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EXHIBIT 10.1
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT AND WILL BE FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. SUCH PORTIONS ARE DESIGNATED "[***]".
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REVOLVING CREDIT AGREEMENT
by and between
CROWN CRAFTS, INC.
as Borrower,
BANK OF AMERICA, N. A.,
as Lender
August 9, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions and Terms
1.1. Definitions..............................................................................................1
1.2. Rules of Interpretation.................................................................................22
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans.........................................................................................24
2.2. Revolving Notes.........................................................................................26
2.3. Reductions..............................................................................................26
2.4. Use of Proceeds.........................................................................................26
ARTICLE III
Eurodollar Funding, Fees, and Payment Conventions
3.1. Interest Rate Options...................................................................................27
3.2. Conversions and Elections of Subsequent Interest Periods................................................27
3.3. Payment of Interest.....................................................................................28
3.4. Prepayments of Eurodollar Rate Loans....................................................................28
3.5. Manner of Payment.......................................................................................28
3.6. Commitment Fee..........................................................................................29
3.7. Computation of Rates and Fees...........................................................................29
ARTICLE IV
Change in Circumstances
4.1. Increased Cost and Reduced Return.......................................................................29
4.2. Limitation on Types of Loans............................................................................30
4.3. Illegality..............................................................................................31
4.4. Treatment of Affected Loans.............................................................................31
4.5. Compensation............................................................................................32
4.6. Taxes...................................................................................................32
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ARTICLE V
Conditions to Making Loans
5.1. Conditions of Initial Advance...........................................................................34
5.2. Conditions of All Revolving Loans.......................................................................36
ARTICLE VI
Representations and Warranties
6.1. Organization and Authority..............................................................................36
6.2. Senior Debt Documents...................................................................................37
6.3. Solvency................................................................................................37
6.4. Subsidiaries and Stockholders...........................................................................37
6.5. Ownership Interests.....................................................................................38
6.6. Financial Condition.....................................................................................38
6.7. Title to Properties.....................................................................................38
6.8. Taxes...................................................................................................38
6.9. Other Agreements........................................................................................39
6.10. Litigation..............................................................................................39
6.11. Margin Stock............................................................................................39
6.12. Investment Company; Public Utility Holding Company......................................................39
6.13. Patents, Etc............................................................................................40
6.14. No Untrue Statement.....................................................................................40
6.15. No Consents, Etc........................................................................................40
6.16. Employee Benefit Plans..................................................................................40
6.17. No Default..............................................................................................41
6.18. Hazardous Materials.....................................................................................41
6.19. Employment Matters......................................................................................41
6.20. Year 2000 Compliance. .................................................................................42
ARTICLE VII
Affirmative Covenants
7.1. Financial Reports, Etc..................................................................................42
7.2. Maintain Properties.....................................................................................44
7.3. Existence, Qualification, Etc...........................................................................44
7.4. Regulations and Taxes...................................................................................44
7.5. Insurance...............................................................................................44
7.6. True Books..............................................................................................44
7.7. Payment of Other Indebtedness...........................................................................44
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7.8. Right of Inspection.....................................................................................45
7.9. Observe all Laws........................................................................................45
7.10. Governmental Licenses...................................................................................45
7.11. Covenants Extending to Other Persons....................................................................45
7.12. Officer's Knowledge of Default..........................................................................45
7.13. Suits or Other Proceedings..............................................................................45
7.14. Notice of Discharge of Hazardous Material or Environmental Complaint....................................45
7.15. Environmental Compliance................................................................................45
7.16. Indemnification.........................................................................................46
7.17. Further Assurances......................................................................................46
7.18. Employee Benefit Plans..................................................................................46
7.19. Termination Events......................................................................................46
7.20. ERISA Notices...........................................................................................47
7.21. Continued Operations....................................................................................47
7.22. Use of Proceeds.........................................................................................47
7.23. New Subsidiaries........................................................................................47
7.24. Security................................................................................................50
7.25. Year 2000 Compliance....................................................................................51
ARTICLE VIII
Negative Covenants
8.1. Financial Covenants.....................................................................................51
8.2. Indebtedness............................................................................................52
8.3. Liens...................................................................................................53
8.4. Transfer of Assets......................................................................................55
8.5. Investments; Acquisitions...............................................................................55
8.6. Merger or Consolidation.................................................................................55
8.7. Restricted Payments.....................................................................................56
8.8. Transactions with Affiliates............................................................................56
8.9. Compliance with ERISA...................................................................................56
8.10. Changes and Amendments..................................................................................57
8.11. Limitations on Sales and Leasebacks.....................................................................57
8.12. Dissolution, etc........................................................................................57
8.13 Mortgages and Appraisals................................................................................57
8.14 Liquidity...............................................................................................57
8.15 Factor Advances.........................................................................................57
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ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default.......................................................................................57
9.2. Lender to Act...........................................................................................60
9.3. Cumulative Rights.......................................................................................60
9.4. No Waiver...............................................................................................61
ARTICLE X
Miscellaneous
10.1. Assignments and Participations..........................................................................61
10.2. Notices.................................................................................................62
10.3. Right of Set-off........................................................................................63
10.4. Survival................................................................................................63
10.5. Expenses................................................................................................64
10.6. Amendments and Waivers..................................................................................64
10.7. Counterparts............................................................................................64
10.8. Termination.............................................................................................64
10.9. Indemnification; Limitation of Liability................................................................65
10.10. Severability............................................................................................66
10.11. Entire Agreement........................................................................................66
10.12. Agreement Controls......................................................................................66
10.13. Usury Savings Clause....................................................................................66
10.14. Payments................................................................................................67
10.15. GOVERNING LAW; WAIVER OF JURY TRIAL.....................................................................67
EXHIBIT A Commitment.....................................................................................70
EXHIBIT B Form of Assignment and Acceptance..............................................................71
EXHIBIT C Notice of Appointment (or Revocation) of Authorized Representative.............................74
EXHIBIT D Form of Borrowing Notice.......................................................................75
EXHIBIT E Form of Interest Rate Selection Notice.........................................................77
EXHIBIT F-1 Form of Revolving A Note.......................................................................78
EXHIBIT F-1 Form of Revolving B Note.......................................................................80
EXHIBIT G Form of Subsidiary Guaranty Agreement..........................................................82
EXHIBIT H Form of Opinion of Borrower's Counsel..........................................................90
EXHIBIT I Form of Compliance Certificate.................................................................91
EXHIBIT J Form of Borrowing Base Certificate.............................................................95
EXHIBIT L Form of Security Agreement.....................................................................99
EXHIBIT M Form of Assignment of Factoring Balances.......................................................99
Schedule 6.4
Subsidiaries and Ownership Interests............................................................................100
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Schedule 6.6
Liabilities.....................................................................................................101
Schedule 6.16
ERISA Matters...................................................................................................102
Schedule 8.3
Liens .......................................................................................................103
Schedule 8.8
Affiliate Transactions..........................................................................................104
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of August 9, 1999 (the
"Agreement"), is made by and among CROWN CRAFTS, INC., a Georgia corporation
having its principal place of business in Atlanta, Georgia (the "Borrower"),
BANK OF AMERICA, N.A., a national banking association organized under the laws
of the United States ("Bank of America"), in its capacity as Lender (the
"Lender"), and each other lender which may hereafter execute and deliver an
instrument of assignment with respect to this Agreement pursuant to Section
10.1 hereof (hereinafter such lenders may be referred to individually as a
"Lender" or collectively as the "Lenders");
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender have entered into that certain
Revolving Credit Agreement dated as of August 25, 1995, as amended through
Amendment No. 12 to Revolving Credit Agreement dated as of July 12, 1999 (the
"Existing Credit Agreement"), pursuant to which the Lender has made revolving
advances to the Borrower in the aggregate amount of $15,000,000;
WHEREAS, the Borrower has delivered to the Lender that certain
Promissory Note dated as of January 31, 1999 (the "Demand Note"), pursuant to
which the Lender has made revolving advances to the Borrower in the aggregate
amount of $10,000,000;
WHEREAS, the Borrower has requested that the Lender make available to
the Borrower a revolving A credit facility of up to $15,000,000 and a revolving
B credit facility of up to $10,000,000, the proceeds of such facilities to be
used to refinance the amounts outstanding under the Existing Credit Agreement
and the Demand Note, respectively; and
WHEREAS, the Lender is willing to make the revolving credit facilities
available to the Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:
ARTICLE I
Definitions and Terms
1.1. Definitions. For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Acquisition" means the non-hostile acquisition of (i) a
controlling equity interest in another Person (including the purchase
of an option, warrant or convertible or similar type security to
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acquire such a controlling interest at the time it becomes exercisable
by the holder thereof), whether by purchase of such equity interest or
upon exercise of an option or warrant for, or conversion of securities
into, such equity interest, or (ii) assets of another Person which
constitute all or any material part of the assets of such Person or of
a line or lines of business conducted by such Person.
"Advance" means a borrowing under either Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan.
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or
is under common control with the Borrower; or (ii) which beneficially
owns or holds 10% or more of any class of the outstanding voting stock
(or in the case of a Person which is not a corporation, 10% or more of
the equity interest) of the Borrower or any Person described in clause
(i) above; or 10% or more of any class of the outstanding voting stock
(or in the case of a Person which is not a corporation, 10% or more of
the equity interest) of which is beneficially owned or held by the
Borrower. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of
voting stock, by contract or otherwise.
"Applicable Interest Addition" means for each Eurodollar Rate
Loan, 2.75%, for each Base Rate Loan which is not an Overadvance Loan,
1.00%, and for each Base Rate Loan which is also an Overadvance Loan,
1.50%.
"Applicable Lending Office" means, for each Type of Loan, the
"Lending Office" of the Lender (or of an affiliate of the Lender)
designated for such Type of Loan on the signature pages hereof or such
other office of the Lender (or an affiliate of the Lender) as the
Lender may from time to time specify to the Borrower by written notice
in accordance with the terms hereof as the office by which the Loans
of such Type are to be made and maintained.
"Applicable Property Value" means the sum of (a) the orderly
liquidation value of all equipment as determined by the appraisal to
be delivered to the Lender pursuant to Section 8.13 hereof (and prior
to such delivery based on the lesser of the book value or fair market
value thereof), plus (b) the fair market value of all real property
owned by the Borrower and its Subsidiaries.
"Asset Disposition" means any disposition, whether by sale,
lease, assignment or other transfer of (a) any of the assets of the
Borrower or its Subsidiaries, and (b) any of the capital stock of any
Subsidiary, or securities or investments exchangeable, exercisable or
convertible for or into, or otherwise entitling the holder to receive
any of the capital stock of any Subsidiary (other than a disposition
to the Borrower or a Facility Guarantor).
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"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered to the Lender in connection with an assignment of a
Lender's interest under this Agreement pursuant to Section 10.1
hereof.
"Assignment of Factoring Balances" means an Assignment of
Factoring Balances and Agreement in the form of Exhibit M, or
otherwise acceptable to the Lender and the Collateral Agent, and
entered into from time to time by the Collateral Agent, the Borrower
and an Permitted Factor.
"Authorized Representative" means any of the President or
Vice President of the Borrower or, with respect to financial matters,
the chief financial officer of the Borrower or any other person
expressly designated by the Board of Directors of the Borrower (or the
appropriate committee thereof) as an Authorized Representative of the
Borrower, as set forth from time to time in a certificate in the form
attached hereto as Exhibit C.
"Base Rate" means the per annum rate of interest equal to the
sum of (a) the greater of (i) the Prime Rate or (ii) the Federal Funds
Effective Rate plus one-half of one percent (.50%) plus (b) the
Applicable Interest Addition. Any change in the Base Rate resulting
from a change in the Prime Rate or the Federal Funds Effective Rate
shall become effective as of 12:01 A.M. of the Business Day on which
each such change occurs.
"Base Rate Loan" means a Loan or a Segment of a Loan for
which the rate of interest is determined by reference to the Base
Rate.
"▇▇▇▇▇▇▇▇▇ Family" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and his wife, their
children and their children's spouses and their grandchildren.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Borrower's Account" means a demand deposit account number
▇▇▇▇▇▇▇▇ or any successor account with the Lender, which may be
maintained at one or more offices of the Lender or an agent of the
Lender.
"Borrowing Base" means, as of any date of determination
thereof, an amount equal to:
(a) all Net Receivables multiplied by 85%, less
the amount of all Factor Advances which have been received
from the applicable Permitted Factor; plus
(b) all Recoverable Income Taxes multiplied by
85%; plus
(c) the lesser of the book value (net of all
reserves) or market value of all Inventory multiplied by 50%;
plus
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(d) prior to November 1, 1999, the net book
value of all plant, property and equipment of the Borrower
and its Subsidiaries multiplied by 50% and on and after
November 1, 1999, the Applicable Property Value multiplied by
80%; plus
(e) the Overadvance Amount.
"Borrowing Base Certificate" means a certificate of the Chief
Financial Officer of the Borrower in the form of Exhibit J hereto.
"Borrowing Notice" means the notice delivered by an
Authorized Representative in connection with an Advance under either
Revolving Credit Facility, in the form attached hereto as Exhibit D
and incorporated herein by reference.
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
State of North Carolina are authorized or obligated by law, executive
order or governmental decree to be closed and, (ii) with respect to
any Eurodollar Rate Loan, any day which is a Business Day, as
described above, and on which the relevant international financial
markets are open for the transaction of business contemplated by this
Agreement in London, England, New York, New York, and Charlotte, North
Carolina.
"Capital Expenditures" means, with respect to the Borrower
and its Subsidiaries, for any period the sum of (without duplication)
(i) all expenditures (whether paid in cash or accrued as liabilities)
by the Borrower or any Subsidiary during such period for items that
would be classified as "property, plant or equipment" or comparable
items on the consolidated balance sheet of the Borrower and its
Subsidiaries, including without limitation all transactional costs
incurred in connection with such expenditures provided the same have
been capitalized, excluding, however, the amount of any Capital
Expenditures paid for with proceeds of casualty insurance as evidenced
in writing and submitted to the Lender together with any compliance
certificate delivered pursuant to Section 7.1(a) or (b), and (ii) with
respect to any Capital Lease entered into by the Borrower or its
Subsidiaries during such period, the present value of the lease
payments due under such Capital Lease over the term of such Capital
Lease applying a discount rate equal to the interest rate provided in
such lease (or in the absence of a stated interest rate, that rate
used in the preparation of the financial statements described in
Section 7.1(a)), all the foregoing in accordance with GAAP applied on
a Consistent Basis.
"Capital Leases" means all leases which have been or should
be capitalized in accordance with GAAP as in effect from time to time,
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
"Capital Market Transactions" means (a) the issuance or sale
in a registered public offering, Rule 144A/Regulation S transaction or
private placement of capital stock (including equity-linked
securities) or notes, debentures, instruments or other debt securities
or (b) the incurrence of any
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loans; provided, however, none of the Senior Debt shall constitute a
"Capital Markets Transactions".
"Closing Date" means the date as of which this Agreement is
executed by the Borrower and the Lender and on which the conditions
set forth in Section 5.1 hereof have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any final or temporary regulations promulgated thereunder.
"Collateral" means, collectively, all property of the
Borrower, any Domestic Subsidiary or any other Person in which the
Collateral Agent or any Secured Party is granted a Lien as security
for all or any portion of the Senior Debt under any Security
Instrument.
"Collateral Agent" means Wachovia Bank, N.A., in its capacity
as collateral agent for the Secured Parties under the Intercreditor
Agreement.
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the
preparation of the audited financial statements of the Borrower first
delivered to the Lender hereunder.
"Consolidated EBIT" means, with respect to the Borrower and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, and (iii) taxes on
income, all determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis.
"Consolidated EBITDA" means, with respect to the Borrower and
its Subsidiaries for any Twelve Month Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) taxes on income,
(iv) amortization and (v) depreciation, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis.
"Consolidated Fixed Charge Coverage Ratio" means, with
respect to the Borrower and its Subsidiaries for any Four-Quarter
Period ending on the date of computation thereof, the ratio of (i)
Consolidated EBIT for such period plus Consolidated Lease Expense, to
(ii) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" means, with respect to Borrower
and its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Interest Expense plus (ii) Consolidated Lease Expense, all determined
on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
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"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Borrower and its Subsidiaries, including without limitation (i) the
current amortized portion of debt discounts to the extent included in
gross interest expense, (ii) the current amortized portion of all fees
(including, without limitation, fees payable in respect of a Hedging
Agreement) payable in connection with the incurrence of Indebtedness
to the extent included in gross interest expense, (iii) the portion of
any payments made in connection with Capital Leases allocable to
interest expense and (iv) the interest component of any payments made
to an Permitted Factor in connection with Factored Accounts, all
determined on a consolidated basis in accordance with GAAP applied on
a Consistent Basis.
"Consolidated Lease Expense" means for any period all amounts
paid or accrued by the Borrower and its Subsidiaries during such
period under operating leases (whether or not constituting rental
expense) determined on a consolidated basis.
"Consolidated Net Income" means, for any period of
computation thereof, the gross revenues from operations of the
Borrower and its Subsidiaries (including payments received by the
Borrower and its Subsidiaries of (i) interest income, and (ii)
dividends and distributions made in the ordinary course of their
businesses by Persons in which investment is permitted pursuant to
this Agreement and not related to an extraordinary event), less all
operating and non-operating expenses of the Borrower and its
Subsidiaries, including taxes on income, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis; but excluding (for all purposes other than compliance with
Section 8.1(a) hereof) as income (or loss with respect to clauses (i)
and (v)): (i) net gains or losses on the sale, conversion or other
disposition of capital assets in excess of an aggregate amount of
$1,500,000 , (ii) net gains on the acquisition, retirement, sale or
other disposition of capital stock and other securities of the
Borrower or its Subsidiaries, (iii) net gains on the collection of
proceeds of life insurance policies, (iv) any write-up of any asset,
and (v) any other net gain or credit or loss of an extraordinary
nature as determined in accordance with GAAP applied on a Consistent
Basis; provided, however, that for purposes of determining
Consolidated EBIT and Consolidated EBITDA for the last fiscal quarter
(or any month therein) of Fiscal Year 1999, Consolidated Net Income
shall be deemed to be zero (0).
"Consolidated Net Worth" means at any time as of which the
amount thereof is to be determined, the sum of the following in
respect of the Borrower and its Subsidiaries (determined on a
consolidated basis and excluding intercompany items among the Borrower
and its Subsidiaries and any upward adjustment after the Closing Date
due to revaluation of assets): (i) the amount of issued and
outstanding share capital, plus (ii) the amount of additional paid-in
capital and retained income (or, in the case of a deficit, minus the
amount of such deficit), minus (iii) the amount of any treasury stock,
minus (iv) valuation allowances, minus (v) receivables due from the
Crown ESOP and minus (vi) any translation, adjustments for any foreign
currency transactions, all as determined in accordance with GAAP
applied on a Consistent Basis.
