1
CREDIT AGREEMENT
Dated as of March 8, 1995
among
TULTEX CORPORATION,
as Borrower,
AND
CERTAIN SUBSIDIARIES AND RELATED PARTIES,
as Guarantors and Credit Parties,
THE BANKS IDENTIFIED HEREIN,
CORESTATES BANK, N.A.,
AND
FIRST UNION NATIONAL BANK OF VIRGINIA,
as Co-Agents,
AND
NATIONSBANK, N.A. (CAROLINAS),
as Administrative Agent
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TABLE OF CONTENTS
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS 1
1.01 Definitions 1
1.02 Computation of Time Periods 17
1.03 Accounting Terms 17
SECTION 2
CREDIT FACILITIES 17
2.01 Revolving Loan Commitment 17
2.02 Committed Revolving Loan Advances 18
2.03 Conversion 19
2.04 Repayment of the Committed Revolving Loans 20
2.05 Interest on Committed Revolving Loans 20
2.06 Committed Revolving Notes 20
2.07 Letter of Credit Subfacility 20
2.08 Swingline Loan Subfacility. 25
2.09 Conditions of Lending 27
2.10 Termination of Commitments 28
2.11 Fees 28
2.12 Prepayments 29
2.13 Increased Costs, Illegality, etc 29
2.14 Capital Adequacy 30
2.15 Compensation 31
2.16 Net Payments 31
2.17 Indemnification; Nature of Issuing Bank's Duties 32
2.18 Change of Lending Office 33
2.19 Payments and Computations 34
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2.20 Pro Rata Treatment 34
2.21 Set-Off; Sharing of Payments 35
2.22 Determination as a Highly Leveraged Transaction 35
SECTION 3
GUARANTEE 36
3.01 The Guarantee 36
3.02 Obligations Unconditional 36
3.03 Reinstatement 37
3.04 Certain Additional Waivers 37
3.05 Remedies 37
3.06 Continuing Guarantee 38
3.07 Limitation of Guarantee 38
SECTION 4
CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT 38
4.01 Executed Credit Documents 38
4.02 No Default; Representations and Warranties 38
4.03 Opinion of Counsel 38
4.04 Corporate Documents 38
4.05 Issuance of the Senior Notes 39
4.06 Termination of Existing Credit Facility 39
SECTION 5
REPRESENTATIONS AND WARRANTIES 39
5.01 Organization and Good Standing 39
5.02 Due Authorization 39
5.03 No Conflicts 39
5.04 Consents 40
5.05 Enforceable Obligations 40
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5.06 Financial Condition 40
5.07 No Default 40
5.08 Liens 40
5.09 Indebtedness 40
5.10 Litigation 40
5.11 Material Agreements 40
5.12 Taxes 40
5.13 Compliance with Law 41
5.14 ERISA 41
5.15 Subsidiaries 41
5.16 Use of Proceeds; Margin Stock 41
5.17 Government Regulation 41
5.18 Hazardous Substances 42
5.19 Patents, Franchises, etc 42
5.20 Solvency 42
5.21 Investments 42
SECTION 6
AFFIRMATIVE COVENANTS 42
6.01 Information Covenants 42
6.02 Preservation of Existence and Franchises 44
6.03 Books, Records and Inspections 44
6.04 Compliance with Law 45
6.05 Payment of Taxes and Other Indebtedness 45
6.06 Insurance 45
6.07 Maintenance of Property 45
6.08 Performance of Obligations 45
6.09 ERISA 45
6.10 Use of Proceeds 46
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6.11 Financial Covenants 46
6.12 Additional Subsidiaries 47
SECTION 7
NEGATIVE COVENANTS 47
7.01 Indebtedness 47
7.02 Liens 47
7.03 Guaranty Obligations 47
7.04 Nature of Business 48
7.05 Consolidation, Merger, Sale or Purchase of Assets, etc. 48
7.06 Advances, Investments and Loans 48
7.07 Prepayments of Indebtedness, etc 48
7.08 Transactions with Affiliates 49
7.09 Ownership of Subsidiaries 49
7.10 Fiscal Year 49
SECTION 8
EVENTS OF DEFAULT 49
8.01 Events of Default 49
8.02 Acceleration; Remedies 51
SECTION 9
AGENCY PROVISIONS 52
9.01 Appointment 52
9.02 Delegation of Duties 53
9.03 Exculpatory Provisions 53
9.04 Reliance on Communications 53
9.05 Notice of Default 54
9.06 Non-Reliance on Agents and Other Banks 54
9.07 Indemnification 54
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9.08 Agents in their Individual Capacity 55
9.09 Successor Agent 55
SECTION 10
MISCELLANEOUS 55
10.01 Notices 55
10.02 Right of Set-Off 56
10.03 Benefit of Agreement 56
10.04 No Waiver; Remedies Cumulative 57
10.05 Payment of Expenses, etc 58
10.06 Amendments, Waivers and Consents 58
10.07 Counterparts 59
10.08 Headings 59
10.09 Survival 59
10.10 Governing Law; Submission to Jurisdiction; Venue 59
10.11 Severability 59
10.12 Entirety 59
10.13 Survival 60
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of March 8, 1995 (the
"Credit Agreement"), is by and among TULTEX CORPORATION, a
Virginia corporation (the "Borrower"), each of the corporations
identified as a "Guarantor" on the signature pages hereto
(hereinafter sometimes referred to individually as a "Guarantor"
and collectively as the "Guarantors"), the various banks and
lending institutions identified on the signature pages hereto
(each a "Bank" and collectively, the "Banks"), CORESTATES BANK,
N.A. and FIRST UNION NATIONAL BANK OF VIRGINIA, as co-agents (in
such capacity, the "Co-Agents") and NATIONSBANK, N.A.
(CAROLINAS), as administrative agent for the Banks (in such
capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Banks
provide a $225,000,000 credit facility for the purposes
hereinafter set forth;
WHEREAS, the Banks have agreed to make the requested
credit facility available to the Borrower, and the Agents have
accepted their duties hereunder, all on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.01 Definitions. As used herein, the following
terms shall have the meanings herein specified unless the
context otherwise requires. Defined terms herein shall include
in the singular number the plural and in the plural the singular:
"Additional Credit Party" means each Person that
becomes a direct or indirect Material Subsidiary of the Borrower
after the Closing Date.
"Adjusted CD Loan" means a Loan which bears
interest based on the Adjusted CD Rate.
"Adjusted CD Rate" means for the Interest Period
for each Adjusted CD Loan comprising part of the same borrowing
(including conversions, extensions and renewals), a per annum
interest rate equal to the sum of:
(a) the rate obtained by dividing (i) the rate of
interest determined by the Administrative Agent to be the
average (rounded upward to the nearest whole multiple of 1/100
of 1% per annum, if such average is not such a multiple) of the
consensus bid rate determined by the Administrative Agent for
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the bid rates per annum, at 10:00 A.M. (Charlotte, North
Carolina time) (or as soon thereafter as is practicable) on the
first day of such Interest Period, of certificate of deposit
dealers of recognized standing selected by the Administrative
Agent for the purchase at face value of certificates of deposit
in an amount substantially equal to the Adjusted CD Loan
comprising part of such borrowing (including extensions and
renewals) and with a maturity equal to such Interest Period, by
(ii) a percentage equal to 100% minus the Adjusted CD Rate
Reserve Percentage (as defined below) for such Interest Period,
plus
(b) the Assessment Rate (as defined below) for
such Interest Period.
As used herein, "Adjusted CD Rate Reserve
Percentage" for the Interest Period for each Adjusted CD Loan
comprising part of the same borrowing (including conversions,
extensions and renewals) means the reserve percentage applicable
on the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York City
with deposits exceeding one billion dollars with respect to
liabilities consisting of or including (among other liabilities)
U.S. dollar nonpersonal time deposits in the United States with
a maturity equal to such Interest Period. The "Assessment Rate"
for the Interest Period for each Adjusted CD Loan comprising
part of the same borrowing (including conversions, extensions
and renewals) means the annual assessment rate estimated by the
Administrative Agent on the first day of such Interest Period
for determining the then current annual assessment payable by
the Administrative Agent to the Federal Deposit Insurance
Corporation (or any successor) for insuring U.S. dollar deposits
of the Administrative Agent in the United States.
"Adjusted Eurodollar Rate" means for the Interest
Period for each Eurodollar Loan comprising part of the same
borrowing (including conversions, extensions and renewals), a
per annum interest rate equal to the rate obtained by dividing
(a) the rate of interest determined by the Administrative Agent
to be the average (rounded upward to the nearest whole multiple
of 1/16 of 1% per annum, if such average is not such a multiple)
of the per annum rates at which deposits in U.S. dollars are
offered to the Administrative Agent in the interbank eurodollar
market at 11:00 A.M. (Charlotte, North Carolina time) (or as
soon thereafter as is practicable), in each case two Business
Days before the first day of such Interest Period, in an amount
substantially equal to such Eurodollar Loan comprising part of
such borrowing (including conversions, extensions and renewals)
and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Adjusted Eurodollar Rate
Reserve Percentage for such Interest Period. As used herein,
"Adjusted Eurodollar Rate Reserve Percentage" for the Interest
Period for each Eurodollar Loan comprising part of the same
borrowing (including conversions, extensions and renewals),
means the percentage applicable two Business Days before the
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first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with respect
to liabilities or assets consisting of or including eurocurrency
liabilities, as such term is defined in Regulation D (or with
respect to any other category of liabilities which includes
deposits by reference to which the interest rate on Eurodollar
Loans is determined) having a term equal to the Interest Period
for which such Adjusted Eurodollar Reserve Percentage is
determined.
"Adjusted Federal Funds Rate" means, for any day, a
per annum rate equal to the rate at which Federal funds are
offered to NationsBank on an overnight basis.
"Adjusted Net Worth" means, with respect to any
Guarantor as of any date of determination thereof, the excess of
(i) the amount of the "present fair saleable value" of the
assets of such Guarantor as of such date of determination, over
(ii) the amount of all "liabilities, contingent or otherwise",
of such Guarantor as of such date of determination, as such
quoted terms are determined in accordance with applicable
Federal and state laws governing determinations of the
insolvency of debtors. In determining the Adjusted Net Worth of
any Guarantor for purposes of calculating the Maximum Guaranteed
Amount for such Guarantor in respect of any Extension of Credit,
the liabilities of such Guarantor to be used in such
determination pursuant to clause (ii) of the preceding sentence
shall in any event include the liabilities of such Guarantor
hereunder in respect of all Extensions of Credit other than the
Extension of Credit in respect of which such calculation is
being made.
"Administrative Agent" means the administrative
agent for the Banks under this Credit Agreement as identified in
the recital of parties hereinabove, and any successors and
assigns in such capacity.
"Administrative Agent's Fee Letter" means the
letter agreement dated as of January 20, 1995 between the
Administrative Agent and the Borrower, as amended, modified,
supplemented or replaced from time to time.
"Affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling (including but
not limited to all directors and officers of such Person),
controlled by or under direct or indirect common control with
such Person. A Person shall be deemed to control a corporation
if such Person possesses, directly or indirectly, the power (i)
to vote 10% or more of the securities having ordinary voting
power for the election of directors of such corporation or (ii)
to direct or cause direction of the management and policies of
such corporation, whether through the ownership of voting
securities, by contract or otherwise.
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"Agent" means the Administrative Agent and the
Co-Agents, individually or collectively, as appropriate.
"Applicable Inventory Advance Rate Percentage"
means, with regard to the Eligible Inventory component of the
Borrowing Base, (i) from the beginning of the Borrower's tenth
(10th) fiscal month of any fiscal year through the end of the
Borrower's fourth (4th) fiscal month of the next succeeding
fiscal year, 50%, and (ii) from the beginning of the Borrower's
fifth (5th) fiscal month of any fiscal year through the end of
the Borrower's ninth (9th) fiscal month of the same such fiscal
year, 65%.
"Applicable Percentage" means, initially until
receipt by the Administrative Agent of the December 31, 1994
financial statements (the "Initial Interest Rate Period"), 1.25%
in the case of Committed Revolving Loans which are Eurodollar
Loans, 1.375% in the case of Committed Revolving Loans which are
Adjusted CD Loans, 1.25% in the case of Swingline Loans which
are Fed Funds Swingline Loans and 1.375% in the case of the
Standby Letter of Credit Fee, and on Interest Determination
Dates occurring after the Initial Interest Rate Period:
Applicable Percentage
Ratio of Consolidated Debt Eurodollar Standby
to Loans Letter of
Consolidated Tangible and Adjusted CD Credit
Capitalization Fed Funds Loans Fee
Swingline
Loans
---------- ----------- --------
< 40% .75% .875% .875%
40% to < 50% 1.00% 1.125% 1.125%
50% to < 60% 1.25% 1.375% 1.375%
60% 1.50% 1.625% 1.625%
The appropriate Applicable Percentage shall be
determined and adjusted annually on the date 5 days after the
date by which the Borrower shall have provided annual financial
information to the Administrative Agent in accordance with the
provisions of Section 6.01(a) (an "Interest Determination
Date"), such Applicable Percentage to be effective from such
Interest Determination Date until the next such Interest
Determination Date.
"Bankruptcy Code" means the Bankruptcy Code in
Title 11 of the United States Code, as amended, modified,
succeeded or replaced from time to time.
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"Base Rate" means, for any day, a rate per annum
(rounded upwards, if necessary, to the nearest whole multiple of
1/16 of 1%) equal to the greater of (a) the Federal Funds
Effective Rate in effect on such day plus p of 1% or (b) the
Prime Rate in effect on such day. If for any reason the
Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms
hereof, the Base Rate shall be determined without regard to
clause (a) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"Base Rate Loan" means a Loan which bears interest
based on the Base Rate.
"Borrower" means Tultex Corporation, a Virginia
corporation, and its successors and permitted assigns.
"Borrowing Base" means, at any time, the sum of 80%
of Eligible Receivables plus the Applicable Inventory Advance
Rate Percentage of Eligible Inventory plus an amount equal to
50% of Trade LOC Obligations.
"Business Day" means any day other than a Saturday,
a Sunday, a legal holiday or a day on which banking
institutions are authorized by law or other governmental action
to close in Charlotte, North Carolina or Philadelphia,
Pennsylvania; except that in the case of Eurodollar Loans, such
day is also a day on which dealings between banks are carried on
in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" means all expenditures which
in accordance with generally accepted accounting principles
would be classified as capital expenditures, including without
limitation Capitalized Leases.
"Capitalized Lease" means any lease the obligation
for Rentals with respect to which is required to be capitalized
on a consolidated balance sheet of the lessee and its
subsidiaries in accordance with generally accepted accounting
principles.
"Capitalized Rentals" means, with regard to any
Person, as of the date of any determination thereof, the amount
at which the aggregate Rentals due and to become due under all
Capitalized Leases under which such Person is a lessee would be
reflected as a liability on a consolidated balance sheet of such
Person.
"Cash Equivalents" means (i) securities issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
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thereof) having maturities of not more than twelve months from
the date of acquisition, (ii) U.S. dollar denominated (or
foreign currency fully hedged) time deposits, certificates of
deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (x) Piedmont Trust Bank, (y) any domestic commercial
bank of recognized standing having capital and surplus in excess
of $500,000,000 or (z) any bank whose short-term commercial
paper rating from S&P is at least A-1 or the equivalent thereof
or from Moody's is at least P-1 or the equivalent thereof (any
such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of
acquisition, (iii) commercial paper and variable or fixed rate
notes issued by any Approved Bank (or by the parent company
thereof) or any variable rate notes issued by, or guaranteed by
any domestic corporation rated A-2 (or the equivalent thereof)
or better by S&P or P-2 (or the equivalent thereof) or better by
Moody's and maturing within six months of the date of
acquisition and (iv) repurchase agreements with a bank or trust
company (including the Bank) or recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States
of America in which the Borrower shall have a perfected first
priority security interest (subject to no other liens or
encumbrances) and having, on the date of purchase thereof, a
fair market value of at least 100% of the amount of the
repurchase obligations.
"Change of Control" means (i) any Person or two or
more Persons acting in concert shall have acquired beneficial
ownership, directly or indirectly, of Voting Stock of the
Borrower (or other securities convertible into such Voting
Stock) representing 35% or more of the combined voting power of
all Voting Stock of the Borrower, (ii) during any period of up
to 24 consecutive months, commencing after the Closing Date,
individuals who at the beginning of such 24 month period were
directors of the Borrower cease to constitute a majority of the
board of directors of the Borrower and such event is a result
(directly or indirectly) of the acquisition of 5% or more of the
combined voting power of the Voting Stock by a Person or Persons
who did not own at least 5% or more of the combined voting power
of the Voting Stock as of the Closing Date, or (iii) any Person
or two or more Persons acting in concert shall have acquired by
contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their
acquisition of, control over Voting Stock of the Borrower (or
other securities convertible into such securities) representing
35% or more of the combined voting power of all Voting Stock of
the Borrower. As used herein, "beneficial ownership" shall have
the meaning provided in Rule 13d-3 of the Securities and
Exchange Commission under the Securities and Exchange Act of
1934.
"Closing Date" means the date on which the
conditions set forth in Section 4 to the making of the initial
Loans and the issuance of the initial Letters of Credit
hereunder shall have been fulfilled (or waived) and on which the
initial Loans shall have been made or the initial Letters of
Credit shall have been issued.
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"Co-Agent" means the co-agents for the Banks under
this Credit Agreement as identified and defined in the recital
of the parties hereinabove, and any successors and assigns in
such capacity.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" means the commitments of the Banks to
make Committed Revolving Loans and to purchase participation
interests in the Letters of Credit hereunder, and of the Issuing
Bank to issue Letters of Credit.
"Commitment Fee" means such term as defined in
Section 2.11(b).
"Committed Revolving Loan" means a contractual
revolving credit loan made by the Banks pursuant to the
provisions of Section 2.01.
"Committed Revolving Note" means the promissory
notes of the Borrower in favor of each of the Banks evidencing
the Committed Revolving Loans as provided pursuant to Section
2.06, individually or collectively, as appropriate, as such
promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"Consistent Basis" or "consistent basis" means,
with regard to the application of accounting principles,
accounting principles consistent in all material respects with
the accounting principles used and applied in preparation of the
financial statements previously delivered to the Banks and
referred to in Section 5.06.
"Consolidated Borrower Group" means the Borrower
and its Restricted Subsidiaries.
"Consolidated Debt" means all Indebtedness of the
Borrower and its Restricted Subsidiaries on a consolidated basis
determined in accordance with generally accepted accounting
principles.
"Consolidated Funded Debt" means all Funded Debt of
the Borrower and its Restricted Subsidiaries on a consolidated
basis determined in accordance with generally accepted
accounting principles.
"Consolidated Net Income" means for any period the
gross revenues of the Borrower and its Restricted Subsidiaries
for such period less all expenses and other proper charges
(including taxes on income), determined on a consolidated basis
in accordance with generally accepted accounting principles
after eliminating earnings or losses attributable to outstanding
Minority Interests, but excluding in any event:
(a) any extraordinary gains or losses on the sale
or other disposition of assets, and any taxes on such excluded
gains and any tax deductions or credits on account of any such
excluded losses;
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(b) the proceeds of any life insurance policy;
(c) net earnings of any business entity (other
than a Restricted Subsidiary) in which the Borrower or any
Restricted Subsidiary has an ownership interest unless such net
earnings shall have actually been received by the Borrower or
such Restricted Subsidiary in the form of cash distributions; and
(d) any portion of the net earnings of any
Restricted Subsidiary which for any reason is unavailable for
payment of dividends to the Borrower or any other Restricted
Subsidiary.
"Consolidated Tangible Net Worth" means as of any
Determination Date Tangible Assets less all obligations of the
Borrower and its Restricted Subsidiaries which in accordance
with generally accepted accounting principles shall be
classified upon a consolidated balance sheet of the Borrower as
liabilities. For purposes of calculating Consolidated Tangible
Net Worth, treasury stock shall be excluded.
"Consolidated Tangible Capitalization" means as of
any date the sum of (i) Consolidated Funded Debt plus (ii)
Consolidated Tangible Net Worth.
"Controlled Group" means (i) the controlled group
of corporations as defined in Section 414(b) of the Code and
the applicable regulations thereunder, or (ii) the group of
trades or businesses under common control as defined in Section
414(c) of the Code and the applicable regulations thereunder, of
which the Borrower is a part or may become a part.
"Credit Documents" means this Credit Agreement, the
Notes, the LOC Documents, any Joinder Agreement and all other
related agreements and documents issued or delivered hereunder
or thereunder or pursuant hereto or thereto.
"Credit Party" means any of the Borrower and the
Guarantors.
"Credit Party Obligations" means, without
duplication, all of the obligations of the Borrower or other
Credit Party to the Banks, the Administrative Agent and the
Issuing Banks (including the obligations to pay principal of and
interest on the Loans, to pay LOC Obligations, to pay all Fees,
to provide cash collateral in respect of Letters of Credit, to
pay certain expenses and the obligations arising in connection
with various indemnities) whenever arising, under this Credit
Agreement, the Notes or any of the other Credit Documents to
which the Borrower or other Credit Party is a party.
"Default" means any event, act or condition which
with notice or lapse of time, or both, would constitute an Event
of Default.
"Determination Date" means the last day of each
quarterly fiscal period of the Borrower and each other date upon
which the Borrower or a Restricted Subsidiary shall incur or
otherwise become liable for Consolidated Funded Debt.
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"Eligible Assignee" means any Bank or Affiliate or
subsidiary of a Bank, and any other commercial bank, financial
institution or "accredited investor" (as defined in Regulation D
of the Securities and Exchange Commission) reasonably acceptable
to the Administrative Agent and the Borrower.
"Eligible Inventory" means, as of any date of
determination, the lower of the aggregate book value (based on a
FIFO valuation) or fair market value of all raw materials,
greige cloth and finished goods inventory (specifically
excluding, however, all work-in-process inventory, except for
greige cloth inventory), owned by the Credit Parties less
appropriate reserves determined in accordance with generally
accepted accounting principles applied on a consistent basis but
excluding in any event (i) inventory subject to any Lien
whatsoever to any Person other than the Banks, (ii) inventory
which is not in good condition or fails to meet standards for
sale or use imposed by governmental agencies, departments or
divisions having regulatory authority over such goods, and (iii)
inventory which is not useable or saleable at prices
approximating their cost in the ordinary course of the Credit
Party's business (including without duplication the amount of
any reserves for obsolescence, unsaleability or decline in
value).
"Eligible Receivables" means as of any date of
determination the aggregate book value of all accounts
receivable, receivables, and obligations for payment created or
arising from the sale of inventory or the rendering of services
in the ordinary course of business (hereinafter sometimes
referred to collectively as "Receivables"), owned by or owing to
the Credit Parties, but excluding in any event, without
duplication, (i) Receivables subject to a Lien to any Person
other than the Banks, (ii) Receivables which are outstanding
more than 90 days from the due date of the original invoice or
more than 270 days from the date of the original invoice, (iii)
Receivables evidenced by notes, chattel paper or other
instruments, unless such notes, chattel paper or instruments
have been delivered to and are in the possession of the Credit
Party, (iv) Receivables the account debtor with respect to which
is not solvent or is the subject of any bankruptcy or insolvency
proceedings of any kind, (v) Receivables owing by an account
debtor located outside of the United States (unless payment for
the goods shipped is secured by an irrevocable letter of credit
in a form and from an institution acceptable to the
Administrative Agent), (vi) Receivables which, in the absence of
manifest error, are presently, or may be in the future,
contingent or subject to offset, deduction, counterclaim,
dispute or other defense to payment and (vii) Receivables
arising out of transactions with Subsidiaries or Affiliates of
any Credit Party.
"Equity Transaction" means (i) the issuance by the
Borrower or any of its Restricted Subsidiaries of new shares of
its capital stock, unless such new shares are being issued in
exchange for an ownership interest in another Person or in
exchange for substantially all of the assets of another Person
in connection with an acquisition permitted by Section 7.05,
(ii) an issuance by the Borrower or any of its Restricted
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Subsidiaries of any shares of its capital stock pursuant to the
exercise of options or warrants and (iii) an issuance by the
Borrower or any of its Restricted Subsidiaries of any shares of
its capital stock pursuant to the conversion of any debt
securities (including without limitation any Subordinated Debt)
to equity.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and the rulings issued thereunder.
"ERISA Affiliate" means each person (as defined in
Section 3(9) of ERISA) which together with the Borrower, any
Subsidiary of the Borrower or member of the Consolidated
Borrower Group would be deemed to be a member of the same
"controlled group" within the meaning of Section 414(b), (c),
(m) and (o) of the Code.
"Eurodollar Loan" means a Loan which bears interest
based on the Adjusted Eurodollar Rate.
"Event of Default" has the meaning specified in
Section 8.
"Existing Letters of Credit" means those Letters of
Credit issued by CoreStates Bank, N.A., as Issuing Bank for
Trade Letters of Credit, and by NationsBank, N.A. (Carolinas),
as Issuing Bank for Standby Letters of Credit, for the account
of the Borrower or other Credit Party outstanding on the Closing
Date and being more particularly identified on Schedule 2.07(c)
hereof as such Letters of Credit may be amended, modified,
extended, renewed or replaced from time to time.
"Extension of Credit" means any Loan advance or the
issuance or extension of any Letters of Credit and the
obligations to make advances thereunder.
"Federal Funds Effective Rate" means, for any day,
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve Bank of New
York, or, if such rate is not so released for any day which is a
Business Day, the arithmetic average (rounded upwards to the
next 1/100th of 1%), as determined by the Administrative Agent,
of the quotations for the day of such transactions received by
the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"Fed Funds Swingline Loan" means a Swingline Loan
which bears interest based on the Adjusted Federal Funds Rate.
