any
termination of the Commitments and payment in full of the Obligations.
4.6. AGENT'S ALLOCATION OF PAYMENTS AND COLLECTIONS.
4.6.1 Allocation of Payments. All monies to be applied to
the Obligations, whether such monies represent voluntary payments by one or more
Obligors or are received pursuant to demand for payment or realized from any
disposition of Collateral, shall be allocated among Agent and such of the
Lenders as are entitled thereto (and, with respect to monies allocated to
Lenders, on a Pro Rata basis unless otherwise provided herein): (i) first, to
Agent to pay principal and accrued interest on any portion of the Revolver Loans
which Agent may have advanced on behalf of any Lender and for which Agent has
not been reimbursed by such Lender or Borrower; (ii) second, to Fleet to pay the
principal and accrued interest on any portion of the Settlement Loans and 1995
Bonds (to the extent due) outstanding, to be shared with Lenders that have
acquired a participating interest in such Settlement Loans and 1995 Bonds; (iii)
third, to the extent that Fleet has not received from any Participating Lender a
payment as required by SECTION 1.3.2 hereof, to Fleet to pay all amounts owing
to Fleet pursuant to SECTION 1.3.2(ii) hereof; (iv) fourth, to Agent to pay the
amount of Extraordinary Expenses and amounts owing to Agent pursuant to SECTION
14.10 hereof that have not been reimbursed to Agent by Borrower or Lenders,
together with interest accrued thereon at the rate applicable to Revolver Loans
that are Base Rate Loans; (v) fifth, to Agent to pay any Indemnified Amount that
has not been paid to Agent by Obligors or Lenders, together with interest
accrued thereon at the rate applicable to Revolver Loans that are Base Rate
Loans; (vi) sixth, to Agent to pay any fees due and payable solely to Agent;
(vii) seventh, to Lenders for any Indemnified Amount that they have paid to
Agent and any Extraordinary Expenses that they have reimbursed to Agent or
themselves incurred, to the extent that Lenders have not been reimbursed by
Obligors therefor; (viii) eighth, to Fleet to pay principal and interest with
respect to LC Obligations (or to the extent any of the LC Obligations are
contingent and an Event of Default then exists, deposited in the Cash Collateral
Account to provide security for the payment of the LC Obligations), which
payment shall be shared with the Participating Lenders in accordance with
SECTION 1.3.2(iii) hereof; (ix) ninth, to Lenders in payment
of the unpaid principal and accrued interest in respect of the Loans and in
payment of any other Obligations (other than the Obligations described in clause
(x) below) then outstanding to be shared among Lenders on a Pro Rata basis or on
such other basis as may be agreed upon in writing by Lenders (which agreement or
agreements may be entered into without notice to or the consent or approval of
Borrower); and (x) tenth, to the Secured Parties in payment of any Banking
Relationship Debt, to be shared among such Secured Parties ratably. The
allocations set forth in this SECTION 4.6 are solely to determine the rights and
priorities of Agent and Lenders as among themselves and may be changed by Agent
and Lenders without notice to or the consent or approval of Borrower or any
other Person.
4.6.2 Erroneous Allocation. Agent shall not be liable for
any allocation or distribution of payments made by it in good faith and, if any
such allocation or distribution is subsequently determined to have been made in
error, the sole recourse of any Lender to whom payment was due but not made
shall be to recover from the other Lenders any payment in excess of the amount
to which such other Lenders are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them).
4.7. APPLICATION OF PAYMENTS AND COLLECTIONS. All Payment Items
received by Agent by 12:00 noon on any Business Day shall be deemed received on
that Business Day. All Payment Items received by Agent after 12:00 noon on any
Business Day shall be deemed received on the following Business Day. Except to
the extent that the manner of application to the Obligations of payments or
proceeds of Collateral is expressly governed by other provisions of this
Agreement, Borrower irrevocably waives the right to direct the application of
any and all payments and Collateral proceeds at any time or times hereafter
received by Agent or any Lender from or on behalf of Borrower, and Borrower does
hereby irrevocably agree that Agent shall have the continuing exclusive right to
apply and reapply any and all such payments and Collateral proceeds received at
any time or times hereafter by Agent or its agent against the Obligations, in
such manner as Agent may deem advisable, notwithstanding any entry by Agent upon
any of its books and records. If as the result of Agent's collection of proceeds
of Accounts and other Collateral as authorized by SECTION 7.2.6 a credit balance
exists, such credit balance shall not accrue interest in favor of Borrower, but
shall be available to Borrower at any time or times for so long as no Default or
Event of Default exists. Lenders may, at their option, offset such credit
balance against any of the Obligations upon and after the occurrence of an Event
of Default. If no Event of Default exists, Borrower may request that Agent and
Lenders invest any credit balance in an interest-bearing account but Agent and
Lenders shall have no liability to Borrower arising from such investments.
4.8. LOAN ACCOUNTS; THE REGISTER; ACCOUNT STATED.
4.8.1 Loan Accounts. Each Lender shall maintain in
accordance with its usual and customary practices an account or accounts (a
"Loan Account") evidencing the Debt of Borrower to such Lender resulting from
each Loan owing to such Lender from time to time, including the amount of
principal and interest payable to such Lender from time to time hereunder and
under each Note payable to such Lender. Any failure of a Lender to record in the
Loan Account, or any error in doing so, shall not limit or otherwise affect the
obligation of Borrower hereunder (or under any Note) to pay any amount owing
hereunder to such Lender.
4.8.2 The Register. Agent shall maintain a register (the
"Register") which shall include a master account and a subsidiary account for
each Lender and in which accounts (taken together) shall be recorded (i) the
date and amount of each Borrowing made hereunder, the Type of each Loan
comprising such Borrowing and any Interest Period applicable thereto, (ii) the
effective date and amount of each Assignment and Acceptance delivered to and
accepted by it and the parties thereto, (iii) the amount of any principal or
interest due and payable or to become due and payable from Borrower to each
Lender hereunder or under the Notes, and (iv) the amount of any sum received by
Agent from Borrower or any
other Obligor and each Lender's share thereof. The Register shall be available
for inspection by Borrower or any Lender at the offices of Agent at any
reasonable time and from time to time upon reasonable prior notice. Any failure
of Agent to record in the Register, or any error in doing so, shall not limit or
otherwise affect the obligation of Borrower hereunder (or under any Note) to pay
any amount owing with respect to the Loans or provide the basis for any claim
against Agent.
4.8.3 Entries Binding. The entries made in the Register and
each Loan Account shall constitute rebuttably presumptive evidence of the
information contained therein; provided, however, that if a copy of information
contained in the Register or any Loan Account is provided to any Person, or any
Person inspects the Register or any Loan Account, at any time or from time to
time, then the information contained in the Register or the Loan Account, as
applicable shall be conclusive and binding on such Person for all purposes
absent manifest error, unless such Person notifies Agent in writing within 30
days after such Person's receipt of such copy or such Person's inspection of the
Register or Loan Account of its intention to dispute the information contained
therein.
4.9. GROSS UP FOR TAXES. If Borrower shall be required by
Applicable Law to withhold or deduct any Taxes from or in respect of any sum
payable under this Agreement or any of the other Loan Documents, (a) Borrower
shall make such withholding or deductions and (b) Borrower shall pay the full
amount withheld or deducted to the relevant taxation authority or other
authority in accordance with Applicable Law. The sum payable to Agent or such
Lender under this Agreement by Borrower shall not be decreased and Agent or such
Lender (as the case may be) shall receive an amount equal to the sum it would
have received had no such withholding or deductions been made.
4.10. WITHHOLDING TAX EXEMPTION. At least 5 Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Lender, each Lender that is not incorporated under the laws of the United
States or any state thereof agrees that it will deliver to Borrower and Agent 2
duly completed copies of United States Internal Revenue Service Form W-8BEN or
W-8ECI, certifying in either case that such Lender is entitled to receive
payment under this Agreement and its Notes without deduction or withholding of
any United States federal income taxes. Each Lender which so delivers a Form
W-8BEN or W-8ECI further undertakes to deliver to Borrower and Agent 2
additional copies of such form (or a successor form) on or before the date that
such form expires (currently, 3 successive calendar years for Form W-8BEN and
one calendar year for Form W-8ECI) or becomes obsolete or after the occurrence
of any event requiring a change in the form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by Borrower or Agent, in each case, certifying that such Lender is
entitled to receive payments under this Agreement and its Notes without
deduction or withholding of any United States federal income taxes, unless an
event (including any change in treaty, law or regulation) has occurred prior to
the date on which any such delivery would otherwise be required that renders all
such forms inapplicable or that would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender advises Borrower
and Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income taxes.
SECTION 5. ORIGINAL TERM AND TERMINATION OF COMMITMENTS
5.1. ORIGINAL TERM OF COMMITMENTS. Subject to each Lender's right
to cease making Loans and other extensions of credit to Borrower when any
Default or Event of Default exists (provided, that each Lender's obligation
vis-a-vis Agent shall be governed by SECTION 3.1.2 hereof) or upon termination
of the Commitments as provided in SECTION 5.2 hereof, the Commitments shall be
in effect from the Original Closing Date through the close of business on May
11, 2007 (the "Original Term").
5.2. TERMINATION.
5.2.1 Termination by Agent. Agent may (and upon the
direction of the Required Lenders, shall) terminate the Commitments without
notice upon or after the occurrence of an Event of Default; provided, however,
that the Commitments shall automatically terminate (i) as provided in SECTION
11.2 hereof and (ii) at the end of the Original Term.
5.2.2 Termination by Borrower. Upon at least 90 days prior
written notice to Agent, Borrower may, at its option, terminate the Commitments;
provided, however, no such termination by Borrower shall be effective until
Borrower has satisfied all of the Obligations. Any notice of termination given
by Borrower shall be irrevocable unless Agent otherwise agrees in writing.
Borrower may elect to terminate the Commitments in their entirety only;
provided, that nothing contained herein shall affect Borrower's right to reduce
the Commitments as provided in SECTION 1.1.5 of this Agreement. No section of
this Agreement, Type of Loan available hereunder or Commitment may be terminated
by Borrower singly.
5.2.3 Termination Charges. On the effective date of
termination of the Commitments pursuant to SECTION 5.2.2, Borrower shall be
obligated to pay to Agent, for the Pro Rata benefit of Lenders (in addition to
the then outstanding principal, accrued interest, fees and other charges owing
under the terms of this Agreement and any of the other Loan Documents), as
liquidated damages for the loss of the bargain and not as a penalty, an amount
equal to .50% of the total amount of Commitments if termination occurs prior to
May 14, 2004. In no event shall any termination charge be payable if the
effective date of termination occurs on or after May 14, 2004. In addition, no
portion of the termination charge payable to a Lender shall be payable to such
Lender if such Lender is a member of any new lending group that refinances in
full the Commitments.
5.2.4 Effect of Termination. On the effective date of
termination of the Commitments by Agent or by Borrower, all of the Obligations
shall be immediately due and payable and Lenders shall have no obligation to
make any Loans and Fleet shall have no obligation to procure any Letters of
Credit. All undertakings, agreements, covenants, warranties and representations
of Borrower contained in the Loan Documents shall survive any such termination
and Agent shall retain its Liens in the Collateral and all of its rights and
remedies under the Loan Documents notwithstanding such termination until
Borrower has satisfied the Obligations to Agent and Lenders, in full. For
purposes of this Agreement, the Obligations shall not be deemed to have been
satisfied until all Obligations for the payment of money have been paid to Agent
in same day funds and all Obligations that are at the time in question
contingent (including all LC Outstandings that exist by virtue of an outstanding
Letter of Credit) have been fully cash collateralized in favor and to the
satisfaction of Agent or Agent has received as beneficiary a direct pay letter
of credit in form and from an issuing bank acceptable to Agent and providing for
direct payment to Agent of all such contingent Obligations at the time they
become fixed (including reimbursement of all sums paid by Agent under any LC
Support). Notwithstanding the payment in full of the Obligations, Agent shall
not be required to terminate its security interests in any of the Collateral
unless, with respect to any loss or damage Agent may incur as a result of the
dishonor or return of any Payment Items applied to the Obligations, Agent shall
have received either (i) a written agreement, executed by Borrower and any
Person whose loans or other advances to Borrower are used in whole or in part to
satisfy the Obligations, indemnifying Agent and Lenders from any such loss or
damage; or (ii) such monetary reserves and Liens on the Collateral for such
period of time as Agent, in its reasonable discretion, may deem necessary to
protect Agent from any such loss or damage. The provisions of SECTIONS 2.4, 2.7,
2.8, 2.9, 4.5, 4.9 and this SECTION 5.2.4 and all obligations of Borrower to
indemnify Agent or any Lender pursuant to this Agreement or any of the other
Loan Documents shall in all events survive any termination of the Commitments.
SECTION 6. COLLATERAL SECURITY
6.1. GRANT OF SECURITY INTEREST. To secure the prompt payment and
performance of all of the Obligations, Borrower hereby grants to Agent, for the
benefit of itself as Agent and for the benefit of the Lenders and the other
Secured Parties, a continuing security interest in and Lien upon all of the
following Property and interests in Property of Borrower, whether now owned or
existing or hereafter created, acquired or arising and wheresoever located:
(i) All Accounts
(ii) All Inventory;
(iii) All Letter-of-Credit Rights;
(iv) All Supporting Obligations;
(v) All Commercial Tort Claims;
(vi) All Equipment;
(vii) All Instruments;
(viii) All Chattel Paper, including Electronic Chattel Paper
and Tangible Chattel Paper;
(ix) All Documents;
(x) All General Intangibles, including all Payment
Intangibles and all Software;
(xi) All Deposit Accounts;
(xii) All Investment Property (but excluding any portion
thereof that constitutes Margin Stock unless otherwise expressly
provided in any Security Documents);
(xiii) All monies now or at any time or times hereafter in
the possession or under the control of Agent or a Lender or a bailee or
Affiliate of Agent or a Lender, including any Cash Collateral in the
Cash Collateral Account;
(xiv) All accessions to, substitutions for and all
replacements, products and cash and non-cash proceeds of (i) through
(xiii) above, including proceeds of and unearned premiums with respect
to insurance policies insuring any of the Collateral and claims against
any Person for loss of, damage to or destruction of any of the
Collateral; and
(xv) All books and records (including customer lists,
files, correspondence, tapes, computer programs, print-outs, and other
computer materials and records) of Borrower pertaining to any of (i)
through (xiv) above.
6.2. LIEN ON DEPOSIT ACCOUNTS. As additional security for the
payment and performance of the Obligations, Borrower hereby grants to Agent, for
the benefit of itself as Agent and for the benefit of the Secured Parties, a
continuing security interest in and Lien upon, and hereby collaterally assigns
to Agent, all of Borrower's right, title and interest in and to each Deposit
Account of Borrower and in and to any deposits or other sums at any time
credited to each such Deposit Account, including any sums in any blocked account
or any special lockbox account and in the accounts in which sums are deposited.
In connection with the foregoing, Borrower hereby authorizes and directs each
such bank or other depository to pay or deliver to Agent upon its written demand
therefor made at any time upon the occurrence and during the continuation of an
Event of Default and without further notice to Borrower (such notice being
hereby expressly waived), all balances in each Deposit Account maintained by
Borrower with such depository for application to the Obligations then
outstanding, and the rights given Agent in this SECTION 6.2 shall be cumulative
with and in addition to Agent's other rights and remedies in regard to the
foregoing Property as proceeds of Collateral. Borrower hereby irrevocably
appoints Agent as Borrower's attorney-in-fact to collect any and all such
balances to the extent any such payment is not made to Agent by such bank or
other depository after demand thereon is made by Agent pursuant hereto.
6.3. LIEN ON REAL ESTATE. The due and punctual payment and
performance of the obligations shall also be secured by the Lien created by the
Mortgages upon all Real Estate of Borrower and the other Obligors described
therein. If requested by Agent, amendments to the Mortgages shall be executed by
Borrower and the other Obligors in favor of Agent on or before the Closing Date
and shall be duly recorded, at Borrower's expense, in each office where such
recording is required to constitute a fully perfected Lien upon the Real Estate
covered thereby.
6.4. OTHER COLLATERAL. In addition to the items of Property
referred to in SECTION 6.1 above, the Obligations shall also be secured by the
Cash Collateral to the extent provided herein and all of the other items of
Property from time to time described in any of the Security Documents as
security for any of the Obligations.
6.5. NO ASSUMPTION OF LIABILITY. The security interest granted
pursuant to this Agreement is granted as security only and shall not subject
Agent or any Lender to, or in any way alter or modify, any obligation or
liability of Borrower with respect to or arising out of the Collateral.
6.6. LIEN PERFECTION; FURTHER ASSURANCES. Promptly after Agent's
request therefor, Borrower shall execute or cause to be executed and deliver to
Agent such instruments, assignments, title certificates or other documents as
are necessary under the UCC or other Applicable Law (including any motor vehicle
certificates of title act) to perfect (or continue the perfection of) Agent's
Lien upon the Collateral, and shall take such other action as may be requested
by Agent to give effect to or carry out the intent and purposes of this
Agreement. Borrower shall give Agent prompt written notice at any time Borrower
commences a Commercial Tort Claim against any Person in excess of $500,000 and
shall execute such documents as are necessary under the UCC to grant to Agent
and perfect Agent's Lien in such Commercial Tort Claim. Unless prohibited by
Applicable Law, Borrower hereby irrevocably authorizes Agent to execute and/or
file in any jurisdiction any financing statement or amendment thereto on
Borrower's behalf, including financing statements that indicate the Collateral
(i) as all assets or all personal property of Borrower or words to similar
effect or (ii) as being of an equal or lesser scope, or with greater or lesser
detail, than as set forth in this SECTION 6. Borrower also hereby ratifies its
authorization for Agent to have filed in any jurisdiction any like financing
statements or amendments thereto if filed prior to the date hereof. The parties
agree that a carbon, photographic or other reproduction of this Agreement shall
be sufficient as a financing statement and may be filed in any appropriate
office in lieu thereof.
6.7. LIMITATION ON EQUITY INTERESTS. Notwithstanding anything to
the contrary set forth in SECTION 6.1 above, the types or items of Collateral
described in such Section shall not include any Equity Interests of Borrower in
Chroma or any Equity Interest of Chroma in Chroma Systems and shall include only
sixty-six percent (66%) of the voting stock of any Foreign Subsidiary.
6.8. EXCLUSION FOR CERTAIN CONTRACTS AND LEASES. Notwithstanding
anything to the contrary set forth in SECTION 6.1 above, the types or items of
Collateral described in such Section shall not include
any rights or interests in any contract, lease, permit, license, charter or
license agreement covering real or personal Property, as such, if under the
terms of such contract, lease, permit, license, charter or license agreement, or
Applicable Law with respect thereto, the valid grant of a security interest or
Lien therein to Agent is prohibited and such prohibition has not been or is not
waived or the consent of the other party to such contract, lease, permit,
license, charter or license agreement has not been or is not otherwise obtained
or under Applicable Law such prohibition cannot be waived, provided that the
foregoing exclusion shall in no way be construed (a) to apply if any such
prohibition is unenforceable under Section 9-406, 9-407, 9-408 or 9-409 of the
UCC or other Applicable Law or (b) so as to limit, impair or otherwise affect
Agent's unconditional continuing security interests in and Liens upon any rights
or interests of Borrower in or to monies due or to become due under any such
contract, lease, permit, license, charter or license agreement (including any
Accounts).
SECTION 7. COLLATERAL ADMINISTRATION
7.1. GENERAL PROVISIONS.
7.1.1 Location of Collateral. All tangible items of
Collateral, other than Inventory in transit, shall at all times be kept by
Borrower at one or more of the business locations of Borrower set forth in
SCHEDULE 7.1.1 hereto and shall not be moved therefrom, without the prior
written approval of Agent, except that in the absence of an Event of Default and
acceleration of the maturity of the Obligations in consequence thereof, Borrower
may (a) make sales or other dispositions of any Collateral to the extent
authorized by SECTION 9.2.10 hereof, (b) have Inventory and Equipment at a
location not listed on SCHEDULE 7.1.1, not to exceed $500,000 in the aggregate,
provided, that Borrower promptly advises Agent of such location, and (c) except
as permitted by subsection (b) above, move Inventory or Equipment or any record
relating to any Collateral to a location in the United States other than those
shown on SCHEDULE 7.1.1 hereto so long as Borrower has given Agent at least 15
Business Days prior written notice of such new location and prior to moving any
Inventory or Equipment to such location there have been filed any UCC-1
financing statements and any other appropriate documentation necessary to
perfect or continue the perfection of Agent's first priority Liens with respect
to such Inventory or Equipment. Notwithstanding anything to the contrary
contained in this Agreement, Borrower shall not be permitted to keep, store or
otherwise maintain any Collateral (except as permitted by subsection (b) above)
at any location (including any location described in SECTION 7.1.1), unless (i)
Borrower is the owner of such location, (ii) Borrower leases such location and
the landlord has executed in favor of Agent a Landlord Waiver (or Agent has
imposed a Rent Reserve), or (iii) the Collateral consists of Inventory placed
with a warehouseman, bailee or processor, Agent has received from such
warehouseman, bailee or processor an acceptable Lien waiver agreement and an
appropriate UCC-1 financing statement has been filed with the appropriate
Governmental Authority in the jurisdiction where such warehouseman, bailee or
processor is located in order to perfect, or to maintain the uninterrupted
perfection of, Agent's security interest in such Inventory.
7.1.2 Insurance of Collateral; Condemnation Proceeds.
(i) Borrower shall maintain and pay for
insurance upon all Collateral, wherever located, covering casualty,
hazard, public liability, theft, malicious mischief, and such other
risks in such amounts (subject to current deductibles of $250,000
unless otherwise consented to by Agent) and with such insurance
companies as are reasonably satisfactory to Agent. SCHEDULE 7.1.2
describes all insurance of Borrower in effect on the date hereof. All
proceeds payable under each such policy shall be payable to Agent for
application to the Obligations. Borrower shall deliver the originals or
certified copies of such policies to Agent with lender's loss payable
endorsements reasonably satisfactory to Agent, naming Agent as sole
lender's loss payee, mortgagee, assignee or additional insured, as
appropriate. Each policy of insurance or endorsement shall contain a
clause requiring the insurer to give not less than 30 days prior
written notice to Agent in the event of cancellation of the policy for
any reason whatsoever and a clause specifying that the interest of
Agent shall not be impaired or invalidated by any act or neglect of any
Borrower or the owner of the Property or by the occupation of the
premises for purposes more hazardous than are permitted by said policy.
If Borrower fails to provide and pay for such insurance, Agent may, at
its option, but shall not be required to, procure the same and charge
Borrower therefor. If requested by Agent, Borrower agrees to deliver to
Agent, promptly as rendered, true copies of all reports made in any
reporting forms to insurance companies. For so long as no Event of
Default exists, Borrower shall have the right to settle, adjust and
compromise any claim with respect to any insurance maintained by
Borrower provided that all proceeds thereof are applied in the manner
specified in this Agreement, and Agent agrees promptly to provide any
necessary endorsement to any checks or drafts issued in payment of any
such claim. At any time that an Event of Default exists, only Agent
shall be authorized to settle, adjust and compromise such claims, Agent
shall have all rights and remedies with respect to such policies of
insurance as are provided for in this Agreement and the other Loan
Documents; provided, that Agent shall use reasonable efforts to consult
with Borrower regarding such settlement, adjustment or compromise but
shall have no liability to Borrower for Agent's failure to do so.
(ii) Unless otherwise consented to by the
Required Lenders in writing, any proceeds of insurance referred to in
this SECTION 7.1.2 and any condemnation awards that are paid to Agent
in connection with a condemnation of any of the Collateral shall be
paid to Agent and (a) in the case of proceeds that relate to Inventory,
applied first to the payment of the Revolver Loans and then to any
other Obligations outstanding, and (b) in the case of proceeds of
Equipment or Real Estate, applied first to the Term Loan, and then to
any other Obligations outstanding; provided that if requested by
Borrower in writing within 5 days after Agent's receipt of such
proceeds and if no Default or Event of Default exists, Borrower and the
other Obligors may apply such proceeds to repair or replace the damaged
or destroyed Equipment or Real Estate so long as (1) such repair or
replacement is promptly undertaken and concluded, (2) replacements of
buildings are constructed on the sites of the original casualties and
are of comparable size, and quality and utility to the destroyed
buildings, (3) the repaired or replaced Property is at all times free
and clear of Liens other than Permitted Liens that are not Purchase
Money Liens, (4) Borrower and such other Obligors comply with such
disbursement procedures for such proceeds as Agent may reasonably
impose for repair or replacement, and (5) the amount of proceeds from
any single casualty affecting Equipment or Real Estate does not exceed
$5,000,000.
7.1.3 Protection of Collateral. All expenses of protecting,
storing, warehousing, insuring, handling, maintaining and shipping any
Collateral, all Taxes imposed under any Applicable Law on any of the Collateral
or in respect of the sale thereof, and all other payments required to be made by
Agent to any Person to realize upon any Collateral shall be borne and paid by
Borrower. Agent shall not be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto (except
for reasonable care in the custody thereof while any Collateral is in Agent's
actual possession) or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other Person
whomsoever, but the same shall be at Borrower's sole risk.
7.1.4 Defense of Title to Collateral. Borrower shall at all
times defend its title to the Collateral and Agent's Liens therein against all
Persons and all claims and demands whatsoever other than Permitted Liens.
7.2. ADMINISTRATION OF ACCOUNTS.
7.2.1 Records and Schedules of Accounts. Borrower shall
keep accurate and complete records of its Accounts and all payments and
collections thereon and shall submit to Agent on such periodic basis as Agent
shall request a sales and collections report for the preceding period, in form
satisfactory to Agent. Borrower shall also provide to Agent on or before the
20th day of each month a detailed aged trial balance of all Accounts existing as
of the last day of the preceding month, specifying the names, face value and due
dates for each Account Debtor obligated on an Account so listed ("Schedule of
Accounts"), and, upon Agent's request therefor, customer addresses, dates of
invoices, copies of proof of delivery and a copy of all documents, including
repayment histories and present status reports relating to the Accounts so
scheduled and such other matters and information relating to the status of then
existing Accounts as Agent shall reasonably request. In addition, if Accounts in
an aggregate face amount in excess of $500,000 cease to be Eligible Accounts in
whole or in part, Borrower shall notify Agent of such occurrence promptly (and
in any event within 2 Business Days) after Borrower's having obtained knowledge
of such occurrence and the Borrowing Base shall thereupon be adjusted to reflect
such occurrence. Borrower shall deliver to Agent copies of invoices or invoice
registers related to all of its Accounts.
7.2.2 Discounts, Disputes and Returns. If Borrower grants
any discounts, allowances or credits that are not shown on the face of the
invoice for the Account involved, Borrower shall report such discounts,
allowances or credits, as the case may be, to Agent as part of the next required
Schedule of Accounts. If any amounts due and owing in excess of $500,000 are in
dispute between Borrower and any Account Debtor, or if any returns are made in
excess of $500,000 with respect to any Accounts owing from an Account Debtor,
Borrower shall provide Agent with written notice thereof at the time of
submission of the next Schedule of Accounts. At the request of Agent, Borrower
will explain in detail the reason for the dispute or return, all claims related
thereto and the amount in controversy. Upon and after the occurrence of an Event
of Default, Agent shall have the right to settle or adjust all disputes and
claims directly with the Account Debtor and to compromise the amount or extend
the time for payment of any Accounts comprising a part of the Collateral upon
such terms and conditions as Agent may deem advisable, and to charge the
deficiencies, costs and expenses thereof, including attorneys' fees, to
Borrower.
7.2.3 Taxes. If an Account of Borrower includes a charge
for any Taxes payable to any governmental taxing authority, Agent is authorized,
in its sole discretion, to pay the amount thereof to the proper taxing authority
for the account of Borrower and to charge Borrower therefor; provided, however,
that neither Agent nor Lenders shall be liable for any Taxes that may be due by
Borrower.
7.2.4 Account Verification. Whether or not a Default or an
Event of Default exists, Agent shall have the right at any time, in the name of
Agent, any designee of Agent or Borrower to verify the validity, amount or any
other matter relating to any Accounts of Borrower by mail, telephone, telegraph
or otherwise. Borrower shall cooperate fully with Agent in an effort to
facilitate and promptly conclude any such verification process.
7.2.5 Maintenance of Dominion Account. If an Event of
Default exists or Availability at any time declines below $5,000,000, then
Borrower shall maintain a Dominion Account pursuant to a lockbox or other
arrangement acceptable to Agent and, in the case of such Dominion Account and
lockbox arrangement, with such bank as may be selected by Borrower and be
acceptable to Agent. Borrower shall issue to each such lockbox bank an
irrevocable letter of instruction directing such bank to deposit all payments or
other remittances received in the lockbox to the Dominion Account. Borrower
shall enter into agreements, in form satisfactory to Agent, with each bank at
which a Dominion Account is maintained by which such bank shall immediately
transfer to the Payment Account all monies deposited to the Dominion Account.
All funds deposited in each Dominion Account shall be subject to Agent's Lien.
Borrower shall obtain the agreement (in favor of and in form and content
satisfactory to Agent) by each bank at which a Dominion Account is maintained to
waive any offset rights against the funds deposited into such Dominion Account,
except offset rights in respect of charges incurred in the administration of
such Dominion Account. Neither Agent nor Lenders assume any responsibility to
Borrower for such lockbox arrangement or Dominion Account, including any claim
of accord and satisfaction or release with respect to deposits accepted by any
bank thereunder.
7.2.6 Collection of Accounts and Proceeds of Collateral.
Unless an Event of Default exists or Availability at any time declines below
$5,000,000, Borrower shall have the option to receive all Payment Items in
respect of its Accounts, provided, however, if Borrower does not deposit such
Payment Items in the Dominion Account, the Loans shall bear interest at the
Default Rate until such time as Borrower deposits all such amounts in the
Dominion Account. Unless an Event of Default exists or Availability at any time
declines below $5,000,000, Borrower may receive all Payments Items from any
Permitted Asset Dispositions, provided, that, any Payment Items received from
any Permitted Asset Disposition shall be applied in accordance with SECTION
4.3.3 hereof. Agent retains the right at all times after the occurrence of a
Default or an Event of Default to notify Account Debtors of Borrower that
Accounts have been assigned to Agent and to collect Accounts directly in its own
name and to charge to Borrower the collection costs and expenses, incurred by
Agent or Lenders, including reasonable attorneys' fees.
7.3. ADMINISTRATION OF INVENTORY.
7.3.1 Records and Reports of Inventory. Borrower shall keep
accurate and complete records of its Inventory and shall furnish Agent and
Lenders inventory reports respecting such Inventory in form and detail
satisfactory to Agent and Lenders at such times as Agent and Lenders may
request, but so long as no Default or Event of Default exists, no more
frequently than once each week. Borrower shall, at Borrower's expense, conduct
periodic cycle counts consistent with Borrower's historical practices and shall
provide to Agent and Lenders a report based on each such cycle count promptly
thereafter, together with such supporting information as Agent shall request.
Agent may participate in and observe each count or inventory, which
participation shall be at Borrower's expense at any time that an Event of
Default exists.
7.3.2 Returns of Inventory. Borrower shall not return any
of its Inventory to a supplier or vendor thereof, or any other Person, whether
for cash, credit against future purchases or then existing payables, or
otherwise, unless (i) such return is in the Ordinary Course of Business of
Borrower and such Person; (ii) no Default or Event of Default exists or would
result therefrom; (iii) the return of such Inventory will not result in an
Out-of-Formula Condition; and (iv) Borrower promptly notifies Agent thereof if
the aggregate Value of all Inventory returned in any month exceeds $500,000.
7.4. ADMINISTRATION OF EQUIPMENT.
7.4.1 Records and Schedules of Equipment. Borrower shall
keep accurate records itemizing and describing the kind, type, quality, quantity
and cost of its Equipment and all dispositions made in accordance with SECTION
7.4.2 hereof, and at the request of Agent, shall furnish Agent and Lenders with
a current schedule containing the foregoing information. Promptly after request
therefor by Agent, Borrower shall deliver to Agent and Lenders any and all
evidence of ownership, if any, of any of the Equipment.
7.4.2 Dispositions of Equipment. Borrower will not sell,
lease or otherwise dispose of or transfer any of the Equipment or any part
thereof without the prior written consent of Agent; provided, however, that the
foregoing restriction shall not apply, for so long as no Default or Event of
Default exists, to (i) dispositions of Equipment which, in the aggregate during
any consecutive 12-month period, has a fair market value or book value,
whichever is more, of $250,000 or less, provided that all Net Proceeds thereof
are remitted to Agent for application to the Obligations (other than the Term
Loan), or (ii) replacements of Equipment that is substantially worn, damaged or
obsolete with Equipment of like kind, function and value, provided that the
replacement Equipment shall be acquired prior to or concurrently with any
disposition of the Equipment that is to be replaced, the replacement Equipment
shall be free and clear of Liens other than Permitted Liens that are not
Purchase Money Liens, and Borrower shall have given Agent at least 5 days prior
written notice of such disposition.
7.4.3 Condition of Equipment. The Equipment is in good
operating condition and repair, and all necessary replacements of and repairs
thereto shall be made so that the value and operating efficiency of the
Equipment shall be maintained and preserved, reasonable wear and tear excepted.
Borrower will not permit any of the Equipment to become affixed to any real
Property leased to Borrower so that an interest arises therein under the real
estate laws of the applicable jurisdiction unless the landlord of such real
Property has executed a Landlord Waiver or leasehold mortgage in favor of and in
form acceptable to Agent, and Borrower will not permit any of the Equipment to
become an accession to any personal Property that is subject to a Lien unless
the Lien is a Permitted Lien.
7.5. BORROWING BASE CERTIFICATES. On the Closing Date and (i) if
Availability is greater than or equal to $15,000,000 and no Event of Default
exists, on or before the fifth Business Day of each week after the Closing Date,
Borrower shall deliver to Agent a Borrowing Base Certificate prepared as of the
close of business of the previous week, and (ii) if Availability is less than
$15,000,000 or an Event of Default exists, on such days and in such frequency as
Agent shall request in its reasonable discretion, Borrower shall deliver to
Agent a Borrowing Base Certificate prepared as of the close of business of the
previous reporting period, and (iii) at such other times as Agent may request.
