NATWEST BANK N.A.
PROMISSORY NOTE
$10,000,0O Office 100 Jericho Quadrangle As of
Address: Jericho, New York 11753 April 25, 1995
On the maturity dates set forth in the next succeeding paragraph, for value
received, ONEITA INDUSTRIES, INC., (the "Borrower") promises to pay to the order
of NATWEST BANK N.A. (the "Bank") at the office of the Bank located at the place
first above stated or at such other place as the holder hereof may from time to
time appoint in writing, in lawful money of the United States of America in
immediately available funds, the principal sum of Ten Million ($10,000,000)
Dollars or such lesser amount as may then be the aggregate unpaid principal
balance of all loans made by the Bank to the Borrower hereunder (each a "Loan"
and collectively the "Loans") as shown on the schedule attached to and made a
part of this Note, on the maturity dates set forth on such schedule. The
Borrower also promises to pay interest (computed on the basis of a 360 day year
for actual days elapsed) at said office in like money on the unpaid principal
amount of each Loan from time to time outstanding at a rate per annum, to be
elected by the Borrower at the time each Loan is made, equal to either (i) a
fluctuating rate equal to the Prime Rate (the rate of interest established from
time to time by the Bank as its "prime rate"; a Loan bearing interest at this
rate is sometimes hereinafter called a "Prime Loan"), (ii) a fixed rate of 0.75%
plus the Eurodollar Rate for an Interest Period of 1, 2 or 3 months (a Loan
bearing interest at this rate is sometimes hereinafter called a "Eurodollar
Loan") or (iii) such other fixed rate as may be agreed upon between the Borrower
and the Bank for an Interest Period which is also then agreed upon (a Loan
bearing interest at this rate is sometimes hereinafter called an "Agreed Rate
Loan" - Agreed Rate Loans, and Eurodollar Loans are sometimes collectively
referred to as "Fixed Rate Loans"); provided, however, that no Interest Period
with respect to a Fixed Rate Loan shall extend beyond April 30, 1996; and
provided, further, that if prior to the end of any such Interest Period the
Borrower and the Bank fail to agree upon a new Interest Period therefor so as to
maintain such Loan as either a Eurodollar Loan, or an Agreed Rate Loan within
the pertinent time set forth in Section 2 hereof, such Fixed Rate Loan shall
automatically be converted into a Prime Rate Loan at the end of such Interest
Period and shall be maintained as such until a new Fixed Rate and a new Interest
Period therefor are agreed upon. Interest on each Loan shall be payable monthly
on the last day of each month commencing the first such day to occur after a
Loan is made hereunder and, together with principal, on the maturity thereof.
Interest on Fixed Rate Loans shall also be payable on the last day of each
Interest Period applicable thereto. If any payment of principal or interest
becomes due on a day on which the banks in New York, New York, are required or
permitted by law to remain closed, such payment may be made on the next
succeeding day on which such banks are open, and such extensions shall be
included in computing interest in connection with such payment; provided,
however, that if the result of any such extension would be to extend the
maturity date of any Eurodollar Loan into another calendar month the payment
shall be made on the immediately preceding Business Day. The Borrower
further agrees that after any stated or any accelerated maturity of Loans
hereunder, all Loans shall bear interest (computed daily) at a rate of 2% per
annum in excess of the Prime Rate, payable on demand. In no event shall interest
payable hereunder be in excess of the maximum rate of interest permitted under
applicable law.
All Loans then outstanding shall be due an payable on January 31, 1996.
Fixed Rate Loans may be requested, in accordance with the provisions of Section
1 hereof, up to 1 p.m. on January 31, 1996; provided that no Interest Period for
any Fixed Rate Loan shall extend beyond April 30, 1996.
The Borrower hereby expressly authorizes the Bank to record on the attached
schedule the amount and date of each Loan, the rate of interest thereon,
Interest Period thereof and the date and amount of each payment of principal.
All such notations shall be presumptive as to the correctness thereof; provided,
however, the failure of the bank to make any such notation shall not limit or
otherwise affect the obligations of the borrower under this Note.
In consideration of the granting of the Loans evidenced by this Note, the
Borrower hereby agrees as follows:
1. Loan Requests. Requests for Eurodollar Loans shall be made not less than
three Business Days prior to the first day of the Interest Period of each such
Loan. Requests for Agreed Rate Loans and Prime Loans may be made up until 1 p.m.
on the date the Loan is to be made. Any request for a Loan may be written or
oral, but if oral, written confirmation thereof must be received by the Bank
within 3 Business Days thereafter. The Bank shall have no obligation to make any
Loan hereunder and no Loan may be requested after January 31, 1996.
