[MILLER, CANFIELD, PADDOCK AND STONE P.L.C. LETTERHEAD]
January 28, 2000
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Dear Sirs:
We have acted as counsel for La-Z-Boy Incorporated, a Michigan
corporation (the "Borrower"), in connection with the Credit Agreement (the
"Credit Agreement") dated as of January 28, 2000, among the Borrower, the banks
listed on the signature pages thereof and Wachovia Bank, N.A., as Agent. Terms
defined in the Credit Agreement are used herein as therein defined unless
otherwise defined herein.
In connection with the delivery of our legal opinion, we have reviewed
the following documents:
(1) A copy of the Credit Agreement executed by the Borrower; and
(2) Copies of the Notes executed by the Borrower.
As to certain questions of fact material to our opinions, we have
relied upon a certificate of an officer of the Borrower (the "Officer's
Certificate"), which reliance we deem appropriate in the circumstances. A copy
of the Officer's Certificate is attached hereto as Exhibit A.
In rendering our opinion, we have also examined certified copies of the
following instruments or documents:
(1) a copy of the articles of incorporation of the Borrower
certified by the Michigan Corporation, Securities and Land
Development Bureau (the "Bureau") on January 6, 2000;
(2) the "Bank Certificate" referred to in the Officer's
Certificate and the documents attached thereto;
(3) a good standing certificate relating to the Borrower issued by
the Bureau on January 6, 2000;
(4) copies of the articles of incorporation of LZB Acquisition
Corp., England/Corsair, Inc., LZB Properties, Inc., LZB
Florida Realty, Inc. and La-Z-Boy Logistics, Inc.
(collectively, the "Michigan Subsidiaries") certified by the
Bureau on January 6, 2000;
(5) a certified copy of the bylaws of each Michigan Subsidiary;
(6) a good standing certificate relating to each Michigan
Subsidiary issued by the Bureau on January 6, 2000;
(7) a certified copy of the resolution adopted by the Board of
Directors of each Michigan Subsidiary authorizing each
Michigan Subsidiary to consummate the transactions
contemplated in the Credit Agreement;
(8) Proxy Statement/Prospectus dated December 23, 1999 relating to
the Borrower's acquisition of LADD Furniture, Inc. (the
"Prospectus"); and
(9) such other instruments and documents as we have deemed
relevant and necessary as basis for the opinions hereinafter
expressed.
In rendering the opinions expressed below, we have also assumed, with
your permission and without independent verification, that:
1. the signatures of persons signing all documents in
connection with which our opinions herein are rendered are genuine and (other
than officers of the Borrower) authorized;
2. all documents submitted to us as originals or duplicate
originals are authentic;
3. all documents submitted to us as copies, whether certified or not,
conform to authentic original documents;
4. all parties (other than the Borrower and Michigan Subsidiaries) to
the documents reviewed by us are duly organized, validly existing and in good
standing under the laws of all
2
jurisdictions where they are conducting their businesses or otherwise required
to be so qualified, are in compliance with all applicable laws, rules, and
regulations which would have an effect on the opinions contained herein, and
have full power and authority to execute, deliver and perform under such
documents, and all such documents have been duly authorized by all necessary
corporate or other action on the part of such parties, have been or will be
prior to the effectiveness of this letter duly executed by such parties and have
been or will be duly delivered prior to the effectiveness of this letter by such
parties; and
5. the Credit Agreement constitutes the valid and binding obligation of
each party thereto (other than the Borrower);
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation validly existing and in good standing
under the laws of Michigan and has all corporate powers required to carry on its
business as described in the Prospectus.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes (i) are within the Borrower's corporate powers,
(ii) have been duly authorized by all necessary corporate action, (iii) require
no action by or in respect of, or filing with, any Michigan or United States
federal governmental body, agency or official, (iv) do not contravene, or
constitute a default under, any provision of applicable Michigan or United
States federal law or regulation or of the articles of incorporation or bylaws
of the Borrower or of any Identified Agreement (as defined in the Officer's
Certificate) or Identified Judgment (as defined in the Officer's Certificate)
and (v) to our knowledge, except as provided in the Credit Agreement, do not
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries.
3. If their validity, binding effect, and enforceability were
determined under Michigan law, the Credit Agreement would constitute a valid and
binding agreement of the Borrower, enforceable against the Borrower in
accordance with its terms, and the Notes would constitute valid and binding
obligations of the Borrower, enforceable in accordance with their respective
terms. We note that the Credit Agreement and Notes provide that they are to be
governed by Georgia law.
4. Each of the Michigan Subsidiaries is a corporation validly existing
and in good standing under the laws of State of Michigan, and has all corporate
powers required to carry on its business as described in the Prospectus.
5. Neither the Borrower nor any of its Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
3
6. Neither the Borrower nor any of its Subsidiaries is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
7. A Michigan court or a federal court applying the choice of law
principles prevailing under the laws of Michigan to which the question is
presented will give effect to the provisions in the Credit Agreement and the
Notes choosing the laws of Georgia as the governing law thereof to the extent
that such choice of law would be given effect under Section 187 of the
Restatement of Law, Conflicts of Law 2d.
Based solely on a review of litigation matters in which our firm is
representing the Borrower or a Michigan Subsidiary and on the Officer's
Certificate, we hereby confirm that, to our knowledge, there is no action, suit,
or proceeding pending or overtly threatened in writing against the Borrower or
any Michigan Subsidiary before any court, arbitrator, or governmental body,
agency, or official that: (a) in any manner questions the validity or
enforceability of the Credit Agreement or any Note; or; (b) was required to have
been disclosed in the Prospectus by the Securities Act of 1933 and the
applicable rules and regulations of the Securities and Exchange Commission (or
that would have been so required to have been disclosed if the same had been
pending or threatened on the date of the Prospectus) and was not so disclosed.
The matters set forth above are subject to the following assumptions,
limitations, and qualifications:
A. The opinions expressed in paragraph 3 are qualified to the extent
that enforceability may be limited by (i) the effect of bankruptcy, insolvency,
fraudulent conveyance, fraudulent transfer, reorganization, receivership,
re-arrangement, liquidation, conservatorship, moratorium or other laws from time
to time in effect affecting or relating to the rights of the parties, including
the enforcement of creditors' rights generally or the collection of debtors'
obligations generally, (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law), (iii)
the doctrines of good faith and commercial reasonableness, (iv) applicable laws
which may affect the remedies, covenants and provisions provided therein,
particularly where a court having competent personal and subject matter
jurisdiction finds that such remedies, covenants or provisions were at the time
made, or are in application, unconscionable as a matter of law or public policy,
which laws do not in our opinion make the remedies, covenants and provisions
provided therein inadequate for the practical realization of the benefits
intended to be provided thereby, and (v) the unenforceability of purported
waivers of claims, rights, benefits and defenses.
B. We express no opinion with regard to the availability of the
remedies of specific performance and injunctive and other forms of equitable
relief, or the availability of attorneys' fees.
4
C. Our opinions are subject to generally applicable rules of law which:
(i) limit the availability of a remedy under certain circumstances where another
remedy has been elected; (ii) may, where less than all of a contract may be
unenforceable, limit the enforceability of the balance of the contract to
circumstances in which the unenforceable portion is not an essential part of the
agreed exchange; (iii) may permit a party who has materially failed to render or
offer performance required by the contract to cure that failure unless
permitting a cure would unreasonably hinder the aggrieved party from making
substitute arrangements for performance, or it was important in the
circumstances to the aggrieved party that performance occur by the date stated
in the contract; or (iv) limit the enforceability of provisions releasing,
exculpating, or exempting a party from, or requiring indemnification of a party
for, liability for its own action or inaction (to the extent the action or
inaction involves negligence, willful misconduct, unlawful conduct, or breach of
its contractual obligations to the other party) or liabilities under federal or
state securities laws.
D. We express no opinion with respect to the enforceability of any
provisions of the Credit Agreement or the Notes with respect to late charges,
indemnities, forfeitures, liquidated damages, compounding of interest, interest
on interest, limitations on damages, or prepayment premiums or penalties, if
any, and we express no opinion as to whether any of the fees or commissions
provided for in the Credit Agreement or the Notes or related documents may be
regarded as interest for purposes of applying Michigan's usury and other laws
regulating the payment or charging of interest or whether such fees or
commissions are reasonable.
E. The opinions contained herein are given as of the date of this
letter, are limited to the effect of the present internal laws of the State of
Michigan and, to the extent applicable, the federal laws of the United States of
America and of no other state or jurisdiction, and are based on the statutes,
the published and reported judicial and administrative decisions, and the rules
and regulations of the governmental agencies of such jurisdictions. However, we
express no opinion as to any laws, rules, or regulations of any political
subdivisions of the State of Michigan. Any change in the laws (including an
interpretation or relevant holding) may be applied retroactively, and we assume
no responsibility to advise you of any changes in laws.
F. In this letter, "our knowledge" and any similar expressions mean,
the actual awareness of those attorneys in our office who have directly
participated in the preparation of this letter or have been involved in
negotiation of the Credit Agreement and the related documents.
G. We express no opinion with respect to the effect of any Michigan or
federal securities, pension, benefit, trade regulation, antitrust, tax,
intellectual property, labor, zoning, land use, or environmental laws or
regulations which may be applicable to the Credit Agreement and the related
documents or the transactions contemplated thereby.
5
This opinion letter addresses only with the specific legal issues
specifically set forth herein, and there are no implied opinions.
For purposes of rendering the opinions in paragraphs 2 and 3, we have
assumed that the interest rate specified in the Credit Agreement and the Notes
will not exceed 25% simple interest annually (including as interest all items
which a court would consider to constitute interest no matter how denominated).
Furthermore, under the laws of Michigan, an agreement to pay interest on overdue
interest made before such interest becomes overdue is enforceable only if the
rate set forth in the relevant agreement is not greater than 10% per annum.
This letter is delivered to you in connection with the transaction
referenced above and may not be relied upon in connection with any other
transaction. No one other than you or any Assignee, Participant or other
Transferee under the Credit Agreement may rely upon this letter without our
prior written consent. Except for reproductions for inclusions in the
transcripts of the documentation relating to the Credit Agreement and for
delivery to any governmental or regulatory authorities having jurisdiction over
the Agent or Banks, this opinion may not be copied or otherwise reproduced or
quoted from or in any other way made public, in whole or in part, without our
prior written consent.
Very truly yours,
Miller, Canfield, Paddock and Stone, P.L.C.
6
$150,000,000
CREDIT AGREEMENT
dated as of
January 28, 2000
among
LA-Z-BOY INCORPORATED
The Banks Listed Herein
and
WACHOVIA BANK, N.A.,
as Agent
TABLE OF CONTENTS
Page
ARTICLE I.
DEFINITIONS
SECTION 1.01 Definitions. ...............................................................................1
SECTION 1.02 Accounting Terms and Determinations........................................................11
SECTION 1.03 Use of Defined Terms.......................................................................11
SECTION 1.04 Terminology. ..............................................................................11
SECTION 1.05 References.................................................................................11
ARTICLE II.
THE CREDITS
SECTION 2.01 Commitments to Make Loans..................................................................12
SECTION 2.02 Method of Borrowing Loans. ................................................................12
SECTION 2.03 Notes. ....................................................................................13
SECTION 2.04 Maturity of Loans. ........................................................................14
SECTION 2.05 Interest Rates.............................................................................14
SECTION 2.06 Fees.......................................................................................15
SECTION 2.07 Optional Termination or Reduction of Commitments. .........................................15
SECTION 2.08 Mandatory Reduction and Termination of Commitments.........................................15
SECTION 2.09 Optional Prepayments.......................................................................16
SECTION 2.10 Mandatory Prepayments......................................................................16
SECTION 2.11 General Provisions as to Payments..........................................................16
SECTION 2.12 Computation of Interest and Fees...........................................................18
ARTICLE III.
CONDITIONS
SECTION 3.01 Conditions to Closing......................................................................18
SECTION 3.02 Conditions to First Borrowing. ............................................................19
SECTION 3.03 Conditions to All Borrowings. .............................................................20
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Status...........................................................................21
SECTION 4.02 Authority; No Conflict.....................................................................21
i
SECTION 4.03 Binding Effect.............................................................................21
SECTION 4.04 Governmental Approval......................................................................21
SECTION 4.05 Litigation.................................................................................21
SECTION 4.06 ERISA......................................................................................22
SECTION 4.07 Financial Information. ....................................................................22
SECTION 4.08 Title to Properties; Liens.................................................................22
SECTION 4.09 Investments. ..............................................................................22
SECTION 4.10 Taxes......................................................................................22
SECTION 4.11 Representations and Warranties True........................................................23
SECTION 4.12 Environmental Compliance...................................................................23
SECTION 4.13 No Default.................................................................................23
SECTION 4.14 Margin Stock. .............................................................................23
SECTION 4.15 Investment Company. .......................................................................23
SECTION 4.16 Public Utility Holding Company.............................................................23
SECTION 4.17 Compliance with Laws.......................................................................23
SECTION 4.18 Subsidiaries...............................................................................23
SECTION 4.19 Full Disclosure............................................................................23
ARTICLE V.
COVENANTS
SECTION 5.01 Preservation of Existence, Etc.............................................................24
SECTION 5.02 Keeping of Books...........................................................................24
SECTION 5.03 Reporting Requirements.....................................................................24
SECTION 5.04 Taxes. ....................................................................................25
SECTION 5.05 Inspections................................................................................25
SECTION 5.06 Computation of Financial Tests.............................................................25
SECTION 5.07 Governmental and Other Approvals.......................................................... 26
SECTION 5.08 Insurance..................................................................................26
SECTION 5.09 Compliance with ERISA......................................................................26
SECTION 5.10 Ratio of Consolidated Total Funded Debt to Consolidated Total Capital..................... 26
SECTION 5.11 Fixed Charge Coverage Ratio................................................................26
SECTION 5.12 Compliance with Laws.......................................................................26
SECTION 5.13 Notice of Litigation...................................................................... 26
SECTION 5.14 Maintenance of Property................................................................... 26
SECTION 5.15 Environmental Notices..................................................................... 27
SECTION 5.16 Environmental Release......................................................................27
SECTION 5.17 Encumbrances...............................................................................27
SECTION 5.18 Acquisitions...............................................................................27
SECTION 5.19 Transactions with Affiliates.............................................................. 27
SECTION 5.20 Merger or Consolidation................................................................... 27
SECTION 5.21 Disposition of Assets......................................................................28
SECTION 5.22 Dissolution................................................................................28
SECTION 5.23 Change in Fiscal Year. ....................................................................28
SECTION 5.24 Environmental Matters......................................................................28
SECTION 5.25 Subsidiaries...............................................................................28
ii
ARTICLE VI.
DEFAULTS
SECTION 6.01 Events of Default..........................................................................28
SECTION 6.02 Notice of Default. ........................................................................30
ARTICLE VII.
THE AGENT
SECTION 7.01 Appointment, Powers and Immunities.........................................................30
SECTION 7.02 Reliance by Agent..........................................................................31
SECTION 7.03 Defaults...................................................................................31
SECTION 7.04 Rights of Agent and its Affiliates as a Bank...............................................31
SECTION 7.05 Indemnification............................................................................32
SECTION 7.06 CONSEQUENTIAL DAMAGES......................................................................32
SECTION 7.07 Payee of Note Treated as Owner.............................................................32
SECTION 7.08 Non-Reliance on Agent and Other Banks......................................................32
SECTION 7.09 Failure to Act.............................................................................33
SECTION 7.10 Resignation or Removal of Agent............................................................33
ARTICLE VIII.
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01 Basis for Determining Interest Rate Inadequate or Unfair. .................................33
SECTION 8.02 Illegality.................................................................................34
SECTION 8.03 Increased Cost and Reduced Return. ........................................................34
SECTION 8.04 Base Rate Loans Substituted for Euro-Dollar Loans..........................................35
SECTION 8.05 Compensation...............................................................................36
ARTICLE IX.
MISCELLANEOUS
SECTION 9.01 Notices....................................................................................36
SECTION 9.02 No Waivers.................................................................................36
SECTION 9.03 Expenses; Documentary Taxes; Indemnification...............................................37
SECTION 9.04 Setoffs; Sharing of Set-Offs...............................................................37
SECTION 9.05 Amendments and Waivers.....................................................................38
SECTION 9.06 Margin Stock Collateral....................................................................39
SECTION 9.07 Successors and Assigns.....................................................................39
SECTION 9.08 Confidentiality............................................................................41
SECTION 9.09 Representation by Banks....................................................................41
iii
SECTION 9.10 Obligations Several........................................................................41
SECTION 9.11 Survival of Certain Obligations............................................................41
SECTION 9.12 Georgia Law................................................................................41
SECTION 9.13 Severability...............................................................................41
SECTION 9.14 Interest...................................................................................41
SECTION 9.15 Interpretation.............................................................................42
SECTION 9.16 Consent to Jurisdiction....................................................................42
SECTION 9.17 Counterparts...............................................................................42
SCHEDULE 5.20 Existing Liens
EXHIBIT A Form of Note
EXHIBIT B Form of Opinion of Counsel for the Borrower
EXHIBIT C Form of Opinion of Special Counsel for the Agent
EXHIBIT D Form of Funding Certificate
EXHIBIT E Form of Secretary's Certificate
EXHIBIT F Form of Assignment and Acceptance
EXHIBIT G Form of Notice of Borrowing
EXHIBIT H Form of Guaranty
EXHIBIT I Form of Indemnity, Subrogation and Contribution Agreement
iv
CREDIT AGREEMENT
AGREEMENT dated as of January 28, 2000, among LA-Z-BOY INCORPORATED,
the BANKS listed on the signature pages hereof and WACHOVIA BANK, N.A., as
Agent.
The parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01 Definitions. The terms as defined in this Section 1.01
shall, for all purposes of this Agreement and any amendment hereto (except as
herein otherwise expressly provided or unless the context otherwise requires),
have the meanings set forth herein:
"Acquisition" means any transaction pursuant to which the Borrower or
any of its Subsidiaries directly or indirectly, in its own name or by or through
a nominee or an agent (a) acquires from any Person other than a Wholly Owned
Subsidiary equity Securities (or warrants, options or other rights to acquire
such Securities) of any Person other than the Borrower or any Person which is
not then a Subsidiary of the Borrower, pursuant to a solicitation of tenders
therefor, or in one or more negotiated block, market or other transactions not
involving a tender offer, or a combination of any of the foregoing, or (b) makes
any Person (other than a Wholly Owned Subsidiary) a Subsidiary of the Borrower,
or causes any Person (other than a Wholly Owned Subsidiary) to be merged into
the Borrower or any of its Subsidiaries, in any case pursuant to a merger,
purchase of assets or any reorganization providing for the delivery or issuance
to the holders of such Person's then outstanding Securities, in exchange for
such Securities, of cash or Securities of the Borrower or any of its
Subsidiaries, or a combination thereof, or (c) purchases from any Person other
than a Wholly Owned Subsidiary all or substantially all of the business or
assets of any Person; provided that, notwithstanding the foregoing, the
formation and capitalization of a Wholly Owned Subsidiary shall not constitute
an Acquisition.
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.05(c).
"Affiliate" of any Person means (i) any other Person which directly, or
indirectly through one or more intermediaries, controls such Person, (ii) any
other Person which directly, or indirectly through one or more intermediaries,
is controlled by or is under common control with such Person, or (iii) any other
Person of which such Person owns, directly or indirectly, 20% or more of the
common stock or equivalent equity interests. As used herein, the term "control"
means possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means Wachovia Bank, N.A., a national banking association
organized under the laws of the United States of America, in its capacity as
agent for the Banks hereunder, and its successors and permitted assigns in such
capacity.
"Agent's Letter Agreement" means that certain letter agreement, dated
as of December 14, 1999, among the Borrower, the Agent and Wachovia Securities,
Inc. relating to
certain fees from time to time payable by the Borrower to the
Agent and Wachovia Securities, Inc., together with all amendments and
modifications thereto.
"Agreement" means this Credit Agreement, together with all amendments
and supplements hereto.
"Applicable Margin" has the meaning set forth in Section 2.05(a).
"Assignee" has the meaning set forth in Section 9.07(c).
"Assignment and Acceptance" means an Assignment and Acceptance executed
in accordance with Section 9.07(c) in the form attached hereto as Exhibit F.
"Authority" has the meaning set forth in Section 8.02.
"Bank" means each bank listed on the signature pages hereof as having a
Commitment, and its successors and assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate per
annum equal to the higher as of such day of (i) the Prime Rate, and (ii)
one-half of one percent above the Federal Funds Rate for such day. For purposes
of determining the Base Rate for any day, changes in the Prime Rate and the
Federal Funds Rate shall be effective on the date of each such change.
"Base Rate Loan" means a Loan which bears or is to bear interest at a
rate based upon the Base Rate.
"Borrower" means La-Z-Boy Incorporated, a Michigan corporation, and its
successors and permitted assigns.
"Borrowing" means a borrowing hereunder consisting of Loans made to the
Borrower at the same time by the Banks pursuant to Article II. A Borrowing is a
"Base Rate Borrowing" if such Loans are Base Rate Loans or a "Euro-Dollar
Borrowing" if such Loans are Euro-Dollar Loans.
"Capitalized Lease" shall mean any lease of property (real, personal or
mixed) the obligation for Rentals with respect to which is required to be
capitalized on a balance sheet of the lessee in accordance with generally
accepted accounting principles or for which the amount of the asset and
liability thereunder as so capitalized should be disclosed in a note to such
balance sheet.
"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. ss.9601 et seq. and its implementing regulations
and amendments.
"Change of Law" shall have the meaning set forth in Section 8.02.
"Closing Date" means January 28, 2000.
2
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code. Any reference to any provision of the Code shall
also be deemed to be a reference to any successor provision or provisions
thereof.
"Commitment" means, with respect to each Bank, (i) the amount set forth
opposite the name of such Bank on the signature pages hereof, or (ii) as to any
Bank which enters into an Assignment and Acceptance (whether as transferor Bank
or as Assignee thereunder), the amount of such Bank's Commitment after giving
effect to such Assignment and Acceptance, in each case as such amount may be
reduced from time to time pursuant to Sections 2.07 and 2.08.
"Commitment Fee Payment Date" means each March 31, June 30, September
30 and December 31.
"Consolidated Net Worth" means, at any time, shareholders' equity of
the Borrower and its Subsidiaries, as set forth or reflected on the most recent
consolidated balance sheet of the Borrower and its Subsidiaries, prepared in
accordance with GAAP.
"Consolidated Total Capital" means, at any time, the sum of (i)
Consolidated Net Worth, and (ii) Consolidated Total Funded Debt.
"Consolidated Total Funded Debt" means at any date the Debt of the
Borrower and its Subsidiaries, determined on a consolidated basis as of such
date.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414(b) or 414(c) of the Code.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under capital leases,
(v) all obligations of such Person to reimburse any bank or other Person in
respect of amounts payable under a banker's acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation),
(vii) all obligations (absolute or contingent) of such Person to reimburse any
bank or other Person in respect of amounts paid under a letter of credit or
similar instrument with an expiration date more than one year from such date,
(viii) all Debt of others secured by a Lien on any asset of such Person, whether
or not such Debt is assumed by such Person, (ix) all Debt of others Guaranteed
by such Person, and (x) all obligations of such Person with respect to interest
rate protection agreements, foreign currency exchange agreements or other
hedging agreements (valued as the termination value thereof computed in
accordance with a method approved by the International Swap Dealers Association
and agreed to by such Person in the applicable hedging agreement, if any).
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived in writing, become an Event of Default.
3
"Default Rate" means, with respect to any Loan, on any day, the sum of
2% plus the then highest interest rate (including the Applicable Margin) which
may be applicable to any Loans hereunder (irrespective of whether any such type
of Loans are actually outstanding hereunder).
"Dollars" or "$" means dollars in lawful currency of the United States
of America.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Georgia are authorized or required by law
to close.
"Domestic Subsidiary" means any Subsidiary that is organized under the
laws of any state or territory of the United States of America.
"Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or
orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
decree or order.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment, including, without limitation, ambient air, surface water,
groundwater or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"Environmental Liabilities" means any liabilities, whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.
"Environmental Notices" means notice from any Environmental Authority
or by any other person or entity, of possible or alleged noncompliance with or
liability under any Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental Authority or
from any other person or entity for correction of any violation of any
Environmental Requirement or any investigations concerning any violation of any
Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or under
any applicable state or local environmental law or regulation.
4
"Environmental Requirements" means any legal requirement relating to
health, safety or the environment and applicable to the Borrower, any Subsidiary
or any of their respective properties, including but not limited to any such
requirement under CERCLA or similar state legislation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended. Any reference to any provision of ERISA shall also be deemed to be a
reference to any successor provision or provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Euro-Dollar Loan" means a Loan which bears or is to bear interest at a
rate based upon the London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.05(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 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 Domestic Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Domestic Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate charged to Wachovia on such day on such
transactions as determined by the Agent.
"Fixed Charge Coverage Ratio" shall mean as at any date of
determination thereof, a ratio (i) the numerator of which shall be equal to Net
Income plus income taxes of the Borrower and its Subsidiaries plus Interest
Expense, all of which accrued during the preceding four fiscal quarter quarters,
and (ii) the denominator of which shall be the sum of Interest Expense and
Rentals for such period.
"Funding Certificate" has the meaning set forth in Section 3.02(a).
"GAAP" means generally accepted accounting principles consistently
applied.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect
5
thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means each of the Domestic Subsidiaries existing on the
Closing Date and any other Domestic Subsidiary which shall become a party to the
Guaranty at any time after the Closing Date.
"Guaranty" means the Guaranty Agreement dated as of even date herewith
executed by each Guarantor in favor of the Agent, substantially in the form
attached hereto as Exhibit H, as modified, amended, supplemented or restated
from time to time.
"Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, or in any applicable state or local law or regulation, (b) hazardous
substances, as defined in CERCLA, or in any applicable state or local law or
regulation, (c) gasoline, or any other petroleum product or by-product, (d)
toxic substances, as defined in the Toxic Substances Control Act of 1976, or in
any applicable state or local law or regulation or (e) insecticides, fungicides,
or rodenticides, as defined in the Federal Insecticide, Fungicide, and
Rodenticide Act of 1975, or in any applicable state or local law or regulation,
as each such Act, statute or regulation may be amended from time to time.
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement among the Borrower, the
Guarantors and the Agent, substantially in the form attached hereto as Exhibit
I, as modified, amended, supplemented or restated from time to time.
"Interest Expense" means, with respect to any period, the sum of the
amount of interest paid or accrued by the Borrower and its Subsidiaries in
respect of such period.
"Interest Period" means with respect to each Euro-Dollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the first, second or third month thereafter, as the
Borrower may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (subject to clause (c) below) which
would otherwise end on a day which is not a Euro-Dollar Business Day
shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month,
in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month) shall, subject to clause (c) below, end on the last Euro-Dollar
Business Day of the appropriate subsequent calendar month; and
(c) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
6
"LADD" means LADD Furniture, Inc., a North Carolina corporation.
"LADD Acquisition" means the acquisition by the Borrower of LADD
through the merger of LZB Acquisition Corp., a Michigan corporation, with and
into LADD.
"LADD Acquisition Agreement" means the Agreement and Plan of Merger
dated as of December 13, 1999 among the Borrower, LADD and LZB Acquisition
Corp., a Michigan corporation, as amended to the Closing Date, pursuant to which
the LADD Acquisition will be consummated.
"LADD Indebtedness" means all obligations of LADD under that certain
Loan and Security Agreement dated as of July 12, 1996, as amended and amended
and restated, among LADD, certain subsidiaries of LADD, certain lenders party
thereto, and Bank of America, N.A., as agent.
"Lending Office" means, as to each Bank, its office located at its
address set forth on the signature pages hereof (or identified on the signature
pages hereof as its Lending Office) or such other office as such Bank may
hereafter designate as its Lending Office by notice to the Borrower and the
Agent.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purpose of this Agreement, a Person shall be deemed to own subject to a
Lien any proceeds of a sale with recourse of accounts receivable, any asset
leased under any "sale and lease back" or similar arrangement and any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Base Rate Loan or a Euro-Dollar Loan and "Loans" means
Base Rate Loans or Euro-Dollar Loans, or any or all of them, as the context
shall require.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the
Indemnity, Subrogation and Contribution Agreement, any other document
evidencing, relating to or securing the Loans, and any other document or
instrument delivered from time to time in connection with this Agreement, the
Notes or the Loans, as such documents and instruments may be amended or
supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in Section
2.05(c).
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
financial condition, operations, business, properties or prospects of the
Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of
the Agent or the Banks under the Loan Documents, or the ability of the Borrower
to perform its obligations under the Loan Documents to which it is a party, as
applicable, or (c) the legality, validity or enforceability of any Loan
Document.
7
"Net Income" means for any period the net income (or the net deficit if
expenses and charges exceed revenues and other proper income credits) of the
Borrower and its Subsidiaries for such period taken as one accounting period,
determined in accordance with GAAP.
"Net Proceeds of Debt" means any proceeds received by the Borrower or a
Subsidiary in respect of the incurrence or the private or public issuance of
Debt of the Borrower or such Subsidiary, after deducting therefrom all
reasonable and customary costs and expenses incurred by the Borrower or such
Subsidiary directly in connection with the incurrence or issuance of such Debt.
"Net Proceeds of Stock" means any proceeds received by the Borrower or
a Subsidiary in respect of the private or public issuance of stock, membership
interest or other equity interest of the Borrower or such Subsidiary (but
excluding stock, membership interests or other equity interests issued to any
member of the board of directors of the Borrower or any Subsidiary or any
employee of the Borrower or any Subsidiary), after deducting therefrom all
reasonable and customary costs and expenses incurred by the Borrower or such
Subsidiary directly in connection with the issuance of such stock, membership
interest or other equity interest.
"Notes" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, together with all amendments, consolidations, modifications, renewals and
supplements thereto and "Note" means any one of such Notes.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Officer's Certificate" has the meaning set forth in Section 3.01(f).
"Participant" has the meaning set forth in Section 9.07(b).
"Pay-Off Letter" means the letter agreement dated January 28, 2000
among Bank of America, N.A., as administrative agent, LADD and the Agent,
relating to the repayment of the LADD Indebtedness, in form and substance
satisfactory to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" means any Acquisition (a) which is of a Person
engaged in the same or similar line or lines of business as the Borrower or any
of its Subsidiaries, and (b) which has been approved by the Board of Directors
of the Person to be acquired in connection with such Acquisition.
"Permitted Encumbrances" shall mean, with respect to any Person:
(a) Liens for taxes not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently pursued, provided
that such provision for the payment of all such taxes known to such Person has
been made on the books of such Person as may be required by GAAP;
(b) mechanics', materialmen's, banker's, carriers', warehousemen's and
similar Liens and encumbrances arising in the ordinary course of business and
securing obligations of such
8
Person that are not overdue for a period of more than 60 days or are being
contested in good faith by appropriate proceedings diligently pursued, provided
that in the case of any such contest (i) any proceedings commenced for the
enforcement of such Liens and encumbrances shall have been duly suspended; and
(ii) such provision for the payment of such Liens and encumbrances has been made
on the books of such Person as may be required by
GAAP;
(c) Liens arising in connection with worker's compensation,
unemployment insurance, old age pensions and social security benefits and
similar statutory obligations which are not overdue or are being contested in
good faith by appropriate proceedings diligently pursued, provided that in the
case of any such contest (i) any proceedings commenced for the enforcement of
such Liens shall have been duly suspended; and (ii) such provision for the
payment of such Liens has been made on the books of such Person as may be
required by GAAP;
(d) (i) Liens incurred in the ordinary course of business to secure the
performance of statutory obligations arising in connection with progress
payments or advance payments due under contracts with the United States
government or any agency thereof entered into in the ordinary course of business
and (ii) Liens incurred or deposits made in the ordinary course of business to
secure the performance of statutory obligations, bids, leases, fee and expense
arrangements with trustees and fiscal agents and other similar obligations
(exclusive of obligations incurred in connection with the borrowing of money,
any lease-purchase arrangements or the payment of the deferred purchase price of
property), provided that full provision for the payment of all such obligations
set forth in clauses (i) and (ii) has been made on the books of such Person as
may be required by GAAP; and
(e) any easements, restrictions, mineral, oil, gas and mining rights
and reservations and defects in title with respect to real property which do not
individually or in the aggregate materially detract from the value thereof.
"Permitted Receivables" shall mean the indebtedness of any obligor
(whether now existing or hereafter arising) under a contract for sale of goods
or services by the Borrower, which shall include the right to payment of any
interest or finance charges and other obligations of such obligor with respect
thereto.
"Permitted Receivables Purchase Facility" shall mean any agreement of
the Borrower providing for sales, transfers or conveyances of Permitted
Receivables purporting to be sales (and considered to be sales under generally
accepted accounting principles as in effect from time to time in the United
States of America) that do not provide, directly or indirectly, for recourse
against the seller of such Permitted Receivables by way of guaranty or any other
support arrangement, with respect to the amount of such Permitted Receivables
(based on the financial condition or circumstances of the obligor thereunder)
other than such limited recourse as is reasonable given market standards for
transactions of a similar type, taking into account such factors as historical
bad debt loss experience and obligor concentration levels.
"Person" means an individual, a corporation, a limited liability
company, a partnership (including without limitation, a joint venture), an
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
9
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Prime Rate" refers to that interest rate so denominated and set by
Wachovia from time to time as an interest rate basis for borrowings. The Prime
Rate is but one of several interest rate bases used by Wachovia. Wachovia lends
at interest rates above and below the Prime Rate.
"Redeemable Preferred Stock" of any Person means any preferred stock
issued by such Person which is at any time prior to the Termination Date either
(i) mandatorily redeemable (by sinking fund or similar payments or otherwise) or
(ii) redeemable at the option of the holder thereof.
"Rentals" with respect to any Person shall mean and include all fixed
rents (including as such all payments which the lessee is obligated to make to
the lessor on termination of the lease or surrender of the property) payable by
such Person, as lessee or sublessee under a lease of real or personal property,
but shall be exclusive of any amounts required to be paid by such person
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges.
"Reportable Event" means a Reportable Event as defined in Section
4043(b) of ERISA, which event could have a Material Adverse Effect.
"Required Banks" means at any time Banks having at least 66-2/3% of the
aggregate amount of the Commitments or, if the Commitments are no longer in
effect, Banks holding at least 66-2/3% of the aggregate outstanding principal
amount of the Notes.
"Security" has the meaning assigned to such term in Section 2(1) of the
Securities Act of 1933, as amended.
"Stock" of any Person means any capital stock or other equity Security,
of any classification, of such Person.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
"Taxes" has the meaning set forth in Section 2.11(c).
"Termination Date" means July 28, 2001.
"Third Parties" means all lessees, sublessees, licensees and other
users of the properties of the Borrower and its Subsidiaries, excluding those
users of such properties in the ordinary course of the Borrower's and its
Subsidiaries' business and on a temporary basis.
10
"Total Unused Commitments" means at any date, an amount equal to: (i)
the aggregate amount of the Commitments of all of the Banks at such time, less
(ii) the aggregate outstanding principal amount of the Loans of all of the Banks
at such time.
"Transferee" has the meaning set forth in Section 9.07(d).
"Unused Commitment" means at any date, with respect to any Bank, an
amount equal to its Commitment less the aggregate outstanding principal amount
of its Loans.
"Wachovia" means Wachovia Bank, N.A., a national banking association
and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower.
SECTION 1.02 Accounting Terms and Determinations. Unless otherwise
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Borrower and its Subsidiaries delivered to the
Banks, unless with respect to any such change concurred in by the Borrower's
independent public accountants or required by GAAP, in determining compliance
with any of the provisions of this Agreement or any of the other Loan Documents:
(i) the Borrower shall have objected to determining such compliance on such
basis at the time of delivery of such financial statements, or (ii) the Required
Banks shall so object in writing within 30 days after the delivery of such
financial statements, in either of which events such calculations shall be made
on a basis consistent with those used in the preparation of the latest financial
statements as to which such objection shall not have been made (which, if
objection is made in respect of the first financial statements delivered under
Section 5.03 hereof, shall mean the financial statements referred to in Section
4.07).
SECTION 1.03 Use of Defined Terms. All terms defined in this Agreement
shall have the same meanings when used in any of the other Loan Documents,
unless otherwise defined therein or unless the context shall otherwise require.