All calculations of Availability in connection with any Borrowing Base
Certificate shall originally be made by Borrower and certified by a Senior
Officer of Borrower (or his appointee) to Agent, provided that Agent shall have
the right to review and adjust, in the exercise of its reasonable credit
judgment, any such calculation (i) to reflect its reasonable estimate of
declines in value of any of the Collateral described therein and (ii) to the
extent that such calculation is not in accordance with this Agreement or does
not accurately reflect the amount of the Availability Reserve. In no event shall
the Borrowing Base on any date be deemed to exceed the amount of the Borrowing
Base shown on the Borrowing Base Certificate last received by Agent prior to
such date, as such Borrowing Base Certificate may be adjusted by Agent as herein
authorized.
SECTION 8. REPRESENTATIONS AND WARRANTIES
8.1. GENERAL REPRESENTATIONS AND WARRANTIES. To induce Agent and
Lenders to enter into this Agreement and to make available the Commitments,
Borrower warrants and represents to Agent and Lenders that:
8.1.1 Organization and Qualification. Borrower and each of
its Subsidiaries is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization. Borrower and
each of its Subsidiaries is duly qualified and is authorized to do business and
is in good standing as a foreign corporation in each state or jurisdiction
listed on SCHEDULE 8.1.1 hereto and in all other states and jurisdictions in
which the failure of Borrower or any of such Subsidiaries to be so qualified
would have a Material Adverse Effect.
8.1.2 Power and Authority. Borrower and each of its
Subsidiaries is duly authorized and empowered to enter into, execute, deliver
and perform this Agreement and each of the other Loan Documents to which it is a
party. The execution, delivery and performance of this Agreement and each of the
other Loan Documents have been duly authorized by all necessary action and do
not and will not (i) require any consent or approval of any of the holders of
the Equity Interests of Borrower or any of its Subsidiaries; (ii) contravene the
Organization Documents of Borrower or any of its Subsidiaries; (iii) violate, or
cause Borrower or any of its Subsidiaries to be in default under, any provision
of any Applicable Law, order, writ, judgment, injunction, decree, determination
or award in effect having applicability to Borrower or any such Subsidiary; (iv)
result in a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which Borrower
or any of its Subsidiaries is a party or by which it or its Properties may be
bound or affected; or (v) result in, or require, the creation or imposition of
any Lien (other than Permitted Liens) upon or with respect to any of the
Properties now owned or hereafter acquired by Borrower or any of its
Subsidiaries.
8.1.3 Legally Enforceable Agreement. This Agreement is, and
each of the other Loan Documents when delivered under this Agreement will be, a
legal, valid and binding obligation of each Borrower and each of its
Subsidiaries signatories thereto enforceable against them in accordance with the
respective terms of such Loan Documents, except as the enforceability thereof
maybe limited by bankruptcy, insolvency or other similar laws of general
application affecting the enforcement of creditors' rights.
8.1.4 Capital Structure. As of the date hereof, SCHEDULE
8.1.4 hereto states (i) the correct name of each Subsidiary, its jurisdiction of
incorporation and the percentage of its Equity Interests having voting powers
owned by each Person, (ii) the name of each corporate Affiliate of Borrower and
the nature of the affiliation and (iii) the number of authorized and issued
Equity Interests (and treasury shares) of Borrower and each of its Subsidiaries.
Borrower has good title to all of the shares it purports to own of the Equity
Interests of each of its Subsidiaries, free and clear in each case of any Lien
other than Permitted Liens. All such Equity Interests have been duly issued and
are fully paid and non-assessable. Since the date of the financial statements of
Borrower referred to in SECTION 8.1.9 hereof, Borrower has not made, or
obligated itself to make, any Distribution. Except as disclosed on SCHEDULE
8.1.4 hereto, as the date hereof, there are no outstanding options to purchase,
or any rights or warrants to subscribe for, or any commitments or agreements to
issue or sell, or any Equity Interests or obligations convertible into, or any
powers of attorney relating to, shares of the capital stock of any Borrower or
any Subsidiary. Except as set forth on SCHEDULE 8.1.4 hereto, there are no
outstanding agreements or instruments binding upon the holders of Borrower's
Equity Interests relating to the ownership of its Equity Interests.
8.1.5 Corporate Names. During the 5-year period preceding
the date of this Agreement, neither Borrower nor any of its Subsidiaries has
been known as or used any corporate, fictitious or trade names except those
listed on SCHEDULE 8.1.5 hereto. Except as set forth on SCHEDULE 8.1.5, neither
Borrower nor any of its Subsidiaries has been the surviving corporation of a
merger or consolidation or acquired all or substantially all of the assets of
any Person. SCHEDULE 8.1.5 lists the organizational identification number
assigned to each of Borrower and its Subsidiaries by the jurisdiction of its
organization.
8.1.6 Business Locations; Agent for Process. As of the date
hereof, the chief executive office and other places of business of Borrower and
each of its Subsidiaries are as listed on SCHEDULE 7.1.1 hereto. During the
5-year period preceding the date of this Agreement, neither Borrower nor any of
its Subsidiaries has had an office, place of business or agent for service of
process other than as listed on SCHEDULE 7.1.1. Except as shown on SCHEDULE
7.1.1 on the date hereof, no Inventory of Borrower or any Subsidiary is stored
with a bailee, warehouseman or similar Person, nor is any Inventory consigned to
any Person (except as otherwise permitted by SECTION 7.1.1(b)).
8.1.7 Title to Properties; Priority of Liens. Borrower and
each of its Subsidiaries has good and marketable title to and fee simple
ownership of, or valid and subsisting leasehold interests in, all of its real
Property, and good title to all of its personal Property, including all Property
reflected in the financial statements referred to in SECTION 8.1.9 or delivered
pursuant to SECTION 9.1.3, in each case free and clear of all Liens except
Permitted Liens. Borrower has paid or discharged, and has caused each of its
Subsidiaries to pay and discharge, all lawful claims which, if unpaid, might
become a Lien against any Properties of Borrower or such Subsidiary that is not
a Permitted Lien. The Liens granted to Agent pursuant to this Agreement and the
other Security Documents are first priority Liens, subject only to those
Permitted Liens which are expressly permitted by the terms of this Agreement to
have priority over the Liens of Agent.
8.1.8 Accounts. Agent may rely, in determining which
Accounts are Eligible Accounts, on all statements and representations made by
Borrower with respect to any Account. Unless otherwise indicated in writing to
Agent or excluded by Borrower in their calculation of the Borrowing Base in any
Borrowing Base Certificate, with respect to each Eligible Account, Borrower
warrants that:
(i) It is genuine and in all respects what it
purports to be, and it is not evidenced by a judgment;
(ii) It arises out of a completed, bona fide sale
and delivery of goods by Borrower in the Ordinary Course of its
Business and substantially in accordance with the terms and conditions
of all purchase orders, contracts or other documents relating thereto
and forming a part of the contract between Borrower and the Account
Debtor;
(iii) It is for a sum certain maturing as stated
in the duplicate invoice covering such sale or rendition of services, a
copy of which has been furnished or is available to Agent on request;
(iv) Such Account, and Agent's security interest
therein, is not, and will not (by voluntary act or omission of
Borrower) be in the future, subject to any offset, Lien, deduction,
defense, dispute, counterclaim or any other adverse condition except
for disputes resulting in returned goods where the amount in
controversy, together with all other claims relating to Accounts does
not exceed the sum of the claims reserve, the warranty reserve and the
disputes reserve deducted from Eligible Accounts, and each such Account
is absolutely owing to Borrower and is not contingent in any respect or
for any reason;
(v) The contract under which such Account arose
does not condition or restrict Borrower's right to assign to Agent the
right to payment thereunder unless Borrower has obtained the Account
Debtor's consent to such collateral assignment or complied with any
conditions to such assignment (regardless of whether under the UCC or
other Applicable Law any such restrictions are ineffective to prevent
the grant of a Lien upon such Account in favor of Agent);
(vi) Borrower has not made any agreement with any
Account Debtor thereunder for any extension, compromise, settlement or
modification of any such Account or any deduction therefrom, except
discounts or allowances which are granted by Borrower in the ordinary
course of its business for prompt payment and which are reflected in
the calculation of the net amount of each respective invoice related
thereto and are reflected in the Schedules of Accounts submitted to
Agent pursuant to SECTION 7.2.1 hereof;
(vii) To the best of Borrower's knowledge, there
are no facts, events or occurrences which are reasonably likely to
impair the validity or enforceability of any of its Accounts or reduce
the amount payable thereunder from the face amount of the invoice and
statements delivered to Agent with respect thereto;
(viii) To the best of Borrower's knowledge, (1) the
Account Debtor thereunder had the capacity to contract at the time any
contract or other document giving rise to the Account was executed and
(2) such Account Debtor is Solvent; and
(ix) To the best of Borrower's knowledge, there
are no proceedings or actions which are threatened or pending against
any Account Debtor thereunder and which Borrower believes in good faith
will make such Account uncollectible.
8.1.9 Financial Statements. The Consolidated and
consolidating balance sheets of Borrower and such other Persons described
therein (including the accounts of all Subsidiaries of Borrower for the
respective periods during which a Subsidiary relationship existed) as of
December 27, 2003 and the related statements of income, changes in stockholder's
equity, and changes in financial position for the periods ended on such dates,
have been prepared in accordance with GAAP, and present fairly the financial
positions of Borrower and such Persons at such dates and the results of
Borrower's operations for such periods. From December 27, 2003 to the Closing
Date, there has been no material change in the condition, financial or
otherwise, of Borrower and such other Persons as shown on the Consolidated
balance sheet as of such date and no material change in the aggregate value of
Equipment and real Property owned by Borrower or such other Persons.
8.1.10 Full Disclosure. The financial statements referred to
in SECTION 8.1.9 hereof do not contain any untrue statement of a material fact
and neither this Agreement nor any other written statement contains or omits any
material fact necessary to make the statements contained herein or therein not
materially misleading. There is no fact or circumstance in existence on the date
hereof which Borrower has failed to disclose to Agent in writing that may
reasonably be expected to have a Material Adverse Effect.
8.1.11 Solvent Financial Condition. Borrower and each of its
Subsidiaries is now Solvent and, after giving effect to the Loans to be made
hereunder, the Letters of Credit to be issued in connection herewith and the
consummation of the other transactions described in the Loan Documents, Borrower
and each of its Subsidiaries will be Solvent.
8.1.12 Surety Obligations. Except as set forth on SCHEDULE
8.1.12 hereto on the date hereof, neither Borrower nor any of its Subsidiaries
is obligated as surety or indemnitor under any surety or similar bond or other
contract issued or entered into any agreement to assure payment, performance or
completion of performance of any undertaking or obligation of any Person.
8.1.13 Taxes. The FEIN of Borrower and each of its
Subsidiaries is as shown on SCHEDULE 8.1.13 hereto. Borrower and each of its
Subsidiaries has filed all federal, state and local tax returns and other
reports it is required by law to file and has paid, or made provision for the
payment of, all Taxes upon it, its income and Properties as and when such Taxes
are due and payable, except to the extent being Properly Contested. The
provision for Taxes on the books of Borrower and each of its Subsidiaries are
adequate for all years not closed by applicable statutes, and for its current
Fiscal Year.
8.1.14 Brokers. There are no claims against Borrower for
brokerage commissions, finder's fees or investment banking fees in connection
with the transactions contemplated by this Agreement or any of the other Loan
Documents.
8.1.15 Intellectual Property. Borrower and each of its
Subsidiaries each owns or has the lawful right to use all Intellectual Property
necessary for the present and planned future conduct of its business without any
conflict with the rights of others; there is no objection to, or pending (or, to
Borrower's knowledge, threatened) Intellectual Property Claim with respect to
Borrower's or any Subsidiary's right to use any such Intellectual Property and
Borrower is not aware of any grounds for challenge or objection thereto; and,
except as may be disclosed on SCHEDULE 8.1.15, neither Borrower nor any
Subsidiary pays any royalty or other compensation to any Person for the right to
use any Intellectual Property. All such patents, trademarks, service marks,
trade names, copyrights, licenses and other similar rights are listed on
SCHEDULE 8.1.15 hereto, to the extent they are registered under any Applicable
Law or are otherwise material to Borrower's or any Subsidiary's business.
8.1.16 Governmental Approvals. Borrower and each of its
Subsidiaries has, and is in good standing with respect to, all Governmental
Approvals necessary to continue to conduct its business as heretofore or
proposed to be conducted by it and to own or lease and operate its Properties as
now owned or leased by it.
8.1.17 Compliance with Laws. Borrower and each of its
Subsidiaries has duly complied with, and its Properties, business operations and
leaseholds are in compliance in all material respects with, the provisions of
all Applicable Law (except to the extent that any such noncompliance with
Applicable Law could not reasonably be expected to have a Material Adverse
Effect) and there have been no citations, notices or orders of noncompliance
issued to Borrower or any of the Subsidiaries under any such law, rule or
regulation which could be reasonably expected to have a Material Adverse Effect.
No Inventory has been produced in violation of the FLSA. With respect to matters
arising under any Environmental Laws, the representations and warranties
contained in the Environmental Agreement are true and correct on the date
hereof.
8.1.18 Burdensome Contracts. Neither Borrower nor any of the
Subsidiaries is a party or subject to any contract, agreement, or charter or
other corporate restriction, which has or could be reasonably expected to have a
Material Adverse Effect. Neither Borrower nor any of the Subsidiaries is a party
or subject to any Restrictive Agreement, except as set forth on SCHEDULE 8.1.18
hereto, none of which prohibit the execution or delivery of any of the Loan
Documents by any Obligor or the performance by any Obligor of its obligations
under any of the Loan Documents to which it is a party, in accordance with the
terms of such Loan Documents.
8.1.19 Litigation. Except as set forth on SCHEDULE 8.1.19
hereto, there are no actions, suits, proceedings or investigations pending or,
to the knowledge of Borrower, threatened on the date hereof, against or
affecting Borrower or any of the Subsidiaries, or the business, operations,
Properties, prospects, profits or condition of Borrower or any of the
Subsidiaries, (i) which relates to any of the Loan Documents or any of the
transactions contemplated thereby or (ii) which, if determined adversely to
Borrower or any of the Subsidiaries, could reasonably be expected to have a
Material Adverse Effect. To the knowledge of Borrower, neither Borrower nor any
of the Subsidiaries is in default on the date hereof with respect to any order,
writ, injunction, judgment, decree or rule of any court, Governmental Authority
or arbitration board or tribunal.
8.1.20 No Defaults. No event has occurred and no condition
exists which would, upon or after the execution and delivery of this Agreement
or Borrower's performance hereunder, constitute a Default or an Event of
Default. Neither Borrower nor any of its Subsidiaries is in default, and no
event has occurred and no condition exists which constitutes or which with the
passage of time or the giving of notice or both would constitute a default,
under any Material Contract or in the payment of any Debt of Borrower or a
Subsidiary to any Person for Money Borrowed.
8.1.21 Leases. SCHEDULE 8.1.21 hereto is a complete listing
of each capitalized and operating lease of Borrower and each of its Subsidiaries
on the date hereof that constitutes a Material Contract. Borrower and each of
its Subsidiaries is in substantial compliance with all of the terms of each of
its respective capitalized and operating leases and there is no basis upon which
the lessors under any such leases could terminate same or declare Borrower or
any of its Subsidiaries in default thereunder.
8.1.22 Pension Plans. Except as disclosed on SCHEDULE 8.1.22
hereto, neither Borrower nor any of its Subsidiaries has any Plan on the date
hereof. Except as disclosed on SCHEDULE 8.1.22 hereto, Borrower and each of its
Subsidiaries is in full compliance with the requirements of ERISA and the
regulations promulgated thereunder with respect to each Plan. No fact or
situation exists in connection with any Plan that is reasonably likely to result
in a Material Adverse Effect. Neither Borrower nor any of its Subsidiaries has
any withdrawal liability in connection with a Multi-employer Plan.
8.1.23 Trade Relations. There exists no actual or threatened
termination, cancellation or limitation of, or any materially adverse
modification or change in, the business relationship between Borrower and any
customer or any group of customers whose purchases individually or in the
aggregate are material to the business of Borrower, or with any material
supplier or group of suppliers, and there exists no condition or state of facts
or circumstances in either event which is reasonably likely to have a Material
Adverse Effect or prevent Borrower from conducting such business after the
consummation of the transactions contemplated by this Agreement in substantially
the same manner in which it has heretofore been conducted.
8.1.24 Labor Relations. Except as described on SCHEDULE
8.1.24 hereto, neither Borrower nor any of the Subsidiaries is a party to any
collective bargaining agreement on the date hereof. On the date hereof, there
are no grievances, disputes or controversies with any union or any other
organization of Borrower's or any Subsidiary's employees, or, to Borrower's
knowledge, any threats of strikes, work stoppages or any asserted pending
demands for collective bargaining by any union or organization that would have a
Material Adverse Effect.
8.1.25 Not a Regulated Entity. No Obligor is (i) an
"investment company" or a "person directly or indirectly controlled by or acting
on behalf of an investment company" within the meaning of the Investment Company
Act of 1940; (ii) a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935; or (iii) subject to regulation under the Federal Power Act, the
Interstate Commerce Act, any public utilities code or any other Applicable Law
regarding its authority to incur Debt.
8.1.26 Margin Stock. Neither Borrower nor any of its
Subsidiaries is engaged, principally or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock.
8.1.27 Real Estate. The Real Estate constitutes all real
Property owned by Borrower, or in which Borrower has any interest (other than an
interest as lessee), on the Closing Date.
8.1.28 Commercial Transaction. All of the Loans and other
transactions contemplated by this Agreement and the other Loan Documents arise
out of a commercial transaction and not a consumer transaction or consumer goods
transaction.
8.1.29 Senior Indebtedness. After giving effect to each Loan
made hereunder or the issuance of each Letter of Credit as provided herein, the
Obligations do not violate the terms of any of the Subordinated Debt Documents
and the Obligations constitute Senior Indebtedness (as such term is defined in
the Indenture and the other Subordinated Debt Documents).
8.1.30 Anti-Terrorism Laws.
(a) General. Borrower represents and warrants to
Agent and Lenders that neither Borrower, nor any Subsidiary or
Affiliate of Borrower is in violation of any Anti-Terrorism
Law or engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set
forth in any Anti-Terrorism Law.
(b) Executive Order No. 13224. Borrower
represents and warrants to Agent and Lenders that:
(i) Neither Borrower nor any Subsidiary
or Affiliate of Borrower is any of the following
(each a "Blocked Person"):
(1) a Person that is listed in the
annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224;
(2) a Person owned or controlled
by, or acting for or on behalf of, any
Person that is listed in the annex to, or is
otherwise subject to the provisions of,
Executive Order No. 13224;
(3) a Person or entity with which
any bank or other financial institution is
prohibited from dealing or otherwise
engaging in any transaction by any
Anti-Terrorism Law;
(4) a Person or entity that
commits, threatens or conspires to commit or
supports "terrorism" as defined in Executive
Order No. 13224;
(5) a Person or entity that is
named as a "specially designated national"
on the most current list published by the
U.S. Treasury Department Office of Foreign
Asset Control at its official website or any
replacement website or other replacement
official publication of such list; or
(6) a Person or entity who is
affiliated with a Person or entity listed
above.
(ii) Neither Borrower nor any Subsidiary
or Affiliate of Borrower (i) conducts any business or
engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any
Blocked Person or (ii) deals in, or otherwise engages
in any transaction relating to, any property or
interests in property blocked pursuant to Executive
Order No. 13224.
8.1.31 Reporting Company. None of the proceeds of the Loans
will be used directly or indirectly to fund a personal loan to or for the
benefit of a director or executive officer of a Borrower or Guarantor, or
otherwise used for any purpose that is prohibited by Applicable Law.
8.2. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty contained in this Agreement and the other Loan
Documents shall be deemed to be reaffirmed by Borrower on each day that any
Obligations are outstanding or that Borrower requests or is deemed to have
requested an extension of credit hereunder, except for changes in the nature of
Borrower's or, if applicable, any of its Subsidiaries' business or operations
that may occur after the date hereof in the Ordinary Course of Business so long
as (i) Agent has consented in writing to such changes (or if such changes are
material, Agent and Required Lenders have consented in writing to such changes)
or (ii) such changes are not violative of any provision of this Agreement.
Notwithstanding the foregoing, representations and warranties which by their
terms are applicable only to a specific date shall be deemed made only at and as
of such date.
8.3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of Borrower contained in this Agreement or any of
the other Loan Documents shall survive the execution, delivery and acceptance
thereof by Agent, Lenders and the parties thereto and the closing of the
transactions described therein or related thereto.
SECTION 9. COVENANTS AND CONTINUING AGREEMENTS
9.1. AFFIRMATIVE COVENANTS. For so long as there are any
Commitments outstanding and thereafter until payment in full of the Obligations,
Borrower covenants that, unless the Required Lenders have otherwise consented in
writing, it shall and shall cause each Subsidiary to:
9.1.1 Visits and Inspections. Permit representatives of
Agent, from time to time, as often as may be reasonably requested, but only
during normal business hours and (except when a Default or Event of Default
exists) upon reasonable prior notice to Borrower, to visit and inspect the
Properties of such Borrower and each of its Subsidiaries, inspect, audit and
make extracts from Borrower's and each Subsidiary's books and records, and
discuss with its officers, its employees and its independent accountants,
Borrower's and each Subsidiary's business, financial condition, business
prospects and results of operations. Representatives of each Lender shall be
authorized to accompany Agent on each such visit and inspection and to
participate with Agent therein, but at their own expense, unless a Default or
Event of Default exists. Neither Agent nor any Lender shall have any duty to
make any such inspection and shall not incur any liability by reason of its
failure to conduct or delay in conducting any such inspection.
9.1.2 Notices. Notify Agent and Lenders in writing,
promptly after Borrower's obtaining knowledge thereof, (i) of the commencement
of any litigation affecting any Obligor or any of its Properties, whether or not
the claims asserted in such litigation are considered by Borrower to be covered
by insurance, and of the institution of any administrative proceeding, to the
extent that such litigation or proceeding, if determined adversely to such
Obligor, would reasonably be expected to have a Material Adverse Effect; (ii) of
any material labor dispute to which any Obligor may become a party, any strikes
or walkouts relating to any of its plants or other facilities, and the
expiration of any labor contract to which it is a party or by which it is bound;
(iii) of any material default by any Obligor under or termination of any
Material Contract or any note, indenture, loan agreement, mortgage, lease, deed,
guaranty or other similar agreement relating to any Debt of such Obligor
exceeding $1,000,000; (iv) of the existence of any Default or Event of Default;
(v) of any default by any Person under any note or other evidence of Debt
payable to an Obligor in an amount exceeding $1,000,000; (vi) of any judgment
against any Obligor in an amount exceeding $500,000; (vii) of the assertion by
any Person of any Intellectual
Property Claim, the adverse resolution of which could reasonably be expected to
have a Material Adverse Effect; (viii) of any violation or asserted violation by
Borrower of any Applicable Law (including ERISA, OSHA, FLSA or any Environmental
Laws), the adverse resolution of which could reasonably be expected to have a
Material Adverse Effect; (ix) of any Environmental Release by an Obligor or on
any Property owned or occupied by an Obligor; (x) of the discharge of Borrower's
independent accountants or any withdrawal of resignation by such independent
accountants from their acting in such capacity; (xi) of any pending or
threatened strike, work stoppage, unfair labor practice claim or other labor
dispute affecting Borrower or any of its Subsidiaries in a manner that could
reasonably be expected to have a Material Adverse Effect. In addition, Borrower
shall give Agent at least 15 Business Days prior written notice of any Obligor's
opening of any new office (other than a single employee sales office) or place
of business; and (xii) of the issuance of any payment blockage notice by any
Person in connection with any of the Subordinated Debt Documents.
9.1.3 Financial and Other Reporting. Keep adequate records
and books of account with respect to its business activities in which proper
entries are made in accordance with GAAP reflecting all its financial
transactions; and cause to be prepared and to be furnished to Agent and Lenders
the following (all to be prepared in accordance with GAAP applied on a
consistent basis, unless Borrower's certified public accountants concur in any
change therein, such change is disclosed to Agent and is consistent with GAAP
and, if required by the Required Lenders, the financial covenants set forth in
SECTION 9.3 are amended in a manner requested by the Required Lenders to take
into account the effects of such change):
(i) as soon as available, and in any event
within 95 days after the close of each Fiscal Year, unqualified audited
balance sheets of Borrower and its Subsidiaries as of the end of such
Fiscal Year and the related statements of income, shareholders' equity
and cash flow, on a Consolidated basis (and unaudited balance sheets
and statements of income on a consolidating basis), certified without
qualification by a firm of independent certified public accountants of
recognized national standing (or a firm approved by all Lenders)
selected by Borrower but reasonably acceptable to Agent (except for a
qualification for a change in accounting principles with which the
accountant concurs), and setting forth in each case in comparative form
the corresponding Consolidated and consolidating figures for the
preceding Fiscal Year, together with a certification of the financial
statements by the chief executive officer or the chief financial
officer as required by the SEC;
(ii) as soon as available, and in any event
within 50 days after the end of each Fiscal Quarter hereafter,
including the last Fiscal Quarter of Borrower's Fiscal Year, unaudited
balance sheets of Borrower and its Subsidiaries as of the end of such
month and the related unaudited statements of income and cash flow for
such month and for the portion of Borrower's Fiscal Year then elapsed,
on a Consolidated basis and unaudited balance sheets and statements of
income on a consolidating basis, setting forth in each case in
comparative form, the corresponding figures for the preceding Fiscal
Year and certified by the principal financial officer of Borrower as
prepared in accordance with GAAP and fairly presenting the Consolidated
financial position and results of operations of Borrower and its
Subsidiaries for such month and period subject only to changes from
audit and year-end adjustments and except that such statements need not
contain notes;
(iii) as soon as available, and in any event
within 30 days after the end of each month hereafter (but within 50
days after the last month in a Fiscal Year), including the last month
of Borrower's Fiscal Year, unaudited balance sheets and statements of
income of Borrower and its Subsidiaries on a consolidating basis as of
the end of such month and the related unaudited Consolidated balance
sheet, statements of income and cash flow for such month and for the
portion of Borrower's Fiscal Year then elapsed, on a Consolidated
basis, setting forth in each case in comparative form, the
corresponding figures for the preceding Fiscal Year and certified by
the principal financial officer of Borrower as prepared in accordance
with GAAP and fairly presenting the Consolidated financial position and
results of operations of Borrower and its Subsidiaries for such month
and period subject only to changes from audit and year-end adjustments
and except that such statements need not contain notes;
(iv) not later than 20 days after each month, a
listing of all of Borrower's trade payables as of the last Business Day
of such month, specifying the name of and balance due each trade
creditor, and, such additional information regarding trade payables as
Agent may request;
(v) promptly after the sending or filing
thereof, as the case may be, copies of any proxy statements, financial
statements or reports which Borrower has made generally available to
its shareholders and copies of any regular, periodic and special
reports or registration statements which Borrower files with the SEC or
any Governmental Authority which may be substituted therefor, or any
national securities exchange.
Upon Borrower's receipt, Borrower shall deliver to Agent and Lenders a
copy of the accountants' letter to Borrower's management that is prepared in
connection with the financial statements delivered pursuant to SECTION 9.1.3(i).
Concurrently with the delivery of the financial statements described in clauses
(i) and (ii) of this SECTION 9.1.3, or more frequently if requested by Agent or
any Lender during any period that a Default or Event of Default exists, Borrower
shall cause to be prepared and furnished to Agent and Lenders a Compliance
Certificate executed by the chief financial officer of Borrower.
Promptly after the sending or filing thereof, Borrower shall also provide to
Agent copies of any annual report to be filed in accordance with ERISA in
connection with each Plan and such other data and information (financial and
otherwise) as Agent, from time to time, may reasonably request bearing upon or
related to the Collateral or Borrower's and each of its Subsidiaries' financial
condition or results of operations.
9.1.4 Landlord and Storage Agreements. Provide Agent with
copies of all existing agreements, and promptly after execution thereof provide
Agent with copies of all future agreements, between Borrower and any landlord,
warehouseman or bailee which owns any premises at which any Collateral may, from
time to time, be kept.
9.1.5 Projections. By December 31 of each Fiscal Year of
Borrower, deliver to Agent and Lenders the Projections of Borrower for the
forthcoming Fiscal Year, month by month.
9.1.6 Taxes. Pay and discharge all Taxes prior to the date
on which such Taxes become delinquent or penalties attach thereto, except and to
the extent only that such Taxes are being Properly Contested.
9.1.7 Compliance with Laws. Comply with all Applicable Law,
including ERISA, all Environmental Laws, FLSA, OSHA, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002, and all laws, statutes, regulations and ordinances regarding the
collection, payment and deposit of Taxes, and obtain and keep in force any and
all Governmental Approvals necessary to the ownership of its Properties or to
the conduct of its business, to the extent that any such failure to comply,
obtain or keep in force could be reasonably expected to have a Material Adverse
Effect. Without limiting the generality of the foregoing, if any Environmental
Release shall occur at or on any of the Properties of Borrower or any of its
Subsidiaries, Borrower shall, or shall cause the applicable Subsidiary to, act
promptly and diligently to investigate and report to Agent and all appropriate
Governmental Authorities the extent of, and to make appropriate remedial action
to eliminate, such Environmental Release.
9.1.8 Insurance. In addition to the insurance required
herein with respect to the Collateral, maintain, with its current insurers or
with other financially sound and reputable insurers having a rating of at least
A- or better by Best Rating Guide, (i) insurance with respect to its Properties
and business against such casualties and contingencies of such type (including
product liability, or larceny, embezzlement or other criminal misappropriation
insurance) and in such amounts and with such coverages, limits and deductibles
as is customary in the business of Borrower or such Subsidiary and (ii) business
interruption insurance in an amount not less than $75,000,000.
9.1.9 Intellectual Property. Promptly after applying for or
otherwise acquiring any Intellectual Property, deliver to Agent in form and
substance acceptable to Agent and in recordable form, all documents necessary
for Agent to perfect its Lien on such Intellectual Property.
9.1.10 License Agreements. Keep each License Agreement in
full force and effect for so long as Borrower has any Inventory, the
manufacture, sale or distribution of which is in any manner governed by or
subject to such License Agreement.
9.1.11 Cash Management. Borrower shall cause all of its
concentration and operating accounts to be maintained with Bank.
9.2. NEGATIVE COVENANTS. For so long as there are any Commitments
outstanding and thereafter until payment in full of the Obligations, Borrower
covenants that, unless the Required Lenders have otherwise consented in writing,
it shall not and shall not permit any of its Subsidiaries to:
9.2.1 Fundamental Changes. Merge, reorganize, consolidate
or amalgamate with any Person, or liquidate, wind up its affairs or dissolve
itself or fail to maintain its existence, except for mergers or consolidations
of any Subsidiary with another Subsidiary or Borrower (provided that Borrower is
the survivor in any such transaction involving Borrower); change Borrower's or
any of its Subsidiaries name; or conduct business under any new fictitious name
(unless Borrower has given Agent at least 15 days prior written notice); or
change Borrower's or any of its Subsidiaries' FEIN or organizational
identification numbers.
9.2.2 Loans. Make any loans or other advances of money to
any Person other than to an officer or employee of Borrower or a Subsidiary for
salary, travel advances, advances against commissions and other similar advances
in the Ordinary Course of Business.
9.2.3 Permitted Debt. Create, incur, assume, guarantee or
suffer to exist any Debt, except:
(i) the Obligations;
(ii) Subordinated Debt existing on the Closing
Date and consisting of the Convertible Debentures;
(iii) accounts payable by Borrower or any of its
Subsidiaries to trade creditors that are not aged more than 30 days
from the due date, in each case incurred in the Ordinary Course of
Business and paid within such time period, unless the same are being
Properly Contested;
(iv) obligations to pay Rentals permitted by
SECTION 9.2.14;
(v) Permitted Purchase Money Debt;
(vi) Debt for accrued payroll, Taxes, and other
operating expenses (other than for Money Borrowed) incurred in the
Ordinary Course of Business of Borrower or such Subsidiary, including
cash management obligations, in each case, so long as payment thereof
is not past due and payable unless, in the case of Taxes only, such
Taxes are being Properly Contested;
(vii) Debt for Money Borrowed by Borrower (other
than the Obligations), but only to the extent that such Debt is
outstanding on the date of this Agreement and is listed on SCHEDULE
9.2.3 hereto and is not to be satisfied on or about the Closing Date
from the proceeds of the initial Loans;
(viii) Permitted Contingent Obligations;
(ix) Extensions of credit in the Ordinary Course
of Business arising solely from the payment by SunTrust Bank, in its
capacity as a Factor, of amounts on the average due date under its
Factoring Agreement with Fabrica;
(x) Debt that is not included in any of the
preceding paragraphs of this SECTION 9.2.3, is not secured by a Lien
(unless such Lien is a Permitted Lien) and does not exceed at any time,
in the aggregate, the sum of $2,000,000 as to Borrower and all of its
Subsidiaries;
9.2.4 Affiliate Transactions. Enter into, or be a party to
any transaction with any Affiliate, except: (i) the transactions contemplated by
the Loan Documents; (ii) payment of reasonable compensation to officers and
employees for services actually rendered to Borrower or to its Subsidiaries;
(iii) payment of customary directors' fees and indemnities; (iv) transactions
with Affiliates that were consummated prior to the date hereof and have been
disclosed on SCHEDULE 9.2.4 hereto; and (v) transactions with Affiliates in the
Ordinary Course of Business and pursuant to the reasonable requirements of
Borrower's or such Subsidiary's business and upon fair and reasonable terms that
are fully disclosed in writing to Agent and are no less favorable to Borrower or
such Subsidiary than Borrower or
such Subsidiary would obtain in a comparable arm's length transaction with a
Person not an Affiliate or stockholder of Borrower or such Subsidiary.