"Fees" means all fees payable pursuant to Section
2.11.
"Fixed Charges" means, on a consolidated basis for
any period, the sum of (i) all Rentals (other than Rentals on
Capitalized Leases) payable during such period by the Borrower
and its Restricted Subsidiaries, (ii) all Interest Charges on
all Indebtedness (including the interest component on Rentals on
17
Capitalized Leases) of the Borrower and its Restricted
Subsidiaries, (iii) all dividends paid in cash or property and
redemptions made of capital stock by the Borrower and its
Restricted Subsidiaries (other than dividends paid to, or
redemptions of capital stock owned by, the Borrower or a
wholly-owned Restricted Subsidiary and exclusive of one-time
dividend arrearage payment on the Borrower's cumulative
convertible preferred stock, $7.50 Series B, no par value, and
the Borrower's 5% cumulative preferred stock, $100 par value, in
an aggregate amount not to exceed $1,800,000) during such
period, (iv) the cash payment portion of current maturities of
that Funded Debt having a final maturity of one or more years
from the date of origin thereof (or which is renewable or
extendible at the option of the obligor for a period or periods
more than one year from the date of origin) and current
maturities of Capitalized Leases and (v) the amount of voluntary
or optional prepayments on, or redemptions or acquisition for
value (including by way of defeasance) of, the Senior Notes (or
any Indebtedness incurred in a refinancing of the Senior Notes
permitted hereunder), for the Borrower and its Restricted
Subsidiaries during such period.
"Funded Debt" means, for any Person, (i) all
Indebtedness of such Person for borrowed money (including
without limitation, indebtedness evidenced by promissory notes,
bonds, debentures and similar instruments and further any
portion of the purchase price for assets or acquisitions
permitted hereunder which may be financed by the seller), (ii)
all Capitalized Rentals for such Person, and (iii) all Guaranty
Obligations by such Person of Funded Debt of others. Funded
Debt shall include payments in respect of Funded Debt which
constitute current liabilities of the obligor under generally
accepted accounting principles.
"Generally Accepted Accounting Principles" or
"generally accepted accounting principles" means generally
accepted accounting principles at the time in the United States.
"Governmental Authority" means any Federal, state,
local or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Government Acts" has the meaning specified in
Section 2.17.
"Guarantor" means those corporations identified as
a "Guarantor" on the signature pages hereto, being Dominion
Stores, Inc., a Virginia corporation; Logo 7, Inc., a Virginia
corporation; Universal Industries, Inc., a Massachusetts
corporation; and each Additional Credit Party which has executed
a Joinder Agreement.
"Guaranty Obligations" means any obligations (other
than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) guaranteeing
or intended to guarantee any Indebtedness, leases, dividends or
other obligations of any other Person in any manner, whether
direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such
18
Indebtedness or other obligation or any property constituting
security therefor, (ii) to advance or provide funds or other
support for the payment or purchase of such indebtedness or
obligation or to maintain working capital, solvency or other
balance sheet condition of such other Person (including without
limitation keep well agreements, maintenance agreements, comfort
letters or similar agreements or arrangements), (iii) to lease
or purchase property, securities or services primarily for the
purpose of assuring the owner of such Indebtedness or
obligation, or (iv) to otherwise assure or hold harmless the
owner of such Indebtedness or obligation against loss in respect
thereof. The amount of Guaranty Obligations hereunder shall be
deemed to be an amount equal to the stated or determinable
amount of the Indebtedness or obligation in respect of which
such Guaranty Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated amount in
respect thereof (assuming such other Person is required to
perform thereunder) as determined in good faith.
"Indebtedness" means without duplication, (i) all
indebtedness for borrowed money, (ii) the deferred purchase
price of assets or services which in accordance with generally
accepted accounting principles would be shown to be a liability
(or on the liability side of a balance sheet), (iii) all
Guaranty Obligations, (iv) the maximum amount of all letters of
credit issued or acceptance facilities established for the
account of such Person and, without duplication, all drafts
drawn thereunder (other than letters of credit (x) supporting
other Indebtedness of the Borrower or a Subsidiary or (y) offset
by a like amount of cash or government securities held in escrow
to secure such letter of credit and draws thereunder), (v) all
Capitalized Lease obligations, (vi) all Indebtedness of another
Person secured by any Lien on any property of the Borrower or a
Restricted Subsidiary, whether or not such indebtedness has been
assumed, (vii) all obligations under take-or-pay or similar
arrangements or under interest rate, currency, or commodities
agreements, (viii) indebtedness created or arising under any
conditional sale or title retention agreement, and (ix)
withdrawal liability or insufficiency under ERISA or under any
qualified plan or related trust; but specifically excluding from
the foregoing trade payables and accrued expenses arising or
incurred in the ordinary course of business.
"Interest Charges" means, for any period, all
interest and amortization of debt discount and expense on any
particular Indebtedness (including specifically without
limitation Capitalized Rentals) for which such calculations are
being made.
"Interest Payment Date" means (i) as to Loans which
are Committed Revolving Loans and Swingline Loans, the last day
of each month and on the Termination Date and (ii) as to
Eurodollar Loans and Adjusted CD Loans, on the last day of each
Interest Period for such Loan and on the Termination Date, and
in addition where the applicable Interest Period is more than 3
months, in the case of Eurodollar Loans, or more than 90 days,
in the case of Adjusted CD Loans, then also on the date 3 months
or 90 days, respectively, from the beginning of the Interest
Period, and each 3 months or 90 days, respectively, thereafter.
19
If an Interest Payment Date falls on a date which is not a
Business Day, such Interest Payment Date shall be deemed to be
the next succeeding Business Day, except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in
the next succeeding calendar month, then on the next preceding
day.
"Interest Period" means (i) as to Adjusted CD
Loans, a period of 30, 60, 90 or 180 days' duration, as the
Borrower may elect, and (ii) as to Eurodollar Loans, a period of
one, two, three or six month's duration, as the Borrower may
elect, commencing in each case, on the date of the borrowing
(including conversions, extensions and renewals); provided,
however, (A) if any Interest Period would end on a day which is
not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day (except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in
the next succeeding calendar month, then on the next preceding
Business Day), (B) no Interest Period shall extend beyond the
Termination Date (or if more than one Termination Date exists
with respect to the Commitments on account of a failure of one
or more Banks to extend the Termination Date as provided in
Section 2.01, then no Interest Period shall extend beyond any
Termination Date, unless either the portion of Committed
Revolving Loans comprised of Base Rate Loans together with the
amount of any unused availability is at least equal to the
amount of such Commitments terminating on such date, or the
Interest Periods for Committed Revolving Loans which, when taken
together with Base Rate Loans then outstanding and any unused
availability, are at least equal to the amount of such
Commitments terminating on such date) and (C) in the case of
Eurodollar Loans, where an Interest Period begins on a day for
which there is no numerically corresponding day in the calendar
month in which the Interest Period is to end, such Interest
Period shall end on the last day of such calendar month.
"Investment Grade Rating" means a rating for the
Borrower's senior unsecured long-term debt (which is not
supported through defeasance, guarantees, letters of credit or
other forms of credit enhancement) of "BBB-" or better by S&P or
"Baa3" or better by Moody's.
"Issuing Bank" means, in the case of Trade Letters
of Credit, CoreStates Bank, N.A., or, in the case of Standby
Letters of Credit, NationsBank, or in each case, such other Bank
as to which the Borrower may request. There shall be no more
than one Issuing Bank for Trade Letters of Credit or for Standby
Letters of Credit at any time although the Issuing Bank for
Trade Letters of Credit and for Standby Letters of Credit need
not be the same, and provided that should there be a change in
the Issuing Bank any Letters of Credit then issued and
outstanding need not be replaced, but may remain outstanding.
"Issuing Bank Fees" means such term as defined in
Section 2.11(c).
20
"Joinder Agreement" means a Joinder Agreement
substantially in the form of Schedule 6.12 hereto executed and
delivered by an Additional Credit Party in accordance with the
provisions of Section 6.12.
"Letter of Credit" means a Standby Letter of
Credit, a Trade Letter of Credit or both, as appropriate.
"Letter of Credit Fees" means the Standby Letter of
Credit Fee and the Trade Letter of Credit Fee.
"Lien" means any mortgage, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance,
lien (statutory or otherwise), preference, priority or charge of
any kind (including any agreement to give any of the foregoing,
any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform
Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Loan" means a Committed Revolving Loan, a
Swingline Loan or both, as appropriate.
"LOC Documents" means, with respect to any Letter
of Credit, such Letter of Credit, any amendments thereto, any
documents delivered in connection therewith, any application
therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to
such Letter of Credit) governing or providing for (i) the rights
and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations, and including
specifically without limitation the Master Trade LOC Agreement.
"LOC Obligations" means, at any time, the sum of
Standby LOC Obligations plus Trade LOC Obligations.
"Mandatory Borrowing" means such term as defined in
Sections 2.07(e) and 2.08(b).
"Master Trade LOC Agreement" means those Master
Letter of Credit Agreements dated as of _________, 199_ between
CoreStates Bank, N.A., as Issuing Bank for Trade Letters of
Credit hereunder, and each of the Credit Parties substantially
in the form of Schedule 4.01(a) attached, together with any
other such agreements entered into subsequent thereto with
another Credit Party, and any amendments or modifications
thereto or extensions or replacements thereof, individually or
collectively, as appropriate.
"Material Adverse Effect" means a material adverse
effect on (i) the operations or financial condition of the
Borrower and its Restricted Subsidiaries, or of the Borrower and
its Subsidiaries, in each case taken as a whole, (ii) the
ability of the Borrower or Guarantors to perform their
respective obligations under this Credit Agreement, or (iii) the
validity or enforceability of this Credit Agreement, any of the
other Credit Documents, or the rights and remedies of the Banks
hereunder or thereunder.
21
"Material Subsidiary" means each of the
Subsidiaries of the Borrower listed on the signature pages
hereto under the caption "Guarantors" and any other Subsidiary
of the Borrower from and after the date on which such Subsidiary
has total assets equal to or greater than $2,500,000.
"Maximum Guaranteed Amount" means, for any
Guarantor as of the date of determination thereof, the sum of
(i) with respect to each Extension of Credit (or portion
thereof) the proceeds of which are used to make a Valuable
Transfer to such Guarantor, the amount of such Extension of
Credit (or such portion thereof) plus (ii) with respect to each
Extension of Credit (or portion thereof) the proceeds of which
are not used to make a Valuable Transfer to such Guarantor, the
lesser of (a) the outstanding amount of such Extension of Credit
(or such portion thereof) as of such date or (b) the greater of
(1) ninety-five percent (95%) of the Adjusted Net Worth of such
Guarantor at the time of such Extension of Credit or (2)
ninety-five percent (95%) of the Adjusted Net Worth of such
Guarantor at the earliest of (A) such date, (B) the date of
commencement of a case under the Bankruptcy Code in which such
Guarantor is a debtor or (C) the date enforcement of such
Guarantor's obligations under Section 3 is sought.
"Minority Interests" means any shares of stock of
any class of a Restricted Subsidiary (other than directors'
qualifying shares as required by law) that are not owned by the
Borrower and/or one or more of its Restricted Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests
constituting preferred stock at the voluntary or involuntary
liquidating value of such preferred stock, whichever is greater,
and by valuing Minority Interests constituting common stock at
the book value of capital and surplus applicable thereto
adjusted, if necessary, to reflect any changes from the book
value of such common stock required by the foregoing method of
valuing Minority Interests in preferred stock.
"Moody's" means Moody's Investors Service, Inc.,
and any successor thereof.
"Multiemployer Plan" means at any time an employee
pension benefit plan within the meaning of Section 4001(a)(3) of
ERISA to which any member of the Controlled Group is then making
or accruing an obligation to make contributions or has within
the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the
Controlled Group during such five year period.
"NationsBank" means NationsBank, N.A. (Carolinas)
or its successor.
"Net Income Available for Fixed Charges" means, for
any period, the sum of Consolidated Net Income during such period
plus (to the extent deducted in determining
Consolidated Net Income) (i) depreciation, amortization and
other non-cash charges, (ii) all provisions for any Federal,
state or other income taxes made by the Borrower or its
Restricted Subsidiaries during such period, (iii) Fixed Charges
22
of the Borrower and its Restricted Subsidiaries during such
period, and (iv) amortization of the acquisition cost of license
agreements and goodwill of the Borrower and its Restricted
Subsidiaries (including any such charges deducted in determining
the net income of Logo 7, Inc. during the applicable period)
minus Capital Expenditures made or incurred by the
Borrower and its Restricted Subsidiaries during such period.
"Note" or "Notes" means the Committed Revolving
Notes, the Swingline Note, or both, as appropriate.
"Notice of Borrowing" shall have such meaning as
provided in Section 2.02(a).
"Notice of Conversion" shall have such meaning as
provided in Section 2.03.
"Obligations" means, collectively, Loans and LOC
Obligations.
"PBGC" means the Pension Benefit Guaranty
Corporation established under ERISA, and any successor thereto.
"Participation Interest" means the extension of
credit by a Bank by way of purchase of a participation hereunder
in Letters of Credit or LOC Obligations as provided in Section
2.07, in the Swingline Loans as provided in Section 2.08 or in
Committed Revolving Loans as provided in Section 2.21.
"Permitted Investments" means (i) cash and Cash
Equivalents, (ii) receivables owing to the Borrower or its
Restricted Subsidiaries or any of its receivables and advances
to suppliers, in each case if created, acquired or made in the
ordinary course of business and payable or dischargeable in
accordance with customary trade terms, (iii) subject to the
limitations set out in Section 7.05(b), investments by the
Borrower and its Restricted Subsidiaries in and to a Credit
Party, including any investment in a corporation which, after
giving effect to such investment, will become an Additional
Credit Party (provided such Additional Credit Party shall
execute a Joinder Agreement), (iv) loans and advances in the
usual and ordinary course of business to officers, directors and
employees for expenses (including moving expenses related to a
transfer) incidental to carrying on the business of the Borrower
or any Restricted Subsidiary in an aggregate amount not to
exceed $5,000,000 at any time outstanding, (v) investments
(including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course of
business, and (vi) additional loan advances and/or investments
of a nature not contemplated by the foregoing clauses hereof,
provided that such loans, advances and/or investments made
pursuant to this clause (vi) shall not exceed in aggregate
amount at any time outstanding an amount equal to the sum of
$5,000,000 plus 1% of Consolidated Tangible Net Worth. As used
herein, "investment" means all investments, in cash or by
23
delivery of property made, directly or indirectly in any Person,
whether by acquisition of shares of capital stock, indebtedness
or other obligations or securities or by loan advance, capital
contribution or otherwise.
"Permitted Liens" means (i) Liens created by, under
or in connection with this Credit Agreement or the other Credit
Documents in favor of the Banks; (ii) Liens described on
Schedule 7.02 attached hereto; (iii) Liens for taxes not yet
delinquent or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves determined
in accordance with generally accepted accounting principles have
been established (and as to which the property subject to such
lien is not yet subject to foreclosure, sale or loss on account
thereof); (iv) Liens in respect of property imposed by law
arising in the ordinary course of business such as
materialmen's, mechanics', warehousemen's and other like Liens
provided that such Liens secure only amounts not yet due and
payable; (v) pledges or deposits made to secure payment of
worker's compensation insurance, unemployment insurance,
pensions or social security programs; (vi) Liens arising from
good faith deposits in connection with or to secure performance
of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in
the ordinary course of business (other than obligations in
respect of the payment of borrowed money); (vii) easements,
rights-of-way, restrictions (including zoning restrictions),
minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing
the use of such property for its intended purposes or
interfering with the ordinary conduct of business of the
Borrower and its Subsidiaries; (viii) Liens arising from UCC
financing statements regarding leases permitted by this Credit
Agreement; (ix) leases or subleases granted to others in the
ordinary course of business not interfering in any material
respect with the business or operations of the Borrower or its
Subsidiaries; and (x) purchase money Liens securing purchase
money indebtedness to the extent permitted under Section 7.01.
"Person" means any individual, partnership, joint
venture, firm, corporation, association, trust or other
enterprise (whether or not incorporated), or any government or
political subdivision or any agency, department or
instrumentality thereof.
"Plan" means any multiemployer or single-employer
plan as defined in Section 4001 of ERISA, which is maintained,
or at any time during the five calendar years preceding the date
of this Credit Agreement was maintained, for employees of the
Borrower, any Subsidiary or an ERISA Affiliate.
"Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by NationsBank as its
prime rate in effect at its principal office in Charlotte, North
Carolina; each change in the Prime Rate shall be effective on
the date such change is publicly announced as effective.
"Pro Forma Basis" means, with respect to any
24
optional payment on or redemption or repurchase of the Senior
Notes pursuant to the provisions of Section 7.07, such
transaction shall be deemed to have occurred as of the first day
of the four fiscal quarter period ending as of the end of the
most recent fiscal quarter preceding the date of such
transaction with respect to which the Administrative Agent shall
have received financial information pursuant to the provisions
of Sections 6.01(a) or (b).
"Reclassification Fee" means such term as defined
in Section 2.22.
"Regulation D" means Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof
establishing reserve requirements.
"Regulation G" means Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof
establishing margin requirements.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof
establishing margin requirements.
"Regulation X" means Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof
establishing margin requirements.
"Rentals" means, as of the date of determination
thereof, all fixed payments (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 the Borrower or a Restricted Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall
be exclusive of any amounts required to be paid by the Borrower
or a Restricted Subsidiary (whether designated as rents or
additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Required Banks" means Banks which are then in
compliance in all material respects with their obligations
hereunder (as shall be reasonably determined by the
Administrative Agent) holding in the aggregate at least 51% of
the Commitments (other than with respect to Swingline Loans) or,
if the aggregate Commitments have been terminated, Banks which
are then in compliance in all material respects with their
obligations hereunder (as shall be reasonably determined by the
Administrative Agent) in the aggregate holding at least 51% of the
principal amount of the Obligations then outstanding (provided that
in the case of Letters of Credit or Swingline Loans, where a Mandatory
Borrowing cannot be made and the Banks shall have purchased a
25
participation interest in unreimbursed drawings under Letters of
Credit or in Swingline Loans in accordance with the provisons of
Section 2.07(e) or Section 2.08(b)(iii), respectively, for
purposes of determining the aggregate amount of Obligations
owing to each Bank hereunder, such Bank's funded participation
interest such unreimbursed drawings under Letters of Credit and
in Swingline Loans shall be considered as if it were a direct
loan and not a participation interest, and the aggregate amount
of LOC Obligations owing to the Issuing Banks and the aggregate
amount of Swingline Loans owing to the Swingline Lender shall be
reduced by the amount of such funded participation interests).
"Restricted Subsidiary" means any Guarantor and
also any Subsidiary (i) which is organized under the laws of the
United States or any other State thereof; (ii) which conducts
substantially all of its business and has substantially all of
its assets within the United States; and (iii) of which more
than 50% (by number of votes) of the Voting Stock is
beneficially owned, directly or indirectly, by the Borrower. In
addition, notwithstanding the provisions of clauses (i) and (ii)
of the immediately preceding sentence, AKOM, Ltd., a corporation
organized under the laws of the Cayman Islands, and Tultex
Canada, Inc., a corporation organized under the laws of Canada,
and any other corporation which fails to qualify under clauses
(i) and (ii) of the immediately preceding sentence shall be
Restricted Subsidiaries so long as the portion of Consolidated
Net Income attributable to the net income of such companies
(taken in the aggregate) shall be less than 5% of Consolidated
Net Income for the immediately preceding fiscal year and so long
as the assets of such companies (taken in the aggregate) shall
be less than 5% of the consolidated assets of the Company and
its Restricted Subsidiaries.
"Revolving Committed Amount" means collectively the
aggregate amount of all of the Banks commitments, and
individually the amount of each such Bank's commitment to make
Committed Revolving Loans specified in Schedule 2.01(a).
"S&P" means Standard & Poors Rating Group, a
division of McGraw Hill, Inc., and any successor thereof.
"Senior Notes" means those publicly issued notes of
the Borrower which are guaranteed by the Subsidiaries of the
Borrower issued prior to or contemporaneous with the initial
Extensions of Credit hereunder.
"Standby Letter of Credit" means any standby letter
of credit issued for the account of a Credit Party by an Issuing
Bank pursuant to the letter of credit subfacility provided in
Section 2.07, as such letter of credit may be amended, modified,
extended, renewed or replaced from time to time.
"Standby Letter of Credit Fees" means such term as
defined in Section 2.11(c).
"Standby LOC Committed Amount" means such term as
defined in Section 2.07(a).
"Standby LOC Obligations" means, at any time, the
26
sum of (i) the maximum amount which is, or at any time
thereafter may become, available to be drawn under Standby
Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Standby Letters of
Credit plus (ii) the aggregate amount of all drawings under
Standby Letters of Credit honored by the Issuing Bank but not
theretofore reimbursed.
"Subordinated Debt" means such term as defined in
Section 7.07.
"Subsidiary" means, as to any Person, (i) any
corporation more than 50% of whose stock of any class or classes
having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of such
corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such
Person directly or indirectly through Subsidiaries, and (ii) any
partnership, association, joint venture or other entity in which
such person directly or indirectly through Subsidiaries has more
than 50% equity interest at any time. Except as otherwise
expressly provided, all references herein to "Subsidiary" shall
mean a Subsidiary of the Borrower.
"Swingline Committed Amount" means the amount of
the Swingline Lender's commitment to make Swingline Loans as
specified in Section 2.08(a).
"Swingline Lender" means NationsBank, or such other
Bank as the Borrower has requested and as to which such
requested successor Swingline Lender and the Required Banks may
agree, and their respective successors and assigns. There shall
be no more than one Swingline Lender at any time.
"Swingline Loan" means a swingline revolving credit
loan made by the Swingline Lender pursuant to the provisions of
Section 2.08.
"Swingline Note" means the promissory note of the
Borrower in favor of the Swingline Lender evidencing the
Swingline Loans as provided pursuant to Section 2.08(d), as such
promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"Tangible Assets" means as the date of any
determination thereof the total amount of all assets of the
Borrower and its Restricted Subsidiaries (less depreciation,
depletion and other properly deductible valuation reserves)
after deducting good will, patents, trade names, trade marks,
copyrights, franchises, experimental expense, organizational
expense, unamortized debt discount and expense, deferred assets
other than prepaid insurance and prepaid taxes, the excess of
cost of shares acquired over book value of related assets and
such other assets as are properly classified as "intangible
assets" in accordance with generally accepted accounting
principles.
"Taxes" shall have such meaning as provided in
27
Section 2.16.
"Termination Date" means such term as defined in
Section 2.01, being initially April 30, 1998.
"Trade Letter of Credit" means any trade,
documentary or merchandise letter of credit issued for the
account of a Credit Party by an Issuing Bank pursuant to the
committed letter of credit subfacility provided in Section 2.07,
as such letter of credit may be amended, modified, extended,
renewed or replaced from time to time.
"Trade Letter of Credit Fees" means such term as
defined in Section 2.11(c).
"Trade LOC Committed Amount" means such term as
defined in Section 2.07(a).
"Trade LOC Obligations" means, at any time, the sum
of (i) the maximum amount which is, or at any time thereafter
may become, available to be drawn under Trade Letters of Credit
then outstanding, assuming compliance with all requirements for
drawings referred to in such Trade Letters of Credit plus (ii)
the aggregate amount of all drawings under Trade Letters of
Credit honored by the Issuing Bank but not theretofore
reimbursed. For purposes of clause (i) hereof, each Trade
Letter of Credit shall be deemed to be outstanding from the date
of issuance thereof until and including the earlier of (A) the
date which is thirty (30) days after the stated expiration date
of such Trade Letter of Credit or (B) the date on which such
Trade Letter of Credit is fully drawn.
"Unrestricted Subsidiary" means any Subsidiary
which is not a Restricted Subsidiary.
"Upfront Fee" means such term as defined in Section
2.11(a).
"Valuable Transfer" means, in respect of any
Guarantor, (i) all loans, advances or capital contributions made
to or for the benefit of such Guarantor with proceeds of
Extensions of Credit, (ii) all debt securities or other
obligations of such Guarantor acquired from such Guarantor or
retired by such Guarantor with proceeds of Extensions of Credit,
(iii) the fair market value of all property acquired with
proceeds of Extensions of Credit and transferred, absolutely and
not as collateral, to such Guarantor and (iv) all equity
securities of such Guarantor acquired from such Guarantor with
proceeds from Extensions of Credit.
"Voting Stock" means the voting stock or other
securities of any class or classes, the holders of which are
ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing
similar functions).
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1.02 Computation of Time Periods. For purposes of
computation of periods of time hereunder, the word "from" means
"from and including" and the words "to" and "until" each mean
"to but excluding."
1.03 Accounting Terms. Accounting terms used but
not otherwise defined herein shall have the meanings provided
by, and be construed in accordance with, generally accepted
accounting principles. References herein to "consolidating"
financial statements shall mean and include financial statements
for each business segment of the subject Person.
SECTION 2
CREDIT FACILITIES
2.01 Revolving Loan Commitment. Subject to and
upon the terms and conditions and relying upon the
representations and warranties herein set forth, each Bank
severally agrees, from time to time from the Closing Date until
April 30, 1998 (such date, as extended, if extended, in the sole
discretion of the Banks as hereinafter provided, is hereinafter
referred to as the "Termination Date") to make revolving credit
loans (each a "Committed Revolving Loan" and, collectively, the
"Committed Revolving Loans") to the Borrower for the purposes
hereinafter set forth; provided, however, that (i) with regard
to the Banks collectively, the amount of Committed Revolving
Loans outstanding shall not at any time exceed TWO HUNDRED
TWENTY-FIVE MILLION DOLLARS ($225,000,000) in the aggregate (as
such aggregate maximum amount may be reduced from time to time
as hereinafter provided, the "Revolving Committed Amount"), and
(ii) with regard to each Bank individually, each such Bank's pro
rata share of outstanding Committed Revolving Loans plus
Swingline Loans plus LOC Obligations shall not at any time
exceed such Bank's Revolving Committed Amount; and provided,
further, that notwithstanding anything herein to the contrary,
(A) the sum of Committed Revolving Loans plus Swingline Loans
plus LOC Obligations shall not at any time exceed (B) the lesser
of the aggregate Revolving Committed Amount or the Borrowing
Base. Committed Revolving Loans hereunder may consist of Base
Rate Loans, Eurodollar Loans or Adjusted CD Loans (or a
combination thereof) as the Borrower may request, and may be
repaid and reborrowed in accordance with the provisions hereof.