SECTION 1.04 Terminology. All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural and the plural shall
include the singular. Titles of Articles and Sections in this Agreement are for
convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 1.05 References. Unless otherwise indicated, references in this
Agreement to "Articles", "Exhibits", "Schedules", and "Sections" are references
to articles, exhibits, schedules and sections hereof.
11
ARTICLE II.
THE CREDITS
SECTION 2.01 Commitments to Make Loans. Each Bank severally agrees, on
the terms and conditions set forth herein, to make Loans to the Borrower from
time to time before the Termination Date; provided that, immediately after each
such Loan is made, the aggregate outstanding principal amount of Loans by such
Bank shall not exceed the amount of its Commitment, provided further that the
aggregate principal amount of all Loans at any one time outstanding shall not
exceed the aggregate amount of the Commitments of all of the Banks at such time.
Each Borrowing under this Section shall be in an aggregate principal amount of
$10,000,000 or any larger multiple of $5,000,000 (except that any such Borrowing
may be in the aggregate amount of the Unused Commitments) and shall be made from
the several Banks ratably in proportion to their respective Commitments. Within
the foregoing limits, the Borrower may borrow under this Section, repay or, to
the extent permitted by Section 2.09, prepay Loans and reborrow under this
Section at any time before the Termination Date.
SECTION 2.02 Method of Borrowing Loans.The Borrower shall give the
Agent notice in the form attached hereto as Exhibit G (a "Notice of Borrowing")
prior to 11:00 A.M. (Atlanta, Georgia time) on the Domestic Business Day of each
Base Rate Borrowing and at least 3 Euro-Dollar Business Days before each
Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or
a Euro-Dollar Business Day in the case of a
Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be
Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Euro-Dollar Borrowing, the duration
of the Interest Period applicable thereto, subject to
the provisions of the definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's ratable share of
such Borrowing and such Notice of Borrowing shall not thereafter be revocable by
the Borrower.
(c) Not later than 11:00 A.M. (Atlanta, Georgia time) on the date of
each Borrowing, each Bank shall (except as provided in subsection (d) of this
Section) make available its ratable share of such Borrowing, in Federal or other
funds immediately available in Atlanta, Georgia, to the Agent at its address
referred to in or specified pursuant to Section 9.01. Unless the Agent
determines that any applicable condition specified in Article III has not been
satisfied, the Agent will make the funds so received from the Banks available to
the Borrower at the Agent's aforesaid address. Unless the Agent receives notice
from a Bank, at the Agent's address referred to in Section 9.01, no later than
4:00 P.M. (local time at such address) on the Domestic Business Day before the
date of a Borrowing stating that such Bank will not make a Loan in connection
with such Borrowing, the Agent shall be entitled to assume that such Bank will
make a Loan in connection with such Borrowing and, in reliance on such
assumption, the Agent may (but shall
12
not be obligated to) make available such Bank's ratable share of such Borrowing
to the Borrower for the account of such Bank. If the Agent makes such Bank's
ratable share available to the Borrower and such Bank does not in fact make its
ratable share of such Borrowing available on such date, the Agent shall be
entitled to recover such Bank's ratable share from such Bank or the Borrower
(and for such purpose shall be entitled to charge such amount to any account of
the Borrower maintained with the Agent), together with interest thereon for each
day during the period from the date of such Borrowing until such sum shall be
paid in full at a rate per annum equal to the rate at which the Agent determines
that it obtained (or could have obtained) overnight Federal funds to cover such
amount for each such day during such period, provided that any such payment by
the Borrower of such Bank's ratable share and interest thereon shall be without
prejudice to any rights that the Borrower may have against such Bank. If such
Bank shall repay to the Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan included in such Borrowing for purposes of
this Agreement.
(d) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank, such
Bank shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by such Bank to the Agent as
provided in subsection (c) of this Section, or remitted by the Borrower to the
Agent as provided in Section 2.11, as the case may be.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no Euro-Dollar Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default shall not have
been cured or waived in writing.
(f) In the event that a Notice of Borrowing fails to specify whether
the Loans comprising such Borrowing are to be Base Rate Loans or Euro-Dollar
Loans, such Loans shall be made as Base Rate Loans. If the Borrower is otherwise
entitled under this Agreement to repay any Loans maturing at the end of an
Interest Period applicable thereto with the proceeds of a new Borrowing, and the
Borrower fails to repay such Loans using its own moneys and fails to give a
Notice of Borrowing in connection with such new Borrowing, a new Borrowing shall
be deemed to be made on the date such Loans mature in an amount equal to the
principal amount of the Loans so maturing, and the Loans comprising such new
Borrowing shall be Base Rate Loans.
(g) Notwithstanding anything to the contrary contained herein, there
shall not be more than [__] different Interest Periods outstanding at the same
time (for which purpose Interest Periods described in different numbered clauses
of the definition of the term "Interest Period" shall be deemed to be different
Interest Periods even if they are coterminous).
SECTION 2.03 Notes. The Loans of each Bank shall be evidenced by a
single Note payable to the order of such Bank for the account of its Lending
Office in an amount equal to the original principal amount of such Bank's
Commitment.
(b) Upon receipt of each Bank's Notes pursuant to Section 3.01, the
Agent shall deliver such Notes to such Bank. Each Bank shall record, and prior
to any transfer of its Notes shall endorse on the schedule forming a part
thereof appropriate notations to evidence, the date, amount and maturity of, and
effective interest rate for, each Loan made by it, the date and amount of each
payment of principal made by the Borrower with respect thereto and whether, in
13
the case of such Bank's Note, such Loan is a Base Rate Loan or Euro-Dollar Loan,
and such schedule shall constitute rebuttable presumptive evidence of the
principal amount owing and unpaid on such Bank's Note; provided that the failure
of any Bank to make, or any error in making, any such recordation or endorsement
shall not affect the obligation of the Borrower hereunder or under the Note or
the ability of any Bank to assign its Note. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Notes and to attach to and make a
part of any Note a continuation of any such schedule as and when required.
SECTION 2.04 Maturity of Loans. Each Loan included in any Borrowing
shall mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to such Borrowing.
SECTION 2.05 Interest Rates."Applicable Margin" means (a) for any Base
Rate Loan, 0%; and (b) for any Euro-Dollar Loan, (i) .750% for the period
commencing on the Closing Date to and including April 30, 2000, (ii) 1.00% for
the period from and including May 1, 2000 to and including July 31, 2000, (iii)
1.50% for the period from and including August 1, 2000 to and including October
31, 2000, and (iv) 2.00% thereafter.
(b) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such day plus the
Applicable Margin. Such interest shall be payable on the first Domestic Business
Day of each month. Any overdue principal of and, to the extent permitted by
applicable law, overdue interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
Default Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Applicable Margin plus the applicable Adjusted
London Interbank Offered Rate for such Interest Period; provided that if any
Euro-Dollar Loan shall, as a result of clause (1)(c) of the definition of
Interest Period, have an Interest Period of less than one month, such
Euro-Dollar Loan shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be payable
for each Interest Period on the last day thereof. Any overdue principal of and,
to the extent permitted by applicable law, overdue interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable
London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Euro-Dollar Loan
means for the Interest Period of such Euro-Dollar Loan the rate per annum
determined on the basis of the offered rate for deposits in Dollars of amounts
equal or comparable to the principal amount of such Euro-Dollar Loan offered for
a term comparable to such Interest Period, which rate appears on the display
designated as Page "3750" of the Telerate Service (or such other page as may
replace page 3750 of that service or such other service or services as may be
nominated by the British Banker's Association for the purpose of displaying
London Interbank Offered Rates for
14
U.S. dollar deposits) determined as of 1:00 p.m. New York City time, 2
Euro-Dollar Business Days prior to the first day of such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted London Interbank Offered Rate
shall be adjusted automatically on and as of the effective date of any change in
the Euro-Dollar Reserve Percentage.
(d) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
Banks by telecopy of each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.
(e) After the occurrence and during the continuance of a Default, the
principal amount of the Loans (and, to the extent permitted by applicable law,
all accrued interest thereon not paid when due) may, at the election of the
Required Banks, bear interest at the Default Rate; provided, however, that
automatically, whether or not the Required Banks elect to do so, any overdue
principal of and, to the extent permitted by law, overdue interest on any Loan
shall bear interest payable on demand, for each day until paid at a rate per
annum equal to the Default Rate.
SECTION 2.06 Fees.The Borrower shall pay to the Agent for the ratable
account of each Bank a commitment fee calculated at the rate of .15% per annum
on the daily average amount of such Bank's Unused Commitment. Such commitment
fees shall accrue from and including the Closing Date to but excluding the
Termination Date and shall be payable on each Commitment Fee Payment Date and on
the Termination Date; provided, that should the Commitments be terminated at any
time prior to the Termination Date for any reason, the entire accrued and unpaid
commitment fee shall be paid on the date of such termination.
(b) The Borrower shall pay to the Agent and Wachovia Securities, Inc.,
for the account and sole benefit of the Agent and Wachovia Securities, Inc.,
such fees and other amounts at such times as set forth in the Agent's Letter
Agreement.
SECTION 2.07 Optional Termination or Reduction of Commitments. The
Borrower may, upon at least 3 Domestic Business Days' notice to the Agent,
terminate at any time, or proportionately reduce from time to time by an
aggregate amount of at least $10,000,000 or any larger multiple of $5,000,000,
the Commitments; provided, however, no such termination or reduction shall be in
an amount greater than the Total Unused Commitments on the date of such
termination or reduction. If the Commitments are terminated in their entirety,
all accrued fees (as provided under Section 2.06) shall be payable on the
effective date of such termination.
SECTION 2.08 Mandatory Reduction and Termination of Commitments.The
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
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(b) In the event and on each occasion that the Borrower or any of its
Subsidiaries shall issue any Stock or issue or incur any Debt, the Borrower
shall, concurrently with such issuance or incurrence, immediately give notice to
the Agent of such issuance or incurrence, and on the 3rd Euro-Dollar Business
Day after the date of such issuance or incurrence there shall be an automatic
reduction in the aggregate amount of the Commitments (with each Bank's
Commitment reduced ratably) by an amount equal to 100% of the Net Proceeds of
Stock (in the case of issuance of Stock) or 100% of the Net Proceeds of Debt (in
the case of issuance or incurrence of Debt).
SECTION 2.09 Optional Prepayments.The Borrower may, upon at least 1
Domestic Business Day's notice to the Agent, prepay any Base Rate Borrowing in
whole at any time, or from time to time in part in amounts aggregating at least
$5,000,000, or any larger multiple of $2,500,000, by paying the principal amount
to be prepaid together with accrued interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Base Rate
Loans of the several Banks included in such Base Rate Borrowing.
(b) Except as provided in Section 8.02, the Borrower may not prepay all
or any portion of the principal amount of any Euro-Dollar Loan prior to the last
day of an Interest Period applicable thereto.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such prepayment and such notice shall not thereafter be
revocable by the Borrower.
SECTION 2.10 Mandatory Prepayments. On each date on which the
Commitments are reduced or terminated pursuant to Section 2.07 or Section 2.08,
the Borrower shall repay or prepay such principal amount of the outstanding
Loans, if any (together with interest accrued thereon and any amounts due under
Section 8.05(a)), as may be necessary so that after such payment the aggregate
unpaid principal amount of the Loans does not exceed the aggregate amount of the
Commitments as then reduced. Each such payment or prepayment shall be applied to
repay or prepay ratably the Loans of the several Banks.
SECTION 2.11 General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and interest
on, the Loans and of commitment fees hereunder, not later than 11:00 A.M.
(Atlanta, Georgia time) on the date when due, in Federal or other funds
immediately available in Atlanta, Georgia, to the Agent at its address referred
to in Section 9.01. The Agent will promptly distribute to each Bank its ratable
share of each such payment received by the Agent for the account of the Banks.
(b) Whenever any payment of principal of, or interest on, the Base Rate
Loans or of fees shall be due on a day which is not a Domestic Business Day, the
date for payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day,
the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. If the
16
date for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(c) All payments of principal, interest and fees and all other amounts
to be made by the Borrower pursuant to this Agreement with respect to any Loan
or fee relating thereto shall be paid without deduction for, and free from, any
tax, imposts, levies, duties, deductions, or withholdings of any nature now or
at anytime hereafter imposed by any governmental authority or by any taxing
authority thereof or therein excluding in the case of each Bank, taxes imposed
on or measured by its net income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction of such Bank's applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, imposts, levies, duties, deductions or withholdings of any nature being
"Taxes"). In the event that the Borrower is required by applicable law to make
any such withholding or deduction of Taxes with respect to any Loan or fee or
other amount, the Borrower shall pay such deduction or withholding to the
applicable taxing authority, shall promptly furnish to any Bank in respect of
which such deduction or withholding is made all receipts and other documents
evidencing such payment and shall pay to such Bank additional amounts as may be
necessary in order that the amount received by such Bank after the required
withholding or other payment shall equal the amount such Bank would have
received had no such withholding or other payment been made. If no withholding
or deduction of Taxes are payable in respect of any Loan or fee relating
thereto, the Borrower shall furnish any Bank, at such Bank's request, a
certificate from each applicable taxing authority or an opinion of counsel
acceptable to such Bank, in either case stating that such payments are exempt
from or not subject to withholding or deduction of Taxes. If the Borrower fails
to provide such original or certified copy of a receipt evidencing payment of
Taxes or certificate(s) or opinion of counsel of exemption, the Borrower hereby
agrees to compensate such Bank for, and indemnify them with respect to, the tax
consequences of the Borrower's failure to provide evidence of tax payments or
tax exemption.
In the event any Bank receives a refund of any Taxes paid by the
Borrower pursuant to this Section 2.11, it will pay to the Borrower the amount
of such refund promptly upon receipt thereof; provided, however, if at any time
thereafter it is required to return such refund, the Borrower shall promptly
repay to it the amount of such refund.
(d) Each Bank (or Assignee) that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a "Non-U.S. Bank") shall deliver to the Borrower and the Agent two
copies of either United States Internal Revenue Service Form 1001 or Form 4224,
or, in the case of a Non-U.S. Bank claiming exemption from U.S. Federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest," a Form W-8, or any subsequent versions thereof
or successors thereto (and, if such Non-U.S. Bank delivers a Form W-8, a
certificate representing that such Non-U.S. Bank is not a bank for purposes of
Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Code)), properly completed and duly executed by such Non-U.S.
Bank claiming complete exemption from U.S. Federal withholding tax on payments
by the Borrower under this Agreement and the other Loan Documents. Such forms
shall be delivered by each Non-U.S. Bank on or before the date it becomes a
party to this Agreement and on or before the date, if any,
17
such Non-U.S. Bank changes its applicable Lending Office by designating a
different Lending Office (a "New Lending Office"). In addition, each Non-U.S.
Bank shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Bank. Notwithstanding any other
provision of this Section 2.11(d), a Non-U.S. Bank shall not be required to
deliver any form pursuant to this Section 2.11(d) that such Non-U.S. Bank is not
legally able to deliver.
(e) The Borrower shall not be required to indemnify any Non-U.S. Bank,
or to pay any additional amounts to any Non-U.S. Bank, in respect of United
States Federal withholding tax pursuant to paragraph (c) above to the extent
that (i) the obligation to withhold amounts with respect to United States
Federal withholding tax existed on the date such Non-U.S. Bank became a party to
this Agreement or, with respect to payments to a New Lending Office, the date
such Non-U.S. Bank designated such New Lending Office with respect to a Loan;
provided, however, that this paragraph (e) shall not apply (x) to any Assignee
or New Lending Office that becomes an Assignee or New Lending Office as a result
of an assignment, transfer or designation made at the written request of the
Borrower and (y) to the extent the indemnity payment or additional amounts any
Assignee, or any Bank (or Assignee) acting through a New Lending Office, would
be entitled to receive (without regard to this paragraph (e)) do not exceed the
indemnity payment or additional amounts that the Person making the assignment or
transfer to such Assignee, or Bank (or Assignee) making the designation of such
New Lending Office, would have been entitled to receive in the absence of such
assignment, transfer or designation or (ii) the obligation to pay such
additional amounts would not have arisen but for a failure by such Non-U.S. Bank
to comply with the provisions of paragraph (d) above.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.11 shall be applicable with respect to any Participant, Assignee
or other Transferee, and any calculations required by such provisions (i) shall
be made based upon the circumstances of such Participant, Assignee or other
Transferee, and (ii) constitute a continuing agreement and shall survive the
termination of this Agreement and the payment in full or cancellation of the
Notes.
SECTION 2.12 Computation of Interest and Fees. Interest on Base Rate
Loans shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Interest on Euro-Dollar Loans shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed, calculated as to each
Interest Period from and including the first day thereof to but excluding the
last day thereof. Commitment fees and any other fees payable hereunder shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
ARTICLE III.
CONDITIONS
SECTION 3.01 Conditions to Closing. This Agreement shall become
effective upon the satisfaction of the following conditions:
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(a) receipt by the Agent from each of the parties hereto of either (i)
a duly executed counterpart of this Agreement signed by such party or (ii) a
facsimile transmission stating that such party has duly executed a counterpart
of this Agreement and sent such counterpart to the Agent;
(b) receipt by the Agent of a duly executed Note for the account of
each Bank complying with the provisions of Section 2.03;
(c) receipt by the Agent from each of the parties thereto of either (i)
a duly executed counterpart of the Guaranty and the Indemnity, Subrogation and
Contribution Agreement signed by such party or (ii) a facsimile transmission
stating that such party has duly executed a counterpart of the Guaranty and the
Indemnity, Subrogation and Contribution Agreement and sent such counterpart to
the Agent;
(d) receipt by the Agent of an opinion (together with any opinions of
local counsel relied on therein) of Miller, Canfield, Paddock and Stone, P.L.C.,
counsel for the Borrower, dated as of the Closing Date, substantially in the
form of Exhibit B hereto;
(e) receipt by the Agent of an opinion of Womble Carlyle Sandridge &
Rice, PLLC, special counsel for the Agent, dated as of the Closing Date,
substantially in the form of Exhibit C hereto and covering such additional
matters relating to the transactions contemplated hereby as the Agent may
reasonably request;
(f) receipt by the Agent of all documents which the Agent or any Bank
may reasonably request relating to the existence of the Borrower, the corporate
authority for and the validity of this Agreement and the Notes, and any other
matters relevant hereto, all in form and substance satisfactory to the Agent,
including without limitation a certificate of incumbency of the Borrower (the
"Officer's Certificate"), signed by the Secretary or an Assistant Secretary of
the Borrower, substantially in the form of Exhibit E hereto, certifying as to
the names, true signatures and incumbency of the officer or officers of the
Borrower authorized to execute and deliver the Loan Documents, and certified
copies of the following items: (i) the Borrower's Certificate of Incorporation,
(ii) the Borrower's Bylaws, (iii) a certificate of the Secretary of State of the
State of Michigan as to the good standing of the Borrower as a Michigan
corporation, and (iv) the action taken by the Board of Directors of the Borrower
authorizing the Borrower's execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents to which the Borrower is a
party;
(g) receipt by the Agent and Wachovia Securities, Inc. of all fees and
expenses payable on the Closing Date pursuant to the Agent's Letter Agreement;
and
(h) receipt by the Agent of such other documents or items as the Agent
or its counsel may reasonably request.