9.2.5 Limitation on Liens. Create or suffer to exist any
Lien upon any of its Property, income or profits, whether now owned or hereafter
acquired, except the following (collectively, "Permitted Liens"):
(i) Liens at any time granted in favor of Agent
to secure the Obligations;
(ii) Liens for Taxes (excluding any Lien imposed
pursuant to any of the provisions of ERISA) not yet due or being
Properly Contested;
(iii) statutory Liens (excluding any Lien imposed
pursuant to any of the provisions of ERISA) arising in the Ordinary
Course of Business of Borrower or a Subsidiary and which secure
obligations (other than Funded Debt) incurred by Borrower or such
Subsidiary in the Ordinary Course of Business of such Person, but only
if and for so long as (x) payment in respect of any such Lien is not at
the time required or the Debt secured by any such Lien is being
Properly Contested and (y) such Liens do not materially detract from
the value of the Property of Borrower or such Subsidiary and do not
materially impair the use thereof in the operation of Borrower's or
such Subsidiary's business;
(iv) Purchase Money Liens securing Permitted
Purchase Money Debt;
(v) Liens securing Debt of a Subsidiary of
Borrower to Borrower or to another Subsidiary;
(vi) Liens arising by virtue of the rendition,
entry or issuance against Borrower or any of its Subsidiaries, or any
Property of Borrower or any of its Subsidiaries, of any judgment, writ,
order, or decree for so long as any such Lien (a) is in existence for
less than 20 consecutive days after it first arises or is being
Properly Contested and (b) is at all times junior in priority to any
Liens in favor of Agent;
(vii) Liens incurred or deposits made in the
Ordinary Course of Business to secure the performance of tenders, bids,
leases, contracts (other than for the repayment of Money Borrowed),
statutory obligations and other similar obligations or arising as a
result of progress payments under government contracts, provided that,
to the extent any such Liens attach to any of the Collateral, such
Liens are at all times subordinate and junior to the Liens upon the
Collateral in favor of Agent;
(viii) easements, rights-of-way, restrictions,
covenants or other agreements of record and other similar charges or
encumbrances on real Property of Borrower or any of its Subsidiaries
that do not interfere with the ordinary conduct of the business of
Borrower or such Subsidiary;
(ix) normal and customary rights of setoff upon
deposits of cash in favor of banks and other depository institutions
and Liens of a collection bank arising under the UCC on Payment Items
in the course of collection;
(x) Liens in existence immediately prior to the
Closing Date that are satisfied in full and released on the Closing
Date as a result of the application of Borrower's cash on hand at the
Closing Date or the proceeds of Loans to be made on the Closing Date;
(xi) such other Liens as appear on SCHEDULE 9.2.5
hereto, to the extent provided therein; and
(xii) such other Liens as Agent and the Required
Lenders in their sole discretion may hereafter approve in writing.
The foregoing negative pledge shall include the Real Estate and improvements
thereon of Borrower and its Subsidiaries located in Gastonia, ▇▇▇▇▇▇ County,
North Carolina and Fayetteville, Cumberland County, North Carolina. The
foregoing negative pledge shall not apply to any Margin Stock to the extent that
the application of such negative pledge to such Margin Stock would require
filings or other actions by any Lender under such regulations or otherwise
result in a violation of such regulations.
9.2.6 Subordinated Debt. Make any payment of all or any
part of any Subordinated Debt or take any other action or omit to take any other
action in respect of any Subordinated Debt, except in accordance with the
subordination agreement relative thereto or in accordance with the terms of the
Convertible Debentures as in effect on the date hereof; (or, with respect to the
Convertible Debentures, as amended to the extent expressly permitted herein); or
amend or modify the terms of any agreement applicable to any Subordinated Debt,
other than to extend the time of payment thereof or to reduce the rate of
interest payable in connection therewith other than amendment of the Convertible
Debentures to permit delivery of repurchased debentures to make sinking fund
payments in the order in which such payments become due. To the extent that any
payment is permitted to be made with respect to any Subordinated Debt pursuant
to the provisions of the subordination agreement relative thereto or in
accordance with the terms of the Convertible Debentures as in effect on the date
hereof, as a condition precedent to Borrower's authorization to make any such
payment, Borrower shall provide to Agent, not less than 5 Business Days prior to
the scheduled payment, a certificate from a Senior Officer of Borrower stating
that no Default or Event of Default is in existence as of the date of the
certificate or will be in existence as of the date of such payment (both with
and without giving effect to the making of such payment), and specifying the
amount of principal and interest to be paid.
9.2.7 Distributions. Declare or make any Distributions,
except for (i) Upstream Payments, and (ii) so long as each of the Distribution
Conditions are satisfied, repurchases of Equity Interests in Borrower not to
exceed of $1,000,000 in the aggregate per Fiscal Year.
9.2.8 Upstream Payments. Create or suffer to exist any
encumbrance or restriction on the ability of a Subsidiary to make any Upstream
Payment, except for encumbrances or restrictions (i) pursuant to the Loan
Documents, (ii) existing under Applicable Law and (iii) identified and fully
disclosed in SCHEDULE 9.2.8.
9.2.9 Capital Expenditures. Make Capital Expenditures which
in the aggregate, as to Borrower and its Subsidiaries, exceed $15,000,000 during
any Fiscal Year; provided, that, the GE Lease and the conversion of the GE Lease
into a capital lease shall not be deemed Capital Expenditures for purposes of
this covenant nor subject to the limitation contained herein.
9.2.10 Disposition of Assets. Sell, assign, lease, consign
or otherwise dispose of any of its Properties or any interest therein, including
any disposition of Property as part of a sale and leaseback transaction, to or
in favor of any Person, except (i) sales of Inventory in the Ordinary Course of
Business, (ii) dispositions of Equipment to the extent authorized by Section
7.4.2 hereof, (iii) a transfer of Property to Borrower by a Subsidiary, (iv)
Permitted Asset Dispositions, and (v) other dispositions expressly authorized by
other provisions of the Loan Documents.
9.2.11 Subsidiaries. Form or acquire any Subsidiary after
the Closing Date or permit any existing Subsidiary to issue any additional
Equity Interests except director's qualifying shares.
9.2.12 ▇▇▇▇-and-Hold Sales and Consignments. Make a sale to
any customer on a ▇▇▇▇-and-hold, guaranteed sale, sale and return, sale on
approval or consignment basis, or any sale on a repurchase or return basis
(other than sales on consignment not to exceed $1,000,000 in the aggregate at
any time).
9.2.13 Restricted Investments. Make or have any Restricted
Investment.
9.2.14 Leases. Become a lessee under any operating lease
(other than a lease under which Borrower or any of the Subsidiaries is lessor)
of Property if the aggregate Rentals payable during any current or future period
of 12 consecutive months under the lease in question and all other leases under
which Borrower or any of the Subsidiaries is then lessee would exceed
$6,000,000. The term "Rentals" means, as of the date of determination, all
payments which the lessee is required to make by the terms of any lease.
9.2.15 Tax Consolidation. File or consent to the filing of
any consolidated income tax return with any Person other than Borrower and its
Subsidiaries.
9.2.16 Accounting Changes. Make any significant change in
accounting treatment or reporting practices, except as may be required by GAAP
or which is concurred with by Borrower's independent accountants, or establish a
fiscal year different from the Fiscal Year.
9.2.17 Organization Documents. Amend, modify or otherwise
change any of the terms or provisions in any of its Organization Documents as in
effect on the date hereof, except for changes that do not affect in any way
Borrower's or any of its Subsidiaries' rights and obligations to enter into and
perform the Loan Documents to which it is a party and to pay all of the
Obligations and that do not otherwise have a Material Adverse Effect.
9.2.18 Restrictive Agreements. Enter into or become party to
any Restrictive Agreement other than those disclosed in SCHEDULE 8.1.18 hereto,
provided that none of such disclosed agreements shall be amended without prior
notice and the consent of Agent.
9.2.19 Conduct of Business. Engage in any business other
than the business engaged in by it on the Closing Date and any business or
activities which are substantially similar, related or incidental thereto.
9.2.20 Fabrica Purchase Documents. Amend, renegotiate or
otherwise modify any of the terms of any of the Fabrica Purchase Documents
except upon terms and conditions acceptable to Agent and all Lenders.
9.2.21 Anti-Terrorism Laws. Borrower shall not conduct, deal
in or engage in, or permit any Subsidiary or Affiliate or agent of Borrower to
conduct, deal in or engage in of the following: (i) conduct any business or
engage in any transaction or dealing with any Blocked Person, including the
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person; (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224; or (iii) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in Executive Order No.
13224 or the USA Patriot Act. Borrower shall deliver to
Agent any certification or other evidence requested from time to time by Agent,
in its sole discretion, confirming Borrower's compliance with this SECTION
9.2.21.
9.3. FINANCIAL COVENANTS. At any time that Availability is less
than $15,000,000 or an Event of Default exists (a "Trigger Event"), and
thereafter until payment in full of the Obligations, Borrower covenants that,
unless otherwise consented to by the Required Lenders in writing, it shall:
9.3.1 Fixed Charge Coverage Ratio. Maintain a Fixed Charge
Coverage Ratio, on a Consolidated basis, of not less than the following ratios
for the periods applicable thereto:
Period Ratio
------ -----
Twelve months ended as of the
last day of each Fiscal Quarter 1.10 to 1.0
9.3.2 Debt Coverage Ratio. Maintain a Debt Coverage Ratio,
on a Consolidated basis, of not more than 4.0 to 1.0 as of the end of each
Fiscal Quarter, for the four Fiscal Quarters ending with such period.
Notwithstanding the foregoing, if a Trigger Event shall have occurred
as a result of Availability being less than $15,000,000 and thereafter Borrower
maintains Availability of greater than $20,000,000 on each Business Day during a
Fiscal Quarter and no Event of Default exists, then Agent and Lenders agree not
to test the financial covenants set forth in this SECTION 9.3 until Availability
is less than $15,000,000 or an Event of Default occurs. If a Trigger Event shall
have occurred as a result of the occurrence of an Event of Default but
Availability is not less than $15,000,000, and after the occurrence of such
Event of Default, such Event of Default is waived in writing by Agent, then
Agent and Lenders agree not to test the financial covenants set forth in this
SECTION 9.3 until Availability is less than $15,000,000 or an Event of Default
occurs.
SECTION 10. CONDITIONS PRECEDENT
10.1. CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSIONS. Initial
Lenders shall not be required to fund any Loan requested by Borrower to procure
any Letter of Credit or otherwise extend credit to Borrower, unless, on or
before April 20, 2004, each of the following conditions has been satisfied:
10.1.1 Loan Documents. Each of the Loan Documents shall have
been duly executed and delivered to Agent by each of the signatories thereto
(and, with the exception of the Notes, in sufficient counterparts for each
Lender) and accepted by Agent and Initial Lenders and each Obligor shall be in
compliance with all of the terms thereof.
10.1.2 Evidence of Perfection and Priority of Liens. Agent
shall have received copies of all filing receipts or acknowledgments issued by
any Governmental Authority to evidence any filing or recordation necessary to
perfect the Liens of Agent in the Collateral and evidence in form satisfactory
to Agent and Initial Lenders that such Liens constitute valid and perfected
security interests and Liens, and that there are no other Liens upon any
Collateral except for Permitted Liens.
10.1.3 Organization Documents. Agent shall have received
copies of the Organization Documents of each Obligor, and all amendments
thereto, certified by the Secretary of State or other appropriate official of
the jurisdiction of each Obligor's organization.
10.1.4 Good Standing Certificates. Agent shall have received
good standing certificates for each Obligor, issued by the Secretary of State or
other appropriate official of such Obligor's jurisdiction of organization and
each jurisdiction where the conduct of such Obligor's business activities or
ownership of its Property necessitates qualification.
10.1.5 Opinion Letters. Agent shall have received a
favorable, written opinion of Shumacker ▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C., counsel
to Borrower and Guarantors, covering, to Agent's satisfaction, the matters set
forth on EXHIBIT G attached hereto.
10.1.6 Insurance. Agent shall have received certified copies
of the property and casualty insurance policies of Borrower with respect to the
Collateral, or certificates of insurance with respect to such policies in form
acceptable to Agent, and loss payable endorsements on Agent's standard form of
loss payee endorsement naming Agent as lenders loss payee and mortgagee with
respect to each such policy and certified copies of Borrower's liability
insurance policies, including product liability policies, together with
endorsements naming Agent as an additional insured, all as required by the Loan
Documents.
10.1.7 Landlord Waivers. Agent shall have received Landlord
Waivers with respect to all leased or warehouse premises at which any Collateral
may be located, other than leased or warehouse premises at which Collateral with
an aggregate value of less than $500,000 is located.
10.1.8 Solvency Certificates. Agent and Initial Lenders
shall have received certificates satisfactory to them from one or more
knowledgeable Senior Officers of Borrower that, after giving effect to the
financing under this Agreement and the issuance of the Letters of Credit,
Borrower is Solvent.
10.1.9 No Labor Disputes. Agent shall have received
assurances satisfactory to it that there are no threats of strikes or work
stoppages by any employees, or organization of employees, of any Obligor which
Agent reasonably determines may have a Material Adverse Effect.
10.1.10 Compliance with Laws and Other Agreements. Agent
shall have determined or received assurances satisfactory to it that none of the
Loan Documents or any of the transactions contemplated thereby violate any
Applicable Law, court order or agreement binding upon any Obligor.
10.1.11 Financial Statements. Agent shall have received,
reviewed and found satisfactory drafts of Borrower's audited Consolidated and
consolidating financial statements for Borrower's Fiscal Year ending on or about
December 27, 2003 and Borrower's unaudited Consolidated and consolidating
financial statements for the month ending more than 20 days preceding the month
in which the Closing Date occurs
10.1.12 No Material Adverse Change. No material adverse
change in the financial condition of any Obligor or in the quality, quantity or
value of any Collateral shall have occurred since December 27, 2003.
10.1.13 Accounts Payable. Agent shall have reviewed and found
reasonably acceptable Borrower's accounts payable and vendor arrangements.
10.1.14 Payment of Fees. Borrower shall have paid, or made
provision for the payment on the Closing Date of, all fees and expenses to be
paid hereunder to Agent and Lenders on the Closing Date.
10.1.15 Title Insurance Policies. Agent shall have received,
had at least 5 days to review, and found acceptable fully paid mortgagee title
insurance policies (or endorsements to existing title insurance policies, to
Agent's satisfaction), in standard ALTA form, issued by a title insurance
company satisfactory to Agent, each in an amount equal to not less than the fair
market value of the real Property or leasehold interest, as the case may be,
subject to the Mortgage, insuring the Mortgage to create a valid Lien on all
real Property and valid Liens on the leasehold interest described therein with
no exceptions which Agent shall not have approved in writing and no survey
exceptions.
10.1.16 Environmental Matters. Agent shall have received,
reviewed and found satisfactory the representations, warranties and disclosures
in the Environmental Agreement.
10.1.17 Capital Structure. Agent shall have received,
reviewed and found satisfactory Borrower's capital structure as of the Closing
Date, including, without limitation, Borrower's real property financing, lease
financing and convertible subordinated debt.
10.1.18 Projections. Agent shall have received, reviewed and
found satisfactory Projections on a month by month basis for Borrower for the
12-month period following the Closing Date.
10.1.19 LC Conditions. With respect to the procurement of any
Letter of Credit on the Closing Date, each of the LC Conditions is satisfied.
10.2. CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. Lenders shall
not be required to fund any Loans, procure any Letters of Credit or otherwise
extend any credit to or for the benefit of Borrower, unless and until each of
the following conditions has been and continues to be satisfied:
10.2.1 No Defaults. No Default or Event of Default exists at
the time, or would result from the funding, of any Loan or other extension of
credit.
10.2.2 Satisfaction of Conditions in Other Loan Documents.
Each of the conditions precedent set forth in any other Loan Document shall have
been and shall remain satisfied.
10.2.3 No Litigation. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain or
prohibit, or to obtain damages in respect of, or which is related to or arises
out of, this Agreement or any of the other Loan Documents or the consummation of
the transactions contemplated hereby or thereby.
10.2.4 Borrowing Base Certificate. Agent shall have received
each Borrowing Base Certificate required by the terms of this Agreement or
otherwise requested by Agent.
10.2.5 LC Conditions. With respect to the procurement of any
Letter of Credit after the Closing Date, each of the LC Conditions is satisfied.
10.3. INAPPLICABILITY OF CONDITIONS. None of the conditions
precedent set forth in SECTIONS 10.1 or 10.2 shall be conditions to the
obligation of (i) each Participating Lender to make payments to Fleet pursuant
to SECTION 1.3.2, (ii) each Lender to deposit with Agent such Lender's Pro Rata
share of a Borrowing in accordance with SECTION 3.1.2, (iii) each Lender to fund
its Pro Rata share of a Revolver Loan to repay outstanding Settlement Loans to
Fleet as provided in SECTION 3.1.3(ii), (iv) each Lender to pay any amount
payable to Agent or any other Lender pursuant to this Agreement or (v) Agent to
pay any amount payable to any Lender pursuant to this Agreement.
10.4. LIMITED WAIVER OF CONDITIONS PRECEDENT. If Lenders shall make
any Loans, procure any Letter of Credit or otherwise extend any credit to
Borrower under this Agreement at a time when any of the foregoing conditions
precedent are not satisfied (regardless of whether the failure of satisfaction
of any such conditions precedent was known or unknown to Agent or Lenders), the
funding of such Loan or procurement of such Letter of Credit shall not operate
as a waiver of the right of Agent and Lenders to insist upon the satisfaction of
all conditions precedent with respect to each subsequent Borrowing requested by
Borrower or a waiver of any Default or Event of Default as a consequence of the
failure of any such conditions to be satisfied, unless Agent, with the prior
written consent of the Required Lenders, in writing waives the satisfaction of
any condition precedent, in which event such waiver shall only be applicable for
the specific instance given and only to the extent and for the period of time
expressly stated in such written waiver.
SECTION 11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
11.1. EVENTS OF DEFAULT. The occurrence or existence of any one or
more of the following events or conditions shall constitute an "Event of
Default" (each of which Events of Default shall be deemed to exist unless and
until waived by Agent and Lenders in accordance with the provisions of SECTION
12.9 hereof):
11.1.1 Payment of Obligations. Borrower shall fail to pay
any of the Obligations on the due date thereof (whether due at stated maturity,
on demand, upon acceleration or otherwise).
11.1.2 Misrepresentations. Any representation, warranty or
other written statement to Agent or any Lender by or on behalf of any Obligor,
whether made in or furnished in compliance with or in reference to any of the
Loan Documents, proves to have been false or misleading in any material respect
when made or furnished or when reaffirmed pursuant to SECTION 8.2 hereof.
11.1.3 Breach of Specific Covenants. Borrower shall fail or
neglect to perform, keep or observe any covenant contained in SECTIONS 6.6,
7.1.1, 7.2.4, 7.2.5, 7.2.6, 7.5, 9.1.1, 9.1.3, 9.1.8, 9.2 or 9.3 hereof on the
date that Borrower is required to perform, keep or observe such covenant.
11.1.4 Breach of Other Covenants. Borrower shall fail or
neglect to perform, keep or observe any covenant contained in this Agreement
(other than a covenant which is dealt with specifically elsewhere in SECTION
11.1 hereof) and the breach of such other covenant is not cured to Agent's and
the Required Lender's satisfaction within 15 days after the sooner to occur of
any Senior Officer's receipt of notice of such breach from Agent or the date on
which such failure or neglect first becomes known to any Senior Officer;
provided, however, that such notice and opportunity to cure shall not apply in
the case of any failure to perform, keep or observe any covenant which is not
capable of being cured at all or within such 15-day period or which is a willful
and knowing breach by Borrower.
11.1.5 Default Under Security Documents/Other Agreements.
Borrower or any other Obligor shall default in the due and punctual observance
or performance of any liability or obligation to be observed or performed by it
under any of the Other Agreements or Security Documents beyond any applicable
cure period.
11.1.6 Other Defaults. There shall occur any default or
event of default on the part of Borrower or any Subsidiary under any agreement,
document or instrument to which Borrower or such Subsidiary is a party or by
which Borrower or such Subsidiary or any of their respective Properties is
bound, creating or relating to any Debt (other than the Obligations) in excess
of $1,000,000 if the payment or maturity of such Debt may be accelerated in
consequence of such event of default or demand for payment of such Debt may be
made.
11.1.7 Uninsured Losses. Any loss, theft, damage or
destruction of any of the Collateral not fully covered (subject to such
deductibles as Agent shall have permitted) by insurance if the amount not
covered by insurance exceeds $500,000.
11.1.8 Reserved.
11.1.9 Solvency. Any Obligor shall cease to be Solvent.
11.1.10 Insolvency Proceedings. Any Insolvency Proceeding
shall be commenced by any Obligor; an Insolvency Proceeding is commenced against
any Obligor and any of the following events occur: such Obligor consents to or
acquiesces in the institution of the Insolvency Proceeding against it, the
petition commencing the Insolvency Proceeding is not timely controverted by such
Obligor, the petition commencing the Insolvency Proceeding is not dismissed
within 30 days after the date of the filing thereof (provided that, in any
event, during the pendency of any such period, Lenders shall be relieved from
their obligation to make Loans or otherwise extend credit to or for the benefit
of Borrower hereunder), an interim trustee is appointed to take possession of
all or a substantial portion of the Properties of such Obligor or to operate all
or any substantial portion of the business of such Obligor, or an order for
relief shall have been issued or entered in connection with such Insolvency
Proceeding; or any Obligor shall make an offer of settlement extension or
composition to its unsecured creditors generally.
11.1.11 Business Disruption; Condemnation. There shall occur
a cessation of a substantial part of the business of any Obligor for a period
which may be reasonably expected to have a Material Adverse Effect; or any
Obligor shall suffer the loss or revocation of any license or permit now held or
hereafter acquired by such Obligor which is necessary to the continued or lawful
operation of its business; or any Obligor shall be enjoined, restrained or in
any way prevented by court, governmental or administrative order from conducting
all or any material part of its business affairs; or any material lease or
agreement pursuant to which any Obligor leases or occupies any premises on which
any Collateral is located shall be canceled or terminated prior to the
expiration of its stated term and such cancellation or termination has a
Material Adverse Effect or results in an Out-of-Formula Condition; or any
material part of the Collateral shall be taken through condemnation or the value
of such Property shall be materially impaired through condemnation.
11.1.12 Change of Control. There shall occur a Change of
Control.
11.1.13 ERISA. The Pension Benefit Guaranty Corporation has
provided notice that a Reportable Event has occurred which constitutes grounds
for the termination of any Plan or for the appointment by the appropriate United
States district court of a trustee for any Plan, or if any Plan shall be
terminated or any such trustee shall be requested or appointed, or if Borrower,
any Subsidiary or any
Obligor is in "default" (as defined in Section 4219(c)(5) of ERISA) with respect
to payments to a Multiemployer Plan resulting from Borrower's, such Subsidiary's
or such Obligor's complete or partial withdrawal from such Plan.
11.1.14 Challenge to Loan Documents. Any Obligor or any of
its Affiliates shall challenge or contest in any action, suit or proceeding the
validity or enforceability of any of the Loan Documents, the legality or
enforceability of any of the Obligations or the perfection or priority of any
Lien granted to Agent, or any of the Loan Documents ceases to be in full force
or effect for any reason other than a full or partial waiver or release by Agent
and Lenders in accordance with the terms thereof.
11.1.15 Judgment. One or more judgments or orders for the
payment of money in an amount that exceeds, individually or in the aggregate,
$500,000 shall be entered against Borrower or any other Obligor and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect.
11.1.16 Repudiation of or Default Under Guaranty. Any
Guarantor shall revoke or attempt to revoke the Guaranty signed by such
Guarantor, shall repudiate such Guarantor's liability thereunder, or shall be in
default under the terms thereof, or shall fail to confirm in writing, promptly,
after receipt of Agent's written request therefor, such Guarantor's ongoing
liability under the Guaranty in accordance with the terms thereof.
11.1.17 Criminal Forfeiture. Any Obligor shall be convicted
under any criminal law that could lead to a forfeiture of any Property of such
Obligor.
11.1.18 Fabrica Documents. Any Obligor shall fail to make any
payment under the Fabrica Purchase Documents on the due date thereof (unless
such payment is being Properly Contested); or there shall occur any default or
event of default on the part of Borrower or any Subsidiary under the Fabrica
Purchase Documents beyond any applicable grace or cure period (unless such
default is being Properly Contested).
11.1.19 Subordinated Debt Documents. There shall occur a
default or event of default under any of the Subordinated Debt Documents and
such default or event of default shall continue beyond any applicable cure
period provided for therein.
11.1.20 Factoring Agreements. There shall occur a default or
event of default under any Factoring Agreement and such default or event of
default shall continue beyond any applicable cure period provided for therein.
11.1.21 Bond Documents. There shall occur a default or event
of default under any of the Bond Documents and such default or event of default
shall continue beyond any applicable cure period provided for therein.
11.2. ACCELERATION OF THE OBLIGATIONS; TERMINATION OF COMMITMENTS.
Without in any way limiting the right of Agent to demand payment of any portion
of the Obligations payable on demand in accordance with this Agreement:
11.2.1 Upon or at any time after the occurrence of an Event
of Default (other than pursuant to SECTION 11.1.10 hereof) and for so long as
such Event of Default shall exist, Agent may in its discretion (and, upon
receipt of written instructions to do so from the Required Lenders, shall) (a)
declare the principal of and any accrued interest on the Loans and all other
Obligations owing under any of the
Loan Documents to be, whereupon the same shall become without further notice or
demand (all of which notice and demand Borrower expressly waives), forthwith due
and payable and Borrower shall forthwith pay to Agent the entire principal of
and accrued and unpaid interest on the Loans and other Obligations plus
reasonable attorneys' fees and expenses if such principal and interest are
collected by or through an attorney-at-law and (b) terminate the Commitments.
11.2.2 Upon the occurrence of an Event of Default specified
in SECTION 11.1.10 hereof, all of the Obligations shall become automatically due
and payable without declaration, notice or demand by Agent to or upon Borrower
and the Commitments shall automatically terminate as if terminated by Agent
pursuant to SECTION 5.2.1 hereof and with the effects specified in SECTION 5.2.4
hereof provided, however, that, if Agent or Lenders shall continue to make Loans
or otherwise extend credit to Borrower pursuant to this Agreement after an
automatic termination of the Commitments by reason of the commencement of an
Insolvency Proceeding by or against Borrower, such Loans and other credit shall
nevertheless be governed by this Agreement and enforceable against and
recoverable from each Obligor as if such Insolvency Proceeding had never been
instituted.
11.3. OTHER REMEDIES. Upon and after the occurrence of an Event of
Default and for so long as such Event of Default shall exist, Agent may in its
discretion (and, upon receipt of written direction of the Required Lenders,
shall) exercise from time to time the following rights and remedies (without
prejudice to the rights of Agent or any Lender to enforce its claim against any
or all Obligors):
11.3.1 All of the rights and remedies of a secured party
under the UCC or under other Applicable Law, and all other legal and equitable
rights to which Agent may be entitled under any of the Loan Documents, all of
which rights and remedies shall be cumulative and shall be in addition to any
other rights or remedies contained in this Agreement or any of the other Loan
Documents, and none of which shall be exclusive.
11.3.2 The right to collect all amounts at any time payable
to Borrower from any Account Debtor or other Person at any time indebted to
Borrower.
11.3.3 The right to take immediate possession of any of the
Collateral, and to (i) require Borrower to assemble the Collateral, at
Borrower's expense, and make it available to Agent at a place designated by
Agent which is reasonably convenient to both parties, and (ii) enter any
premises where any of the Collateral shall be located and to keep and store the
Collateral on said premises until sold (and if said premises be the Property of
Borrower, then Borrower agrees not to charge Agent for storage thereof).
11.3.4 The right to sell or otherwise dispose of all or any
Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as may
be required by Applicable Law, in lots or in bulk, for cash or on credit, all as
Agent, in its sole discretion, may deem advisable. Borrower agrees that any
requirement of notice to Borrower or any other Obligor of any proposed public or
private sale or other disposition of Collateral by Agent shall be deemed
reasonable notice thereof if given at least 10 days prior thereto, and such sale
may be at such locations as Agent may designate in said notice. Agent shall have
the right to conduct such sales on Borrower's or any other Obligor's premises,
without charge therefor, and such sales may be adjourned from time to time in
accordance with Applicable Law. Agent shall have the right to sell, lease or
otherwise dispose of the Collateral, or any part thereof, for cash, credit or
any combination thereof, and Agent may purchase all or any part of the
Collateral at public or, if permitted by law, private sale and, in lieu of
actual payment of such purchase price, may set off the amount of such price
against the Obligations. The proceeds realized from the sale or other
disposition of any Collateral may be applied, after allowing 2 Business Days for
collection, first to any Extraordinary Expenses incurred by Agent,
second to interest accrued with respect to any of the Obligations; and third, to
the principal balance of the Obligations. If any deficiency shall arise,
Obligors shall remain jointly and severally liable to Agent and Lenders
therefor.
11.3.5 The right to the appointment of a receiver, without
notice of any kind whatsoever, to take possession of all or any portion of the
Collateral and to exercise such rights and powers as the court appointing such
receiver shall confer upon such receiver.
11.3.6 The right to exercise all of Agent's rights and
remedies under the Mortgage with respect to any Real Estate.
11.3.7 The right to require Borrower to deposit with Agent
funds equal to the LC Obligations and, if Borrower fails promptly to make such
deposit, Agent may (and shall upon the direction of the Required Lenders)
advance such amount as a Revolver Loan (whether or not an Out-of-Formula
Condition exists or is created thereby). Any such deposit or advance shall be
held by Agent as a reserve to fund future payments on any LC Support. At such
time as the LC Support has been paid or terminated and all Letters of Credit
have been drawn upon or expired, any amounts remaining in such reserve shall be
applied against any outstanding Obligations, or, if all Obligations have been
indefeasibly paid in full, returned to Borrower.
Agent is hereby irrevocably granted a license or other right to use, license or
sub-license, without charge, any and all of Borrower's Intellectual Property and
all of Borrower's computer hardware and software, trade secrets, brochures,
customer lists, promotional and advertising materials, labels, and packaging
materials, and any Property of a similar nature, in advertising for sale,
marketing, selling and collecting and in completing the manufacturing of any
Collateral, and Borrower's rights under all licenses and all franchise
agreements shall inure to Agent's benefit.
11.4. SETOFF. In addition to any Liens granted under any of the Loan
Documents and any rights now or hereafter available under Applicable Law, Agent
and each Lender (and each of their respective Affiliates) is hereby authorized
by Borrower at any time that an Event of Default exists, without notice to
Borrower or any other Person (any such notice being hereby expressly waived) to
set off and to appropriate and to apply any and all deposits, general or special
(including Debt evidenced by certificates of deposit whether matured or
unmatured (but not including trust accounts)) and any other Debt at any time
held or owing by Agent, such Lender or any of their Affiliates to or for the
credit or the account of Borrower against and on account of the Obligations of
Borrower arising under the Loan Documents to Agent, such Lender or any of their
Affiliates, including all Loans and LC Obligations and all claims of any nature
or description arising out of or in connection with this Agreement, irrespective
of whether or not (i) Agent or such Lender shall have made any demand hereunder,
(ii) Agent, at the request or with the consent of the Required Lenders shall
have declared the principal of and interest on the Loans and other amounts due
hereunder to be due and payable as permitted by this Agreement and even though
such Obligations may be contingent or unmatured or (iii) the Collateral for the
Obligations is adequate. Notwithstanding the foregoing, each of Agent and
Lenders agree with each other that it shall not, without the express consent of
the Required Lenders, and that it shall (to the extent that it is lawfully
entitled to do so) upon the request of the Required Lenders, exercise its setoff
rights hereunder against any accounts of Borrower now or hereafter maintained
with Agent, such Lender or any Affiliate of any of them, but Borrower shall not
have a claim or cause of action against Agent or any Lender for any setoff made
without the consent of the Required Lenders and the validity of any such setoff
shall not be impaired by the absence of such consent. If any party (or its
Affiliate) exercises the right of setoff provided for hereunder, such party
shall be obligated to share any such setoff in the manner and to the extent
required by SECTION 12.5.
11.5. REMEDIES CUMULATIVE; NO WAIVER.
11.5.1 All covenants, conditions, provisions, warranties,
guaranties, indemnities, and other undertakings of Borrower contained in this
Agreement and the other Loan Documents, or in any document referred to herein or
contained in any agreement supplementary hereto or in any schedule or in any
Guaranty given to Agent or any Lender or contained in any other agreement
between Agent or any Lender and Borrower, heretofore, concurrently, or hereafter
entered into, shall be deemed cumulative to and not in derogation or
substitution of any of the terms, covenants, conditions, or agreements of
Borrower herein contained. The rights and remedies of Agent and Lenders under
this Agreement and the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies that Agent or any Lender would otherwise
have.
11.5.2 The failure or delay of Agent or any Lender to
require strict performance by Borrower of any provision of any of the Loan
Documents or to exercise or enforce any rights, Liens, powers, or remedies under
any of the Loan Documents or with respect to any Collateral shall not operate as
a waiver of such performance, Liens, rights, powers and remedies, but all such
requirements, Liens, rights, powers, and remedies shall continue in full force
and effect until all Loans and all other Obligations owing or to become owing
from Borrower to Agent and Lenders shall have been fully satisfied. None of the
undertakings, agreements, warranties, covenants and representations of Borrower
contained in this Agreement or any of the other Loan Documents and no Event of
Default by Borrower under this Agreement or any other Loan Documents shall be
deemed to have been suspended or waived by Agent or any Lender, unless such
suspension or waiver is by an instrument in writing specifying such suspension
or waiver and is signed by a duly authorized representative of Agent or such
Lender and directed to Borrower.
11.5.3 If Agent or any Lender shall accept performance by
Borrower, in whole or in part, of any obligation that Borrower is required by
any of the Loan Documents to perform only when a Default or Event of Default
exists, or if Agent or any Lender shall exercise any right or remedy under any
of the Loan Documents that may not be exercised other than when a Default or
Event of Default exists, Agent's or Lender's acceptance of such performance by
Borrower or Agent's or Lender's exercise of any such right or remedy shall not
operate to waive any such Event of Default or to preclude the exercise by Agent
or any Lender of any other right or remedy, unless otherwise expressly agreed in
writing by Agent or such Lender, as the case may be.