No more than 10 Interest Periods may be outstanding at any time.
The Borrower may, within 90 days prior to April 30, 1996 and
within 90 days prior to each anniversary date thereafter (April
30, 1996 and each anniversary date thereof being referred to as
an "Anniversary Date"), by notice to the Administrative Agent,
make written request of the Banks to extend the Termination Date
for an additional period of one year. The Administrative Agent
will give prompt notice to each of the Banks of its receipt of
any such request for extension of the Termination Date. Each
Bank shall make a determination not later than 30 days prior to
the then applicable Anniversary Date as to whether or not it
will agree to extend the Termination Date as requested;
provided, however, that failure by any Bank to make a timely
response to the Borrower's request for extension of the
Termination Date shall be deemed to constitute a refusal by the
Bank to extend the Termination Date. If, in response to a
29
request for an extension of the Termination Date, one or more
Banks shall fail to agree to the requested extension (the
"Disapproving Banks"), then provided that the requested
extension is approved by Banks holding at least 75% of the
Commitments hereunder (the "Approving Banks"), the credit
facility may be extended and continued at the option of the
Borrower at a lower aggregate amount equal to the Commitments
held by the Approving Banks. In any such case, (i) the
Termination Date relating to the Commitments held by the
Disapproving Banks shall remain as then in effect with repayment
of Obligations held by such Disapproving Banks being due on such
date and termination of their respective Commitments on such
date, (ii) the Termination Date relating to the Commitments held
by the Approving Banks shall be extended by an additional one
year period, and (iii) the Borrower may, at its own expense with
the assistance of the Administrative Agent, make arrangements
for another bank or financial institution reasonably acceptable
to the Administrative Agent to acquire, in whole or in part, the
Obligations and Commitments of the Disapproving Banks. Where
any such arrangements are made for another bank or financial
institution to acquire the Obligations and Commitments of a
Disapproving Bank, or any portion thereof, then upon payment of
the Obligations and termination of the Commitments relating
thereto, such Disapproving Bank shall promptly transfer and
assign, in whole or in part, as requested, without recourse (in
accordance with and subject to the provisions of Section 10.03),
all or part of its interests, rights and obligations under this
Credit Agreement to such bank or financial institution which
shall assume such assigned obligations (which assignee may be
another Bank, if a Bank accepts such assignment); provided, that
such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority.
2.02 Committed Revolving Loan Advances.
(a) Notices. Whenever the Borrower desires a
Committed Revolving Loan advance hereunder, it shall give
written notice (or telephone notice promptly confirmed in
writing) to the Administrative Agent (a "Notice of Borrowing")
not later than 10:00 A.M. (Charlotte, North Carolina time) on
the Business Day of the requested advance in the case of Base
Rate Loans, on the second Business Day prior to the requested
advance in the case of Adjusted CD Loans and on the third
Business Day prior to the requested advance in the case of
Eurodollar Loans. Each such notice shall be irrevocable and
shall specify (i) that a Committed Revolving Loan is requested,
(ii) the date of the requested advance (which shall be a
Business Day), (iii) the aggregate principal amount of Committed
Revolving Loans requested, and (iv) whether the Loan requested
shall consist of Base Rate Loans, Eurodollar Loans, Adjusted CD
Loans or a combination thereof, and if Eurodollar Loans and/or
Adjusted CD Loans are requested, the Interest Periods with
respect thereto. If the Borrower shall fail to specify in any
Notice of Borrowing (A) an applicable Interest Period in the
case of a Eurodollar Loan or an Adjusted CD Loan, then such
notice shall be deemed to be a request for an Interest Period of
one month or 30 days, respectively, or (B) the type of Committed
Revolving Loan requested, then such notice shall be deemed to be
a request for a Base Rate Loan hereunder. The Administrative
30
Agent shall as promptly as practicable give each Bank notice of
each requested Committed Revolving Loan advance, of such Bank's
pro rata share thereof and of the other matters covered in the
Notice of Borrowing.
(b) Minimum Amounts. Committed Revolving Loan
advances shall be in a minimum aggregate amount of $5,000,000
and integral multiples of $1,000,000 in excess thereof.
(c) Advances. Each Bank will make its pro rata
share of each Committed Revolving Loan advance available to the
Administrative Agent by 2:00 P.M. (Charlotte, North Carolina
time) on the date specified in the Notice of Borrowing by
deposit in U.S. dollars of immediately available funds at the
offices of the Administrative Agent in Charlotte, North
Carolina, or at such other address in the United States as the
Administrative Agent may designate in writing. All Committed
Revolving Loan advances shall be made by the Banks pro rata on
the basis of each Bank's share of the Revolving Committed
Amount. No Bank shall be responsible for the failure or delay
by any other Bank in its obligation to make Committed Revolving
Loan advances hereunder; provided, however, that the failure of
any Bank to fulfill its commitments hereunder shall not relieve
any other Bank of its commitments hereunder. Unless the
Administrative Agent shall have been notified by any Bank prior
to the date of any such Committed Revolving Loan advance that
such Bank does not intend to make available to the
Administrative Agent its portion of the Committed Revolving Loan
advance to be made on such date, the Administrative Agent may
assume that such Bank has made such amount available to the
Administrative Agent on the date of such Committed Revolving
Loan advance, and the Administrative Agent, in reliance upon
such assumption, may (in its sole discretion without any
obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by a Bank, the
Administrative Agent shall be entitled to recover such
corresponding amount from such Bank. If such Bank does not pay
such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent will promptly
notify the Borrower and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such
Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative
Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a per annum rate equal
to (i) if paid by such Bank, within two (2) Business Days of
making such corresponding amount available to the Borrower, the
overnight Federal Funds Effective Rate, and thereafter the Base
Rate, and (ii) if paid by the Borrower, the then applicable rate
calculated in accordance with Section 2.05.
2.03 Conversion. The Borrower shall have the
option, on any Business Day, to extend existing Loans into a
subsequent Interest Period or to convert Loans into Loans of
another type; provided, however, that (i) except as provided in
Section 2.13(iii), Eurodollar Loans and Adjusted CD Loans may be
31
converted into Loans of another type only on the last day of an
Interest Period applicable thereto, (ii) Eurodollar Loans and
Adjusted CD Loans may be extended, and Loans may be converted
into Eurodollar Loans or Adjusted CD Loans, only if no Default
or Event of Default is in existence on the date of extension or
conversion, (iii) Loans extended as, or converted into,
Eurodollar Loans or Adjusted CD Loans shall be in such minimum
amounts as provided in Section 2.02(b), and (iv) any request for
extension or conversion of a Eurodollar Loan or Adjusted CD Loan
which shall fail to specify an Interest Period shall be deemed
to be a request for an Interest Period of one month or 30 days,
respectively. Each such extension or conversion shall be
effected by the Borrower by giving written notice (or telephone
notice promptly confirmed in writing) to the Administrative
Agent (including requests for extensions and renewals, a "Notice
of Conversion") prior to 10:00 A.M. (Charlotte, North Carolina
time) on the Business Day of, in the case of Base Rate Loans, on
the second Business Day prior to, in the case of Adjusted CD
Loans, and on the third Business Day prior to, in the case of
Eurodollar Loans, the date of the proposed extension or
conversion, specifying the date of the proposed extension or
conversion, the Loans to be so extended or converted, the types
of Loans into which such Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect
thereto. Each request for extension or conversion shall be
deemed to be a reaffirmation by the Borrower that no Default or
Event of Default then exists and is continuing and that the
representations and warranties set forth in Section 4 are true
and correct in all material respects (except to the extent they
relate to an earlier period). In the event the Borrower fails
to request extension or conversion of any Eurodollar Loan or
Adjusted CD Loan in accordance with this Section, or any such
conversion or extension is not permitted by this Section, then
such Loans shall be automatically converted into Base Rate Loans
at the end of their Interest Period. The Administrative Agent
shall give each Bank notice as promptly as practicable of any
such proposed conversion affecting any Loans.
2.04 Repayment of the Committed Revolving Loans.
The Committed Revolving Loans shall be due and payable in full
on the Termination Date.
2.05 Interest on Committed Revolving Loans. The
Committed Revolving Loans shall bear interest at a per annum
rate equal to:
(a) Base Rate Loans. During such periods as
Committed Revolving Loans shall consist of Base Rate Loans, the
Base Rate;
(b) Eurodollar Loans. During such periods as
Committed Revolving Loans shall consist of Eurodollar Loans, the
sum of the Adjusted Eurodollar Rate plus the Applicable
Percentage;
(c) Adjusted CD Loans. During such periods as
Committed Revolving Loans shall consist of Adjusted CD Loans,
the sum of the Adjusted CD Rate plus the Applicable Percentage;
32
provided, however, that from and after any failure to
make any payment of principal or interest in respect of the
Obligations hereunder when due, whether at scheduled or
accelerated maturity or on account of any mandatory prepayment
(including any reimbursement obligations in respect of Letters
of Credit and requirement for cash collateral hereunder), the
principal of and, to the extent permitted by law, interest on,
the Committed Revolving Loans shall bear interest, payable on
demand, at a per annum rate two percent (2%) in excess of the
rate otherwise applicable hereunder. Interest on Committed
Revolving Loans shall be payable in arrears on each Interest
Payment Date.
2.06 Committed Revolving Notes. Committed
Revolving Loans by each Bank shall be evidenced by a duly
executed promissory note of the Borrower to each such Bank dated
as of the Closing Date in an original principal amount equal to
such Bank's Revolving Committed Amount and substantially in the
form of Schedule 2.06 (such promissory note, as amended,
modified, extended, renewed or replaced from time to time is
hereinafter referred to individually as a "Committed Revolving
Note" and collectively as the "Committed Revolving Notes").
2.07 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions
hereof and of the LOC Documents, if any, and any other terms and
conditions which the Issuing Bank may reasonably require, the
Banks will participate in the Existing Letters of Credit and in
the issuance by the Issuing Banks from time to time of such
Letters of Credit from the Closing Date until the Termination
Date as the Borrower or any other Credit Party may request in a
form acceptable to the Issuing Bank; provided, however, that (i)
the aggregate amount of Trade LOC Obligations shall not at any
time exceed $70,000,000 (the "Trade LOC Committed Amount"), (ii)
the aggregate amount of Standby LOC Obligations shall not at any
time exceed $10,000,000 (the "Standby LOC Committed Amount"),
(iii) the sum of Committed Revolving Loans plus Swingline Loans
plus LOC Obligations shall not at any time exceed the lesser of
the aggregate Revolving Committed Amount or the Borrowing Base
and (iv) Standby Letters of Credit shall be issued solely for
the purpose of supporting workers' compensation and other
insurance programs. Except as otherwise expressly agreed upon
by all the Banks, no Standby Letter of Credit shall have an
original expiry date more than one year from the date of
issuance and no Trade Letter of Credit shall have an original
expiry date more than 210 days following the date of issuance
thereof; provided, however, so long as no Default or Event of
Default has occurred and is continuing and subject to the other
terms and conditions to the issuance of Standby Letters of
Credit hereunder, the expiry dates of Standby Letters of Credit
will be extended annually on each anniversary date of their date
of issuance for an additional period not to exceed one year;
provided, further, that no Letter of Credit, whether Standby or
Trade, as originally issued or as extended, shall have an expiry
date extending beyond the Termination Date except that prior to
the Termination Date a Letter of Credit may be issued or
extended with an expiry date extending beyond the Termination
Date if, and to the extent that, the responsible Credit Party
33
shall provide cash collateral to the Issuing Bank on the date of
issuance or extension in an amount equal to the maximum amount
available to be drawn under such Letter of Credit. Each Letter
of Credit shall comply with the related LOC Documents. The
issuance and expiry date of each Letter of Credit shall be a
Business Day.
(b) Notice and Reports. The request for the
issuance of a Letter of Credit shall be submitted to the Issuing
Bank at least three (3) Business Days in the case of Standby
Letters of Credit and one (1) Business Day in the case of Trade
Letters of Credit, prior to the requested date of issuance. The
Issuing Banks will, at least quarterly and more frequently upon
request, provide to the Administrative Agent for dissemination
to the Banks a detailed report specifying the Letters of Credit
which are then issued and outstanding and any activity with
respect thereto which may have occurred since the date of the
prior report, and including therein, among other things, the
account party, the beneficiary, the face amount, expiry date as
well as any payment or expirations which may have occurred. The
Issuing Banks will further provide to the Administrative Agent
promptly upon request copies of the Letters of Credit. Each
Issuing Bank, by acceptance of its position as such,
acknowledges that the nature of the credit provided pursuant to
this Credit Agreement necessitates that the Administrative Agent
be kept informed as to the nature and extent of credit extended
hereunder, including particularly LOC Obligations. To that end
each Issuing Bank agrees to provide to the Administrative Agent
at least weekly, and more frequently upon request, a summary
report of the nature and extent of LOC Obligations then
outstanding.
(c) Participations. Each Bank, with respect to the
Existing Letter of Credit, hereby purchases a participation in
such Existing Letters of Credit and with respect to Letters of
Credit issued on or after the Closing Date, upon issuance of a
Letter of Credit, shall be deemed to have purchased without
recourse a risk participation from the Issuing Bank in such
Letter of Credit and the obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal to
its pro rata share of the obligations under such Letter of
Credit (based on the proportion which each such Bank's Trade LOC
Committed Amount or Standby LOC Committed Amount bears to the
aggregate Trade LOC Committed Amount or aggregate Standby LOC
Committed Amount, as appropriate) and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and
not as surety, and be obligated to pay to the Issuing Bank
therefor and discharge when due, its pro rata share of the
obligations arising under such Letter of Credit. Without
limiting the scope and nature of each Bank's participation in
any Letter of Credit, to the extent that the Issuing Bank has
not been reimbursed as required hereunder or under any such
Letter of Credit, each such Bank shall pay to the Issuing Bank
its pro rata share of such unreimbursed drawing in same day
funds on the day of notification by the Issuing Bank of an
unreimbursed drawing pursuant to the provisions of subsection
(d) hereof. The obligation of each Bank to so reimburse the
Issuing Bank shall be absolute and unconditional and shall not
be affected by the occurrence of a Default, an Event of Default
34
or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of the Borrower
to reimburse the Issuing Bank under any Letter of Credit,
together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing
under any Letter of Credit, the Issuing Bank will promptly
notify the Borrower and the responsible Credit Party. Unless
the Borrower or responsible Credit Party shall immediately
notify the Issuing Bank of its intent to otherwise reimburse the
Issuing Bank, the Borrower shall be deemed to have requested a
Committed Revolving Loan in the amount of the drawing as
provided in subsection (e) hereof, the proceeds of which will be
used to satisfy the reimbursement obligations. The appropriate
Credit Party shall reimburse the Issuing Bank on the day of
drawing under any Letter of Credit (either with the proceeds of
a Committed Revolving Loan obtained hereunder or otherwise) in
same day funds as provided herein or in the LOC Documents. If
the appropriate Credit Party shall fail to reimburse the Issuing
Bank as provided hereinabove, the unreimbursed amount of such
drawing shall bear interest at a per annum rate equal to the
Base Rate plus two percent (2%). The Credit Parties'
reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights
of set-off, counterclaim or defense to payment the Credit
Parties may claim or have against the Issuing Bank, the
Administrative Agent, the Banks, the beneficiary of the Letter
of Credit drawn upon or any other Person, including without
limitation any defense based on any failure of the Credit
Parties to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The
Issuing Bank will promptly notify the other Banks of the amount
of any unreimbursed drawing and each Bank shall promptly pay to
the Administrative Agent for the account of the Issuing Bank in
Dollars and in immediately available funds, the amount of such
Bank's pro rata share of such unreimbursed drawing. Such
payment shall be made on the day such notice is received by such
Bank from the Issuing Bank if such notice is received at or
before 2:00 p.m., Charlotte, North Carolina time, otherwise such
payment shall be made at or before 12:00 Noon, Charlotte, North
Carolina time, on the Business Day next succeeding the day such
notice is received. If such Bank does not pay such amount to
the Issuing Bank in full upon such request, such Bank shall, on
demand, pay to the Administrative Agent for the account of the
Issuing Bank interest on the unpaid amount during the period
from the date of such drawing until such Bank pays such amount
to the Issuing Bank in full at a rate per annum equal to, if
paid within two (2) Business Days of the date of drawing, the
Federal Funds Effective Rate and thereafter at a rate equal to
the Base Rate. Each Bank's obligation to make such payment to
the Issuing Bank, and the right of the Issuing Bank to receive
the same, shall be absolute and unconditional, shall not be
affected by any circumstance whatsoever and without regard to
the termination of this Credit Agreement or the Commitments
hereunder, the existence of a Default or Event of Default or the
acceleration of the Obligations hereunder and shall be made
without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment
by a Bank to the Issuing Bank, such Bank shall, automatically
35
and without any further action on the part of the Issuing Bank
or such Bank, acquire a participation in an amount equal to such
payment (excluding the portion of such payment constituting
interest owing to the Issuing Bank) in the related unreimbursed
drawing portion of the LOC Obligation and in the interest
thereon and in the related LOC Documents, and shall have a claim
against the respective Credit Parties with respect thereto.
(e) Repayment with Committed Revolving Loans. On
any day on which the Borrower shall have requested, or been
deemed to have requested, a Committed Revolving Loan advance to
reimburse a drawing under a Letter of Credit, the Administrative
Agent shall give notice to the Banks that a Committed Revolving
Loan has been requested or deemed requested in connection with a
drawing under a Letter of Credit, in which case a Committed
Revolving Loan advance comprised solely of Base Rate Loans (each
such borrowing, a "Mandatory Borrowing") shall be immediately
made from all Banks (without giving effect to any termination of
the Commitments pursuant to Section 8.02) pro rata based on each
of the Banks' respective Revolving Loan Commitments (determined
before giving effect to any termination of the Commitments
pursuant to Section 8.02) and the proceeds thereof shall be paid
directly to the appropriate Issuing Bank(s) for application to
the respective LOC Obligations. Each such Bank hereby
irrevocably agrees to make such Committed Revolving Loans
immediately upon any such request or deemed request on account
of each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the same such date
notwithstanding (i) the amount of Mandatory Borrowing may not
comply with the minimum amount for advances of Committed
Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 2.09 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for Committed
Revolving Loan to be made by the time otherwise required in
Section 2.02(a), (v) the date of such Mandatory Borrowing, or
(vi) any reduction in the Revolving Committed Amount after any
such Letter of Credit may have been drawn upon; provided,
however, that in the event any such Mandatory Borrowing should
be less than the minimum amount for advances of Committed
Revolving Loans otherwise provided in Section 2.02(b), the
Borrower shall pay to the Agent for its own account an
administrative fee of $500. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any other Credit Party), then each
such Bank hereby agrees that it shall forthwith purchase (as of
the date the Mandatory Borrowing would otherwise have occurred,
but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Issuing
Bank(s) such participations in the outstanding LOC Obligations
as shall be necessary to cause each such Bank to share in such
LOC Obligations ratably based upon its respective Revolving Loan
Commitments (determined before giving effect to any termination
of the Commitments pursuant to Section 8.02), provided that at
the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Bank shall be required
to pay to the Issuing Bank interest on the principal amount of
36
participation purchased for each day from and including the day
upon which the Mandatory Borrowing would otherwise have occurred
to but excluding the date of payment for such participation, at
the rate equal to, if paid within two (2) Business Days of the
date of the Mandatory Borrowing, the Federal Funds Effective
Rate, and thereafter at a rate equal to the Base Rate.
(f) Modification, Extension. The issuance of any
supplement, modification, amendment, renewal, or extension to
any Letter of Credit shall, for purposes hereof, be treated in
all respects the same as the issuance of a new Letter of Credit
hereunder.
(g) Uniform Customs and Practices. The Issuing
Bank may have the Letters of Credit be subject to The Uniform
Customs and Practice for Documentary Credits, as published as of
the date of issue by the International Chamber of Commerce (the
"UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
(h) Provisions Relating to Trade Letters of Credit.
(i) Each of the respective Credit Parties agrees to procure or
to cause the beneficiaries of each Trade Letter of Credit to
procure promptly any necessary import and export or other
licenses for the import or export or shipping of any goods
referred to in or pursuant to a Trade Letter of Credit and to
comply and to cause the beneficiaries to comply with all foreign
and domestic governmental regulations with respect to the
shipment and warehousing of such goods or otherwise relating to
or affecting such Trade Letter of Credit, including governmental
regulations pertaining to transactions involving designated
foreign countries or their nationals, and to furnish such
certificates in that respect as the Issuing Bank thereof may at
any time reasonably require, and to keep such goods adequately
covered by insurance in amounts, with carriers and for such
risks as shall be customary in the industry and to cause the
Issuing Bank's interest to be endorsed on such insurance and to
furnish the Issuing Bank at its request with reasonable evidence
thereof. Should such insurance (or lack thereof) upon said
goods for any reason not be reasonably satisfactory to such
Issuing Bank, the Issuing Bank may (but is not obligated to)
obtain, at such Credit Party's expense, insurance satisfactory
to the Issuing Bank.
(ii) In connection with each Trade Letter of
Credit, neither any Issuing Bank nor any of their correspondents
shall be responsible for: (A) the existence, character, quality,
quantity, condition, packing, value or delivery of the property
purporting to be represented by documents; (B) any difference in
character, quality, quantity, condition or value of the property
from that expressed in documents; (C) the time, place, manner or
order in which shipment of the property is made; (D) partial or
incomplete shipment referred to in such credit; (E) the
character, adequacy or responsibility of any insurer, or any
other risk connected with insurance; (F) any deviation from
instructions, delay, default or fraud by the beneficiary or any
one else in connection with the property or the shipping
thereof; (G) the solvency, responsibility or relationship to the
property of any party issuing any documents in connection with
37
the property; (H) delay in arrival or failure to arrive of
either the property or any of the documents relating thereto;
(I) delay in giving or failure to give notice of arrival or any
other notice; (J) any breach of contract between the shippers or
vendors and the respective Credit Party; (K) any laws, customs,
and regulations which may be effective in any jurisdiction where
any negotiation and/or payment of such Trade Letter of Credit
occurs; (L) failure of documents (other than documents required
by the terms of the Trade Letter of Credit) to accompany any
draft at negotiation; or (M) failure of any person to note the
amount of any document or drafts on the reverse of such Trade
Letter of Credit or to surrender or to take up such Trade Letter
of Credit or to forward documents other than documents required
by the terms of the Trade Letter of Credit. In connection with
each Trade Letter of Credit, no Issuing Bank shall be
responsible for any error, neglect or default of any of their
correspondents. None of the above shall affect, impair or
prevent the vesting of any of the Issuing Bank's rights or
powers hereunder. If a Trade Letter of Credit provides that
payment is to be made by the Issuing Bank's correspondent,
neither the Issuing Bank nor such correspondent shall be
responsible for the failure of any of the documents specified in
such Trade Letter of Credit to come into the Issuing Bank's
hands, or for any delay in connection therewith, and Credit
Parties respective obligations to make reimbursements shall not
be affected by such failure or delay in the receipt of any such
documents.
(iii) Notwithstanding but without limiting any of the
foregoing, with respect to any Trade Letter of Credit, the Credit
Parties and the Banks shall have a claim against the respective
Issuing Bank, and such Issuing Bank shall be liable to such Credit
Parties and the Banks, to the extent, but only to the extent, of
any direct, as opposed to indirect or consequential, damages
suffered by the Credit Parties and the Banks caused by the Issuing
Bank's willful misconduct or gross negligence.
38
2.08 Swingline Loan Subfacility.
(a) Swingline Commitment. Subject to and upon
the terms and conditions and relying upon the representations
and warranties herein set forth, the Swingline Lender, in its
individual capacity, agrees to make certain revolving credit
loans to the Borrower (each a "Swingline Loan" and,
collectively, the "Swingline Loans") from time to time from the
Closing Date until the Termination Date for the purposes
hereinafter set forth; provided, however, (i) the aggregate
amount of Swingline Loans outstanding at any time shall not
exceed TEN MILLION DOLLARS ($10,000,000) (the "Swingline
Committed Amount"), and (ii) the sum of Committed Revolving
Loans plus Swingline Loans plus LOC Obligations outstanding at
any time shall not exceed the lesser of the Revolving Committed
Amount or the Borrowing Base. Swingline Loans hereunder may
consist of Base Rate Loans or Fed Funds Swingline Loans as the
Borrower may request and may be repaid and reborrowed in
accordance with the provisions hereof.
(b) Swingline Loan Advances.
(i) Notices; Disbursement. Whenever the
Borrower desires a Swingline Loan advance hereunder it shall
give written notice (or telephone notice promptly confirmed in
writing) to the Swingline Lender and to the Administrative Agent
(not later than 12:00 noon (Charlotte, North Carolina time) on
the Business Day of the requested Swingline Loan advance. Each
such notice shall be irrevocable and shall specify (A) that a
Swingline Loan advance is requested, (B) the date of the
requested Swingline Loan advance (which shall be a Business
Day), (C) the aggregate principal amount of the Swingline Loan
advance requested and (D) whether the Swingline Loan shall
consist of Base Rate Loans or Fed Funds Swingline Loans.