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"Consolidated Total Assets" means, as at any time of
calculation thereof, the net book value of all assets of the Borrower
and its Subsidiaries as determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation or incurring
thereof, would be required) to be included in the financial statements
(including footnotes) of such Person in accordance with GAAP applied
on a Consistent Basis, including Statement No. 5 of the Financial
Accounting Standards Board, all Rate Hedging Obligations and any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including obligations of such Person however incurred:
(a) to purchase such Indebtedness or other
obligation or any property or assets constituting security
therefor;
(b) to advance or supply funds in any manner
(i) for the purchase or payment of such Indebtedness or other
obligation, or (ii) to maintain a minimum working capital,
net worth or other balance sheet condition or any income
statement condition of the primary obligor;
(c) to grant or convey any lien, security
interest, pledge, charge or other encumbrance on any property
or assets of such Person to secure payment of such
Indebtedness or other obligation;
(d) to lease property or to purchase securities
or other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(e) otherwise to assure the owner of the
Indebtedness or such obligation of the primary obligor
against loss in respect thereof.
"Continue," "Continuation," and "Continued" shall refer to
the continuation of a Eurodollar Rate Loan of one Type as a Eurodollar
Rate Loan of the same Type from one Interest Period to the next
Interest Period.
"Convert," "Conversion," and "Converted" shall refer to a
conversion of one Type of Loan into another Type of Loan.
"Credit Party" means each of the Borrower, each Facility
Guarantor and each other Person providing Collateral pursuant to any
Security Instrument from time to time.
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"Crown ESOP" means that certain employee stock ownership plan
of the Borrower as in effect on the date hereof.
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan, until the end of the Interest Period applicable thereto, a rate
of two percent (2%) above the Eurodollar Rate applicable to such Loan,
and thereafter at a rate of interest per annum which shall be two
percent (2%) above the Base Rate, (ii) with respect to Base Rate
Loans, fees, and other amounts payable in respect of Obligations or
(except as otherwise expressly provided therein) the obligations of
any other Credit Party under any of the other Loan Documents, a rate
of interest per annum which shall be two percent (2%) above the Base
Rate and (iii) in any case, the maximum rate permitted by applicable
law, if lower.
"Direct Foreign Subsidiary" means a Subsidiary other than a
Domestic Subsidiary a majority of whose Voting Securities, or a
majority of whose Subsidiary Securities, are owned by the Borrower or
a Domestic Subsidiary.
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United
States of America.
"Domestic Subsidiary" means any Subsidiary of the Borrower
organized under the laws of the United States of America, any state or
territory thereof or the District of Columbia.
"Eligible Assignee" means (i) an affiliate of the Lender, and
(ii) any other Person approved by the Lender and, unless an Event of
Default has occurred and is continuing at the time any assignment is
effected in accordance with Section 10.1, the Borrower, such approval
not to be unreasonably withheld or delayed by the Borrower and such
approval to be deemed given by the Borrower (in the absence of notice
to the contrary, effective upon receipt) within two Business Days
after notice of such proposed assignment has been provided by the
assigning Lender to the Borrower; provided, however, that neither the
Borrower nor an affiliate of the Borrower shall qualify as an Eligible
Assignee.
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Lender:
(a) Government Securities;
(b) obligations of any corporation organized
under the laws of any state of the United States of America
or under the laws of any other nation, payable in the United
States of America, expressed to mature not later than 90 days
following the date of issuance thereof and rated in an
investment grade rating category by S&P and Moody's;
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(c) interest bearing demand or time deposits
issued by any bank or certificates of deposit, bankers
acceptances and other "money market instruments" maturing
within one hundred eighty (180) days from the date of
issuance thereof and issued by a bank or trust company
organized under the laws of the United States or of any state
thereof having capital surplus and undivided profits
aggregating at least $400,000,000 and being rated A or better
by S&P or A2 or better by Moody's;
(d) Repurchase Agreements;
(e) Municipal Obligations;
(f) shares of mutual funds which invest
exclusively in obligations described in paragraphs (a)
through (e) above, the shares of which mutual funds are at
all times rated "AAA" by S&P; and
(g) shares of "money market funds," of
financial institutions rated A or better by S&P or A2 or
better by Moody's.
"Employee Benefit Plan" means any employee benefit plan
within the meaning of Section 3(3) of ERISA which (a) is maintained
for employees of the Borrower or is assumed by the Borrower in
connection with any Acquisition or any of its ERISA Affiliates or (b)
has at any time during the six (6) years immediately prior the date
hereof been maintained for the employees of the Borrower or any
current or former ERISA Affiliate.
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the
Resource Conservation and Recovery Act, the Toxic Substances Control
Act, as amended, the Clean Air Act, as amended, the Clean Water Act,
as amended, any other "Superfund" or "Superlien" law or any other
federal, or applicable state or local statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
final or temporary regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any
Person or trade or business which is a member of a group which is
under common control with the Borrower, who together with the
Borrower, is treated as a single employer within the meaning of
Section 414(b) and (c) of the Code.
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate.
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16
"Eurodollar Rate" means the interest rate per annum
calculated according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
------------------------
Rate 1- Reserve Requirement Interest Addition
"Event of Default" means any of the occurrences set forth as
such in Section 9.1 hereof.
"Excluded Locations" means the real property of the Borrower
or its Subsidiaries located at ▇▇▇▇▇▇ Street in Calhoun, Georgia
(Plant 1), Chatsworth, Georgia, Dalton, Georgia (Plant 4), Berea,
Kentucky and Roxboro, North Carolina (Outlet Store).
"Facility Guarantors" means on any date the Subsidiaries
party to a Facility Guaranty on such date and shall in any event
include all Material Subsidiaries that are Domestic Subsidiaries.
"Facility Guaranty" means each guaranty agreement between one
or more Facility Guarantors and the Lender, substantially in the form
of Exhibit G, delivered as of the Closing Date and otherwise pursuant
to Section 7.23, as the same may be amended, modified or supplemented
from time to time.
"Factor Advances" means all amounts advanced to the Borrower
or a Subsidiary in respect of an account prior to its stated maturity
by a factor in connection with a factoring program relating to the
Borrower's or a Subsidiary's accounts.
"Factored Accounts" means all accounts of the Borrower or any
Subsidiary purchased or approved by a Permitted Factor in connection
with a factoring program approved by the Lender.
"Federal Funds Effective Rate" means, for any day, the rate
per annum (rounded upward to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day, provided that (a)
if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average
rate quoted to the Lender on such day on such transaction as
determined by the Lender.
"Fiscal Year" means the twelve month fiscal period of the
Borrower ending the Sunday nearest March 31 of each calendar year; any
reference to a Fiscal Year immediately followed by a calendar year
shall mean the Fiscal Year ending in such calendar year.
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political
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17
subdivision thereof regulating, relating to, or imposing liability or
standards of conduct concerning, any Employee Benefit Plan.
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrower and its Subsidiaries, taken together
as one accounting period.
"GAAP" means Generally Accepted Accounting Principles, being
those principles of accounting set forth in pronouncements of the
Financial Accounting Standards Board, the American Institute of
Certified Public Accountants or which have other substantial
authoritative support and are applicable in the circumstances as of
the date of a report, as such principles are from time to time
supplemented and amended.
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on which are
fully and unconditionally guaranteed by, the United States of America.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, agency or instrumentality or political subdivision
thereof or any entity or officer exercising executive, legislative or
judicial, regulatory or administrative functions of or pertaining to
any government or any court, in each case whether a state of the
United States, the United States or foreign.
"Guaranties" means all obligations of the Borrower or any
Subsidiary directly or indirectly guaranteeing, or in effect
guaranteeing, any Indebtedness or other obligation of any other
Person.
"Hazardous Material" means and includes any hazardous, toxic
or dangerous waste, substance or material, the generation, handling,
storage, disposal, treatment or emission of which is subject to any
Environmental Law.
"Hedging Agreement" means any agreement governing Rate
Hedging Obligations.
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property, all indebtedness secured
by any Lien on the property of such Person whether or not such
indebtedness is assumed, all liability of such Person by way of
endorsements (other than for collection or deposit in the ordinary
course of business), all Contingent Obligations, the undrawn portion
of letters of credit, all reimbursement obligations of such person
with respect to letters of credit, that portion of obligations with
respect to Capital Leases and other items which in accordance with
GAAP is classified as a liability on a balance sheet; but excluding
all accounts payable in the ordinary course of business so long as
payment therefor is due within one year; provided that in no event
shall the term Indebtedness include surplus and retained earnings,
lease obligations (other than pursuant to Capital Leases), reserves
for deferred income taxes and investment credits, other deferred
credits and reserves, and deferred compensation obligations.
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"Indebtedness for Money Borrowed" means for any Person all
indebtedness in respect of money borrowed, including without
limitation all Capital Leases and the deferred purchase price of any
property or asset, evidenced by a promissory note, bond, debenture or
similar written obligation for the payment of money, other than trade
payables incurred in the ordinary course of business.
"Interbank Offered Rate" means, with respect to any
Eurodollar Rate Loan for the Interest Period applicable thereto, the
rate per annum (rounded upwards, if necessary), to the nearest 1/100
of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately
11:00 A.M. (London time) two Business Days prior to the first day of
such Interest Period for a term comparable to such Interest Period. If
for any reason such rate is not available, the term "Interbank Offered
Rate" shall mean, with respect to any Eurodollar Rate Loan for the
Interest Period applicable thereto, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however; if more
than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%).
"Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of the date hereof among the Borrower, the
Collateral Agent and the Secured Parties, as amended, restated or
supplemented from time to time.
"Interest Period" for each Eurodollar Rate Loan means a
period commencing on the date such Eurodollar Rate Loan is made or
converted and each subsequent period commencing on the last day of the
immediately preceding Interest Period for such Eurodollar Rate Loan,
and ending, at the Borrower's option, on the date one, two, three or
six months thereafter as notified to the Lender by the Authorized
Representative no later than three (3) Business Days prior to the
beginning of such Interest Period; provided, that,
(i) if the Authorized Representative fails to notify the
Lender of the length of an Interest Period three (3) Business
Days prior to the first day of such Interest Period, the Loan
for which such Interest Period was to be determined shall be
deemed to be a Base Rate Loan as of the first day thereof;
(ii) if an Interest Period for a Eurodollar Rate Loan
would end on a day which is not a Business Day such Interest
Period shall be extended to the next Business Day (unless
such extension would cause the applicable Interest Period to
end in the succeeding calendar month, in which case such
Interest Period shall end on the next preceding Business
Day);
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19
(iii) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(iv) no Interest Period shall extend past April 3, 2000
with respect to Revolving A Loans and January 15, 2000 with
respect to Revolving B Loans; and
(v) there shall not be more than four (4) Interest
Periods in effect on any day.
"Interest Rate Selection Notice" means the notice delivered
by an Authorized Representative in connection with the election of a
subsequent interest period for any Eurodollar Rate Loan or the
conversion of any Eurodollar Rate Loan into a Base Rate Loan or the
conversion of any Base Rate Loan (other than an Overadvance Loan) into
a Eurodollar Rate Loan, in the form of Exhibit E hereto.
"Inventory" means the book value of inventory of the Borrower
which consists of the raw materials and finished goods inventory, all
of which inventory is usable, in good condition, and saleable (at
prices not less than cost).
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it
has acquired or holds subject to a conditional sale agreement,
financing lease, or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for
security purposes.
"Loan" or "Loans" means any of the Revolving Loans made under
the Revolving Credit Facility.
"Loan Documents" means this Agreement, the Security
Instruments, the Facility Guaranties, the Notes, the Intercreditor
Agreement and all other instruments and documents heretofore or
hereafter executed or delivered to or in favor of the Lender or the
Collateral Agent in connection with the Loans made and transactions
contemplated under this Agreement, as the same may be amended,
supplemented or replaced from the time to time.
"Margin Stock" shall have the meaning given to such term in
Section 6.11 hereof.
"Material Adverse Effect" means with respect to the Borrower
and any Facility Guarantor a material adverse effect (x) on the
business, properties, operations or condition, financial or otherwise,
of the Borrower and its Subsidiaries taken as a whole or (y) on the
ability of any party
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20
to the Loan Documents to perform, or of the Lender or the Collateral
Agent to enforce, the obligations of such Person under the Loan
Documents to which it is a party.
"Material Subsidiary" means any direct or indirect Subsidiary
of the Borrower which (a) has total assets equal to or greater than
$500,000 or (b) has net income equal to or greater than $500,000;
provided, however, that notwithstanding the foregoing, if the Borrower
and the Material Subsidiaries, as defined above, have less than 95% of
Consolidated Total Assets, then the term "Material Subsidiaries" shall
mean Subsidiaries of the Borrower, as specified by the Borrower, that
together with the Borrower have assets equal to not less than 95% of
Consolidated Total Assets. In any event, notwithstanding the foregoing
provisions of this definition, each Subsidiary of the Borrower formed
or acquired after the date of this Agreement shall constitute a
Material Subsidiary.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means, collectively (or individually as the
context may indicate), each mortgage or similar agreement executed by
the Borrower or any Subsidiary and delivered after the Closing Date
pursuant to Sections 7.23, 7.24 or 8.13 hereof in favor of the
Collateral Agent and in form and substance acceptable to the Lender,
each as from time to time amended, supplemented or replaced.
"Mortgaged Property" means each parcel of real property which
is subject to a Mortgage from time to time.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) years.
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal corporation or other public body
organized under the laws of any such state which are rated, in their
capacity as issuer of general obligations, in the highest investment
rating category by both S&P and Moody's.
"Net Income" means, as applied to any Person for any period,
the aggregate amount of net income of such Person, after taxes, for
such period, as determined in accordance with GAAP applied on a
Consistent Basis.
"Net Proceeds" means (a) in connection with any Restricted
Asset Disposition, the proceeds thereof in the form of cash and cash
equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and
when received) of such Restricted Asset Disposition, after deducting
therefrom, as applicable, (i) attorneys' fees, accountants' fees,
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21
investment banking fees, survey costs, title insurance premiums, and
related search and recording charges, transfer taxes, deed or mortgage
recording taxes, amounts required to be applied to the repayment of
Indebtedness secured by a Lien on any asset which is the subject of
such Restricted Asset Disposition and other customary fees and
expenses actually incurred in connection therewith, (ii) taxes paid or
reasonably estimated by the Borrower to be payable as a result thereof
(including withholding taxes incurred in connection with cross-border
transactions, if applicable) and (iii) appropriate amounts to be
provided by the Borrower or any Subsidiary, as the case may be, as a
reserve required in accordance with GAAP against any liabilities
associated with such Restricted Asset Disposition and retained by the
Borrower or any Subsidiary, as the case may be, after such Restricted
Asset Disposition, including, without limitation, pension and other
post-employment benefit liabilities and liabilities under any
indemnification obligations associated with such Restricted Asset
Disposition, (b) in connection with any Capital Market Transactions
(but not including in "Net Proceeds" any replacements, refundings or
refinancings of existing Indebtedness), the cash proceeds received
from such issuance or incurrence, net of attorneys' fees, investment
banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith and (c) in connection with any Asset Disposition
means cash payments received by the Borrower therefrom (including any
cash payments received pursuant to any note or other debt security
received in connection with any Asset Disposition) as and when
received, net of (i) all legal fees and expenses and other fees and
expenses paid to third parties and incurred in connection therewith,
(ii) all taxes required to be paid or accrued as a consequence of such
disposition, (iii) all amounts applied to repayment of Indebtedness
(other than the Obligations) secured by a Lien on the asset or
property disposed.
"Net Receivables" means the sum of Factored Accounts plus
Other Accounts, net of all reserves with respect to such accounts
required in accordance with GAAP.
"Notes" means, collectively, the Revolving A Note and the
Revolving B Note.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) all liabilities
of Borrower to the Lender which arise under any Swap Agreement with
the Lender and (iii) the payment and performance of all other
obligations, liabilities and Indebtedness of the Borrower to the
Lender hereunder, under any one or more of the other Loan Documents or
with respect to the Loans.
"Operating Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, the bylaws, operating agreement, partnership
agreement, limited partnership agreement or other applicable documents
relating to the operation, governance or management of such entity.
"Organizational Action" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally authorized
incorporated
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22
or unincorporated entity, any corporate, organizational or partnership
action (including any required shareholder, member or partner action),
or other similar official action, as applicable, taken by such entity.
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally authorized
incorporated or unincorporated entity, the articles of incorporation,
certificate of incorporation, articles of organization, certificate of
limited partnership or other applicable organizational or charter
documents relating to the creation of such entity.
"Other Accounts" means all accounts receivable recorded on
the books of the Borrower in accordance with GAAP, other than Factored
Accounts and income tax accruals.
"Overadvance Amount" means an amount equal to the following
amounts for the corresponding periods:
Closing Date through September 25, 1999 $35,000,000
September 26, 1999 through December 26, 1999 $25,000,000
[***]
[***]
Thereafter $ 0
[***].
[***].
"Overadvance Loan" means, as determined by the most recent
Borrowing Base Certificate, that portion of the Revolving Loans equal
to (x) all Obligations divided by total Senior Debt outstanding,
multiplied by (y) the amount of total Senior Debt outstanding in
excess of (i) the Borrowing Base minus (ii) the Overadvance Amount.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of
ERISA or Section 412 of the Code and which is, or was during the six
(6) years immediately prior to the date hereof maintained for
employees of the Borrower or any ERISA Affiliate.
"Permitted Asset Dispositions" means Asset Dispositions
consisting of (a) dispositions of inventory in the ordinary course of
business, (b) dispositions of equipment which, in the aggregate
16
23
during any Fiscal Year, have a fair market value or book value,
whichever is greater, of $1,000,000 or less, (c) dispositions of
property that is substantially worn, damaged, or obsolete and (to the
extent not replaced by assets of substantially the same or greater
utility and value), in the judgment of the Borrower, no longer best
used or useful in its business or that of any Subsidiary, (d)
transfers of assets necessary to give effect to merger or
consolidation transactions permitted by Section 8.6, (e) the
disposition of cash or Eligible Securities in the ordinary course of
management of the investment portfolio of the Borrower and its
Subsidiaries, (f) the sale or discount without recourse of accounts
receivable or notes receivable, or the conversion or exchange of
accounts receivable into or for notes receivable in connection with
the compromise or collection thereof, each in the ordinary course of
business, (g) the transfer of the corporate aircraft currently leased
by the Borrower, and (h) Restricted Asset Dispositions.
"Permitted Factor" means any factor approved by the
Collateral Agent and subject to an Assignment of Factoring Proceeds.
"Permitted Liens" shall have the meaning given to such term
in Section 8.3 hereof.
"Person" means an individual, partnership, corporation,
trust, unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof.
"Pledge Agreement" means, collectively (or individually as
the context may indicate), (i) that certain Securities Pledge
Agreement dated as of the date hereof between the Borrower and the
Collateral Agent for the benefit of the Secured Parties, (ii) any
additional Securities Pledge Agreement delivered to the Collateral
Agent pursuant to Sections 7.23 or 7.24, and (iii) with respect to any
Subsidiary Securities issued by a Direct Foreign Subsidiary, any
additional or substitute charge, agreement, document, instrument or
conveyance, in form and substance acceptable to the Collateral Agent,
conferring under applicable foreign law upon the Collateral Agent for
the benefit of the Secured Parties a Lien upon such Subsidiary
Securities as are owned by the Borrower or any Domestic Subsidiary,
each in the form of Exhibit K and as hereafter amended, supplemented
(including by Pledge Agreement Supplement) or amended and restated
from time to time.