SECTION 12. AGENT
12.1. APPOINTMENT, AUTHORITY AND DUTIES OF AGENT.
12.1.1. Each Lender hereby irrevocably appoints and
designates Fleet as Agent to act as herein specified. Agent may, and each Lender
by its acceptance of a Note shall be deemed irrevocably to have authorized Agent
to, enter into all Loan Documents to which Agent is or is intended to be a party
and all amendments hereto and all Security Documents at any time executed by
Borrower, for its benefit and the Pro Rata benefit of Lenders and, except as
otherwise provided in this SECTION 12, to exercise such rights and powers under
this Agreement and the other Loan Documents as are specifically delegated to
Agent by the terms hereof and thereof, together with such other rights and
powers as are reasonably incidental thereto. Each Lender agrees that any action
taken by Agent or the Required Lenders in accordance with the provisions of this
Agreement or the other Loan Documents, and the exercise by Agent or the Required
Lenders of any of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all Lenders. Without limiting the generality of the foregoing,
Agent shall have the sole and exclusive right and authority to (a) act as the
disbursing and collecting agent for Lenders with respect to all payments and
collections
arising in connection with this Agreement and the other Loan Documents; (b)
execute and deliver as Agent each Loan Document and accept delivery of each such
agreement delivered by Borrower or any other Obligor; (c) act as collateral
agent for Lenders for purposes of the perfection of all security interests and
Liens created by this Agreement or the Security Documents with respect to all
material items of the Collateral and, subject to the direction of the Required
Lenders, for all other purposes stated therein, provided that Agent hereby
appoints, authorizes and directs each Lender to act as a collateral sub-agent
for Agent and the other Lenders for purposes of the perfection of all security
interests and Liens with respect to Borrower's Deposit Accounts maintained with,
and all cash and Cash Equivalents held by, such Lender; (d) subject to the
direction of the Required Lenders, manage, supervise or otherwise deal with the
Collateral; and (e) except as may be otherwise specifically restricted by the
terms of this Agreement and subject to the direction of the Required Lenders,
exercise all remedies given to Agent with respect to any of the Collateral under
the Loan Documents relating thereto, Applicable Law or otherwise. The duties of
Agent shall be ministerial and administrative in nature, and Agent shall not
have by reason of this Agreement or any other Loan Document a fiduciary
relationship with any Lender (or any Lender's participants). Unless and until
its authority to do so is revoked in writing by Required Lenders, Agent alone
shall be authorized to determine whether any Accounts or Inventory constitute
Eligible Accounts or Eligible Inventory (basing such determination in each case
upon the meanings given to such terms in Appendix A), or whether to impose or
release any reserve, and to exercise its own credit judgment in connection
therewith, which determinations and judgments, if exercised in good faith, shall
exonerate Agent from any liability to Lenders or any other Person for any errors
in judgment.
12.1.2. Agent (which term, as used in this sentence, shall
include reference to Agent's officers, directors, employees, attorneys, agents
and Affiliates and to the officers, directors, employees, attorneys and agents
of Agent's Affiliates) shall not: (a) have any duties or responsibilities except
those expressly set forth in this Agreement and the other Loan Documents or (b)
be required to take, initiate or conduct any litigation, foreclosure or
collection proceedings hereunder or under any of the other Loan Documents except
to the extent directed to do so by the Required Lenders during the continuance
of any Event of Default. The conferral upon Agent of any right hereunder shall
not imply a duty on Agent's part to exercise any such right unless instructed to
do so by the Required Lenders in accordance with this Agreement.
12.1.3. Agent may perform any of its duties by or through its
agents and employees and may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Borrower shall promptly
(and in any event, ON DEMAND) reimburse Agent for all reasonable expenses
(including all Extraordinary Expenses) incurred by Agent pursuant to any of the
provisions hereof or of any of the other Loan Documents or in the execution of
any of Agent's duties hereby or thereby created or in the exercise of any right
or power herein or therein imposed or conferred upon it or Lenders (excluding,
however, general overhead expenses), and each Lender agrees promptly to pay to
Agent, ON DEMAND, such Lender's Pro Rata share of any such reimbursement for
expenses (including Extraordinary Expenses) that is not timely made by Borrower
to Agent.
12.1.4. The rights, remedies, powers and privileges conferred
upon Agent hereunder and under the other Loan Documents may be exercised by
Agent without the necessity of the joinder of any other parties unless otherwise
required by Applicable Law. If Agent shall request instructions from the
Required Lenders with respect to any act or action (including the failure to
act) in connection with this Agreement or any of the other Loan Documents, Agent
shall be entitled to refrain from such act or taking such action unless and
until Agent shall have received instructions from the Required Lenders; and
Agent shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any of the Loan Documents pursuant to or in accordance with
the
instructions of the Required Lenders except for Agent's own gross negligence or
willful misconduct in connection with any action taken by it. Notwithstanding
anything to the contrary contained in this Agreement, Agent shall not be
required to take any action that is in its opinion contrary to Applicable Law or
the terms of any of the Loan Documents or that would in its opinion subject it
or any of its officers, employees or directors to personal liability.
12.1.5. Agent shall promptly, upon receipt thereof, forward
to each Lender (i) copies of any significant written notices, reports,
certificates and other information received by Agent from any Obligor (but only
upon request by Lender if and to the extent such Obligor is required by the
terms of the Loan Documents to supply such information directly to Lenders) and
(ii) copies of the results of any field audits by Agent with respect to
Borrower. Agent shall have no liability to any Lender for any errors in or
omissions from any field audit or other examination of Borrower or the
Collateral.
12.2. AGREEMENTS REGARDING COLLATERAL.12.2.1. Lenders hereby
irrevocably authorize Agent, at its option and in its discretion, to release any
Lien upon any Collateral (i) upon the termination of the Commitments and payment
or satisfaction of all of the Obligations or (ii) constituting Equipment sold or
disposed of in accordance with the terms of this Agreement if Borrower certifies
to Agent that the disposition is made in compliance with the terms of this
Agreement (and Agent may rely conclusively on any such certificate, without
further inquiry) or (iii) if approved or ratified by the Required Lenders;
provided, however, that Agent (without the consent of any Lender) shall be
authorized to release any Lien upon any Collateral having a net book value of
less than $500,000 in the aggregate during any 12-month period. Agent shall have
no obligation whatsoever to any of the Lenders to assure that any of the
Collateral exists or is owned by Borrower or is cared for, protected or insured
or has been encumbered, or that Agent's Liens have been properly, sufficiently
or lawfully created, perfected, protected or enforced or entitled to any
particular priority or to exercise any duty of care with respect to any of the
Collateral.
12.2.2. Each Lender shall be deemed to have requested that
Agent furnish such Lender, promptly after the same becomes available, a copy of
each field audit or examination report (each a "Report" and collectively,
"Reports") prepared by or on behalf of Agent; agrees that neither Fleet nor
Agent makes any representation or warranty as to the accuracy or completeness of
any Report and shall not be liable for any information contained in or omitted
from any such Report; agrees that the Reports are not intended to be
comprehensive audits or examinations, that Fleet or Agent or any other Person
performing any audit or examination will inspect only specific information
regarding Borrower or the Collateral and will rely significantly upon Borrower's
books and records as well as upon representations of Borrower's officers and
employees; agrees to keep all Reports confidential and strictly for its internal
use and not to distribute the Reports to any Person (except to its Participants)
or use any Report in any other manner; and, without limiting the generality of
any other indemnification contained herein, agrees to hold Agent and any other
Person preparing a Report harmless from all losses or liabilities incurred by
Agent, such other Person or such Lender as a direct or indirect result of any
action that the indemnifying Lender may take or fail to take or any conclusion
the indemnifying Lender may reach or draw from any Report in connection with any
Loans or other credit accommodations that the indemnifying Lender has made or
may make to Borrower, or the indemnifying Lender's participation in, or its
purchase of, a Loan or Loans of Borrower, and to pay and protect, and indemnify,
defend and hold Agent and each other such Person preparing a Report harmless
from and against all claims, actions, proceedings, damages, costs, expenses and
other amounts (including attorneys' fees incurred by Agent and any such other
Person preparing a Report) arising as the direct or indirect result of any third
parties who might obtain all or any part of any Report through the indemnifying
Lender.
12.3. RELIANCE BY AGENT. Agent shall be entitled to rely, and shall
be fully protected in so relying, upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram, telecopier
message or cable) believed by it to be genuine and correct and to have been
signed,
sent or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by Agent. As to any matters not expressly provided for by this
Agreement or any of the other Loan Documents, Agent shall in all cases be fully
protected in acting or refraining from acting hereunder and thereunder in
accordance with the instructions of the Required Lenders, and such instructions
of the Required Lenders and any action taken or failure to act pursuant thereto
shall be binding upon Lenders.
12.4. ACTION UPON DEFAULT. Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default (other than
nonpayment when due of an amount required to be repaid with respect to the
Loans) unless it has received written notice from a Lender or Borrower
specifying the occurrence and nature of such Default or Event of Default. If
Agent shall receive such a notice of a Default or an Event of Default or shall
otherwise acquire actual knowledge of any Default or Event of Default, Agent
shall promptly notify Lenders in writing and Agent shall take such action and
assert such rights under this Agreement and the other Loan Documents, or shall
refrain from taking such action and asserting such rights, as the Required
Lenders shall direct from time to time. If any Lender shall receive a notice of
a Default or an Event of Default or shall otherwise acquire actual knowledge of
any Default or Event of Default, such Lender shall promptly notify Agent and the
other Lenders in writing. As provided in SECTION 12.3 hereof, Agent shall not be
subject to any liability by reason of acting or refraining to act pursuant to
any request of the Required Lenders except for its own willful misconduct or
gross negligence in connection with any action taken by it. Before directing
Agent to take or refrain from taking any action or asserting any rights or
remedies under this Agreement and the other Loan Documents on account of any
Event of Default, the Required Lenders shall consult with and seek the advice of
(but without having to obtain the consent of) each other Lender, and promptly
after directing Agent to take or refrain from taking any such action or
asserting any such rights, the Required Lenders will so advise each other Lender
of the action taken or refrained from being taken and, upon request of any
Lender, will supply information concerning actions taken or not taken. In no
event shall the Required Lenders, without the prior written consent of each
Lender, direct Agent to accelerate and demand payment of the Loans held by one
Lender without accelerating and demanding payment of all other Loans or to
terminate the Commitments of one or more Lenders without terminating the
Commitments of all Lenders. Each Lender agrees that, except as otherwise
provided in any of the Loan Documents and without the prior written consent of
the Required Lenders, it will not take any legal action or institute any action
or proceeding against any Obligor with respect to any of the Obligations or
Collateral, or accelerate or otherwise enforce its portion of the Obligations.
Without limiting the generality of the foregoing, no Lender may exercise any
right that it might otherwise have under Applicable Law to credit bid at
foreclosure sales, UCC sales or other similar sales or dispositions of any of
the Collateral except as authorized by the Required Lenders. Notwithstanding
anything to the contrary set forth in this SECTION 12.4 or elsewhere in this
Agreement, each Lender shall be authorized to take such action to preserve or
enforce its rights against any Obligor where a deadline or limitation period is
otherwise applicable and would, absent the taking of specified action, bar the
enforcement of Obligations held by such Lender against such Obligor, including
the filing of proofs of claim in any Insolvency Proceeding.
12.5. RATABLE SHARING. If any Lender shall obtain any payment or
reduction (including any amounts received as adequate protection of a bank
account deposit treated as cash collateral under the Bankruptcy Code) of any
Obligation of Borrower hereunder (whether voluntary, involuntary, through the
exercise of any right of set-off or otherwise) in excess of its Pro Rata share
of payments or reductions on account of such Obligations obtained by all of the
Lenders, such Lender shall forthwith (i) notify the other Lenders and Agent of
such receipt and (ii) purchase from the other Lenders such participations in the
affected Obligations as shall be necessary to cause such purchasing Lender to
share the excess payment or reduction, net of costs incurred in connection
therewith, on a Pro Rata basis, provided that if all or any portion of such
excess payment or reduction is thereafter recovered from such purchasing Lender
or additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to
the extent of such recovery or such additional costs, but without interest.
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this SECTION 12.5 may, to the fullest extent permitted by
Applicable Law, exercise all of its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of Borrower in the amount of such participation.
12.6. INDEMNIFICATION OF AGENT. Each Lender agrees to indemnify and
defend the Agent Indemnitees (to the extent not reimbursed by Borrower under
this Agreement, but without limiting the indemnification obligation of Borrower
under this Agreement), on a Pro Rata basis, and to hold each of the Agent
Indemnitees harmless from and against, any and all Claims which may be imposed
on, incurred by or asserted against any of the Agent Indemnitees in any way
related to or arising out of this Agreement or any of the other Loan Documents
or any other document contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including the costs and expenses
which Borrower is obligated to pay under SECTION 14.2 hereof or amounts Agent
may be called upon to pay in connection with any lockbox or Dominion Account
arrangement contemplated hereby) or the enforcement of any of the terms hereof
or thereof or of any such other documents, provided that no Lender shall be
liable to any Agent Indemnitee for any of the foregoing to the extent that they
result from the willful misconduct or gross negligence of such Agent Indemnitee.
12.6.1. Without limiting the generality of the foregoing
provisions of this SECTION 12.6, if Agent should be sued by any receiver,
trustee in bankruptcy, debtor-in-possession or other Person on account of any
alleged preference or fraudulent transfer received or alleged to have been
received from Borrower or any other Obligor as the result of any transaction
under the Loan Documents, then in such event any monies paid by Agent in
settlement or satisfaction of such suit, together with all Extraordinary
Expenses incurred by Agent in the defense of same, shall be promptly reimbursed
to Agent by Lenders to the extent of each Lender's Pro Rata share.
12.6.2. Without limiting the generality of the foregoing
provisions of this SECTION 12.6, if at any time (whether prior to or after the
Commitment Termination Date) any action or proceeding shall be brought against
any of the Agent Indemnitees by an Obligor or by any other Person claiming by,
through or under an Obligor, to recover damages for any act taken or omitted by
Agent under any of the Loan Documents or in the performance of any rights,
powers or remedies of Agent against any Obligor, any Account Debtor, the
Collateral or with respect to any Loans, or to obtain any other relief of any
kind on account of any transaction involving any Agent Indemnitees under or in
relation to any of the Loan Documents, each Lender agrees to indemnify, defend
and hold the Agent Indemnitees harmless with respect thereto and to pay to the
Agent Indemnitees such Lender's Pro Rata share of such amount as any of the
Agent Indemnitees shall be required to pay by reason of a judgment, decree, or
other order entered in such action or proceeding or by reason of any compromise
or settlement agreed to by the Agent Indemnitees, including all interest and
costs assessed against any of the Agent Indemnitees in defending or compromising
such action, together with attorneys' fees and other legal expenses paid or
incurred by the Agent Indemnitees in connection therewith; provided, however,
that no Lender shall be liable to any Agent Indemnitee for any of the foregoing
to the extent that they arise from the willful misconduct or gross negligence of
such Agent Indemnitee. In Agent's discretion, Agent may also reserve for or
satisfy any such judgment, decree or order from proceeds of Collateral prior to
any distributions therefrom to or for the account of Lenders.
12.7. LIMITATION ON RESPONSIBILITIES OF AGENT. Agent shall in all
cases be fully justified in failing or refusing to act hereunder unless it shall
have received further assurances to its satisfaction from Lenders of their
indemnification obligations under SECTION 12.6 hereof against any and all Claims
which may be incurred by Agent by reason of taking or continuing to take any
such action. Agent shall not be liable to Lenders (or any Lender's participants)
for any action taken or omitted to be taken under or in
connection with this Agreement or the other Loan Documents except as a result of
actual gross negligence or willful misconduct on the part of Agent. Agent does
not assume any responsibility for any failure or delay in performance or breach
by any Obligor or any Lender of its obligations under this Agreement or any of
the other Loan Documents. Agent does not make to Lenders, and no Lender makes to
Agent or the other Lenders, any express or implied warranty, representation or
guarantee with respect to the Loans, the Collateral, the Loan Documents or any
Obligor. Neither Agent nor any of its officers, directors, agents, attorneys or
employees shall be responsible to Lenders, and no Lender nor any of its
officers, directors, employees, attorneys or agents shall be responsible to
Agent or the other Lenders, for: (i) any recitals, statements, information,
representations or warranties contained in any of the Loan Documents or in any
certificate or other document furnished pursuant to the terms hereof; (ii) the
execution, validity, genuineness, effectiveness or enforceability of, any of the
Loan Documents; (iii) the validity, genuineness, enforceability, collectibility,
value, sufficiency or existence of any Collateral, or the perfection or priority
of any Lien therein; or (iv) the assets, liabilities, financial condition,
results of operations, business, creditworthiness or legal status of any Obligor
or any Account Debtor. Neither Agent nor any of its officers, directors,
employees, attorneys or agents shall have any obligation to any Lender to
ascertain or inquire into the existence of any Default or Event of Default, the
observance or performance by any Obligor of any of the duties or agreements of
such Obligor under any of the Loan Documents or the satisfaction of any
conditions precedent contained in any of the Loan Documents. Agent may consult
with and employ legal counsel, accountants and other experts and shall be
entitled to act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by such experts.
12.8. SUCCESSOR AGENT AND CO-AGENTS.
12.8.1. Subject to the appointment and acceptance of a
successor Agent as provided below, Agent may resign at any time by giving at
least 30 days written notice thereof to each Lender and Borrower. Upon receipt
of any notice of such resignation, the Required Lenders, after prior
consultation with (but without having to obtain consent of) each Lender, shall
have the right to appoint a successor Agent which shall be (i) a Lender, (ii) a
United States based affiliate of a Lender or (iii) a commercial bank or other
financial institution that is organized under the laws of the United States or
of any State thereof and has a combined capital surplus of at least $100,000,000
and, provided no Default or Event of Default then exists, is reasonably
acceptable to Borrower (and for purposes hereof, any successor to Fleet shall be
deemed acceptable to Borrower). Upon the acceptance by a successor Agent of an
appointment to serve as an Agent hereunder, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent without further act, deed or conveyance, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this SECTION
12 (including the provisions of SECTION 12.6 hereof) shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Agent. Notwithstanding anything to the contrary contained
in this Agreement, any successor by merger or acquisition of the stock or assets
of Fleet shall continue to be Agent hereunder unless such successor shall resign
in accordance with the provisions hereof.
12.8.2. It is the purpose of this Agreement that there shall
be no violation of any Applicable Law denying or restricting the right of
financial institutions to transact business as agent or otherwise in any
jurisdiction. It is recognized that, in case of litigation under any of the Loan
Documents, or in case Agent deems that by reason of present or future laws of
any jurisdiction Agent might be prohibited from exercising any of the powers,
rights or remedies granted to Agent or Lenders hereunder or under any of the
Loan Documents or from holding title to or a Lien upon any Collateral or from
taking any other action which may be necessary hereunder or under any of the
Loan Documents, Agent may appoint an additional Person as a separate collateral
agent or co-collateral agent which is not so prohibited from taking any of such
actions or exercising any of such powers, rights or remedies. If Agent shall
appoint an additional Person as a separate collateral agent or co-collateral
agent as provided above, each and every remedy, power, right, claim, demand or
cause of action intended by any of the Loan Documents to be exercised by or
vested in or conveyed to Agent with respect thereto shall be exercisable by and
vested in such separate collateral agent or co-collateral agent, but only to the
extent necessary to enable such separate collateral agent or co-collateral agent
to exercise such powers, rights and remedies, and every covenant and obligation
necessary to the exercise thereof by such separate collateral agent or
co-collateral agent shall run to and be enforceable by either of them. Should
any instrument from Lenders be required by the separate collateral agent or
co-collateral agent so appointed by Agent in order more fully and certainly to
vest in and confirm to him or it such rights, powers, duties and obligations,
any and all of such instruments shall, on request, be executed, acknowledged and
delivered by Lenders whether or not a Default or Event of Default then exists.
In case any separate collateral agent or co-collateral agent, or a successor to
either, shall die, become incapable of acting, resign or be removed, all the
estates, properties, rights, powers, duties and obligations of such separate
collateral agent or co-collateral agent, so far as permitted by Applicable Law,
shall vest in and be exercised by the Agent until the appointment of a new
collateral agent or successor to such separate collateral agent or co-collateral
agent.
12.9. CONSENTS, AMENDMENTS AND WAIVERS; OUT-OF-FORMULA LOANS.
12.9.1 No amendment or modification of any provision of this
Agreement or any Security Document shall be effective without the prior written
agreement of the Required Lenders and Borrower, and no waiver of any Default or
Event of Default shall be effective without the prior written consent of the
Required Lenders; provided, however, that, (i) without the prior written consent
of Agent no amendment or waiver shall be effective with respect to any provision
of any of the Loan Documents (including SECTION 1.1.7 and this SECTION 12) to
the extent such provision relates to the rights, remedies, duties or immunities
of Agent; (ii) without the prior written consent of Fleet, no amendment to the
provisions of SECTIONS 1.3 OR 3.1.3 shall be effective; (iii) without the prior
written consent of all Lenders, no waiver of any Default or Event of Default
shall be effective if the Default or Event of Default relates to Borrower's
failure to observe or perform any covenant that may not be amended without the
unanimous written consent of Lenders (and, where so provided hereinafter, the
written consent of Agent) as hereinafter set forth in this SECTION 12.9.1; and
(iv) the written agreement of all Lenders (except a defaulting Lender as
provided in SECTION 3.2 of this Agreement) shall be required to effectuate any
amendment, modification or waiver that would (a) alter the provisions of
SECTIONS 2.2, 2.4, 2.6, 2.7, 2.8, 2.9, 4.6, 4.7, 4.9, 4.10, 5.1, 5.2.3, 6.7, 12,
13, 14.2, 14.3 OR 14.14,(b) amend the definitions of "Pro Rata," "Required
Lenders," "Availability Reserve," "Borrowing Base" (and the other defined terms
used in such definitions), or any provision of this Agreement obligating Agent
to take certain actions at the direction of the Required Lenders or all Lenders,
or any provision of any of the Loan Documents regarding the Pro Rata treatment
or obligations of Lenders, (c) increase or otherwise modify any of the
Commitments (other than to reduce proportionately each Lender's Commitment in
connection with any overall reduction in the amount of the Commitments), (d)
alter or amend (other than to increase) the rate of interest payable in respect
of the Loans (except as may be expressly authorized by the Loan Documents or as
may be necessary, in Agent's judgment, to comply with Applicable Law), (e) waive
or agree to defer collection of any interest, fee, termination charge or other
charge provided for under any of the Loan Documents (except to the extent that
the Required Lenders agree after and during the continuance of any Event of
Default to a waiver or deferral of any termination charge provided for in
SECTION 5.2.3 hereof) or the unused line fee in SECTION 2.2.3 hereof, (f)
subordinate the payment of any of the Obligations to any other Debt or the
priority of any Liens granted to Agent under any of the Loan Documents to Liens
granted to any other Person, except as currently provided in or contemplated by
the Loan Documents in connection with Borrower's incurrence of Permitted
Purchase Money Debt, and except for Liens granted by an Obligor to financial
institutions with respect to amounts on deposit with such financial institutions
to cover returned items, processing and analysis charges and other charges in
the Ordinary Course of Business that relate to deposit accounts with such
financial institutions, (g) alter the time or amount of
repayment of any of the Loans or waive any Event of Default resulting from
nonpayment of the Loans on the due date thereof (or within any applicable period
of grace), (h) forgive any of the Obligations, except any portion of the
Obligations held by a Lender who consents in writing to such forgiveness, or (i)
release any Obligor from liability for any of the Obligations. No Lender shall
be authorized to amend or modify any Note held by it, unless such amendment or
modification is consented to in writing by all Lenders; provided, however, that
the foregoing shall not be construed to prohibit an amendment or modification to
any provision of this Agreement that may be effected pursuant to this SECTION
12.9.1 by agreement of Borrower and the Required Lenders even though such an
amendment or modification results in an amendment or modification of the Notes
by virtue of the incorporation by reference in each of the Notes of this
Agreement. The making of any Loans hereunder by any Lender during the existence
of a Default or Event of Default shall not be deemed to constitute a waiver of
such Default or Event of Default. Any waiver or consent granted by Lenders
hereunder shall be effective only if in writing and then only in the specific
instance and for the specific purpose for which it was given.
12.9.2 In connection with any proposed amendment to any of
the Loan Documents or waiver of any of the terms thereof or any Default or Event
of Default thereunder, Borrower shall not solicit, request or negotiate for or
with respect to any such proposed amendment or waiver of any of the provisions
of this Agreement or any of the other Loan Documents unless each Lender shall be
informed thereof by Borrower or Agent (to the extent known by Agent) and shall
be afforded an opportunity of considering the same and supplied by Borrower with
sufficient information to enable it to make an informed decision with respect
thereto. Borrower will not, directly or indirectly, pay or cause to be paid any
remuneration or other thing of value, whether by way of supplemental or
additional interest, fee or otherwise, to any Lender (in its capacity as a
Lender hereunder) as consideration for or as an inducement to the consent to or
agreement by such Lender with any waiver or amendment of any of the terms and
provisions of this Agreement or any of the other Loan Documents to the extent
that the agreement of all Lenders to any such waiver or amendment is required,
unless such remuneration or thing of value is concurrently paid, on the same
terms, on a Pro Rata basis to all Lenders; provided, however, that Borrower may
contract to pay a fee only to those Lenders who actually vote in writing to
approve any waiver or amendment of the terms and provisions of this Agreement or
any of the other Loan Documents to the extent that such waiver or amendment may
be implemented by vote of the Required Lenders and such waiver or amendment is
in fact approved.
12.9.3 Unless otherwise directed in writing by the Required
Lenders, Agent may require Lenders to honor requests by Borrower for
Out-of-Formula Loans (in which event, and notwithstanding anything to the
contrary set forth in SECTION 1.1.1 or elsewhere in this Agreement, Lenders
shall continue to make Revolver Loans up to their Pro Rata share of the
Commitments) and to forbear from requiring Borrower to cure an Out-of-Formula
Condition, whether or not an Event of Default exists, if and for so long as (i)
such Out-of-Formula Condition does not continue for a period of more than 15
consecutive days, following which no Out-of-Formula Condition exists for at
least 15 consecutive days before another Out-of-Formula Condition exists, (ii)
the amount of the Revolver Loans (including any Out-of-Formula Loans)
outstanding at any time does not exceed the aggregate of the Commitments at such
time, and (iii) the Out-of-Formula Condition does not exceed $5,000,000. In no
event shall Borrower or any other Obligor be deemed to be a beneficiary of this
SECTION 12.9.3 or authorized to enforce any of the provisions of this SECTION
12.9.3.
12.10. DUE DILIGENCE AND NON-RELIANCE. Each Lender hereby
acknowledges and represents that it has, independently and without reliance upon
Agent or the other Lenders, and based upon such documents, information and
analyses as it has deemed appropriate, made its own credit analysis of each
Obligor and its own decision to enter into this Agreement and to fund the Loans
to be made by it hereunder and to purchase participations in the LC Obligations
pursuant to SECTION 1.3.2 hereof, and each Lender has made such inquiries
concerning the Loan Documents, the Collateral and each Obligor as such
Lender feels necessary and appropriate, and has taken such care on its own
behalf as would have been the case had it entered into the other Loan Documents
without the intervention or participation of the other Lenders or Agent. Each
Lender hereby further acknowledges and represents that the other Lenders and
Agent have not made any representations or warranties to it concerning any
Obligor, any of the Collateral or the legality, validity, sufficiency or
enforceability of any of the Loan Documents. Each Lender also hereby
acknowledges that it will, independently and without reliance upon the other
Lenders or Agent, and based upon such financial statements, documents and
information as it deems appropriate at the time, continue to make and rely upon
its own credit decisions in making Loans and in taking or refraining to take any
other action under this Agreement or any of the other Loan Documents. Except for
notices, reports and other information expressly required to be furnished to
Lenders by Agent hereunder, Agent shall not have any duty or responsibility to
provide any Lender with any notices, reports or certificates furnished to Agent
by any Obligor or any credit or other information concerning the affairs,
financial condition, business or Properties of any Obligor (or any of its
Affiliates) which may come into possession of Agent or any of Agent's
Affiliates.
12.11. REPRESENTATIONS AND WARRANTIES OF LENDERS. By its execution of
this Agreement, each Lender hereby represents and warrants to Borrower and the
other Lenders that it has the power to enter into and perform its obligations
under this Agreement and the other Loan Documents, and that it has taken all
necessary and appropriate action to authorize its execution and performance of
this Agreement and the other Loan Documents to which it is a party, each of
which will be binding upon it and the obligations imposed upon it herein or
therein will be enforceable against it in accordance with the respective terms
of such documents.
12.12. THE REQUIRED LENDERS. As to any provisions of this Agreement
or the other Loan Documents under which action may or is required to be taken
upon direction or approval of the Required Lenders, the direction or approval of
the Required Lenders shall be binding upon each Lender to the same extent and
with the same effect as if each Lender had joined therein. Notwithstanding
anything to the contrary contained in this Agreement, Borrower shall not be
deemed to be a beneficiary of, or be entitled to enforce, ▇▇▇ upon or assert as
a defense to any of the Obligations, any provisions of this Agreement that
requires Agent or any Lender to act, or conditions their authority to act, upon
the direction or consent of the Required Lenders; and any action taken by Agent
or any Lender that requires the consent or direction of the Required Lenders as
a condition to taking such action shall, insofar as Borrower is concerned, be
presumed to have been taken with the requisite consent or direction of the
Required Lenders.
12.13. SEVERAL OBLIGATIONS. The obligations and commitments of each
Lender under this Agreement and the other Loan Documents are several and neither
Agent nor any Lender shall be responsible for the performance by the other
Lenders of its obligations or commitments hereunder or thereunder.
Notwithstanding any liability of Lenders stated to be joint and several to third
Persons under any of the Loan Documents, such liability shall be shared, as
among Lenders, Pro Rata according to the respective Commitments of Lenders.
12.14. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to lend under this Agreement, the Loans made by it and each Note
issued to it, Agent shall have the same rights and powers hereunder and under
the other Loan Documents as any other Lender or holder of a Note and may
exercise the same as though it were not performing the duties specified herein;
and the terms "Lenders," "Required Lenders," or any similar term shall, unless
the context clearly otherwise indicates, include Agent in its capacity as a
Lender. Agent and its Affiliates may each accept deposits from, maintain
deposits or credit balances for, invest in, lend money to, act as trustee under
indentures of, serve as financial advisor to, and generally engage in any kind
of business with Borrower or any other Obligor, or any affiliate of Borrower or
any other Obligor, as if it were any other bank and without any duty to
account therefor (or for any fees or other consideration received in connection
therewith) to the other Lenders. Fleet or its Affiliates may receive information
regarding Borrower or Borrower's Affiliates and Account Debtors (including
information that may be subject to confidentiality obligations in favor of
Borrower or any of its Affiliates) and Lenders acknowledge that neither Agent
nor Fleet shall be under any obligation to provide such information to Lenders
to the extent acquired by Fleet in its individual capacity and not as Agent
hereunder.
12.15. THIRD PARTY BENEFICIARIES. This SECTION 12 is not intended to
confer any rights or benefits upon Borrower or any other Person except Lenders
and Agent, and no Person (including Borrower) other than Lenders and Agent shall
have any right to enforce any of the provisions of this SECTION 12 except as
expressly provided in SECTION 12.17 hereof. As between Borrower and Agent, any
action that Agent may take or purport to take on behalf of Lenders under any of
the Loan Documents shall be conclusively presumed to have been authorized and
approved by Lenders as herein provided.
12.16. NOTICE OF TRANSFER. Agent may deem and treat a Lender party to
this Agreement as the owner of such Lender's portion of the Revolver Loans for
all purposes, unless and until a written notice of the assignment or transfer
thereof executed by such Lender has been received by Agent.
12.17. REPLACEMENT OF CERTAIN LENDERS. If a Lender ("Affected
Lender") shall have (i) failed to fund its Pro Rata share of any Revolver Loan
requested (or deemed requested) by Borrower which such Lender is obligated to
fund under the terms of this Agreement and which such failure has not been
cured, (ii) requested compensation from Borrower under SECTION 2.7 to recover
increased costs incurred by such Lender (or its parent or holding company) which
are not being incurred generally by the other Lenders (or their respective
parents or holding companies), or (iii) delivered a notice pursuant to SECTION
2.6 hereof claiming that such Lender is unable to extend LIBOR Loans to Borrower
for reasons not generally applicable to the other Lenders, then, in any such
case and in addition to any other rights and remedies that Agent, any other
Lender or Borrower may have against such Affected Lender, Borrower or Agent may
make written demand on such Affected Lender (with a copy to Agent in the case of
a demand by Borrower and a copy to Borrower in the case of a demand by Agent)
for the Affected Lender to assign, and such Affected Lender shall assign
pursuant to one or more duly executed Assignment and Acceptances within 5
Business Days after the date of such demand, to one or more Lenders willing to
accept such assignment or assignments, or to one or more Eligible Assignees
designated by Agent, all of such Affected Lender's rights and obligations under
this Agreement (including its Commitments and all Loans owing to it) in
accordance with SECTION 13 hereof. Agent is hereby irrevocably authorized to
execute one or more Assignment and Acceptances as attorney-in-fact for any
Affected Lender which fails or refuses to execute and deliver the same within 5
Business Days after the date of such demand. The Affected Lender shall be
entitled to receive, in cash and concurrently with execution and delivery of
each such Assignment and Acceptance, all amounts owed to the Affected Lender
hereunder or under any other Loan Document, including the aggregate outstanding
principal amount of the Revolver Loans owed to such Lender, together with
accrued interest thereon through the date of such assignment. Upon the
replacement of any Affected Lender pursuant to this SECTION 12.17, such Affected
Lender shall cease to have any participation in, entitlement to, or other right
to share in the Liens of Agent in any Collateral and such Affected Lender shall
have no further liability to Agent, any Lender or any other Person under any of
the Loan Documents (except as provided in SECTION 12.6 hereof as to events or
transactions which occur prior to the replacement of such Affected Lender),
including any commitment to make Loans or purchase participations in LC
Obligations.
12.18. REMITTANCE OF PAYMENTS AND COLLECTIONS.
12.8.1 All payments by any Lender to Agent shall be made not
later than the time set forth elsewhere in this Agreement on the Business Day
such payment is due; provided, however, that if such payment is due on demand by
Agent and such demand is made on the paying Lender after 12:00 noon on such
Business Day, then payment shall be made by 12:00 noon on the next Business Day.
Payment by Agent to any Lender shall be made by wire transfer, promptly
following Agent's receipt of funds for the account of such Lender and in the
type of funds received by Agent; provided, however, that if Agent receives such
funds at or prior to 1:00 p.m., Agent shall pay such funds to such Lender by
2:00 p.m. on such Business Day, but if Agent receives such funds after 1:00
p.m., Agent shall pay such funds to such Lender by 2:00 p.m. on the next
Business Day.