(ii) Minimum Amounts. Each Swingline Loan advance
shall be in a minimum principal amount of $250,000 and integral
multiples of $100,000 in excess thereof.
(iii) Repayment of Swingline Loans. Each
Swingline Loan advance shall be due and payable on the earliest
of (A) 29 days from the date of advance thereof, (B) the date of
the next Committed Revolving Loan advance, or (C) the
Termination Date. If, and to the extent, any Swingline Loan
advances shall be outstanding on the date of any Committed
Revolving Loan advance, such Swingline Loans shall first be
repaid from the proceeds of such Committed Revolving Loan
advance prior to distribution to the Borrower. If, and to the
extent, Committed Revolving Loans are not requested prior to the
39
Termination Date or the end of any such 29 day period from the
date of any such Swingline Loan advance, the Borrower shall be
deemed to have requested a Committed Revolving Loan comprised
solely of Base Rate Loans in the amount of such Swingline Loan
advance then outstanding, the proceeds of which shall be used to
repay the Swingline Lender for such Swingline Loan. In
addition, the Swingline Lender may, at any time, in its sole
discretion, by written notice to the Borrower and the
Administrative Agent, demand repayment of its Swingline Loans by
way of a Committed Revolving Loan advance, in which case the
Borrower shall be deemed to have requested a Committed Revolving
Loan advance comprised solely of Base Rate Loans in the amount
of such Swingline Loans; provided, however, that any such demand
shall be deemed to have been given one Business Day prior to the
Termination Date and upon the occurrence of any Event of Default
described in Section 8.01(f) and also upon acceleration of the
Obligations hereunder, whether on account of an Event of Default
described in Section 8.01(f) or any other Event of Default, and
the exercise of remedies in accordance with the provisions of
Section 8.02 hereof (each such Committed Revolving Loan advance
made on account of any such deemed request therefor as provided
herein being hereinafter referred to as a "Mandatory
Borrowing"). Each Bank hereby irrevocably agrees to make such
Committed Revolving Loans promptly upon any such request or
deemed request on account of each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and
on the same such date notwithstanding (I) the amount of
Mandatory Borrowing may not comply with the minimum amount for
advances of Committed Revolving Loans otherwise required
hereunder, (II) whether any conditions specified in Section 2.09
are then satisfied, (III) whether a Default or an Event of
Default then exists, (IV) failure for any such request or deemed
request for Committed Revolving Loan to be made by the time
otherwise required in Section 2.02(a), (V) the date of such
Mandatory Borrowing, or (VI) any reduction in the Revolving
Committed Amount or termination of the Commitments relating
thereto immediately prior to such Mandatory Borrowing or
contemporaneous therewith. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any other Credit Party), then each
Bank hereby agrees that it shall forthwith purchase promptly
upon demand (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such
purchase) from the Swingline Lender such participations in the
outstanding Swingline Loans as shall be necessary to cause each
such Bank to share in such Swingline Loans ratably based upon
its respective Revolving Loan Commitment (determined before
giving effect to any termination of the Commitments pursuant to
Section 8.02), provided that (A) all interest payable on the
Swingline Loans shall be for the account of the Swingline Lender
until the date as of which the respective participation is
purchased, and (B) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Bank
shall be required to pay to the Swingline Lender interest on the
principal amount of participation purchased for each day from
and including the day upon which the Mandatory Borrowing would
40
otherwise have occurred to but excluding the date of payment for
such participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Borrowing, the
Federal Funds Effective Rate, and thereafter at a rate equal to
the Base Rate.
(c) Interest on Swingline Loans. Swingline Loans
shall bear interest at a per annum rate equal to
(i) Base Rate Loans. During such periods as a
Swingline Loan shall consist of Base Rate Loans, the Base Rate;
and
(ii) Fed Funds Swingline Loans. During such
periods as a Swingline Loan shall consist of Fed Funds Swingline
Loans, the sum of the Adjusted Federal Funds Rate plus the
Applicable Percentage;
provided, however, that from and after any failure
to make any payment of principal or interest in respect of any
of the Loans hereunder when due, whether at scheduled or
accelerated maturity or on account of any mandatory prepayment,
the principal of and, to the extent permitted by law, interest
on, Swingline Loans shall bear interest, payable on demand, at a
per annum rate two percent (2%) in excess of the Base Rate.
Interest on Swingline Loans shall be payable in arrears on each
Interest Payment Date.
(d) Swingline Note. The Swingline Loans shall be
evidenced by a duly executed promissory note of the Borrower to
the Swingline Lender dated as of the Closing Date in the
original amount of the Swingline Committed Amount and
substantially in the form of Schedule 2.08(d) (as amended,
modified, supplemented, extended, renewed or replaced from time
to time, the "Swingline Note").
2.09 Conditions of Lending.
(a) Conditions. The obligation to make any
Extensions of Credit hereunder is subject to satisfaction of the
following conditions:
41
(i) receipt of a Notice of Borrowing pursuant to
Section 2.02(a) or request for Letter of Credit pursuant to
Section 2.07;
(ii) the representations and warranties set forth
in Section 5 hereof shall be true and correct in all material
respects as of such date (except for those which expressly
relate to an earlier date);
(iii) immediately after giving effect to the
requested Extension of Credit, (A) with regard to each Bank
individually, the Bank's pro rata share of the outstanding
Committed Revolving Loans plus Swingline Loans plus LOC
Obligations shall not exceed such Bank's Revolving Committed
Amount, and (B) with regard to the Banks collectively, (I) the
sum of Committed Revolving Loans plus Swingline Loans plus LOC
Obligations then outstanding shall not exceed the lesser of the
aggregate Revolving Committed Amount or the Borrowing Base, (II)
the aggregate amount of Trade LOC Obligations shall not exceed
the Trade LOC Committed Amount, (III) the aggregate amount of
Standby LOC Obligations shall not exceed the Standby LOC
Committed Amount, and (IV) the aggregate amount of Swingline
Loans shall not exceed the Swingline Committed Amount; and
(iv) no Default or Event of Default shall exist
and be continuing either prior to or after giving effect thereto.
(b) Reaffirmation. Each request for a Committed
Revolving Loan advance pursuant to a Notice of Borrowing or a
Notice of Conversion, for a Swingline Loan advance pursuant to a
Notice of Borrowing and for issuance, extension or modification
of a Letter of Credit shall be deemed to be representation and
warranty of the correctness of the matters specified in this
subsections (a)(ii), (iii) and (iv) hereof.
2.10 Termination of Commitments. The Borrower may
from time to time permanently terminate the Revolving Committed
Amount and/or the respective LOC Committed Amounts in whole or
in part (in minimum aggregate amounts of $10,000,000 and
integral multiples of $1,000,000 in excess thereof) upon 3
Business Days' prior written notice to the Administrative Agent.
2.11 Fees.
42
(a) Upfront Fee. The Borrower agrees to pay in
immediately available funds to the Administrative Agent for the
benefit of the Banks on or before the Closing Date an upfront
fee (the "Upfront Fee") in the amounts provided in the letter
agreement dated as of January 20, 1995 between the Borrower and
the Bank.
(b) Commitment Fee. In consideration of the
Commitments by the Banks hereunder, the Borrower agrees to pay
to the Administrative Agent quarterly in arrears on the 15th day
following the last day of each of the Borrower's fiscal quarters
for the benefit of the Banks a commitment fee (the "Commitment
Fee") of one-fourth of one percent (q%) per annum (i) to each
Bank other than the Swingline Lender, on each such Bank's pro
rata share of the average daily unused amount of the Revolving
Committed Amount for such prior quarter and (ii) to the
Swingline Lender, on the Swingline Lender's pro rata share of
the average daily unused amount of the Revolving Committed
Amount for such prior period adjusted as provided below for the
average daily amount of Swingline Loans outstanding during such
period. For purposes of computation of the Commitment Fee,
Committed Revolving Loans and LOC Obligations shall be
considered as usage, but Swingline Loans shall not be considered
as usage for any Banks other than the Swingline Lender.
(c) Letter of Credit Fees.
(i) Standby Letter of Credit Fee. In
consideration of the issuance of Standby Letters of Credit
hereunder, the Borrower or other Credit Party agrees to pay to
the Issuing Bank a fee (the "Standby Letter of Credit Fee")
equal to the Applicable Percentage per annum on the average
daily maximum amount available to be drawn under each such
Letter of Credit from the date of issuance to the date of
expiration. Of such Standby Letter of Credit Fee, the Issuing
Bank shall retain for its own account without sharing by the
other Banks one-eighth of one percent (9%) per annum thereon and
shall promptly pay over to the Administrative Agent for the
ratable benefit of the Banks (including the Issuing Bank) the
remainder thereof. The Standby Letter of Credit Fee will be
payable quarterly in arrears on the 15th day following the last
day of each of the Borrower's fiscal quarters.
(ii) Trade Letter of Credit Fee. In
consideration of the issuance of Trade Letters of Credit
hereunder, the Borrower or other Credit Party agrees to pay to
the Issuing Bank a fee (the "Trade Letter of Credit Fee") equal
to one-fourth of one percent (q%) of the amount of each drawing
under any such Letter of Credit or such lesser amount as may be
agreed upon by the Issuing Bank and the Borrower or other Credit
Party. Of such Trade Letter of Credit Fee, the Issuing Bank
43
shall pay over to the Administrative Agent for the ratable
benefit of the Banks (including the Issuing Bank) one-eighth of
one percent (9%) thereof and the Issuing Bank may retain for its
own account without sharing by the other Banks the amount in
excess thereof, if any. The Trade Letter of Credit Fee will be
collected by the Issuing Bank on the date of each drawing, the
Banks' portion of which will be paid over to the Administrative
Agent quarterly on the last day of each calendar quarter for
distribution to the Banks (including the Issuing Bank). Payment
to the Administrative Agent of the Banks' portion of the Trade
Letter of Credit Fee will be accompanied by a report providing
the appropriate information necessary for computation of such
Fee.
(iii) Issuing Bank Fees. In addition to the
Standby Letter of Credit Fees and Trade Letter of Credit Fees
payable pursuant to subsections (i) and (ii) above, the Borrower
shall pay to the Issuing Bank for its own account without
sharing by the other Banks the customary charges from time to
time of the Issuing Bank with respect to the issuance,
amendment, transfer, administration, cancellation and conversion
of, and drawings under, such Letters of Credit (collectively,
the "Issuing Bank Fees").
2.12 Prepayments.
(a) Voluntary Prepayments. The Borrower shall
have the right to prepay Loans in whole or in part from time to
time without premium or penalty; provided, however, that (A)
Eurodollar Loans and Adjusted CD Loans may only be prepaid on
the last day of an Interest Period applicable thereto, and (B)
each such partial prepayment shall be a minimum principal amount
of $5,000,000 and integral multiples of $1,000,000 in excess
thereof (or the amount then outstanding, if less). Amounts
prepaid on the Loans may be reborrowed in accordance with the
provisions hereof. If the Borrower shall fail to specify the
manner of application, prepayments shall be applied first to
Base Rate Loans, then to Eurodollar Loans and Adjusted CD Loans
in direct order of their Interest Period maturities.
(b) Mandatory Prepayments. If at any time (i) the
sum of Committed Revolving Loans plus Swingline Loans plus LOC
Obligations shall exceed the lesser of the aggregate Revolving
Committed Amount or the Borrowing Base, (ii) the aggregate
amount of Trade LOC Obligations shall exceed the Trade LOC
Committed Amount, (iii) the aggregate amount of Standby LOC
Obligations shall exceed the Standby LOC Committed Amount, or
(iv) the aggregate amount of the Swingline Loans shall exceed
the Swingline Committed Amount, then in any such instance the
Borrower shall immediately make payment on the Loans (or in
respect of the LOC Obligations) in an amount equal to the
44
deficiency. In the case of a mandatory payment required on
account of subsections (ii), (iii) or (iv) the amount required
to be paid hereby shall serve to temporarily reduce the
Revolving Committed Amount (for purposes of borrowing
availability hereunder, but not for purposes of computation of
fees) by the amount of the payment required until such time as
the situation described in subsection (ii), (iii) or (iv) shall
no longer exist. Payments made hereunder shall be applied to
Swingline Loans, then to Committed Revolving Loans and then to a
cash collateral account in respect of the LOC Obligations, and
with respect to the types of Loans, first to Base Rate Loans and
then to Eurodollar Loans and Adjusted CD Loans in direct order
of their Interest Period maturities.
(c) Notice. The Borrower will provide notice to
the Administrative Agent of any prepayment by 10:00 a.m.
(Charlotte, North Carolina time) on the date of prepayment.
2.13 Increased Costs, Illegality, etc. In the
event any Bank shall determine (which determination shall be
final and conclusive and binding on all the parties hereto
absent manifest error) that:
(i) Unavailability. On any date for determining
the appropriate Adjusted Eurodollar Rate or Adjusted CD Rate for
any Interest Period, that by reason of any changes arising on or
after the date of this Credit Agreement affecting the interbank
Eurodollar market or the certificate of deposit market, dollar
deposits in the principal amount requested are not generally
available in the interbank Eurodollar Market, in the case of
Eurodollar Loans, or quotes for determination of the Adjusted CD
Rate are unavailable, in the case of Adjusted CD Loans, or
adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the
definition of Adjusted Eurodollar Rate or Adjusted CD Rate,
respectively; then Eurodollar Loans or Adjusted CD Loans, as
appropriate, will no longer be available, and request for a
Eurodollar Loan or Adjusted CD Loans shall be deemed requests
for Base Rate Loans, until such time as such Bank shall notify
the Borrower that the circumstances giving rise thereto no
longer exist.
(ii) Increased Costs. At any time that such Bank
shall incur increased costs or reductions in the amounts
received or receivable hereunder with respect to any Eurodollar
Loans or Adjusted CD Loans because of (x) any change since the
date of this Credit Agreement in any applicable law,
governmental rule, regulation, guideline or order (or in the
interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation,
guideline or order) including without limitation the imposition,
45
modification or deemed applicability of any reserves, deposits
or similar requirements as related to Eurodollar Loans or
Adjusted CD Loans (such as, for example, but not limited to, a
change in official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent
included in the computation of the Adjusted Eurodollar Rate or
Adjusted CD Rate, as appropriate) and/or (y) other circumstances
affecting such Bank, the certificate of deposit market, the
interbank Eurodollar market or the position of such Bank in such
market; then the Borrower shall pay to such Bank promptly upon
written demand therefor, such additional amounts (in the form of
an increased rate of, or a different method of calculating,
interest or otherwise as such Bank may determine in its sole
discretion) as may be required to compensate such Bank for such
increased costs or reductions in amounts receivable hereunder
(written notice as to the additional amounts owed to such Bank,
showing the basis for calculation thereof, shall, absent
manifest error, be final and conclusive and binding on all
parties hereto; provided, however, that such determinations are
made on a reasonable basis).
(iii) Illegality. At any time, that the making or
continuance of any Eurodollar Loan has become unlawful by
compliance by such Bank in good faith with any law, governmental
rule, regulation, guideline or order (or would conflict with any
such governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply
therewith would not be unlawful), or has become impractical as a
result of a contingency occurring after the date of this Credit
Agreement which materially and adversely affects the interbank
Eurodollar market; then Eurodollar Loans will no longer be
available, requests for Eurodollar Loans shall be deemed
requests for Base Rate Loans and the Borrower may, and upon
direction of the Bank, shall, as promptly as possible and, in
any event within the time period required by law, have any such
Eurodollar Loans then outstanding converted into Base Rate Loans.
2.14 Capital Adequacy. If after the date hereof,
any Bank or any parent company of a Bank (a "Parent Company")
has determined that the adoption or effectiveness of any
applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank or Parent
Company with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect
of reducing the rate of return on such Bank's or Parent
Company's capital or assets as a consequence of its commitments
or obligations hereunder to a level below that which such Bank
or Parent Company could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration
such Bank's or Parent Company's policies with respect to capital
adequacy), then from time to time, within 15 days after demand
46
by such Bank, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for
such reduction. Upon determining in good faith that any
additional amounts will be payable pursuant to this Section,
such Bank will give prompt written notice thereof to the
Borrower, which notice shall set forth the basis of the
calculation of such additional amounts, although the failure to
give any such notice shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to
this Section. Determination by any such Bank of amounts owing
under this Section shall, absent manifest error, be final and
conclusive and binding on the parties hereto; provided, however,
that such determinations are made on a reasonable basis.
Failure on the part of any Bank to demand compensation for any
period hereunder shall not constitute a waiver of such Bank's
rights to demand any such compensation in such period or in any
other period.
2.15 Compensation. The Borrower shall compensate
each Bank, upon its written request (which request shall set
forth the basis for requesting such compensation), for all
reasonable losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of
the liquidation or reemployment of deposits or other funds
required by the Bank to fund its Eurodollar Loans or Adjusted CD
Loans) which such Bank may sustain:
(i) if for any reason (other than a default by such
Bank or the Administrative Agent) a borrowing of Eurodollar
Loans or Adjusted CD Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion;
(ii) if any repayment or conversion of any
Eurodollar Loan or Adjusted CD Loan occurs on a date which is
not the last day of an Interest Period applicable thereto
including without limitation in connection with any demand,
acceleration or otherwise;
(iii) if any prepayment of any Eurodollar Loan or
Adjusted CD Loan is not made on any date specified in a notice
of prepayment given by the Borrower; or
(iv) as a consequence of (x) any other default by
the Borrower to repay its Loans when required by the terms of
this Credit Agreement or (y) an election made pursuant to this
Section.
47
Calculation of all amounts payable to a Bank under
this Section shall be made as though the Bank has actually
funded its relevant Eurodollar Loan or Adjusted CD Loan through
the purchase of a Eurodollar deposit bearing interest at the
Eurodollar Rate or a certificate of deposit bearing interest at
the Adjusted CD Rate, as appropriate, in an amount equal to the
amount of that Loan, having a maturity comparable to the
relevant Interest Period and in the case of Eurodollar Loans,
through the transfer of such Eurodollar deposit from an offshore
office of that Bank to a domestic office of that Bank in the
United States of America; provided, however, that each Bank may
fund each of its Eurodollar Loans in any manner it sees fit and
the foregoing assumption shall be utilized only for the
calculation of amounts payable under this Section.
2.16 Net Payments. All payments made by the
Borrower hereunder will be made without setoff or counterclaim.
Promptly upon notice from any Bank to the Borrower, the Borrower
will pay, prior to the date on which penalties attach thereto,
all present and future income, stamp and other taxes, levies, or
costs and charges whatsoever imposed, assessed, levied or
collected on or in respect of a Loan solely as a result of the
interest rate being determined by reference to the Adjusted
Eurodollar Rate or Adjusted CD Rate, as appropriate, and/or the
provisions of this Credit Agreement relating to the Adjusted
Eurodollar Rate or Adjusted CD Rate, as appropriate, and/or the
recording, registration, notarization or other formalization of
any thereof and/or any payments of principal, interest or other
amounts made on or in respect of a Loan when the interest rate
is determined by reference to the Adjusted Eurodollar Rate or
Adjusted CD Rate (all such taxes, levies, costs and charges
being herein collectively call "Taxes"), provided that Taxes
shall not include taxes imposed on or measured by the overall
net income of such Bank by the United States of America or any
political subdivision or taxing authority thereof or therein, or
taxes on or measured by the overall net income of any foreign
office, branch or Subsidiary of such Bank by any foreign
country of subdivision thereof in which that office, branch or
Subsidiary is doing business. The Borrower shall also pay such
additional amounts equal to increases in taxes payable by such
Bank described in the foregoing proviso which increases are
attributable to payments made by the Borrower described in the
immediately preceding sentence of this Section. Promptly after
the date on which payment of any such Tax is due pursuant to
applicable law, the Borrower will at the request of such Bank,
furnish to such Bank evidence, in form and substance
satisfactory to such Bank, that the Borrower has met its
obligations under this Section. The Borrower will indemnify
such Bank against, and reimburse such Bank on demand for, any
Taxes, as determined by such Bank in its good faith discretion.
Such Bank shall provide the Borrower with appropriate receipts
for any payments or reimbursements made by the Borrower pursuant
to this Section.
48
2.17 Indemnification; Nature of Issuing Bank's Duties.
(a) In addition to its other obligations under
Sections 2.07, the Borrower hereby agrees to protect, indemnify,
pay and save each Issuing Bank harmless from and against any and
all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees) that
the Issuing Bank may incur or be subject to as a consequence,
direct or indirect, of (A) the issuance of any Letter of Credit
or (B) the failure of the Issuing Bank to honor a drawing under
a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or
omissions, herein called "Government Acts").
(b) As between the Borrower and the Issuing Bank,
the Borrower shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. The
Issuing Bank shall not be responsible: (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, that may prove to be invalid or ineffective
for any reason; (iii) for failure of the beneficiary of a Letter
of Credit to comply fully with conditions required in order to
draw upon a Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (v) for errors in interpretation of
technical terms; (vi) for any loss or delay in the transmission
or otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (vii)
for any consequences arising from causes beyond the control of
the Issuing Bank, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the
vesting of the Issuing Bank's rights or powers hereunder.
(c) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, any
action taken or omitted by the Issuing Bank, under or in
connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put
such Issuing Bank under any resulting liability to the Borrower.
It is the intention of the parties that this Credit Agreement
shall be construed and applied to protect and indemnify the
Issuing Bank against any and all risks involved in the issuance
of the Letters of Credit, all of which risks are hereby assumed
by the Borrower, including, without limitation, any and all
risks of the acts or omissions, whether rightful or wrongful, of
49
any present or future Government Acts. The Issuing Bank shall
not, in any way, be liable for any failure by the Issuing Bank
or anyone else to pay any drawing under any Letter of Credit as
a result of any Government Acts or any other cause beyond the
control of the Issuing Bank.
(d) Nothing in this Section 2.17 is intended to
limit the reimbursement obligation of the Borrower contained in
Section 2.07(d) hereof. The obligations of the Borrower under
this Section 2.17 shall survive the termination of this Credit
Agreement. No act or omissions of any current or prior
beneficiary of a Letter of Credit shall in any way affect or
impair the rights of the Issuing Bank to enforce any right,
power or benefit under this Credit Agreement.
(e) Notwithstanding anything to the contrary
contained in this Section 2.17, the Borrower shall have no
obligation to indemnify any Issuing Bank in respect of any
liability incurred by such Issuing Bank arising solely out of
the gross negligence or willful misconduct of the Issuing Bank,
as determined by a court of competent jurisdiction.
2.18 Change of Lending Office. (a) Each Bank
agrees that, upon the occurrence of any event giving rise to the
operation of Section 2.13(ii) or (iii) or 2.16, it will, if
requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate another
lending office for any Loans affected by such event, provided
that such designation is made on such terms that such Bank and
its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of any such Section. Except
in the case of a change of lending office made at the request of
the Borrower, no change in lending office will be made if
greater costs and expenses would result under Section 2.13(ii)
or (iii) or 2.16 on account of any such change in designation.
Nothing in this Section shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in
Section 2.13, 2.14 or 2.16.
(b) In the event that any Bank shall request
compensation under Sections 2.13, 2.14 or 2.16, the Borrower
may, so long as no Default or Event of Default then exists, upon
three (3) Business Days' prior written notice to such Bank (with
a copy to the Administrative Agent), repay or otherwise satisfy
such Bank's share of Obligations (including cash
collateralization of such Bank's share of LOC Obligations then
outstanding) and cancel such Bank's Commitment hereunder;
provided, however, the Borrower shall have the right to seek a
substitute bank or financial institution reasonably acceptable
to the Administrative Agent (which may be one or more of the
50
Banks) to purchase at par such Bank's share of the Obligations
hereunder and to assume the Bank's Commitment hereunder by way
of assignment pursuant to the provisions and requirements of
Section 10.03.
2.19 Payments and Computations. Except as
otherwise specifically provided herein, all payments hereunder
shall be made to the Administrative Agent in U.S. dollars in
immediately available funds at its offices at NationsBank
Corporate Center, Charlotte, North Carolina not later than 2:00
p.m. (Charlotte, North Carolina time) on the date when due.
Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. The
Administrative Agent may (but shall not be obligated to) debit
the amount of any such payment which is not made by such time to
any ordinary deposit account of the Borrower maintained with the
Administrative Agent (with notice to the Borrower). The
Borrower shall, at the time it makes any payment under this
Credit Agreement, specify to the Administrative Agent the Loans,
LOC Obligations, Fees or other amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the
event that it fails so to specify, or if such application would
be inconsistent with the terms hereof, the Administrative Agent
shall distribute such payment to the Banks in such manner as the
Administrative Agent may determine to be appropriate in respect
of obligations owing by the Borrower hereunder, subject to the
terms of Section 2.20). The Administrative Agent will
thereafter cause to be distributed promptly like funds relating
to the payment of principal, reimbursement of drawings under
Letters of Credit, or interest or fees ratably to the Banks
entitled to receive such payments in accordance with the terms
of this Credit Agreement. Whenever any payment hereunder shall
be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding
Business Day (subject to accrual of interest and Fees for the
period of such extension), except that in the case of Eurodollar
Loans, if the extension would cause the payment to be made in
the next following calendar month, then such payment shall
instead be made on the next preceding Business Day. Except as
expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of
days elapsed over a year of 360 days. Interest shall accrue
from and include the date of advance, but exclude the date of
payment.