SECTION 3.02 Conditions to First Borrowing. The obligation of each Bank
to make a Loan on the date of the first Borrowing under this Agreement is
subject to the satisfaction of the conditions set forth in Section 3.01 and the
following additional conditions:
(a) receipt by the Agent of a certificate (the "Funding Certificate"),
dated the date of the first Borrowing, substantially in the form of Exhibit D
hereto, signed by a principal financial
19
officer of the Borrower, to the effect that (i) no Default has occurred and is
continuing on the date of the first Borrowing and (ii) the representations and
warranties of the Borrower contained in Article IV and of the Guarantors
contained in the Guaranty are true on and as of the date of the first Borrowing;
(b) receipt by the Agent of evidence satisfactory to it that all of the
conditions to the LADD Acquisition contained in the LADD Acquisition Agreement
have been satisfied or waived with the consent of the Agent and that immediately
upon funding of the first Borrowing, the LADD Acquisition shall be consummated;
(c) the LADD Indebtedness shall have been terminated and repaid (except
as provided in the Pay-Off Letter), or shall be terminated and repaid
immediately upon the funding of the first Borrowing, in full, and all Liens in
respect thereof shall have been, or will immediately upon the funding of the
first Borrowing be, released and the Pay-Off Letter shall have been duly
executed and delivered by all parties thereto; and
(d) receipt by the Agent of such other documents or items as the Agent
or its counsel may reasonably request.
SECTION 3.03 Conditions to All Borrowings. The obligation of each Bank
to make a Loan on the occasion of each Borrowing (including the first Borrowing)
is subject to the satisfaction of the following conditions:
(a) receipt by the Agent of Notice of Borrowing as required by Section
2.02;
(b) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the Borrower
contained in Article IV of this Agreement shall be true on and as of the date of
such Borrowing in all material respects; and
(d) the fact that, immediately after such Borrowing (i) the aggregate
outstanding principal amount of the Loans of each Bank will not exceed the
amount of its Commitment and (ii) the aggregate outstanding principal amount of
the Loans will not exceed the aggregate amount of the Commitments of all of the
Banks as of such date.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the truth and accuracy of the
facts specified in clauses (b), (c) and (d) of this Section; provided that such
Borrowing shall not be deemed to be such a representation and warranty to the
effect set forth in the last sentence of Section 4.07 as to any event, act or
condition having a Material Adverse Effect which has theretofore been disclosed
in writing by the Borrower to the Banks if the aggregate outstanding principal
amount of the Loans immediately after such Borrowing will not exceed the
aggregate outstanding principal amount thereof immediately before such
Borrowing.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01 Corporate Status. The Borrower and each Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it was incorporated, has the corporate power and
legal authority to own its property and to carry on its business as now being
conducted, is duly qualified to do business in every jurisdiction in which the
nature of its business or property makes such qualification necessary and has
all governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted (except where the failure to have such
licenses, authorizations, consents and approvals could not, alone or in the
aggregate, reasonably be expected to have a Material Adverse Effect).
SECTION 4.02 Authority; No Conflict. The execution, delivery and
performance of this Agreement, the Notes and the other Loan Documents and the
consummation of the transactions contemplated hereby, (i) are within the legal
power and authority of the Borrower, (ii) have been duly authorized by all
requisite actions, (iii) do not and will not conflict with, contravene or
violate any provision of, or result in a breach of or default under, or require
the waiver (not already obtained) of any provision of or the consent (not
already given) of any Person under the terms of, the Borrower's articles of
incorporation or by-laws, or any indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the Borrower is a
party or by which it is bound or to which any of its properties are subject,
(iv) will not violate, conflict with, give rise to any liability under, or
constitute a default under any law, regulation, order (including, without
limitation, all applicable state and federal securities laws) or any other
requirement of any court, tribunal, arbitrator, or governmental body, agency or
official, and (v) will not result in the creation, imposition, or acceleration
of any indebtedness or tax or any mortgage, lien, reservation, covenant,
restriction, or other encumbrance of any nature upon, or with respect to, the
Borrower or any of its properties.
SECTION 4.03 Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms and the Notes and the other Loan Documents, when
executed and delivered in accordance with this Agreement, will constitute valid
and binding obligations of the Borrower enforceable in accordance with their
respective terms.
SECTION 4.04 Governmental Approval. The execution, delivery and
performance of this Agreement, the Notes and the other Loan Documents and the
transactions contemplated hereby do not require any action, approval or consent
of, or filing with, any governmental body, agency or official.
SECTION 4.05 Litigation. There is no action, suit, claim or proceeding
pending against or affecting the Borrower or any Subsidiary, nor to the
knowledge of the officers of the Borrower or any Subsidiary threatened, before
any court, commission, panel, board, bureau or arbitrator or before or by any
governmental body, agency or official and which, in any one case or in the
aggregate,
21
if determined adversely to the interests of the Borrower or any Subsidiary would
have a Material Adverse Effect.
SECTION 4.06 ERISA. The Borrower and each member of the Controlled
Group have fulfilled their obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and are in compliance in all
material respects with all applicable provisions of ERISA and no Reportable
Event has occurred and is continuing with respect to any Plan. The Borrower has
not withdrawn from any such Plan or initiated steps to do so, and no steps have
been taken to terminate any such Plan.
SECTION 4.07 Financial Information. The audited consolidated annual
financial statements of the Borrower and its Subsidiaries for the fiscal year
ended April 24, 1999, certified by independent certified public accountants of
nationally recognized standing, and the unaudited interim financial statements
for the period ended October 23, 1999 (such annual and interim financial
statements hereinafter collectively called the "Financial Statements"), have
been prepared in accordance with GAAP and fairly reflect the consolidated
financial condition of the Borrower and its Subsidiaries and the results of
their operations as of the dates and for the periods stated. Since April 24,
1999, there has been no material adverse change in the business, properties,
condition (financial or otherwise) or operations of the Borrower and its
Subsidiaries from that set forth on the Financial Statements.
SECTION 4.08 Title to Properties; Liens. The Borrower and its
Subsidiaries have good, valid, insurable (in the case of real property) and
marketable title to all of the Borrower's and each Subsidiary's respective
material properties and assets (whether real or personal, tangible or
intangible), subject to those Liens permitted by Section 5.17, whether or not
such properties and assets are reflected on the Financial Statements except for
such properties and assets as have been disposed of in the ordinary course of
the Borrower's and each Subsidiary's businesses, and all such properties and
assets are free and clear of all mortgages, security interests or other liens
except: (i) those permitted by Section 5.17, (ii) those shown in the Financial
Statements, and (iii) liens for taxes which are not yet due and payable.
SECTION 4.09 Investments. The Borrower and its Subsidiaries have made
no material investments in, advances to or guarantees of the obligations of any
Person except: (i) those permitted by Section 5.18, (ii) those disclosed in the
Financial Statements, and (iii) guarantees by the Borrower of the obligations of
any Subsidiary or by any Subsidiary of the obligations of the Borrower or any
other Subsidiary.
SECTION 4.10 Taxes. The Borrower and its Subsidiaries have filed all
required federal, state and local tax returns within the time period required by
applicable law (including any extensions granted to the Borrower or such
Subsidiary) and have paid all taxes as shown on such returns or as assessed as
such taxes have become due (except as such taxes or assessments are being
contested in good faith by appropriate proceedings and for which reserves
consistent with GAAP have been established on the Borrower's books). No claims
have been assessed and are unpaid with respect to such taxes except as shown in
the Financial Statements. The charges, accruals and reserves on the books of the
Borrower in respect of taxes and other governmental charges are, in the opinion
of the Borrower, adequate.
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SECTION 4.11 Representations and Warranties True. None of the
representations or warranties made by the Borrower in this Agreement or any
other Loan Document contains any untrue statement of material fact or omits any
material fact necessary to make the statements made not misleading.
SECTION 4.12 Environmental Compliance. The Borrower and its
Subsidiaries comply with all Environmental Laws and Environmental Requirements
including, without limitation, those which relate to the production, storage,
disposal or use of any and all Hazardous Materials, and including, without
limitation, the provisions of CERCLA and 42 U.S.C. ss.6901 et seq. (RCRA),
except where the failure to be in compliance could not, alone or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 4.13 No Default. Neither the Borrower nor any Subsidiary is in
default under or in violation of any agreement, instrument, contract or other
document to which the Borrower or any Subsidiary is a party or by which any of
its assets are bound., except any default or violation that could not, alone or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 4.14 Margin Stock. Neither the Borrower nor any Subsidiary is
engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System). The execution, delivery and performance of this Agreement and
the use of the proceeds of the Bonds or any extension of credit hereunder, do
not and will not constitute a violation of said Regulations.
SECTION 4.15 Investment Company. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.16 Public Utility Holding Company. Neither the Borrower nor
any Subsidiary is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or a "subsidiary company" of
a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
SECTION 4.17 Compliance with Laws. The Borrower and each of its
Subsidiaries are in full compliance with all applicable laws, statutes and
governmental regulations, except where noncompliance could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 4.18 Subsidiaries. Each of the Borrower's Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, is duly qualified to transact business in
every jurisdiction where, by the nature of its business, such qualification is
necessary, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted (except where the failure to have such licenses, authorizations,
consents and approvals could not, alone or in the aggregate, reasonably be
expected to have a Material Adverse Effect).
SECTION 4.19 Full Disclosure. All information heretofore furnished in
writing, taken as a whole, by the Borrower to the Agent or any Bank for purposes
of or in connection
23
with this Agreement, any other Loan Document or any transaction contemplated
hereby or thereby is, and all such information hereafter furnished in writing,
taken as a whole, by the Borrower to the Agent or any Bank will be, true,
accurate and complete in every material respect or based on reasonable estimates
on the date as of which such information is stated or certified.
ARTICLE V.
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01 Preservation of Existence, Etc. The Borrower shall, and
shall cause each of its Subsidiaries (except as contemplated by the Ladd
Acquisition) to, preserve and maintain its corporate existence and such of its
rights, licenses, and privileges as are material to the business and operations
conducted by it; qualify and remain qualified to do business in each
jurisdiction in which such qualification is material to its business and
operations or ownership of its properties; and carry on its business in
substantially the same manner and in substantially the same fields as such
business is now carried on and maintained.
SECTION 5.02 Keeping of Books. The Borrower shall, and shall cause each
of its Subsidiaries to, keep proper books of record and account in which full
and correct entries shall be made of all of its financial transactions and its
assets and businesses so as to permit the presentation of financial statements
prepared in accordance with GAAP; and permit any Bank or its representatives, at
reasonable times and intervals, to visit all of its offices, discuss its
financial matters with its officers and independent certified public accountants
(and by this provision the Borrower authorizes such accountants to discuss the
finances and affairs of the Borrower and its Subsidiaries) and examine any of
its or their books and other corporate records.
SECTION 5.03 Reporting Requirements. The Borrower shall furnish to each
of the Banks:
(a) as soon as possible, and in any event within three calendar days
after becoming aware of the occurrence of any Default or Event of Default, a
written statement of the chief financial officer of the Borrower (or in his
absence, a responsible senior officer) setting forth details of such Default or
Event of Default and the action which the Borrower has taken or has caused to be
taken or proposes to take or cause to be taken with respect thereto;
(b) as soon as available, and in any event within one hundred twenty
(120) days after and as of the end of each of the Borrower's fiscal years, a
detailed consolidated audit report of the Borrower certified to by independent
certified public accountants satisfactory to the Agent together with an
unaudited consolidating report of the Borrower and its Subsidiaries certified by
an authorized officer of the Borrower;
(c) as soon as available, and in any event within sixty (60) days after
and as of the end of each fiscal quarter, excluding the last quarter of each
fiscal year, consolidated and consolidating balance sheet and statement of
profit and loss and surplus reconciliation of the Borrower and its Subsidiaries
certified by an authorized officer of the Borrower;
24
(d) as soon as possible, and in any event within three calendar days
after becoming aware (A) of any material adverse change in the financial
condition of the Borrower or any of the Subsidiaries of the Borrower, a
certificate of the chief financial officer of the Borrower (or in his absence, a
responsible senior officer) setting forth the details of such change or (B) of
the taking by the Internal Revenue Service of a tax position (verbal or written)
which could have a Material Adverse Effect (or a material adverse effect on any
tax position taken by the Borrower) setting forth the details of such position
and the financial impact thereof;
(e) as soon as available, the Borrower's 10-Q and 10-K Reports filed
with the Securities and Exchange Commission, and in any event, with respect to
the 10-Q Report, within sixty (60) days of the end of each of the Borrower's
fiscal quarters, and with respect to the 10-K Report, within one hundred (100)
days after and as of the end of each of the Borrower's fiscal years, and, as
soon as available, copies of all other documents, filed by the Borrower with the
Securities and Exchange Commission or other federal regulatory or taxing
agencies or authorities;
(f) if and when any member of the Controlled Group (A) gives or is
required to give notice to the PBGC of any Reportable Event with respect to any
Plan which might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such Reportable Event, a copy of the notice of
such Reportable Event given or required to be given to the PBGC; (B) receives
notice of complete or partial withdrawal liability under Title IV of ERISA, a
copy of such notice; or (C) receives notice from the PBGC under Title IV of
ERISA of an intent to terminate or appoint a trustee to administer any Plan, a
copy of such notice; and
(g) promptly, and in form to be satisfactory to the Agent, such other
information as any Bank may reasonably request from time to time.
SECTION 5.04 Taxes. The Borrower shall, and shall cause each of its
Subsidiaries to, pay and discharge all taxes and other governmental charges, and
all contractual obligations calling for the payment of money, before the same
shall become overdue, unless and to the extent only that such payment is being
contested in good faith and is reserved for, as required by GAAP, on its balance
sheet.
SECTION 5.05 Inspections. The Borrower shall, and shall cause each of
its Subsidiaries to, permit each Bank, through its authorized attorneys,
accountants and representatives to examine the Borrower's and each of its
Subsidiaries' books, accounts, records, ledgers and assets and properties of
every kind and description wherever located at all reasonable times during
normal business hours, upon oral or written request of such Bank. Such
inspection rights are subject to reasonable limitations imposed by the Borrower
with respect to safety and shall not extend to trade secrets of the Borrower or
its Subsidiaries or to information within the attorney client privilege.
SECTION 5.06 Computation of Financial Tests. The Borrower shall furnish
to the Bank concurrently with the delivery of each of the financial statements
required by Section 5.03(b) and (c), a statement prepared and certified by the
chief financial officer of the Borrower (or in his absence, a responsible senior
officer) setting forth all computations necessary to show compliance by the
Borrower with the covenants contained herein, as of the date of such financial
statements.
25
SECTION 5.07 Governmental and Other Approvals. The Borrower shall apply
for, obtain and/or maintain in effect, as applicable, all authorizations,
consents, approvals, licenses, qualifications, exemptions, filings, declarations
and registrations (whether with any court, governmental agency, regulatory
authority, securities exchange or otherwise) which are necessary in connection
with the execution, delivery and performance by the Borrower of this Agreement
or any other Loan Document.
SECTION 5.08 Insurance. The Borrower shall maintain, with responsible
insurers, insurance with respect to its and its Subsidiaries' properties and
business against such casualties and contingencies (including public liability,
or larceny, embezzlement or other criminal misappropriation) and in such amount
as is customary in the case of similarly situated corporations engaged in the
same or similar businesses, and, upon the request of the Agent, together with
each delivery of annual financial statements under Section 5.03(b), the Borrower
will promptly deliver to the Agent an officer's certificate specifying the
details of such insurance in effect.
SECTION 5.09 Compliance with ERISA. The Borrower and each member of the
Controlled Group shall comply in all material respect with all requirements
imposed by ERISA as presently in effect or hereafter promulgated including, but
not limited to, the maximum funding requirements of any Plan.
SECTION 5.10 Ratio of Consolidated Total Funded Debt to Consolidated
Total Capital. The Borrower shall maintain a ratio of Consolidated Total Funded
Debt to Consolidated Total Capital of not more than 0.50 to 1.00.
SECTION 5.11 Fixed Charge Coverage Ratio. The Borrower shall maintain a
Fixed Charge Coverage Ratio at the end of each fiscal quarter of not less than
3.0 to 1.0.
SECTION 5.12 Compliance with Laws. The Borrower shall, and shall cause
each of its Subsidiaries to, comply with all laws, statutes and government
regulations (except where non-compliance could not, alone or in the aggregate,
reasonably be expected to have a Material Adverse Effect) and pay promptly when
due all taxes, assessments, governmental charges, claims for labor, supplies,
rent and other obligations, which, if unpaid, would become a lien against the
property of the Borrower or any Subsidiary, except liabilities being contested
in good faith and against which, if requested by the Agent, the Borrower will
set up reserves reasonably satisfactory to the Agent.
SECTION 5.13 Notice of Litigation. The Borrower shall immediately give
the Agent written notice of any litigation, dispute or proceeding involving a
stated claim for $10,000,000 or more in excess of amounts covered in full by
applicable insurance or any attachment, levy, execution, or other process being
instituted against any assets of the Borrower or any of its Subsidiaries for an
amount in excess of $1,000,000 and, if requested by the Agent, to establish
reserves with respect thereto satisfactory to the Agent.
SECTION 5.14 Maintenance of Property. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain all of its material properties and
assets in good condition, repair and working order consistent with past
practices, ordinary wear and tear excepted.