12.8.2 With respect to the payment of any funds from Agent
to a Lender or from a Lender to Agent, the party failing to make full payment
when due pursuant to the terms hereof shall, on demand by the other party, pay
such amount together with interest thereon at the Federal Funds Rate. In no
event shall Borrower be entitled to receive any credit for any interest paid by
Agent to any Lender, or by any Lender to Agent, at the Federal Funds Rate as
provided herein.
12.8.3 If Agent pays any amount to a Lender in the belief or
expectation that a related payment has been or will be received by Agent from an
Obligor and such related payment is not received
by Agent, then Agent shall be entitled to recover such amount from each Lender
that receives such amount. If Agent determines at any time that any amount
received by it under this Agreement or any of the other Loan Documents must be
returned to an Obligor or paid to any other Person pursuant to any Applicable
Law, court order or otherwise, then, notwithstanding any other term or condition
of this Agreement or any of the other Loan Documents, Agent shall not be
required to distribute such amount to any Lender.
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
13.1. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of Borrower, Agent and Lenders and their respective
successors and assigns (which, in the case of Agent, shall include any successor
Agent appointed pursuant to SECTION 12.8 hereof), except that (i) Borrower shall
not have the right to assign its rights or delegate performance of any of its
obligations under any of the Loan Documents and (ii) any assignment by any
Lender must be made in compliance with SECTION 13.3 hereof. Agent may treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
such payee complies with SECTION 13.3 in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the transfer is filed
with Agent. Any assignee or transferee of a Note agrees by acceptance thereof to
be bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the holder of a Note, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
13.2. PARTICIPATIONS.
13.2.1 Permitted Participants; Effect. Any Lender may, in
the ordinary course of its business and in accordance with Applicable Law, at
any time sell to one or more banks or other financial institutions (each a
"Participant") participating interest in any of the Obligations owing to such
Lender, any Commitment of such Lender or any other interest of such Lender under
any of the Loan Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the holder of any Note for all purposes under the Loan
Documents, all amounts payable by Borrower under this Agreement and any of the
Notes shall be determined as if such Lender had not sold such participating
interests, and Borrower and Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents. If a Lender sells a participation to a Person other than an
Affiliate of such Lender, then such Lender shall give prompt written notice
thereof to Borrower and the other Lenders.
13.2.2. Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than an
amendment, modification or waiver with respect to any Loans or Commitment in
which such Participant has an interest which forgives principal, interest or
fees or reduces the stated interest rate or the stated rates at which fees are
payable with respect to any such Loan or Commitment, postpones the Commitment
Termination Date, or any date fixed for any regularly scheduled payment of
interest or fees on such Loan or Commitment, or releases from liability Borrower
or any Guarantor or releases any substantial portion of any of the Collateral.
13.2.3. Benefit of Set-Off. Borrower agrees that each
Participant shall be deemed to have the right of set-off provided in SECTION
11.4 hereof in respect of its participating interest in amounts owing under the
Loan Documents to the same extent and subject to the same requirements under
this
Agreement (including SECTION 12.5) as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents,
provided that each Lender shall retain the right of set-off provided in SECTION
11.4 hereof with respect to the amount of participating interests sold to each
Participant. Lenders agree to share with each Participant, and each Participant
by exercising the right of set-off provided in SECTION 11.4 agrees to share with
each Lender, any amount received pursuant to the exercise of its right of
set-off, such amounts to be shared in accordance with SECTION 12.5 hereof as if
each Participant were a Lender.
13.2.4. Notices. Each Lender shall be solely responsible for
notifying its Participants of any matters relating to the Loan Documents to the
extent that any such notice may be required, and neither Agent nor any other
Lender shall have any obligation, duty or liability to any Participant of any
other Lender. Without limiting the generality of the foregoing, neither Agent
nor any Lender nor Borrower shall have any obligation to give notices or to
provide documents or information to a Participant of another Lender.
13.3. ASSIGNMENTS.
13.3.1 Permitted Assignments. Subject to its giving at least
5 Business Days notice to Agent and Borrower, any Lender may, in accordance with
Applicable Law, at any time assign to any Eligible Assignee all or any part of
its rights and obligations under the Loan Documents, so long as (i) each
assignment is of a constant, and not a varying, ratable percentage of all of the
transferor Lender's rights and obligations under the Loan Documents with respect
to the Revolver Loans, LC Obligations, 1995 Bonds and Term Loan and, in the case
of a partial assignment, is in a minimum principal amount of $2,500,000 (unless
otherwise agreed by Agent in its sole discretion) and integral multiples of
$500,000 in excess of that amount; (ii) except in the case of an assignment in
whole of a Lender's rights and obligations under the Loan Documents or an
assignment by one original signatory to this Agreement to another such
signatory, immediately after giving effect to any assignment, the aggregate
amount of the Commitments retained by the transferor Lender shall in no event be
less than $5,000,000 (unless otherwise agreed by Agent in its sole discretion);
and (iii) the parties to each such assignment shall execute and deliver to
Agent, for its acceptance and recording, an Assignment and Acceptance. The
consent of Agent shall be required prior to an assignment becoming effective
with respect to an Eligible Assignee that is not a Lender or an Affiliate of a
Lender. Nothing contained herein shall limit in any way the right of Lenders to
assign (i) with the prior written consent of Agent (not to be unreasonably
withheld or delayed) to any Eligible Assignee all of their rights and
obligations under the Loan Documents or (ii) all or any portion of the Loans
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors and any
Operating Circular issued by such Federal Reserve Bank, provided that in the
case of this clause (ii) any payment in respect of such assigned Loans made by
Borrower to the assigning Lender in accordance with the terms of this Agreement
shall satisfy Borrower's obligations hereunder in respect of such assigned Loans
to the extent of such payment, but no such assignment shall release the
assigning Lender from its obligations hereunder. Notwithstanding anything to the
contrary contained in this SECTION 13.3.1, when the consent of Agent is required
under this SECTION 13.3.1 (or pursuant to the definition of "Eligible
Assignee"), such consent of Agent shall not be unreasonably withheld.
13.3.2. Effect; Effective Date. Upon (i) delivery to Agent of
a notice of assignment substantially in the form attached as EXHIBIT I hereto,
together with any consents required by SECTION 13.3.1, and (ii) payment of a
$5,000 fee to the Agent for processing any assignment to an Eligible Assignee
that is not an Affiliate of the transferor Lender or an original signatory
hereto, such assignment shall become effective on the effective date specified
in such notice of assignment. On and after the effective date of such
assignment, such Eligible Assignee shall for all purposes be a Lender party to
the Agreement and any other Loan Document executed by the Lenders and shall have
all the rights and
obligations of the Lender under the Loan Documents to the same extent as if it
were an original party thereto, and no further consent or action by Borrower,
Lenders or Agent shall be required to release the transferor Lender with respect
to the Commitment (or portion thereof) of such Lender and Obligations assigned
to such Eligible Assignee. Upon the consummation of any assignment to an
Eligible Assignee pursuant to this SECTION 13.3.2, the transferor Lender, Agent
and Borrower shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate, replacement
Notes, are issued to such Eligible Assignee, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such
assignment. If the transferor Lender shall have assigned all of its interests,
rights and obligations under this Agreement pursuant to SECTION 13.3.1 hereof,
such transferor Lender shall no longer have any obligation to indemnify Agent
with respect to any transactions, events or occurrences that transpire after the
effective date of such assignment, and each Eligible Assignee to which such
transferor shall make an assignment shall be responsible to Agent to indemnify
Agent in accordance with this Agreement with respect to transactions, events and
occurrences transpiring on and after the effective date of such assignment to
it.
13.3.3. Dissemination of Information. Borrower authorizes
each Lender and Agent to disclose to any Participant, any Eligible Assignee or
any other Person acquiring an interest in the Loan Documents by operation of law
(each a "Transferee"), and any prospective Transferee, any and all information
in Agent's or such Lender's possession concerning Borrower, the Subsidiaries of
Borrower or the Collateral, subject to appropriate confidentiality undertakings
on the part of such Transferee.
13.4. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee that is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of SECTION 4.10 hereof.
SECTION 14. MISCELLANEOUS
14.1. POWER OF ATTORNEY. Borrower hereby irrevocably designates,
makes, constitutes and appoints Agent (and all Persons designated by Agent) as
Borrower's true and lawful attorney (and agent-in-fact) and Agent, or Agent's
designee, may, without notice to Borrower and in either Borrower's or Agent's
name, but at the cost and expense of Borrower:
14.1.1. At such time or times as Agent or said designee, in
its sole discretion, may determine, endorse Borrower's name on any Payment Item
or proceeds of the Collateral which come into the possession of Agent or under
Agent's control.
14.1.2. At any time that an Event of Default exists: (i)
demand payment of the Accounts from the Account Debtors, enforce payment of the
Accounts by legal proceedings or otherwise, and generally exercise all of
Borrower's rights and remedies with respect to the collection of the Accounts;
(ii) settle, adjust, compromise, discharge or release any of the Accounts or
other Collateral or any legal proceedings brought to collect any of the Accounts
or other Collateral; (iii) sell or assign any of the Accounts and other
Collateral upon such terms, for such amounts and at such time or times as Agent
deems advisable; (iv) take control, in any manner, of any item of payment or
proceeds relating to any Collateral; (v) prepare, file and sign Borrower's name
to a proof of claim in bankruptcy or similar document against any Account Debtor
or to any notice of Lien, assignment or satisfaction of Lien or similar document
in connection with any of the Collateral; (vi) receive, open and dispose of all
mail addressed to Borrower and to notify postal authorities to change the
address for delivery thereof to such address as Agent may designate; (vii)
endorse the name of Borrower upon any of the items of payment or proceeds
relating to any Collateral and deposit the same to the account of Agent on
account of the Obligations; (viii) endorse the name of such Borrower upon any
chattel paper, document, instrument,
invoice, freight ▇▇▇▇, ▇▇▇▇ of lading or similar document or agreement relating
to any Accounts or Inventory of any Obligor and any other Collateral; (ix) use
Borrower's stationery and sign the name of Borrower to verifications of the
Accounts and notices thereof to Account Debtors; (x) use the information
recorded on or contained in any data processing equipment and computer hardware
and software relating to the Accounts, Inventory, Equipment or any other
Collateral; (xi) make and adjust claims under policies of insurance; (xii) sign
the name of such Borrower on any proof of claim in bankruptcy against Account
Debtors and on notices of Liens, claims of mechanic's Liens or assignments or
releases of mechanic's Liens securing any Accounts; (xiii) take all action as
may be necessary to obtain the payment of any letter of credit or banker's
acceptance of which Borrower is a beneficiary; and (xiv) do all other acts and
things necessary, in Agent's determination, to fulfill Borrower's obligations
under this Agreement.
14.2. GENERAL INDEMNITY. Borrower hereby agrees to indemnify and
defend the Indemnitees against and to hold the Indemnitees harmless from any
Claim ever suffered or incurred by any of the Indemnitees that arises out of or
relates to this Agreement or any of the other Loan Documents, any transactions
entered into pursuant to any of the Loan Documents, Lender's Lien upon the
Collateral, or the performance by Agent or Lenders of their duties or the
exercise of any of their rights or remedies under this Agreement or any of the
other Loan Documents, or that results from Borrower's failure to observe,
perform or discharge any of its duties hereunder. Without limiting the
generality of the foregoing, this indemnity shall extend to any Claims asserted
against or incurred by any of the Indemnitees by any Person under any
Environmental Laws or similar laws by reason of Borrower's or any other Person's
failure to comply with laws applicable to solid or hazardous waste materials or
other toxic substances. Additionally, if any Taxes (excluding Taxes imposed upon
or measured solely by the net income of Agent and Lenders, but including, any
intangibles tax, stamp tax, recording tax or franchise tax) shall be payable by
Agent or any Obligor on account of the execution or delivery of this Agreement,
or the execution, delivery, issuance or recording of any of the other Loan
Documents, or the creation or repayment of any of the Obligations hereunder, by
reason of any Applicable Law now or hereafter in effect, Borrower will pay (or
will promptly reimburse Agent and Lenders for the payment of) all such Taxes,
including any interest and penalties thereon, and will indemnify and hold
Indemnitees harmless from and against all liability in connection therewith. The
foregoing indemnities shall not apply to Claims incurred by any of the
Indemnitees as a direct and proximate result of their own gross negligence or
willful misconduct or that arise out of any disputes arising solely out of the
relationship between Agent and any Lender.
14.3. SURVIVAL OF ALL INDEMNITIES. Notwithstanding anything to the
contrary in this Agreement or any of the other Loan Documents, the obligation of
Borrower and each Lender with respect to each indemnity given by it in this
Agreement, whether given by Borrower to Agent Indemnitees, Lender Indemnitees or
Fleet Indemnitees or by any Lender to any Agent Indemnitees or Fleet
Indemnitees, shall survive the payment in full of the Obligations and the
termination of any of the Commitments.
14.4. MODIFICATION OF AGREEMENT. This Agreement may not be modified,
altered or amended, except by an agreement in writing signed by Borrower and
Agent and Lenders (or, where otherwise expressly allowed by Section 12.9.1
hereof, the Required Lenders in lieu of Agent and Lenders); provided, however,
that no consent, written or otherwise, of Borrower shall be necessary or
required in connection with any amendment of any of the provisions of SECTIONS
1.3.2, 3.1.3, 4.6, OR 12 (other than SECTION 12.17) or any other provision of
this Agreement that affects only the rights, duties and responsibilities of
Lenders and Agent as among themselves so long as no such amendment imposes any
additional obligations on Borrower.
14.5. SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
14.6. CUMULATIVE EFFECT; CONFLICT OF TERMS. The provisions of the
Other Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Without limiting the generality of the foregoing,
the parties acknowledge that this Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the same or
similar matters and that such limitations, tests and measures are cumulative and
each must be performed, except as may be expressly stated to the contrary in
this Agreement. Except as otherwise provided in any of the other Loan Documents
by specific reference to the applicable provision of this Agreement, if any
provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
14.7. EXECUTION IN COUNTERPARTS. This Agreement and any amendments
hereto may be executed in any number of counterparts and by different parties
hereto in separate counterparts (including by facsimile transmission), each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts taken together shall constitute but one and the same
instrument.
14.8. CONSENT. Except as otherwise expressly provided herein,
whenever Agent's, Lenders' or Required Lenders' consent is required to be
obtained under this Agreement or any of the other Loan Documents as a condition
to any action, inaction, condition or event, Agent and each Lender shall be
authorized to give or withhold its consent in its sole and absolute discretion
and to condition its consent upon the giving of additional collateral security
for the Obligations, the payment of money or any other matter.
14.9. NOTICES. All notices, requests and demands to or upon a party
hereto shall be in writing and shall be sent by certified or registered mail,
return receipt requested, personal delivery against receipt or by telecopier or
other facsimile transmission and shall be deemed to have been validly served,
given or delivered when delivered against receipt or, in the case of facsimile
transmission, when received (if on a Business Day and, if not received on a
Business Day, then on the next Business Day after receipt) at the
office where the noticed party's telecopier is located, in each case addressed
to the noticed party at the address shown for such party on the signature page
hereof or, in the case of a Person who becomes a Lender after the date hereof,
at the address shown on the Assignment and Acceptance by which such Person
became a Lender. Notwithstanding the foregoing, no notice to or upon Agent
pursuant to SECTIONS 1.3, 2.1.2, 3.1 OR 5.2.2 shall be effective until after
actually received by the individual to whose attention at Agent such notice is
required to be sent. Any written notice, request or demand that is not sent in
conformity with the provisions hereof shall nevertheless be effective on the
date that such notice, request or demand is actually received by the individual
to whose attention at the noticed party such notice, request or demand is
required to be sent.
14.10. PERFORMANCE OF BORROWER'S OBLIGATIONS. If Borrower shall fail
to discharge any covenant, duty or obligation hereunder or under any of the
other Loan Documents, Agent may, in its sole discretion at any time or from time
to time, for Borrower's account and at Borrower's expense, pay any amount or do
any act required of Borrower hereunder or under any of the other Loan Documents
or otherwise lawfully requested by Agent to enforce any of the Loan Documents or
Obligations, preserve, protect, insure or maintain any of the Collateral, or
preserve, defend, protect or maintain the validity or priority of Agent's Liens
in any of the Collateral, including the payment of any judgment against
Borrower, any insurance premium, any warehouse charge, any finishing or
processing charge, any landlord claim, or any other Lien upon or with respect to
any of the Collateral. All payments that Agent may make under this Section and
all out-of-pocket costs and expenses (including Extraordinary Expenses) that
Agent pays or incurs in connection with any action taken by it hereunder shall
be reimbursed to Agent by Borrower ON DEMAND with interest from the date such
payment is made or such costs or expenses are incurred to the date of payment
thereof at the Default Rate applicable for Revolver Loans that are Base Rate
Loans. Any payment made or other action taken by Agent under this Section shall
be without prejudice to any right to assert, and without waiver of, an Event of
Default hereunder and to proceed thereafter as provided herein or in any of the
other Loan Documents.
14.11. CREDIT INQUIRIES. Borrower hereby authorizes and permits Agent
and Lenders (but Agent and Lenders shall have no obligation) to respond to usual
and customary credit inquiries from third parties concerning Borrower or any
Subsidiaries.
14.12. TIME OF ESSENCE. Time is of the essence of this Agreement, the
Other Agreements and the Security Documents.
14.13. INDULGENCES NOT WAIVERS. Agent's or any Lender's failure at
any time or times hereafter, to require strict performance by Borrower of any
provision of this Agreement shall not waive, affect or diminish any right of
Agent or any Lender thereafter to demand strict compliance and performance
therewith.
14.14. ENTIRE AGREEMENT; APPENDIX A, EXHIBITS AND SCHEDULES. This
Agreement and the other Loan Documents, together with all other instruments,
agreements and certificates executed by the parties in connection therewith or
with reference thereto, embody the entire understanding and agreement between
the parties hereto and thereto with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings and inducements,
whether express or implied, oral or written. Appendix A, each of the Exhibits
and each of the Schedules attached hereto are incorporated into this Agreement
and by this reference made a part hereof.
14.15. INTERPRETATION. No provision of this Agreement or any of the
other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having, or being deemed to have, structured,
drafted or dictated such provision.
14.16. OBLIGATIONS OF LENDERS SEVERAL. The obligations of each Lender
hereunder are several, and no Lender shall be responsible for the obligations or
Commitment of any other Lender. Nothing contained in this Agreement and no
action taken by Lenders pursuant hereto shall be deemed to constitute the
Lenders to be a partnership, association, joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled, to the extent
not otherwise restricted hereunder, to protect and enforce its rights arising
out of this Agreement and any of the other Loan Documents and it shall not be
necessary for Agent or any other Lender to be joined as an additional party in
any proceeding for such purpose.
14.17. ADVERTISING AND PUBLICITY. With the prior consent of Borrower
(which shall not be unreasonably withheld or delayed), Agent, on behalf of
Lenders, may issue and disseminate to the public (by advertisement or otherwise)
information describing the credit accommodations made available by Lenders
pursuant to this Agreement, including the name and address of Borrower, the
amount and security for the credit accommodations and the general nature of
Borrower's business, provided that detail regarding terms (such as interest
rate) may be provided only to industry publications, such as the "LPC Gold
Sheets."
14.18. CONFIDENTIALITY. EACH OF AGENT AND LENDERS AGREES TO EXERCISE
REASONABLE EFFORTS (AND, IN ANY EVENT, WITH AT LEAST THE SAME DEGREE OF CARE AS
IT ORDINARILY EXERCISES WITH RESPECT TO CONFIDENTIAL INFORMATION OF ITS OTHER
CUSTOMERS) TO KEEP ANY CONFIDENTIAL INFORMATION THAT IS DELIVERED OR MADE
AVAILABLE BY BORROWER TO IT, INCLUDING INFORMATION MADE AVAILABLE TO AGENT OR
ANY LENDER IN CONNECTION WITH A VISIT OR INVESTIGATION BY ANY PERSON
CONTEMPLATED IN SECTION 9.1.1 HEREOF, CONFIDENTIAL FROM ANY PERSON OTHER THAN
THEIR RESPECTIVE AFFILIATES AND INDIVIDUALS EMPLOYED OR RETAINED BY AGENT OR
SUCH LENDER WHO ARE OR ARE EXPECTED TO BECOME ENGAGED IN EVALUATING, APPROVING,
STRUCTURING, ADMINISTERING OR OTHERWISE GIVING PROFESSIONAL ADVICE WITH RESPECT
TO ANY OF THE LOANS OR COLLATERAL (INCLUDING ANY OF THEIR RESPECTIVE LEGAL
COUNSEL, AUDITORS OR OTHER PROFESSIONAL ADVISORS); PROVIDED, HOWEVER, THAT
NOTHING HEREIN SHALL PREVENT AGENT OR ANY LENDER FROM DISCLOSING SUCH
CONFIDENTIAL INFORMATION (i) TO ANY PARTY TO THIS AGREEMENT FROM TIME TO TIME OR
ANY PARTICIPANT, (ii) PURSUANT TO THE ORDER OF ANY COURT OR ADMINISTRATIVE
AGENCY, (iii) UPON THE REQUEST OR DEMAND OF ANY REGULATORY AGENCY OR AUTHORITY
HAVING JURISDICTION OVER AGENT OR SUCH LENDER, (iv) WHICH HAS BEEN PUBLICLY
DISCLOSED OTHER THAN BY AN ACT OR OMISSION OF AGENT OR ANY
LENDER EXCEPT AS PERMITTED HEREIN, (v) TO THE EXTENT REASONABLY REQUIRED IN
CONNECTION WITH ANY LITIGATION (WITH RESPECT TO ANY OF THE LOAN DOCUMENTS OR ANY
OF THE TRANSACTIONS CONTEMPLATED THEREBY) TO WHICH AGENT, ANY LENDER OR THEIR
RESPECTIVE AFFILIATES MAY BE A PARTY, (vi) TO THE EXTENT REASONABLY REQUIRED IN
CONNECTION WITH THE EXERCISE OF ANY REMEDIES HEREUNDER, (vii) TO ANY ACTUAL OR
PROPOSED PARTICIPANT, ASSIGNEE OR OTHER TRANSFEREE OF ALL OR PART OF A LENDER'S
RIGHTS HEREUNDER SO LONG AS SUCH TRANSFEREE HAS AGREED IN WRITING TO BE BOUND BY
THE PROVISIONS OF THIS SECTION, AND (viii) TO THE NATIONAL ASSOCIATION OF
INSURANCE COMMISSIONERS OR ANY SIMILAR ORGANIZATION OR TO ANY NATIONALLY
RECOGNIZED RATING AGENCY THAT REQUIRES ACCESS TO INFORMATION ABOUT A LENDER'S
PORTFOLIO IN CONNECTION WITH RATINGS ISSUED WITH RESPECT TO SUCH LENDER.
14.19. GOVERNING LAW; CONSENT TO FORUM. THIS AGREEMENT HAS BEEN
NEGOTIATED, EXECUTED AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN
ATLANTA, GEORGIA. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA; PROVIDED, HOWEVER, THAT IF ANY
OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN GEORGIA, THE
LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR
FORECLOSURE OF AGENT'S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF AGENT'S
OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH
JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF THE STATE OF
GEORGIA. AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF
ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF BORROWER, ANY
LENDER OR AGENT, BORROWER HEREBY CONSENTS AND AGREES THAT THE SUPERIOR COURT OF
▇▇▇▇ COUNTY, GEORGIA, OR, AT AGENT'S OPTION, THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA, ATLANTA DIVISION, SHALL HAVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES AMONG ANY OR ALL OF BORROWER, AGENT
AND LENDERS PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT. BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND
BORROWER HEREBY WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH BORROWER
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINT AND OTHER PROCESS MAY BE MADE BY CERTIFIED MAIL ADDRESSED TO BORROWER
AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF OR 3 DAYS
AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF AGENT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY
AGENT OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY
ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR
JURISDICTION.
14.20. WAIVERS BY BORROWER. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER WAIVES (i) THE RIGHT TO TRIAL BY JURY (WHICH AGENT AND
EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM
OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE
OBLIGATIONS OR THE COLLATERAL; (ii) PRESENTMENT, DEMAND AND PROTEST AND NOTICE
OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE,
SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS,
CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY
TIME HELD BY AGENT ON WHICH BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY
RATIFIES AND CONFIRMS WHATEVER AGENT MAY DO IN THIS REGARD; (iii) NOTICE PRIOR
TO TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH
MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING AGENT TO EXERCISE ANY OF
AGENT'S REMEDIES; (iv) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION
LAWS; AND (v) NOTICE OF ACCEPTANCE HEREOF. BORROWER ACKNOWLEDGES THAT THE
FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO AGENT'S AND LENDER'S ENTERING
INTO THIS AGREEMENT AND THAT AGENT AND LENDERS ARE RELYING UPON THE FOREGOING
WAIVERS IN ITS FUTURE DEALINGS WITH BORROWER. BORROWER WARRANTS AND REPRESENTS
THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS
KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
14.21. AMENDMENT AND RESTATEMENT. This Agreement amends and restates
the Original Loan Agreement, and is not intended to be or operate as a novation
or an accord and satisfaction of the Original Loan Agreement or the Obligations
evidenced or secured thereby or provided for thereunder.
SECTION 15. GUARANTY.
15.1. GUARANTORS. Each of the Guarantors joins this Agreement for
the purpose of making the guaranty ("Guaranty") as set forth in SECTION 15.2.
15.2. AGREEMENT OF GUARANTY.
15.2.1. To induce Agent and Lenders to make loans or
otherwise extend credit to Borrower from time to time as set forth in this
Agreement, and for other good and valuable consideration, each Guarantor hereby
unconditionally and absolutely guarantees to the Guaranteed Parties the due and
punctual payment, performance and discharge (whether upon stated maturity,
demand, acceleration or otherwise in accordance with the terms thereof) of all
of the Obligations of Borrower or any other Obligor now or hereafter existing,
whether for principal, interest, fees, expenses or otherwise, regardless of
whether recovery upon any of such Obligations becomes barred by any statute of
limitations, is void or voidable under any law relating to fraudulent
obligations or otherwise, is or becomes invalid or unenforceable for any other
reason, or is unrecoverable in any Insolvency Proceeding of an Obligor (whether
pursuant to 11 U.S.C. Section 506 or otherwise).
15.2.2. Each Guarantor does hereby waive: notice of
acceptance hereof; notice of the extension of credit from time to time by any
Guaranteed Party to Borrower and the creation, existence or acquisition of any
Obligations; notice of the amount of Obligations outstanding from time to time,
subject, however, to each Guarantor's right to make inquiry of Agent to
ascertain the amount of Obligations at any reasonable time; notice of any
adverse change in Borrower's financial condition or of any other fact which
might increase such Guarantor's risk; notice of presentment for payment, demand,
protest and notice thereof as to any instrument; notice of any Default, Event of
Default or acceleration and all other notices and demands to which Guarantors
might otherwise be entitled; any defense that Borrower may at any time assert
based upon the invalidity or unenforceability of any of the Loan Documents, the
statute of limitations, the statute of frauds, failure of consideration, fraud,
bankruptcy, lack of legal capacity, usury, or accord and satisfaction; and any
right to contest the commercial reasonableness of the disposition of any or all
Collateral. Each Guarantor further waives any right such Guarantor may have, by
statute or otherwise, to require any of the Guaranteed Parties to institute suit
against Borrower or any other Obligor after notice or demand from Guarantors or
to seek recourse first against Borrower or any other Obligor, or to realize upon
any Collateral, as a condition to enforcing any Guarantor's liability and
obligations hereunder; any defense or claim that any Person purporting to bind
Borrower to the payment of any Obligations did not have actual or apparent
authority to do so; and any right to appraisement, valuation, stay of execution,
or notice of election to declare due the amount of any Obligations of Borrower
with regard to Agent's enforcement of any Lien or other interest Agent, for the
benefit of the Guaranteed Parties, may hold in any real or personal property of
Borrower. To the fullest extent permitted by Applicable Law, each Guarantor
hereby also expressly waives any and all rights or defenses arising by reason of
(i) any "one action" or "anti-deficiency" law which would otherwise prevent any
Guaranteed Party from bringing any action, including any claim for a deficiency,
or exercising any other right or remedy (including any right of setoff) against
such Guarantor before or after the Guaranteed Parties' commencement or
completion of any foreclosure action, whether by judicial action, by exercise of
power of sale or otherwise or (ii) any other law which in any other manner would
otherwise require
any election of remedies by any Guaranteed Party. Except as otherwise prohibited
by Applicable Law, each Guarantor hereby waives any right that it may have to
claim or recover in any litigation respecting this Guaranty any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages. Guarantors shall make all payments hereunder for
the benefit of the Guaranteed Parties, free and clear of, and without deduction
or withholding for or on account of, any setoff, counterclaim, defense, duties,
taxes, levies, imposts, fees, deductions, restrictions or conditions of any
kind.
15.2.3. If Borrower fails to pay any Obligations on the due
date thereof (whether due on demand, at stated maturity, upon acceleration or
otherwise) or any other Event of Default under this Agreement occurs or exists,
then, whether or not any of the Obligations are then due and payable or the
maturity thereof has been accelerated or demand for payment thereof from
Borrower or any other Obligor has been made, all of the Obligations shall, at
the election of Agent, become immediately due and payable hereunder as to
Guarantors and Agent shall be entitled to enforce the obligations of Guarantors
hereunder for the benefit of the Guaranteed Parties. Each Guarantor agrees to
pay all expenses incurred by the Guaranteed Parties in connection with
enforcement of the Guaranteed Parties' rights under this Guaranty, including
court costs, collection charges and reasonable attorneys' fees.
15.2.4. Agent shall have, for the benefit of the Guaranteed
Parties, a Lien upon and right of setoff to any and all credits and any and all
other property of each Guarantor, now or at any time whatsoever with or in the
possession of any of the Guaranteed Parties or anyone holding for any Guaranteed
Party as security for any and all Obligations and the indebtedness and
obligations of Guarantors hereunder.
15.2.5. Each Guarantor consents and agrees that, without
notice to or by such Guarantor and without impairing or otherwise affecting the
liability or obligations of such Guarantor hereunder, the Guaranteed Parties
may: compromise or settle, extend the period of duration or the time for the
payment, discharge or performance of any of the Obligations or increase the
amount of the Obligations; refuse to enforce, or release any Person liable for
payment of, any of the Obligations; increase, decrease or otherwise alter the
rate of interest payable with respect to the Obligations or grant other
indulgences to Borrower in respect thereof; amend or modify in any manner, or
terminate or release, any of the Loan Documents or any other agreements
evidencing, securing or otherwise relating to the Obligations; release,
surrender, exchange, modify or impair any and all Collateral or other property
at any time securing (directly or indirectly) any of the Obligations or on which
the Guaranteed Parties at any time may have a Lien; extend the time of payment
of any Collateral consisting of Accounts or other rights to the payment of
money; refuse to enforce its rights, or make any comprise or settlement or
agreement therefor, in respect of any such Collateral, deposits and property, or
with any party to the Obligations, or with any other Person whatsoever; or
release or substitute any Obligor.
15.2.6. None of the Guaranteed Parties shall be under any
obligation to marshal any assets in favor of Guarantors or against or in payment
of any of the Obligations. If and to the extent any Guaranteed Party receives
any payment on account of any of the Obligations (whether from Borrower or any
other Obligor or from the sale or other disposition of any Collateral) and such
payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other Person in any Insolvency Proceeding or under any
Applicable Law, then the part of the Obligations intended to be satisfied shall
be revived and continued in full force and effect as if said payment had not
been made. The foregoing provisions of this paragraph shall survive any
termination or revocation of this Guaranty.
15.2.7. Any and all present and future debts and obligations
of Borrower to any Guarantor are hereby postponed in favor of and subordinated
to the full and final payment of the
Obligations. The provisions of this Guaranty shall be supplemental to and not in
derogation of any rights and remedies of the Guaranteed Parties or any
affiliates of the Guaranteed Parties under any separate subordination agreement
that the Guaranteed Parties or such affiliate may at any time or from time to
time enter into with any Guarantor.
15.2.8. Each Guarantor represents and warrants to the
Guaranteed Parties that, as of the date of this Guaranty, the fair saleable
value of such Guarantor's assets exceeds its liabilities; such Guarantor is
meeting current liabilities as they mature; the financial statements of such
Guarantor furnished to the Guaranteed Parties pursuant to SECTION 9.1.3 hereof
have been prepared in accordance with GAAP, except, in the case of interim
statements, for the absence of footnotes and normal year-end adjustments, and
fairly present the financial condition and results of operation as of the dates
and for the periods covered; there are not now pending any undischarged
judgments against such Guarantor and no federal or state tax liens have been
filed or threatened against such Guarantor; and such Guarantor is not in default
or claimed default under any agreement for borrowed money. Each Guarantor shall
immediately give Agent written notice of any material adverse change in such
Guarantor's financial condition, including litigation commenced, tax liens
filed, defaults claimed under its indebtedness for borrowed money or Insolvency
Proceedings commenced by or against such Guarantor. At such reasonable times as
Agent requests, each Guarantor shall furnish its current financial statements to
the Guaranteed Parties and permit any Guaranteed Party or its representatives to
inspect such Guarantor's financial records and properties and make copies
thereof or extracts therefrom in order to evaluate the financial condition of
such Guarantor, on reasonable notice, at reasonable times and during normal
business hours.
15.2.9. This Guaranty is a primary, immediate and original
obligation of each Guarantor and is an absolute, unconditional, continuing and
irrevocable guaranty of payment of the Obligations and not of its collectibility
only, is not contingent upon the exercise or enforcement by the Guaranteed
Parties of whatever remedies the Guaranteed Parties may have against Borrower or
otherwise or the enforcement of any Lien or realization upon any Collateral and
shall remain in full force and effect without regard to future changes in
conditions, including change of law or any invalidity or unenforceability of any
of the Obligations or Loan Documents. This Guaranty shall be in addition to any
other present or future guaranty or other security for any of the Obligations,
shall not be prejudiced or unenforceable by the invalidity of any such other
guaranty or security and is not conditioned upon or subject to the execution by
any other Person of this Guaranty or any other guaranty or suretyship agreement.
15.2.10. Agent, for and on behalf of the Guaranteed Parties,
shall have the right to seek recourse against any Guarantor to the full extent
provided for herein and in any other Loan Document and against Borrower and each
other Obligor to the full extent provided for in any of the Loan Documents. No
election to proceed in one form of action or proceeding, or against any party,
or on any obligation, shall constitute a waiver of the Agent's right to proceed
in any other form of action or proceeding against other parties, unless Agent
has expressly waived such right in writing. Specifically, but without limiting
the generality of the foregoing, no action or proceeding by the Guaranteed
Parties against Borrower or any other Obligor under any Loan Document shall
serve to diminish the liability of Guarantors except to the extent the
Guaranteed Parties realized payment by such action or proceeding.