"Pledge Agreement Supplement" means, with respect to each
Pledge Agreement, the Pledge Agreement Supplement in the form affixed
as an exhibit to such Pledge Agreement.
"Pledged Interests" means the Subsidiary Securities required
to be pledged as Collateral pursuant to Sections 7.23 or 7.24 or the
terms of any Pledge Agreement.
"Prime Rate" means the rate of interest per annum announced
publicly by the Lender as its prime rate from time to time. The Prime
Rate is not necessarily the best or the lowest rate of interest
offered by the Lender.
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24
"Principal Office" means the office of the Lender at
Independence Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇- ▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ or such other office and address as the Lender may from time to
time designate.
"Property" means all types of real, personal, tangible,
intangible or mixed property, whether owned in fee simple or leased.
"Prudential" means The Prudential Insurance Company of
America.
"Prudential Note Agreement" means that certain Note Agreement
dated as of October 12, 1995 between the Borrower and Prudential, as
amended from time to time.
"Prudential Obligations" means all obligations of the
Borrower to Prudential under the Prudential Note Agreement in an
aggregate principal amount of $50,000,000.
"Rate Hedging Obligations" means any and all obligations of
the Borrower or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts,
warrants and those commonly known as interest rate "swap" agreements;
and (ii) any and all cancellations, buybacks, reversals, terminations
or assignments of any of the foregoing.
"Recoverable Income Taxes" means (i) at any time prior to the
earlier of September 15, 1999 or the date of filing of the Borrower's
tax returns for Fiscal Year 1999 (the earlier of such being the
"Filing Date"), the amount of tax refunds for Fiscal Year 1999 as
determined by Deloitte & Touche as of the Closing Date and (ii) on and
after the Filing Date, as reflected on the filed tax returns of the
Borrower.
"Regulation D" means Regulation D of the Board as the same
may be amended or supplemented from time to time.
"Regulatory Change" means any change effective after the
Closing Date in United States federal or state laws or regulations
(including Regulation D and capital adequacy regulations) or foreign
laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks,
which includes the Lender, under any United States federal or state or
foreign laws or regulations (whether or not having the force of law)
by any court or governmental or monetary authority charged with the
interpretation or administration thereof or compliance by the Lender
with any request or directive regarding capital adequacy,
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25
including with respect to "highly leveraged transactions," whether or
not having the force of law, whether or not failure to comply
therewith would be unlawful and whether or not published or proposed
prior to the date hereof.
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or ▇▇▇▇▇'▇ or "A-1" by
S&P or "P-1" by ▇▇▇▇▇'▇.
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or any successor) by member banks of
the Federal Reserve System against "Eurocurrency liabilities" (as such
term is used in Regulation D). Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks with respect to (i) any
category of liabilities which includes deposits by reference to which
the Eurodollar Rate is to be determined, or (ii) any category of
extensions of credit or other assets which include Eurodollar Rate
Loans. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Reserve Requirement.
"Restricted Asset Dispositions" means (i) any Subsidiary
Disposition and (ii) any Asset Dispositions (other than an Asset
Disposition referred to in clauses (a) through (g) of the definition
of "Permitted Asset Disposition") having an aggregate fair market
value of less than $1,000,000, provided that the proceeds therefrom
shall be applied as provided in Section 2.3(b).
"Restricted Payment" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of stock of Borrower or any of its Subsidiaries (other than
those payable or distributable solely to the Borrower) now or
hereafter outstanding, except a dividend payable solely in shares of a
class of stock to the holders of that class; (b) any redemption,
conversion, exchange, retirement or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class
of stock of Borrower or any of its Subsidiaries (other than those
payable or distributable solely to the Borrower) now or hereafter
outstanding, other than shares redeemed, converted, exchanged or
retired in connection with the cashless purchase of shares subject to
an existing employee stock option plan of the Borrower; (c) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of
stock of Borrower or any Subsidiary of its Subsidiaries now or
hereafter outstanding; and (d) any issuance and sale of capital stock
of any Subsidiary of the Borrower (or any option, warrant or right to
acquire such stock) other than to the Borrower; provided, however,
that any payment made in respect of capital stock of the Borrower as
described in the certain letter agreement of even date herewith among
the Borrower and the Secured Parties, shall not be a Restricted
Payment hereunder.
"Revolving A Credit Commitment" means, with respect to the
Lender, the obligation of such Lender to make Revolving A Loans to the
Borrower up to an aggregate principal amount
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26
reflected on Exhibit A hereto, as reduced from time to time in
accordance with Section 2.3(a) hereof.
"Revolving A Credit Facility" means the facility described in
Article II hereof providing for Revolving A Loans to the Borrower by
the Lender in the aggregate principal amount equal to the Revolving A
Credit Commitment.
"Revolving A Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving A Loans
then outstanding and all interest accrued and unpaid thereon.
"Revolving A Credit Termination Date" means (i) April 3, 2000
or (ii) such earlier date of termination of Lender's obligations
pursuant to Section 9.1 upon the occurrence of an Event of Default, or
(iii) such date as the Borrower may permanently terminate the
Revolving A Credit Facility by payment in full of all Revolving A
Credit Outstandings and cancellation of the Revolving A Credit
Commitment pursuant to Section 2.3 hereof.
"Revolving A Loan" means any borrowing pursuant to an Advance
under the Revolving A Credit Facility in accordance with Article II
hereof.
"Revolving A Note" means the promissory note of the Borrower
evidencing Revolving A Loans executed and delivered to the Lender as
provided in Section 2(a) hereof substantially in the form attached
hereto as Exhibit F-1.
"Revolving B Credit Commitment" means, with respect to the
Lender, the obligation of such Lender to make Revolving B Loans to the
Borrower up to an aggregate principal amount reflected on Exhibit A
hereto, as reduced from time to time in accordance with Section 2.3
hereof.
"Revolving B Credit Facility" means the facility described in
Article II hereof providing for Revolving B Loans to the Borrower by
the Lender in the aggregate principal amount equal to the Revolving B
Credit Commitment.
"Revolving B Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving B Loans
then outstanding and all interest accrued and unpaid thereon.
"Revolving B Credit Termination Date" means (i) January 15,
2000 or (ii) such earlier date of termination of Lender's obligations
pursuant to Section 9.1 upon the occurrence of an Event of Default, or
(iii) such date as the Borrower may permanently terminate the
Revolving B Credit Facility by payment in full of all Revolving B
Credit Outstandings and cancellation of the Revolving B Credit
Commitment pursuant to Section 2.3 hereof or (iv) the date upon which
demand is made by the Lender for payment in full of all Revolving B
Credit Outstandings after the occurrence of a Triggering Event.
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"Revolving B Loan" means any borrowing pursuant to an Advance
under the Revolving B Credit Facility in accordance with Article II
hereof.
"Revolving B Note" means the promissory note of the Borrower
evidencing Revolving B Loans executed and delivered to the Lender as
provided in Section 2(b) hereof substantially in the form attached
hereto as Exhibit F-2.
"Revolving Credit Facilities" means the Revolving A Credit
Facility and the Revolving B Credit Facility described in Article II
hereof providing for Loans to the Borrower by the Lender in the
aggregate principal amount equal to the Total Revolving Credit
Commitment.
"Revolving Credit Outstandings" means the sum of the
Revolving A Credit Outstandings and the Revolving B Credit
Outstandings.
"Revolving Loan" means the Revolving A Loans or Revolving B
Loans.
"Revolving Notes" means the Revolving A Note and the
Revolving B Note.
"S&P" means Standard & Poor's Ratings Group.
"Secured Parties" means, collectively, the Lender, Wachovia
and Prudential.
"Security Agreement" means, collectively (or individually as
the context may indicate), (i) the Security Agreement dated as of the
date hereof by the Borrower and the Subsidiaries to the Collateral
Agent for the benefit of the Secured Parties, and (ii) any additional
Security Agreement delivered to the Collateral Agent pursuant to
Section 7.23, each in the form of Exhibit L-1, with respect to the
Borrower, and Exhibit L-2, with respect to any Subsidiary, and as the
same are hereafter modified, amended or supplemented from time to
time.
"Security Instruments" means, collectively, the Pledge
Agreement, the Security Agreement, the Mortgage, the Assignment of
Factoring Balances and all other agreements (including control
agreements), instruments and other documents, whether now existing or
hereafter in effect, pursuant to which the Borrower or any Subsidiary
shall grant or convey to the Collateral Agent or any Secured Party a
Lien in, or any other Person shall acknowledge any such Lien in,
property as security for all or any portion of the Obligations, as any
of them may be amended, modified or supplemented from time to time.
"Senior Debt" means all Indebtedness of the Borrower and its
Subsidiaries owing to the Secured Parties pursuant to the Senior Debt
Documents.
"Senior Debt Documents" means, collectively, this Agreement,
the Wachovia Credit Agreement and the Prudential Note Agreement,
together with all material related documents executed in connection
with the transactions contemplated thereby.
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"Single Employer Plan" means any employee pension benefit
plan covered by Title IV of ERISA in respect of which the Borrower is
an "employer" as described in Section 4001(b) of ERISA and which is
not a Multi-employer Plan.
"Solvent" means, when used with respect to any Person, that
at the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including, without limitation, Contingent Obligations; and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding voting stock or more than 50% of all
equity interests is owned directly or indirectly by the Borrower
and/or by one or more of the Borrower's Subsidiaries.
"Subsidiary Disposition" means the sale of the capital stock
or substantially all of the assets of a Subsidiary or Subsidiaries of
the Borrower [***].
"Swap Agreement" means one or more agreements between the
Borrower and any Person with respect to Indebtedness evidenced by the
Notes, on terms mutually acceptable to Borrower and such Person and
approved by the Lender, which agreements create Rate Hedging
Obligations.
"Termination Event" means: (a) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(b) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4068(f) of ERISA; or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (d) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (e) any other event or
condition which would constitute grounds under Section 4042(a) of
ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; or (f) the partial or complete
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
Plan; or (g) the imposition of a Lien pursuant to Section 412 of the
Code or Section 302 of ERISA; or (h) any event or condition which
results in the reorganization or insolvency of a Multiemployer Plan
under Section 4241 or Section 4245 of ERISA, respectively; or (i) any
event or condition which results in the termination of a Multiemployer
Plan under Section 4041A of ERISA or the institution by the PBGC of
proceedings to terminate a Multiemployer Plan under Section 4042 of
ERISA.
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"Total Revolving Credit Commitment" means the sum of the
Revolving A Credit Commitment and the Revolving B Credit Commitment.
"Total Senior Debt Outstandings" means, as of any date of
determination, the aggregate principal amount of all Senior Debt then
outstanding and all interest accrued and unpaid thereon.
"Triggering Event" means the failure of the Borrower to
obtain (and provide a copy to the Lender), prior to any payment to
Prudential of the principal amount due on October 12, 1999, a bona
fide letter of intent containing customary provisions (in form and
substance reasonably acceptable to the Lender) with a third party
(which may be non-binding) [***].
"Twelve Month Period" means a period of twelve consecutive
fiscal months, taken together as one accounting period.
"Type" shall mean any type of Loan (i.e., a Base Rate Loan or
a Eurodollar Rate Loan).
"Voting Securities" means shares of capital stock issued by a
corporation, or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been
suspended by the happening of such a contingency.
"Wachovia" means Wachovia Bank, N.A.
"Wachovia Credit Agreement" means that certain Revolving
Credit Agreement dated as of the date hereof between the Borrower and
Wachovia, refinancing certain Indebtedness of the Borrower to Wachovia
under (a) that certain Revolving Credit Agreement dated as of August
15, 1995, as amended, (b) that certain Master Note dated June 17, 1998
and (c) that certain Note dated April 30, 1999, as from time to time
amended, restated or supplemented.
"Wachovia Obligations" means all obligations of the Borrower
to Wachovia under the Wachovia Credit Agreement in an aggregate
principal amount of up to $60,000,000.
"Year 2000 Compliant" means all computer applications
(including those affected by information received from its suppliers
and vendors) that are material to and used in the Borrower's or any of
its Subsidiaries' business and operations will on a timely basis be
able to perform properly date-sensitive functions involving all dates
on and after January 1, 2000.
"Year 2000 Problem" means the risk that computer applications
used by the Borrower or any of its Subsidiaries (including those
affected by information received from its suppliers and vendors) may
be unable to recognize and perform properly date-sensitive functions
involving certain dates on and after January 1, 2000.
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1.2. Rules of Interpretation.
(a) All accounting terms not specifically defined herein
shall have the meanings assigned to such terms and shall be
interpreted in accordance with GAAP applied on a Consistent Basis.
(b) Each term defined in Articles 1, 8 or 9 of the
Georgia Uniform Commercial Code shall have the meaning given therein
unless otherwise defined herein, except to the extent that the Uniform
Commercial Code of another jurisdiction is controlling, in which case
such terms shall have the meaning given in the Uniform Commercial Code
of the applicable jurisdiction.
(c) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision thereof.
(d) Except as otherwise expressly provided, references
in any Loan Document to articles, sections, paragraphs, clauses,
annexes, appendices, exhibits and schedules are references to
articles, sections, paragraphs, clauses, annexes, appendices, exhibits
and schedules in or to such Loan Document.
(e) All definitions set forth herein or in any other
Loan Document shall apply to the singular as well as the plural form
of such defined term, and all references to the masculine gender shall
include reference to the feminine or neuter gender, and vice versa, as
the context may require.
(f) When used herein or in any other Loan Document,
words such as "hereunder", "hereto", "hereof" and "herein" and other
words of like import shall, unless the context clearly indicates to
the contrary, refer to the whole of the applicable document and not to
any particular article, section, subsection, paragraph or clause
thereof.
(g) References to "including" means including without
limiting the generality of any description preceding such term, and
for purposes hereof the rule of ejusdem generis shall not be
applicable to limit a general statement, followed by or referable to
an enumeration of specific matters, to matters similar to those
specifically mentioned.
(h) Except as otherwise expressly provided, all dates
and times of day specified herein shall refer to such dates and times
at Charlotte, North Carolina.
(i) Whenever interest rates or fees are established in
whole or in part by reference to a numerical percentage expressed as
"___%", such arithmetic expression shall be interpreted in accordance
with the convention that 1% = 100 basis points.
(j) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the
opportunity to request) revisions to, the Loan Documents, and any rule
of construction that ambiguities are to be resolved against the
drafting party shall be
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inapplicable in the construing and interpretation of the Loan
Documents and all exhibits, schedules and appendices thereto.
(k) Any reference to an officer of the Borrower or any
other Person by reference to the title of such officer shall be deemed
to refer to each other officer of such Person, however titled,
exercising the same or substantially similar functions.
(l) All references to any agreement or document as
amended, modified or supplemented, or words of similar effect, shall
mean such document or agreement, as the case may be, as amended,
modified or supplemented from time to time only as and to the extent
permitted therein and in the Loan Documents.
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans.
(a) Commitment.
(i) Subject to the terms and conditions of Article V
of this Agreement, the Lender severally agrees to make Advances to the
Borrower under the Revolving A Credit Facility from time to time from
the Closing Date until the Revolving A Credit Termination Date on a
pro rata basis as to the total borrowing requested by the Borrower on
any day; provided, however, that immediately after giving effect to
each such Advance, (i) the principal amount of Revolving A Credit
Outstandings shall not exceed the Revolving A Credit Commitment and
(ii) Total Senior Debt Outstandings do not exceed the Borrowing Base.
Within such limits, the Borrower may borrow, repay and reborrow under
the Revolving A Credit Facility on a Business Day from the Closing
Date until, but (as to borrowings and reborrowings) not including, the
Revolving A Credit Termination Date; provided, however, that (y) no
Revolving A Loan that is a Eurodollar Rate Loan shall be made which
has an Interest Period that extends beyond the Revolving A Credit
Termination Date and (z) each Revolving A Loan that is a Eurodollar
Rate Loan may, subject to the provisions of Section 3.4 hereof, be
repaid only on the last day of the Interest Period with respect
thereto.
(ii) Subject to the terms and conditions of Article
V of this Agreement, the Lender severally agrees to make Advances to
the Borrower under the Revolving B Credit Facility from time to time
from the Closing Date until the earlier of (1) the Revolving B Credit
Termination Date, or (2) the occurrence of a Triggering Event (after a
Triggering Event, any such Advances may be made by the Lender in the
exercise of its sole discretion), on a pro rata basis as to the total
borrowing requested by the Borrower on any day; provided, however,
that immediately after giving effect to each such Advance, (i) the
principal amount of Revolving B Credit Outstandings shall not exceed
the Revolving B Credit Commitment and (ii) Total Senior Debt
Outstandings do not exceed
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the Borrowing Base. Within such limits, the Borrower may borrow, repay and
reborrow under the Revolving B Credit Facility on a Business Day from the
Closing Date until, but (as to borrowings and reborrowings) not including, the
Revolving B Credit Termination Date; provided, however, that (y) no Revolving B
Loan that is a Eurodollar Rate Loan shall be made which has an Interest Period
that extends beyond the Revolving B Credit Termination Date and (z) each
Revolving B Loan that is a Eurodollar Rate Loan may, subject to the provisions
of Section 3.2 hereof, be repaid only on the last day of the Interest Period
with respect thereto.
(b) Amounts. Except as otherwise permitted by the
consent of the Lender from time to time, the aggregate unpaid principal amount
of the Revolving Credit Outstandings shall not exceed at any time the Total
Revolving Credit Commitment and the Total Senior Debt Outstandings shall not
exceed the Borrowing Base. The Lender shall have no obligation to advance any
funds in excess of the Total Revolving Credit Commitment. If at any time the
aggregate Senior Debt outstanding exceeds the Borrowing Base, subject to the
terms of the Intercreditor Agreement, the Borrower shall prepay an amount equal
to such excess to be applied to the Obligations. Each Revolving Loan hereunder
and each Conversion under Section 3.2 hereof shall be in an amount of at least
(i) $2,000,000, and, if greater than $2,000,000, an integral multiple of
$1,000,000, if a Eurodollar Rate Loan and (ii) $250,000, and, if greater than
$250,000, an integral multiple of $100,000, if a Base Rate Loan.
(c) Advances.
(i) An Authorized Representative shall give the Lender (A) at least
three (3) Business Days' irrevocable telephonic notice of each Revolving Loan
that is a Eurodollar Rate Loan (whether representing an additional borrowing
hereunder or the conversion of borrowing hereunder from Base Rate Loans to
Eurodollar Rate Loans) prior to 10:00 A.M. Eastern Time and (B) irrevocable
written notice of each Revolving Loan that is a Base Rate Loan (whether
representing an additional borrowing hereunder or the conversion of borrowing
hereunder from Eurodollar Rate Loans to Base Rate Loans) prior to 10:00 A.M.