2.20 Pro Rata Treatment. Except to the extent
otherwise provided herein:
(a) Committed Revolving Loans. Each Committed
Revolving Loan (including without limitation each Mandatory
Borrowing), each payment or prepayment of principal of any
Committed Revolving Loan, each payment of interest on the
Committed Revolving Loans, each payment of Commitment Fees or
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Letter of Credit Fees (except for the portion retained by the
Issuing Bank for its own account), each reduction of the
Revolving Committed Amount, and each conversion or continuation
of any Committed Revolving Loan, shall be allocated pro rata
among the relevant Banks in accordance with the respective
applicable Revolving Loan Commitments (or, if the Commitments of
such Banks have expired or been terminated, in accordance with
the principal amounts of the outstanding Committed Revolving
Loans and Participation Interests of such Banks); and
(b) Letters of Credit. Each payment of
unreimbursed drawings in respect of LOC Obligations shall be
allocated to each Bank entitled thereto pro rata in accordance
with the respective applicable Revolving Loan Commitments;
provided that, if any Bank shall have failed to pay its
applicable pro rata share of any drawing under any Letter of
Credit, then any amount to which such Bank would otherwise be
entitled pursuant to this subsection (b) shall instead be
payable to the Issuing Bank; provided further, that in the event
any amount paid to any Bank pursuant to this subsection (b) is
rescinded or must otherwise be returned by the Issuing Bank,
each Bank shall, upon the request of the Issuing Bank, repay to
the Administrative Agent for the account of the Issuing Bank the
amount so paid to such Bank, with interest for the period
commencing on the date such payment is returned by the Issuing
Bank until the date the Issuing Bank receives such repayment at
a rate per annum equal to, during the period to but excluding
the date two (2) Business Days after such request, the Federal
Funds Effective Rate, and thereafter, the Base Rate plus two
percent (2%).
2.21 Set-Off; Sharing of Payments.
(a) The Borrower agrees that, in addition to (and
without limitation of) any right of set-off, bankers' lien or
counterclaim a Bank may otherwise have, each Bank shall be
entitled, at its option, to offset balances held by it for the
account of the Borrower at any of the offices of such Bank, in
Dollars or in any other currency, against any principal of or
interest on any Loan, any unreimbursed drawing or cash
collateral required in respect of any LOC Obligation, any Fees
or any other amounts, payable by the Borrower to such Bank
hereunder and which is not paid when due (regardless of whether
such balances are then due to the Borrower), in which case it
shall promptly notify the Borrower and the Administrative Agent
thereof (provided that such Bank's failure to give such notice
shall not affect the validity thereof).
(b) The Banks agree among themselves that, in the
event that any Bank shall obtain payment in respect of any Loan
or unreimbursed drawing or obligation to provide cash collateral
52
with respect to any LOC Obligations owing to such Bank under
this Credit Agreement through the exercise of a right of
set-off, banker's lien, counterclaim or otherwise in excess of
its pro rata share as provided for in this Credit Agreement,
such Bank shall promptly purchase from the other Banks a
participation in such Loans, LOC Obligations and other
obligations in such amounts, and make such other adjustments
from time to time, as shall be equitable to the end that all
Banks share such payment in accordance with their respective
ratable shares as provided for in this Credit Agreement. The
Banks further agree among themselves that if payment to a Bank
obtained by such Bank through the exercise of a right of
set-off, banker's lien, counterclaim or otherwise as aforesaid
shall be rescinded or must otherwise be restored, each Bank
which shall have shared the benefit of such payment shall, by
repurchase of a participation theretofore sold, return its share
of that benefit to each Bank whose payment shall have been
rescinded or otherwise restored. The Borrower and each other
Credit Party agrees that any Bank so purchasing such a
participation may, to the fullest extent permitted by law,
exercise all rights of payment, including set-off, banker's lien
or counterclaim, with respect to such participation as fully as
if such Bank were a holder of such Loan, LOC Obligation or other
obligation in the amount of such participation. Except as
otherwise expressly provided in this Credit Agreement, if any
Bank or the Administrative Agent shall fail to remit to the
Administrative Agent or any other Bank an amount payable by such
Bank or the Administrative Agent to the Administrative Agent or
such other Bank pursuant to this Credit Agreement on the date
when such amount is due, such payments shall be made together
with interest thereon for each date from the date such amount is
due until the date such amount is paid to the Administrative
Agent or such other Bank at a rate per annum equal to the
Federal Funds Effective Rate.
2.22 Determination as a Highly Leveraged
Transaction. The Borrower recognizes that laws, rules,
regulations or guidelines of Governmental Authorities now or
hereafter applicable may require the Administrative Agent to
determine whether the transactions contemplated hereby should be
classified as "highly leveraged" or assigned any equivalent or
successor classification, and that such determination
(hereinafter a "Reclassification") may be binding upon all the
Banks. The Borrower understands that any such determination may
be made by the Administrative Agent based upon such factors
(which may include, without limitation, the Administrative
Agent's internal policies and prevailing market practices) as
the Administrative Agent shall deem relevant and agrees that
neither the Administrative Agent nor any of the Banks shall have
any liability for the consequences of any such Reclassification.
The Borrower further acknowledges and agrees that, upon a
Reclassification by the Administrative Agent, then,
notwithstanding any other provision of this Agreement to the
contrary, then automatically, (a) on and after the date of such
Reclassification and until the circumstances giving rise to such
Reclassification no longer exist, (i) the Applicable Percentage
for Eurodollar Loans shall be three percent (3%), (ii) the
53
Applicable Percentage for Adjusted CD Loans shall be three
percent (3%), (iii) the Applicable Percentage for Base Rate
Loans shall be one and one-half percent (1p%), (iv) the
Applicable Percentage for Fed Funds Swingline Loans shall be
three percent (3%), (v) the Standby Letter of Credit Fee shall
be increased to a rate of three percent (3%) per annum and the
Trade Letter of Credit Fee shall be increased to a rate of one
and one-fourth percent (1q%) per annum and (b) on or before the
date ninety (90) days following the date of such
Reclassification, the Borrower shall pay to the Administrative
Agent for the ratable benefit of the Banks in immediately
available funds a fee (the "Reclassification Fee") equal to 1%
of the Revolving Committed Amount as of the date of such
Reclassification.
The Administrative Agent and the Banks hereby
acknowledge and agree that, based solely on circumstances
existing as of the Closing Date, the transactions contemplated
by this Agreement do not require a Reclassification as of such
date.
SECTION 3
GUARANTEE
3.01 The Guarantee. Each of the Credit Parties
hereby jointly and severally guarantees to each Bank, the
Administrative Agent and the Issuing Bank as hereinafter
provided the prompt payment of the Credit Party Obligations in
full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the
terms thereof. The Credit Parties hereby further agree that if
any of the Credit Party Obligations are not paid in full when
due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or
otherwise), the Credit Parties will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or
renewal of any of the Credit Party Obligations, the same will be
promptly paid in full when due (whether at extended maturity, as
a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of
such extension or renewal.
54
3.02 Obligations Unconditional. The obligations of
the Credit Parties under Section 3.01 hereof are joint and
several, absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of
the Credit Documents, or any other agreement or instrument
referred to therein, or any substitution, release or exchange of
any other guarantee of or security for any of the Credit Party
Obligations, and, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which
might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, it being the intent of this
Section 3.02 that the obligations of the Credit Parties
hereunder shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more
of the following shall not alter or impair the liability of any
Credit Party hereunder which shall remain absolute and
unconditional as described above:
(i) at any time or from time to time, without
notice to any Credit Party, the time for any performance of or
compliance with any of the Credit Party Obligations shall be
extended, or such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the
provisions of any of the Credit Documents or any other agreement
or instrument referred therein shall be done or omitted;
(iii) the maturity of any of the Credit Party
Obligations shall be accelerated, or any of the Credit Party
Obligations shall be modified, supplemented or amended in any
respect, or any right under any of the Credit Documents or any
other agreement or instrument referred to therein shall be
waived or any other guarantee of any of the Credit Party
Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the
Administrative Agent or any Bank or Banks as security for any of
the Credit Party Obligations shall fail to attach or be
perfected; or
(v) any of the Credit Party Obligations shall be
determined to be void or voidable (including, without
limitation, for the benefit of any creditor of any Credit Party)
or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of any Credit Party).
55
With respect to its obligations hereunder, each
Credit Party hereby expressly waives diligence, presentment,
demand of payment, protest and all notices whatsoever, and any
requirement that the Administrative Agent or any Bank exhaust
any right, power or remedy or proceed against any Person under
any of the Credit Documents or any other agreement or instrument
referred to therein, or against any other Person under any other
guarantee of, or security for, any of the Credit Party
Obligations.
3.03 Reinstatement. The obligations of the Credit
Parties under this Section 3 shall be automatically reinstated
if and to the extent that for any reason any payment by or on
behalf of any Person in respect of the Credit Party Obligations
is rescinded or must be otherwise restored by any holder of any
of the Credit Party Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and
each Credit Party agrees that it will indemnify each of the
Administrative Agent and each Bank on demand for all reasonable
costs and expenses (including, without limitation, fees of
counsel) incurred by the Administrative Agent or such Bank in
connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or
similar law.
3.04 Certain Additional Waivers. Without limiting
the generality of the provisions of any other Section of this
Section 3, each Credit Party hereby specifically waives the
benefits of the Code of Virginia Sections 49-25 and 49-26,
inclusive. Each Credit Party further agrees that such Guarantor
shall have no right of recourse to security for the Credit Party
Obligations. In addition, each Credit Party hereby waives and
renounces any and all rights it has or may have for subrogation,
indemnity, reimbursement or contribution against the Borrower
for amounts paid by such Credit Party pursuant to Section 3.01.
This waiver is expressly intended to prevent the existence of
any claim in respect to such reimbursement by any Credit Party
against the estate of the Borrower within the meaning of Section
101 of the Bankruptcy Code, and to prevent any Credit Party from
constituting a creditor of the Borrower in respect of such
reimbursement within the meaning of Section 547(b) of the
Bankruptcy Code in the event of a subsequent case involving the
Borrower.
3.05 Remedies. The Guarantors agree that, as
between the Credit Parties, on the one hand, and the
Administrative Agent and the Banks, on the other hand, the
Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 8.02 hereof (and shall be deemed
to have become automatically due and payable in the
circumstances provided in said Section 8.02) for purposes of
56
Section 3.01 hereof notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing
such Credit Party Obligations from becoming automatically due
and payable) as against any other Person and that, in the event
of such declaration (or such Credit Party Obligations being
deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any
other Person) shall forthwith become due and payable by the
Credit Parties for purposes of said Section 3.01.
3.06 Continuing Guarantee. The guarantee in this
Section 3 is a continuing guarantee, and shall apply to all
Credit Party Obligations whenever arising.
3.07 Limitation of Guarantee. The liability of
each Credit Party (other than the Borrower whose liability under
this guarantee shall not be limited) with respect to the Credit
Party Obligations guaranteed hereunder shall not exceed the
Maximum Guaranteed Amount as determined at the earlier of the
date of commencement of a case under the Bankruptcy Code in
which the Creditor Party is a debtor or the date enforcement is
sought under this Section 3.
SECTION 4
CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
4.01 Conditions to Closing. The closing of the
credit facility is subject to satisfaction of the following
conditions in form and substance acceptable to the
Administrative Agent and the Required Banks:
(a) Executed Credit Documents. Receipt by the
Administrative Agent of executed copies of this Credit
Agreement, the Notes, the Master Trade LOC Agreement and the
other Credit Documents (in sufficient numbers to provide a fully
executed original of each, to each Bank).
(b) Fees. Payment to the Administrative Agent of
the portion of the Upfront Fees and other fees, if any, payable
on the Closing Date.
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4.02 Conditions to Initial Extensions of Credit.
The obligation of the Banks to make the initial Extensions of
Credit hereunder, is subject, at the time of the making of such
Extension of Credit, to satisfaction of the following conditions
in form and substance acceptable to the Administrative Agent and
the Required Banks:
(a) No Default; Representations and Warranties.
Both at the time of the making of such Loan or issuance of such
Letter of Credit and after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all
representations and warranties contained herein or in the other
Credit Documents then in effect shall be true and correct in all
material respects.
(b) Opinion of Counsel. Receipt by the
Administrative Agent of an opinion, or opinions, in form and
substance satisfactory to the Required Banks, addressed to the
Administrative Agent and the Banks and dated as of the Closing
Date from Hunton & Williams, counsel to the Borrower and the
Guarantors (in sufficient numbers to provide a fully executed
original to each Bank).
(c) Corporate Documents. Receipt by the
Administrative Agent of the following:
(i) Articles of Incorporation. Copies of the
articles of incorporation or charter documents of the Borrower
and the Guarantors certified to be true and complete as of a
recent date by the appropriate governmental authority of the
state of its incorporation.
(ii) Resolutions. Copies of resolutions of the
Board of Directors of the Borrower and the Guarantors approving
and adopting the Credit Documents, the transactions contemplated
therein and authorizing execution and delivery thereof,
certified by a secretary or assistant secretary as of the
Closing Date to be true and correct and in force and effect as
of such date.
(iii) Bylaws. A copy of the bylaws of the
Borrower and the Guarantors certified by a secretary or
assistant secretary as of the Closing Date to be true and
correct and in force and effect as of such date.
58
(iv) Good Standing. Copies of (i) certificates
of good standing, existence or its equivalent with respect to
the Borrower and the Guarantors certified as of a recent date by
the appropriate governmental authorities of the state of
incorporation and each other state in which the failure to so
qualify and be in good standing would have a material adverse
effect on the business or operations of the Borrower or
Guarantor in such state and (ii) a certificate indicating
payment of all corporate franchise taxes certified as of a
recent date by the appropriate governmental taxing authorities.
(d) Issuance of the Senior Notes. Receipt by the
Administrative Agent and the Banks of certified copies of the
form of the Senior Notes and the indenture or other governing
instrument pursuant to which such Senior Notes shall have been
issued, the form and substance of which shall be acceptable to
the Administrative Agent and the Banks in their discretion,
together with evidence of receipt by the Borrower of gross
proceeds of at least $110,000,000 from the issuance of the
Senior Notes and evidence or repayment of the 8<% Senior Notes
due June 1, 1999 and the Variable Rate Term Loan owing to
Wachovia Bank of North Carolina, N.A., each as referenced on
Schedule 5.09 and the termination of any commitments relating
thereto.
(e) Termination of Existing Credit Facility.
Evidence of repayment of, and termination of the commitments
under, the credit facility established pursuant to that Credit
Agreement dated as of October 6, 1993 among the Borrower, the
other Credit Parties thereto, the banks and financial
institutions thereto, NationsBank of North Carolina, N.A. and
Philadelphia National Bank (incorporated as CoreStates Bank,
N.A.), as co-agents, and NationsBank of North Carolina, N.A., as
administrative agent, as amended and modified.
SECTION 5
REPRESENTATIONS AND WARRANTIES
Each Credit Party hereby represents and warrants to
each Bank that:
5.01 Organization and Good Standing. Each of the
Borrower and its Restricted Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of its incorporation, is duly qualified and in
good standing as a foreign corporation authorized to do business
59
in every jurisdiction where the failure to so qualify would have
a Material Adverse Effect, and has the requisite corporate power
and authority to own its properties and to carry on its business
as now conducted and as proposed to be conducted.
5.02 Due Authorization. Each Credit Party (i) has
the requisite corporate power and authority to execute, deliver
and perform this Credit Agreement and the other Credit Documents
to which it is a party and to incur the obligations herein and
therein provided for, and (ii) is duly authorized to, and has
been authorized by all necessary corporate action, to execute,
deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party.
5.03 No Conflicts. With respect to each of the
Credit Parties, neither the execution and delivery of the Credit
Documents, nor the consummation of the transactions contemplated
therein, nor performance of and compliance with the terms and
provisions thereof will (i) violate or conflict with any
provision of its articles of incorporation or bylaws, (ii)
violate, contravene or materially conflict with any law,
regulation (including without limitation Regulation U or
Regulation X), order, writ, judgment, injunction, decree or
permit applicable to it, (iii) violate, contravene or materially
conflict with contractual provisions of, or cause an event of
default under, any indenture, loan agreement, mortgage, deed of
trust, contract or other agreement or instrument to which it is
a party or by which it may be bound, (iv) result in or require
the creation of any lien, security interest or other charge or
encumbrance (other than those contemplated in or in connection
with the Credit Documents) upon or with respect its properties,
the violation of which would or might have a Material Adverse
Effect.
5.04 Consents. No consent, approval, authorization
or order of, or filing, registration or qualification with, any
court or governmental authority or third party in respect of any
Credit Party is required in connection with the execution,
delivery or performance of this Credit Agreement or any of the
other Credit Documents.
5.05 Enforceable Obligations. This Credit
Agreement and the other Credit Documents have been duly executed
and delivered and constitute legal, valid and binding
obligations of each Credit Party enforceable in accordance with
their respective terms, except as may be limited by bankruptcy
or insolvency laws or similar laws affecting creditors' rights
generally.
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5.06 Financial Condition. The financial statements
and financial information provided to the Banks, consisting of,
among other things, (i) an audited consolidated balance sheet of
the Borrower and its Subsidiaries dated as of January 1, 1994
and draft copies of an audited consolidated balance sheet of the
Borrower and its subsidiaries dated as of December 31, 1994,
together with related consolidated statements of income,
stockholders' equity and changes in financial position or cash
flow certified by Price Waterhouse, certified public
accountants, and (ii) a company-prepared consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries
dated as of December 31, 1994, together with related
consolidated and consolidating statements of income,
stockholders' equity and changes in financial position or cash
flow, are true and correct and fairly represent the financial
condition of the Borrower and its Subsidiaries as of such
respective dates; such financial statements were prepared in
accordance with generally accepted accounting principles applied
on a consistent basis (except as noted therein); and since the
date of such financial statements there have occurred no changes
or circumstances which have had or are likely to have a Material
Adverse Effect.
5.07 No Default. No Default or Event of Default
presently exists.
5.08 Liens. Except for Permitted Liens, each of
the Credit Parties has good and marketable title to all of its
properties and assets free and clear of all liens, encumbrances,
mortgages, pledges, security interests and other adverse claims
of any nature.
5.09 Indebtedness. The Credit Parties have no
Indebtedness (including without limitation Guaranty,
reimbursement or other contingent obligations) except as
disclosed in the financial statements referenced in Section 5.06
and as set forth in Schedule 5.09.
5.10 Litigation. Except as disclosed in Schedule
5.10 , there are no actions, suits or legal, equitable,
arbitration or administrative proceedings, pending or, to the
knowledge of the Borrower threatened, against the Borrower or
any of its Restricted Subsidiaries which, if adversely
determined, would likely have a Material Adverse Effect. For
purposes hereof, in the case of proceedings involving only
monetary damages, $5,000,000 or more shall be considered as
having a Material Adverse Effect. Since the date of this Credit
Agreement (or the date of the most recent update hereunder),
there has been no material adverse change in the status of any
actions, suits, investigations, litigation or proceedings
disclosed hereunder except as disclosed in writing to the Banks
prior to or upon reaffirmation of this provision as provided
herein.
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5.11 Material Agreements. None of the Credit
Parties is in default in any material respect under any
contract, lease, loan agreement, indenture, mortgage, security
agreement or other material agreement or obligation to which it
is a party or by which any of its properties is bound which
default would have a Material Adverse Effect.
5.12 Taxes. Each of the Credit Parties has filed,
or caused to be filed, all material tax returns (federal, state,
local and foreign) required to be filed and paid all amounts of
taxes shown thereon to be due (including interest and penalties)
and has paid all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing (or
necessary to preserve any liens in favor of the Banks), by it,
except for such taxes (i) which are not yet delinquent or (ii)
as are being contested in good faith and by proper proceedings,
and against which adequate reserves are being maintained in
accordance with generally accepted accounting principles, but
only so long as there is no liability or risk of loss, sale or
forfeiture of any collateral pledged to the Banks. None of the
Credit Parties is aware of any proposed material tax assessments
against it or any of members of the Consolidated Borrower Group.
5.13 Compliance with Law. Each of the Credit
Parties is in substantial compliance with all laws, rules,
regulations, orders and decrees (including without limitation
environmental laws) applicable to it, or to its properties.
5.14 ERISA. (i) No Reportable Event (as defined in
ERISA) has occurred and is continuing with respect to any Plan;
(ii) no Plan has an unfunded current liability (determined under
Section 412 of the Code) or an accumulated funding deficiency,
(iii) no proceedings have been instituted, or, to the knowledge
of the Borrower, planned, to terminate any Plan, (iv) neither
the Borrower, any Subsidiary, any member of a Controlled Group,
nor any duly-appointed administrator of a Plan has instituted or
intends to institute proceedings to withdraw from any
Multi-Employer Pension Plan (as defined in Section 3(37) or
ERISA); and (v) each Plan has been maintained and funded in all
material respects with its terms and with the provisions of
ERISA applicable thereto.
5.15 Subsidiaries. Set forth in Schedule 5.15 is a
complete and accurate list of all Affiliates and Subsidiaries of
each of the Credit Parties. Information on the attached
Schedule includes state of incorporation; the number of shares
of each class of capital stock or other equity interests
outstanding; the number and percentage of outstanding shares of
each class owned (directly or indirectly) by the Borrower,
62
Subsidiary or Affiliate; and the number and effect, if
exercised, of all outstanding options, warrants, rights of
conversion or purchase and similar rights. The outstanding
capital stock and other equity interests of all such
Subsidiaries is validly issued, fully paid and non-assessable
and is owned by the Borrower, directly or indirectly, free and
clear of all liens, security, interests and other charges or
encumbrances (other than those arising under or contemplated in
connection with the Credit Documents).
5.16 Use of Proceeds; Margin Stock. The proceeds
of the Loans hereunder will be used solely for the purposes
specified in Section 6.10. None of such proceeds will be used
for the purpose of purchasing or carrying any "margin stock" as
defined in Regulation U, Regulation X or Regulation G, or for
the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry "margin stock" or for
any other purpose which might constitute this transaction a
"purpose credit" within the meaning of Regulation U, Regulation
X or Regulation G. None of the Credit Parties own "margin
stock" except as identified in the financial statements referred
to in Section 5.06 hereof and, as of the date hereof, the
aggregate value of all "margin stock" owned by the Borrower and
its Subsidiaries does not exceed 25% of the value of all the
Borrower's and its Subsidiaries assets.
5.17 Government Regulation. None of the Credit
Parties is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 or the Interstate Commerce Act,
each as amended. In addition, none of the Credit Parties is (i)
an "investment company" registered or required to be registered
under the Investment Company Act of 1940, as amended, and is not
controlled by such a company, or (ii) a "holding company," or a
"Subsidiary company" of a "holding company," or an "affiliate"
of a "holding company" or of a "Subsidiary" or a "holding
company," within the meaning of the Public Utility Holding
Company Act of 1935, as amended. No director, executive officer
or principal shareholder of any Credit Party is a director,
executive officer or principal shareholder of any Bank. For
purposes hereof, the terms "director", "executive officer" and
"principal shareholder" (when used with reference to any Bank)
shall have the meanings ascribed to them in Regulation O issued
by the Board of Governors of the Federal Reserve System.
5.18 Hazardous Substances. Except as disclosed on
Schedule 5.18 or except as would not reasonably be expected to
have a Material Adverse Effect, the real property owned or
leased by the Borrower and its Subsidiaries or on which the
Borrower or its Subsidiaries operates (the "Subject Property")
is free from "hazardous substances" as defined in the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. ee 9601 et seq., as amended, and the
regulations promulgated thereunder; no portion of the Subject
Property is subject to federal, state or local regulation or
63
liability because of the presence of stored, leaked or spilled
petroleum products, waste materials or debris, "PCB's" or PCB
items (as defined in 40 C.F.R. e763.3), underground storage
tanks, "asbestos" (as defined in 40 C.F.R. e763.63) or the past
or present accumulation, spillage or leakage of any such
substance; and the Borrower and its Subsidiaries are in
substantial compliance with all federal, state and local
requirements relating to protection of health or the environment
in connection with the operation of their businesses; and the
Credit Parties know of no complaint or investigation regarding
real property which it or any other Credit Party owns or leases
or on which it or any other Credit Party operates.
5.19 Patents, Franchises, etc. Each of the Credit
Parties possesses all material patents, trademarks, service
marks, trade names, copyrights, licenses and other rights, free
from burdensome restrictions, that are necessary for the
operation of their respective businesses as presently conducted
and as proposed to be conducted. Each of the Credit Parties has
obtained all material licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its
respective property and to the conduct of its business.
5.20 Solvency. The Borrower and each of its
Restricted Subsidiaries, both collectively and individually, is
and, after consummation of this Credit Agreement and after
giving effect to all Indebtedness incurred hereunder, will be,
solvent.
5.21 Investments. All investments of each of the
Credit Parties are Permitted Investments.
SECTION 6
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that
so long as this Credit Agreement is in effect and until the
Loans and LOC Obligations, together with interest, fees and
other obligations hereunder, have been paid in full and the
Commitments hereunder shall have terminated:
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6.01 Information Covenants. The Credit Parties
will furnish, or cause to be furnished, to the Administrative
Agent and each Bank:
(a) Annual Financial Statements. As soon as
available and in any event within 90 days after the close of
each fiscal year of the Borrower, a consolidated balance sheet
of the Borrower and its Subsidiaries as at the end of such
fiscal year together with related consolidated statements of
income and retained earnings and of cash flows for such fiscal
year, setting forth in comparative form consolidated figures for
the preceding fiscal year, all in reasonable detail and examined
by Price Waterhouse, or other independent certified public
accountants of recognized national standing reasonably
acceptable to the Required Banks and whose opinion shall be to
the effect that such consolidated financial statements have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except for changes
with which such accountants concur). It is specifically
understood and agreed that failure of the annual financial
statements to be accompanied by an opinion and certificate of
such accountants in form and substance as provided herein shall
constitute a Default hereunder.