15.2.11. Each Guarantor is fully aware of the financial
condition and business of Borrower. Each Guarantor delivers this Guaranty based
solely upon its own independent investigation and in no part upon any
representation or statement of any of the Guaranteed Parties with respect
thereto. Each Guarantor is in a position to and hereby assumes full
responsibility for obtaining any additional information concerning Borrower's
financial condition as such Guarantor may deem material to such Guarantor's
obligations hereunder and such Guarantor is not relying upon, nor expecting the
Guaranteed Parties to furnish such Guarantor any information in any Guaranteed
Party's possession concerning
Borrower's financial condition, operations or business prospects. Each Guarantor
hereby knowingly accepts the full range of risks encompassed within a contract
of "Guaranty," which risks include, without limitation, the possibility that
Borrower will contract additional Obligations for which such Guarantor may be
liable hereunder after Borrower's financial condition or ability to pay its
lawful debts when they fall due has deteriorated.
15.2.12. The books and records of Agent, showing the amounts
owed to Guaranteed Parties by Borrower, shall be admissible in evidence in any
action or proceeding against or involving Guarantors as prima facie proof of the
items therein set forth, and the monthly statements of Agent rendered to
Borrower, to the extent to which no written objection is made within 30 days
from the date of sending thereof to Borrower, shall be deemed conclusively
correct and shall constitute an account stated between the Guaranteed Parties
and Borrower and shall be binding on Guarantors.
15.2.13. Each Guarantor agrees that this Guaranty shall
continue in full force and effect until all of the Obligations have been fully
paid and discharged (or, in the case of Obligations that are Contingent
Obligations, cash collateralized to Agent's satisfaction) and all Commitments of
Lenders have been terminated. If for any reason Borrower has no legal existence
or is under no legal obligation to discharge any of the Obligations, or if any
of the Obligations have become unrecoverable from Borrower by reason of any
Insolvency Proceeding or by other operation of law or for any other reason, this
Guaranty shall nevertheless be binding upon each Guarantor. If acceleration of
the time for payment of any of the Obligations is stayed as the result of any
Insolvency Proceeding or any other reason, all such amounts otherwise subject to
acceleration under the terms of the Loan Documents shall be immediately due and
payable by Guarantors.
15.2.14. To the fullest extent permitted by Applicable Law,
each Guarantor hereby waives the right to revoke or terminate this Guaranty
prior to payment in full of the Obligations and termination of the Commitments;
but, if the foregoing waiver shall be ineffective under Applicable Law, then
each Guarantor agrees that any revocation or termination of this Guaranty, to be
effective, must be in a writing signed by such Guarantor specifically referring
to this Guaranty and actually received by an officer of Agent who is familiar
with this Guaranty and Borrower's account with the Guaranteed Parties. Any such
termination or revocation shall not affect the right and power of Agent, for the
benefit of Guaranteed Parties, to enforce the Obligations and other rights
arising, incurred or contracted for prior to Agent's receipt of such written
notice of termination or revocation and this Guaranty shall continue to be
effective with respect to all such Obligations. If Guaranteed Parties make loans
or other extensions of credit to or for the benefit of Borrower or take other
action after the termination or revocation by any Guarantor, but prior to
Agent's receipt of notice of termination or revocation, then the rights of the
Guaranteed Parties with respect thereto shall be the same as if such termination
or revocation had not occurred.
15.2.15. All rights, benefits and privileges herein and hereby
conferred upon Agent shall vest in and be enforceable by Agent and its
successors and assigns. This Guaranty shall be binding upon each Guarantor and
upon their respective successors and assigns.
15.2.16. To the extent any performance of this Guaranty would
violate any usury statute or other Applicable Law, the obligation to be
fulfilled shall be reduced to the limit legally permitted, so that this Guaranty
shall not require any performance in excess of the limit legally permitted, but
such obligations shall be fulfilled to the limit of the legal validity. The
provisions of this paragraph shall control every other provision of this
Guaranty.
15.2.17. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE GOVERNED, CONSTRUED AND INTERPRETED ACCORDING TO THE
INTERNAL LAWS OF THE STATE OF GEORGIA. AS PART
OF THE CONSIDERATION FOR THE GUARANTEED PARTIES' GRANTING CREDIT TO BORROWER,
EACH GUARANTOR HEREBY AGREES THAT ALL ACTIONS, SUITS OR PROCEEDINGS ARISING
DIRECTLY OR INDIRECTLY HEREUNDER MAY, AT THE OPTION OF AGENT, BE LITIGATED IN
COURTS HAVING SITUS WITHIN THE STATE OF GEORGIA, AND EACH GUARANTOR HEREBY
EXPRESSLY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED
WITHIN SAID STATE, AND CONSENTS THAT ANY SERVICE OF PROCESS IN WHICH ACTION OR
PROCEEDINGS MAY BE MADE BY PERSONAL SERVICE UPON SUCH GUARANTOR WHEREVER SUCH
GUARANTOR MAY BE THEN LOCATED, OR BY CERTIFIED OR REGISTERED MAIL DIRECTED TO
SUCH GUARANTOR AT SUCH GUARANTOR'S LAST KNOWN ADDRESS.
15.2.18. This Guaranty expresses the entire understanding of
the parties hereto with respect to the subject matter hereof and may not be
changed orally, and no obligations of any Guarantor can be released or waived by
any of the Guaranteed Parties, except by a writing signed by a duly authorized
officer of Agent.
15.2.19. Until all of the Obligations have been paid in full
and the Commitments have been terminated, no Guarantor shall have a claim, right
or remedy (whether or not arising in equity, by contract or Applicable Law)
against Borrower or any other Person by reason of such Guarantor's payment or
other performance hereunder. Without limiting the generality of the foregoing,
each Guarantor hereby waives and renounces any and all legal or equitable rights
or claims that such Guarantor may have to reimbursement, subrogation, indemnity
and exoneration and agrees that such Guarantor shall have no recourse to any
assets or property of Borrower (including any Collateral) and no right of
recourse against or contribution from any other Person in any way directly or
contingently liable for any of the Obligations, whether any of such rights arise
under contract, in equity or under Applicable Law, until all of the Obligations
have been paid in full and the Commitments have been terminated.
15.2.20. Each Guarantor hereby waives any and all rights or
defenses based on, and understands and agrees that such Guarantor's liability as
guarantor shall not be impaired or affected by, an election of remedies by Agent
and Lenders, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed
such Guarantor's rights of subrogation and reimbursement against the principal
by the operation of Section 580d of the California Code of Civil Procedure or
otherwise, or the foreclosure of any of the security for the Loans, including
without limitation the security described in the Mortgages, or such Guarantor's
right to a fair value hearing under Section 580a of the California Code of Civil
Procedure following the nonjudicial foreclosure of the Mortgages or any other
deed of trust on the Property held by Agent and Lenders, it being intended that
this Guaranty shall survive the realization upon any of the security for the
Loans, including without limitation the security described in the Mortgages,
including without limitation nonjudicial foreclosure notwithstanding any
defense, right, or claim that any such foreclosure satisfied the obligations
secured thereby. Each Guarantor agrees that the payment of all sums payable
under this Agreement, the Notes or any of the other Loan Documents or any part
thereof or other act which tolls any statute of limitations applicable to the
Notes or the other Loan Documents shall similarly operate to toll the statute of
limitations applicable to such Guarantor's liability hereunder. Without limiting
the generality of the foregoing or any other provision hereof, each Guarantor
expressly waives to the extent permitted by law any and all rights and defenses
that such Guarantor may have because Borrower's debt is secured by real
Property. This means, among other things: (1) Agent and Lenders may collect from
each Guarantor without first foreclosing on any security for the Loans (whether
such security is real or personal Property) pledged by Borrower or any other
Obligor; and (2) if Agent and Lenders foreclose on any real Property security
pledged by Borrower or any other Obligor (including without limitation the real
Property described in the Mortgages), (A) the amount of the Obligations may be
reduced only by the price for which that security is sold at the foreclosure
sale, even if the security is worth more than the sale price, (B) Agent and
Lenders may collect from each Guarantor even if Agent and Lenders, by
foreclosing on the real Property security, have destroyed any right such
Guarantor may have to collect from Borrower. This is an unconditional and
irrevocable waiver of any rights and defenses each Guarantor may have because
Borrower's debt is secured by real Property. These rights and defenses include,
but are not limited to, any rights or defenses based upon Section 580a, 580b,
580d, or 726 of the California Code of Civil Procedure, and/or Sections 2787 to
2855, inclusive, 2899 and 3433 of the California Civil Code, or any of such
sections.
15.2.21. Notwithstanding any provision herein contained to the
contrary, such Guarantor's liability under this Guaranty shall be limited to an
amount not to exceed as of any date of determination the greater of:
(a) the net amount of all Loans and other
extensions of credit (including Letters of Credit) advanced under this Agreement
and directly or indirectly re-loaned or otherwise transferred to, or incurred
for the benefit of, such Guarantor, plus interest thereon at the rate specified
in this Agreement; or
(b) the amount which could be claimed by the
Agent and Lenders from such Guarantor under this Guaranty without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law after taking into
account, among other things, such Guarantor's right of contribution and
indemnification from the Borrower.
15.2.22. (a) To the extent that any Guarantor shall make a
payment under this Guaranty of all or any of the Obligations (a "GUARANTOR
PAYMENT") which, after taking into account all other Guarantor Payments then
previously or concurrently made by the other Guarantors, exceeds the amount
which such Guarantor would otherwise have paid if each Guarantor had paid the
aggregate Obligations satisfied by such Guarantor Payment in the same proportion
that such Guarantor's "ALLOCABLE AMOUNT" (as defined below) (in effect
immediately prior to such Guarantor Payment) bore to the aggregate Allocable
Amounts of all of Guarantors in effect immediately prior to the making of such
Guarantor Payment, then, following indefeasible payment in full in cash of the
Obligations and termination of the Commitments, such Guarantor shall be entitled
to receive contribution and indemnification payments from, and be reimbursed by,
each of the other Guarantors for the amount of such excess, pro rata based upon
their respective Allocable Amounts in effect immediately prior to such Guarantor
Payment.
(b) As of any date of determination, the
"ALLOCABLE AMOUNT" of any Guarantor shall be equal to the maximum amount of the
claim which could then be recovered from such Guarantor under this Guaranty
without rendering such claim voidable or avoidable under Section 548 of Chapter
11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent
Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common
law.
(c) This SECTION 15.2.22 is intended only to
define the relative rights of Guarantors and nothing set forth in this SECTION
15.2.22 is intended to or shall impair the obligations of Guarantors, jointly
and severally, to pay any amounts as and when the same shall become due and
payable in accordance with the terms of this Guaranty.
(d) The rights of the parties under this SECTION
15.2.22 shall be exercisable upon the full and indefeasible payment of the
Obligations and the termination of this Agreement and the other Loan Documents.
(e) The parties hereto acknowledge that the
rights of contribution and indemnification hereunder shall constitute assets of
any Guarantor to which such contribution and indemnification is owing.
15.2.23. Each Guarantor hereby ratifies and reaffirms its
grant of a security interest and Lien in favor of Agent for the benefit of
itself as Agent, the Lenders and the other Secured Parties, in all property of
such Guarantor described in and pursuant to the Guarantor Security Agreements
and that certain Fifth Amendment to Loan and Security Agreement dated June 30,
2003, among Borrower, Guarantors, Agent and Original Lenders, and each Guarantor
hereby grants and regrants to Agent, for the benefit of itself as Agent, the
Lenders and the other Secured Parties, a continuing security interest in and
Lien upon all of such Guarantor's assets, including all of the following
Property and interests in Property of such Guarantor, whether now owned or
existing or hereafter created, acquired or arising and wheresoever located:
(i) All "accounts" as defined in the
UCC, including all of such Guarantor's now owned or hereafter
acquired accounts and all other rights to payment for goods
sold or leased or for services rendered which are not
evidenced by an instrument or chattel paper, whether or not
they have been earned by performance;
(ii) All "inventory" as defined in the
UCC, including all goods intended for sale or lease by such
Guarantor, to be furnished by such Guarantor under contracts
of service, or for display or demonstration; all work in
process; all raw materials and other materials and supplies of
every nature and description used or which might be used in
connection with the manufacture, printing, packing, shipping,
advertising, selling, leasing or furnishing of such goods or
otherwise used or consumed in such Guarantor's business; and
all documents evidencing and general intangibles relating to
any of the foregoing, whether now owned or hereafter acquired
by such Guarantor;
(iii) All "letter-of-credit rights" as
defined in the UCC;
(iv) All "supporting obligations" as
defined in the UCC;
(v) All "commercial tort claims" as
defined in the UCC;
(vi) All of such Guarantor's machinery,
apparatus, equipment, fittings, furniture, fixtures, motor
vehicles and other tangible personal Property (other than
Inventory) of every kind and description, whether now owned or
hereafter acquired by such Guarantor and wherever located, and
all parts, accessories and special tools therefor, all
accessions thereto, and all substitutions and replacements
thereof;
(vii) All "instruments" as defined in the
UCC;
(viii) All "chattel paper", including
"electronic chattel paper" and "tangible chattel paper" (as
all defined in the UCC);
(ix) All "documents" as defined in the
UCC;
(x) All general intangibles of such
Guarantor, whether now owned or hereafter created or acquired
by such Guarantor, including all choses in action, causes of
action, company or other business records, inventions,
blueprints, designs, patents, patent applications, trademarks,
trademark applications, trade names, trade secrets, service
marks, goodwill, brand names, copyrights, registrations,
licenses, franchises, customer lists, permits, tax refund
claims, computer programs, operational manuals, internet
addresses and domain names, insurance refunds and premium
rebates, all claims under guaranties, security interests or
other security held by or granted to such Guarantor
to secure payment of any of any of such Guarantor's accounts
by an account debtor, and all rights to indemnification, and
including all "payment intangibles" and all "software" as
defined in the UCC;
(xi) All "deposit accounts" as defined
in the UCC;
(xii) All "investment property" as
defined in the UCC (but excluding any portion thereof that
constitutes Margin Stock unless otherwise expressly provided
in any Security Documents);
(xiii) All monies now or at any time or
times hereafter in the possession or under the control of
Agent or a Lender or a bailee or Affiliate of Agent or a
Lender, including any Cash Collateral in the Cash Collateral
Account;
(xiv) All accessions to, substitutions
for and all replacements, products and cash and non-cash
proceeds of (i) through (xiii) above, including proceeds of
and unearned premiums with respect to insurance policies
insuring any of the Collateral and claims against any Person
for loss of, damage to or destruction of any of the
Collateral; and
(xv) All books and records (including
customer lists, files, correspondence, tapes, computer
programs, print-outs, and other computer materials and
records) of such Guarantor pertaining to any of (i) through
(xiv) above.
15.2.24 As used herein, all references to "Guarantors" shall
mean Guarantors and their respective successors and assigns (including any
receiver, trustee or custodian for any Guarantor or any of its assets or any
Guarantor in its capacity as debtor or debtor-in-possession under the United
States Bankruptcy Code).
15.2.25. GUARANTOR AND AGENT EACH HEREBY WAIVES THE RIGHT TO A
JURY TRIAL IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATED TO THIS GUARANTY.
[Remainder of page intentionally left blank; signatures begin on following
page]
IN WITNESS WHEREOF, this Agreement has been duly executed in Atlanta,
Georgia, on the day and year specified at the beginning of this Agreement.
BORROWER:
ATTEST: THE ▇▇▇▇▇ GROUP, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------- -------------------------------------
Assistant Secretary Chairman
[CORPORATE SEAL] By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President and
Chief Financial Officer
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
GUARANTORS:
ATTEST: FABRICA INTERNATIONAL, INC.,
FORMERLY KNOWN AS FABRICA INTERNATIONAL
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------- By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary -------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
[CORPORATE SEAL] ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: BRETLIN, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------- -------------------------------------
Assistant Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
[CORPORATE SEAL] ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: CANDLEWICK YARNS, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------- -------------------------------------
Assistant Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
[CORPORATE SEAL] Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTEST: CHROMA TECHNOLOGIES, INC
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------- -------------------------------------
Assistant Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
[CORPORATE SEAL] ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
ATTEST: ▇▇▇▇▇ GROUP LOGISTICS, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------- -------------------------------------
Assistant Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
[CORPORATE SEAL] ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
ATTEST: MASLAND CARPETS, LLC
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------- -------------------------------------
Assistant Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
[CORPORATE SEAL] ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President
LENDER AND AGENT:
FLEET CAPITAL CORPORATION, as Lender
and as Agent
Revolver Commitment: $40,000,000.00 By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Term Loan A Commitment: $18,520,812.40 ---------------------------------
Term Loan C Commitment: $1,479,187.60 Senior Vice President
LIBOR Lending Office:
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Office Head
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
APPENDIX A
GENERAL DEFINITIONS
When used in the Amended and Restated Loan and Security Agreement dated
April 14, 2004 (as at any time amended, the "Agreement"), by and among THE ▇▇▇▇▇
GROUP, INC., a Tennessee corporation ("Borrower"), each of the Subsidiaries of
Borrower, as guarantors ("Guarantors"); each financial institution listed on the
signature pages attached thereto and its successors and assigns which become
"Lenders" as provided therein (such financial institutions and their respective
successors and assigns referred to collectively herein as "Lenders" and
individually as a "Lender"), and FLEET CAPITAL CORPORATION (together with its
successors and assigns, "Agent"), in its capacity as collateral and
administrative agent for itself and the Lenders, the following terms shall have
the following meanings (terms defined in the singular to have the same meaning
when used in the plural and vice versa):
Accounts - shall have the meaning ascribed to "account" in the UCC and
shall include all of Borrower's now owned or hereafter acquired accounts and all
other rights to payment for goods sold or leased or for services rendered which
are not evidenced by an Instrument or Chattel Paper, whether or not they have
been earned by performance.
Account Debtor - a Person who is or becomes obligated under or on
account of an Account.
Accounts Formula Amount - on any date of determination thereof, an
amount equal to the lesser of (i) the Revolver Commitments on such date or (ii)
the sum of: (x) 85% of the net amount of Eligible Accounts on such date and (y)
85% of the Factor Credit Balances on such date. As used herein, the phrase "net
amount of Eligible Accounts" shall mean the face amount of such Accounts on any
date less any and all returns, rebates, discounts (which may, at Agent's option,
be calculated on shortest terms), credits, allowances or Taxes (including sales,
excise or other taxes) at any time issued, owing, claimed by Account Debtors,
granted, outstanding or payable in connection with, or any interest accrued on
the amount of, such Accounts at such date.
Adjusted LIBOR Rate - with respect to each Interest Period for a LIBOR
Loan, an interest rate per annum (rounded upwards, to the next 1/16th of 1%)
equal to the quotient of (a) the LIBOR Rate in effect for such Interest Period
divided by (b) a percentage (expressed as a decimal) equal to 100% minus
Statutory Reserves.
Adjusted Net Earnings - with respect to any fiscal period, means the
net earnings (or loss) for such fiscal period of Borrower, all as reflected on
the financial statement of Borrower supplied to Lender pursuant to SECTION 9.1.3
hereof, but excluding: (i) any pre-tax gain or loss arising from the sale or
write-down of capital assets; (ii) any pre-tax gain or loss arising from any
write-up or write-down of assets or any write-down of goodwill during such
period; (iii) pre-tax earnings of any Subsidiary accrued prior to the date it
became a Subsidiary; (iv) non-cash pre-tax earnings or losses of any Person,
substantially all the assets of which have been acquired in any manner by
Borrower, realized by such Person prior to the date of such acquisition; (v) net
pre-tax earnings of any entity (other than a Subsidiary of Borrower) in which
Borrower has an ownership interest unless such net pre-tax earnings have
actually been received by Borrower in the form of Cash Distributions; (vi) any
portion of the net pre-tax earnings of any Subsidiary which for any reason is
unavailable for payment of Distributions to Borrower; (vii) the pre-tax earnings
of any Person to which any assets of Borrower shall have been sold, transferred
or disposed of, or into which Borrower shall have merged, or been a party to any
consolidation or other form of reorganization, prior to the date of such
transaction; (viii) any pre-tax gain arising from the acquisition of any
Securities of
Borrower; and (ix) any pre-tax gain arising from extraordinary or non-recurring
items or as otherwise agreed to by Lenders as non-recurring, all as determined
in accordance with GAAP.
Affiliate - a Person (other than a Subsidiary or Chroma Systems): (i)
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, another Person; (ii) which
beneficially owns or holds 20% or more of any class of the Equity Interests of a
Person; or (iii) 20% or more of the Equity Interests with power to vote of which
is beneficially owned or held by another Person or a Subsidiary of another
Person. For purposes hereof, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of any Equity Interest, by
contract or otherwise.
Agent Indemnitees - Agent in its capacity as collateral and
administrative agent for the Lenders under the Loan Documents and all of Agent's
present and future officers, directors, employees, agents and attorneys.
Agreement - the Amended and Restated Loan and Security Agreement
referred to in the first sentence of this Appendix A, all Exhibits and Schedules
thereto and this Appendix A.
Anti-Terrorism Laws - any laws relating to terrorism or money
laundering, including Executive Order No. 13224 and the USA Patriot Act.
Applicable Law - all laws, rules and regulations applicable to the
Person, conduct, transaction, covenant, Loan Document or Material Contract in
question, including all applicable common law and equitable principles; all
provisions of all applicable state, federal and foreign constitutions, statutes,
rules, regulations and orders of governmental bodies; and orders, judgments and
decrees of all courts and arbitrators.
Applicable Margin - a percentage equal to zero with respect to Revolver
Loans that are Base Rate Loans, 2.25% with respect to Revolver Loans that are
LIBOR Loans, 0.25% with respect to each Term Loan Advance made or outstanding as
a Base Rate Loan, 2.75% with respect to each Term Loan Advance made or
outstanding as a LIBOR Loan, and .375% with respect to unused line fees payable
to Lenders pursuant to Section 2.2; provided that, commencing with Agent's
receipt of the financial statements described in SECTION 9.1.3(ii) of the
Agreement for the period ended March 27, 2004, the Applicable Margin shall be
increased or (if no Default or Event of Default exists) decreased, based upon
the Leverage Ratio, as follows:
Applicable Margin For:
---------------------------------------------------------------------------------------------------
Unused Line
Level Leverage Ratio Revolver Loans Term Loan Fee
---------------------------------------------------------------------------------------------------
Base Rate LIBOR Base Rate LIBOR
---------------------------------------------------------------------------------------------------
I Greater than 5.0 to .75% 3.00% 1.00% 3.50% .375%
1.0
---------------------------------------------------------------------------------------------------
II If less than or .50% 2.75% .75% 3.25% .375%
equal to 5.0 to 1.0
but greater than
4.0 to 1.0
---------------------------------------------------------------------------------------------------
III If less than or .25% 2.5% .50% 3.00% .375%
equal to 4.0 to 1.0
but greater than
3.50 to 1.0
---------------------------------------------------------------------------------------------------
IV If less than or 0 2.25% 0.25% 2.75% .375%
equal to 3.50 to
1.0 but greater
than 3.0 to 1.0
---------------------------------------------------------------------------------------------------
V If less than or 0 2.00% 0 2.50% .375%
equal to 3.00 to
1.0
---------------------------------------------------------------------------------------------------
The Applicable Margin shall be subject to reduction or increase, as
applicable and as set forth in the table above, on a quarterly basis
according to the performance of Borrower as measured by the Leverage
Ratio for the immediately preceding 4 Fiscal Quarters of Borrower.
Except as set forth in the last sentence hereof, any such increase or
reduction in the Applicable Margin provided for herein shall be
effective 3 Business Days after receipt by Agent of the applicable
financial statements and corresponding Compliance Certificate. If the
financial statements and the Compliance Certificate of Borrower setting
forth the Leverage Ratio are not received by Agent by the date required
pursuant to SECTION 9.1.3 of the Agreement, the Applicable Margin shall
be determined as if the Leverage Ratio exceeds 5.0 to 1.0 until such
time as such financial statements and Compliance Certificate are
received and any Event of Default resulting from a failure timely to
deliver such financial statements or Compliance Certificate is waived
in writing by Agent and Lenders; provided, however, that nothing herein
shall be deemed to prevent Agent and Lenders from charging interest at
the Default Rate at any time that an Event of Default exists.
Asset Sale - the sale by Borrower, Candlewick, Bretlin and ▇▇▇▇▇
Logistics pursuant to a certain Asset Purchase Agreement, dated as of September
4, 2003, among each of them and ▇▇▇▇, and the subsequent asset sale to ▇▇▇▇
pursuant to an Asset Purchase Agreement dated December 5, 2003 of the ▇▇▇▇▇
plant, pursuant to which they sold certain assets and liabilities with respect
to their North Georgia operations, and ▇▇▇▇ purchased such assets and assumed
such liabilities.
Assignment and Acceptance - an assignment and acceptance entered into
by a Lender and an Eligible Assignee and accepted by Agent, in the form of
EXHIBIT H.
Availability - on any date, the amount that Borrower is entitled to
borrow as Revolver Loans on such date, such amount being the difference derived
when the sum of the principal amount of Revolver Loans then outstanding
(including any amounts that Agent or Lenders may have paid for the account of
Borrower pursuant to any of the Loan Documents and that have not been reimbursed
by Borrower and any outstanding Settlement Loans) is subtracted from the
Borrowing Base on such date. If the amount outstanding is equal to or greater
than the Borrowing Base, Availability is zero.
Availability Reserve - on any date of determination thereof, an amount
equal to the sum of the following (without duplication): (i) a reserve for
general inventory shrinkage, whether as a result of theft or otherwise, that is
determined by Agent from time to time in its reasonable credit judgment based
upon Borrower's historical losses due to such shrinkage; (ii) all amounts of
past due payments, fees or other charges owing at such time by any Obligor to
any processor, repairman, mechanic or other Person who is in possession of any
Collateral or has asserted any Lien or claim thereto; (iii) any amounts which
any Obligor is obligated to pay pursuant to the provisions of any of the Loan
Documents that Agent or any Lender elects to pay for the account of such Obligor
in accordance with authority contained in any of the Loan Documents; (iv) the LC
Reserve; (v) any amount received by Agent from the Business Interruption
Insurance Assignment and applied to the Revolver Loans; (vi) aggregate amount of
reserves established by Agent in its reasonable discretion in respect of ACH
(automated clearinghouse) transfers or obligations of Borrower under any
Interest Rate Contract; (vii) the Rent Reserve; (viii) the Factor Reserve; (ix)
the Interest Rate Swap Reserve; (x) the Environmental Reserve; (xi) the ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇; and (xii) such additional reserves or adjustments to reserves, in
such amounts and with respect to such matters, as Agent in its reasonable credit
judgment may elect to impose from time to time.
Average Revolver Loan Balance - for any period, the amount obtained by
adding the aggregate of the unpaid balance of Revolver Loans and LC Obligations
at the end of each day for the period in question and by dividing such sum by
the number of days in such period.
Bank - Fleet National Bank and its successors and assigns.
Banking Relationship Debt - Debt or other obligations of Borrower
relating to or arising out of (i) checking and operating account relationships
between Borrower and Bank (or any Affiliate of Bank), including any obligations
under Cash Management Agreements, and (ii) Hedging Agreements with Bank (or any
Affiliate of Bank).
Bankruptcy Code - title 11 of the United States Code.
Base Rate - on any date, the greater of (i) the Prime Rate on such date
or (ii) the Federal Funds Rate on such date plus .50%.
Base Rate Loan - a Loan, or portion thereof, during any period in which
it bears interest at a rate based upon the Base Rate.
Blended OLV Percentages - with respect to Eligible Inventory, the
inventory percentages referenced on EXHIBIT K attached hereto, which percentages
may be revised from time to time in Agent's reasonable credit judgment based
upon Agent's receipt and review of the most recent Orderly Liquidation Value
Appraisal, subject to Agent's and Required Lenders' approval of any increase in
such percentages.
Board - the Board of Directors of Borrower or a committee of two or
more directors lawfully exercising the relevant powers of the Board.
Board of Governors - the Board of Governors of the Federal Reserve
System.
Bond Documents - collectively, the 1991 Bond Documents, the 1995 Bond
Documents and the 2000 Real Estate Transaction Documents.
Bond Purchase Agreement - shall have the meaning ascribed to such term
in the 1995 Bond.
1991 Bonds - $2,300,000 The Industrial Development Board of the City of
Atmore (Alabama) Industrial Development Revenue Bonds (Masland Carpets, Inc.
Project), Series 1991.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ - as defined in SECTION 1.1.7 of the Agreement.
1995 Bonds - State Industrial Development Authority (Alabama)
$7,000,000 Taxable Revenue Bonds, Series 1995 (Masland Carpets, Inc. Project).
1991 Bond Documents - the 1991 Bonds and any and all agreements,
instruments or documents executed in connection therewith or pursuant thereto.
1995 Bond Documents - the 1995 Bonds and any and all agreements,
instruments or documents executed in connection therewith or pursuant thereto.
1995 Bond Obligations - all obligations, indebtedness and liabilities
now or hereafter owing by Borrower under any of the 1995 Bond Documents.
Borrowing - a borrowing consisting of Loans of one Type made on the
same day by Lenders (or by Fleet in the case of a Borrowing funded by Settlement
Loans) or a conversion of a Loan or Loans of one Type from Lenders on the same
day.
Borrowing Base - on any date of determination thereof, an amount equal
to the lesser of: (a) the aggregate amount of the Revolver Commitments on such
date minus the LC Obligations on such date, or (b) an amount equal to (i) the
sum of the Accounts Formula Amount plus the Inventory Formula Amount on such
date minus (ii) the Availability Reserve on such date.
Borrowing Base Certificate - a certificate, in the form of EXHIBIT L
attached hereto or such other form as may be requested by Agent from time to
time, by which Borrower shall certify to Agent and Lenders, with such frequency
as Agent may request, the amount of the Borrowing Base as of the date of the
certificate (which date shall be not more than three Business Days earlier than
the date of submission of such certificate to Agent) and the calculation of such
amount.
Bretlin - Bretlin, Inc., a Georgia corporation with its chief executive
office and principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇.
Business Day - any day excluding Saturday, Sunday and any other day
that is a legal holiday under the laws of the State of Georgia or is a day on
which banking institutions located in such state are closed; provided, however,
that when used with reference to a LIBOR Loan (including the making, continuing,
prepaying or repaying of any LIBOR Loan), the term "Business Day" shall also
exclude any day on which banks are not open for dealings in Dollar deposits on
the London interbank market.
Business Interruption Insurance Assignment - the Collateral Assignment
of Business Interruption Insurance executed by Borrower on or after the Original
Closing Date in favor of Agent, in form and substance satisfactory to Agent, as
security for the payment of the Obligations.
Candlewick - Candlewick Yarns, Inc., a Tennessee corporation with its
chief executive office and principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
Capital Expenditures - expenditures made or liabilities incurred for
the acquisition of any fixed assets or improvements, replacements, substitutions
or additions thereto which have a useful life of more than one year, including
the total principal portion of Capitalized Lease Obligations.
Capitalized Lease Obligation - any Debt represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP.
Cash Collateral - cash or Cash Equivalents, and any interest earned
thereon, that is deposited with Agent in accordance with the Agreement for the
Pro Rata benefit of Lenders as security for the Obligations.
Cash Collateral Account - a demand deposit, money market or other
account established by Agent at such financial institution as Agent may select
in its discretion, which account shall be in Agent's name and subject to Agent's
Liens for the Pro Rata benefit of Lenders.
Cash Distributions - an amount equal to the cash received by Borrower
from non-Consolidated entities.
Cash Equivalents - (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government having maturities of not
more than 12 months from the date of acquisition; (ii) domestic certificates of
deposit and time deposits having maturities of not more than 12 months from the
date of acquisition, bankers' acceptances having maturities of not more than 12
months from the date of acquisition and overnight bank deposits, in each case
issued by any commercial bank organized under the laws of the United States, any
state thereof or the District of Columbia, which at the time of acquisition are
rated A-1 (or better) by S&P or P-1 (or better) by ▇▇▇▇▇'▇, and (unless issued
by a Lender) not subject to offset rights in favor of such bank arising from any
banking relationship with such bank; (iii) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in
clauses (i) and (ii) entered into with any financial institution meeting the
qualifications specified in clause (ii) above; and (iv) commercial paper having
at the time of investment therein or a contractual commitment to invest therein
a rating of A-1 (or better) by S&P or P-1 (or better) by ▇▇▇▇▇'▇, and having a
maturity within 9 months after the date of acquisition thereof.
Cash Management Agreements - any agreement entered into from time to
time between Borrower or any of its Subsidiaries, on the one hand, and Bank or
any of its Affiliates or any other banking or financial institution, on the
other, in connection with cash management services for operating, collections,
payroll and trust accounts of Borrower or its Subsidiaries provided by such
banking or financial institution, including automatic clearinghouse services,
controlled disbursement services, electronic funds transfer services,
information reporting services, lockbox services, stop payment services and wire
transfer services.
CERCLA - the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq. and its implementing regulations.
Change of Control - (i) the ▇▇▇▇▇▇▇▇ Family shall cease to have Control
of Borrower; or (ii) Borrower shall cease to own and control 100% of the Equity
Interests of any of C-Knit, Fabrica, Bretlin, Chroma or Masland; or (iii)
Bretlin shall cease to own and control 100% of the Equity Interests of any of
Candlewick or ▇▇▇▇▇ Logistics.
Chattel Paper - shall have the meaning given to" chattel paper" in the
UCC.
Chroma - Chroma Technologies, Inc., a California corporation.
Chroma Systems - Chroma Systems Partners, a California general
partnership.
C-Knit - C-Knit Apparel, Inc., a Tennessee corporation.
Claims - any and all claims, demands, liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, awards, remedial response costs,
expenses or disbursements of any kind or nature whatsoever (including reasonable
attorneys', accountants', consultants' or paralegals' fees and expenses),
whether arising under or in connection with the Loan Documents, any Applicable
Law (including any Environmental Laws) or otherwise, that may now or hereafter
be suffered or incurred by a Person and whether suffered or incurred in or as a
result of any investigation, litigation, arbitration or other judicial or
non-judicial proceeding or any appeals related thereto.