Eastern Time on the day of such proposed Revolving Loan. Each such telephonic
notice, which shall be effective upon receipt by the Lender, shall specify the
amount of the borrowing, the type of Revolving Loan (Base Rate or Eurodollar
Rate), the date of borrowing and, if a Eurodollar Rate Loan, the Interest
Period to be used in the computation of interest. The Authorized Representative
shall provide the Lender written confirmation of each such telephonic notice no
later than 11:00 A.M. Eastern Time on the same day received by telefacsimile
transmission in the form of a Borrowing Notice for additional Advances, or in
the form of an Interest Rate Selection Notice for the selection or conversion
of interest rates for outstanding Revolving Credit Loans, in each case with
appropriate insertions, but failure to provide such confirmation shall not
affect the validity of such telephonic notice. The amount of any Advance shall,
subject to the terms and conditions of this Agreement, be made available to the
Borrower by delivery of the proceeds thereof to the Borrower's Account or
otherwise as shall be directed in the applicable Borrowing Notice by the
Authorized Representative not later than 3:00 P.M., Eastern Time on the day so
received.
(ii) The duration of the initial Interest Period for each Revolving
Loan that is a Eurodollar Rate Loan shall be as specified in the initial
Borrowing Notice for such Loan. The Borrower shall have the option to elect the
duration of subsequent Interest Periods and to convert the Loans in accordance
with
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Section 3.2 hereof. If the Lender does not receive an Interest Rate Selection
Notice giving notice of election of duration of an Interest Period or
conversion by the time prescribed by Section 3.2 hereof, the Borrower shall be
deemed to have elected to convert such Revolving Loan to (or continue such
Revolving Loan as) a Base Rate Loan until the Borrower notifies the Lender in
accordance with Section 3.2 hereof.
2.2. Revolving Notes.
(a) Revolving A Credit Loans made by the Lender shall be
evidenced by the Revolving A Notes, which Revolving A Notes shall be dated the
Closing Date or such later date pursuant to an Assignment and Acceptance and
shall be duly completed, executed and delivered by the Borrower.
(b) Revolving B Credit Loans made by the Lender shall be
evidenced by the Revolving B Notes, which Revolving B Notes shall be dated the
Closing Date or such later date pursuant to an Assignment and Acceptance and
shall be duly completed, executed and delivered by the Borrower.
2.3. Reductions. (a) The Borrower may, by notice from an
Authorized Representative, upon not less than three (3) Business Days written
notice to the Lender, reduce either the Revolving A Credit Commitment or the
Revolving B Credit Commitment from time to time. Each such reduction shall be
in the aggregate amount of $2,500,000 or such greater amount which is in an
integral multiple of $500,000, and shall permanently reduce the Revolving A
Credit Commitment or the Revolving B Credit Commitment, as applicable. No such
reduction shall result in the payment of any Eurodollar Rate Loan other than on
the last day of the Interest Period of such Eurodollar Rate Loan unless such
prepayment is accompanied by amounts due, if any, under Section 4.5 hereof.
Each reduction of the Revolving A Credit Commitment or the Revolving B Credit
Commitment shall be accompanied by payment of the Revolving A Note or Revolving
B Note, as applicable, to the extent that the amount of Revolving A Credit
Outstandings exceeds the Revolving A Credit Commitment or the Revolving B
Credit Outstandings exceeds the Revolving B Credit Commitment after giving
effect to such reduction, together with accrued and unpaid interest on the
amounts prepaid and any fees otherwise due.
(b) In addition to the optional reductions of the Revolving
Credit Commitment effected under Section 2.3(a), the Borrower shall make, or
shall cause each applicable Subsidiary to make, a prepayment of Revolving
Credit Outstandings (with an equal and simultaneous reduction of the Total
Revolving Credit Commitment) from the Net Proceeds of each Capital Market
Transaction and each Restricted Asset Disposition. All mandatory prepayments
and commitment reductions to be made pursuant to this Section 2.3(b) shall be
governed by and subject to the Intercreditor Agreement which provides for pro
rata application of such Net Proceeds to all Senior Debt. Any prepayment
required to be made pursuant to this Section 2.3(b) shall be accompanied by any
payment required pursuant to Section 4.5 hereof.
2.4. Use of Proceeds. The proceeds of the Loans made pursuant to
the Revolving Credit Facilities hereunder shall be used by the Borrower to
refinance the Existing Credit Agreement and the Demand Note and for working
capital, Capital Expenditures and other lawful corporate purposes.
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ARTICLE III
Eurodollar Funding, Fees, and Payment Conventions
3.1. Interest Rate Options. Eurodollar Rate Loans and Base Rate
Loans may be outstanding at the same time and, so long as no Default or Event
of Default shall have occurred and be continuing, the Borrower shall have the
option to elect the Type of Loan and the duration of the initial and any
subsequent Interest Periods and to Convert Revolving Loans in accordance with
Sections 2.1(c)(i) and 4.2, as applicable; provided, however, (a) there shall
not be outstanding at any one time Eurodollar Rate Loans having more than four
(4) different Interest Periods, (b) each Eurodollar Rate Loan (including each
Conversion into and each Continuation as a Eurodollar Rate Loan) shall be in an
amount of $2,000,000 or, if greater than $2,000,000, an integral multiple of
$1,000,000, (c) no Eurodollar Rate Loan which is a Revolving A Loan shall have
an Interest Period that extends beyond the Revolving A Credit Termination Date,
(d) no Eurodollar Rate Loan which is a Revolving B Loan shall have an Interest
Period that extends beyond the Revolving B Credit Termination Date and (e)
notwithstanding any interest rate options or rights of Conversion provided to
the Borrower under this Agreement, all Overadvance Loans shall bear interest at
the Base Rate at all times. If the Lender does not receive a Borrowing Notice
or an Interest Rate Selection Notice giving notice of election of the duration
of an Interest Period or of Conversion of any Loan to or Continuation of a Loan
as a Eurodollar Rate Loan by the time prescribed by Sections 2.1(c)(i) and 4.2,
as applicable, the Borrower shall be deemed to have elected to obtain or
Convert such Loan to (or Continue such Loan as) a Base Rate Loan until the
Borrower notifies the Lender in accordance with Section 4.2. The Borrower shall
not be entitled to elect to Continue any Loan as or Convert any Loan into a
Eurodollar Rate Loan if a Default or Event of Default shall have occurred and
be continuing.
3.2. Conversions and Elections of Subsequent Interest Periods.
Subject to the limitations set forth in the definition of "Interest Period" and
in Section 2.1 and Article IV, the Borrower may:
(a) upon delivery of telephonic notice to the Lender (which shall
be irrevocable) on or before 10:30 A.M. on any Business Day, Convert any
Eurodollar Rate Loan to a Base Rate Loan on the last day of the Interest Period
for such Eurodollar Rate Loan; and
(b) provided that no Default or Event of Default shall have
occurred and be continuing, upon delivery of telephonic notice to the Lender
(which shall be irrevocable on or before 10:30 A.M. three (3) Business Days'
prior to the date of such Conversion or Continuation:
(i) elect a subsequent Interest Period for any Eurodollar Rate
Loan to begin on the last day of the then current Interest Period for such
Eurodollar Rate Loan; or
(ii) Convert any Base Rate Loan (other than an Overadvance Loan)
to a Eurodollar Rate Loan on any Business Day.
Each such notice shall be effective upon receipt by the Lender, shall specify
the amount of the Eurodollar Rate Loan affected, and, if a Continuation as or
Conversion into a Eurodollar Rate Loan, the Interest Period to be used in the
computation of interest. The Authorized Representative shall provide the Lender
written confirmation of each such telephonic notice in the form of a Borrowing
Notice or Interest Rate
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Selection Notice (as applicable) with appropriate insertions but failure to
provide such confirmation shall not affect the validity of such telephonic
notice.
3.3. Payment of Interest. The Borrower shall pay interest on the
outstanding and unpaid principal amount of each Revolving Loan, commencing on
the first date of such Revolving Loan until such Revolving Loan shall be
repaid, at the applicable Base Rate or Eurodollar Rate as designated by the
Borrower in the related Borrowing Notice or Interest Rate Selection Notice or
as otherwise provided hereunder. Interest on each Revolving Loan shall be paid
on the earlier of (a) in the case of any Base Rate Loan, quarterly in arrears
of the last Business Day of each March, June, September and December,
commencing on September 30, 1999, until the Revolving Credit Termination Date,
at which date the entire principal amount of and all accrued interest on the
Revolving Loans shall be paid in full, (b) in the case of any Eurodollar Rate
Loan, on last day of the applicable Interest Period for such Eurodollar Rate
Loan and if such Interest Period extends for more than three (3) months, at
intervals of three (3) months after the first day of such Interest Period, and
(c) upon payment in full of the related Revolving Loan; provided, however, that
if any Event of Default shall occur and be continuing, all amounts outstanding
hereunder shall bear interest thereafter until paid in full at the Default
Rate.
3.4. Prepayments of Eurodollar Rate Loans. Whenever any payment of
principal shall be made in respect of any Loan hereunder, whether at maturity,
on acceleration, by optional or mandatory prepayment or as otherwise required
or permitted hereunder, with the effect that any Eurodollar Rate Loan shall be
prepaid in whole or in part prior to the last day of the Interest Period
applicable to such Eurodollar Rate Loan, such payment of principal shall be
accompanied by the additional payment, if any, required by Section 4.5.
3.5. Manner of Payment. (a) Each payment of principal (including
any prepayment) and payment of interest and fees, and any other amount required
to be paid by or on behalf of the Borrower to the Lender with respect to any
Loan shall be made to the Lender at the Principal Office in Dollars in
immediately available funds without condition or deduction or for any setoff,
recoupment, deduction or counterclaim on or before 12:30 P.M. on the date such
payment is due. The Lender may, but shall not be obligated to, debit the amount
of such payment from any one or more ordinary deposit accounts of the Borrower
with the Lender.
(b) Any payment made by or on behalf of the Borrower that is not
made both in Dollars in immediately available funds and prior to 12:30 P.M. on
the date such payment is to be made shall constitute a non-conforming payment.
Any such non-conforming payment shall not be deemed to be received until the
later of (i) the time such funds become available funds and (ii) the next
Business Day. Any non-conforming payment may constitute or become a Default or
Event of Default as otherwise provided herein. Interest shall continue to
accrue at the Default Rate on any principal or fees as to which no payment or a
non-conforming payment is made from the date such amount was due and payable
until the later of (i) the date such funds become available funds or (ii) the
next Business Day.
(c) In the event that any payment hereunder or under any of the
Notes becomes due and payable on a day other than a Business Day, then such due
date shall be extended to the next succeeding
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Business Day unless provided otherwise under the definition of "Interest
Period"; provided, however, that interest shall continue to accrue during the
period of any such extension; and provided further, however, that in no event
shall any such due date be extended beyond the Revolving Credit Termination
Date.
3.6. Commitment Fee.
(a) For the period beginning on the Closing Date and ending on
the Revolving A Credit Termination Date with respect to Revolving A Loans, the
Borrower agrees to pay to the Lender a commitment fee equal to .50% multiplied
by the average daily amount by which the Revolving A Credit Commitment exceeds
the sum of Revolving A Credit Outstandings. Such fees shall be due in arrears
on the last Business Day of each March, June, September and December commencing
September 30, 1999 to and on the Revolving A Credit Termination Date.
(b) For the period beginning on the Closing Date and ending on
the Revolving B Credit Termination Date with respect to Revolving B Loans, the
Borrower agrees to pay to the Lender a commitment fee equal to .50% multiplied
by the average daily amount by which the Revolving B Credit Commitment exceeds
the sum of Revolving B Credit Outstandings. Such fees shall be due in arrears
on the last Business Day of each March, June, September and December commencing
September 30, 1999 to and on the Revolving B Credit Termination Date.
3.7. Computation of Rates and Fees. Except as may be otherwise
expressly provided, all interest rates (including the Base Rate, each
Eurodollar Rate, and the Default Rate) and fees shall be computed on the basis
of a year of 360 days and calculated for actual days elapsed.
ARTICLE IV
Change in Circumstances
4.1. Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any applicable law, rule,
or regulation, or any change in the interpretation or administration thereof by
any governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by the Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such governmental authority, central bank, or
comparable agency:
(i) shall subject the Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with respect to any
Eurodollar Rate Loans, its Note, or its obligation to make Eurodollar
Rate Loans, or change the basis of taxation of any amounts payable to
the Lender (or its Applicable Lending Office) under this Agreement or
its Note in respect of any Eurodollar Rate Loans (other than taxes
imposed on the overall net income of the Lender by the jurisdiction in
which the Lender has its principal office or such Applicable Lending
Office);
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(ii) shall impose, modify, or deem applicable
any reserve, special deposit, assessment, or similar requirement
(other than the Reserve Requirement utilized in the determination of
the Eurodollar Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or commitments
of, the Lender (or its Applicable Lending Office), including the
Revolving Credit Commitment of the Lender hereunder; or
(iii) shall impose on the Lender (or its
Applicable Lending Office) or on the London interbank market any other
condition affecting this Agreement or its Note or any of such
extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to the
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Loans or to reduce any sum received or
receivable by the Lender (or its Applicable Lending Office) under this
Agreement or its Note with respect to any Eurodollar Rate Loans, then
the Borrower shall pay to the Lender on demand such amount or amounts
as will compensate the Lender for such increased cost or reduction. If
the Lender requests compensation by the Borrower under this Section
4.1(a), the Borrower may, by notice to the Lender, suspend the
obligation of the Lender to make or Continue Loans of the Type with
respect to which such compensation is requested, or to Convert Loans
of any other Type into Loans of such Type, until the event or
condition giving rise to such request ceases to be in effect (in which
case the provisions of Section 4.4 shall be applicable); provided that
such suspension shall not affect the right of the Lender to receive
the compensation so requested.
(b) If, after the date hereof, the Lender shall have
determined that the adoption of any applicable law, rule, or regulation
regarding capital adequacy or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such governmental authority, central bank, or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of the Lender or any corporation controlling the Lender as a
consequence of the Lender's obligations hereunder to a level below that which
the Lender or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies with
respect to capital adequacy), then from time to time upon demand the Borrower
shall pay to the Lender such additional amount or amounts as will compensate
the Lender for such reduction.
(c) The Lender shall promptly notify the Borrower of any
event of which it has knowledge, occurring after the date hereof, which will
entitle the Lender to compensation pursuant to this Section 4.1 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of the Lender, be otherwise disadvantageous to it. If the Lender
claims compensation under this Section 4.1, it shall furnish to the Borrower a
statement setting forth in reasonable detail the reasons therefor and the
additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount, the
Lender may use any reasonable averaging and attribution methods.
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4.2. Limitation on Types of Loans. If on or prior to the first day
of any Interest Period for any Eurodollar Rate Loan:
(a) the Lender determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period; or
(b) the Lender determines (which determination shall be
conclusive) that the Eurodollar Rate will not adequately and fairly reflect the
cost to the Lender of funding Eurodollar Rate Loans for such Interest Period;
then the Lender shall give the Borrower prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Lender shall be under no obligation to make
additional Loans of such Type, Continue Loans of such Type, or to Convert Loans
of any other Type into Loans of such Type and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans or Convert such Loans into another Type
of Loan in accordance with the terms of this Agreement.
4.3. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Rate Loans
hereunder, then the Lender shall promptly notify the Borrower thereof and the
Lender's obligation to make or Continue Eurodollar Rate Loans and to Convert
other Types of Loans into Eurodollar Rate Loans shall be suspended until such
time as the Lender may again make, maintain, and fund Eurodollar Rate Loans (in
which case the provisions of Section 4.4 shall be applicable).
4.4. Treatment of Affected Loans. If the obligation of the Lender
to make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other
Type into, Loans of a particular Type shall be suspended pursuant to Section
4.1 or 4.3 hereof (Loans of such Type being herein called "Affected Loans" and
such Type being herein called the "Affected Type"), the Lender's Affected Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for Affected Loans (or, in the case of a
Conversion required by Section 4.3 hereof, on such earlier date as the Lender
may specify to the Borrower) and, unless and until the Lender gives notice as
provided below that the circumstances specified in Section 4.1 or 4.3 hereof
that gave rise to such Conversion no longer exist:
(a) to the extent that the Lender's Affected Loans have
been so Converted, all payments and prepayments of principal that would
otherwise be applied to the Lender's Affected Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued
by the Lender as Loans of the Affected Type shall be made or Continued instead
as Base Rate Loans, and all Loans of the Lender that would otherwise be
Converted into Loans of the Affected Type shall be Converted instead into (or
shall remain as) Base Rate Loans.
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If the Lender gives notice to the Borrower that the circumstances specified in
Section 4.1 or 4.3 hereof that gave rise to the Conversion of the Lender's
Affected Loans pursuant to this Section 4.4 no longer exist (which the Lender
agrees to do promptly upon such circumstances ceasing to exist) at a time when
Loans of the Affected Type made by other Lenders are outstanding, the Lender's
Base Rate Loans shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Loans of the Affected
Type, to the extent necessary so that, after giving effect thereto, all Loans
held by the Lenders holding Loans of the Affected Type and by the Lender are
held pro rata (as to principal amounts, Types, and Interest Periods) in
accordance with their respective Revolving Credit Commitments.
4.5. Compensation. Upon the request of the Lender, the Borrower
shall pay to the Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of the Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a
Eurodollar Rate Loan for any reason (including the acceleration of the Loans
pursuant to Section 9.1) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Borrower for any reason
(including the failure of any condition precedent specified in Article V to be
satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Rate Loan on
the date for such borrowing, Conversion, Continuation, or prepayment specified
in the relevant notice of borrowing, prepayment, Continuation, or Conversion
under this Agreement.
4.6. Taxes.
(a) Any and all payments by the Borrower to or for the
account of the Lender hereunder or under any other Loan Document shall be made
free and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which the
Lender (or its Applicable Lending Office) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred
to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable under this Agreement or any other Loan
Document to the Lender, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.6) the Lender receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) the Borrower shall furnish to the
Lender, at its address referred to in Section 10.2, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made under this
Agreement or any other Loan Document or from the execution or delivery of,
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or otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify the Lender for the
full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section
4.6) paid by the Lender and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto.
(d) If the Lender is organized under the laws of a
jurisdiction outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of the Lender listed on
the signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter if
requested in writing by the Borrower (but only so long as the Lender remains
lawfully able to do so), shall provide the Borrower with (i) Internal Revenue
Service Form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that the Lender is entitled to
benefits under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or certifying that
the income receivable pursuant to this Agreement is effectively connected with
the conduct of a trade or business in the United States, (ii) Internal Revenue
Service Form W-8 or W-9, as appropriate, or any successor form prescribed by
the Internal Revenue Service, and (iii) any other form or certificate required
by any taxing authority (including any certificate required by Sections 871(h)
and 881(c) of the Internal Revenue Code), certifying that the Lender is
entitled to an exemption from or a reduced rate of tax on payments pursuant to
this Agreement or any of the other Loan Documents.
(e) For any period with respect to which the Lender has
failed to provide the Borrower with the appropriate form pursuant to Section
4.6(d) (unless such failure is due to a change in treaty, law, or regulation
occurring subsequent to the date on which a form originally was required to be
provided), the Lender shall not be entitled to indemnification under Section
4.6(a) or 4.6(b) with respect to Taxes imposed by the United States; provided,
however, that should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such steps as the
Lender shall reasonably request to assist the Lender to recover such Taxes.