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SECTION 5.15 Environmental Notices. The Borrower shall furnish to the
Bank prompt written notice of all Environmental Liabilities aggregating an
amount greater than $1,000,000, pending, threatened or anticipated Environmental
Proceedings, Environmental Notices, Environmental Judgments and Orders, and
Environmental Releases at, on, in, under or in any way affecting the properties
of the Borrower or any of its Subsidiaries, if such Environmental Proceedings,
Environmental Notices, Environmental Judgments and Orders or Environmental
Releases could reasonably be expected to result in Environmental Liabilities in
excess of $1,000,000.
SECTION 5.16 [Reserved]
SECTION 5.17 Encumbrances. The Borrower shall not, nor shall it permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any of its assets, whether now owned or hereafter acquired, except:
(a) purchase money security interests in fixed assets (including such
security interests granted in connection with the issuance of industrial
development revenue bonds issued to permit the Borrower or any of its
Subsidiaries to acquire fixed assets), provided that each such security interest
is created substantially contemporaneously with the acquisition of such fixed
assets and does not extend to any property other than the fixed asset so
financed;
(b) Permitted Encumbrances;
(c) Interests of purchasers of Permitted Receivables under Permitted
Receivables Purchase Facilities;
(d) Liens and attachments set forth in Schedule 5.17 hereto; and
(e) Liens not otherwise permitted by the foregoing clauses of this
subsection (a) securing Debt (other than indebtedness represented by the Notes)
in an aggregate principal amount at any time outstanding not to exceed 15% of
tangible net worth of the Borrower as determined in accordance with GAAP.
SECTION 5.18 Acquisitions. Neither the Borrower nor any of its
Subsidiaries shall make any Acquisitions (other than the LADD Acquisition),
provided that Permitted Acquisitions may be made if, after giving effect
thereto, no Default would be caused thereby (giving effect thereto on a pro
forma basis as to financial covenants).
SECTION 5.19 Transactions with Affiliates. The Borrower shall not, nor
shall it permit any of its Subsidiaries to, enter into any transaction with any
of their stockholders or officers or their Affiliates, except in the ordinary
course of business and on terms not less favorable than would be usual and
customary in similar transactions between Persons dealing at arm's length.
SECTION 5.20 Merger or Consolidation. The Borrower shall not, nor shall
it permit any of its Subsidiaries to, become a party to a merger, consolidation
or other reorganization with any other Person (including a de facto merger by
which all or substantially all of the property or assets of another Person are
acquired) except a merger, consolidation or other reorganization in which the
Borrower is the surviving corporation.
27
SECTION 5.21 Disposition of Assets. The Borrower shall not, nor shall
it permit any of its Subsidiaries to, sell, lease, convey or otherwise dispose
of all or any material portion of the property or assets (other than the sale of
any Permitted Receivables pursuant to a Permitted Receivables Purchase Facility)
of the Borrower or any of its Subsidiaries except in the ordinary course of its
business.
SECTION 5.22 Dissolution. The Borrower shall not, nor shall it permit
any of its Subsidiaries (except as contemplated by the Ladd Acquisition) to,
suffer or permit dissolution or liquidation either in whole or in part.
SECTION 5.23 Change in Fiscal Year. The Borrower shall not change its
fiscal year without the consent of the Agent.
SECTION 5.24 Environmental Matters. The Borrower shall not, nor shall
it permit any of its Subsidiaries to, use, produce, manufacture, process,
generate, store, dispose of, manage at, or ship or transport to or from
properties of the Borrower or any of its Subsidiaries (or permit any Third Party
to do any of the foregoing), any Hazardous Materials except in compliance with
all applicable Environmental Requirements (unless such non-compliance could not,
alone or in the aggregate, reasonably be expected to have a Material Adverse
Effect).
SECTION 5.25 Domestic Subsidiaries. The Borrower shall cause any Person
which becomes a Domestic Subsidiary after the Closing Date to become a party to,
and agree to be bound by the terms of, the Guaranty and the Indemnity,
Subrogation and Contribution Agreement pursuant to an instrument in form and
substance satisfactory to the Agent executed and delivered to the Agent within 5
Domestic Business Days after the day on which such Person becomes a Domestic
Subsidiary.
ARTICLE VI.
DEFAULTS
SECTION 6.01 Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan
or shall fail to pay any interest on any Loan within 5 Domestic Business Days
after such interest shall become due, or shall fail to pay any fee or other
amount payable hereunder within 5 Domestic Business Days after such fee or other
amount becomes due; or
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.01, 5.03(a), 5.03(d), 5.04 to 5.06, inclusive, 5.08 to
5.12, inclusive, or 5.17 to 5.25, inclusive; or
(c) either (i) the Borrower shall fail to observe or perform any
covenant, restriction or agreement contained or incorporated by reference in
this Agreement (other than those covered by clause (a) or (b) above) for 30 days
after the earlier of (A)
28
the first day on which the Borrower has knowledge of such failure, or (B)
written notice thereof has been given to the Borrower by the Agent at the
request of any Bank or (ii) any Guarantor shall fail to observe or perform any
covenant, restriction or agreement contained in the Guaranty for 30 days after
the earlier of (A) the first day on which the Borrower or such Guarantor has
knowledge of such failure or (B) written notice thereof has been given to the
Borrower by the Agent at the request of any Bank; or
(d) either (i) any warranty or representation made by the Borrower in
this Agreement or in any document, instrument or certificate delivered to the
Agent or any Bank in connection with this Agreement shall be incorrect in any
material respect when made or deemed made or (ii) any warranty or representation
made by any Guarantor in the Guaranty or in any document, instrument or
certificate delivered to the Agent or any Bank in connection with the Guaranty
shall be incorrect in any material respect when made or deemed made; or
(e) the occurrence and continuance of any default or event of default,
as defined in any mortgage, indenture, agreement or instrument (i) under which
there may be issued, or by which there may be secured or evidenced, any
indebtedness of the Borrower or any Subsidiary in excess of $10,000,000, whether
such indebtedness now exists or shall hereafter be created or (ii) between the
Borrower and Wachovia; or
(f) one or more judgments or orders for the payment of money in excess
of $10,000,000 in the aggregate shall be rendered or issued against the Borrower
or any Subsidiary and such judgment or order shall continue unsatisfied and
unstayed for a period of thirty (30) days; or
(g) the Borrower or any Subsidiary shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any action to authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced against
the Borrower or any Subsidiary seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of sixty (60) days; or an
order for relief shall be entered against the Borrower or any Subsidiary under
the federal bankruptcy laws as now or hereafter in effect; or
(i) the occurrence of a Change of Ownership (as hereinafter defined) or
the Continuing Directors (as hereinafter defined) shall cease to constitute at
least a majority of the members of the Board of Directors of the Borrower; the
term "Change of Ownership" as used above shall mean any transaction or series of
transactions by or as a result of which any "person" or "group" of persons (as
said terms are defined in Section 13(d) of the Securities and Exchange Act of
1934, as amended) shall subsequent to the date of this Agreement acquire,
directly or indirectly, beneficial ownership of twenty percent (20%) or more of
the outstanding voting stock of the Borrower and the term "Continuing Directors"
as used above shall mean each member of the Board of Directors of the Borrower
(i) who was a member of such Board on the date of this
29
Agreement, or (ii) who was nominated or appointed to such Board by, or whose
nomination or election to such Board by the Borrower's stockholders was approved
in writing by, at least two-thirds of the members of the Borrower's Board of
Directors who were Continuing Directors at the time of such nomination,
appointment or election by virtue of clause (i) of this definition; or
(j) a Reportable Event shall have occurred with respect to any Plan or
a trustee shall be appointed by the PBGC to administer any Plan or the PBGC
shall institute proceedings to terminate any Plan and the Agent determines that
such event or action could have or cause a Material Adverse Effect; or
(k) if any provision of the Guaranty shall for any reason cease to be
valid and binding on any Guarantor or any Guarantor shall deny or disaffirm its
obligations thereunder;
then, and in every such event, the Agent shall (i) if requested by the Required
Banks, by notice to the Borrower terminate the Commitments and they shall
thereupon terminate, and (ii) if requested by the Required Banks, by notice to
the Borrower declare the Notes (together with accrued interest thereon) and all
other amounts payable hereunder and under the other Loan Documents to be, and
the Notes (together will all accrued interest thereon) and all other amounts
payable hereunder and under the other Loan Documents shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; provided that if
any Event of Default specified in clause (g) or (h) above occurs with respect to
the Borrower, without any notice to the Borrower or any other act by the Agent
or the Banks, the Commitments shall thereupon automatically terminate and the
Notes (together with accrued interest thereon) and all other amounts payable
hereunder and under the other Loan Documents shall automatically become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower. Notwithstanding the
foregoing, the Agent shall have available to it all other remedies at law or
equity, and shall exercise any one or all of them at the request of the Required
Banks.
SECTION 6.02 Notice of Default. The Agent shall give notice to the
Borrower of any Default under Section 6.01(c) promptly upon being requested to
do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII.
THE AGENT
SECTION 7.01 Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated to
the Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent: (a) shall have no duties or
responsibilities except as expressly set forth in this Agreement and the other
Loan Documents, and shall not by reason of this Agreement or any other Loan
Document be a trustee for any Bank; (b) shall not be responsible to the Banks
for any recitals, statements, representations or warranties contained in this
Agreement or any other Loan Document, or in any certificate or other document
referred to or provided for in, or received by any Bank under, this Agreement or
any other Loan Document, or for the validity, effectiveness, genuineness,
30
enforceability or sufficiency of this Agreement or any other Loan Document or
any other document referred to or provided for herein or therein or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan Document except to the
extent requested by the Required Banks, and then only on terms and conditions
satisfactory to the Agent, and (d) shall not be responsible for any action taken
or omitted to be taken by it hereunder or under any other Loan Document or any
other document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or willful
misconduct. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The provisions of this
Article VII are solely for the benefit of the Agent and the Banks, and the
Borrower shall not have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement
and under the other Loan Documents, the Agent shall act solely as agent of the
Banks and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrower. The duties
of the Agent shall be ministerial and administrative in nature, and the Agent
shall not have by reason of this Agreement or any other Loan Document a
fiduciary relationship in respect of any Bank.
SECTION 7.02 Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telefax, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants or
other experts selected by the Agent. As to any matters not expressly provided
for by this Agreement or any other Loan Document, the Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions signed by the Required Banks, and
such instructions of the Required Banks in any action taken or failure to act
pursuant thereto shall be binding on all of the Banks.
SECTION 7.03 Defaults. The Agent shall not be deemed to have knowledge
of the occurrence of a Default or an Event of Default (other than the
non-payment of principal of or interest on the Loans) unless the Agent has
received notice from a Bank or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Agent receives such a notice of the occurrence of a Default or an Event of
Default, the Agent shall give prompt notice thereof to the Banks. The Agent
shall (subject to Section 9.05) take such action with respect to such Default or
Event of Default as shall be directed by the Required Banks, provided that,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Banks.
SECTION 7.04 Rights of Agent and its Affiliates as a Bank. With respect
to any Loan made by Wachovia or an Affiliate of Wachovia, such Affiliate and
Wachovia in their capacity as a Bank hereunder shall have the same rights and
powers hereunder as any other Bank and may exercise the same as though it were
not an Affiliate of Wachoiva (or in Wachovia's case, acting as the Agent), and
the term "Bank" or "Banks" shall, unless the context otherwise indicates,
include such Affiliate of Wachovia or Wachovia in its individual capacity. Such
Affiliate and Wachovia may (without having to account therefor to any Bank)
accept deposits
31
from, lend money to and generally engage in any kind of banking, trust or other
business with the Borrower (and any of its Affiliates) as if they were not an
Affiliate of the Agent or acting as the Agent, respectively; and such Affiliate
and Wachovia may accept fees and other consideration from the Borrower (in
addition to any agency fees and arrangement fees heretofore agreed to between
the Borrower and the Wachovia) for services in connection with this Agreement or
any other Loan Document or otherwise without having to account for the same to
the Banks.
SECTION 7.05 Indemnification. Each Bank severally agrees to indemnify
the Agent, to the extent the Agent shall not have been reimbursed by the
Borrower, ratably in accordance with its Commitment, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided, however, that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
SECTION 7.06 CONSEQUENTIAL DAMAGES. THE AGENT SHALL NOT BE RESPONSIBLE
OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY FOR ANY
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 7.07 Payee of Note Treated as Owner. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall have been
filed with the Agent and the provisions of Section 9.07(c) have been satisfied.
Any requests, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of that
Note or of any Note or Notes issued in exchange therefor or replacement thereof.
SECTION 7.08 Non-Reliance on Agent and Other Banks. Each Bank agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Agent shall not be required to keep itself (or any Bank) informed
as to the performance or observance by the
32
Borrower of this Agreement or any of the other Loan Documents or any other
document referred to or provided for herein or therein or to inspect the
properties or books of the Borrower or any other Person. Except for notices,
reports and other documents and information expressly required to be furnished
to the Banks by the Agent hereunder or under the other Loan Documents, the Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the affairs, financial condition or business of the
Borrower or any other Person (or any of their Affiliates) which may come into
the possession of the Agent.
SECTION 7.09 Failure to Act. Except for action expressly required of
the Agent hereunder or under the other Loan Documents, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction by the Banks of
their indemnification obligations under Section 7.05 against any and all
liability and expense which may be incurred by the Agent by reason of taking,
continuing to take, or failing to take any such action.
SECTION 7.10 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Banks and the Borrower and
the Agent may be removed at any time with or without cause by the Required
Banks. Upon any such resignation or removal, the Required Banks shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Banks and shall have accepted such appointment within
30 days after the retiring Agent's notice of resignation or the Required Banks'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent. Any successor Agent shall be a bank which has
a combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder.
ARTICLE VIII.
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01 Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period:
(a) the Agent determines that deposits in Dollars (in the applicable
amounts) are not being offered in the relevant market for such Interest Period,
or
(b) the Required Banks advise the Agent that the London Interbank
Offered Rate as determined by the Agent will not adequately and fairly reflect
the cost to such Banks of funding Euro-Dollar Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
Euro-Dollar Loans shall be suspended. Unless the
33
Borrower notifies the Agent at least 2 Domestic Business Days before the date of
any Borrowing of Euro-Dollar Loans for which a Notice of Borrowing has
previously been given that it elects not to borrow on such date, such Borrowing
shall instead be made as a Base Rate Borrowing.
SECTION 8.02 Illegality. If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change in any existing or future 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 (any such authority, bank or
agency being referred to as an "Authority" and any such event being referred to
as a "Change of Law"), or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority shall make it unlawful or impossible for any Bank (or its Lending
Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so
notify the Agent, the Agent shall forthwith give notice thereof to the other
Banks and the Borrower, whereupon until such Bank notifies the Borrower and the
Agent that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each Euro-Dollar Loan of
such Bank, together with accrued interest thereon and any amount due such Bank
pursuant to Section 8.05(a). Concurrently with prepaying each such Euro-Dollar
Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount
from such Bank (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and
such Bank shall make such a Base Rate Loan.
SECTION 8.03 Increased Cost and Reduced Return.If after the date
hereof, a Change of Law or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority:
(i) shall subject any Bank (or its Lending Office) to any tax,
duty or other charge with respect to its Euro-Dollar Loans,
its Note or its obligation to make Euro-Dollar Loans, or shall
change the basis of taxation of payments to any Bank (or its
Lending Office) of the principal of or interest on its
Euro-Dollar Loans or any other amounts due under this
Agreement in respect of its Euro-Dollar Loans or its
obligation to make Euro-Dollar Loans (except for changes in
the rate of tax on the overall net income of such Bank or its
Lending Office imposed by the jurisdiction in which such
Bank's principal executive office or Lending Office is
located); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding with respect to any
Euro-Dollar Loan any such requirement included in an
applicable Euro-Dollar Reserve Percentage) against assets of,
deposits with or for the account of, or credit extended by,
any Bank (or its Lending Office); or
34
(iii) shall impose on any Bank (or its Lending Office) or on the
United States market for London interbank market any other
condition affecting its Euro-Dollar Loans, its Note or its
obligation to make Euro-Dollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined that after the date hereof the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any existing or future law, rule or regulation, or any change
in the interpretation or administration thereof, or compliance by any Bank (or
its Lending Office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any Authority, has or would have the
effect of reducing the rate of return on such Bank's capital as a consequence of
its obligations hereunder to a level below that which such Bank could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within 15 days after demand by
such Bank, the Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(d) The provisions of this Section 8.03 shall be applicable with
respect to any Participant, Assignee or other Transferee, and any calculations
required by such provisions shall be made based upon the circumstances of such
Participant, Assignee or other Transferee.
SECTION 8.04 Base Rate Loans Substituted for Euro-Dollar Loans. If (i)
the obligation of any Bank to make or maintain Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03, and the Borrower shall, by at least 5 Euro-Dollar Business
Days' prior notice to such Bank through the Agent, have elected that the
provisions of this Section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer apply, all Loans which would otherwise be
made by such Bank as Euro-Dollar Loans shall be made instead as Base Rate Loans.
In the event that the Borrower shall elect that the provisions of this Section
shall apply to any Bank, the Borrower shall remain liable for, and shall pay to
such Bank as provided herein, all
35
amounts due such Bank under Section 8.03 in respect of the period preceding the
date of conversion of such Bank's Loans resulting from the Borrower's election.
SECTION 8.05 Compensation. Upon the request of any Bank, delivered to
the Borrower and the Agent, the Borrower shall pay to such Bank such amount or
amounts as shall compensate such Bank for any loss, cost or expense incurred by
such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.08, Section 2.09,
Section 8.02 or otherwise) of a Euro-Dollar Loan on a date other than the last
day of an Interest Period for such Euro-Dollar Loan;
(b) any failure by the Borrower to prepay a Euro-Dollar Loan on the
date for such prepayment specified in the relevant notice of prepayment
hereunder; or
(c) any failure by the Borrower to borrow a Euro-Dollar Loan on the
date for the Euro-Dollar Borrowing of which such Euro-Dollar Loan is a part
specified in the applicable Notice of Borrowing delivered pursuant to Section
2.02;
such compensation to include, without limitation, an amount equal to the excess,
if any, of (x) the amount of interest which would have accrued on the amount so
paid or prepaid or not prepaid or borrowed for the period from the date of such
payment, prepayment or failure to prepay or borrow to the last day of the then
current Interest Period for such Euro-Dollar Loan (or, in the case of a failure
to prepay or borrow, the Interest Period for such Euro-Dollar Loan which would
have commenced on the date of such failure to prepay or borrow) at the
applicable rate of interest for such Euro-Dollar Loan provided for herein over
(y) the amount of interest (as reasonably determined by such Bank) such Bank
would have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading banks in the London
interbank market.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.01 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission or
similar writing) and shall be given to such party at its address or telecopy
number set forth on the signature pages hereof or such other address or telecopy
number as such party may hereafter specify for the purpose by notice to each
other party. Each such notice, request or other communication shall be effective
(i) if given by telecopier, when such telecopy is transmitted to the telecopy
number specified in this Section and the telecopy machine used by the sender
provides a written confirmation that such telecopy has been so transmitted or
receipt of such telecopy transmission is otherwise confirmed, (ii) if given by
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, and (iii) if given by any other
means, when delivered at the address specified in this Section; provided that
notices to the Agent under Article II or Article VIII shall not be effective
until received.