Closing Date - the date on which all of the conditions precedent in
SECTION 10 of the Agreement are satisfied and the initial Loans are made under
the Agreement.
Collateral - all of the Property and interests in Property described in
SECTION 6 of the Agreement, all other Property and interests in Property
described in any of the Security Documents as security for the payment or
performance of any of the Obligations; and all other Property and interests in
Property that now or hereafter secure (or are intended to secure) the payment
and performance of any of the Obligations.
Commercial Tort Claim - as defined in the UCC.
Commitment - at any date for any Lender, the aggregate amount of such
Lender's Revolver Commitment and Term Loan Commitment on such date, and
"Commitments" means the aggregate amount of all Revolver Commitments and Term
Loan Commitments.
Commitment Termination Date - the date that is the soonest to occur of
(i) the last day of the Original Term; (ii) the date on which either Borrower or
Agent terminates the Commitments pursuant to SECTION 5.2 of the Agreement; or
(iii) the date on which the Commitments are automatically terminated pursuant to
SECTION 11.2 of the Agreement.
Compliance Certificate - a Compliance Certificate to be provided by
Borrower to Agent in accordance with, and in the form annexed as EXHIBIT F to,
the Agreement, and the supporting schedules to be annexed thereto.
Consolidated - the consolidation in accordance with GAAP of the
accounts or other items as to which such term applies.
▇▇▇▇▇▇▇▇▇▇▇ Arbitration Award - the arbitration award entered on
November 21, 2003 against Borrower and Bretlin in favor of ▇▇▇▇▇▇▇▇▇▇▇ Dyeing,
LLC and Product Concepts Residential, LLC in the amount of $1,774,160.51, as may
be supplemented for additional damages and interest for the period from May 1,
2003 through November 21, 2003.
Contingent Obligation - with respect to any Person, any obligation of
such Person arising from any guaranty, indemnity or other assurance of payment
or performance of any Debt, lease, dividend or other obligation ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the Ordinary Course of
Business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (ii) the obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement, (iii) any obligation of such Person,
whether or not contingent, (A) to purchase any such primary obligation or any
Property constituting direct or indirect security therefor, (B) to advance or
supply funds (1) for the purchase or payment of any such primary obligations or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (C) to
purchase Property, Securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (D) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term "Contingent Obligation" shall not include any
product warranties extended in the Ordinary Course of Business. The amount of
any Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation with respect to which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
Control or controlled by or under common control - possession, directly
or indirectly, of the power to direct or cause the direction of management or
policies (whether through ownership of Voting Stock, by contract or otherwise,
but not solely by being an officer or director of that Person); provided,
however, that in any event any Person which beneficially owns, directly or
indirectly, 20% or more (in number of votes) of the Equity Interests having
ordinary Voting Power with respect to a corporation shall be conclusively
presumed to control such corporation.
Controlled Disbursement Account - a demand deposit account maintained
by Borrower at Bank and to which proceeds of Loans will be wired from time to
time.
Convertible Debentures - the unsecured 7% Convertible Subordinated
Debentures due 2012 issued pursuant to the Indenture.
Copyright Security Agreement - collectively, (i) that certain Copyright
Security Agreement dated May 14, 2002, from Borrower to Agent, pursuant to which
Borrower has granted to Agent a Lien in its copyrights as security for the
Obligations, and (ii) that certain Copyright Security Agreement dated June 15,
2003, from Masland to Agent, pursuant to which Masland has granted to Agent a
Lien in its copyrights as security for the Obligations.
Credit Risk - with respect to any Factored Account, the risk that such
Account is not paid, in whole or in part, due to the Account Debtor's financial
inability to pay.
Current Assets - at any date, the amount at which all of the current
assets of a Person would be properly classified as current assets shown on a
balance sheet at such date in accordance with GAAP except that amounts due from
Affiliates and investments in Affiliates shall be excluded therefrom.
Debt - as applied to a Person means, without duplication: (i) all items
which in accordance with GAAP would be included in determining total liabilities
as shown on the liability side of a balance sheet of such Person as of the date
as of which Debt is to be determined, including Capitalized Lease Obligations;
(ii) all Contingent Obligations of such Person; (iii) all reimbursement
obligations in connection with letters of credit or letter of credit guaranties
issued for the account of such Person; (iv) in
the case of Borrower, the Obligations; and (v) sale-leaseback, securitization
and similar off-balance sheet liabilities. The Debt of a Person shall include
any recourse Debt of any partnership or joint venture in which such Person is a
general partner or joint venturer.
Debt Coverage Ratio - for any period, the ratio of (a) Borrower's total
Funded Debt, to (b) Borrower's EBITDA.
Debt Principal Payments - with respect to any Funded Debt, any
principal repayments made or required to be made on account of Funded Debt;
provided, that any repayment of Revolver Loans shall not be a Debt Principal
Payment unless such principal repayment results in a permanent reduction of the
Revolver Commitments to the extent permitted in the Agreement.
Default - an event or condition the occurrence of which would, with the
lapse of time or the giving of notice, or both, become an Event of Default.
Default Rate - on any date, a rate per annum that is equal to (i) in
the case of each Loan outstanding on such date, 2.0% in excess of the rate
otherwise applicable to such Loan on such date, (ii) in the case of LC
Obligations, 2.0% in excess of the rate otherwise applicable to Letters of
Credit on such date, and (iii) in the case of any of the other Obligations
outstanding on such date, 2.0% plus the highest Applicable Margin for Base Rate
Loans plus the Base Rate in effect on such date.
Deposit Account Assignment - the Collateral Assignment of Deposit
Accounts executed by Borrower on or before the Original Closing Date in favor of
Agent for itself and the Pro Rata benefit of Lenders as security for the
Obligations.
Deposit Accounts - all of a Person's demand, time, savings, passbook,
money market or other depository accounts, and all certificates of deposit,
maintained by such Person with any bank, savings and loan association, credit
union or other depository institution.
Distribution - in respect of any entity, (i) any payment of any
dividends or other distributions on Equity Interests of the entity (except
distributions in such Equity Interests) and (ii) any purchase, redemption or
other acquisition or retirement for value of any Equity Interests of the entity
or any Affiliate of the entity unless made contemporaneously from the net
proceeds of the sale of Equity Interests.
Distribution Conditions - the following conditions, the satisfaction of
each of which shall be a condition to any Distribution under SECTION 9.2.7(ii)
of the Agreement:
(i) No Default or Event of Default exists at the time of such
payment or would result therefrom;
(ii) Borrower is Solvent at the time of and after giving effect to
such payment; and
(iii) Such redemption would not violate Applicable Law.
▇▇▇▇▇ Logistics - ▇▇▇▇▇ Group Logistics, Inc., a Georgia corporation.
Document - shall have the meaning given to" document" in the UCC.
Dollar Equivalent - with respect to any monetary amount in any foreign
currency at any date for the determination thereof, the amount of Dollars
obtained by converting such foreign currency into
Dollars at the spot rate for the purchase of Dollars with such foreign currency
as quoted by Bank at approximately 12:00 noon (Atlanta, Georgia time) on the
date of determination thereof.
Dollars and the sign $ - lawful money of the United States of America.
Domestic Subsidiary - a Subsidiary of Borrower that is incorporated
under the laws of a state or territory of the United States or the District of
Columbia.
Dominion Account - a special account of Agent established by Borrower
at a bank selected by Borrower, but acceptable to Agent and Lenders in their
discretion, and over which Agent shall have sole and exclusive access and
control for withdrawal purposes.
Due from Factor Report - a report prepared by Borrower that reflects
the amount of Factored Accounts on such date.
EBITDA - for any fiscal period of Borrower, an amount equal to the sum
for such fiscal period of (i) Adjusted Net Earnings, plus (ii) provision for
taxes based on income, plus (iii) Interest Expense, plus (iv) depreciation,
amortization plus other non-cash charges to the extent deducted in calculating
Adjusted Net Earnings.
Electronic Chattel Paper - shall have the meaning given to "electronic
chattel paper" in the UCC.
Eligible Account - an Account which arises in the Ordinary Course of
Business of an Eligible Obligor's business from the sale of goods, is payable in
Dollars, is subject to Agent's duly perfected Lien, and is deemed by Agent, in
its sole credit judgment, to be an Eligible Account. Without limiting the
generality of the foregoing, no Account shall be an Eligible Account if: (i) it
arises out of a sale made by an Eligible Obligor to a Subsidiary or an Affiliate
of such Eligible Obligor or to a Person controlled by an Affiliate of such
Eligible Obligor; (ii) it is unpaid for more than 60 days after the original due
date shown on the invoice; (iii) it is due or unpaid more than 90 days after the
original in-voice date; (iv) 20% or more of the Accounts from the Account Debtor
(other than with respect to Home Depot, for which such percentage shall be 50%)
are not deemed Eligible Accounts hereunder; (v) the total unpaid Accounts of the
Account Debtor exceed 20% of the aggregate amount of all Eligible Accounts or
exceed a credit limit established by Agent for such Account Debtor, in each case
to the extent of such excess; (vi) any covenant, representation or warranty
contained in the Agreement (including SECTION 8.1.8) with respect to such
Account has been breached; (vii) the Account Debtor is also an Eligible
Obligor's creditor or supplier, or the Account Debtor has disputed liability
with respect to such Account, or the Account Debtor has made any claim with
respect to any other Account due from such Account Debtor to an Eligible
Obligor, or the Account otherwise is or may become subject to any right of
setoff, counterclaim, recoupment, reserve or chargeback, provided that, the
Accounts of such Account Debtor shall be ineligible only to the extent of such
offset, counterclaim, disputed amount, reserve or chargeback; (viii) an
Insolvency Proceeding has been commenced by or against the Account Debtor or the
Account Debtor has failed, suspended business or ceased to be Solvent; (ix) it
arises from a sale to an Account Debtor with its principal office, assets or
place of business outside the United States or Canada (other than the Province
of Quebec), unless the sale is backed by an irrevocable letter of credit issued
or confirmed by a bank acceptable to Agent and that is in form and substance
acceptable to Agent and payable in the full amount of the Account in freely
convertible Dollars at a place of payment within the United States, and, if
requested by Agent, such letter of credit, or amounts payable thereunder, is
assigned to Agent; (x) it arises from a sale to the Account Debtor on a
▇▇▇▇-and-hold, guaranteed sale, sale-or-return, sale-on-approval, consignment or
any other repurchase or return basis; (xi) the Account Debtor is the United
States of America or any department, agency or instrumentality thereof, unless
such Eligible Obligor is not prohibited from assigning the Account and does
assign its right to payment of such Account to Agent, in a
manner satisfactory to Agent, so as to comply with the Assignment of Claims Act
of 1940 (31 U.S.C. Section 3727 and 41 U.S.C. Section 15), or is a state, county
or municipality, or a political subdivision or agency thereof and Applicable Law
disallows or restricts an assignment of Accounts on which it is the Account
Debtor; (xii) the Account Debtor is located in any state which imposes similar
conditions on the right of a creditor to collect accounts receivable unless such
Eligible Obligor has either qualified to transact business in such state as a
foreign entity or filed a Notice of Business Activities Report or other required
report with the appropriate officials in such state for the then current year;
(xiii) the Account Debtor is located in a state in which such Eligible Obligor
is deemed to be doing business under the laws of such state and which denies
creditors access to its courts in the absence of qualification to transact
business in such state or of the filing of any reports with such state, unless
such Eligible Obligor has qualified as a foreign entity authorized to transact
business in such state or has filed all required reports; (xiv) the Account is
subject to a Lien other than a Permitted Lien; (xv) the goods giving rise to
such Account have not been delivered to and accepted by the Account Debtor or
the services giving rise to such Account have not been performed by such
Eligible Obligor and accepted by the Account Debtor or the Account otherwise
does not represent a final sale; (xvi) the Account is evidenced by Chattel Paper
or an Instrument of any kind, or has been reduced to judgment; (xvii) the
Account represents a progress billing or a retainage; (xviii) such Eligible
Obligor has made any agreement with the Account Debtor for any deduction
therefrom, except for discounts or allowances which are made in the Ordinary
Course of Business for prompt payment and which discounts or allowances are
reflected in the calculation of the face value of each invoice related to such
Account; (xix) such Eligible Obligor has made an agreement with the Account
Debtor to extend the time of payment thereof; (xx) the Account represents, in
whole or in part, a billing for interest, fees or late charges, provided that
such Account shall be ineligible only to the extent of the amount of such
billing; (xxi) it arises out of a sale of Inventory consisting of samples;
(xxii) it arises out of a sale on a cash-on-delivery basis; (xxiii) it
constitutes unapplied cash, customer support accruals, customer rebates or
accrued advertising; (xxiv) it constitutes a warranty reserve established by
such Eligible Obligor with respect to potential warranty claims; or (xxv) it
constitutes the differential between the lower of the aging of such Account or
the amount of such Account as reflected on the general ledger of such Eligible
Obligor.
Eligible Assignee - a Lender or a U.S. based Affiliate of a Lender; a
commercial bank, commercial finance institution or insurance company organized
under the laws of the United States or any state that has total assets in excess
of $2 billion and that is acceptable to Agent; and any other Person (except
Borrower or a Guarantor, or an Affiliate of either) approved by Agent and,
unless a Default or an Event of Default exists, Borrower (such approval by Agent
or Borrower, when required, not to be unreasonably withheld, conditioned or
delayed and to be deemed given by Borrower if no objection is received by the
assigning Lender and Agent from Borrower within 2 Business Days after notice of
such proposed assignment has been provided by the assigning Lender as set forth
in SECTION 13.3 of the Agreement).
Eligible Inventory - such Inventory of an Eligible Obligor (other than
samples, packaging materials, labels and supplies) which Agent, in its sole
credit judgment, deems to be Eligible Inventory. Without limiting the generality
of the foregoing, no Inventory shall be Eligible Inventory unless: (i) it is raw
materials (excluding (a) stockroom inventory such as bearings, machine parts and
fuel , and (b) product supply inventory such as cones, tubes, stretch wrap and
cartons), finished goods, or work-in-process that is, in Agent's opinion,
readily marketable in its current form; (ii) it is owned by an Eligible Obligor
and not held by it on consignment or other sale or return terms; (iii) it is in
good, new and saleable condition and is not damaged or defective; (iv) it is not
slow-moving, obsolete or unmerchantable and is not goods returned to an Eligible
Obligor by or repossessed from an Account Debtor; (v) it meets all standards
imposed by any Governmental Authority; (vi) it conforms in all respects to the
warranties and representations set forth in the Agreement; (vii) it is at all
times subject to Agent's duly perfected, first priority security interest and no
other Lien except a Permitted Lien; (viii) it is in an
Eligible Obligor's possession and control at a location in compliance with the
Agreement (including SECTION 7.1.1), is not in transit or outside the
continental United States and is not consigned to any Person unless such Person
has executed a landlord waiver or consignment agreement with Agent in form and
substance satisfactory to Agent in all respects; (ix) it is not the subject of a
negotiable warehouse receipt or other negotiable Document; (x) it is not subject
to any License Agreement or other agreement that limits, conditions or restricts
an Eligible Obligor's or Agent's right to sell or otherwise dispose of such
Inventory unless the Licensor has entered into a Licensor/Lender Agreement with
Agent; and (xi) it is not the subject of an Intellectual Property Claim.
Eligible Obligor - each of Borrower, Candlewick, Fabrica, Bretlin and
Masland.
Environmental Agreement - the Agreement Regarding Environmental Matters
executed by Borrower in favor of Agent on or about the Original Closing Date and
by which Borrower shall, among other things, indemnify Agent and Lenders from
liability for Borrower's failure to comply with any Environmental Laws.
Environmental Laws - all federal, state and local laws, rules,
regulations, codes, ordinances, programs, permits, guidance documents
promulgated by regulatory agencies, orders and consent decrees, now or hereafter
in effect and relating to human health and safety or the protection or pollution
of the environment, including CERCLA.
Environmental Release - a release as defined in CERCLA or under any
applicable Environmental Laws.
Environmental Reserve - a reserve that may be established by Agent from
time to time in its reasonable credit judgment in connection with any actual or
potential remediation under any Environmental Laws.
Equipment - all of Borrower's machinery, apparatus, equipment,
fittings, furniture, fixtures, motor vehicles and other tangible personal
Property (other than Inventory) of every kind and description, whether now owned
or hereafter acquired by Borrower and wherever located, and all parts,
accessories and special tools therefor, all accessions thereto, and all
substitutions and replacements thereof.
Equity Interest - the interest of (i) a shareholder in a corporation,
(ii) a partner (whether general or limited) in a partnership (whether general,
limited or limited liability), (iii) a member in a limited liability company, or
(iv) any other Person having any other form of equity security or ownership
interest.
ERISA - the Employee Retirement Income Security Act of 1974, and all
rules and regulations from time to time promulgated thereunder.
Eurocurrency Liabilities - shall have the meaning ascribed thereto in
Regulation D issued by the Board of Governors.
Event of Default - as defined in SECTION 11 of the Agreement.
Executive Order ▇▇. ▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.
Existing SWAP Agreement - that certain ISDA Master Agreement date as of
March 9, 1998, between SunTrust Bank and Borrower, which Agreement was assigned
to Agent on the Original Closing
Date, and as amended and replaced effective March 11, 2003, by a swap agreement
between Bank and Borrower dated October 18, 2002.
Extraordinary Expenses - all costs, expenses, fees or advances that
Agent or any Lender may suffer or incur, whether prior to or after the
occurrence of an Event of Default, and whether prior to, after or during the
pendency of an Insolvency Proceeding of an Obligor, on account of or in
connection with (i) the audit, inspection, repossession, storage, repair,
appraisal, insuring, completion of the manufacture of, preparing for sale,
advertising for sale, selling, collecting or otherwise preserving or realizing
upon any Collateral; (ii) the defense of Agent's Lien upon any Collateral or the
priority thereof or any adverse claim with respect to the Loans, the Loan
Documents or the Collateral asserted by any Obligor, any receiver or trustee for
any Obligor or any creditor or representative of creditors of any Obligor; (iii)
the settlement or satisfaction of any Liens upon any Collateral (whether or not
such Liens are Permitted Liens); (iv) the collection or enforcement of any of
the Obligations; (v) the negotiation, documentation, and closing of any
restructuring or forbearance agreement with respect to the Loan Documents or
Obligations; (vi) amounts advanced by Agent pursuant to SECTION 7.1.3 of the
Agreement; (vii) the enforcement of any of the provisions of any of the Loan
Documents; or (viii) any payment under a guaranty, indemnity or other payment
agreement provided by Agent or (with Agent's consent) any Lender, which is
reimbursable to Agent or such Lender by Borrower pursuant to SECTION 2.4.2 of
the Agreement. Such costs, expenses and advances may include transfer fees,
taxes, storage fees, insurance costs, permit fees, utility reservation and
standby fees, legal fees, appraisal fees, brokers' fees and commissions,
auctioneers' fees and commissions, accountants' fees, environmental study fees,
wages and salaries paid to employees of Borrower or independent contractors in
liquidating any Collateral, travel expenses, all other fees and expenses payable
or reimbursable by Borrower or any other Obligor under any of the Loan
Documents, and all other fees and expenses associated with the enforcement of
rights or remedies under any of the Loan Documents, but excluding compensation
paid to employees (including inside legal counsel who are employees) of Agent.
Fabrica - Fabrica International, Inc., a California corporation with
its chief executive office and principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Fabrica Purchase Documents - collectively and individually, (i) that
certain Amended and Restated Stock Purchase Agreement dated as of September 8,
2000, by and among Borrower, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇
▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ Charitable Remainder Unitrust and the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Loving Trust (collectively, the "Trusts"), (ii) that certain Pledge and Security
Agreement dated as of July 1, 2000, between Borrower and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
(iii) that certain Pledge and Security Agreement dated as of July 1, 2000,
between Borrower and the Trusts, (iv) that certain Pledge and Security Agreement
dated as of September 8, 2000, by and between Borrower and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and
(v) any and all other agreements, instruments and documents executed in
connection therewith or pursuant hereto.
Factor - SunTrust and each other Person who executes a Factoring
Agreement with Borrower and is approved by Agent and Lenders in writing.
Factor Assignment Agreements - collectively, (i) the Assignment of
Factoring Proceeds dated of even date herewith between Fabrica and Agent, and
consented to by SunTrust, pursuant to which, among other things, Fabrica has
collaterally assigned to Agent and SunTrust has acknowledged the assignment to
Agent of, all sums at any time or times due or to become due from SunTrust under
its Factoring Agreement, and (ii) any and all other assignments of factoring
proceeds acceptable to Agent and executed by Borrower in favor of Agent in
connection with a factoring arrangement of Borrower.
Factor Credit Balances - on any date of determination thereof, an
amount equal to the aggregate of all outstanding Factored Accounts with respect
to which a Factor bears the Credit Risk on such date, minus the sum of any fees,
commissions or other charges due from Borrower to such Factor on such date under
its Factoring Agreement, including any deductions for credit loss sharing, which
amount, on any date of determination thereof, shall be deemed to be, when the
date of determination is the date of a Factor Status Statement, the amount
reflected on such Factor Status Statement as the aggregate balance standing to
the credit of Borrower, and when the date of determination is any other date, an
amount equal to the aggregate balances standing to the credit of Borrower as
reflected on the Due From Factor Report delivered to Agent by Borrower on such
date, or, in the absence of the delivery of a Due From Factor Report on any
date, an amount determined by Agent in sole and absolute discretion.
Factor Intercreditor Agreements - collectively, (i) the Factor
Intercreditor Agreement dated on or about the Original Closing Date herewith
between SunTrust and Agent by which, among other things, such parties have
established the relative priorities of their Liens with respect to Fabrica's
Accounts, and (ii) any and all other intercreditor agreements executed by a
Factor and Agent in connection with a factoring arrangement of Borrower.
Factor Reserve - the amount which at any time may be charged to
Borrower under a Factoring Agreement or withheld from sums otherwise due to
Borrower under a Factoring Agreement, including interest, fees, commissions,
ledger debt and other charges due a Factor under a Factoring Agreement and the
amount of any actual or anticipated disputes or claims arising with respect to
any Factored Account.
Factor Status Statement - an account current statement or similar
report issued by a Factor on a monthly basis (or more frequently if requested by
Agent) under its Factoring Agreement and setting forth the status of the
Factored Accounts under such Factoring Agreement.
Factored Account - an Account factored by a Factor under a Factoring
Agreement and that otherwise constitutes an Eligible Account.
Factoring Agreements - collectively, (i) that certain Factoring
Agreement dated as of November 1, 1980, as amended, between Fabrica and
SunTrust, and (ii) any and all other factoring agreements executed by Borrower
in favor of a Factor.
Federal Funds Rate - for any period, a fluctuating interest rate per
annum equal for each date during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) in
Atlanta, Georgia by the Federal Reserve Bank of Atlanta, or if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by Agent from 3 federal funds brokers
of recognized standing selected by Agent.
Fee Letter - the fee letter agreement between Agent and Borrower dated
March 29, 2002.
FEIN - with respect to any Person, the Federal Employer Identification
Number of such Person.
Fiscal Quarter - each consecutive period of 13 weeks beginning on the
first day of a Fiscal Year (and, in the case of any Fiscal Year of 53 weeks, the
14-week period occurring at the end thereof).
Fiscal Year - the fiscal year of Borrower and its Subsidiaries for
accounting and tax purposes, which ends on or about December 31 of each year.
Fixed Charge Coverage Ratio - for any period, the ratio of (i)
Borrower's EBITDA for such period minus Borrower's Capital Expenditures for such
period (but excluding Capital Expenditures financed with the proceeds of Debt
for Money Borrowed other than Revolver Loans), minus Borrower's cash income
taxes for such period (but excluding the effect of income tax refunds with
respect to prior fiscal periods), minus Distributions made during such period,
minus the effect of income taxes relating to any one-time gain from any sale of
assets, to (ii) regularly scheduled payments of principal and interest on
Borrower's Funded Debt due during such period; provided that expenditures for
fixed assets recorded as a result of the GE Lease shall not be included in the
definition of Capital Expenditures for purposes of this covenant, and provided
further that to the extent that the payment and satisfaction of the ▇▇▇▇▇▇▇▇▇▇▇
Arbitration Award by Borrower would otherwise be deducted from Borrower's EBITDA
as provided therein, for purposes only of computing the Fixed Charge Coverage
Ratio, the amount of such award recognized for accounting purposes up to
$2,200,000 shall not be deducted in the calculation of EBITDA.
Fleet - Fleet Capital Corporation, a Rhode Island corporation, and its
successors and assigns.
Fleet Indemnitees - Fleet and all of its present and future officers,
directors, employees, attorneys and agents.
FLSA - the Fair Labor Standards Act of 1938.
Foreign Subsidiary - a Subsidiary that is not a Domestic Subsidiary.
▇▇▇▇▇▇▇▇ Family - shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, his brothers and their
respective spouses, children and any trusts for the sole benefit of any of the
foregoing Persons.
Funded Debt - collectively, without duplication, (a) the aggregate
principal amount of Debt for Money Borrowed, including Capitalized Lease
Obligations, and all Revolver Loans and (b) all Debt outstanding under any
revolving credit, line of credit or renewals thereof), notwithstanding that any
such Debt is created within one year of the expiration of such agreement.
Funding Account - an account established by Borrower or any of them for
receipt of proceeds of Loans or such other account as Borrower may specify in
writing.
GAAP - generally accepted accounting principles in the United States of
America in effect from time to time.
GE Lease - that certain Master Lease Agreement (Off Balance Sheet -
Synthetic) dated October 14, 2003, between Borrower and General Electric Capital
Corporation in the original principal amount of $9,482,424.98.
General Intangibles - all general intangibles of Borrower, whether now
owned or hereafter created or acquired by Borrower, including all choses in
action, causes of action, company or other business records, inventions,
blueprints, designs, patents, patent applications, trademarks, trademark
applications, trade names, trade secrets, service marks, goodwill, brand names,
copyrights, registrations, licenses, franchises, customer lists, permits, tax
refund claims, computer programs, operational manuals, internet addresses and
domain names, insurance refunds and premium rebates, all claims under
guaranties, security interests or other security held by or granted to Borrower
to secure payment of any of any of Borrower's Accounts by an Account Debtor, all
rights to indemnification and all other intangible property of Borrower of every
kind and nature (other than Accounts).
Goods - shall have the meaning given to "goods" in the UCC.
Governmental Approvals - all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
Governmental Authority - any federal, state, municipal, national,
foreign or other governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the District of
Columbia or a foreign entity or government.
Guarantor Security Agreement - each security agreement executed by a
Guarantor in favor of Agent, for the benefit of Lenders, as security for the
Obligations.
Guarantors - each Subsidiary of Borrower and each other Person who
guarantees payment or performance of the whole or any part of the Obligations.
Guaranty - each guaranty agreement now or hereafter executed by a
Guarantor in favor of Agent with respect to any of the Obligations, including
the guaranty contained in SECTION 15 of the Agreement.
Hedging Agreement - any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
Indemnified Amount - in the case of Agent Indemnitees, the amount of
any loss, cost, expenses or damages suffered or incurred by Agent Indemnitees
and against which Lenders or any Obligor have agreed to indemnify Agent
Indemnitees pursuant to the terms of the Agreement or any of the other Loan
Documents; in the case of Lender Indemnitees, the amount of any loss, cost,
expenses or damages suffered or incurred by Lender Indemnitees and against which
Lenders or any Obligor have agreed to indemnify Lender Indemnitees pursuant to
the terms of the Agreement or any of the other Loan Documents; and, in the case
of Fleet Indemnitees, the amount of any loss, cost, expenses or damages suffered
or incurred by Fleet Indemnitees and against which Lenders or any Obligor have
agreed to indemnify Fleet Indemnitees pursuant to the terms of the Agreement or
any of the other Loan Documents.
Indemnitees - the Agent Indemnitees, the Lender Indemnitees and the
Fleet Indemnitees.
Indenture - that certain Indenture dated as of May 15, 1987, between
▇▇▇▇▇ Yarns, Inc. and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as trustee.
Initial Lender - Fleet in its capacity as the sole Lender on the date
hereof.
Insolvency Proceeding - any action, case or proceeding commenced by or
against a Person, or any agreement of such Person, for (i) the entry of an order
for relief under any chapter of the Bankruptcy Code or other insolvency or debt
adjustment law (whether state, federal or foreign), (ii) the appointment of a
receiver, trustee, liquidator or other custodian for such Person or any part of
its Property, (iii) an assignment or trust mortgage for the benefit of creditors
of such Person, or (iv) the liquidation, dissolution or winding up of the
affairs of such Person.
Instrument - shall have the meaning ascribed to the term "instrument"
in the UCC.
Intellectual Property - Property constituting under any Applicable Law
a patent, patent application, copyright, trademark, service ▇▇▇▇, trade name,
mask work, trade secret or license or other right to use any of the foregoing.
Intellectual Property Claim - the assertion by any Person of a claim
(whether asserted in writing, by action, suit or proceeding or otherwise) that
Borrower's ownership, use, marketing, sale or distribution of any Inventory,
Equipment, Intellectual Property or other Property is violative of any ownership
or other right to use any Intellectual Property of such Person.
Interest Expense - with respect to any Person for any fiscal period,
the sum of (a) interest expense (whether cash or non-cash) of such Person
determined in accordance with GAAP for the relevant period ended on such date,
including (i) amortization of original issue discount on any Indebtedness and of
all fees payable in connection with the incurrence of such Indebtedness (to the
extent included in interest expense); (ii) the interest portion of any deferred
payment obligation; and (iii) the interest component of any Capitalized Lease
Obligation.
Interest Period - shall have the meaning ascribed to it in SECTION
2.1.3 of the Agreement.
Interest Rate Contract - any interest rate agreement, interest rate
collar agreement, interest rate swap agreement, or other agreement or
arrangement at any time entered into by a Borrower with a Lender or Bank that is
designed to protect against fluctuations in interest rates.
Interest Rate Swap Reserve - a reserve that may be established by Agent
and adjusted from time to time by Agent equal to the net present value of such
Hedging Agreement, as calculated by Agent in its sole discretion.
Inventory - shall have the meaning given to "inventory" in the UCC and
shall include all goods intended for sale or lease by Borrower, to be furnished
by Borrower under contracts of service, or for display or demonstration; all
work in process; all raw materials and other materials and supplies of every
nature and description used or which might be used in connection with the
manufacture, printing, packing, shipping, advertising, selling, leasing or
furnishing of such goods or otherwise used or consumed in Borrower's business;
and all Documents evidencing and General Intangibles relating to any of the
foregoing, whether now owned or hereafter acquired by Borrower.
Inventory Formula Amount - on any date of determination thereof, an
amount equal to the lesser of (a) $40,000,000 or (b) 85% multiplied by the sum
of (w) the Blended OLV Percentage of the Value of Eligible Inventory on such
date consisting of finished goods, plus (x) the Blended OLV Percentage of the
Value of Eligible Inventory on such date consisting of work-in-process, plus (y)
the Blended OLV Percentage of the Value of Eligible Inventory on such date
consisting of raw materials, minus (z) liquidation expenses. The percentages
referenced above shall be subject to increase or decrease from time to time, in
Agent's reasonable credit judgment, upon Agent's receipt and review of the most
recent Orderly Liquidation Value Appraisal; provided, that any increase in such
percentages shall require the written consent of the Agent and the Lenders.
Investment Property - shall have the meaning given to "investment
property" in the UCC and shall include all Securities (whether certificated or
uncertificated), security entitlements, securities accounts, commodity contracts
and commodity accounts.
Landlord Waiver - an agreement duly executed in favor of Agent, in form
and content acceptable to Agent, by which an owner or mortgagee of premises upon
which any Property of an Obligor is located agrees to waive or subordinate any
Lien it may have with respect to such Property in favor of Agent's Lien therein
and to permit Agent to enter upon such premises and to remove such Property or
to use such premises to store or dispose of such Property.
LC Application - an application by Borrower to Bank (on which Fleet may
be a co-applicant), pursuant to a form approved by Bank, for the issuance of a
Letter of Credit, that is submitted to Bank at least 2 Business Days prior to
the requested issuance of such Letter of Credit.
LC Conditions - the following conditions, the satisfaction of each of
which is required before Fleet shall be obligated to provide any LC Support to
Bank for the issuance of a Letter of Credit: (i) each of the conditions set
forth in SECTION 10 of the Agreement has been and continues to be satisfied,
including the absence of any Default or Event of Default; (ii) after giving
effect to the issuance of the requested Letter of Credit and all other unissued
Letters of Credit for which an LC Application has been signed by Borrower, the
LC Outstandings would not exceed $10,000,000 and no Out-of-Formula Condition
would exist, and, if no Revolver Loans are outstanding, the LC Outstandings do
not, and would not upon the issuance of the requested Letter of Credit, exceed
the Borrowing Base; (iii) such Letter of Credit has an expiration date less than
the 10th Business Day prior to the last Business Day of the Original Term or
(without regard to the effect of an "evergreen" or automatic renewal provision)
365 days from the date of issuance in the case of standby letters of credit and
150 days from the date of issuance in the case of documentary letters of
credit); and (iv) the currency in which payment is to be made under the Letter
of Credit is Dollars.
LC Documents - any and all agreements, instruments and documents (other
than an LC Application or an LC Support) required by Bank to be executed by
Borrower or any other Person and delivered to Bank for the issuance of a Letter
of Credit.
LC Facility - a subfacility of the Revolver Facility established
pursuant to SECTION 1.3 of the Agreement.
LC Obligations - on any date of determination thereof, an amount (in
Dollars) equal to the sum of (i) all amounts then due and payable by any Obligor
on such date by reason of any payment made on or before such date by Fleet under
any LC Support plus (ii) the aggregate undrawn amount of all Letters of Credit
then outstanding or to be issued by Bank under an LC Application theretofore
submitted to Bank.
LC Request - a Letter of Credit Procurement Request from Borrower to
Fleet in the form of EXHIBIT J annexed hereto.
LC Reserve - at any date, the aggregate of all LC Obligations
outstanding on such date, other than LC Obligations that are fully secured by
Cash Collateral.
LC Support - a guaranty or other support agreement from Fleet in favor
of Bank pursuant to which Fleet shall guarantee or otherwise assure the payment
or performance by the parties (other than Fleet, if a party) to an LC
Application of such parties' obligations with respect to such Letter of Credit,
including the obligation of such parties to reimburse Bank for any payment made
by Bank under such Letter of Credit.