(f) If the Borrower is required to pay additional
amounts to or for the account of the Lender pursuant to this Section 4.6, then
the Lender will agree to use reasonable efforts to change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of the
Lender, is not otherwise disadvantageous to the Lender.
(g) Within thirty (30) days after the date of any
payment of Taxes, the Borrower shall furnish to the Lender the original or a
certified copy of a receipt evidencing such payment.
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(h) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 4.6 shall survive the termination of the
Revolving Credit Commitment and the payment in full of the Notes.
ARTICLE V
Conditions to Making Loans
5.1. Conditions of Initial Advance. The obligation of the Lender
to make the initial Advance is subject to the conditions precedent that:
(a) the Lender shall have received on the Closing Date,
in form and substance satisfactory to the Lender, the following:
(i) executed originals of each of this
Agreement, the Notes, the Security Agreement, the Pledge
Agreement, the Facility Guaranties, the Assignment of
Factoring Balances, the Intercreditor Agreement and the other
Loan Documents, together with all schedules and exhibits
thereto;
(ii) favorable written opinions of special
counsel of the Borrower and the Facility Guarantors dated the
Closing Date, addressed to the Lender and satisfactory to
▇▇▇▇▇ ▇▇▇▇▇ Mulliss & ▇▇▇▇▇, L.L.P., special counsel to the
Lender, substantially in the form of Exhibit H hereto;
(iii) resolutions of the boards of directors or
other appropriate governing body (or of the appropriate
committee thereof) of the Borrower and each Facility
Guarantor certified by its secretary or assistant secretary
as of the Closing Date, appointing the initial Authorized
Representative (with respect to the Borrower only) and
approving and adopting the Loan Documents to be executed by
such Person, and authorizing the execution and delivery
thereof;
(iv) specimen signatures of officers of the
Borrower and each Facility Guarantor executing the Loan
Documents on behalf of the Borrower or such Facility
Guarantor, certified by the secretary or assistant secretary
of the Borrower or such Facility Guarantor, as applicable;
(v) the Organizational Documents of the
Borrower and each Facility Guarantor certified as of a recent
date by the Secretary of State of its state of formation;
(vi) the Operating Documents of the Borrower and
each Facility Guarantor certified as of the Closing Date as
true and correct by its secretary or assistant secretary;
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(vii) certificates issued as of a recent date by
the Secretary of State of its state of formation as to the
due existence and good standing of the Borrower and each
Facility Guarantor;
(viii) appropriate certificates of qualification
to do business, good standing and, where appropriate,
authority to conduct business under assumed name, issued in
respect of the Borrower and each Facility Guarantor as of a
recent date by the Secretary of State or comparable official
of each jurisdiction in which the failure to be qualified to
do business or authorized so to conduct business could have a
Material Adverse Effect;
(ix) notice of appointment of the initial
Authorized Representative;
(x) certificate of an Authorized Representative
dated the Closing Date demonstrating compliance with the
financial covenant contained in Section 8.1(a) as of the
Closing Date, substantially in the form of Exhibit I hereto;
(xi) copies of (A) all UCC-1 financing
statements, (B) all certificates evidencing all Subsidiary
Securities subject to the Pledge Agreement and (C) undated
stock powers executed in blank with respect to such pledged
Subsidiary Securities, all in such form and numbers
sufficient to perfect the Lien of the Collateral Agent for
the benefit of the Secured Parties in all Collateral;
(xii) an initial Borrowing Notice;
(xiii) an initial Borrowing Base certificate as of
May 30, 1999;
(xiv) copies of all other Senior Debt documents
certified as true and correct by an Authorized
Representative;
(xv) evidence of payment of all fees payable by
the Borrower on the Closing Date to the Lender;
(xvi) payment in full on the Closing Date of all
amounts due and owing under the Existing Credit Agreement,
the Demand Note and the Bridge Note;
(xvii) an agreement in writing whereby the
Lender's commitments under the Existing Credit Agreement are
terminated;
(xviii) the Wachovia Credit Agreement containing
substantially the same terms as this Agreement is executed
and delivered by the parties thereto;
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(xix) a copy of an amendment to the Prudential
Note Agreement satisfactory to the Lender in all respects;
and
(xviii) such other documents, instruments,
certificates and opinions as the Lender or the Collateral
Agent may reasonably request on or prior to the Closing Date
in connection with the consummation of the transactions
contemplated hereby.
(b) In the good faith judgment of the Lender there shall
not have occurred or become known to the Lender any event, condition,
situation or status since the date of the draft financial statements
for the fiscal quarter ended March 28, 1999 delivered to the Lender
that has had or could reasonably be expected to result in a Material
Adverse Effect;
5.2. Conditions of All Revolving Loans. The obligations of the
Lender to make any Revolving Loans hereunder subsequent to the Closing Date are
subject to the satisfaction of the following conditions:
(a) the Lender shall have received a Borrowing Notice in
the form of Exhibit D hereto;
(b) the representations and warranties of the Borrower
and the Facility Guarantor set forth in Article VI hereof and in each
of the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Advance, with the same effect
as though such representations and warranties had been made on and as
of such date, except to the extent that such representations and
warranties expressly relate to an earlier date and except that the
financial statements referred to in Section 6.6(a)(i) hereof shall be
deemed to be those financial statements most recently delivered to the
Lender pursuant to Section 7.1 hereof;
(c) at the time of (and after giving effect to) each
Advance, no Default or Event of Default specified in Article IX
hereof, shall have occurred and be continuing;
(d) immediately after giving effect to any Revolving A
Loan or Revolving B Loan, the Revolving A Credit Outstandings and
Revolving B Credit Outstandings shall not exceed the Revolving A
Credit Commitment or the Revolving B Credit Commitment, respectively;
and
(e) immediately after giving effect to a Revolving Loan,
the aggregate principal balance of all Senior Debt shall not exceed
the Borrowing Base.
ARTICLE VI
Representations and Warranties
The Borrower and each Facility Guarantor represents and warrants with
respect to itself and its Subsidiaries that:
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6.1. Organization and Authority.
(a) The Borrower and each Material Subsidiary is a
corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation;
(b) The Borrower and each Material Subsidiary (x) has
the requisite power and authority to own its properties and assets and
to carry on its business as now being conducted and as contemplated in
the Senior Debt Documents, and (y) is qualified to do business in
every jurisdiction in which failure so to qualify would have a
Material Adverse Effect;
(c) The Borrower has the corporate power and authority
to execute, deliver and perform the Senior Debt Documents, and to
borrow thereunder and hereunder, and to execute, deliver and perform
each of the other Senior Debt Documents to which it is a party; and
(d) Each Facility Guarantor will have the corporate
power and authority to execute, deliver and perform the Subsidiary
Guaranty and to execute, deliver and perform the other Senior Debt
Documents to which it becomes a party;
(e) When executed and delivered, each of the Senior Debt
Documents to which the Borrower or any Facility Guarantor is a party
will be the legal, valid and binding obligation or agreement, as the
case may be, of the Borrower or such Facility Guarantor, enforceable
against the Borrower or such Facility Guarantor in accordance with its
terms, subject to the effect of any applicable bankruptcy, moratorium,
insolvency, reorganization or other similar law affecting the
enforceability of creditors' rights generally and to the effect of
general principles of equity which may limit the availability of
equitable remedies (whether in a proceeding at law or in equity);
6.2. Senior Debt Documents. The execution, delivery and
performance by the Borrower and each Facility Guarantor of each of the Senior
Debt Documents to which it is a party:
(a) have been duly authorized by all requisite
Organizational Action of the Borrower and each Facility Guarantor
required for the lawful execution, delivery and performance thereof;
(b) do not violate any provisions of (i) applicable law,
rule or regulation, (ii) any order of any court or other agency of
government binding on the Borrower or any Material Subsidiary, or
properties, or (iii) the Organization Documents or Operating Documents
of the Borrower or any Facility Guarantor;
(c) does not and will not be in conflict with, result in
a breach of or constitute an event of default, or an event which, with
notice or lapse of time, or both, would constitute an event of
default, under any material indenture, agreement or other instrument
to which
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Borrower or any Facility Guarantor is a party, or by which the
properties or assets of Borrower or any Facility Guarantor are bound;
(d) does not and will not result in the creation or
imposition of any Lien, other than Permitted Liens, charge or
encumbrance of any nature whatsoever upon any of the properties or
assets of Borrower or any Facility Guarantor;
6.3. Solvency. The Borrower and each Facility Guarantor is Solvent
after giving effect to the transactions contemplated by this Agreement and the
other Senior Debt Documents;
6.4. Subsidiaries and Stockholders. The Borrower has no
Subsidiaries other than those listed on Schedule 6.4 hereto and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 7.23 hereof; Schedule 6.4 states as of the date hereof the
organizational form of each Subsidiary, the authorized and issued
capitalization of each Subsidiary listed thereon, the number of shares or other
equity interests of each class of capital stock or interest issued and
outstanding of each such Subsidiary and the number and percentage of
outstanding shares or other equity interest (including options, warrants and
other rights to acquire any interest) of each such class of capital stock or
equity interest owned by Borrower or by any such Subsidiary; the outstanding
shares or other equity interests of each such Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable; and
Borrower and each such Subsidiary owns beneficially and of record all the
shares and other interests it is listed as owning in Schedule 6.4, free and
clear of any Lien;
6.5. Ownership Interests. Borrower owns no interest in any Person
other than the Persons listed in Schedule 6.4 hereto;
6.6. Financial Condition.
(a) The Borrower has heretofore furnished to the Lender
(i) consolidated balance sheets of the Borrower and its Subsidiaries,
and related notes thereto, and the related statements of operations,
stockholders equity and cash flows, and the related notes thereto,
dated March 29, 1998 with respect to Fiscal Year 1998, and (ii) draft
consolidated balance sheets of the Borrower and its Subsidiaries and
the related statements of operations, stockholders' equity and cash
flows for the Fiscal Year of the Borrower ending March 28, 1999 (the
"March 28 Draft Financial Statements"). The Borrower hereby represents
and warrants that the audited financial statements to be delivered for
the Fiscal Year ended March 28, 1999 will not contain any material
deviation from the information contained in the March 28 Draft
Financial Statements.
(b) since March 28, 1999 there has been no material
adverse change in the condition, financial or otherwise, of the
Borrower or its Material Subsidiaries or in the businesses, properties
and operations of the Borrower or the Material Subsidiaries, nor have
such businesses or properties, taken as a whole, been materially
adversely affected as a result
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of any fire, explosion, earthquake, accident, strike, lockout,
combination of workers, flood, embargo or act of God;
(c) except as set forth on Schedule 6.6 hereto, neither
the Borrower nor any Subsidiary has incurred, any material
indebtedness, or other liability, contingent or otherwise, which
remains outstanding or unsatisfied;
6.7. Title to Properties. The Borrower and each Material
Subsidiary has good and marketable title to all its real and personal
properties, subject to no transfer restrictions or Liens of any kind, except
for Permitted Liens;
6.8. Taxes. The Borrower and each Material Subsidiary has filed or
caused to be filed all federal, state and local tax returns which are required
to be filed by it and except for taxes and assessments being contested in good
faith by appropriate proceedings diligently conducted and against which
reserves satisfactory to the Borrower's independent certified public
accountants have been established, have paid or caused to be paid all taxes as
shown on said returns or on any assessment received by it, to the extent that
such taxes have become due;
6.9. Other Agreements. Neither the Borrower nor any Subsidiary is
(a) a party to any judgment, order, decree or any
agreement or instrument or subject to restrictions which could
reasonably be likely to have a Material Adverse Effect; or
(b) in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which the Borrower or any
Subsidiary is a party, which default has, or if not remedied within
any applicable grace period could reasonably be likely to have, a
Material Adverse Effect;
6.10. Litigation. There is no action, suit or proceeding at law or
in equity or by or before any governmental instrumentality or agency or
arbitral body pending, or, to the knowledge of the Borrower, threatened by or
against the Borrower or any Subsidiary or affecting the Borrower or any
Subsidiary or any properties or rights of the Borrower or any Subsidiary, which
could reasonably be likely to have a Material Adverse Effect;
6.11. Margin Stock. The Borrower does not own any "margin stock" as
such term is defined in Regulation U, as amended (12 C.F.R. Part 221), of the
Board. The proceeds of the borrowings made pursuant to Article II hereof will
be used by the Borrower only for the purposes set forth in Section 2.4 and
hereof. None of such proceeds will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which might constitute any of
the Loans under this Agreement a "purpose credit" within the meaning of said
Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither the
Borrower nor any agent acting in its behalf has taken or will take any action
which might cause this Agreement or any of the
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documents or instruments delivered pursuant hereto to violate any regulation of
the Board or to violate the Securities Exchange Act of 1934, as amended, or the
Securities Act of 1933, as amended, or any state securities laws, in each case
as in effect on the date hereof;
6.12. Investment Company; Public Utility Holding Company. Neither
the Borrower nor any Subsidiary is (a) an "investment company," or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act
of 1940, as amended (15 U.S.C. ss. 80a-1, et seq.) or (b) a "Holding Company"
or a "Subsidiary Company" of a "Holding Company" or an "Affiliate" of a
"Holding Company" or a "Subsidiary Company" of a "Holding Company," as such
terms are defined under the Public Utility Holding Company Act of 1935, as
amended. The application of the proceeds of the Loans and repayment thereof by
the Borrower and the performance by the Borrower and the Facility Guarantors of
the transactions contemplated by this Agreement and the other Senior Debt
Documents will not violate any provision of said Acts, or any rule, regulation
or order issued by the Securities and Exchange Commission thereunder, in each
case as in effect on the date hereof;
6.13. Patents, Etc. The Borrower and each Material Subsidiary owns
or has the right to use, under valid license agreements or otherwise, all
material patents, licenses, franchises, trademarks, trademark rights, trade
names, trade name rights, trade secrets and copyrights necessary to the conduct
of its businesses as now conducted, without known conflict with any patent,
license, franchise, trademark, trade secrets and confidential commercial or
proprietary information, trade name, copyright, rights to trade secrets or
other proprietary rights of any other Person;
6.14. No Untrue Statement. Neither (a) this Agreement nor any other
Senior Debt Document or certificate or document executed and delivered by or on
behalf of the Borrower or any Facility Guarantor in accordance with or pursuant
to any Senior Debt Document nor (b) any statement, representation, or warranty
provided to the Lender in connection with the negotiation or preparation of the
Senior Debt Documents contains any misrepresentation or untrue statement of
material fact or omits to state a material fact necessary, in light of the
circumstance under which it was made, in order to make any such representation
or statement contained therein not misleading;
6.15. No Consents, Etc. Neither the respective businesses or
properties of the Borrower or any Subsidiary, nor any relationship between the
Borrower or any Subsidiary and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Senior Debt
Documents and the transactions contemplated thereby, is such as to require a
consent, approval or authorization of, or filing, registration or qualification
with, any governmental or other authority or any other Person on the part of
the Borrower or any Subsidiary as a condition to the execution, delivery and
performance of, or consummation of the transactions contemplated by, this
Agreement or the other Loan Documents, which, if not obtained or effected,
would reasonably likely to have a Material Adverse Effect, or if so, such
consent, approval, authorization, filing, registration or qualification has
been obtained or effected, as the case may be;
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6.16. Employee Benefit Plans.
(a) Neither the Borrower nor any ERISA Affiliate
maintains or contributes to, or has any obligation under, any Employee
Benefit Plans other than those identified on Schedule 6.16 hereto;
(b) The Borrower and each ERISA Affiliate is in
compliance with all applicable provisions of ERISA and the regulations
and published interpretations thereunder and in compliance with all
Foreign Benefit Laws with respect to all Employee Benefit Plans except
where failure to comply would not result in a Material Adverse Effect
and except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet
expired. Each Employee Benefit Plan that is intended to be qualified
under Section 401(a) of the Code has been determined by the Internal
Revenue Service to be so qualified, and each trust related to such
plan has been determined to be exempt under Section 501(a) of the
Code. No material liability has been incurred by the Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or penalties
with respect to any Employee Benefit Plan or any Multiemployer Plan;
(c) Other than as described on Schedule 6.16 hereto, no
Pension Plan has been terminated within the six year period prior to
the execution of this Agreement, nor has any accumulated funding
deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the IRS been received or requested
with respect to any Pension Plan, nor has the Borrower or any ERISA
Affiliate failed to make any contributions or to pay any amounts due
and owing as required by Section 412 of the Code, Section 202 of ERISA
or the terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 202 of ERISA,
nor has there been any event requiring any disclosure under Section
4041(c)(3)(C), 4063(a) or 4068(f) of ERISA with respect to any Pension
Plan;
(d) Neither the Borrower nor any ERISA Affiliate has:
(i) engaged in a nonexempt prohibited transaction described in Section
406 of ERISA or Section 4975 of the Code, (ii) incurred any liability
to the PBGC which remains outstanding other than the payment of
premiums and there are no premium payments which are due and unpaid,
(iii) failed to make a required contribution or payment to a
Multiemployer Plan or (iv) failed to make a required installment or
other required payment under Section 412 of the Code;
(e) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan;
(f) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Borrower after
due inquiry, is threatened concerning or involving any Employee
Benefit Plan;
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6.17. No Default. No Default or Event of Default exists hereunder;
6.18. Hazardous Materials. The Borrower and each Subsidiary is in
compliance with all applicable Environmental Laws in all respects except where
the failure to comply does not have and could not reasonably be expected to
have a Material Adverse Effect, and the Borrower has not been notified of any
action, suit, proceeding or investigation which calls into question compliance
by the Borrower or any Subsidiary with any Environmental Laws or which seeks to
suspend, revoke or terminate any license, permit or approval necessary for the
generation, handling, storage, treatment or disposal of any Hazardous Material;
6.19. Employment Matters. (a) None of the employees of the Borrower
or any Subsidiary is subject to any collective bargaining agreement and there
are no strikes, work stoppages, election or decertification petitions or
proceedings, unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings pending or, to the
best knowledge of the Borrower, threatened against the Borrower or any
Subsidiary or between the Borrower or any Subsidiary and any of its employees,
other than employee grievances arising in the ordinary course of business which
would not in the aggregate have a Material Adverse Effect;
(b) The Borrower and each Subsidiary is in compliance in all
respects with all applicable laws, rules and regulations pertaining to labor or
employment matters, including those pertaining to wages, hours, occupational
safety and taxation and there is neither pending or threatened any material
litigation, administrative proceeding or investigation in respect of such
matters.
6.20. Year 2000 Compliance. The Borrower and each Subsidiary has
(i) initiated a review and assessment of all areas within its business and
operations (including those affected by information received from suppliers and
vendors) that could reasonably be expected to be adversely affected by the Year
2000 Problem, (ii) developed a plan and time line for addressing the Year 2000
Problem on a timely basis, and (iii) to date, implemented that plan
substantially in accordance with that timetable. The Borrower reasonably
believes that it will not later than September 30, 1999 be Year 2000 Compliant,
except to the extent that a failure to do so could not reasonably be expected
to have Material Adverse Effect.