SECTION 9.02 No Waivers. No failure or delay by the Agent or any Bank
in exercising any right, power or privilege hereunder or under any Note or other
Loan Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any
36
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 9.03 Expenses; Documentary Taxes; Indemnification.
(a) The Borrower shall pay (i) all out-of-pocket expenses of the Agent,
including fees and disbursements of special counsel for the Agent, in connection
with the preparation of this Agreement and the other Loan Documents, any waiver
or consent hereunder or thereunder or any amendment hereof or thereof or any
Default hereunder or thereunder and (ii) if a Default occurs, all reasonable
out-of-pocket expenses incurred by the Agent or any Bank, including fees and
disbursements of counsel, in connection with such Default and collection and
other enforcement proceedings resulting therefrom, including out-of-pocket
expenses incurred in enforcing this Agreement and the other Loan Documents.
(b) The Borrower shall indemnify the Agent and each Bank against any
transfer taxes, documentary taxes, assessments or charges made by any Authority
by reason of the execution and delivery of this Agreement or the other Loan
Documents.
(c) The Borrower shall indemnify the Agent, the Banks and each
Affiliate thereof and their respective directors, officers, employees and agents
from, and hold each of them harmless against, any and all losses, liabilities,
claims or damages to which any of them may become subject, insofar as such
losses, liabilities, claims or damages arise out of or result from any actual or
proposed use by the Borrower of the proceeds of any extension of credit by any
Bank hereunder or breach by the Borrower of this Agreement or any other Loan
Document or from investigation, litigation (including, without limitation, any
actions taken by the Agent or any of the Banks to enforce this Agreement or any
of the other Loan Documents) or other proceeding (including, without limitation,
any threatened investigation or proceeding) relating to the foregoing, and the
Borrower shall reimburse the Agent and each Bank, and each Affiliate thereof and
their respective directors, officers, employees and agents, upon demand for any
expenses (including, without limitation, legal fees) incurred in connection with
any such investigation or proceeding; but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or misconduct of the Person to be indemnified.
SECTION 9.04 Setoffs; Sharing of Set-Offs.
(a) The Borrower hereby grants to each Bank, as security for the full
and punctual payment and performance of the obligations of the Borrower under
this Agreement, a continuing lien on and security interest in all deposits and
other sums credited by or due from such Bank to the Borrower or subject to
withdrawal by the Borrower; and regardless of the adequacy of any collateral or
other means of obtaining repayment of such obligations, each Bank may at any
time upon or after the occurrence of any Event of Default, and without notice to
the Borrower, set off the whole or any portion or portions of any or all such
deposits and other sums against such obligations, whether or not any other
Person or Persons could also withdraw money therefrom.
(b) Each Bank agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest owing with respect to the Note held
by it which is greater than the proportion received by any
37
other Bank in respect of the aggregate amount of all principal and interest
owing with respect to the Note held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Note
held by the other Banks owing to such other Banks, and/or such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Note held by the Banks owing to such other Banks
shall be shared by the Banks pro rata; provided that (i) nothing in this Section
shall impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of the Borrower other than its indebtedness under the
Notes, and (ii) if all or any portion of such payment received by the purchasing
Bank is thereafter recovered from such purchasing Bank, such purchase from each
other Bank shall be rescinded and such other Bank shall repay to the purchasing
Bank the purchase price of such participation to the extent of such recovery
together with an amount equal to such other Bank's ratable share (according to
the proportion of (x) the amount of such other Bank's required repayment to (y)
the total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in a Note, whether or
not acquired pursuant to the foregoing arrangements, may exercise rights of
set-off or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.
SECTION 9.05 Amendments and Waivers.
(a) Any provision of this Agreement, the Notes or any other Loan
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of the Agent are affected thereby, by the Agent); provided that
no such amendment or waiver shall, unless signed by all the Banks, (i) change
the Commitment of any Bank or subject any Bank to any additional obligation,
(ii) change the principal of or reduce the rate of interest on any Loan or
reduce any fees hereunder, (iii) change the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder, (iv) change the
amount of principal or reduce the amount of interest or fees due on any date
fixed for the payment thereof, (v) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Notes, or the percentage of
Banks, which shall be required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement, or (vi) change the
manner of application of any payments made under this Agreement or the Notes.
(b) The Borrower will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement unless each Bank shall be informed thereof by the Borrower and shall
be afforded an opportunity of considering the same and shall be supplied by the
Borrower with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver or
consent effected pursuant to the provisions of this Agreement shall be delivered
by the Borrower to each Bank forthwith following the date on which the same
shall have been executed and delivered by the requisite percentage of Banks. The
Borrower will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Bank (in its capacity as such) as consideration for or as an
inducement to the entering into by such Bank of any waiver or amendment of any
38
of the terms and provisions of this Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to all Banks approving such waiver
or amendment.
SECTION 9.06 Margin Stock Collateral. Each of the Banks represents to
the Agent and each of the other Banks that it in good faith is not, directly or
indirectly (by negative pledge or otherwise), relying upon any margin stock (as
defined in Section 4.14) as collateral in the extension or maintenance of the
credit provided for in this Agreement.
SECTION 9.07 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided that the Borrower may not assign or otherwise transfer any of its
rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, any Note
held by such Bank, any Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a participating interest
to a Participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of principal of or interest on the related
Loan or Loans, (ii) the change of the amount of any principal, or the reduction
in the amount of interest or fees due on any date fixed for the payment thereof
with respect to the related Loan or Loans, (iii) the change of the principal of
the related Loan or Loans, or (iv) any reduction in the rate at which either
interest is payable thereon or (if the Participant is entitled to any part
thereof) commitment fee is payable hereunder from the rate at which the
Participant is entitled to receive interest or commitment fee (as the case may
be) in respect of such participation. Each Bank selling a participating interest
in any Loan, Note, Commitment or other interest under this Agreement shall,
within 10 Domestic Business Days of such sale, provide the Borrower and the
Agent with written notification stating that such sale has occurred and
identifying the Participant and the interest purchased by such Participant. The
Borrower agrees that each Participant shall be entitled to the benefits of
Article VIII with respect to its participation in Loans outstanding from time to
time.
(c) Any Bank may at any time assign to one or more banks or financial
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume all such rights and obligations,
pursuant to an Assignment and Acceptance in the form attached hereto as Exhibit
F, executed by such Assignee, such transferor Bank and the Agent (and, in the
case of: (i) an Assignee that is not then a Bank or an Affiliate of a Bank; and
(ii) an assignemnt not made during the existence of a Default, by the Borrower);
provided that (i) no interest may be sold by a Bank pursuant to this paragraph
(c) unless the Assignee shall agree to assume ratably equivalent portions of the
transferor Bank's Commitment; (ii) the amount of the Commitment of the assigning
Bank being assigned pursuant to such assignment (determined as of the effective
39
date of the assignment) shall be equal to $10,000,000 (or any larger multiple of
$5,000,000); (iii) no interest may be sold by a Bank pursuant to this paragraph
(c) to any Assignee that is not then a Bank or an Affiliate of a Bank without
the consent of the Borrower, which consent shall not be unreasonably withheld,
provided that the Borrower's consent shall not be necessary with respect to any
assignment made during the existence of a Default; and (iv) no interest may be
sold by a Bank pursuant to this paragraph (c) to any Assignee that is not then a
Bank or an Affiliate of a Bank, without the consent of the Agent, which consent
shall not be unreasonably withheld, provided, that although the Agent's consent
may not be necessary with respect to an Assignee that is then a Bank or an
Affiliate of a Bank, no such assignment shall be effective until the conditions
set forth in the following sentence are satisfied. Upon (A) execution of the
Assignment and Acceptance by such transferor Bank, such Assignee, the Agent and
(if applicable) the Borrower, (B) delivery of an executed copy of the Assignment
and Acceptance to the Borrower and the Agent, (C) payment by such Assignee to
such transferor Bank of an amount equal to the purchase price agreed between
such transferor Bank and such Assignee, and (D) payment by the assigning Bank of
a processing and recordation fee of $3,000 to the Agent, such Assignee shall for
all purposes be a Bank party to this Agreement and shall have all the rights and
obligations of a Bank under this Agreement to the same extent as if it were an
original party hereto with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by the
Borrower, the Banks or the Agent shall be required. Upon the consummation of any
transfer to an Assignee pursuant to this paragraph (c), the transferor Bank, the
Agent and the Borrower shall make appropriate arrangements so that, if required,
a new Note is issued to each of such Assignee and such transferor Bank.
(d) Subject to the provisions of Section 9.08, the Borrower authorizes
each Bank to disclose to any Participant, Assignee or other transferee (each a
"Transferee") and any prospective Transferee any and all financial and other
information in such Bank's possession concerning the Borrower which has been
delivered to such Bank by the Borrower pursuant to this Agreement or which has
been delivered to such Bank by the Borrower in connection with such Bank's
credit evaluation prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment
under Section 8.03 than the transferor Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Section 8.02
or 8.03 requiring such Bank to designate a different Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Anything in this Section 9.07 to the contrary notwithstanding, any
Bank may assign and pledge all or any portion of the Loans and/or obligations
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Loans and/or
obligations made by the Borrower to the assigning and/or pledging Bank in
accordance with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect of such assigned Loans and/or obligations to
the extent of such payment. No such assignment shall release the assigning
and/or pledging Bank from its obligations hereunder.
40
SECTION 9.08 Confidentiality. Each Bank agrees to exercise its best
efforts to keep any information delivered or made available by the Borrower to
it which is clearly indicated to be confidential information, confidential from
anyone other than persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided, however, that nothing herein shall prevent
any Bank from disclosing such information (i) to any other Bank, (ii) upon the
order of any court or administrative agency, (iii) upon the request or demand of
any regulatory agency or authority having jurisdiction over such Bank, (iv)
which has been publicly disclosed, (v) to the extent reasonably required in
connection with any litigation to which the Agent, any Bank or their respective
Affiliates may be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vii) to such Bank's legal counsel
and independent auditors and (viii) to any actual or proposed Participant,
Assignee or other Transferee of all or part of its rights hereunder which has
agreed in writing to be bound by the provisions of this Section 9.08.
SECTION 9.09 Representation by Banks. Each Bank hereby represents that
it is a commercial lender or financial institution which makes loans in the
ordinary course of its business and that it will make its Loans hereunder for
its own account in the ordinary course of such business; provided, however,
that, subject to Section 9.07, the disposition of the Note or Notes held by that
Bank shall at all times be within its exclusive control.
SECTION 9.10 Obligations Several. The obligations of each Bank
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and
no action taken by the Banks pursuant hereto shall be deemed to constitute the
Banks to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document and
it shall not be necessary for any other Bank to be joined as an additional party
in any proceeding for such purpose.
SECTION 9.11 Survival of Certain Obligations. Sections 8.03(a),
8.03(b), 8.05 and 9.03, and the obligations of the Borrower thereunder, shall
survive, and shall continue to be enforceable notwithstanding, the termination
of this Agreement and the Commitments and the payment in full of the principal
of and interest on all Loans.
SECTION 9.12 Georgia Law. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of Georgia.
SECTION 9.13 Severability. In case any one or more of the provisions
contained in this Agreement, the Notes or any of the other Loan Documents should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby and shall be enforced to the
greatest extent permitted by law.
SECTION 9.14 Interest. In no event shall the amount of interest due or
payable hereunder or under the Notes exceed the maximum rate of interest allowed
by applicable law, and in the event any such payment is inadvertently made to
any Bank by the Borrower or inadvertently received by any Bank, then such excess
sum shall be credited as a payment of principal, unless the Borrower shall
41
notify such Bank in writing that it elects to have such excess sum returned
forthwith. It is the express intent hereof that the Borrower not pay and the
Banks not receive, directly or indirectly in any manner whatsoever, interest in
excess of that which may legally be paid by the Borrower under applicable law.
SECTION 9.15 Interpretation. No provision of this Agreement or any of
the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 9.16 Consent to Jurisdiction. The Borrower (a) submits to
personal jurisdiction in the State of Georgia, the courts thereof and the United
States District Courts sitting therein, for the enforcement of this Agreement,
the Notes and the other Loan Documents, (b) waives any and all personal rights
under the law of any jurisdiction to object on any basis (including, without
limitation, inconvenience of forum) to jurisdiction or venue within the State of
Georgia for the purpose of litigation to enforce this Agreement, the Notes or
the other Loan Documents, and (c) agrees that service of process may be made
upon it in the manner prescribed in Section 9.01 for the giving of notice to the
Borrower. Nothing herein contained, however, shall prevent the Agent from
bringing any action or exercising any rights against any security and against
the Borrower personally, and against any assets of the Borrower, within any
other state or jurisdiction.
SECTION 9.17 Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, under seal, by their respective authorized officers as of the day
and year first above written.
LA-Z-BOY INCORPORATED (SEAL)
By:
Title:
1284 North Telegraph Road
Monroe, Michigan 48162
Attention: Gene Hardy
Telecopy number: (734) 457-2005
Telephone number: (734) 241-4306
43
COMMITMENTS WACHOVIA BANK, N.A., as Agent and as a
$90,000,000 Bank (SEAL)
By:
Title:
Lending Office
Wachovia Bank, N.A.
Syndication Services
191 Peachtree Street, N.E., 27th Floor
Mail Code: GA-0382
Atlanta, Georgia 30303-1757
Attention: Lynn Smith, Supervisor,
Syndicated Loan Services
Telecopy number: (404) 332-5144
Telephone number: (404) 332-6971
With a copy to:
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Mail Code: GA-0370
Atlanta, Georgia 30303-1757
Attention: Kathryn Proctor
Telecopy number: (404) 332-6898
Telephone number: (404) 332-4036
44
COMERICA BANK (SEAL)
$60,000,000
By:
Title:
Lending Office
One Detroit Center
500 Woodward Avenue
Detroit, Michigan 48226
Attention: Anthony Davis
Assistant Vice President, U.S. Banking-Midwest I
Telecopy number: (313) 222-9514
Telephone number: (313) 222-9452
TOTAL COMMITMENTS:
$150,000,000
45
SCHEDULE 5.17
ADDITIONAL PERMITTED LIENS AND ENCUMBRANCES
Original Current
Name Principal Principal
* City of Newton, Mississippi $5,350,000 $5,350,000
Tax-Exempt Adjustable Mode
Industrial Development Revenue Refunding Bond
(La-Z-Boy Chair Company Project) Series 1991
Issue Date - July 11, 1991 Mature Date - June 1, 2009
* State of South Carolina $5,000,000 $5,000,000
Florence County, South Carolina
Industrial Revenue Refunding Bond
(La-Z-Boy Chair Company Project) Series 1986
Issue Date - December 30, 1986
Maturity Date - November 1, 2001
* The Industrial Development Board of $4,350,000 $4,350,000
The City of Dayton, Tennessee
Industrial Revenue Bond
(La-Z-Boy Project)
Issue Date - July 1, 1991
Maturity Date - June 1, 2011
* Tremonton City, Box Elder County, Utah $4,300,000 $1,300,000
Variable Rate Demand
Industrial Development Revenue Bond
(La-Z-Boy Chair Company Project) Series 1990
Issue Date - June 1, 1990
Maturity Date - June 1, 2000
* State of Mississippi $4,000,000 $4,000,000
Washington County
Tax-Exempt Adjustable Mode
Industrial Development Revenue Bond
(La-Z-Boy Chair Company Project) Series 1989
Issue Date - September 28, 1989
Maturity Date - July 1, 2004
* State of Arkansas $7,500,000 $7,400,000
City of Siloam Springs, Arkansas
Variable/Fixed Rate Demand
Industrial Development Revenue Bond
(La-Z-Boy Chair Company Project), Series 1994
Issue Date - June 1, 1994
Maturity Date - June 1, 2014
46
Original Current
Name Principal Principal
* Mississippi Business Finance Corp
State of Mississippi General Obligation Bonds
Maturity Date $650,000 $325,000
Maturity Date $750,000 $600,000
Maturity Date $650,000 $585,000
* Mississippi Business Finance Corp. $1,500,000 $1,500,000
State of Mississippi General Obligation Bonds
Issue Date - January 11, 2000 Maturity Date - December 1, 2014
* The CIT Group N/A
With Bauhaus USA, Inc.
Amended and Restated Factoring Agreement
Dated September 5, 1990
* The CIT Group N/A
With Alexvale Furniture, Inc.
Amended and Restated Factoring Agreement
Dated October 17, 1978
* GE Capital First Factors Corporation N/A
Alexvale Furniture Inc.
Amended and Restated Factoring Agreement
Dated November 22, 1996
* The CIT Group N/A
Sam Moore Furniture Industries
Factoring Agreement
Dated October 15, 1999
* GE Capital First Factors Corporation N/A
Sam Moore Furniture Industries
Amended and Restated Factoring Agreement
Dated August 3, 1992
* The CIT Group N/A
England/Corsair, Inc.
Amended and Restated Factoring Agreement
Dated September 19, 1979
* Various trucks, trailers and manufacturing N/A
equipment leases under which the annual
aggregate payments are not more than
$800,000
47
EXHIBIT A
NOTE
$____________ Atlanta, Georgia
January 28, 2000
For value received, LA-Z-BOY INCORPORATED, a Michigan corporation (the
"Borrower"), promises to pay to the order of
(the "Bank"), for the account of its Lending Office, the principal sum of ______
______________________________ and No/100 Dollars ($____________), or such
lesser amount as shall equal the unpaid principal amount of each Loan made by
the Bank to the Borrower pursuant to the Credit Agreement referred to below, on
the dates and in the amounts provided in the Credit Agreement. The Borrower
promises to pay interest on the unpaid principal amount of this Note on the
dates and at the rate or rates provided for in the Credit Agreement. Interest on
any overdue principal of and, to the extent permitted by law, overdue interest
on the principal amount hereof shall bear interest at the Default Rate, as
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Wachovia Bank, N.A., 191 Peachtree
Street, N.E., Atlanta, Georgia 30303, or such other address as may be specified
from time to time pursuant to the Credit Agreement.