(b) Quarterly Financial Statements. As soon as
available and in any event within 45 days after the end of the
first, second and third fiscal quarters of each fiscal year of
the Borrower, a consolidated and consolidating balance sheet of
the Borrower and its Subsidiaries as at the end of such
quarterly period together with related consolidated and
consolidating statements of income and retained earnings and of
cash flows for such quarterly period and for the portion of the
fiscal year ending with such period, in each case setting forth
in comparative form consolidated and consolidating figures for
the corresponding period of the preceding fiscal year, all in
reasonable form and detail acceptable to the Required Banks, and
accompanied by a certificate of the chief financial officer,
treasurer or controller of the Borrower as being true and
correct and as having been prepared in accordance with generally
accepted accounting principles applied on a consistent basis,
subject to changes resulting from audit and normal year-end
audit adjustments.
(c) Borrowing Base Certificates. As soon as
practicable and in any event within 25 days after the end of
each monthly accounting period of each fiscal year of the
Borrower, a statement of the Borrowing Base and its components
as of the end of the immediately preceding monthly accounting
period, substantially in the form of Schedule 6.01(c) hereto,
certified by the chief financial officer, treasurer or
controller of the Borrower to be true and correct as of such
date.
65
(d) Officer's Certificate. At the time of delivery
of the financial statements provided for in Sections 6.01(a) and
(b) hereof, a certificate of the chief financial officer,
treasurer or controller of the Borrower substantially in the
form of Schedule 6.01(d) to the effect that no Default or Event
of Default exists, or if any Default or Event of Default does
exist specifying the nature and extent thereof and what action
the Borrower proposes to take with respect thereto. In
addition, the Officer's Certificate shall demonstrate compliance
of the financial covenants contained in Section 6.11 by
calculation thereof as of the end of each such fiscal period.
(e) Accountant's Certificate. Within the period
for delivery of the annual financial statements provided in
Section 6.01(a), a certificate of the accountants conducting the
annual audit stating that they have reviewed this Credit
Agreement and stating further whether, in the course of their
audit, they have become aware of any Default or Event of Default
(insofar as any such terms or provisions pertain to accounting
matters) and, if any such Default or Event of Default exists,
specifying the nature and extent thereof.
(f) Auditor's Reports. Promptly upon receipt
thereof, a copy of any other report or "management letter"
submitted by independent accountants to the Borrower or a
Subsidiary in connection with any annual, interim or special
audit of the books of the Borrower or any of its Subsidiaries.
(g) SEC and Other Reports. Promptly upon
transmission thereof, copies of any filings and registrations
with, and reports to, (i) the Securities and Exchange
Commission, or any successor agency, by the Borrower or any of
its Subsidiaries, and copies of all financial statements, proxy
statements, notices and reports as the Borrower or its
Subsidiaries shall send to its shareholders or to the holders of
any other Indebtedness (including specifically without
limitation, any Subordinated Debt) in their capacity as such
holders and (ii) the United States Environmental Protection
Agency, or any state or local agency responsible for
environmental matters, the United States Occupational Health
and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or
safety matters.
(h) Other Information. With reasonable promptness
upon any such request, such other information regarding the
business, properties or financial condition of the Borrower and
its Subsidiaries as the Administrative Agent or the Required
Banks may reasonably request.
66
(i) Notice of Default or Litigation. Upon any
Credit Party obtaining knowledge thereof, it will give written
notice to the Administrative Agent (i) immediately, of the
occurrence of an event or condition consisting of a Default or
Event of Default, specifying the nature and existence thereof
and what action the Borrower proposes to take with respect
thereto, and (ii) promptly, but in any event within 5 Business
Days, of the occurrence of any of the following with respect to
any member of the Consolidated Borrower Group: (A) the pendency
or commencement of any litigation, arbitral or governmental
proceeding against any member of the Consolidated Borrower Group
which if adversely determined is likely to have a Material
Adverse Effect, (B) any levy of an attachment, execution or
other process against its assets having a value of $500,000 or
more, (C) the occurrence of an event or condition which shall
constitute a default or event of default under any Indebtedness
of any member of the Consolidated Borrower Group, (D) any
development in its business or affairs which has resulted in, or
which any Credit Party reasonably believes may result in, a
Material Adverse Effect, or (E) the institution of any
proceedings against any member of the Consolidated Borrower
Group with respect to, or the receipt of notice by such Person
of potential liability or responsibility for violation, or
alleged violation of any federal, state or local law, rule or
regulation, including but not limited to, regulations
promulgated under the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ee 6901 et seq., regulating the generation,
handling or disposal of any toxic or hazardous waste or
substance or the release into the environment or storage of any
toxic or hazardous waste or substance, the violation of which
would likely have a Material Adverse Effect, or (F) any notice
or determination concerning the imposition of any withdrawal
liability by a multiemployer Plan against any member of the
Consolidated Borrower Group or any of its ERISA Affiliates, the
determination that a multiemployer Plan is, or is expected to
be, in reorganization within the meaning of Title IV or ERISA,
the termination of any Plan, and the amount of liability
incurred or which may be incurred in connection with any such
event.
6.02 Preservation of Existence and Franchises.
Except as otherwise permitted under Section 7.04, each member of
the Consolidated Borrower Group will do all things necessary to
preserve and keep in full force and effect its existence,
rights, franchises and authority.
6.03 Books, Records and Inspections. Each member
of the Consolidated Borrower Group will keep complete and
accurate books and records of its transactions in accordance
with good accounting practices on the basis of generally
accepted accounting principles applied on a consistent basis
(including the establishment and maintenance of appropriate
reserves). Each member of the Consolidated Borrower Group will
permit on reasonable notice officers or designated
representatives of the Administrative Agent and the Banks to
67
visit and inspect its books of account and records and any of
its properties or assets (in whomever's possession) and to
discuss the affairs, finances and accounts of such member of the
Consolidated Borrower Group with, and be advised as to the same
by, its and their officers, directors and independent
accountants.
6.04 Compliance with Law. Each member of the
Consolidated Borrower Group will comply with all applicable
laws, rules, regulations and orders of, and all applicable
restrictions imposed by all applicable Governmental Authorities
applicable to it and its property (including applicable
statutes, regulations, orders and restrictions relating to
environmental standards and controls) if noncompliance with any
such law, rule, regulation or restriction would have a Material
Adverse Effect.
6.05 Payment of Taxes and Other Indebtedness. Each
member of the Consolidated Borrower Group will pay and discharge
(i) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of
its properties, before they shall become delinquent, (ii) all
lawful claims (including claims for labor, materials and
supplies) which, if unpaid, might give rise to a Lien or charge
upon any of its properties, and (iii) except as prohibited
hereunder, all of its other Indebtedness as it shall become due;
provided, however, that members of the Consolidated Borrower
Group shall not be required to pay any such tax, assessment,
charge, levy, claim or Indebtedness which is being contested in
good faith by appropriate proceedings and as to which adequate
reserves therefor have been established in accordance with
generally accepted accounting principles, unless the failure to
make any such payment (a) shall give rise to an immediate right
to foreclosure on a Lien securing such amounts or (b) otherwise
would have a Material Adverse Effect.
6.06 Insurance. Each member of the Consolidated
Borrower Group will at all times maintain in full force and
effect insurance (including worker's compensation insurance,
liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and
liabilities and with such deductibles or self-insurance
retentions as are in accordance with normal industry practice
unless higher limits or other types of coverage are required by
the terms of the other Credit Documents or are otherwise
reasonably required by the Required Banks. The present coverage
of the members of the Consolidated Borrower Group is outlined as
to carrier, policy number, expiration date, type and amount on
Schedule 6.06 hereto and is acceptable to the Administrative
Agent and the Banks as of the Closing Date.
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6.07 Maintenance of Property. Each member of the
Consolidated Borrower Group will maintain and preserve its
properties and equipment used or useful in its business (in
whomsoever's possession as they may be) in good repair, working
order and condition, normal wear and tear excepted, and will
make, or cause to be made, in such properties and equipment from
time to time all repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto as may be needed
or proper, to the extent and in the manner customary for
companies in similar businesses.
6.08 Performance of Obligations. Each member of
the Consolidated Borrower Group will perform in all material
respects all of its obligations (including, except as may be
otherwise prohibited or contemplated hereunder, payment of
Indebtedness in accordance with its terms) under the terms of
all material agreements, indentures, mortgages, security
agreements or other debt instruments to which it is a party or
by which it is bound.
6.09 ERISA. Each Credit Party and ERISA Affiliate
will, (a) at all times, make prompt payment of all contributions
required under all employee pension benefit plans ("Plans") and
required to meet the minimum funding standard set forth in ERISA
with respect to its Plans; (b) promptly upon request, furnish
the Administrative Agent and the Banks copies of each annual
report/return (Form 5500 Series), as well as all schedules and
attachments required to be filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA, and the
regulations promulgated thereunder, in connection with each of
its Plans for each Plan Year; (c) notify the Administrative
Agent immediately of any fact, including, but not limited to,
any Reportable Event (as defined in ERISA) arising in connection
with any of its Plans, which might constitute grounds for
termination thereof by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to
administer such Plan, together with a statement, if requested by
the Bank, as to the reason therefor and the action, if any,
proposed to be taken with respect thereof; and (d) furnish to
the Administrative Agent, upon its request, such additional
information concerning any of its Plans as may be reasonably
requested. The Borrower will not, nor will it permit any of its
Subsidiaries or ERISA Affiliates to (I) terminate a Plan if any
such termination would give rise to or result in any material
liability, or (II) cause or permit to exist any Termination
Event under ERISA or other event or condition which presents a
material risk of termination at the request of the PBGC.
6.10 Use of Proceeds. The proceeds of the Loans
hereunder shall be used for the purpose of financing working
capital requirements and general corporate purposes.
69
6.11 Financial Covenants.
(a) Consolidated Tangible Net Worth. The Borrower
will not permit Consolidated Tangible Net Worth on each
Determination Date after the Closing Date to be less than
$130,000,000; provided, however, the minimum Consolidated
Tangible Net Worth required hereunder shall increase on the last
day of each fiscal year to occur after the Closing Date to an
amount equal to the sum of (i) the Consolidated Tangible Net
Worth required to be maintained on the last day of the
immediately preceding fiscal year, plus (ii) an amount equal to
50% of Consolidated Net Income for the fiscal year ending as of
such date (or if Consolidated Net Income is a deficit figure for
such year, then zero), plus (iii) 100% of the net proceeds
received by the Borrower or any Restricted Subsidiary pursuant
to any Equity Transaction from and after the Closing Date (other
than and to the extent, the net proceeds from a Equity
Transaction shall be used within 90 days of receipt to redeem or
purchase preferred stock of the Borrower).
(b) Leverage Ratio. On each Determination Date
the Borrower will not permit the ratio of the aggregate
outstanding principal amount of Consolidated Funded Debt to
Consolidated Tangible Capitalization to exceed:
Determination Date Occurring Leverage Ratio
Last day of fourth fiscal
quarter 1994 through last
day of fourth fiscal quarter
1995 .70 : 1.0
Last day of first fiscal
quarter 1996 through last
day of fourth fiscal quarter
1996 .65 : 1.0
Last day of first fiscal quarter
1997 and thereafter .60 : 1.0
70
(c) Fixed Charges Coverage Ratio. The Borrower
will keep and maintain as of each Determination Date a ratio of
Net Income Available for Fixed Charges to Fixed Charges for a
period of four consecutive fiscal quarters ending as of the
Determination Date of not less than 1.25 to 1.0.
6.12 Additional Subsidiaries. Promptly upon any
Person becoming an Additional Credit Party, the Credit Parties
shall so notify the Administrative Agent and the Banks and shall
cause such Person to become a "Guarantor" hereunder pursuant to
a Joinder Agreement.
SECTION 7
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that
so long as this Credit Agreement is in effect and until the
Loans and LOC Obligations, together with interest, fees and
other obligations hereunder, have been paid in full and the
Commitments hereunder shall have terminated:
7.01 Indebtedness. Neither the Borrower nor any of
its Restricted Subsidiaries will contract, create, incur, assume
or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit
Agreement and the other Credit Documents;
(b) Indebtedness evidenced by the Senior Notes
(and a refinancing thereof, so long as in the case of any such
refinancing, such Indebtedness (i) shall not exceed the
principal amount of the Senior Notes then outstanding, (ii) has
a weighted average life to maturity not shorter than that of the
Senior Notes, (ii) is unsecured, except by guaranties of the
Subsidiaries as provided in the case of the Senior Notes, and
the rights of payment are subordinate to or pari pasu with, but
not senior to or given a preference in any material respect
over, the Obligations under this Credit Agreement and (iv) the
terms of the credit agreement, indenture, note or other
instrument pursuant to which such Indebtedness is issued or by
71
which such Indebtedness is governed, shall not, in any material
respect, be more restrictive to the Borrower or its Subsidiaries
than the terms of the Indenture pursuant to which the Senior
Notes shall have been issued);
(c) Indebtedness existing as of the Closing Date as
referenced in Section 5.09 (and renewals, refinancings or
extensions thereof on terms and conditions no more favorable to
such Person than such existing Indebtedness (taking into account
reasonable market conditions existing at such time) and in a
principal amount not in excess of that outstanding as of the
date of such renewal, refinancing or extension);
(d) Indebtedness in respect of current accounts
payable or accrued (other than for borrowed money or purchase
money obligations) and incurred in the ordinary course of
business, provided, that all such liabilities, accounts and
claims shall be paid when due (or in conformity with customary
trade terms);
(e) Purchase money indebtedness incurred to
finance the purchase of fixed assets provided that (i) the total
of all such indebtedness shall not exceed an aggregate principal
amount at any time outstanding of $5,000,000 in fiscal year
1995, $10,000,000 in fiscal year 1996 and thereafter; (ii) such
indebtedness when incurred shall not exceed the purchase price
of the asset financed; and (iii) no such indebtedness shall be
refinanced for a principal amount in excess of the principal
balance outstanding thereon at the time of such refinancing; and
(f) Other short term unsecured indebtedness for
borrowed money (and specifically excluding for purposes hereof
any letters of credit issued outside of this Credit Agreement
other than any such letters of credit which may have been issued
and outstanding on the Closing Date, which letters of credit may
not be renewed or otherwise extended) which do not exceed
$10,000,000 in the aggregate at any time outstanding.
7.02 Liens. Neither the Borrower nor any of its
Restricted Subsidiaries will contract create, incur, assume or
permit to exist any Lien with respect to any of its property or
assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, except for
Permitted Liens.
7.03 Guaranty Obligations. Neither the Borrower
nor any of its Restricted Subsidiaries will enter into or
72
otherwise become or be liable in respect of any Guaranty
Obligations (excluding specifically therefrom endorsements in
the ordinary course of business of negotiable instruments for
deposit or collection) other than those in favor of the Senior
Notes and in favor of the Banks in connection herewith.
7.04 Nature of Business. Neither the Borrower nor
any of its Restricted Subsidiaries will substantively alter the
character of its business from that conducted as of the Closing
Date.
7.05 Consolidation, Merger, Sale or Purchase of
Assets, etc. Neither the Borrower nor any of its Restricted
Subsidiaries will
(a) dissolve, liquidate, or wind up its affairs,
sell, transfer, lease or otherwise dispose of all or any
substantial part of its property or assets (other than in the
ordinary course of business for fair consideration), or agree to
any of the foregoing at a future time, except for the sale or
disposition of machinery and equipment no longer useful in the
conduct of its business. As used herein, "substantial part"
shall mean if the book value of such assets, when added to the
book value of all other assets sold, leased or otherwise
disposed of by the Borrower and its Restricted Subsidiaries
(other than in the ordinary course of business), (i) during the
12-month period ending with the date of such sale, lease or
other disposition exceeds 10% of Consolidated Assets, determined
as of the end of the immediately preceding fiscal year, or (ii)
during the period beginning on the date of this Credit Agreement
and ending on the date of such sale, lease or other disposition,
exceeds an amount equal to 25% of Consolidated Assets determined
as of December 31, 1994; or
(b) purchase, lease or otherwise acquire (in a
single transaction or a series of related transactions) all or
any substantial part of the property or assets of any Person
(other than purchases or other acquisitions of inventory,
leases, materials, property and equipment in the ordinary course
of business, except as otherwise limited or prohibited herein),
or enter into any transaction of merger or consolidation, or
agree to do any of the foregoing at a future time, except for
(i) capital expenditures to the extent of the limitations set
out in Section 6.11(c), (ii) investments, acquisitions and
transfers or dispositions of properties permitted pursuant to
Section 7.06, (iii) the merger or consolidation of a Restricted
Subsidiary into, or a sale, transfer or lease of all or a
substantial part of its properties (at fair value) to, a Credit
Party, and (iv) the merger of any Person into a Credit Party,
provided that the Credit Party shall be the surviving
corporation, and management and control of the Credit Party
73
shall remain substantially unchanged and no Default or Event of
Default shall exist either immediately prior to or after giving
effect to such merger. Notwithstanding the foregoing, other
than capital expenditures permitted pursuant to Section 6.11(c)
and investments pursuant to Section 7.06, in the case of an
acquisition by the Borrower or its Restricted Subsidiaries,
whether by way of asset purchase, stock or securities purchase
or merger or consolidation, the aggregate cash consideration
paid in connection with such acquisitions shall not exceed
$15,000,000 in any instance or $30,000,000 in the aggregate over
the term of this credit facility (including any extensions of
the Termination Date).
7.06 Advances, Investments and Loans. Neither the
Borrower nor any of its Restricted Subsidiaries will lend money
or credit or make advances to any Person, or purchase or acquire
any stock, obligations or securities of, or any other interest
in, or make any capital contribution to any Person except for
Permitted Investments.
7.07 Prepayments of Indebtedness, etc. Neither the
Borrower nor any of its Restricted Subsidiaries will
(i) after the issuance thereof, amend or modify (or
permit the amendment or modification of), if reasonably adverse
to the interests of the Banks, any of the terms of any
subordinated or senior funded indebtedness for borrowed money
(including specifically, but without limitation, the
Indebtedness evidenced by the Senior Notes) to the extent any
such amendment or modification would be adverse to the issuer
thereof or to the interests of the Banks,
(ii) make (or give any notice with respect thereto)
any voluntary or optional payment, prepayment, redemption or
acquisition for value of (including without limitation, by way
of depositing money or securities with the trustee with respect
thereto before due for the purpose of paying when due) or
exchange of any other Indebtedness for borrowed money (including
specifically, but without limitation, the Indebtedness evidenced
by the Senior Notes); except
(A) with the proceeds of an Equity Transaction,
(B) with the proceeds of Indebtedness incurred in a
refinancing of the Senior Notes permitted under Section 7.01(b),
and
74
(C) where
(I) no Default or Event of Default shall exist
either immediately prior to or immediately after giving effect
thereto,
(II) the Borrower shall have achieved a ratio of
Consolidated Funded Debt to Consolidated Tangible Capitalization
of .50:1.0 or less as of the end of the fiscal year then ending,
or if not on the last day of a fiscal year, then as of the end
of the most recent fiscal year preceding the transaction, and
(III) the Borrower can demonstrate compliance with
financial covenants (including without limitation, the Fixed
Charges Coverage Ratio of Section 6.11(c)) and availability
hereunder on both a Pro Forma Basis,
then the Borrower may make optional or voluntary
prepayments of principal on, or redeem or otherwise acquire,
Senior Notes in an aggregate amount not to exceed 10% of the
principal amount of the Senior Notes outstanding at the end of
the fiscal year most recently ended,
(iii) make any payment, prepayment, redemption,
acquisition for value of (including without limitation, by way
of depositing money or securities with the trustee with respect
thereto before due for the purpose of paying when due) refund,
refinance or exchange of any Subordinated Debt. As used herein,
"Subordinated Debt" means any indebtedness for borrowed money
which by its terms is, or upon the happening of certain events
may become, subordinated in right of payment to the Loans and
other amounts owing hereunder or in connection herewith.
7.08 Transactions with Affiliates. No member of
the Consolidated Borrower Group will enter into any transaction
or series of transactions, whether or not in the ordinary course
of business, with any officer, director, shareholder, Subsidiary
or Affiliate other than on terms and conditions substantially as
favorable than would be obtainable in a comparable arm's-length
transaction with a Person other than an Affiliate.
7.09 Ownership of Subsidiaries. Neither the
Borrower nor any of its Restricted Subsidiaries will sell,
transfer or otherwise dispose of, a substantial part the shares
of capital stock of the Subsidiaries or permit any Subsidiaries
75
to issue, sell or otherwise dispose of, a substantial part of
the shares of capital stock of the Subsidiaries. Neither the
Borrower nor any of its Restricted Subsidiaries will create,
form or acquire a Subsidiary unless such Subsidiary is or would
be a Restricted Subsidiary. As used herein, "substantial part"
shall mean any sale, transfer, disposition or issuance which
would (i) result in a Change of Control, or (ii) involve more
than 10% of the Borrower's consolidated net shareholder's equity
during the period ending as of the date of any such sale,
transfer, disposition or issuance, or more than 25% of the
Borrower's consolidated net shareholder's equity determined as
of December 31, 1994.
7.10 Fiscal Year. Neither the Borrower nor any of
its Restricted Subsidiaries will change its fiscal year.
SECTION 8
EVENTS OF DEFAULT
8.01 Events of Default. An Event of Default shall
exist upon the occurrence of any of the following specified
events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any
principal of any of the Loans or of any reimbursement
obligations arising from drawings under Letters of Credit, or in
providing cash collateral when due pursuant to Section 8.02(iv),
or
(ii) default, and such default shall continue for
five or more days, in the payment when due of any interest on
the Loans, or of any fees or other amounts owing hereunder,
under any of the other Credit Documents or in connection
herewith; or
(b) Representations. Any representation, warranty
76
or statement made or deemed to be made by any Credit Party
herein, in any of the other Credit Documents, or in any
statement or certificate delivered or required to be delivered
pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made;
or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance
of any term, covenant or agreement contained in Sections
6.01(i), 6.02, 6.10, 6.11 or 7.01 through 7.10, inclusive, or
(ii) default in the due performance or observance
by it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) or this Section
8.01) contained in this Credit Agreement and such default shall
continue unremedied for a period of at least 30 days after the
earlier of a responsible officer of a Credit Party becoming
aware of such default or notice thereof by the Administrative
Agent; or
(d) Other Credit Documents. (i) Any Credit Party
shall default in the due performance or observance of any term,
covenant or agreement in any of the other Credit Documents
(subject to applicable grace or cure periods, if any), or (ii)
any Credit Document shall fail to be in full force and effect or
to give the Administrative Agent and/or the Banks the liens,
rights, powers and privileges purported to be created thereby; or
(e) Guaranties. The guaranty given by the Credit
Parties hereunder or by any Additional Credit Party hereafter or
any provision thereof shall cease to be in full force and
effect, or any guarantor thereunder or any Person acting by or
on behalf of such guarantor shall deny or disaffirm such
guarantor's obligations under such guaranty, or any guarantor
shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed
pursuant to any guaranty; or
(f) Bankruptcy, etc. The Borrower or any
Restricted Subsidiary shall commence a voluntary case concerning
itself under the Bankruptcy Code; or an involuntary case is
commenced against the Borrower or any Restricted Subsidiary
under the Bankruptcy Code and the petition is not dismissed
within 60 days, after commencement of the case; or a custodian
(as defined in the Bankruptcy Code) is appointed for, or takes
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charge of all or substantially all of the property of the
Borrower or any Restricted Subsidiary; or the Borrower or any
Restricted Subsidiary commences any other proceeding under any
reorganization, arrangement, adjustment of the debt, relief of
creditors, dissolution, insolvency or similar law of any
jurisdiction whether now or hereafter in effect relating to the
Borrower or any Restricted Subsidiary; or there is commenced
against the Borrower or any Restricted Subsidiary any such
proceeding which remains undismissed for a period of 60 days; or
the Borrower or any Restricted Subsidiary is adjudicated
insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the
Borrower or any Restricted Subsidiary suffers appointment of any
custodian or the like for it or for any substantial part of its
property to continue unchanged or unstayed for a period of 60
days; or the Borrower or any Restricted Subsidiary makes a
general assignment for the benefit of creditors; or any
corporate action is taken by the Borrower or any Restricted
Subsidiary for the purpose of effecting any of the foregoing; or
(g) Defaults under Other Agreements. With respect
to any Indebtedness (other than Indebtedness outstanding under
this Credit Agreement) in excess of $5,000,000 in the aggregate
for the Borrower and its Restricted Subsidiaries, (i) the
Borrower or any of its Restricted Subsidiaries shall (A) default
in any payment (beyond the applicable grace period with respect
thereto, if any) with respect to any such Indebtedness, or (B)
default in the observance or performance relating to such
Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event or
condition shall occur or condition exist, the effect of which
default or other event or condition is to cause, or permit, the
holder or holders of such Indebtedness (or trustee or agent on
behalf of such holders) to cause (determined without regard to
whether any notice or lapse of time is required), any such
Indebtedness to become due prior to its stated maturity; or (ii)
any such Indebtedness shall be declared due and payable, or
required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; or
(h) Judgments. One or more judgments or decrees
shall be entered against the Borrower or any Restricted
Subsidiary involving a liability of $500,000 or more in the
aggregate (to the extent not paid or fully covered by insurance
provided by a carrier who has acknowledged coverage) and any
such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 30 days
from the entry thereof; or
(i) ERISA. (i) Any Credit Party or any member of
the Controlled Group shall fail to pay when due an amount or
amounts aggregating in excess of $1,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of
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intent to terminate a Plan or Plans which in the aggregate have
unfunded liabilities in excess of $1,000,000 (individually and
collectively, a "Material Plan") shall be filed under Title IV
of ERISA by any such member of the Consolidate Borrower Group or
any member of the Controlled Group, any plan administrator or
any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA)
in respect of, or to cause a trustee to be appointed to
administer any Material Plan; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there
shall occur a complete or partial withdrawal from, or a default,
within the meaning of Section 4219(c)(5) of ERISA, with respect
to, one or more Multiemployer Plans which could cause one or
more members of the Controlled Group to incur a current payment
obligation in excess of $1,000,000; or
(j) Ownership. There shall occur a Change of
Control; or
(k) Senior Notes. The occurrence of an Event of
Default under the Senoir Notes (as defined therein).