ARTICLE VII
Affirmative Covenants
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Lender shall otherwise consent in writing, the Borrower will and, where
applicable, will cause each Subsidiary to:
7.1. Financial Reports, Etc. (a) Annual Reporting. As soon as
practical and in any event within 120 days after the end of each Fiscal Year of
the Borrower, deliver or cause to be delivered to the Lender (i) consolidated
balance sheets of the Borrower and its Subsidiaries, and the
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notes thereto, the related statements of operations, stockholders' equity and
cash flows, and the respective notes thereto, for such Fiscal Year, setting
forth in the case of the statements comparative financial statements for the
preceding Fiscal Year, all prepared in accordance with GAAP applied on a
Consistent Basis and containing, with respect to the consolidated financial
reports, opinions of Deloitte & Touche, L.L.P., or other such independent
certified public accountants of nationally recognized standing, which are
unqualified and without exception (except as may be acceptable to the Lender)
and (ii) a certificate of an Authorized Representative demonstrating compliance
with Section 8.1(a), (b), (c) and (d) hereof, which certificate shall be in the
form attached hereto as Exhibit I hereof;
(b) Quarterly Reporting. As soon as practical and in any
event within 45 days after the end of each quarterly period (except the last
reporting period of the Fiscal Year) beginning with the fiscal quarter ended
June 27, 1999, deliver to the Lender (i) consolidated balance sheets of the
Borrower and its Subsidiaries as of the end of such reporting period, the
related statements of operations, stockholders' equity and cash flows for such
reporting period and for the period from the beginning of the Fiscal Year
through the end of such reporting period, accompanied by a certificate of an
Authorized Representative to the effect that such financial statements present
fairly the financial position of the Borrower and its Subsidiaries as of the
end of such reporting period and the results of their operations and the
changes in their financial position for such reporting period, in conformity
with GAAP applicable to interim financial information and the rules and
regulations of the Securities and Exchange Commission with respect to interim
financials, and (ii) a certificate of an Authorized Representative containing
computations for such quarter comparable to that required pursuant to Section
7.1(a)(ii) hereof; provided, however, that notwithstanding the foregoing, the
first report required to be delivered hereunder shall be delivered within 60
days after the end of such quarterly period;
(c) Monthly Reporting. As soon as practicable and in any
event within 40 days after the end of each month beginning with the fiscal
month ended August 1, 1998, deliver to the Lender (i) a balance sheet of the
Borrower and its Subsidiaries as at the end of such month and the related
statements of income, stockholders' equity and cash flows for such month, and
accompanied by a certificate of an Authorized Representative to the effect that
such financial statements present fairly in all material respects the financial
position of the Borrower and its Subsidiaries as of the end of such month and
the results of their operations and the changes in their financial position for
such month, in conformity with GAAP applied on a Consistent Basis, subject to
normal year-end audit adjustments and the absence of footnotes, (ii) a
Borrowing Base Certificate and (iii) a certificate of an Authorized
Representative demonstrating compliance with Sections 8.1(a) and 8.1(b) and
hereof, which certificate shall be in the form attached hereto as Exhibit I
hereof; provided, however, that notwithstanding the foregoing, the first report
required to be delivered hereunder shall be delivered within 50 days after the
end of such month;
(d) Accountants' Letter. Together with each delivery of
the financial statements required by Section 7.1(a)(i) hereof, deliver to the
Lender a letter from the Borrower's accountants specified in Section 7.1(a)(i)
hereof stating that in performing the audit necessary to render an opinion on
the financial statements delivered under Section 7.1(a)(i) hereof, they
obtained no knowledge of any
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Default or Event of Default by the Borrower or any Subsidiary in the
fulfillment of the terms and provisions of this Agreement or the other Loan
Documents to which it is a party insofar as they relate to financial matters
(which at the date of such statement remains uncured); and if the accountants
have obtained knowledge of such Default or Event of Default, a statement
specifying the nature and period of existence thereof;
(e) Special Reports. Promptly upon their becoming
available to the Borrower, the Borrower shall deliver to the Lender a copy of
(i) all regular or special reports or effective registration statements which
Borrower or any Subsidiary shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange, and (ii) any
proxy statement distributed by the Borrower or any Subsidiary to its
shareholders, bondholders or the financial community in general;
(f) Other Information. Promptly, from time to time,
deliver or cause to be delivered to the Lender such other information regarding
Borrower's or any Subsidiary's operations, business affairs and financial
condition as the Lender may reasonably request. The Lender is hereby authorized
to deliver a copy of any such financial information delivered hereunder to the
Lender (or any affiliate of the Lender), to any regulatory authority having
jurisdiction over the Lender pursuant to any written request therefor, or to
any other Person who shall acquire or consider the assignment of or
participation in any Loan permitted by this Agreement.
7.2. Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition and make all needed repairs,
replacements and renewals as are reasonably necessary to conduct its business
in accordance with customary business practices.
7.3. Existence, Qualification, Etc. Do or cause to be done all
things necessary to preserve and keep in full force and effect its existence
and all material rights and franchises, trade names, trademarks and permits and
maintain its license or qualification to do business as a foreign corporation
and good standing in each jurisdiction in which its ownership or lease of
property or the nature of its business makes such license or qualification
necessary except where the failure to so qualify would not have a Material
Adverse Effect.
7.4. Regulations and Taxes. Comply in all material respects with
or contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other material obligation which, if unpaid, would become a Lien against any
of its properties except liabilities being contested in good faith by
appropriate proceedings diligently conducted and against which adequate
reserves have been established and (b) cause the Borrower's tax returns for
Fiscal Year 1999 to be filed on or before September 15, 1999.
7.5. Insurance. (a) Keep all of its insurable properties
adequately insured at all times with responsible insurance carriers against
loss or damage by fire and other hazards to the extent and in the manner as are
customarily insured against by similar businesses owning such properties
similarly situated, (b) maintain general public liability insurance at all
times with responsible insurance carriers against liability on account of
damage to persons and property having such limits, deductibles,
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exclusions and co-insurance and other provisions providing no less coverages
than are maintained by similar businesses that are similarly situated, such
insurance policies to be in form reasonably satisfactory to the Lender, and (c)
maintain insurance under all applicable workers' compensation laws (or in the
alternative, maintain required reserves if self-insured for workers'
compensation purposes) and against loss by reason by business interruption.
Each of the policies of insurance described in this Section 7.5 shall provide
that the insurer shall give the Lender not less than thirty (30) days' prior
written notice before any such policy shall be terminated, lapse or be altered
in any manner and shall name the Collateral Agent for the benefit of the
Secured Parties as loss payee or additional insured, as applicable.
7.6. True Books. Keep true books of record and account in which
full, true and correct entries will be made of all of its dealings and
transactions, and set up on its books such reserves as may be required by GAAP
with respect to doubtful accounts and all taxes, assessments, charges, levies
and claims and with respect to its business in general, and include such
reserves in interim as well as year-end financial statements.
7.7. Payment of Other Indebtedness. Subject to Section 8.14
hereof, pay when due (or within applicable grace periods) all Indebtedness (for
which the failure to pay would constitute an Event of Default under Section
9.1(e)) due third Persons, except when the amount thereof is being contested in
good faith by appropriate proceedings diligently conducted and with reserves in
form and amount reasonably acceptable to the Lender therefor being set aside on
the books of the Borrower or the applicable Subsidiary.
7.8. Right of Inspection. Permit any Person designated by the
Lender to visit and inspect any of the properties, corporate books and
financial reports of the Borrower and to discuss its affairs, finances and
accounts with its principal officers and independent certified public
accountants, all at reasonable times, at reasonable intervals and with
reasonable prior notice, and all expenses incurred in connection with such
visits and inspections shall be paid by the Borrower.
7.9. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of
any regulatory authority with respect to the conduct of its business and
otherwise.
7.10. Governmental Licenses. Obtain and maintain all licenses,
permits, certifications and approvals of all applicable Governmental
Authorities as are required for the conduct of its business as currently
conducted and herein contemplated except where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
7.11. Covenants Extending to Other Persons. Cause each of its
Material Subsidiaries to do with respect to itself, its business and its
assets, each of the things required of the Borrower in this Article VII.
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7.12. Officer's Knowledge of Default. Within five (5) days of any
officer of the Borrower obtaining knowledge of any Default or Event of Default
hereunder, under any other Senior Debt Document or under any other obligation
of the Borrower or any Material Subsidiary to the Lender, cause such officer or
an Authorized Representative to notify the Lender within such five (5) day
period of the nature thereof, the period of existence thereof, and what action
the Borrower proposes to take with respect thereto.
7.13. Suits or Other Proceedings. Upon any officer of the Borrower
or any Subsidiary obtaining knowledge of any litigation or other proceedings
being instituted against the Borrower or any Subsidiary, or any attachment,
levy, execution or other process being instituted against any assets of the
Borrower or any Subsidiary, making a claim or claims in an aggregate amount
greater than $1,000,000 or not otherwise covered by insurance, promptly deliver
to the Lender written notice thereof stating the nature and status of such
litigation, dispute, proceeding, levy, execution or other process.
7.14. Notice of Discharge of Hazardous Material or Environmental
Complaint. Promptly provide to the Lender true, accurate and complete copies of
any and all notices, complaints, orders, directives, claims, or citations
received by the Borrower or any Subsidiary relating to any (a) violation or
alleged violation by the Borrower or any Subsidiary of any applicable
Environmental Laws; (b) release or threatened release by the Borrower or any
Subsidiary, or at any facility or upon any property owned or operated by the
Borrower or any Subsidiary, of any Hazardous Material, except where occurring
legally; or (c) liability or alleged liability of the Borrower or any
Subsidiary for the costs of cleaning up, removing, remediating or responding to
a release of Hazardous Materials.
7.15. Environmental Compliance. If the Borrower or any Subsidiary
shall receive letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or and Subsidiary has violated any Environmental Law
or is liable for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials, the Borrower shall, within the time period
permitted by the applicable Environmental Law or the Governmental Authority
responsible for enforcing such Environmental Law, remove or remedy, or cause
the applicable Subsidiary to remove or remedy, such violation or release or
satisfy such liability, except where the applicability of the Environmental
Law, the fact of such violation or liability or what is required to remove or
remedy such violation is being contested by the Borrower or the applicable
Subsidiary by appropriate proceedings diligently conducted and all reserves
with respect thereto as may be required under GAAP, if any, have been made.
7.16. Indemnification. The Borrower hereby agrees to defend,
indemnify and hold harmless the Lender, its affiliates and its officers,
directors, employees and agents, from and against any and all claims, losses,
penalties, liabilities, damages and expenses (including assessment and cleanup
costs and reasonable attorneys' fees and disbursements) arising directly or
indirectly from, out of or by reason of (a) the violation of any Environmental
Law by the Borrower or any Subsidiary or with respect to any property owned,
operated or leased by the Borrower or any Subsidiary or (b) the handling,
storage, treatment, emission or disposal of any Hazardous Material by or on
behalf of the Borrower or any
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Subsidiary on or with respect to property owned or leased or operated by the
Borrower or any Subsidiary. The Borrower shall not be liable under this Section
7.16 for any such amounts arising solely as a result of the gross negligence or
willful misconduct of any indemnified party. The provisions of this Section
7.16 shall survive repayment of the Obligations, occurrence of the Revolving
Credit Termination Date and expiration or termination of this Agreement.
7.17. Further Assurances. At the Borrower's cost and expense, upon
request of the Lender, duly execute and deliver or cause to be duly executed
and delivered, to the Lender such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Lender to carry out more effectively the provisions and purposes of this
Agreement and the other Loan Documents.
7.18. Employee Benefit Plans. With reasonable promptness, and in
any event within thirty (30) days thereof, give notice of and/or deliver to
Lender copies of (a) the establishment of any new Employee Benefit Plan, (b)
the commencement of contributions to any plan to which the Borrower or any of
its ERISA Affiliates was not previously contributing, (c) any material increase
in the benefits of any existing Employee Benefit Plan, (d) each funding waiver
request filed with respect to any Employee Benefit Plan and all communications
received or sent by the Borrower or any ERISA Affiliate with respect to such
request and (e) the failure of the Borrower or any ERISA Affiliate to make a
required installment or payment under Section 202 of ERISA or Section 412 of
the Code by the due date.
7.19. Termination Events. Promptly and in any event within fifteen
(15) days of becoming aware of the occurrence of or forthcoming occurrence of
any (a) Termination Event or (b) "prohibited transaction," as such term is
defined in Section 406 of ERISA or Section 4975 of the Code, in connection with
any Pension Plan or any trust created thereunder, deliver to the Lender a
notice specifying the nature thereof, what action the Borrower has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto.
7.20. ERISA Notices. With reasonable promptness but in any event
within fifteen (15) days for purposes of clauses (a), (b) and (c), deliver to
the Lender copies of (a) any unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit Plan under
Section 401(a) of the Code, (b) all notices received by the Borrower or any
ERISA Affiliate of the PBGC's intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (c) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by the
Borrower or any ERISA Affiliate with the Internal Revenue Service with respect
to each Pension Plan and (d) all notices received by the Borrower or any ERISA
Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount
of withdrawal liability pursuant to Section 4202 of ERISA. The Borrower will
notify the Lender in writing within five (5) Business Days of any Borrower
obtaining knowledge or reason to know that the Borrower or any ERISA Affiliate
has filed or intends to file a notice of intent to terminate any Pension Plan
under a distress termination within the meaning of Section 4041(c) of ERISA.
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7.21. Continued Operations. Continue at all times (i) to conduct
its business and engage principally in the same line or lines of business
substantially as heretofore conducted and (ii) preserve, protect and maintain
free from Liens, other than Permitted Liens, its material patents, copyrights,
licenses, trademarks, trademark rights, trade names, trade name rights, trade
secrets and know-how necessary or useful in the conduct of its operations.
7.22. Use of Proceeds. Use the proceeds of the Loans solely for the
purposes specified in Section 2.4 hereof.
7.23. New Subsidiaries. Within seven (7) days of the acquisition or
creation of any Material Subsidiary, cause to be delivered to the Collateral
Agent for the benefit of the Secured Parties each of the following:
(a) a Facility Guaranty executed by such Material
Subsidiary, if a Domestic Subsidiary, substantially in the form of Exhibit G;
(b) each applicable Security Instrument of such Material
Subsidiary, if a Domestic Subsidiary, to the extent such Material Subsidiary
owns collateral of the type covered by such Security Instrument, substantially
in the form of Exhibit K, L and M, together with (i) such Uniform Commercial
Code financing statements on Form UCC-1 or otherwise duly executed by such
Material Subsidiary as "Debtor" and naming the Collateral Agent for the benefit
of the Secured Parties as "Secured Party," in form, substance and number
sufficient in the reasonable opinion of the Collateral Agent and its special
counsel to be filed in all Uniform Commercial Code filing offices in all
jurisdictions in which filing is necessary or advisable to perfect in favor of
the Collateral Agent for the benefit of the Secured Parties the Lien on
Collateral granted under such Security Instrument to the extent such Lien may
be perfected by Uniform Commercial Code filing, and (ii) landlord waivers,
bailee waivers, processor waivers, warehouseman waivers, title insurance,
surveys, appraisals, environmental assessments and other documents,
certificates and agreements as the Collateral Agent may reasonably request in
order to establish and maintain its Lien on any real property of such Material
Subsidiary covered thereby;
(c) if the Subsidiary Securities issued by such Material
Subsidiary that are, or are required to become, Pledged Interests, shall be
owned by a Subsidiary who has not then executed and delivered to the Collateral
Agent a Pledge Agreement granting a Lien to the Collateral Agent, for the
benefit of the Lender and the other Secured Parties, in such equity interests,
a Pledge Agreement executed by the Subsidiary that directly owns such Material
Subsidiary Securities substantially in the form attached hereto as Exhibit K
(or, as to the Pledged Interests issued by any Direct Foreign Subsidiary, in a
form acceptable to the Collateral Agent), and if such Subsidiary Securities
shall be owned by the Borrower or a Subsidiary who has previously executed a
Pledge Agreement, a Pledge Agreement Supplement in the form required by such
Pledge Agreement pertaining to such Subsidiary Securities;
(d) if the Pledged Interests issued by such Material
Subsidiary constitute securities under Article 8 of the Uniform Commercial Code
(i) the certificates representing 100% of such
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Subsidiary Securities and (ii) duly executed, undated stock powers or other
appropriate powers of assignment in blank affixed thereto;
(e) if the Pledged Interests issued by such Material
Subsidiary do not constitute securities and such Material Subsidiary has not
elected to have such interests treated as securities under Article 8 of the
applicable Uniform Commercial Code, (i) Uniform Commercial Code financing
statements on form UCC-1 duly executed by the pledgor as "Debtor" and naming
the Collateral Agent for the benefit of the Lender and the other Secured
Parties as "Secured Party," in form, substance and number sufficient in the
reasonable opinion of the Collateral Agent and its special counsel to be filed
in all Uniform Commercial Code filing offices and in all jurisdictions in which
filing is necessary or advisable to perfect in favor of the Collateral Agent
for the benefit of the Secured Parties the Lien on such Subsidiary Securities
and (B) a control agreement from the Registrar of such Material Subsidiary, in
form and substance acceptable to the Collateral Agent and in which the
Registrar (1) acknowledges that the pledgor is at the date of such
acknowledgment the sole record, and to its knowledge, beneficial owner of such
Subsidiary Securities, (2) acknowledges the Lien in favor of the Collateral
Agent conferred under the Pledge Agreement and that such Lien will be reflected
on the registry for such Subsidiary Securities, (3) agrees that it will not
register any transfer of such Subsidiary Securities nor acknowledge any Lien in
favor of any other Person on such Subsidiary Securities, without the prior
written consent of the Collateral Agent, in each instance, until it receives
notice from the Collateral Agent that all Liens on such Collateral in favor of
the Collateral Agent for the benefit of the Lender and the other Secured
Parties have been released or terminated, and (4) agrees that upon receipt of
notice from the Collateral Agent that an Event of Default has occurred and is
continuing and that the Subsidiary Securities identified in such notice have
been transferred to a transferee identified in such notice, it will duly record
such transfer of Subsidiary Securities on the appropriate registry without
requiring further consent from the pledgor and shall thereafter treat the
transferee as the sole record and beneficial owner of such Subsidiary
Securities pending further transfer, notwithstanding any contrary instruction
received from the pledgor;
(f) a supplement to the appropriate schedule attached to
the appropriate Security Instruments listing the additional Collateral,
certified as true, correct and complete by the Authorized Representative
(provided that the failure to deliver such supplement shall not impair the
rights conferred under the Security Instruments in after acquired Collateral);
(g) an opinion of counsel to the Material Subsidiary
dated as of the date of delivery of the Facility Guaranty and other Loan
Documents provided for in this Section 7.23 and addressed to the Collateral
Agent and the Secured Parties, in form and substance reasonably acceptable to
the Lender and the Collateral Agent (which opinion may include assumptions and
qualifications of similar effect to those contained in the opinions of counsel
delivered pursuant to Section 7.1(a)), to the effect that:
(i) such Material Subsidiary is duly organized,
validly existing and in good standing in the jurisdiction of its
formation, has the requisite power and authority to own its properties
and conduct its business as then owned and then conducted and proposed
to be
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conducted and to execute, deliver and perform the Facility Guaranty
and other Loan Documents described in this Section 7.23 to which such
Material Subsidiary is a signatory, and is duly qualified to transact
business and is in good standing as a foreign corporation or
partnership in each other jurisdiction in which the character of the
properties owned or leased, or the business carried on by it, requires
such qualification and the failure to be so qualified would reasonably
be likely to result in a Material Adverse Effect;
(ii) the execution, delivery and performance of
the Facility Guaranty and other Loan Documents described in this
Section 7.23 to which such Material Subsidiary is a signatory have
been duly authorized by all requisite corporate or partnership action
(including any required shareholder or partner approval), each of such
agreements has been duly executed and delivered and constitutes the
valid and binding agreement of such Material Subsidiary, enforceable
against such Material Subsidiary in accordance with its terms, subject
to the effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general principles of
equity (whether considered in a proceeding at law or in equity); and
(iii) the Subsidiary Securities of such Material
Subsidiary are duly authorized, validly issued, fully paid and
nonassessable, and free of any preemptive rights, and the applicable
Security Instrument (including foreign collateral documents) is
effective to create a valid security interest in favor of the
Collateral Agent for the benefit of the Secured Parties in such
Subsidiary Securities as constitute Pledged Interests; and
(iv) the Uniform Commercial Code financing
statements on Form UCC-1 delivered to the Collateral Agent by the
Material Subsidiary in connection with the delivery of the Security
Instruments of such Material Subsidiary have been duly executed by the
Material Subsidiary and are in form, substance and number sufficient
for filing in all Uniform Commercial Code filing offices in all
jurisdictions in which filing is necessary to perfect in favor of the
Collateral Agent for the benefit of the Secured Parties the Lien on
Collateral conferred under such Security Instruments to the extent
such Lien may be perfected by Uniform Commercial Code filing; and
(v) in the case of Direct Foreign Subsidiaries
only, that under the laws of the applicable foreign jurisdiction, all
agreements, notices and other documents that are required to be
executed, delivered, filed or recorded and all other action required
to be taken, within or pursuant to the laws of such jurisdiction to
perfect the Lien conferred in favor of the Collateral Agent under the
applicable Security Instrument as against creditors of and purchasers
for value from the holder of the Pledged Interests has been duly
executed, delivered, filed, recorded or taken, as the case may be; and
(h) current copies of the Organizational
Documents and Operating Documents of such Material Subsidiary, minutes
of duly called and conducted meetings (or duly effected consent
actions) of the Board of Directors, partners, or appropriate
committees thereof (and, if required by
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such Organizational Documents, Operating Documents or applicable law, of the
shareholders, members or partners) of such Material Subsidiary authorizing the
actions and the execution and delivery of documents described in this Section
7.23.