All Loans made by the Bank, the respective maturities thereof, the
interest rates from time to time applicable thereto and all repayments of the
principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
the failure of the Bank to make, or any error of the Bank in making, any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement dated
as of January 28, 2000 among the Borrower, the banks listed on the signature
pages thereof and their successors and assigns and Wachovia Bank, N.A., as Agent
(as the same may be amended or modified from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
prepayment and the repayment hereof and the acceleration of the maturity hereof.
The Borrower hereby waives presentment, demand, protest, notice of
demand, protest and nonpayment and any other notice required by law relative
hereto, except to the extent as otherwise may be expressly provided for in the
Credit Agreement.
The Borrower agrees, in the event that this Note or any portion hereof
is collected by law or through an attorney at law, to pay all reasonable costs
of collection, including, without limitation, reasonable attorneys' fees.
A-1
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed under seal, by its duly authorized officer as of the day and year first
above written.
LA-Z-BOY INCORPORATED (SEAL)
By:
----------------------------------
Title:
--------------------------
A-2
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------------------------------------------
Amount of
Principal Notation Made
Date Type of Loan* Interest Rate Amount of Loan Repaid Maturity Date By
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<FN>
- -------------------------
* I.e., a Base Rate or Euro-Dollar Loan.
</FN>
A-3
EXHIBIT B
OPINION OF
COUNSEL FOR THE BORROWER
[Dated as provided in Section 3.01 of the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Dear Sirs:
We have acted as counsel for La-Z-Boy Incorporated, a Michigan
corporation (the "Borrower"), in connection with the Credit Agreement (the
"Credit Agreement") dated as of January 28, 2000, among the Borrower, the banks
listed on the signature pages thereof and Wachovia Bank, N.A., as Agent. Terms
defined in the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion. We have assumed for purposes of our opinions set forth
below that the execution and delivery of the Credit Agreement by each Bank and
by the Agent have been duly authorized by each Bank and by the Agent. As to
questions of fact relating to the Borrower material to such opinions, we have
relied upon representations of appropriate officers of the Borrower.
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of Michigan and has all corporate powers
required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes (i) are within the Borrower's corporate powers,
(ii) have been duly authorized by all necessary corporate action, (iii) require
no action by or in respect of, or filing with, any governmental body, agency or
official, (iv) do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any agreement, judgment, injunction, order, decree
or other instrument which to our knowledge is binding upon the Borrower and (v)
to our knowledge, except as provided in the Credit Agreement, do not result in
the creation or imposition of any Lien on any asset of the Borrower or any of
its Subsidiaries.
B-1
3. The Credit Agreement constitutes a valid and binding agreement of
the Borrower, enforceable against the Borrower in accordance with its terms, and
the Notes constitute valid and binding obligations of the Borrower, enforceable
in accordance with their respective terms, except as such enforceability may be
limited by: (i) bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity.
4. To our knowledge, there is no action, suit or proceeding pending, or
threatened, against or affecting the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the Borrower and its Subsidiaries, considered as a
whole, or which in any manner questions the validity or enforceability of the
Credit Agreement or any Note.
5. Each of the Borrower's Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
6. Neither the Borrower nor any of its Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
7. Neither the Borrower nor any of its Subsidiaries is a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
We are qualified to practice in the State of Michigan and do not
purport to be experts on any laws other than the laws of the United States and
the State of Michigan, and this opinion is rendered only with respect to such
laws. We have made no independent investigation of the laws of any other
jurisdiction.
We express no opinion as to the laws of any jurisdiction wherein any
Bank may be located which limits rates of interest which may be charged or
collected by such Bank other than in paragraph 3 with respect to the State of
Michigan.
This opinion is delivered to you in connection with the transaction
referenced above and may only be relied upon by you or any Assignee, Participant
or other Transferee under the Credit Agreement, without our prior written
consent.
Very truly yours,
B-2
EXHIBIT C
OPINION OF
WOMBLE CARLYLE SANDRIDGE & RICE, PLLC,
SPECIAL COUNSEL FOR THE AGENT
[Date as provided in Section 3.01 of the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"Credit Agreement") dated as of January 28, 2000, among La-Z-Boy Incorporated, a
Michigan corporation (the "Borrower"), the banks listed on the signature pages
thereof (the "Banks") and Wachovia Bank, N.A., as Agent (the "Agent"), and have
acted as special counsel for the Agent for the purpose of rendering this opinion
pursuant to Section 3.01(e) of the Credit Agreement. Terms defined in the Credit
Agreement are used herein as therein defined.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia
which Interpretive Standards are incorporated herein by this reference.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, and assuming the due authorization,
execution and delivery of the Credit Agreement and each of the Notes by or on
behalf of the Borrower, we are of the opinion that the Credit Agreement
constitutes a valid and binding agreement of the Borrower and each Note
constitutes valid and binding obligations of the Borrower, in each case
enforceable in accordance with its terms except as: (i) the enforceability
thereof may be affected by bankruptcy, insolvency, reorganization, fraudulent
conveyance, voidable preference, moratorium or similar laws applicable to
creditors' rights or the collection of debtors' obligations generally; (ii)
rights of acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability; and (iii) the enforceability
of certain of the remedial, waiver and other provisions of the Credit Agreement
and the Notes may be further limited by the laws of the State of Georgia;
provided, however, such additional laws do not, in our opinion, substantially
interfere with the practical realization of the benefits expressed in the Credit
C-1
Agreement and the Notes, except for the economic consequences of any procedural
delay which may result from such laws.
In giving the foregoing opinion, we express no opinion as to the effect
(if any) of any law of any jurisdiction except the State of Georgia. We express
no opinion as to the effect of the compliance or noncompliance of the Agent or
any of the Banks with any state or federal laws or regulations applicable to the
Agent or any of the Banks by reason of the legal or regulatory status or the
nature of the business of the Agent or any of the Banks.
This opinion is delivered to you in connection with the transaction
referenced above and may only be relied upon by you and any Assignee,
Participant or other Transferee under the Credit Agreement without our prior
written consent.
Very truly yours,
Womble Carlyle Sandridge & Rice,
a Professional Limited Liability Company
By:
----------------------------
Member
C-2
EXHIBIT D
FUNDING CERTIFICATE
OF
LA-Z-BOY INCORPORATED
Reference is made to the Credit Agreement (the "Credit Agreement")
dated as of January 28, 2000, among La-Z-Boy Incorporated (the "Borrower"),
Wachovia Bank, N.A., as Agent and as a Bank, and any other Banks listed on the
signature pages thereof. Capitalized terms used herein have the meanings
ascribed thereto in the Credit Agreement.
Pursuant to Section 3.02(a) of the Credit Agreement,
___________________, the duly authorized ____________________ of the Borrower,
hereby certifies to the Agent and the Banks that: (i) no Default has occurred
and is continuing on the date hereof; and (ii) the representations and
warranties of the Borrower contained in Article IV of the Credit Agreement are
true on and as of the date hereof in all material respects.
Certified as of the ___ day of January, 2000.
LA-Z-BOY INCORPORATED
------------------------------
Name:
Title:
D-1
EXHIBIT E
LA-Z-BOY INCORPORATED
SECRETARY'S CERTIFICATE
The undersigned, _____________, _______ Secretary of La-Z-Boy
Incorporated, a Michigan corporation (the "Borrower"), hereby certifies that he
has been duly elected, qualified and is acting in such capacity and that, as
such, he is familiar with the facts herein certified and is duly authorized to
certify the same, and hereby further certifies, in connection with the Credit
Agreement dated as of January 28 2000 among the Borrower, Wachovia Bank, N.A.,
as Agent and as a Bank, and any other Banks listed on the signature pages
thereof that:
1. Attached hereto as Exhibit A is a complete and correct copy of the
Certificate of Incorporation of the Borrower as in full force and effect on the
date hereof as certified by the Secretary of State of the State of Michigan, the
Borrower's state of incorporation.
2. Attached hereto as Exhibit B is a complete and correct copy of the
Bylaws of the Borrower as in full force and effect on the date hereof.
3. Attached hereto as Exhibit C is a complete and correct copy of the
resolutions duly adopted by the Board of Directors of the Borrower as of
___________ __, ____ by unanimous written consent, approving, and authorizing
the execution and delivery of, the Credit Agreement, the Notes (as such term is
defined in the Credit Agreement) and the other Loan Documents (as such term is
defined in the Credit Agreement) to which the Borrower is a party. Such
resolutions have not been repealed or amended and are in full force and effect,
and no other resolutions or consents have been adopted by the Board of Directors
of the Borrower in connection therewith.
4. ____________, who as ________________________ of the Borrower signed
the Credit Agreement, the Notes and the other Loan Documents to which the
Borrower is a party, was duly elected, qualified and acting as such at the time
he signed the Credit Agreement, the Notes and other Loan Documents to which the
Borrower is a party, and his signature appearing on the Credit Agreement, the
Notes and the other Loan Documents to which the Borrower is a party is his
genuine signature.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
28th day of January, 2000.
--------------------------------
Name:
Title:
EXHIBIT F
ASSIGNMENT AND ACCEPTANCE
Dated ________________ __, 200_
Reference is made to the Credit Agreement dated as of January 28, 2000
(together with all amendments and modifications thereto, the "Credit Agreement")
among La-Z-Boy Incorporated, a Michigan corporation (the "Borrower"), the Banks
(as defined in the Credit Agreement) and Wachovia Bank, N.A., as Agent (the
"Agent"). Terms defined in the Credit Agreement are used herein with the same
meaning.
__________________________________________________ (the "Assignor") and
_____________________________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse to the Assignor, and the Assignee hereby purchases and assumes from the
Assignor, a ______% interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the Effective Date (as defined
below) (including, without limitation, a ______% interest (which on the
Effective Date hereof is $_______________) in the Assignor's Commitment and a
______% interest (which on the Effective Date hereof is $_______________) in the
Loans owing to the Assignor and a ______% interest in the Note held by the
Assignor (which on the Effective Date hereof is $__________________).
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement, any other instrument or
document furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
other Loan Document or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of the interest
being assigned by it hereunder, that such interest is free and clear of any
adverse claim and that as of the date hereof its Commitment (without giving
effect to assignments thereof which have not yet become effective) is
$_________________ and the aggregate outstanding principal amount of Loans owing
to it (without giving effect to assignments thereof which have not yet become
effective) is $_________________; (ii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto; and (iii) attaches the Note
referred to in paragraph 1 above and requests that the Agent exchange such Note
as follows: [a new Note dated _______________, ____ in the principal amount of
_________________ payable to the order of the Assignee] [new Notes as follows: a
Note dated _________________, ____ in the principal amount of $_______________
payable to the order of the Assignor and a Note dated ______________, ____ in
the principal amount of $______________ payable to the order of the Assignee].
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.07 thereof (or any more recent financial statements of the Borrower
F-1
delivered pursuant to Section 5.03(b) or (c) thereof) and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iii) confirms that it is a bank or financial
institution; (iv) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank; (vi) specifies as its
Lending Office (and address for notices) the office set forth beneath its name
on the signature pages hereof, (vii) represents and warrants that the execution,
delivery and performance of this Assignment and Acceptance are within its
corporate powers and have been duly authorized by all necessary corporate
action[, and (viii) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee's status for purposes
of determining exemption from United States withholding taxes with respect to
all payments to be made to the Assignee under the Credit Agreement and the Notes
or such other documents as are necessary to indicate that all such payments are
subject to such taxes at a rate reduced by an applicable tax treaty].*
4. The Effective Date for this Assignment and Acceptance shall be
_______________ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for execution and
acceptance by the Agent [and to the Borrower for execution by the Borrower]**.
5. Upon such execution and acceptance by the Agent [and execution by
the Borrower]**, from and after the Effective Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent rights and obligations have
been transferred to it by this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (ii) the Assignor shall, to the extent its
rights and obligations have been transferred to the Assignee by this Assignment
and Acceptance, relinquish its rights (other than under Section 8.03 and Section
9.03 of the Credit Agreement) and be released from its obligations under the
Credit Agreement.
6. Upon such execution and acceptance by the Agent [and execution by
the Borrower]**, from and after the Effective Date, the Agent shall make all
payments in respect of the interest assigned hereby to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments for
periods prior to such acceptance by the Agent directly between themselves.
- ------------
* If the Assignee is organized under the laws of a jurisdiction outside
the United States.
** If the Assignee is not a Bank or an Affiliate of a Bank prior to the
Effective Date.
F-2
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of Georgia.
[NAME OF ASSIGNOR]
By:_________________________________
Title:__________________________
[NAME OF ASSIGNEE]
By:_________________________________
Title:__________________________
Lending Office:
[Address]
WACHOVIA BANK, N.A., as Agent
By:_________________________________
Title:__________________________
LA-Z-BOY INCORPORATED
By:_________________________________
Title:__________________________
F-3
EXHIBIT G
NOTICE OF BORROWING
__________, 200_
Wachovia Bank, N.A., as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndication Services
Re: Credit Agreement (as amended and modified from time to time,
the "Credit Agreement") dated as of January 28, 2000 by and
among La-Z-Boy Incorporated, the Banks from time to time
parties thereto, and Wachovia Bank, N.A., as Agent.
Gentlemen:
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings attributable thereto in the Credit Agreement.
This Notice of Borrowing is delivered to you pursuant to Section 2.02
of the Credit Agreement.
The Borrower hereby requests a [Euro-Dollar Borrowing] [Base Rate
Borrowing] in the aggregate principal amount of $___________ to be made on
________, 200_, and for interest to accrue thereon at the rate established by
the Credit Agreement for [Euro-Dollar Loans] [Base Rate Loans]. The duration of
the Interest Period with respect thereto shall be [1 month] [2 months] [3
months].
The Borrower has caused this Notice of Borrowing to be executed and
delivered by its duly authorized officer this ___ day of ____, 200_.
LA-Z-BOY INCORPORATED
By:__________________________
Title:
G-1
EXHIBIT H
Guaranty Agreement
GUARANTY AGREEMENT (this "Agreement" or this "Guaranty") dated as of
January 28, 2000, among each Subsidiary listed on the signature pages hereto
(each such Subsidiary individually, a "Guarantor" and, if more than one such
Subsidiary is party to this Agreement, collectively, the "Guarantors") of
LA-Z-BOY INCORPORATED, a Michigan corporation (the "Borrower"), and WACHOVIA
BANK, N.A., as agent (the "Agent") for itself and the Banks (as such term is
defined in the Credit Agreement referred to below) and their successors and
assigns (collectively, the "Secured Parties").
Reference is made to the Credit Agreement dated as of January 28, 2000
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, the financial institutions from time to time
party thereto (the "Banks"), and Wachovia Bank, N.A., as Agent and Bank.
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
The Banks have agreed to make Loans to the Borrower pursuant to, and
upon the terms and subject to the conditions specified in, the Credit Agreement.
Each of the Guarantors is a Wholly Owned Subsidiary of the Borrower and
acknowledges that it will derive substantial benefit from the making of the
Loans by the Banks. The obligations of the Banks to make Loans are conditioned
on, among other things, the execution and delivery by the Guarantors of a
Guaranty Agreement in the form hereof. As consideration therefor and in order to
induce the Banks to make Loans, the Guarantors are willing to execute this
Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Each Guarantor unconditionally guarantees,
jointly with the other Guarantors and severally, as a primary obligor and not
merely as a surety, (a) the due and punctual payment of (i) the principal of and
premium, if any, and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise and (ii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Borrower or any Guarantor to the Secured Parties under the Credit Agreement
and the other Loan Documents and (b) the due and punctual performance of all
covenants, agreements, obligations and liabilities of the Borrower or any
Guarantor under or pursuant to the Credit Agreement and the other Loan Documents
(all the monetary and other obligations referred to in the preceding clauses (a)
and (b) being collectively called the "Obligations"). Each Guarantor further
agrees that the Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from it, and that it will remain bound upon
its guarantee notwithstanding any extension or renewal of any Obligation.
1
Anything contained in this Agreement to the contrary notwithstanding,
the obligations of each Guarantor hereunder shall be limited to a maximum
aggregate amount equal to the greatest amount that would not render such
Guarantor's obligations hereunder subject to avoidance as a fraudulent transfer
or conveyance under Section 548 of Title 11 of the United States Code or any
provisions of applicable state law (collectively, the "Fraudulent Transfer
Laws"), in each case after giving effect to all other liabilities of such
Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (a) in respect of intercompany indebtedness to the Borrower or
Affiliates of the Borrower to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such Guarantor hereunder and
(b) under any Guarantee of senior unsecured indebtedness or Debt subordinated in
right of payment to the Obligations which Guarantee contains a limitation as to
maximum amount similar to that set forth in this paragraph, pursuant to which
the liability of such Guarantor hereunder is included in the liabilities taken
into account in determining such maximum amount) and after giving effect as
assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation, contribution,
reimbursement, indemnity or similar rights of such Guarantor pursuant to (i)
applicable law or (ii) any agreement providing for an equitable allocation among
such Guarantor and other Affiliates of the Borrower of obligations arising under
Guarantees by such parties (including the Indemnity, Subrogation and
Contribution Agreement).
SECTION 2. Obligations Not Waived. To the fullest extent permitted by
applicable law, each Guarantor waives presentment to, demand of payment from and
protest to the Borrower of any of the Obligations, and also waives notice of
acceptance of its this Guaranty and notice of protest for nonpayment. To the
fullest extent permitted by applicable law, the obligations of each Guarantor
hereunder shall not be affected by (a) the failure of the Agent or any other
Secured Party to assert any claim or demand or to enforce or exercise any right
or remedy against the Borrower or any other Guarantor under the provisions of
the Credit Agreement, any other Loan Document or otherwise, (b) any rescission,
waiver, amendment or modification of, or any release from any of the terms or
provisions of this Agreement, any other Loan Document, any Guarantee or any
other agreement, including with respect to any other Guarantor under this
Agreement or (c) the failure to perfect any security interest in, or the release
of, any of the security held by or on behalf of the Agent or any other Secured
Party.