8.02 Acceleration; Remedies. Upon the occurrence
of an Event of Default, and at any time thereafter unless and
until such Event of Default has been waived by the Required
Banks or cured to the satisfaction of the Required Banks
(pursuant to the voting procedures in Section 10.06), the
Administrative Agent shall, upon the request and direction of
the Required Banks, by written notice to the Borrower take any of the
following actions without prejudice to the rights of the Administrative
Agent or any Bank to enforce its claims against the Credit Parties, except
as otherwise specifically provided for herein:
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(i) Termination of Commitments. Declare the
Commitments terminated whereupon the Commitments shall be
immediately terminated.
(ii) Acceleration of Loans. Declare the unpaid
principal of and any accrued interest in respect of all Loans
and unreimbursed drawings in respect of LOC Obligations and any
and all other indebtedness or obligations of any and every kind
owing by the Borrower to any of the Banks hereunder to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.
(iii) Enforcement of Rights. Enforce any and all
rights and interests created and existing under the Credit
Documents and all rights of set-off.
(iv) Cash Collateral. Direct the Credit Parties
to pay (and the Credit Parties agree that upon receipt of such
notice, or upon the occurrence of an Event of Default under
Section 8.01(e), they will immediately pay) to the
Administrative Agent additional cash, to be held by the
Administrative Agent, for the benefit of the Banks, in a cash
collateral account as additional security for the LOC
Obligations for subsequent drawings under all then outstanding
Letters of Credit in an amount equal to the maximum aggregate
amount which may be drawn under all Letters of Credits then
outstanding.
Notwithstanding the foregoing, if an Event of Default
specified in Section 8.01(f) shall occur, then the Commitments
shall automatically terminate and all Loans and LOC Obligations,
all accrued interest in respect thereof, all accrued and unpaid
Fees and other indebtedness or obligations owing to the Banks
hereunder shall immediately become due and payable without the
giving of any notice or other action by the Administrative Agent
or the Banks.
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SECTION 9
AGENCY PROVISIONS
9.01 Appointment. Each Bank hereby designates and
appoints CoreStates Bank, N.A. and First Union National Bank of
Virginia as co-agent (in such capacity as Co-Agents hereunder,
the "Co-Agents") and NationsBank, N.A. (Carolinas) as
administrative agent (in such capacity as Administrative Agent
hereunder, the "Administrative Agent") of such Bank to act as
specified herein and the other Credit Documents, and each such
Bank hereby authorizes the Administrative Agent and the
Co-Agents, respectively, as the agent for such Bank, to take
such action on its behalf under the provisions of this Credit
Agreement and the other Credit Documents and to exercise such
powers and perform such duties as are expressly delegated by the
terms hereof and of the other Credit Documents, together with
such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere herein
and in the other Credit Documents, neither the Co-Agents nor the
Administrative Agent shall have any duties or responsibilities,
except those expressly set forth herein and therein, or any
fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Credit Agreement or any of the other
Credit Documents, or shall otherwise exist against the Agents.
The provisions of this Section are solely for the benefit of the
Agents and the Banks and none of the Credit Parties shall have
any rights as a third party beneficiary of the provisions
hereof. In performing its functions and duties under this
Credit Agreement and the other Credit Documents, the
Administrative Agent and the Co-Agents shall not act solely as
agents of the Banks and do not assume and shall not be deemed to
have assumed any obligation or relationship of agency or trust
with or for the Borrower or any other Credit Party.
9.02 Delegation of Duties. The Agents may execute
any of their respective duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Agents shall not be responsible
for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
9.03 Exculpatory Provisions. Neither the Co-Agents
nor the Administrative Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the
Banks for any recitals, statements, representations or
warranties made by any of the Credit Parties contained herein or
in any of the other Credit Documents or in any certificate,
81
report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in
connection herewith or in connection with the other Credit
Documents, or enforceability or sufficiency herefor of any of
the other Credit Documents, or for any failure of the Borrower
to perform its obligations hereunder or thereunder. Neither the
Co-Agents nor the Administrative Agent shall be responsible to
any Bank for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Credit
Agreement, or any of the other Credit Documents or for any
representations, warranties, recitals or statements made herein
or therein or made by the Borrower or any Credit Party in any
written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made
by the Co-Agents or the Administrative Agent to the Banks or by
or on behalf of the Credit Parties to the Co-Agents or the
Administrative Agent or any Bank or be required to ascertain or
inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein
or therein or as to the use of the proceeds of the Loans or of
the existence or possible existence of any Default or Event of
Default or to inspect the properties, books or records of the
Credit Parties.
9.04 Reliance on Communications. The Co-Agents or
the Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order
or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Borrower
or any of the other Credit Parties, independent accountants and
other experts selected by the Administrative Agent with
reasonable care). The Administrative Agent may deem and treat
the Banks as the owner of their respective interests hereunder
for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the
Administrative Agent in accordance with Section 10.03(b) hereof.
The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Credit Agreement or under
any of the other Credit Documents unless it shall first receive
such advice or concurrence of the Required Banks as it deems
appropriate or it shall first be indemnified to its satisfaction
by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting,
hereunder or under any of the other Credit Documents in
accordance with a request of the Required Banks (or to the
extent specifically provided in Section 10.06, all the Banks)
and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Banks (including their
successors and assigns).
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9.05 Notice of Default. The Administrative Agent
shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless
the Administrative Agent has received notice from a Bank or a
Credit Party referring to the Credit Document, describing such
Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Banks. The Administrative Agent
shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Banks.
9.06 Non-Reliance on Agents and Other Banks. Each
Bank expressly acknowledges that neither the Co-Agents nor the
Administrative Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates
has made any representations or warranties to it and that no act
by the Co-Agents or the Administrative Agent or any affiliate
thereof hereinafter taken, including any review of the affairs
of the Borrower, shall be deemed to constitute any
representation or warranty by the Co-Agents or the
Administrative Agent to any Bank. Each Bank represents to the
Co-Agents and the Administrative Agent that it has,
independently and without reliance upon the Co-Agents or the
Administrative Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, assets,
operations, property, financial and other conditions, prospects
and creditworthiness of the Borrower and made its own decision
to make its Loans hereunder and enter into this Credit
Agreement. Each Bank also represents that it will,
independently and without reliance upon the Co-Agents or the
Administrative 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 credit analysis, appraisals and
decisions in taking or not taking action under this Credit
Agreement, and to make such investigation as it deems necessary
to inform itself as to the business, assets, operations,
property, financial and other conditions, prospects and
creditworthiness of the Borrower. Except for notices, reports
and other documents expressly required to be furnished to the
Banks by the Administrative Agent hereunder, neither the
Co-Agents nor the Administrative Agent shall have any duty or
responsibility to provide any Bank with any credit or other
information concerning the business, operations, assets,
property, financial or other conditions, prospects or
creditworthiness of the Borrower which may come into the
possession of the Co-Agents nor the Administrative Agent or any
of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates.
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9.07 Indemnification. The Banks agree to indemnify
the Co-Agents and the Administrative Agent in their respective
capacities as such (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so),
ratably according to their respective Commitments, from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the payment
of the Obligations) be imposed on, incurred by or asserted
against the Co-Agents or the Administrative Agent in their
respective capacities as such in any way relating to or arising
out of this Credit Agreement or the other Credit Documents or
any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action
taken or omitted by the Co-Agents or the Administrative Agent
under or in connection with any of the foregoing; provided that
no Bank shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting
from the gross negligence or willful misconduct of a Co-Agent or
the Administrative Agent. If any indemnity furnished to the
Co-Agents or the Administrative Agent for any purpose shall, in
the opinion of the Co-Agents or the Administrative Agent, be
insufficient or become impaired, the Administrative Agent may
call for additional indemnity and cease, or not commence, to do
the acts indemnified against until such additional indemnity is
furnished. The agreements in this Section shall survive the
payment of the Obligations and all other amounts payable
hereunder and under the other Credit Documents.
9.08 Agents in their Individual Capacity. The
Co-Agents and the Administrative Agent and their respective
affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower or any other
members of the Consolidated Borrower Group as though the
Co-Agents or the Administrative Agent were not a Co-Agent or
Administrative Agent hereunder. With respect to the Loans made
and all Obligations owing to it, the Co-Agent or the
Administrative Agent shall have the same rights and powers under
this Credit Agreement as any Bank and may exercise the same as
though they were not a Co-Agent or Administrative Agent, and the
terms "Bank" and "Banks" shall include the Co-Agents and the
Administrative Agent in their individual capacity.
9.09 Successor Agent. The Administrative Agent and
any Co-Agent may, at any time, resign upon 20 days' written
notice to the Banks, and be removed with or without cause by the
Required Banks upon 30 days' written notice to the Co-Agent or
Administrative Agent. Upon any such resignation or removal, the
Required Banks shall have the right to appoint a successor
Co-Agent or Administrative Agent. If no successor Co-Agent or
Administrative Agent shall have been so appointed by the
Required Banks, and shall have accepted such appointment, within
30 days after the notice of resignation or notice of removal, as
84
appropriate, then the retiring Co-Agent or Administrative Agent
shall select a successor Co-Agent or Administrative Agent
provided such successor is a Bank hereunder or a commercial bank
organized under the laws of the United States of America or of
any State thereof and has a combined capital and surplus of at
least $400,000,000. Upon the acceptance of any appointment as
Co-Agent or Administrative Agent hereunder by a successor, such
successor Co-Agent or Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Co-Agent or Administrative
Agent, and the retiring Co-Agent or Administrative Agent shall
be discharged from its duties and obligations as Co-Agent or
Administrative Agent, as appropriate, under this Credit
Agreement and the other Credit Documents and the provisions of
this Section 9.09 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Co-Agent or
Administrative Agent under this Credit Agreement.
SECTION 10
MISCELLANEOUS
10.01 Notices. Except as otherwise expressly
provided herein, all notices and other communications shall have
been duly given and shall be effective (i) when delivered, (ii)
when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which
the same has been delivered prepaid to a reputable national
overnight air courier service, or (iv) the third Business Day
following the day on which the same is sent by certified or
registered mail, postage prepaid, in each case to the respective
parties at the address, in the case of the Borrower and the
Administrative Agent, set forth below, and in the case of the
Banks, set forth on Schedule 2.01(a), or at such other address
as such party may specify by written notice to the other parties
hereto:
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if to the Borrower or the Guarantors:
Tultex Corporation
101 Commonwealth Boulevard
Martinsville, Virginia 24112
Attn: Kevin W. Walsh
Vice President-Finance/Treasurer
Telephone: (703) 632-2961 Ext. 3101
Telecopy: (703) 634-2611
if to the Administrative Agent:
NationsBank, N.A. (Carolinas)
101 N. Tryon Street
Independence Center
NC1-001-15-04
Charlotte, North Carolina 28255
Attn: Margaret Lydon
Telephone: (704) 386-9371
Telecopy: (704) 386-9923
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with a copy to:
NationsBank, N.A. (Carolinas)
NationsBank Corporate Center, 8th Floor
NC1-007-08-11
100 North Tryon Street
Charlotte, North Carolina 28255
Attn: J. Lance Walton
Telephone: (704)386-6744
Telecopy: (704)386-1270
10.02 Right of Set-Off. In addition to any rights
now or hereafter granted under applicable law or otherwise, and
not by way of limitation of any such rights, upon the occurrence
of an Event of Default, each Bank is authorized at any time and
from time to time, without presentment, demand, protest or other
notice of any kind (all of which rights being hereby expressly
waived), to set-off and to appropriate and apply any and all
deposits (general or special) and any other indebtedness at any
time held or owing by such Bank (including, without limitation
branches, agencies or Affiliates of such Bank wherever located)
to or for the credit or the account of the Borrower against
obligations and liabilities of the Borrower to such Bank
hereunder, under the Notes, the other Credit Documents or
otherwise, irrespective of whether such Bank shall have made any
demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or unmatured, and any
such set-off shall be deemed to have been made immediately upon
the occurrence of an Event of Default even though such charge is
made or entered on the books of such Bank subsequent thereto.
The Borrower hereby agrees that any Person purchasing a
participation in the Loans and Commitments hereunder pursuant to
Section 10.03(c) or Section 2.21. may exercise all rights of
set-off with respect to its participation interest as fully as
if such Person were a Bank hereunder.
10.03 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be
binding upon and inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto;
provided that the none of the Credit Parties may assign and
transfer any of its rights, obligations or interests without
prior written consent of the Banks; provided further that the
87
rights of each Bank to transfer, assign or grant participations
in its rights and/or obligations hereunder shall be limited as
set forth in this Section 10.03, provided however that nothing
herein shall prevent or prohibit any Bank from (i) pledging its
Loans hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank, or
(ii) granting assignments or participation in such Bank's Loans
and/or Commitments hereunder to its parent company and/or to any
affiliate of such Bank which is at least 50% owned by such Bank
or its parent company.
(b) Assignments. Each Bank may assign all or a
portion of its rights and obligations hereunder pursuant to an
assignment agreement substantially in the form of Schedule
10.03(b) to one or more Eligible Assignees, provided that any
such assignment shall be in a minimum aggregate amount of
$10,000,000 of the Commitments and in integral multiples of
$1,000,000 above such amount, that each such assignment shall be
of a constant not varying, percentage of all of the assigning
Bank's rights and obligations under this Credit Agreement. Any
assignment hereunder shall be effective upon delivery to the
Administrative Agent of written notice of the assignment
together with a transfer fee of $1,500 payable to the
Administrative Agent for its own account. The assigning Bank
will give prompt notice to the Administrative Agent and the
Borrower of any such assignment. Upon the effectiveness of any
such assignment (and after notice to the Borrower as provided
herein), the assignee shall become a "Bank" for all purposes of
this Credit Agreement and the other Credit Documents and, to the
extent of such assignment, the assigning Bank shall be relieved
of its obligations hereunder to the extent of the Loans and
Commitment components being assigned. Along such lines the
Borrower agrees that upon notice of any such assignment and
surrender of the appropriate Note or Notes, it will promptly
provide to the assigning Bank and to the assignee separate
promissory notes in the amount of their respective interests
substantially in the form of the original Note (but with
notation thereon that it is given in substitution for and
replacement of the original Note or any replacement notes
thereof).
(c) Participations. Each Bank may sell, transfer,
grant or assign participations in all or any part of such Bank's
interests and obligations hereunder; provided that (i) such
selling Bank shall remain a "Bank" for all purposes under this
Credit Agreement (such selling Bank's obligations under the
Credit Documents remaining unchanged) and the participant shall
not constitute a Bank hereunder, (ii) no such participant shall
have, or be granted, rights to approve any amendment or waiver
relating to this Credit Agreement or the other Credit Documents
except to the extent any such amendment or waiver would (A)
reduce the principal of or rate of interest on or fees in
respect of any Loans in which the participant is participating,
(B) postpone the date fixed for any payment of principal
(including extension of the Termination Date or the date of any
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mandatory prepayment), interest or fees in which the participant
is participating, or (C) release all or substantially all of the
collateral or guaranties (except as expressly provided in the
Credit Documents) supporting any of the Loans or Commitments in
which the participant is participating, (iii) sub-participations
by the participant (except to an affiliate, parent company or
affiliate of a parent company of the participant) shall be
prohibited and (iv) any such participations shall be in a
minimum aggregate amount of $5,000,000 of the Commitments and in
integral multiples of $1,000,000 in excess thereof. In the case
of any such participation, the participant shall not have any
rights under this Credit Agreement or the other Credit Documents
(the participant's rights against the selling Bank in respect of
such participation to be those set forth in the participation
agreement with such Bank creating such participation) and all
amounts payable by the Borrower hereunder shall be determined as
if such Bank had not sold such participation, provided, however,
that such participant shall be entitled to receive additional
amounts under Sections 2.13, 2.14, 2.15 and 2.16 on the same
basis as if it were a Bank.
10.04 No Waiver; Remedies Cumulative. No failure
or delay on the part of the Administrative Agent or any Bank in
exercising any right, power or privilege hereunder or under any
other Credit Document and no course of dealing between the
Borrower or any Guarantor and the Administrative Agent or any
Bank shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or
under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights
or remedies which the Administrative Agent or any Bank would
otherwise have. No notice to or demand on the Borrower in any
case shall entitle the Borrower or any Guarantor to any other or
further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent or
the Banks to any other or further action in any circumstances
without notice or demand.
10.05 Payment of Expenses, etc. The Borrower
agrees to: (i) pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent in connection with the
negotiation, preparation, execution and delivery and
administration of this Credit Agreement and the other Credit
Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and expenses
of Moore & Van Allen, special counsel to the Administrative
Agent) and any amendment, waiver or consent relating hereto and
thereto including, but not limited to, any such amendments,
waivers or consents resulting from or related to any work-out,
renegotiation or restructure relating to the performance by the
Borrower under this Credit Agreement and of the Administrative
Agent and the Banks in connection with enforcement of the Credit
Documents and the documents and instruments referred to therein
89
(including, without limitation, in connection with any such
enforcement, the reasonable fees and disbursements of counsel
for the Administrative Agent and each of the Banks); (ii) pay
and hold each of the Banks harmless from and against any and all
present and future stamp and other similar taxes with respect to
the foregoing matters and save each of the Banks harmless from
and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iii)
indemnify each Bank, its officers, directors, employees,
representatives and agents from and hold each of them harmless
against any and all losses, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out
of, or in any way related to, or by reason of, any
investigation, litigation or other proceeding (whether or not
any Bank is a party thereto) related to the entering into and/or
performance of any Credit Document or the use of proceeds of any
Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any
Credit Document, including, without limitation, the reasonable
fees and disbursements of counsel incurred in connection with
any such investigation, litigation or other proceeding (but
excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of gross negligence or
willful misconduct on the part of the Person to be indemnified).
10.06 Amendments, Waivers and Consents. Neither
this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived,
discharged or terminated unless such amendment, change, waiver,
discharge or termination is in writing signed by the Required
Banks, provided that no such amendment, change, waiver,
discharge or termination shall, without the consent of each
Bank, (i) extend the scheduled maturities (including the final
maturity and any mandatory prepayments) of any Loan, or any
portion thereof, or reduce the rate or extend the time of
payment of interest (other than as a result of waiving the
applicability of any post-default increase in interest rates)
thereon or fees hereunder or reduce the principal amount
thereof, or increase the Commitments of the Banks over the
amount thereof in effect (it being understood and agreed that a
waiver of any Default or Event of Default or of a mandatory
reduction in the total commitments shall not constitute a change
in the terms of any Commitment of any Bank) or issue or extend
Letters of Credit in contravention of the provisions of Section
2.07 requiring unanimous consent, (ii) release any Guarantor
from its guaranty obligations hereunder,, (iii) amend, modify or
waive any provision of this Section or Section 2.13, 2.14, 2.15,
2.16, 2.20, 8.01(a), 9.07, 10.02 and 10.03 (iv) reduce any
percentage specified in, or otherwise modify, the definition of
Required Banks or (v) consent to the assignment or transfer by
the Borrower (or Guarantor) of any of its rights and obligations
under (or in respect of) this Credit Agreement. No provision of
Section 9 may be amended without the consent of the
Administrative Agents.
90
10.07 Counterparts. This Credit Agreement may be
executed in any number of counterparts, each of which where so
executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be
necessary in making proof of this Credit Agreement to produce or
account for more than one such counterpart.
10.08 Headings. The headings of the sections and
subsections hereof are provided for convenience only and shall
not in any way affect the meaning or construction of any
provision of this Credit Agreement.
10.09 Survival of Indemnification. All indemnities
set forth herein, including, without limitation, in Sections
2.13, 2.15 or 10.05 shall survive the execution and delivery of
this Credit Agreement, and the making of the Loans, the
repayment of the Loans and other obligations and the termination
of the Commitment hereunder.
10.10 Governing Law; Submission to Jurisdiction;
Venue.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
VIRGINIA. Any legal action or proceeding with respect to this
Credit Agreement or any other Credit Document may be brought in
the courts of the Commonwealth of Virginia in the City of
Richmond, or of the United States for the Eastern District of
Virginia, and, by execution and delivery of this Credit
Agreement, each of the Credit Parties hereby irrevocably accepts
for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Each of the
Credit Parties further irrevocably consents to the service of
process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at the
address set out notices pursuant to Section 10.01, such service
to become effective 30 days after such mailing. Nothing herein
shall affect the right of the Agent to serve process in any
other manner permitted by law or to commence legal proceedings
or to otherwise proceed against the Borrower in any other
jurisdiction.
(b) Each of the Credit Parties hereby irrevocably
waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Credit Agreement or
91
any other Credit Document brought in the courts referred to in
subsection (a) hereof and hereby further irrevocably waives and
agrees not to plead or claim in any such court that any such
action or proceeding brought in any such court has been brought
in an inconvenient forum.
(c) EACH OF THE AGENTS, EACH OF THE BANKS AND EACH
OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER
CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
10.11 Severability. If any provision of any of the
Credit Documents is determined to be illegal, invalid or
unenforceable, such provision shall be fully severable and the
remaining provisions shall remain in full force and effect and
shall be construed without giving effect to the illegal,
invalid or unenforceable provisions.
10.12 Entirety. This Credit Agreement together
with the other Credit Documents represent the entire agreement
of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to
the Credit Documents or the transactions contemplated herein and
therein.
10.13 Survival of Representations and
Warranties. All representatives and warranties made by the
Borrower herein shall survive delivery of the Notes and the
making of the Loans hereunder.
[Remainder of Page Intentionally Left Blank]
92
IN WITNESS WHEREOF, each of the parties hereto has caused
a counterpart of this Credit Agreement to be duly executed and
delivered as of the date first above written.
BORROWER:
TULTEX CORPORATION,
a Virginia corporation
By____________________________
Title_________________________
GUARANTORS:
DOMINION STORES, INC.,
a Virginia corporation
By____________________________
Title_________________________
93
LOGO 7, INC.,
a Virginia corporation
By____________________________
Title_________________________
UNIVERSAL INDUSTRIES, INC.,
a Massachusetts corporation
By____________________________
Title_________________________ Signature Pages to
94
Tultex Corporation Credit Agreement
BANKS:
NATIONSBANK, N.A. (CAROLINAS),
individually in its capacity as a
Bank and in its capacity as Co-Agent and
Administrative Agent
By_____________________________
Title__________________________
CORESTATES BANK, N.A.,
individually in its capacity as a Bank
and in its capacity as a Co-Agent
By
Title
95
FIRST UNION NATIONAL BANK OF VIRGINIA, individually
in its capacity as a Bank and in its capacity as a Co-Agent
By
Title
SIGNET BANK/VIRGINIA
By
Title
FIRST NATIONAL BANK OF MARYLAND
By
Title
THE BANK OF TOKYO TRUST COMPANY
By
Title
96
Signature Pages to
Tultex Corporation Credit Agreement
NBD BANK, N.A.
By
Title
PNC BANK, N.A.
By
Title
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By
Title
97
THE BANK OF NEW YORK
By
Title
Schedule 2.01(a)
Schedule of Banks and
Commitment
Address Revolving Trade LOC Standby LOC
for Funding Address for Committed Committed Committed
Bank and Payments Other Notices Amount Amount Amount
---- ------------ ---------------- ---------- ------------- ------------
NationsBank, NationsBank, NationsBank, 37,500,000 11,666,666.67 1,666,666.67
N.A. (Carolinas) N.A. (Carolinas) N.A. (Carolinas)
(704)386-9973 NationsBank
101 N. Tryon St. Corporate
Independence Center, 8th
Center Floor
NC1-001-15-04 NC1-007-08-11
Charlotte, NC 100 N. Tryon St.
28255 Charlotte, NC
Attn: Margaret 28255
Lydon Attn: J. Lance
Phone: Walton
(704)386-9371 Phone:
Fax: (704)386-6744
(704)386-9973 Fax:
(704)386-1270
98
Address Revolving Trade LOC Standby LOC
for Funding Address for Committed Committed Committed
Bank and Payments Other Notices Amount Amount Amount
---- ------------ ---------------- ---------- ------------- ------------
CoreStates Bank, CoreStates Bank, 35,000,000 10,888,888.89 1,555,555.56
N.A. N.A.
1345 Chestnut
Street
FC1-1-2-25
Phil., PA
19101-7618
Attn: James P.
Richards
Phone:
(215)973-7397
Fax:
(215)973-6745
Signet Signet 15,000,000 4,666,666.67 666,666.67
Bank/Virginia Bank/Virginia
800 East Main
Street
Upper Mezzanine
Richmond, VA
23219
Attn: William D.
Garrison
Phone:
(804)771-7395
Fax:
(804)771-7151
First Union First Union 30,000,000 9,333,333.33 1,333,333.33
National Bank National Bank
of Virginia of Virginia
One First Union
Ctr., TW19
Charlotte, NC
28288-0730
Attn: Michael
T. Grady
Phone:
(704)383-7514
Fax:
(704)374-2802
NBD Bank, N.A. NBD Bank, N.A. 25,000,000 7,777,777.78 1,111,111.11
One Indiana Sq.
Mail St. 465
Indianapolis, IN
46266
Attn: Mark
Wasden
Phone:
(317)266-6366
Fax:
(317)266-6042
99
Address Revolving Trade LOC Standby LOC
for Funding Address for Committed Committed Committed
Bank and Payments Other Notices Amount Amount Amount
---- ------------ ---------------- ---------- ------------- ------------
First National
Bank of Maryland First National 22,500,000 7,000,000.00 1,000,000.00
Bank of
Maryland
25 S. Charles
St.