7.24. Security.
(a) As security for the full and timely payment and
performance of all Obligations, which security shall ratably secure
the Obligations, the Wachovia Obligations and the Prudential
Obligations, the Borrower shall, and shall cause all other Credit
Parties to, on or before the Closing Date, do or cause to be done all
things necessary in the reasonable opinion of the Lender and its
counsel to grant to the Collateral Agent for the benefit of the Lender
and the other Secured Parties a duly perfected first priority security
interest in all Collateral subject to no prior Lien or other
encumbrance or restriction on transfer (other than restrictions on
transfer imposed by applicable securities laws or Permitted Liens).
Without limiting the foregoing, the Borrower and each Material
Subsidiary having rights in any Collateral shall on the Closing Date
deliver to the Collateral Agent, in form and substance reasonably
acceptable to Lender, (A) a Security Agreement of the Borrower and
each Domestic Subsidiary which shall grant to the Collateral Agent for
the benefit of the Secured Parties a security interest in and lien on
all Collateral described therein, subject to no Liens other than
Permitted Liens, (B) a Pledge Agreement of the Borrower and each
Material Subsidiary owning any Subsidiary Securities which shall
pledge to the Collateral Agent for the benefit of the Secured Parties
100% of the Subsidiary Securities of all Domestic Subsidiaries, (C)
certificates representing such Subsidiary Securities, together with
undated stock powers or other appropriate transfer documents endorsed
in blank pertaining thereto, and (D) Uniform Commercial Code financing
statements reflecting the Lien in favor of the Collateral Agent on
such Subsidiary Securities, and shall take such further action and
deliver or cause to be delivered such further documents as required by
the Security Instruments or otherwise as the Collateral Agent may
request to effect the transactions contemplated by this Section 7.24.
The Borrower shall, and shall cause each Material Subsidiary, to
pledge to the Collateral Agent for the benefit of the Secured Parties
(and as appropriate to reaffirm its prior pledge of) all of the
Subsidiary Securities of any Domestic Subsidiary, acquired or created
after the Closing Date and to deliver to the Collateral Agent all of
the documents and instruments in connection therewith as are
identified in Section 7.23 and in the Security Instruments.
(b) At the request of the Lender, the Borrower will or
will cause each other Credit Party, as the case may be, to execute, by
its duly authorized officers, alone or with the Collateral Agent, any
certificate, instrument, financing statement, control agreement,
statement or document, or to procure any such certificate, instrument,
statement or document, or to take such other action (and pay all
connected costs) which the Lender reasonably deems necessary from time
to time to create, continue or preserve the Liens and security
interests in the Collateral (and the perfection and priority thereof)
of the Collateral Agent contemplated hereby and by the other Loan
Documents and specifically including all Collateral acquired by the
Borrower or any Facility Guarantor after the Closing Date. The
Collateral Agent is hereby
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irrevocably authorized to execute and file or cause to be filed, with
or if permitted by applicable law without the signature of the
Borrower or any Credit Party appearing thereon, all Uniform Commercial
Code financing statements reflecting the Borrower or any other Credit
Party as "debtor" and the Collateral Agent as "secured party", and
continuations thereof and amendments thereto, as the Lender reasonably
deems necessary or advisable to give effect to the transactions
contemplated hereby and by the other Loan Documents.
(c) As security for the full and timely payment and
performance of all Obligations now existing or hereafter arising, the
Borrower shall also cause a Mortgage to be delivered to the Collateral
Agent after the Closing Date with respect to any material real
property that is acquired by the Borrower or any Domestic Subsidiary,
in form and substance reasonably acceptable to the Collateral Agent.
The Borrower shall deliver to the Collateral Agent all environmental
reports, along with all landlord waivers, baliee waivers, processor
waivers, warehouseman waivers, title insurance, appraisals, surveys,
legal opinions and other certificates and documents reasonably
requested by the Collateral Agent in connection with the delivery of
any such Mortgage.
7.25. Year 2000 Compliance. Promptly notify the Lender in the event
the Borrower discovers or determines that any computer application (including
those affected by information received from its suppliers and vendors) that is
material to and used in its or any of its Subsidiaries' business and operations
will not be Year 2000 Compliant on a timely basis.
ARTICLE VIII
Negative Covenants
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Lender shall otherwise consent in writing, the Borrower will not nor permit any
Subsidiary to:
8.1. Financial Covenants.
(a) Consolidated Net Worth. Permit Consolidated Net
Worth at any time to be less than (i) $75,000,000 from the Closing
Date to the next succeeding fiscal quarter end of the Borrower and
(ii) as at the last day of each succeeding fiscal quarter of the
Borrower after the Closing Date and until (but excluding) the last day
of the next following fiscal quarter of the Borrower, the sum of (A)
the amount of Consolidated Net Worth required to be maintained
pursuant to this Section 8.1(a) as at the end of the immediately
preceding fiscal quarter, plus (B) 75% of Consolidated Net Income
(with no reduction for net losses during any period) for the fiscal
quarter of the Borrower ending on such day (including within
"Consolidated Net Income" certain items otherwise excluded, as
provided for in the definition of "Consolidated Net Income"), plus (C)
100% of the aggregate amount of all increases in the stated capital
and additional paid-in capital accounts of the Borrower resulting from
any Capital Markets Transactions.
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(b) Consolidated EBITDA. Permit Consolidated EBITDA as
of the end of any fiscal month for any Twelve Month Period ending on
the dates or during the periods indicated below to be less than the
amounts set forth below:
Minimum
Consolidated
Period EBITDA
------ ------
June 27, 1999 $19,000,000
August 1, 1999 $18,000,000
August 2, 1999 through September 26, 1999 $19,000,000
September 27, 1999 through December 26, 1999 $21,000,000
December 27, 1999 through April 2, 2000 $25,000,000
April 3, 2000 and thereafter $26,000,000
(c) Consolidated Fixed Charge Coverage Ratio. Permit at
any time the Consolidated Fixed Charge Ratio of the Borrower to be
less than the ratio set forth below for the period indicated:
Minimum
Consolidated Fixed
Charge Coverage
Period Ratio
------ -----
Closing Date through September 26, 1999 .75 to 1.00
September 27, 1999 through December 26, 1999 .80 to 1.00
December 27, 1999 and thereafter 1.00 to 1.00
(d) Capital Expenditures. Permit Capital Expenditures
during Fiscal Year 2000 to exceed $16,000,000.
8.2. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness of the Borrower or an Subsidiary, howsoever evidenced, except:
(a) Indebtedness existing as of the Closing Date as set
forth in Schedule 6.6; provided, none of the instruments and
agreements evidencing or governing such Indebtedness shall be amended,
modified or supplemented after the Closing Date to change any terms of
subordination, repayment or rights of conversion, put, exchange or
other rights from such terms and rights as in effect on the Closing
Date;
(b) Senior Debt;
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(c) the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course
of business;
(d) purchase money Indebtedness described in Section
8.3(g) not to exceed an aggregate outstanding amount at any time of
$2,000,000;
(e) Indebtedness arising from Rate Hedging Obligations
up to $50,000,000 with respect to Senior Debt incurred in the ordinary
course of business and not for speculative or investment purposes;
(f) unsecured intercompany Indebtedness for loans and
advances made by the Borrower or any Facility Guarantor to the
Borrower or any Facility Guarantor, provided that such intercompany
Indebtedness is evidenced by a promissory note or similar written
instrument acceptable to the Lender which provides that such
Indebtedness is subordinated to obligations, liabilities and
undertakings of the holder or owner thereof under the Loan Documents
on terms acceptable to the Lender;
(g) additional unsecured Indebtedness for Money Borrowed
not otherwise covered by clauses (a) through (f) above, provided that
the aggregate outstanding principal amount of all such other
Indebtedness permitted under this clause (f) shall in no event exceed
$1,000,000 at any time; and
(h) Indebtedness extending the maturity of, or renewing,
refunding or refinancing, in whole or in part, Indebtedness incurred
under clauses (a), (d) and (f) of this Section 8.2, provided that the
terms of any such extension, renewal, refunding or refinancing
Indebtedness (and of any agreement or instrument entered into in
connection therewith) are no less favorable to the Lender than the
terms of the Indebtedness as in effect prior to such action, and
provided further that (1) the aggregate principal amount of such
extended, renewed, refunded or refinanced Indebtedness shall not be
increased by such action, (2) the group of direct or contingent
obligors on such Indebtedness shall not be expanded as a result of any
such action, and (3) immediately before and immediately after giving
effect to any such extension, renewal, refunding or refinancing, no
Default or Event of Default shall have occurred and be continuing.
8.3. Liens. Incur, create or permit to exist any pledge, Lien,
charge or other encumbrance of any nature whatsoever with respect to any
property or assets now owned or hereafter acquired by the Borrower or any
Subsidiary, other than the following (collectively, "Permitted Liens"):
(a) Liens existing as of the date hereof and as set
forth in Schedule 8.3 attached hereto;
(b) Liens in favor of the Secured Parties securing the
Senior Debt;
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(c) Liens upon accounts of the Borrower and its
Subsidiaries granted to Permitted Factors;
(d) Liens imposed by law for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which
are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(e) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens imposed
by law or created in the ordinary course of business and in existence
less than 90 days from the date of creation thereof for amounts not
yet due or which are being contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate
reserves or other appropriate provisions are being maintained in
accordance with GAAP;
(f) Liens incurred or deposits made in the ordinary
course of business (including surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and
other types of social security benefits or to secure the performance
of tenders, bids, leases, contracts (other than for the repayment of
Indebtedness), statutory obligations and other similar obligations or
arising as a result of progress payments under government contracts;
(g) purchase money Liens to secure Indebtedness incurred
to purchase fixed assets, provided the Indebtedness represents not
less than 75% of the purchase price of such assets as of the date of
purchase thereof and no property other than the assets so purchased
secures such Indebtedness;
(h) Liens granted to the issuer of any documentary
letters of credit upon property shipped under or in connection with
such documentary letters of credit;
(i) easements, rights of ways, restrictions, lease of
Property to others, easements for installations of public utilities,
title imperfections and restrictions, zoning ordinances and other
similar encumbrances affecting the Property in which the aggregate do
not materially adversely affect the value of such Property or
materially impair its use for the operation of the business of the
Borrower;
(j) judgment liens that shall not have been in existence
for a period longer than thirty (30) days after the creation thereof
or, if a stay of execution shall have been obtained, for a period
longer than thirty (30) days after the expiration of such stay;
provided, that, in either case, appropriate reserves shall have been
established for such judgments in accordance with GAAP and the
aggregate amount of such judgements does not exceed $1,000,000; and
(k) rights of lessors under Capital Leases permitted
hereunder.
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8.4. Transfer of Assets. Conduct or permit, or agree to conduct or
permit, any Asset Disposition other than Permitted Asset Dispositions.
8.5. Investments; Acquisitions. Make any Acquisition or otherwise
purchase, own, invest in or otherwise acquire, directly or indirectly, any
stock or other securities, or make or permit to exist any interest whatsoever
in any other Person or permit to exist any loans or advances to any Person,
except that Borrower or any Subsidiary may maintain investments or invest in:
(a) Eligible Securities;
(b) investments in Subsidiaries existing as of the date
hereof and as set forth in Schedule 6.4 attached hereto;
(c) accounts receivable arising and trade credit granted
in the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof in connection with
accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss;
(d) advance payments in respect of Inventory made in the
ordinary course ("Inventory Deposits") in an aggregate principal
amount at any time outstanding not to exceed $5,000,000;
(e) other loans, advances and investments made in the
ordinary course of business in an aggregate principal amount at any
time outstanding not to exceed $750,000;
(f) loans in the ordinary course of business to
employees, affiliates and Subsidiaries who are not Facility Guarantors
in an aggregate principal amount outstanding at any time of
$2,500,000; and
(g) loans and advances to and investments in
Subsidiaries who are Facility Guarantors.
8.6. Merger or Consolidation. (a) Consolidate with or merge into
any other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise dispose
of all or a substantial part of its assets (other than sales in the ordinary
course of business); provided, however, any Subsidiary of the Borrower may
merge or transfer all or substantially all of its assets into or consolidate
with the Borrower or any wholly owned Subsidiary of the Borrower, and any
Person may merge with the Borrower if the Borrower shall be the survivor
thereof and such merger shall not cause, create or result in the occurrence of
any Default or Event of Default hereunder.
8.7. Restricted Payments. Make any Restricted Payments or apply or
set apart any of their assets therefor or agree to do any of the foregoing, in
excess of $1,100,000 in the aggregate in any
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Fiscal Year; provided, however, that in no event shall the per share dividend
payable by the Borrower be increased from $ .03 per share per quarter.
8.8. Transactions with Affiliates. Other than transactions
permitted under Sections 8.6 or 8.7 hereof, transactions described on Schedule
8.8 hereto and transactions among the Borrower and wholly owned Subsidiaries or
among wholly owned Subsidiaries, enter into any transaction after the Closing
Date, including the purchase, sale, lease or exchange of property, real or
personal, or the rendering of any service, with any Affiliate of the Borrower,
except (a) that such Persons may render services to the Borrower or its
Subsidiaries for compensation at the same rates generally paid by Persons
engaged in the same or similar businesses for the same or similar services, (b)
that the Borrower or any Subsidiary may render services to such Persons for
compensation at the same rates generally charged by the Borrower or such
Subsidiary and (c) upon terms no less favorable to the Borrower (or any
Subsidiary) than would be obtained in a comparable arm's-length transaction
with a Person not an Affiliate.
8.9. Compliance with ERISA. With respect to any Pension Plan,
Employee Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which
would result in a liability to the Borrower or any ERISA Affiliate in
excess of $500,000;
(b) permit the present value of all benefit liabilities
under all Pension Plans to exceed the current value of the assets of
such Pension Plans allocable to such benefit liabilities by more than
$500,000;
(c) permit any accumulated funding deficiency in excess
of $500,000 (as defined in Section 202 of ERISA and Section 412 of the
Code) with respect to any Pension Plan, whether or not waived;
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto which results in or is likely to
result in a liability in excess of $500,000; or
(e) engage, or permit any Borrower or any ERISA
Affiliate to engage, in any prohibited transaction under Section 406
of ERISA or Sections 4975 of the Code for which a civil penalty
pursuant to Section 502(i) of ERISA or a tax pursuant to Section 4975
of the Code in excess of $500,000 may be imposed; or
(f) permit the establishment of any Employee Benefit
Plan providing post-retirement welfare benefits or establish or amend
any Employee Benefit Plan which establishment or amendment could
result in liability to the Borrower or any ERISA Affiliate or increase
the obligation of the Borrower or any ERISA Affiliate to a
Multiemployer Plan which
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liability or increase, individually or together with all similar
liabilities and increases, is in excess of $500,000; or
(g) fail, or permit the Borrower or any ERISA Affiliate
to fail, to establish, maintain and operate each Employee Benefit Plan
in compliance in all material respects with the provisions of ERISA,
the Code, all applicable Foreign Benefit Loans and all other
applicable laws and the regulations and official published
interpretations thereof.
8.10. Changes and Amendments. Change its Fiscal Year or supplement
or amend in any material way its Organizational Documents or any other Senior
Debt Document.
8.11. Limitations on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower of real
or personal property which has been or is to be sold or transferred by the
Borrower to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of the Borrower ("Sale and Leaseback Transactions").
8.12. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily
or involuntarily) or commence or suffer any proceedings seeking any such
winding up, liquidation or dissolution.
8.13 Mortgages and Appraisals. Fail to deliver to the Collateral
Agent, in form and substance acceptable to the Lender, (a) on or before August
31, 1999, a Mortgage with respect to each parcel of material real property that
is owned by the Borrower or any Domestic Subsidiary and confirmation of the
engagement of appraisers satisfactory to the Lender with respect to such
material real property and all fixed assets and (b) on or before October 31,
1999, (i) an appraisal of all fixed assets and Mortgaged Property of the
Borrower and its Subsidiaries completed by an appraiser reasonably acceptable
to the Lender and the Borrower and (ii) all environmental reports, title
insurance, surveys, legal opinions and other certificates and documents
reasonably requested by the Lender in connection with all Mortgaged Property
other than Excluded Locations.