SECTION 3. Security. Each of the Guarantors authorizes the Agent and
each of the other Secured Parties to (a) take and hold security for the payment
of this Guaranty and the Obligations and exchange, enforce, waive and release
any such security, (b) apply such security and direct the order or manner of
sale thereof as they in their sole discretion may determine and (c) release or
substitute any one or more endorsees, other guarantors or other obligors.
SECTION 4. Guarantee of Payment. Each Guarantor further agrees that
this Guaranty constitutes a guarantee of payment when due and not of collection,
and waives any right to require that any resort be had by the Agent or any other
Secured Party to any of the security held for payment of the Obligations or to
any balance of any deposit account or credit on the books of the Agent or any
other Secured Party in favor of the Borrower or any other Person.
SECTION 5. No Discharge or Diminishment of Guarantee. The obligations
of each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including
2
any claim of waiver, release, surrender, alteration or compromise of any of the
Obligations, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of the Agent
or any other Secured Party to assert any claim or demand or to enforce any
remedy under the Credit Agreement, any other Loan Document or any other
agreement, by any waiver or modification of any provision of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or omission that may or might in any manner or
to any extent vary the risk of any Guarantor or that would otherwise operate as
a discharge of any Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest extent permitted
by applicable law, each of the Guarantors waives any defense based on or arising
out of any defense of the Borrower or the unenforceability of the Obligations or
any part thereof from any cause, or the cessation from any cause of the
liability of the Borrower, other than the final and indefeasible payment in full
in cash of the Obligations. The Agent and the other Secured Parties may, at
their election, foreclose on any security held by one or more of them by one or
more judicial or nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or adjust any part of the Obligations, make any
other accommodation with the Borrower or any other Guarantor or exercise any
other right or remedy available to them against the Borrower or any other
Guarantor, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Obligations have been fully,
finally and indefeasibly paid in cash. Pursuant to applicable law, each of the
Guarantors waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other Guarantor, as the case may be, or any
security.
SECTION 7. Agreement To Pay; Subordination. In furtherance of the
foregoing and not in limitation of any other right that the Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of the Borrower or any other Guarantor to pay any Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, each Guarantor hereby promises to and
will forthwith pay, or cause to be paid, to the Agent or such other Secured
Party as designated thereby in cash the amount of such unpaid Obligations. Upon
payment by any Guarantor of any sums to the Agent or any Secured Party as
provided above, all rights of such Guarantor against the Borrower arising as a
result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and junior in right
of payment to the prior indefeasible payment in full in cash of all the
Obligations. In addition, any indebtedness of the Borrower or any Guarantor now
or hereafter held by any Guarantor is hereby subordinated in right of payment to
the prior payment in full of the Obligations. If any amount shall erroneously be
paid to any Guarantor on account of (i) such subrogation, contribution,
reimbursement, indemnity or similar right or (ii) any such indebtedness of the
Borrower or any other Guarantor, such amount shall be held in trust for the
benefit of the Secured Parties and shall forthwith be paid to the Agent to be
credited against the payment of the Obligations, whether matured or unmatured,
in accordance with the terms of the Loan Documents. The foregoing sentence shall
be effective only while an Event of Default under the Credit Agreement has
occurred and is continuing and the Agent has given written notice of such Event
of Default to the Guarantors.
3
SECTION 8. Information. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Obligations and the nature, scope and extent of the risks that
such Guarantor assumes and incurs hereunder, and agrees that none of the Agent
or the other Secured Parties will have any duty to advise any of the Guarantors
of information known to it or any of them regarding such circumstances or risks.
SECTION 9. Representations and Warranties. Each of the Guarantors
represents and warrants as to itself as follows:
(a) The execution, delivery and performance of this Guaranty and the
Indemnity, Subrogation and Contribution Agreement (i) are within the legal power
and authority of such Guarantor, (ii) have been duly authorized by all requisite
actions, (iii) do not and will not conflict with, contravene or violate any
provision of, or result in a breach of or default under, or require the waiver
(not already obtained) of any provision of or the consent (not already given) of
any Person under the terms of, such Guarantor's articles of incorporation or
by-laws, or any indenture, mortgage, deed of trust, loan or credit agreement or
other agreement or instrument to which such Guarantor is a party or by which it
is bound or to which any of its properties are subject, (iv) will not violate,
conflict with, give rise to any liability under, or constitute a default under
any law, regulation or order or any other requirement of any court, tribunal,
arbitrator or governmental body, agency or official, and (v) will not result in
the creation, imposition or acceleration of any indebtedness or tax or any
mortgage, lien, reservation, covenant, restriction or other encumbrance of any
nature upon, or with respect to, such Guarantor or any of its properties.
(b) This Guaranty and the Indemnity, Subrogation and Contribution
Agreement each constitutes the legal, valid and binding obligation of such
Guarantor enforceable against the Guarantor in accordance with its terms.
(c) The execution, delivery and performance of this Guaranty and the
Indemnity, Subrogation and Contribution Agreement do not require any action,
approval or consent of, or filing with, any governmental body, agency or
official.
SECTION 10. Termination. This Guaranty (a) shall terminate when all the
Obligations have been indefeasibly paid in full and the Banks have no further
commitment to lend under the Credit Agreement and (b) shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Obligation is rescinded or must otherwise be restored by
any Secured Party or any Guarantor upon the bankruptcy or reorganization of the
Borrower, any Guarantor or otherwise.
SECTION 11. Binding Effect; Several Agreement; Assignments. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Guarantors that are contained in
this Agreement shall bind and inure to the benefit of each party hereto and
their respective successors and assigns. This Agreement shall become effective
4
as to any Guarantor when a counterpart hereof executed on behalf of such
Guarantor shall have been delivered to the Agent, and a counterpart hereof shall
have been executed on behalf of the Agent, and thereafter shall be binding upon
such Guarantor and the Agent and their respective successors and assigns, and
shall inure to the benefit of such Guarantor, the Agent and the other Secured
Parties, and their respective successors and assigns, except that no Guarantor
shall have the right to assign its rights or obligations hereunder or any
interest herein (and any such attempted assignment shall be void). This
Agreement shall be construed as a separate agreement with respect to each
Guarantor and may be amended, modified, supplemented, waived or released with
respect to any Guarantor without the approval of any other Guarantor and without
affecting the obligations of any other Guarantor hereunder.
SECTION 12. Waivers; Amendment.
(a) No failure or delay of the Agent in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Agent hereunder and of the other Secured Parties under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on any Guarantor in any case
shall entitle such Guarantor to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Guarantors with respect to which such waiver, amendment or modification
relates and the Agent, with the prior written consent of the Required Banks
(except as otherwise provided in the Credit Agreement).
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
SECTION 14. Notices. All communications and notices hereunder shall be
in writing and given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to each Guarantor shall be given to it in
care of the Borrower at the address set forth in Section 9.01 of the Credit
Agreement.
SECTION 15. Survival of Agreement, Severability.
(a) All covenants, agreements, representations and warranties made by
the Guarantors herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Agent and the other
Secured Parties and shall survive the making by the Banks of the Loans
regardless of any investigation made by the Secured Parties or on their behalf,
and shall continue in full force and effect as long as the principal of or any
accrued
5
interest on any Loan or any other fee or amount payable under this Agreement or
any other Loan Document is outstanding and unpaid and as long as the Commitments
have not been terminated.
(b) In the event any one or more of the provisions contained in this
Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 16. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract, and shall become effective as
provided in Section 11. Delivery of an executed signature page to this Agreement
by facsimile transmission shall be as effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 17. Rules of Interpretation. The rules of interpretation
specified in Sections 1.04 and 1.05 of the Credit Agreement shall be applicable
to this Agreement.
SECTION 18. Jurisdiction; Consent to Service of Process.
(a) Each Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any Georgia State
court or Federal court of the United States of America sitting in Atlanta,
Georgia, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such Georgia State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Agent or any other Secured Party may otherwise have to bring any
action or proceeding relating to this Agreement or the other Loan Documents
against any Guarantor or its properties in the courts of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any Georgia State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 14. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
6
SECTION 19. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Bank 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 Debt at any time owing by such Bank to or for the credit or the
account of any Guarantor against any or all the obligations of such Guarantor
now or hereafter existing under this Agreement and the other Loan Documents held
by such Bank, irrespective of whether or not such Bank shall have made any
demand under this Agreement or any other Loan Document and although such
obligations may be unmatured. The rights of each Bank under this Section 19 are
in addition to other rights and remedies (including other rights of setoff)
which such Bank may have.
SECTION 20. Additional Guarantors. Pursuant to Section 5.25 of the
Credit Agreement, Domestic Subsidiaries acquired or organized after the Closing
Date are required to enter into this Agreement as a Guarantor upon becoming a
Subsidiary. Upon execution and delivery, after the date hereof, by the Agent and
such a Subsidiary of an instrument in form and substance satisfactory to the
Agent, such Subsidiary shall become a Guarantor hereunder with the same force
and effect as if originally named as a Guarantor herein. The execution and
delivery of any instrument adding an additional Guarantor as a party to this
Agreement shall not require the consent of any other Guarantor hereunder. The
rights and obligations of each Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Guarantor as a party to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
KINCAID FURNITURE COMPANY
INCORPORATED
By:___________________________
Name:_________________________
Title:________________________
LZB FINANCE, INC.
By:___________________________
Name:_________________________
Title:________________________
ENGLAND/CORSAIR, INC.
By:___________________________
Name:_________________________
7
Title:________________________
ALEXVALE FURNITURE, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB DELAWARE VALLEY, INC.
By:___________________________
Name:_________________________
Title:________________________
WILMINGTON HOME FURNISHINGS,
INC.
By:___________________________
Name:_________________________
Title:________________________
NEWARK HOME FURNISHINGS, INC.
By:___________________________
Name:_________________________
Title:________________________
MONTGOMERY HOME FURNISHINGS,
INC.
By:___________________________
Name:_________________________
8
Title:________________________
LZB DELAWARE VALLEY
PROPERTIES, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB FLORIDA REALTY, INC.
By:___________________________
Name:_________________________
Title:________________________
LA-Z-BOY LOGISTICS, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB PROPERTIES, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB RETAIL, INC.
By:___________________________
Name:_________________________
Title:________________________
9
LZB FURNITURE GALLERIES OF
MEMPHIS, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB CAROLINA PROPERTIES, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB FURNITURE GALLERIES OF
WASHINGTON, D.C., INC.
By:___________________________
Name:_________________________
Title:________________________
LZB FURNITURE GALLERIES OF ST.
LOUIS, INC.
By:___________________________
Name:_________________________
Title:________________________
SAM MOORE FURNITURE
INDUSTRIES, INC.
By:___________________________
Name:_________________________
Title:________________________
10
BAUHAUS U.S.A., INC.
By:___________________________
Name:_________________________
Title:________________________
BAUHAUS EXPORTS, INC.
By:___________________________
Name:_________________________
Title:________________________
WACHOVIA BANK, N.A., as Agent
By:___________________________
Name:_________________________
Title:________________________
11
EXHIBIT I
Indemnity, Subrogation and Contribution Agreement
INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT (this "Agreement")
dated as of January 28, 2000, among LA-Z-BOY INCORPORATED, a Michigan
corporation (the "Borrower"), each Subsidiary of the Borrower listed on the
signature pages hereto (the "Guarantors") and WACHOVIA BANK, N.A., as agent (in
such capacity, the "Agent") for itself and the Banks (as such term is defined in
the Credit Agreement referred to below) and their successors and assigns
(collectively, the "Secured Parties").
Reference is made to (a) the Credit Agreement dated as of January 28,
2000 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the Banks from time to time party
thereto, and Wachovia Bank, N.A., as Agent and Bank and (b) the Guaranty
Agreement dated as of January 28, 2000, among the Guarantors and the Agent (the
"Guaranty"). Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
The Banks have agreed to make Loans to the Borrower pursuant to, and
upon the terms and subject to the conditions specified in, the Credit Agreement.
The Guarantors have guaranteed such Loans and the other Obligations (as defined
in the Guaranty) of the Borrower under the Credit Agreement pursuant to the
Guaranty. The obligations of the Banks to make Loans are conditioned on, among
other things, the execution and delivery by the Borrower and the Guarantors of
an agreement in the form hereof.
Accordingly, the Borrower, each Guarantor and the Agent agree as
follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), the Borrower agrees that in the event a payment shall be
made by any Guarantor under the Guaranty, the Borrower shall indemnify such
Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the person to whom such payment shall have been made
to the extent of such payment.
SECTION 2. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 3) that, in the event a
payment shall be made by any other Guarantor under the Guaranty and such other
Guarantor (the "Claiming Guarantor") shall not have been fully indemnified by
the Borrower as provided in Section 1, the Contributing Guarantor shall
indemnify the Claiming Guarantor in an amount equal to the amount of such
payment, multiplied by a fraction of which the numerator shall be the net worth
of the Contributing Guarantor on the date hereof and the denominator shall be
the aggregate net worth of all the Guarantors on the date hereof. Any
Contributing Guarantor making any payment to a Claiming Guarantor pursuant to
this Section 2 shall be subrogated to the rights of such Claiming Guarantor
under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 1 and 2
and all other rights of indemnity, contribution or subrogation under applicable
law or otherwise shall be fully subordinated to the
1
indefeasible payment in full in cash of the Obligations. No failure on the part
of the Borrower or any Guarantor to make the payments required by Sections 1 and
2 (or any other payments required under applicable law or otherwise) shall in
any respect limit the obligations and liabilities of any Guarantor with respect
to its obligations hereunder, and each Guarantor shall remain liable for the
full amount of the obligations of such Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and be in full
force and effect so long as any Obligation is outstanding and has not been
indefeasibly paid in full in cash, and so long as any of the Commitments under
the Credit Agreement have not been terminated, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Obligation is rescinded or must otherwise be restored by
any Secured Party or any Guarantor upon the bankruptcy or reorganization of the
Borrower, any Guarantor or otherwise.
SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
SECTION 6. No Waiver; Amendment.
(a) No failure on the part of the Agent or any Guarantor to exercise,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by the Agent or any Guarantor preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. All
remedies hereunder are cumulative and are not exclusive of any other remedies
provided by law. None of the Agent and the Guarantors shall be deemed to have
waived any rights hereunder unless such waiver shall be in writing and signed by
such parties.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Borrower, the Guarantors and the Agent, with the prior written consent of
the Required Banks (except as otherwise provided in the Credit Agreement).
SECTION 7. Notices. All communications and notices hereunder shall be
in writing and given as provided in the Guaranty and addressed as specified
therein.
SECTION 8. Binding Agreement; Assignments. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the parties that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns. Neither the Borrower nor any Guarantor may assign or transfer any of
its rights or obligations hereunder (and any such attempted assignment or
transfer shall be void) without the prior written consent of the Required Banks.
SECTION 9. Survival of Agreement, Severability.
2
(a) All covenants and agreements made by the Borrower and each
Guarantor herein and in the certificates or other instruments prepared or
delivered in connection with this Agreement or the other Loan Documents shall
be considered to have been relied upon by the Agent, the other Secured Parties
and each Guarantor and shall survive the making by the Banks of the Loans, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loans or any other fee or amount payable under the
Credit Agreement or this Agreement or under any of the other Loan Documents is
outstanding and unpaid and as long as the Commitments have not been
terminated.
(b) In case any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, no
party hereto shall be required to comply with such provision for so long as
such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 10. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall be effective with
respect to any Guarantor when a counterpart bearing the signature of such
Guarantor shall have been delivered to the Agent. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually signed counterpart of this Agreement.
SECTION 11. Rules of Interpretation. The rules of interpretation
specified in Sections 1.04 and1.05 of the Credit Agreement shall be applicable
to this Agreement.
SECTION 12. Additional Guarantors. Pursuant to Section 5.25 of the
Credit Agreement, Domestic Subsidiaries acquired or organized after the Closing
Date are required to become a party to this Agreement as a Guarantor upon
becoming a Subsidiary. Upon execution and delivery, after the date hereof, by
the Agent and such a Subsidiary of an instrument in form and substance
satisfactory to the Agent, such Subsidiary shall become a Guarantor hereunder
with the same force and effect as if originally named as a Guarantor herein. The
execution and delivery of any instrument adding an additional Guarantor as a
party to this Agreement shall not require the consent of any other Guarantor
hereunder. The rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Guarantor as a
party to this Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGES
3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first appearing above.
LA-Z-BOY INCORPORATED
By:___________________________
Name:_________________________
Title:________________________
KINCAID FURNITURE COMPANY
INCORPORATED
By:___________________________
Name:_________________________
Title:________________________
LZB FINANCE, INC.
By:___________________________
Name:_________________________
Title:________________________
ENGLAND/CORSAIR, INC.
By:___________________________
Name:_________________________
Title:________________________
ALEXVALE FURNITURE, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB DELAWARE VALLEY, INC.
4
By:___________________________
Name:_________________________
Title:________________________
WILMINGTON HOME FURNISHINGS,
INC.
By:___________________________
Name:_________________________
Title:________________________
NEWARK HOME FURNISHINGS, INC.
By:___________________________
Name:_________________________
Title:________________________
MONTGOMERY HOME FURNISHINGS,
INC.
By:___________________________
Name:_________________________
Title:________________________
LZB DELAWARE VALLEY
PROPERTIES, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB FLORIDA REALTY, INC.
5
By:___________________________
Name:_________________________
Title:________________________
LA-Z-BOY LOGISTICS, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB PROPERTIES, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB RETAIL, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB FURNITURE GALLERIES OF
MEMPHIS, INC.
By:___________________________
Name:_________________________
Title:________________________
LZB CAROLINA PROPERTIES, INC.
By:___________________________
Name:_________________________
Title:________________________
6
LZB FURNITURE GALLERIES OF
WASHINGTON, D.C., INC.
By:___________________________
Name:_________________________
Title:________________________
LZB FURNITURE GALLERIES OF ST.
LOUIS, INC.
By:___________________________
Name:_________________________
Title:________________________
SAM MOORE FURNITURE
INDUSTRIES, INC.
By:___________________________
Name:_________________________
Title:________________________
BAUHAUS U.S.A., INC.
By:___________________________
Name:_________________________
Title:________________________
BAUHAUS EXPORTS, INC.
By:___________________________
Name:_________________________
Title:________________________
WACHOVIA BANK, N.A., as Agent
7
By:___________________________
Name:_________________________
Title:________________________
8