18th Floor
Mail Code
101-744
Baltimore, MD
21201
Attn: Roy A.
Smith
Phone:
(410)244-4289
Fax:
(410)244-4294
The Bank of
Tokyo Trust
Company The Bank of 15,000,000 4,666,666.67 666,666.67
Tokyo Trust
Company
2000 K. Street
Suite 701
Washington, DC
20006
Attn: Andrew
Don
Phone:
(202)463-0477
Fax:
(202)293-3416
PNC Bank, N.A. PNC Bank, N.A. 15,000,000 4,666,666.67 666,666.67
The Land Title
Building
Broad and
Chestnut Streets
Philadelphia, PA
19101
Attn: Gary
Tyrell
Phone:
(215)585-5934
100
Address Revolving Trade LOC Standby LOC
for Funding Address for Committed Committed Committed
Bank and Payments Other Notices Amount Amount Amount
---- ------------ ---------------- ---------- ------------- ------------
Morgan Guaranty Morgan Guaranty 15,000,000 4,666,666.67 666,666.67
Trust Company of Trust
New York Company of New
York
60 Wall Street,
22nd Floor
New York, NY
10260
Attn: David
Common
Phone:
(212)648-3319
Fax:
(212)648-5336
The Bank of New
York The Bank of New 15,000,000 4,666,666.67 666,666.67
York
One Wall Street
New York, NY
10286
Attn: Ann Marie
Beeble
Phone:
(212)635-1339
Fax:
(212)635-6434
Schedule 2.02(1)
FORM OF NOTICE OF BORROWING
NationsBank, N.A. (Carolinas), NationsBank, N.A. (Carolinas),
as Administrative Agent for as Swingline Lender
the Lenders referred to below 101 N. Tryon Street
101 N. Tryon Street Independence Center
Independence Center NC1-001-15-04
NC1-001-15-04 Charlotte, North Carolina 28255
Charlotte, North Carolina 28255 Attn: Agency Services
Attn: Agency Services Margaret Lydon
Margaret Lydon
101
Ladies and Gentlemen:
The undersigned, Tultex Corporation (the
"Borrower"), refers to the Credit Agreement dated as of March 8,
1995 (as it may be amended, modified, extended or restated from
time to time, the "Credit Agreement"), among the Borrower, the
other Credit Parties party thereto, the Banks party thereto, and
NationsBank, N.A. (Carolinas), as Administrative Agent.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit
Agreement. The Borrower hereby gives you notice that it
requests a Committed Revolving Loan advance or a Swingline Loan
advance pursuant to the provisions of Section 2.07 or 2.08 of
the Credit Agreement, as appropriate, and in connection herewith
sets forth below the terms on which such advance is requested to
be made:
(A) Type of Loan Advance Requested (Check One)
_______ Committed Revolving Loan
_______ Swingline Loan
(B) Date of Borrowing
(which is a Business Day) _______________________
(C) Principal Amount of
Borrowing 1 _______________________
(D) Interest rate basis 2 _______________________
(E) Interest Period and the
last day thereof 3 _______________________
1 In the case of Committed revolving Loans, a minimum of $5,000,000 and
$1,000,000 increments in excess therof (or the remaining Revolving
Committed Amount, if less) and in the case of Swingline Loans, a
minimum of $250,000 and $100,000 increments in excess thereof (or the
remaining Swingline committed Amount, if less).
2 Eurodollar, Adjusted CD and Base Rate Loans available for Committed
Revolving Loans. Money Market and Base Rate Loans available for Swingline
Loans.
3 Interest Periods of one, two, three and six months' duration for Eurodollar
Loans and 30, 60, 90, and 180 days' duration for Adjusted CD Loans.
102
Upon acceptance of any or all of the Loans made by
the Banks in response to this request, the Borrower shall be
deemed to have represented and warranted that the conditions to
lending specified in Section 2.09(b) of the Credit Agreement
have been satisfied.
Very truly yours,
TULTEX CORPORATION
By:__________________________________
Title:_______________________________
Schedule 2.02(2)
FORM OF NOTICE OF CONVERSION
NationsBank, N.A. (Carolinas),
as Administrative Agent for
the Lenders referred to below
101 N. Tryon Street
Independence Center
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Margaret Lydon
Ladies and Gentlemen:
The undersigned, Tultex Corporation (the
"Borrower"), refers to the Credit Agreement dated as of March 8,
1995 (as it may be amended, modified, extended or restated from
103
time to time, the "Credit Agreement"), among the Borrower, the
other Credit Parties party thereto, the Banks party thereto, and
NationsBank, N.A. (Carolinas), as Administrative Agent.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit
Agreement. The Borrower hereby gives you notice pursuant to
Section 2.03 of the Credit Agreement that it requests an
extension or conversion of a Committed Revolving Loan
outstanding under the Credit Agreement, and in that connection
sets forth below the terms on which such extension or conversion
is requested to be made:
(A) Date of Extension or Conversion
(which is the last day of the _______________________
the applicable Interest Period)
(B) Principal Amount of
Extension or Conversion 4 _______________________
(C) Interest rate basis 5 _______________________
(D) Interest Period and the
last day thereof 6 _______________________
4 A minimum of $5,000,000 and $1,000,000 increments in excess therof
(or the reamining Revolving Committed Amount, if less).
5 Eurodollar, Adjusted CD and Base Rate Loans available.
6 Interest Periods of one, two, three and six months' duration for Eurodollar
Loans and 30, 60, 90 and 180 days' duration for Adjusted CD Loans.
104
Upon acceptance of extension or
conversion of any or all of the Loans made by the Banks in
response to this request, the Borrower shall be deemed to have
represented and warranted that the conditions to lending
specified in Section 2.09(b) of the Credit Agreement have been
satisfied.
Very truly yours,
TULTEX CORPORATION
By:__________________________________
Title:_______________________________
Schedule 2.06
FORM OF COMMITTED REVOLVING NOTE
$____________________ March 8, 1995
FOR VALUE RECEIVED, TULTEX CORPORATION, a Virginia
corporation (the "Borrower"), hereby promises to pay to the
order of __________________________ (the "Bank"), at the office
of NationsBank, N.A. (Carolinas), as Administrative Agent (the
"Administrative Agent"), at 101 N. Tryon Street, Independence
Center, NC1-001-15-04, Charlotte, North Carolina 28255 (or at
such other place or places as the holder hereof may designate),
at the times set forth in the Credit Agreement dated as of the
date hereof among the Borrower, certain other Credit Parties
party thereto, the Administrative Agent, the Bank and certain
other lenders (as it may be amended, modified, extended or
restated from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement), but in no event
later than the Termination Date, in Dollars and in immediately
available funds, the principal amount of
________________________ ($____________) or, if less than such
principal amount, the aggregate unpaid principal amount of all
105
Committed Revolving Loans made by the Bank to the Borrower
pursuant to the Credit Agreement, and to pay interest from the
date hereof on the unpaid principal amount hereof, in like
money, at said office, on the dates and at the rates selected in
accordance with Section 2.05 of the Credit Agreement.
Upon the occurrence and during the continuance of an
Event of Default the balance outstanding hereunder shall bear
interest as provided in Section 2.05 of the Credit Agreement.
Further, in the event the payment of all sums due hereunder is
accelerated under the terms of the Credit Agreement, this Note,
and all other indebtedness of the Borrower to the Bank shall
become immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by
the Borrower.
In the event this Note is not paid when due at any
stated or accelerated maturity, the Borrower agrees to pay, in
addition to the principal and interest, all costs of collection,
including reasonable attorneys' fees.
All borrowings evidenced by this Note and all
payments and prepayments of the principal hereof and interest
hereon and the respective dates thereof shall be endorsed by the
holder hereof on Schedule A attached hereto and incorporated
herein by reference, or on a continuation thereof which shall be
attached hereto and made a part hereof; provided, however, that
any failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect the
obligation of the Borrower to make payments of principal and
interest in accordance with the terms of this Note.
IN WITNESS WHEREOF, the Borrower has caused this
Note to be duly executed by its duly authorized officer as of
the day and year first above written.
TULTEX CORPORATION
By____________________________
Title_________________________
106
SCHEDULE A TO THE
COMMITTED REVOLVING NOTE
OF TULTEX CORPORATION
DATED MARCH 8, 1995
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
Schedule 2.07(c)
EXISTING LETTERS OF CREDITSchedule 2.08(d)
FORM OF SWINGLINE NOTE
$10,000,000 March 8, 1995
FOR VALUE RECEIVED, TULTEX CORPORATION, a Virginia
corporation (the "Borrower"), hereby promises to pay to
NATIONSBANK, N.A. (CAROLINAS) (the "Swingline Lender"), its
successors and registered assigns, at the office of NationsBank,
N.A. (Carolinas), as Administrative Agent (the "Administrative
Agent"), at 101 N. Tryon Street, Independence Center,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other
place or places as the holder hereof may designate), at the
times set forth in the Credit Agreement dated as of the date
hereof among the Borrower, certain other Credit Parties party
thereto, the Administrative Agent, the Swingline Lender and
certain other lenders (as it may be amended, modified, extended
or restated from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement), but in no event
later than the Termination Date, in Dollars and in immediately
available funds, the principal amount of TEN MILLION DOLLARS
107
($10,000,000) or, if less than such principal amount, the
aggregate unpaid principal amount of all Swingline Loans made by
the Swingline Lender to the Borrower pursuant to the Credit
Agreement, and to pay interest from the date hereof on the
unpaid principal amount hereof, in like money, at said office,
on the dates and at the rates selected in accordance with
Section 2.08(c) of the Credit Agreement.
From and after any failure to make any payment of
principal or interest in respect of any of the Loans when due,
whether at scheduled or accelerated maturity or on account of
any mandatory prepayment, the principal of and, to the extent
permitted by law, interest on, the Swingline Loans evidenced
hereby, shall bear interest as provided in Section 2.07(c) of
the Credit Agreement. Further, in the event the payment of all
sums due hereunder is accelerated under the terms of the Credit
Agreement, this Note, and all other indebtedness of the Borrower
to the Swingline Lender shall become immediately due and
payable, without presentment, demand, protest or notice of any
kind (except as expressly provided in the Credit Agreement), all
of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any
stated or accelerated maturity, the Borrower agrees to pay, in
addition to the principal and interest, all costs of collection,
including reasonable attorneys' fees.
All borrowings evidenced by this Note and all
payments and prepayments of the principal hereof and interest
hereon and the respective dates thereof shall be endorsed by the
holder hereof on Schedule A attached hereto and incorporated
herein by reference, or on a continuation thereof which shall be
attached hereto and made a part hereof; provided, however, that
any failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect the
obligation of the Borrower to make payments of principal and
interest in accordance with the terms of this Note.
108
IN WITNESS WHEREOF, the Borrower has caused this
Note to be duly executed by its duly authorized officer as of
the day and year first above written.
TULTEX CORPORATION
By____________________________
Title_________________________
SCHEDULE A TO THE
SWINGLINE NOTE EXECUTED IN FAVOR OF
NATIONSBANK, N.A. (CAROLINAS), AS SWINGLINE LENDER
OF TULTEX CORPORATION
DATED MARCH 8, 1995
Date Person Making Interest Payments Balance
Notation Amount Period Rate Principal Interest of Note
Schedule 4.01(a)
Form of Master Trade LOC Agreement
Schedule 5.09
Schedule of Outstanding Indebtedness
109
Schedule 5.10
Schedule of Legal Proceedings
Schedule 5.15
Schedule of Subsidiaries
Schedule 5.18
Schedule of Environmental Exceptions
Schedule 6.01(c)
Form of Borrowing Base Certificate
For the calendar month ended _______________, 19__.
I, the undersigned, the chief financial officer of
Tultex Corporation (the "Borrower"), certify as of the date
hereof and prior to giving effect to any payment due as of the
date hereof under the Credit Agreement dated as March 8, 1995
(as it may be amended, modified, extended or restated from time
to time, the "Credit Agreement"; all capitalized terms used
herein shall have the meanings given to such terms in the Credit
Agreement) among the Borrower, the other Credit Parties party
thereto, the Banks party thereto and NationsBank, N.A.
(Carolinas), as Administrative Agent:
110
ACCOUNTS
Gross Accounts (as of month end set forth
above) $___________
Less
(a) Allowance for Doubtful Accounts $________
(b) Allowance for Price Protection $________
(c) Allowance for Distributor and Other
Returns $________
(d) Allowance for Unresolved Short Pays $________
Total Allowance $___________
Net Accounts $___________
Less Ineligibles:
(a) Accounts subject to any Lien except
those $________
in favor of the Collateral Agent, on behalf
of Lenders, and except for Permitted Encum-
brances specified in subparagraph (iii)
of the definition thereof.
(b) Accounts more than 90 days past due or more
$________
than ___ days from original invoice date
(c) Accounts owing by Account Debtor outside U.S.
$________
(unless secured by Letter of Credit)
111
(d) Accounts subject to offset, deduction
$________
or dispute
(e) Intercompany accounts
$________
Total Ineligibles ($ )
Eligible Accounts: $_________
Eligible Receivables Borrowing Base (80% of Eligible
Receivables) $_________
INVENTORY
Gross FIFO Inventory (as of month end set forth
above) $__________
Less:
(a) Inventory Reserve for Obsolescence $__________
(b) Work-in-process (other than Greige Cloth)
Net Inventory $__________
Less Ineligibles:
(a) Inventory subject to any Lien except $________
for Permitted Encumbrances
112
(b) Inventory not in saleable condition $_________
Total Ineligibles $__________
Eligible Inventory $__________
Eligible Inventory Borrowing Base $__________
(10th through 4th fiscal months, 50% of Eligible
Inventory;
5th through 9th fiscal months, 65% of Eligible
Inventory)
TRADE LETTERS OF CREDIT
Trade Letters of Credit Outstanding $___________
Advance Rate against Trade Letters of Credit (50% of
outstanding $___________
Trade Letters of Credit
BORROWING BASE
Eligible Receivables Borrowing Base $___________
Eligible Inventory Borrowing Base $___________
Advance Rate against Trade Letters of
Credit $___________
________________
Total Borrowing Base $____________
113
OUTSTANDING CREDIT
Committed Revolving Loans $____________
Trade Letters of Credit $____________
Standby Letters of Credit $____________
Swingline Loans $____________
_____________
Total Extensions of Credit $____________
With reference to this Borrowing Base certificate, I
hereby certify on behalf of the Borrower that the above
statements are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand
and seal this _____ day of ______________, 19___.
TULTEX CORPORATION
[CORPORATE SEAL]
By________________________
Chief Financial Officer
114
Schedule 6.01(d)
Form of Officer's Compliance Certificate
For the fiscal quarter ended _________________,
19___.
I, ______________________, chief financial officer
of Tultex Corporation (the "Borrower") hereby certify that, with
respect to that certain Credit Agreement dated as of March 8,
1995 (as it may be amended, modified, extended or restated from
time to time, the "Credit Agreement"; all of the defined terms
in the Credit Agreement are incorporated herein by reference)
among the Borrower, the other Credit Parties party thereto, the
Banks party thereto and NationsBank, N.A. (Carolinas), as
Administrative Agent:
a. Since ___________ (the date of the last similar
certification, or, if none, the Closing Date) (i) the Credit
Parties have kept, observed, performed and fulfilled each and
every agreement binding on them contained in the Credit
Documents in all material respects and (ii) no Default or Event
of Default has occurred under the Credit Agreement7; and
b. The representations and warranties of the Credit
Parties set forth in Section 5 of the Credit Agreement are true
and correct in all respects on and as of the date hereof as
though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier
date.
Delivered herewith are detailed calculations
demonstrating compliance by the Credit Parties with the
financial covenants contained in Section 6.11 of the Credit
Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, 19__.
[Corporate Seal]
Chief Financial Officer
Tultex Corporation
115
7 If a Default or Event of Default shall have
occurred during the applicable period, a detailed explanation of
such Default or Event of Default shall be provided on a separate
page together with an explanation of the action taken or
proposed to be taken by the Credit Parties with respect thereto.
Financial Covenants
Schedule 6.06
Schedule of Insurance
Schedule 6.12
Form of Joinder Agreement
THIS JOINDER AGREEMENT (the "Agreement"), dated as
of _____________, 19__, is by and between _____________________,
a ___________________ (the "Subsidiary"), and NATIONSBANK, N.A.
(CAROLINAS), in its capacity as Administrative Agent under that
certain Credit Agreement (as it may be amended, modified,
extended or restated from time to time, the "Credit Agreement"),
dated as of March 8, 1995, by and among Tultex Corporation (the
"Borrower"), the other Credit Parties party thereto, the Banks
party thereto and NationsBank, N.A. (Carolinas), as
Administrative Agent. All of the defined terms in the Credit
Agreement are incorporated herein by reference.
The Subsidiary is an Additional Credit Party, and,
consequently, the Credit Parties are required by Section 6.12 of
the Credit Agreement to cause the Subsidiary to become a
"Guarantor".
Accordingly, the Subsidiary hereby agrees as follows
with the Administrative Agent, for the benefit of the Banks:
1. The Subsidiary hereby acknowledges, agrees and
confirms that, by its execution of this Agreement, the
Subsidiary will be deemed to be a party to the Credit Agreement
116
and a "Guarantor" for all purposes of the Credit Agreement, and
shall have all of the obligations of a Guarantor thereunder as
if it had executed the Credit Agreement. The Subsidiary hereby
ratifies, as of the date hereof, and agrees to be bound by, all
of the terms, provisions and conditions contained in the Credit
Agreement, including without limitation (i) all of the
representations and warranties of the Credit Parties set forth
in Section 5 of the Credit Agreement, (ii) all of the
affirmative and negative covenants set forth in Sections 6 and 7
of the Credit Agreement and (iii) all of the undertakings and
waivers set forth in Section 3 of the Credit Agreement. Without
limiting the generality of the foregoing terms of this paragraph
1, the Subsidiary hereby (i) subject to the limitation set forth
in Section 3.07 of the Credit Agreement, jointly and severally
together with the other Guarantors, guarantees to each Bank, the
Administrative Agent and the Issuing Banks, as provided in
Section 3 of the Credit Agreement, the prompt payment and
performance of the Credit Party Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof and
(ii) agrees that if any of the Credit Party Obligations are not
paid or performed in full when due (whether at stated maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Subsidiary will, jointly
and severally together with the other Guarantors, promptly pay
and perform the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or
renewal of any of the Credit Party Obligations, the same will be
promptly paid in full when due (whether at extended maturity, as
a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of
such extension or renewal.
2. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all
of which when taken together shall constitute one contract.
117
IN WITNESS WHEREOF, the Subsidiary has caused this
Agreement to be duly executed by its authorized officers, and
the Administrative Agent, for the benefit of the Banks, has
caused the same to be accepted by its authorized officer, as of
the day and year first above written.
[SUBSIDIARY]
By____________________________
Title_________________________
Acknowledged and accepted:
NATIONSBANK, N.A. (CAROLINAS),
as Administrative Agent
By______________________________
Title___________________________
Schedule 7.02
Schedule of Permitted Liens
Logo 7, Inc.
1. [DESCRIBE OVERSEAS FACTORING ARRANGEMENT.]
118
Schedule 10.03(b)
Form of Assignment and Acceptance
THIS ASSIGNMENT AND ACCEPTANCE dated as of ________,
199_ is entered into between ________________ ("Assignor") and
____________________ ("Assignee").
Reference is made to the Credit Agreement dated as
of March 8, 1995, as amended and modified from time to time
thereafter (the "Credit Agreement") among Tultex Corporation,
the other Credit Parties party thereto, the Banks party thereto
and NationsBank, N.A. (Carolinas), as Administrative Agent.
Terms defined in the Credit Agreement are used herein with the
same meanings.
1. The Assignor hereby sells and assigns, without
recourse, to the Assignee, and the Assignee hereby purchases and
assumes, without recourse, from the Assignor, effective as of
the Effective Date set forth below, the interests set forth
below (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without
limitation, the interests set forth below in the Commitments of
the Assignor on the effective date of the assignment designated
below (the "Effective Date") and the Committed Revolving Loans
owing to the Assignor and in the LOC Obligations and Swingline
Loans in which Assignor has a participation interest which are
outstanding on the Effective Date, together with unpaid interest
accrued on the assigned Loans from the Effective Date and the
amount, if any, set forth below of the Fees accrued from the
Effective Date for the account of the Assignor. The Assignor
represents and warrants that it owns the interests assigned
hereby free and clear of liens, encumbrances or other claims.
The Assignee represents that it is an Eligible Assignee within
the meaning of the term in the Credit Agreement. Each of the
Assignor and the Assignee hereby makes and agrees to be bound by
all the representations, warranties and agreements set forth in
Section 10.03(b) of the Credit Agreement, a copy of which has
been received by each such party. From and after the Effective
Date (i) the Assignee, if it is not already a Bank under the
Credit Agreement, shall be a party to and be bound by the
provisions of the Credit Agreement and, to the extent of the
interests assigned by this Assignment and Acceptance, have the
rights and obligations of a Bank thereunder and (ii) the
Assignor shall, to the extent of the interests assigned by this
Assignment and Acceptance, relinquish its rights and be released
from its obligations under the Credit Agreement.
119
2. This Assignment and Acceptance shall be governed
by and construed in accordance with the laws of the Commonwealth
of Virginia.
3. Terms of Assignment
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment:
(e) Revolving Loan Commitment
Percentage Assigned (expressed
as a percentage of the total
Commitment of the Banks to
make Committed Revolving Loans and set
forth to at least 8 decimals) %
(f) Revolving Loan Commitment
Percentage of Assignor after
Assignment (set forth to at
least 8 decimals) %
(g) Total Committed Revolving Loans outstanding
as of the Date of Assignment$_____________
120
(h) Principal Amount of Committed Revolving
Loans assigned on the Date of
Assignment (the amount set forth
in (g) multiplied by the
percentage set forth in (e)) $_____________
The terms set forth above
are hereby agreed to:
____________________, as Assignor
By:_____________________________________
Title:__________________________________
_____________________, as Assignee
By:_____________________________________
Title:__________________________________
121
[ACCEPTED BY:
NATIONSBANK, N.A. (CAROLINAS),
as Administrative Agent
By:____________________________________
Title:_________________________________
TULTEX CORPORATION
By:____________________________________
Title:_________________________________]
122
JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as
of March ______, 1995, is by and among AKOM LTD., a Cayman
Islands, British West Indies corporation, SWEATJET, INC., a
Virginia corporation, TULTEX CANADA, INC., a Canadian
corporation, and TULTEX INTERNATIONAL, a Virginia corporation,
(each individually a "Subsidiary" and collectively the
"Subsidiaries", and NATIONSBANK, N.A. (CAROLINAS), in its
capacity as Administrative Agent under that certain Credit
Agreement (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"), dated as of March 8,
1995, by and among TULTEX CORPORATION (the "Borrower"), the
other Credit Parties party thereto, the Banks party thereto and
NationsBank, N.A. (Carolinas), as Administrative Agent. All of
the defined terms in the Credit Agreement are incorporated
herein by reference.
Each Subsidiary is an Additional Credit Party, and,
consequently, the Credit Parties are required by Section 6.12 of
the Credit Agreement to cause the Subsidiary to become a
"Guarantor".
Accordingly, each Subsidiary hereby agrees as
follows with the Administrative Agent, for the benefit of the
Banks:
1. The Subsidiary hereby acknowledges, agrees
and confirms that, by its execution of this Agreement, the
Subsidiary will be deemed to be a party to the Credit Agreement
and a "Guarantor" for all purposes of the Credit Agreement, and
shall have all of the obligations of a Guarantor thereunder as
if it had executed the Credit Agreement. The Subsidiary hereby
ratifies, as of the date hereof, and agrees to be bound by, all
of the terms, provisions and conditions contained in the Credit
Agreement, including without limitation (i) all of the
representations and warranties of the Credit Parties set forth
in Section 5 of the Credit Agreement, (ii) all of the
affirmative and negative covenants set forth in Sections 6 and 7
of the Credit Agreement and (iii) all of the undertakings and
waivers set forth in Section 3 of the Credit Agreement. Without
limiting the generality of the foregoing terms of this paragraph
1, the Subsidiary hereby (i) subject to the limitation set forth
in Section 3.07 of the Credit Agreement, jointly and severally
together with the other Guarantors, guarantees to each Bank, the
Administrative Agent and the Issuing Banks, as provided in
Section 3 of the Credit Agreement, the prompt payment and
performance of the Credit Party obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or
123
otherwise) strictly in accordance with the terms thereof and
(ii) agrees that if any of the Credit Party Obligations are not
paid or performed in full when due (whether at stated maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Subsidiary will, jointly
and severally together with the other Guarantors, promptly pay
and perform the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or
renewal of any of the Credit Party Obligations, the same will be
promptly paid in full when due (whether at extended maturity, as
a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of
such extension or renewal.
2. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original
but all of which when taken together shall constitute one
contract.
IN WITNESS WHEREOF, each of the Subsidiaries has
caused this Agreement to be duly executed by its authorized
officers, and the Administrative Agent, for the benefit of the
Banks, has caused the same to be accepted by its authorized
officer, as of the day and the year first above written.
AKOM, LTD.
By_________________________
Title______________________
SWEATJET, INC.
By_________________________
Title______________________
124
TULTEX CANADA, INC.
By_________________________
Title_______________________
TULTEX INTERNATIONAL
By_________________________
Title______________________
Acknowledged and accepted:
NATIONSBANK, N.A. (CAROLINAS),
as Administrative Agent
_________________________
Title_____________ ___________