8.14 Liquidity. Permit the Borrower to have an aggregate amount
available to be advanced to it (including Factor Advances) under this Agreement
and the Wachovia Credit Agreement and from any Permitted Factor to be less than
$7,500,000 after giving effect to any payment to Prudential of the principal
amount scheduled to be paid October 12, 1999.
8.15 Factor Advances. Permit to exist any Factor Advances (other
than Factor Advances from a Permitted Factor) in an aggregate amount exceeding
$30,000,000 prior to January 1, 2000 and $1,000,000 at any time thereafter;
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ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default. If any one or more of the following events
("Events of Default") shall occur for any reason whatsoever (and whether such
occurrence shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) if default shall be made in the due and punctual
payment of the principal of any Loan or other Obligation, when and as
the same shall be due and payable whether pursuant to any provision of
Article II hereof, at maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual
payment of any amount of interest on any Loan or of any fees or other
amounts payable to the Lender under the Loan Documents on the date on
which the same shall be due and payable; or
(c) if default shall be made in the performance or
observance of any covenant set forth in Sections 7.4(b), 7.5, 7.8,
7.12, 7.22, 7.23, 7.24 or Article VIII hereof;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement, the Notes or the other Loan
Documents (other than as described in clauses (a), (b) or (c) above)
or any other agreement between the Borrower and the Lender creating or
relating to any Indebtedness between the Borrower and the Lender and
such default shall continue for 30 or more days after the earlier of
receipt of notice of such default by the Authorized Representative
from the Lender or an officer of the Borrower becomes aware of such
default, or if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in any of the other Loan Documents (beyond any
applicable grace period, if any, contained therein) or in any
instrument or document evidencing or creating any obligation,
guaranty, or Lien in favor of the Lender or delivered to the Lender in
connection with or pursuant to this Agreement or any of the
Obligations, or if any Loan Document ceases to be in full force and
effect (other than by reason of any action by the Lender), or if
without the written consent of the Lender this Agreement or any other
Loan Document shall be disaffirmed or shall terminate, be terminable
or be terminated or become void or unenforceable for any reason
whatsoever (other than in accordance with its terms in the absence of
default or by reason of any action by the Lender); or
(e) the Borrower or any Subsidiary shall fail to make
any payment in respect of Indebtedness outstanding (other than the
Notes) when due or within any applicable grace period, the result of
which failure is to permit the holder or holders of such Indebtedness
to cause such Indebtedness to become due prior to its stated maturity;
or
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(f) any event or condition shall occur which results in
the acceleration of the maturity of any Indebtedness of the Borrower
or any Subsidiary or the mandatory prepayment or purchase of such
Indebtedness by the Borrower (or its designee) or such Subsidiary (or
its designee) prior to the scheduled maturity thereof, or enables (or,
with the giving of notice or lapse of time or both, would enable) the
holders of such Indebtedness or any Person acting on such holders'
behalf to accelerate the maturity thereof or require the mandatory
prepayment or purchase thereof prior to the scheduled maturity
thereof, without regard to whether such holders or other Person shall
have exercised or waived their right to do so; or
(g) if any material representation, warranty or other
statement of fact contained herein or any other Loan Document or in
any writing, certificate, report or statement at any time furnished to
the Lender by or on behalf of the Borrower or any Facility Guarantor
pursuant to or in connection with this Agreement or the other Loan
Documents, or otherwise, shall be false or misleading in any material
respect when given; or
(h) if the Borrower or any Facility Guarantor shall be
unable to pay its debts generally as they become due; file a petition
to take advantage of any insolvency statute; make an assignment for
the benefit of its creditors; commence a proceeding for the
appointment of a receiver, trustee, liquidator or conservator of
itself or of the whole or any substantial part of its property; file a
petition or answer seeking reorganization or arrangement or similar
relief under the federal bankruptcy laws or any other applicable law
or statute; or
(i) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or any Facility Guarantor or
of the whole or any substantial part of its properties and such order,
judgment or decree continues unstayed and in effect for a period of
sixty (60) days, or approve a petition filed against the Borrower or
any Facility Guarantor seeking reorganization or arrangement or
similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any
state, which petition is not dismissed within sixty (60) days; or if,
under the provisions of any other law for the relief or aid of
debtors, a court of competent jurisdiction shall assume custody or
control of the Borrower or any Facility Guarantor or of the whole or
any substantial part of its properties, which control is not
relinquished within sixty (60) days; or if there is commenced against
the Borrower any proceeding or petition seeking reorganization,
arrangement or similar relief under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state which proceeding or petition remains undismissed for a period of
sixty (60) days; or if the Borrower or any Facility Guarantor takes
any action to indicate its consent to or approval of any such
proceeding or petition; or
(j) [***]; or
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(k) if the Borrower or any Facility Guarantor shall
suspend all or any part of its operations material to the conduct of
the business of the Borrower for a period of more than 120 days; or
(l) if the Borrower shall breach any of the material
terms or conditions of any Senior Debt Document and such breach shall
continue beyond any grace period, if any, relating thereto pursuant to
its terms; or
(m) if the Borrower shall cause, suffer or permit (i)
any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), other than the ▇▇▇▇▇▇▇▇▇ Family or the
Crown ESOP to own or control, directly or indirectly, more than thirty
percent (30%) of the capital stock of the Borrower having voting
rights in the election of directors, or any other equity security or a
security convertible into or exchangeable or redeemable for any equity
security or (ii) individuals who at the Closing Date constituted the
Board of Directors (together with any new directors whose election by
the Board of Directors or whose nomination for election by the
stockholders of the Borrower was approved by a vote of a majority of
the directors of the Borrower then still in office who were either
directors at the Closing Date or whose election or nomination for
election was previously so approved) to cease for any reason to
constitute at least a majority of the Board of Directors then in
office;
then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall have not been waived,
(A) either or both of the following actions may
be taken: (i) the Lender may declare any obligation of the
Lender to make further Revolving Loans terminated, whereupon
the obligation of the Lender to make further Revolving Loans
hereunder shall terminate immediately, and (ii) the Lender
may, at its option, declare by notice to the Borrower any or
all of the Obligations to be immediately due and payable, and
the same, including all interest accrued thereon and all
other obligations of the Borrower to the Lender shall
forthwith become immediately due and payable without
presentment, demand, protest, notice or other formality of
any kind, all of which are hereby expressly waived, anything
contained herein or in any instrument evidencing the
Obligations to the contrary notwithstanding; provided,
however, that notwithstanding the above, if there shall occur
an Event of Default under clause (h) or (i) above, then the
obligation of the Lender to make Revolving Loans hereunder
shall automatically terminate and any and all of the
Obligations shall be immediately due and payable without the
necessity of any action by the Lender; and
(B) the Lender shall have all of the rights and
remedies available under the Loan Documents or under any
applicable law.
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9.2. Lender to Act. In case any one or more Events of Default
shall occur and not have been waived, the Lender may proceed to protect and
enforce its rights or remedies either by suit in equity or by action at law, or
both, whether for the specific performance of any covenant, agreement or other
provision contained herein or in any other Loan Document, or to enforce the
payment of the Obligations or any other legal or equitable right or remedy.
9.3. Cumulative Rights. No right or remedy herein conferred upon
the Lender is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or
remedy contained herein and therein or now or hereafter existing at law or in
equity or by statute, or otherwise.
9.4. No Waiver. No course of dealing between the Borrower and the
Lender or any failure or delay on the part of the Lender in exercising any
rights or remedies under any Loan Document or otherwise available to it shall
operate as a waiver of any rights or remedies and no single or partial exercise
of any rights or remedies shall operate as a waiver or preclude the exercise of
any other rights or remedies hereunder or of the same right or remedy on a
future occasion.
ARTICLE X
Miscellaneous
10.1. Assignments and Participations. (a) The Lender may assign to
one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Loans, its Revolving
Note, and its Revolving Credit Commitment); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment of all of the
Lender's rights and obligations under this Agreement, any such partial
assignment shall be in an amount at least equal to $1,000,000 or an integral
multiple of $100,000 in excess thereof;
(iii) each such assignment by the Lender shall be of a
constant, and not varying, percentage of all of its rights and obligations
under this Agreement and its Revolving Notes ; and
(iv) the parties to such assignment shall execute an
Assignment and Acceptance in the form of Exhibit B hereto, together with any
Revolving Notes subject to such assignment.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of the Lender hereunder
and the assigning Lender shall, to the extent of such assignment, relinquish
its rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor and the
Borrower shall make appropriate
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arrangements so that, if required, new Revolving Notes are issued to the
assignor and the assignee. If the assignee is not incorporated under the laws
of the United States of America or a state thereof, it shall deliver to the
Borrower certification as to exemption from deduction or withholding of Taxes
in accordance with Section 4.6.
(b) The Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations under
this Agreement; provided, however, that (i) the Lender's obligations under this
Agreement shall remain unchanged, (ii) the Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the benefit of the
yield protection provisions contained in Article IV and the right of set-off
contained in Section 10.3, and (iv) the Borrower shall continue to deal solely
and directly with the Lender in connection with the Lender's rights and
obligations under this Agreement, and the Lender shall retain the sole right to
enforce the obligations of the Borrower relating to its Loans and its Note and
to approve any amendment, modification, or waiver of any provision of this
Agreement (other than amendments, modifications, or waivers decreasing the
amount of principal of or the rate at which interest is payable on such Loans
or Note, extending any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Note, or extending any of its Revolving
Credit Commitments).
(e) Notwithstanding any other provision set forth in this
Agreement, the Lender may at any time assign and pledge all or any portion of
its Loans and its Note to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.
(f) The Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of the Lender from time
to time to assignees and participants (including prospective assignees and
participants).
(g) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and agreements by
or on behalf of the Borrower which are contained in the Loan Documents shall
inure to the benefit of the successors and permitted assigns of the Lender or
any of them. The Borrower may not assign or otherwise transfer to any other
Person any right, power, benefit, or privilege (or any interest therein)
conferred hereunder or under any of the other Loan Documents, or delegate (by
assumption or otherwise) to any other Person any duty, obligation, or liability
arising hereunder or under any of the other Loan Documents, and any such
purported assignment, delegation or other transfer shall be void.
10.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of transmission to such party, in the case
of notice by telefacsimile (where the proper transmission of such notice is
either acknowledged by the recipient or electronically confirmed by the
transmitting device), or (iii) on the fifth
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Business Day after the day on which mailed to such party, if sent prepaid by
certified or registered mail, return receipt requested, in each case delivered,
transmitted or mailed, as the case may be, to the address or telefacsimile
number, as appropriate, set forth below or such other address or number as such
party shall specify by notice hereunder:
(a) if to the Borrower:
Crown Crafts, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Lender:
Bank of America, N.A.
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Credit Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bank of America, N.A.
Apparel-Textile-Furnishings Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
10.3. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, the Lender (and each of its affiliates) is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Lender (or any of its affiliates) to or
for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the Note held by the Lender, irrespective of whether the Lender shall have made
any demand under this Agreement or such Note and although such obligations may
be unmatured. The Lender agrees promptly to notify the Borrower after any such
set-off and application made by the Lender; provided, however, that the
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failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Lender under this Section 10.3 are in addition
to other rights and remedies (including other rights of set-off) that the
Lender may have.
10.4. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lender of the Loans and
the execution and delivery to the Lender of this Agreement and the Notes and
shall continue in full force and effect so long as any of Obligations remain
outstanding or the Lender has any Revolving Credit Commitment hereunder or the
Borrower has continuing obligations hereunder unless otherwise provided herein.
10.5. Expenses. The Borrower agrees to pay on demand all costs and
expenses of the Lender in connection with the preparation, execution, delivery,
administration, modification, and amendment of this Agreement, the other Loan
Documents, and the other documents to be delivered hereunder, including the
reasonable fees and expenses of counsel for the Lender (including the cost of
internal counsel) with respect thereto and with respect to advising the Lender
as to its rights and responsibilities under the Loan Documents. The Borrower
further agrees to pay on demand all costs and expenses of the Lender, if any
(including reasonable attorneys' fees and expenses and the cost of internal
counsel), in connection with the enforcement (whether through negotiations,
legal proceedings, or otherwise) of the Loan Documents and the other documents
to be delivered hereunder.
10.6. Amendments and Waivers. Any provision of this Agreement or
any other Loan Document may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower or other
applicable Credit Party party to such Loan Document and the Lender.
No notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances, except as otherwise expressly provided herein. No delay or
omission on the Lender's part in exercising any right, remedy or option shall
operate as a waiver of such or any other right, remedy or option or of any
Default or Event of Default.
10.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
10.8. Termination. The termination of this Agreement shall not
affect any rights of the Borrower or the Lender or any obligation of the
Borrower or the Lender, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Lender under the Loan
Documents shall continue in full force and effect, notwithstanding the
termination of this Agreement, until all of the Obligations have been paid in
full after the termination hereof (other than Obligations in the nature of
continuing indemnities or expense reimbursement obligations not yet due and
payable, which shall
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continue) or the Borrower has furnished the Lender with an indemnification
satisfactory to the Lender with respect thereto. Notwithstanding the foregoing,
if after receipt of any payment of all or any part of the Obligations, the
Lender is for any reason compelled to surrender such payment to any Person
because such payment is determined to be void or voidable as a preference,
impermissible setoff, a diversion of trust funds or for any other reason, this
Agreement shall continue in full force and the Borrower shall be liable to, and
shall indemnify and hold harmless the Lender for, the amount of such payment
surrendered until the Lender shall have been finally and irrevocably paid in
full. The provisions of the foregoing sentence shall be and remain effective
notwithstanding any contrary action which may have been taken by the Lender in
reliance upon such payment, and any such contrary action so taken shall be
without prejudice to the Lender's rights under this Agreement and shall be
deemed to have been conditioned upon such payment having become final and
irrevocable.
10.9. Indemnification; Limitation of Liability. (a) The Borrower
agrees to indemnify and hold harmless the Lender and each of its affiliates and
their respective officers, directors, employees, agents, and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities, costs, and expenses (including reasonable attorneys' fees) that
may be incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of (including in
connection with any investigation, litigation, or proceeding or preparation of
defense in connection therewith) the Loan Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the Loans,
except to the extent such claim, damage, loss, liability, cost, or expense is
found in a final, non-appealable judgment by a court of competent jurisdiction
to have resulted from such Indemnified Party's gross negligence or willful
misconduct. In the case of an investigation, litigation or other proceeding to
which the indemnity in this Section 10.9 applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is
brought by the Borrower, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated. The Borrower agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to it,
any of its Subsidiaries, any Facility Guarantor, or any security holders or
creditors thereof arising out of, related to or in connection with the
transactions contemplated herein, except to the extent that such liability is
found in a final non-appealable judgment by a court of competent jurisdiction
to have directly resulted from such Indemnified Party's gross negligence or
willful misconduct. In case any claim is asserted or any action or proceeding
is brought against an Indemnified Party, such Indemnified Party shall promptly
notify the Borrower of such claim, action or proceeding and the Borrower shall
resist, settle or defend with counsel reasonably acceptable to such Indemnified
Party such claim, action or proceeding. If, within ten (10) days of the
Borrower's receipt of such notice, the Borrower does not commence and continue
to prosecute the defense of such claim, action or proceeding, then such
Indemnified Party may retain legal counsel to represent it in such defense and
the Borrower shall indemnify such Indemnified Party for the reasonable fees and
expenses of such legal counsel. Subject to the foregoing, the Indemnified
Parties shall cooperate and join with the Borrower, at the expense of the
Borrower, as may be required in connection with any action taken or defended by
the Borrower. The Borrower agrees not to assert any claim against the Lender,
any of its affiliates, or any of their respective directors, officers,
employees, attorneys, agents, and advisers, on any theory of liability, for
special, indirect,
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consequential, or punitive damages arising out of or otherwise relating to the
Loan Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans.
(b) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 10.9 shall survive the payment in full of the Loans
and all other amounts payable under this Agreement.
10.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more
of the parties hereto, then such provision shall remain in effect with respect
to all parties, if any, as to whom such provision is neither illegal nor
invalid, and in any event all other provisions hereof shall remain effective
and binding on the parties hereto.
10.11. Entire Agreement. This Agreement, together with the other
Loan Documents, constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all previous proposals,
negotiations, representations, commitments and other communications between or
among the parties, both oral and written, with respect thereto (except that
those provisions (if any) which by the express terms of the commitment letter
dated as of July 20, 1999, executed by the Lender and accepted by the Borrower,
survive the closing of the Revolving Credit Facilities, shall survive and
continue in effect).
10.12. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of
this Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
10.13. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under applicable law shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined below), the outstanding amount of the Loans made hereunder
shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at
all times been in effect. In addition, if when the Loans made hereunder are
repaid in full the total interest due hereunder (taking into account the
increase provided for above) is less than the total amount of interest which
would have been due hereunder if the stated rates of interest set forth in this
Agreement had at all times been in effect, then to the extent permitted by law,
the Borrower shall pay to the Lender an amount equal to the difference between
the amount of interest paid and the amount of interest which would have been
paid if the Highest Lawful Rate had at all times been in effect.
Notwithstanding the foregoing, it is the intention of the Lender and the
Borrower to conform strictly to any applicable usury laws. Accordingly, if the
Lender contracts for, charges, or receives any consideration which constitutes
interest in excess of the Highest Lawful Rate, then any such excess shall be
cancelled automatically and, if previously paid, shall at the Lender's option
be applied to the outstanding amount of the Loans made hereunder or be refunded
to the Borrower. As used in this paragraph, the term "Highest Lawful Rate"
means the
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maximum lawful interest rate, if any, that at any time or from time to time may
be contracted for, charged, or received under the laws applicable to the Lender
which are presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.
10.14. Payments. All principal, interest, and other amounts to be
paid by the Borrower under this Agreement and the other Loan Documents shall be
paid to the Lender at the Principal Office in Dollars and in immediately
available funds, without setoff, deduction or counterclaim. Subject to the
definition of "Interest Period" herein, whenever any payment under this
Agreement or any other Loan Document shall be stated to be due on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time in such case shall be included in the
computation of interest and fees, as applicable, and as the case may be.
10.15. GOVERNING LAW; WAIVER OF JURY TRIAL.
(A) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER
THAN THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY
SHALL BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
(B) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES
AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY
OF ▇▇▇▇▇▇, STATE OF GEORGIA, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS
PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING,
AND THE BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY AND
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING.
(C) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE
MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR
OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE
BORROWER PROVIDED IN SECTION
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10.2, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF GEORGIA.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF
SHALL PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE
COURTS OF ANY JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY
THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY
ANY SUCH OTHER COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE
UNDER APPLICABLE LAW.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE
AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY
WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH
PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION, SUIT OR
PROCEEDING.
(F) THE BORROWER HEREBY EXPRESSLY WAIVES ANY OBJECTION
IT MAY HAVE THAT ANY COURT TO WHOSE JURISDICTION IT HAS SUBMITTED
PURSUANT TO THE TERMS HEREOF IS AN INCONVENIENT FORUM.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
CROWN CRAFTS, INC.
ATTEST: By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ------------------------------------
---------------------- Title: President
-----------------------------------
Secretary
[CORPORATE SEAL]
BANK OF AMERICA, N.A., as Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Lending Office:
Bank of America, N.A.
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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