Lender Indemnitee - a Lender in its capacity as a lender under the
Agreement and its present and future officers, directors, employees, agents and
attorneys.
Lenders - Fleet (whether in its capacity as a provider of Loans under
SECTION 1 of the Agreement, as the provider of Settlement Loans under SECTION
3.1.3 of the Agreement or as the procurer of Letters of Credit under SECTION 1.3
of the Agreement) and any other Person who may from time to time become a
"Lender" under the Agreement, and their respective successors and permitted
assigns.
Letter of Credit - any standby letter of credit or documentary letter
of credit issued by Bank for the account of Borrower.
Letter-of-Credit Right - shall have the meaning ascribed to the term
"letter-of-credit rights" in the UCC.
Leverage Ratio - with respect to any fiscal period of Borrower, the
ratio of (i) total Funded Debt and LC Obligations as of the last day of such
period to (ii) EBITDA for such period.
LIBOR Lending Office - with respect to a Lender, the office designated
as a LIBOR Lending Office for such Lender on the signature page hereof (or on
any Assignment and Acceptance, in the case of an assignee) and such other office
of such Lender or any of its Affiliates that is hereafter designated by written
notice to Agent.
LIBOR Loan - a Loan, or portion thereof, during any period in which it
bears interest at a rate based upon the applicable Adjusted LIBOR Rate.
LIBOR Rate - with respect to an Interest Period, the rate per annum
reported to Agent by Bank as the rate at which deposits of U.S. Dollars
approximately equal in principal amount to or comparable to the amount of the
LIBOR Loan to which such Interest Period relates and for a term comparable to
such Interest Period are offered to Bank by prime banks in the London interbank
foreign currency deposits market at approximately 11:00 a.m., London time, 2
Business Days prior to the commencement of such Interest Period. Each
determination by Agent of any LIBOR Rate shall, in the absence of any manifest
error, be conclusive.
License Agreement - any agreement between Borrower and a Licensor
pursuant to which Borrower is authorized to use any Intellectual Property in
connection with the manufacturing, marketing, sale or other distribution of any
Inventory of Borrower.
Licensor - any Person from whom Borrower obtains the right to use
(whether on an exclusive or non-exclusive basis) any Intellectual Property in
connection with Borrower's manufacture, marketing, sale or other distribution of
any Inventory.
Licensor/Lender Agreement - an agreement between Agent and a Licensor
by which Agent is given the unqualified right, vis-a-vis such Licensor, to
enforce Agent's Liens with respect to and to dispose of Borrower's Inventory
with the benefit of any Intellectual Property applicable thereto, irrespective
of Borrower's default under any License Agreement with such Licensor and which
is otherwise in form and substance satisfactory to Agent.
Lien - any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on common law, statute or contract. The term "Lien" shall also include
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purpose of the Agreement, Borrower shall be deemed
to be the owner of any Property which it has acquired or holds subject to a
conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.
Loan - a Revolver Loan or a Term Loan Advance (and each Base Rate Loan
and LIBOR Loan comprising such Loan).
Loan Account - the loan account established by each Lender on its books
pursuant to SECTION 4.8 of the Agreement.
Loan Documents - the Agreement, the 1995 Bond Documents, the Other
Agreements and the Security Documents.
Loan Year - a period commencing each calendar year on the same month
and day as the date of the Agreement and ending on the same month and day in the
immediately succeeding calendar year, with the first such period (i.e. the first
Loan Year) to commence on the date of the Agreement.
Margin Stock - shall have the meaning ascribed to it in Regulation U of
the Board of Governors.
▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇ Carpets, LLC, a Georgia limited liability company
with its chief executive office and principal place of business at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
Material Adverse Effect - the effect of any event or condition which,
alone or when taken together with other events or conditions occurring or
existing concurrently therewith, (i) has a material adverse effect upon the
business, operations, prospects, Properties or condition (financial or
otherwise) of any Obligor; (ii) has or may be reasonably expected to have any
material adverse effect whatsoever upon the validity or enforceability of the
Agreement or any of the other Loan Documents; (iii) has any material adverse
effect upon the value of the whole or any material part of the Collateral, the
Liens of Agent with respect to the Collateral or the priority of any such Liens;
(iv) materially impairs the ability of any Obligor to perform its obligations
under this Agreement or any of the other Loan Documents, including repayment of
any of the Obligations when due; or (v) materially impairs the ability of Agent
or any Lender to enforce or collect the Obligations or realize upon any of the
Collateral in accordance with the Loan Documents and Applicable Law. As used in
this definition, the determination whether any fact, event or condition is
"material" or has a "material adverse effect" is dependent upon the relevant
facts and circumstances; provided, however in no event shall such fact, event or
condition be "material" or have a "material adverse effect" unless its adverse
economic impact upon the Borrower is at least $1,000,000.
Material Contract - an agreement to which an Obligor is a party (other
than the Loan Documents) if (i) such agreement is deemed to be a material
contract as provided in Regulation S-K promulgated by the SEC under the
Securities Act of 1933 or (ii) the breach, termination, cancellation or
nonperformance of or failure to renew such agreement could reasonably be
expected to have a Material Adverse Effect.
Maximum Rate - the maximum non-usurious rate of interest permitted by
Applicable Law that at any time, or from time to time, may be contracted for,
taken, reserved, charged or received on the Debt in question or, to the extent
that at any time Applicable Law may thereafter permit a higher maximum
non-usurious rate of interest, then such higher rate. Notwithstanding any other
provision hereof, the Maximum Rate shall be calculated on a daily basis
(computed on the actual number of days elapsed over a year of 365 or 366 days,
as the case may be).
Money Borrowed - as applied to any Person, (i) Debt arising from the
lending of money by any other Person to such Person; (ii) Debt, whether or not
in any such case arising from the lending of money by another Person to such
Person, (A) which is represented by notes payable or drafts accepted that
evidence extensions of credit, (B) which constitutes obligations evidenced by
bonds, debentures, notes or similar instruments, or (C) upon which interest
charges are customarily paid (other than accounts payable) or that was issued or
assumed as full or partial payment for Property; (iii) Debt that constitutes a
Capitalized Lease Obligation; (iv) reimbursement obligations with respect to
letters of credit or guaranties of letters of credit and (v) Debt of such Person
under any guaranty of obligations that would constitute
Debt for Money Borrowed under clauses (i) through (iii) hereof, if owed directly
by such Person; and (vi) similar off-balance sheet obligations.
▇▇▇▇▇'▇ - ▇▇▇▇▇'▇ Investors Services, Inc.
Mortgage - collectively, the mortgages, deeds of trust or deeds to
secure debt executed by Borrower and the other Obligors, as applicable, on or
before the Original Closing Date or thereafter in favor of Agent and by which
Borrower or such other Obligor granted and conveyed or shall grant and convey to
Agent, for its benefit as Agent and for the Pro Rata benefit of Lenders, Liens
upon the Real Estate, as security for the payment of the Obligations.
Multiemployer Plan - has the meaning set forth in Section 4001(a)(3) of
ERISA.
Net Proceeds -with respect to a disposition of any Collateral, proceeds
(including cash receivable (when received) by way of deferred payment) received
by Borrower from the sale, lease, transfer or other disposition of any Property,
including insurance proceeds and awards of compensation received with respect to
the destruction or condemnation of all or part of such Property, net of: (i) the
reasonable and customary costs of such sale, lease, transfer or other
disposition (including legal fees and sales commissions); (ii) amounts applied
to repayment of Debt (other than the Obligations) secured by a Permitted Lien on
the Collateral disposed of that is senior to Agent's Liens with respect to such
Collateral; and (iii) income taxes attributable to such disposition if consented
to by the Required Lenders in writing.
Notes - each Revolver Note, each Term Note and any other promissory
note executed by Borrower at Agent's request to evidence any of the Obligations.
Notice of Borrowing - as defined in SECTION 3.1.1(i) of the Agreement.
Notice of Conversion/Continuation - as defined in SECTION 2.1.2(ii) of
the Agreement.
Obligations - in each case, whether now in existence or hereafter
arising, (i) the principal of, and interest and premium, if any, on, the Loans;
(ii) all LC Obligations and all other obligations of any Obligor to Agent, Fleet
or an Affiliate of Fleet arising in connection with the issuance of any Letter
of Credit; (iii) the 1995 Bond Obligations; and (iv) all other Debts, covenants,
duties and obligations (including Contingent Obligations) now or at any time or
times hereafter owing by any Obligor to Agent or any Lender under or pursuant to
the Agreement or any of the other Loan Documents or owing by any Obligor to
Agent or any Lender (or any Affiliate of a Lender) with respect to the Banking
Relationship Debt, whether evidenced by any note or other writing, whether
arising from any extension of credit, opening of a letter of credit, acceptance,
loan, guaranty, indemnification or otherwise and whether direct or indirect,
absolute or contingent, due or to become due, primary or secondary, or joint or
several, including all interest, charges, expenses, fees or other sums
(including Extraordinary Expenses) chargeable to any or all Obligors under the
Agreement or under any of the other Loan Documents.
Obligor - Borrower and each Guarantor, and any other Person that is at
any time liable for the payment of the whole or any part of the Obligations or
that has granted in favor of Agent a Lien upon any of any of such Person's
assets to secure payment of any of the Obligations.
Original Closing Date - May 14, 2002.
Orderly Liquidation Value - with respect to any Inventory means, as
determined by an appraisal conducted by Hilco Appraisal and Valuation Services,
LLC or such other appraisal company of similar
qualifications and standing acceptable to Agent (and Required Lenders if other
than Hilco), an expected net dollar amount to be realized at an orderly
negotiated sale of such Inventory held within a reasonable period of time as of
the date of such opinion.
Orderly Liquidation Value Appraisal - an appraisal, in form and
substance satisfactory to Agent, conducted by Hilco Appraisal and Valuation
Services, LLC or such other appraisal company of similar qualifications and
standing acceptable to Agent (and Required Lenders if other than Hilco) pursuant
to which such appraisal company determines the Orderly Liquidation Value of
Inventory.
Ordinary Course of Business - with respect to any transaction involving
any Person, the ordinary course of such Person's business, as conducted by such
Person in accordance with past practices and undertaken by such Person in good
faith and not for the purpose of evading any covenant or restriction in any Loan
Document.
Organization Documents - with respect to any Person, its charter,
certificate or articles of incorporation, bylaws, articles of organization,
operating agreement, members agreement, partnership agreement, voting trust, or
similar agreement or instrument governing the formation or operation of such
Person.
Original Term - as defined in SECTION 5.1 of the Agreement.
OSHA - the Occupational Safety and Hazard Act of 1970.
Other Agreements - the Notes, each LC Support, the Environmental
Agreement, the Fee Letter, each Interest Rate Contract with Fleet or with Bank
and subject to credit enhancement from Fleet, and any and all agreements,
instruments and documents (other than the Agreement and the Security Documents),
heretofore, now or hereafter executed by Borrower, any other Obligor or any
other Person and delivered to Agent or any Lender in respect of the transactions
contemplated by the Agreement.
Out-of-Formula Condition - as defined in SECTION 1.1.2 of the
Agreement.
Out-of-Formula Loan - a Revolver Loan made when an Out-of-Formula
Condition exists or the amount of any Revolver Loan which, when funded, results
in an Out-of-Formula Condition.
Participant - as defined in SECTION 13.2.1 of the Agreement.
Participating Lender - as defined in SECTION 1.3.2(i) of the Agreement.
Patent Assignment - each Patent Collateral Assignment and Security
Agreement executed by Borrower in favor of Agent and by which Borrower shall
assign to Agent, for its benefit as Agent and for the Pro Rata benefit of
Lenders, as security for the Obligations, all of Borrower's right, title and
interest in and to the patents described therein.
Payment Account - an account maintained by Agent to which all monies
from time to time deposited to a Dominion Account shall be transferred and all
other payments shall be sent in immediately available federal funds.
Payment Intangible - shall have the meaning given to "payment
intangible" in the UCC.
Payment Items - all checks, drafts, or other items of payment payable
to Borrower, including proceeds of any of the Collateral.
Pending Revolver Loans - at any date, the aggregate principal amount of
all Revolver Loans which have been requested in any Notice of Borrowing received
by Agent but which have not theretofore been advanced by Agent or Lenders.
Permitted Asset Dispositions - a disposition of Real Estate or
Equipment by Borrower or any other Obligor that has been approved by the
Required Lenders in writing at the time of any such proposed disposition
provided, that so long as no Event of Default exists, Borrower or its
Subsidiaries, as applicable, may sell: (i) the remaining Chattanooga, Tennessee
real Property owned by Borrower located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and (ii) real Property owned by Borrower in North
Carolina including those parcels of real Property in ▇▇▇▇▇▇ and Cumberland
Counties, North Carolina.
Permitted Contingent Obligations - Contingent Obligations arising from
endorsements for collection or deposit in the Ordinary Course of Business;
Contingent Obligations arising from Interest Rate Contracts entered into in the
Ordinary Course of Business pursuant to the Agreement or with Agent's prior
written consent; Contingent Obligations of Borrower and its Subsidiaries
existing as of the Closing Date and disclosed on SCHEDULE 9.2.3 hereto,
including extensions and renewals thereof that do not increase the amount of
such Contingent Obligations as of the date of such extension or renewal;
Contingent Obligations incurred in the Ordinary Course of Business with respect
to surety bonds, appeal bonds, performance bonds and other similar obligations;
Contingent Obligations arising under indemnity agreements to title insurers to
cause such title insurers to issue to Agent title insurance policies; Contingent
Obligations with respect to customary indemnification obligations in favor of
purchasers in connection with dispositions of Equipment permitted under SECTION
7.4.2 of the Agreement; and other Contingent Obligations not to exceed
$5,000,000 in the aggregate at any time.
Permitted Lien - a Lien of a kind specified in SECTION 9.2.5 of the
Agreement.
Permitted Purchase Money Debt - Purchase Money Debt of Borrower and its
Subsidiaries and which is secured by no Lien or only by a Purchase Money Lien,
provided that the aggregate amount of Purchase Money Debt outstanding at any
time does not exceed $7,500,000 and the incurrence of such Purchase Money Debt
does not violate any limitation in the Loan Documents regarding Capital
Expenditures. For the purposes of this definition, the principal amount of any
Purchase Money Debt consisting of capitalized leases shall be computed as a
Capitalized Lease Obligation.
Person - an individual, partnership, corporation, limited liability
company, limited liability partnership, joint stock company, land trust,
business trust, or unincorporated organization, or a Governmental Authority.
Plan - an employee benefit plan now or hereafter maintained for
employees of Borrower that is covered by Title IV of ERISA.
Prime Rate - the rate of interest announced or quoted by Bank from time
to time as its prime rate. The prime rate announced by Bank is a reference rate
and does not necessarily represent the lowest or best rate charged by Bank. Bank
may make loans or other extensions of credit at, above or below its announced
prime rate. If the prime rate is discontinued by Bank as a standard, a
comparable reference rate designated by Bank as a substitute therefor shall be
the Base Rate.
Pro Rata - a share of or in all Loans, participations in LC
Obligations, liabilities, payments, proceeds, collections, Collateral and
Extraordinary Expenses, which share for any Lender on any date shall be a
percentage (expressed as a decimal, rounded to the ninth decimal place) arrived
at by dividing the amount of the Commitment of such Lender on such date by the
aggregate amount of the Commitments of all Lenders on such date.
Projections - Borrower's forecasted (a) Consolidated and consolidating
balance sheets, profit and loss statements, cash flow statements, and
capitalization statements, all prepared on a consistent basis with Borrower's
historical financial statements, together with (b) appropriate supporting
details and a statement of underlying assumptions, a projection of the Borrowing
Base and Availability.
Properly Contested - in the case of any Debt of an Obligor (including
any Taxes) that is not paid as and when due or payable by reason of such
Obligor's bona fide dispute concerning its liability to pay same or concerning
the amount thereof, (i) such Debt is being properly contested in good faith by
appropriate proceedings promptly instituted and diligently conducted; (ii) such
Obligor has established appropriate reserves as shall be required in conformity
with GAAP, (iii) the non-payment of such Debt will not have a Material Adverse
Effect and will not result in a forfeiture of any assets of such Obligor; (iv)
no Lien is imposed upon any of such Obligor's assets with respect to such Debt
unless such Lien is at all times junior and subordinate in priority to the Liens
in favor of Agent (except only with respect to property taxes that have priority
as a matter of applicable state law) and enforcement of such Lien is stayed
during the period prior to the final resolution or disposition of such dispute;
(v) if the Debt results from, or is determined by the entry, rendition or
issuance against an Obligor or any of its assets of a judgment, writ, order or
decree, enforcement of such judgment, writ, order or decree is stayed pending a
timely appeal or other judicial review; and (vi) if such contest is abandoned,
settled or determined adversely (in whole or in part) to such Obligor, such
Obligor forthwith pays such Debt and all penalties, interest and other amounts
due in connection therewith.
Property - any interest in any kind of property or asset, whether real,
personal or mixed and whether tangible or intangible.
Purchase Money Debt - means and includes (i) Debt (other than the
Obligations) for the payment of all or any part of the purchase price of any
fixed assets, (ii) any Debt (other than the Obligations) incurred at the time of
or within 10 days prior to or after the acquisition of any fixed assets for the
purpose of financing all or any part of the purchase price thereof, and (iii)
any renewals, extensions or refinancings (but not any increases in the principal
amounts) thereof outstanding at the time.
Purchase Money Lien - a Lien upon fixed assets which secures Purchase
Money Debt, but only if such Lien shall at all times be confined solely to the
fixed assets acquired through the incurrence of the Purchase Money Debt secured
by such Lien and such Lien constitutes a purchase money security interest under
the UCC.
2000 Real Estate Transaction Documents - agreements, instruments or
documents executed in connection with the 2000 Industrial Development Board of
the City of Atmore, Alabama real estate transaction with Borrower.
Real Estate - all parcels and tracts of real Property and the
improvements thereon of each Obligor, wherever located, and whether now existing
or hereafter acquired, including, without limitation, all real Property and
improvements thereon of each Obligor located in Alabama, Georgia, Indiana,
Tennessee and California (but excluding the real Property of Borrower and its
Subsidiaries located in Gastonia, ▇▇▇▇▇▇ County, North Carolina and
Fayetteville, Cumberland County, North Carolina).
Regulation D - Regulation D of the Board of Governors.
Register - the register maintained by Agent in accordance with SECTION
4.8.2 of the Agreement.
Reimbursement Date - as defined in SECTION 1.3.1(iii) of the Agreement.
Rent Reserve - an amount equal to 3 months of all rent, fees or other
charges with respect to any leased or warehouse premises of Borrower where any
of the Collateral is located, other than those with respect to which Agent has
received a Landlord Waiver
Rentals - as defined in SECTION 9.2.13 of the Agreement.
Reportable Event - any of the events set forth in Section 4043(b) of
ERISA.
Required Lenders - at any date of determination thereof, Lenders having
Commitments representing at least 66-2/3% of the aggregate Commitments at such
time; provided, however, that if any Lender shall be in breach of any of its
obligations hereunder to Borrower or Agent, including any breach resulting from
its failure to honor its Commitment in accordance with the terms of the
Agreement, then, for so long as such breach continues, the term "Required
Lenders" shall mean Lenders (excluding each Lender that is in breach of its
obligations under the Agreement) having Commitments representing at least
66-2/3% of the aggregate Commitments at such time of such non-breaching Lenders;
provided further, however, that if the Commitments have been terminated, the
term "Required Lenders" shall mean Lenders (excluding each Lender that is in
breach of its obligations hereunder) holding Loans (including Settlement Loans)
representing at least 66-2/3% of the aggregate principal amount of Loans of such
non-breaching Lenders (including Settlement Loans) outstanding at such time.
Restricted Investment - any acquisition of Property by Borrower or any
of its Subsidiaries in exchange for cash or other Property, whether in the form
of an acquisition of Equity Interests or Debt, or the purchase or acquisition by
Borrower or any Subsidiary of any other Property, or a loan, advance, capital
contribution or subscription, except acquisitions of the following: (i) fixed
assets to be used in the Ordinary Course of Business of Borrower or any
Subsidiary so long as the acquisition costs thereof constitute Capital
Expenditures permitted hereunder; (ii) goods held for sale or lease or to be
used in the manufacture of goods or the provision of services by Borrower or any
Subsidiary in the Ordinary Course of Business; (iii) Current Assets arising from
the sale or lease of goods or the rendition of services in the Ordinary Course
of Business of Borrower or any if its Subsidiaries; (iv) except in de minimis
amounts, investments in Subsidiaries to the extent existing on the Closing Date;
(v) Cash Equivalents to the extent they are not subject to rights of offset in
favor of any Person other than Agent or a Lender; (vi) loans and other advances
of money to the extent not prohibited by SECTION 9.2.2.; and (vii) after the
Closing Date, the Fabrica Payment, which payment shall not exceed $3,000,000 in
the aggregate.
Restrictive Agreement - an agreement (other than any of the Loan
Documents) that, if and for so long as an Obligor or any Subsidiary of such
Obligor is a party thereto, would prohibit, condition or restrict such Obligor's
or Subsidiary's right to incur or repay Debt for Money Borrowed (including any
of the Obligations); grant Liens upon any of such Obligor's or Subsidiary's
assets (including Liens granted in favor of Agent pursuant to the Loan
Documents); declare or make Distributions; amend, modify, extend or renew any
agreement evidencing Debt for Money Borrowed (including any of the Loan
Documents); or repay any Debt owed to any Obligor.
Revolver Commitment - at any date for any Lender, the obligation of
such Lender to make Revolver Loans and to purchase participations in LC
Obligations pursuant to the terms and conditions of the Agreement, which shall
not exceed the principal amount set forth opposite such Lender's name under
the heading "Revolver Commitment" on the signature pages of the Agreement or the
signature page of the Assignment and Acceptance by which it became a Lender, as
modified from time to time pursuant to the terms of the Agreement or to give
effect to any applicable Assignment and Acceptance; and "Revolver Commitments"
means the aggregate principal amount of the Revolver Commitments of all Lenders,
the maximum amount of which shall be $40,000,000.
Revolver Loan - a Loan made by Lenders as provided in SECTION 1.1 of
the Agreement (including any Out-of-Formula Loan) or a Settlement Loan funded
solely by Fleet.
Revolver Note - a Revolver Note to be executed by Borrower in favor of
each Lender in the form of EXHIBIT A attached hereto, which shall be in the face
amount of such Lender's Revolver Commitment and which shall evidence all
Revolver Loans made by such Lender to Borrower pursuant to the Agreement.
S&P - Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.
Schedule of Accounts - as defined in SECTION 7.2.1 of the Agreement.
SEC - Securities and Exchange Commission.
Secured Parties - Fleet (and its successors and assigns) or any
Affiliate of Fleet (and its successors and assigns).
Security - shall have the same meaning as in Section 2(1) of the
Securities Act of 1933.
Security Documents - the Patent Assignment, each Guaranty, the
Trademark Security Agreement, the Copyright Security Agreement, the Deposit
Account Assignment, the Business Interruption Insurance Assignment, the
Mortgages, the Factor Intercreditor Agreements, the Factor Assignment
Agreements, and all other instruments and agreements now or at any time
hereafter securing the whole or any part of the Obligations.
Senior Officer - the chairman of the board of directors, the president,
the chief financial officer or the controller of, or in-house legal counsel to
Borrower.
Settlement Date - as defined in SECTION 3.1.3(i) of the Agreement.
Settlement Loan - as defined in SECTION 3.1.3(ii) of the Agreement.
Settlement Report - a report delivered by Agent to Lenders summarizing
the amount of the outstanding Revolver Loans as of the Settlement Date and the
calculation of the Borrowing Base as of such Settlement Date.
▇▇▇▇ - ▇▇▇▇ Industries Group, Inc.
Software - shall have the meaning given to "software" in the UCC.
Solvent - as to any Person, such Person (i) owns Property whose fair
saleable value is greater than the amount required to pay all of such Person's
Debts (including contingent Debts), (ii) is able to pay all of its Debts as such
Debts mature, (iii) has capital sufficient to carry on its business and
transactions and all business and transactions in which it is about to engage;
and (iv) is not "insolvent" within the meaning of Section 101(32) of the
Bankruptcy Code.
Statutory Reserves - on any date, the percentage (expressed as a
decimal) established by the Board of Governors which is the then stated maximum
rate for all reserves (including any emergency, supplemental or other marginal
reserve requirements) applicable to any member bank of the Federal Reserve
System in respect to Eurocurrency Liabilities (or any successor category of
liabilities under Regulation D). Such reserve percentage shall include those
imposed pursuant to Regulation D. The Statutory Reserve shall be adjusted
automatically on and as of the effective date of any change in such percentage.
Subordinated Debt - Debt of Borrower that is fully and absolutely
subordinated in right of payment to the Obligations in a manner satisfactory to
Agent, including, the Convertible Debentures.
Subordinated Debt Documents - collectively and individually, (i) the
Indenture, (ii) the Convertible Debentures, and (iii) any and all other
agreements, instruments or documents issued in connection with any of the
foregoing or in connection with any other Subordinated Debt.
Subsidiary - any Person in which more than 20% of its outstanding
Voting Stock or more than 20% of all Equity Interests is owned directly or
indirectly by Borrower, by one or more other Subsidiaries of Borrower or by
Borrower and one or more other Subsidiaries, including C-Knit, but excluding
Chroma Systems.
Supporting Obligation - shall have the meaning ascribed to the term
"supporting obligation" in the UCC.
Tangible Chattel Paper - shall have the meaning given to "tangible
chattel paper" in the UCC.
Taxes - any present or future taxes, levies, imposts, duties, fees,
assessments, deductions, withholdings or other charges of whatever nature,
including income, receipts, excise, property, sales, use, transfer, license,
payroll, withholding, social security and franchise taxes now or hereafter
imposed or levied by the United States or any other Governmental Authority and
all interest, penalties, additions to tax and similar liabilities with respect
thereto, but excluding, in the case of each Lender, taxes imposed on or measured
by the net income or overall gross receipts of such Lender.
Term Loan A - the aggregate of the Term Loan A Advances made by Lenders
to Borrower pursuant to SECTION 1.2.1 of the Agreement.
Term Loan A Advance - each Lender's portion of Term Loan A.
Term Loan Advance - means, collectively, each Term Loan A Advance and
each Term Loan C Advance.
Term Loan A Commitment - at any date for any Lender, the obligation of
such Lender to make Term Loan A Advances pursuant to the terms and conditions of
the Agreement, which shall not exceed the principal amount set forth opposite
such Lender's name under the heading "Term Loan A Commitment" on the signature
pages hereof (or any amendment to the Agreement) or the signature page of any
Assignment and Acceptance by which it became a Lender, as modified from time to
time pursuant to the terms of the Agreement or to give effect to any applicable
Assignment and Acceptance; and the term "Term Loan A Commitments" means the
aggregate principal amount of the Term Loan A Commitments of all Lenders, the
maximum amount of which shall be $18,520,812.40.
Term Loan C - the aggregate of the Term Loan C Advances made by Lenders
to Borrower pursuant to SECTION 1.2.4 of the Agreement.
Term Loan C Advance - each Lender's portion of Term Loan C.
Term Loan C Commitment - at any date for any Lender, the obligation of
such Lender to make Term Loan C Advances pursuant to the terms and conditions of
the Agreement, which shall not exceed the principal amount set forth opposite
such Lender's name under the heading "Term Loan C Commitment" on the signature
pages hereof (or any amendment to the Agreement) or the signature page of any
Assignment and Acceptance by which it became a Lender, as modified from time to
time pursuant to the terms of the Agreement or to give effect to any applicable
Assignment and Acceptance; and the term "Term Loan C Commitments" means the
aggregate principal amount of the Term Loan C Commitments of all Lenders, the
maximum amount of which shall be $1,479,187.60.
Term Loan Commitments - means, collectively, the Term Loan A
Commitments and the Term Loan C Commitments.
Term Loans - mean collectively, Term Loan A and Term Loan C.
Term Note A - shall have the meaning ascribed to it in SECTION 1.2.3 of
the Agreement. Term Note C- shall have the meaning ascribed to it in
SECTION 1.2.5 of the Agreement.
Term Notes - means, collectively, each Term Note A and each Term Note
C.
Trademark Security Agreement - the Trademark Security Agreement
executed by Borrower in favor of Agent on or before the Original Closing Date
and by which Borrower assigned to Agent, for its benefit as Agent and for the
Pro Rata benefit of Lenders, as security for the Obligations, all of Borrower's
right, title and interest in and to all of its trademarks.
Transferee - as defined in SECTION 13.3.3 of the Agreement.
Type - any type of a Loan determined with respect to the interest
option applicable thereto, which shall be either a LIBOR Loan or a Base Rate
Loan.
UCC - the Uniform Commercial Code (or any successor statute) as adopted
and in force in the State of Georgia or, when the laws of any other state govern
the method or manner of the perfection or enforcement of any security interest
in any of the Collateral, the Uniform Commercial Code (or any successor statute)
of such state.
Upstream Payment - a payment or distribution of cash or other Property
by a Subsidiary to Borrower, whether in repayment of Debt owed by such
Subsidiary to Borrower, to pay dividends on account of Borrower's ownership of
Equity Interests or otherwise.
USA Patriot Act - the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 1001, Pub.
L. No. 107-56, 115 Stat. 272 (2001), as the same has been, or shall hereafter
be, renewed, extended, amended or replaced.
Value - with reference to the value of Eligible Inventory, value
determined on the basis of the lower of cost or market of such Eligible
Inventory, with the cost thereof calculated on a first-in, first-out basis,
determined in accordance with GAAP.
Voting Power - with respect to any Person, the power ordinarily
(without the occurrence of a contingency) to elect the members of the board of
directors (or Persons performing similar functions) of such Person.
Voting Stock - Equity Interests of any class or classes of a
corporation or other entity the holders of which are ordinarily, in the absence
of contingencies, entitled to elect a majority of the corporate directors or
Persons performing similar functions.
ACCOUNTING TERMS. Unless otherwise specified herein, all terms of an
accounting character used in the Agreement shall be interpreted, all accounting
determinations under the Agreement shall be made, and all financial statements
required to be delivered under the Agreement shall be prepared in accordance
with GAAP, applied on a basis consistent with the most recent audited
Consolidated financial statements of Borrower and the Subsidiaries heretofore
delivered to Agent and Lenders and using the same method for inventory valuation
as used in such audited financial statements, except for any change required by
GAAP; provided, however, that for purposes of determining Borrower's compliance
with financial covenants contained in SECTION 9.3 of the Agreement, all
accounting terms shall be interpreted and all accounting determinations shall be
made in accordance with GAAP as in effect on the date of the Agreement and
applied on a basis consistent with the application used in the financial
statements referred to in SECTION 8.1.9 of the Agreement unless (i) Borrower
shall have objected to determining such compliance on such basis at the time of
delivery of such financial statements or (ii) Agent or any Lender shall so
object in writing within 30 days after the delivery of such financial
statements, in either of which events such calculations shall be made on a basis
consistent with those used in the preparation of the latest financial statements
as to which such objection shall not have been made. In the event of any change
in GAAP that occurs after the date of the Agreement and that is material to
Borrower, Agent and Lenders (but not Borrower) shall have the right to require
either that conforming adjustments be made to any financial covenants set forth
in the Agreement, or the components thereof, that are affected by such change or
that Borrower report its financial condition based on GAAP as in effect
immediately prior to the occurrence of such change.
OTHER TERMS. All other terms contained in the Agreement shall have,
when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.
CERTAIN MATTERS OF CONSTRUCTION. The terms "herein," "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. In the computation of periods of time from
a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding." The
section titles, table of contents and list of exhibits appear as a matter of
convenience only and shall not affect the interpretation of the Agreement. All
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations; to any of the Loan Documents
shall include any and all modifications thereto and any and all restatements,
extensions or renewals thereof; to any Person shall mean and include the
successors and permitted assigns of such Person; to "including" and "include"
shall be understood to mean "including, without limitation" (and, for purposes
of the Agreement and each other Loan Document, the parties agree that the rule
of ejusdem generis shall not be applicable to limit a general statement, which
is followed by or referable to an enumeration of specific matters to matters
similar to the matters specifically mentioned); or to the time of day shall mean
the time of day on the day in question in Atlanta, Georgia, unless otherwise
expressly provided in the Agreement. A Default or an Event of Default shall be
deemed to exist at all times during the period commencing on the date that such
Default or Event of Default occurs to the date on which such Default or Event of
Default is waived in writing by Agent pursuant to the Agreement or, in the case
of a Default, is cured within any period of cure expressly provided in this
Agreement; and an Event of Default shall "continue" or be "continuing" until
such Event
of Default has been waived in writing by Agent. Whenever the phrase "to the best
of Borrower's knowledge" or words of similar import relating to the knowledge or
the awareness of Borrower is used herein, such phrase shall mean and refer to
(i) the actual knowledge of a Senior Officer of Borrower or (ii) the knowledge
that a Senior Officer would have obtained if they had engaged in good faith and
diligent performance of his duties, including the making of such reasonably
specific inquiries as may be necessary of the employees or agents of Borrower
and a good faith attempt to ascertain the existence or accuracy of the matter to
which such phrase relates.
IN WITNESS WHEREOF, this Appendix has been duly executed on the date first
above written.
BORROWER:
ATTEST: THE ▇▇▇▇▇ GROUP, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------- ------------------------------------------
Assistant Secretary Chairman
[CORPORATE SEAL] BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Vice President and Chief Financial Officer
GUARANTORS:
ATTEST: FABRICA INTERNATIONAL, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------- ------------------------------------------
Assistant Secretary Vice President
[CORPORATE SEAL]
ATTEST: BRETLIN, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------- ------------------------------------------
Assistant Secretary President
[CORPORATE SEAL]
ATTEST: CANDLEWICK YARNS, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------- ------------------------------------------
Assistant Secretary President
[CORPORATE SEAL]
ATTEST: CHROMA TECHNOLOGIES, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------- ------------------------------------------
Assistant Secretary President
[CORPORATE SEAL]
ATTEST: ▇▇▇▇▇ GROUP LOGISTICS, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------- ------------------------------------------
Assistant Secretary President
[CORPORATE SEAL]
ATTEST: MASLAND CARPETS, LLC
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------- ------------------------------------------
Assistant Secretary Vice President
[CORPORATE SEAL]
LENDER AND AGENT:
FLEET CAPITAL CORPORATION, as
Lender and Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Senior Vice President