Each Fixed Rate Loan shall be in an amount not less than $500,000.
2. Prepayment. Subject to the indemnification agreement set forth in
paragraph 3 hereof with respect to Fixed Rate Loans, the borrower may prepay any
Loan at any time in whole or in part without premium or penalty. Each such
prepayment shall be made together with interest accrued thereon to and including
the date of prepayment.
3. Indemnity; Yield Protection. The Borrower hereby agrees to indemnify the
bank against any loss or expense which the bank may sustain or incur as a
consequence of any of the following:
(a) the failure of the Borrower to borrow a Fixed Rate Loan after agreement
shall have been reached on the amount, interest rate and Interest Period
thereof;
(b) the receipt or recovery by the Bank, whether by voluntary prepayment,
acceleration or otherwise, of all or any part of a Fixed Rate Loan prior to the
last day of an Interest Period applicable thereto; or
(c) the conversion, prior to the last day of an applicable Interest Period,
of one type of Fixed Rate Loan into another type of Fixed Rate Loan or into a
Prime Loan.
Without limiting the effect of the foregoing, the amount to be paid by the
borrower to the bank in order to so indemnify the Bank for any loss occasioned
by any of the events described in the Preceding paragraph, and as liquidated
damages therefor, shall be equal to the excess, discounted to its present value
as of the date paid to the Bank, of (i) the amount of interest which otherwise
would have accrued on the principal amount so received, recovered, converted or
not borrowed during the period (the "Indemnity Period") commencing with the date
of such receipt, recovery, conversion, or failure to borrow to the last day of
the applicable Interest Period for such Fixed Rate Loan at the rate of interest
applicable to such Loan (or the rate of interest agreed to in the case of a
failure to borrow) provided for herein (prior to default) over (ii) the amount
of interest which would be earned by the Bank during the Indemnity Period if it
invested the principal amount so received, recovered, converted or not borrowed
at the rate per annum determined by the Bank as the rate it would bid in the
London interbank market for a deposit of Eurodollars in an amount approximately
equal to such principal amount for a period of time comparable to the Indemnity
Period.
A certificate as to any additional amounts payable pursuant to this Section 3
setting forth the basis and method of determining such amounts shall be
conclusive, absent manifest error, as to the determination by the Bank set forth
therein if made reasonably and in good faith. The Borrower shall pay any
amounts so certified to it by the bank within 10 days of receipt of any such
certificate. For purposes of this Section, all referenced to the "Bank"
shall be deemed to include any participant in the Commitment and/or Loans.
The indemnities set forth herein shall survive payment in full of all Fixed
Rate Loans and all other Loans made pursuant to this Agreement.
4. Increased Costs. If the Bank determines that the effect of any
applicable law or government regulation, guideline or order or the
interpretation thereof by any governmental authority charged with the
administration thereof (such as, for example, a change in official reserve
requirements which the bank is required to maintain in respect of loans or
deposits or other funds procured for funding such loans) is to increase the cost
of the Bank of making or continuing Fixed Rate Loans hereunder or to reduce the
amount of any payment of principal or interest receivable by the bank thereon,
then the Borrower will pay to the Bank on demand such additional amounts as the
Bank may determine to be required to compensate the Bank for such additional
costs or reduction. Any additional payment under this section will be computed
from the effective date at which such additional costs have to be borne by the
bank. A certificate as to any additional amounts payable pursuant to this
Section 4 setting forth the basis and method of determining such amounts shall
be conclusive, absent manifest error, as to the determination by the Bank set
forth therein if made reasonably and in good faith. The Borrower shall pay any
amounts so certified to it by the bank within 10 days of receipt of any such
certificate.
5. Alternate Rate of Interest. In the event, and on each occasion, that on
the day two Business Days prior to the commencement of any Interest Period for a
Eurodollar Loan, the Bank shall have determined (i) that dollar deposits in the
amount of the requested principal amount of such Eurodollar Loan are not
generally available in the London interbank market, (ii) that the rate at which
such dollar deposits are being offered will not adequately and fairly reflect
the cost to the Bank of making or maintaining such Eurodollar Loan during such
Interest Period, or (iii) that reasonable means do not exist for ascertaining
the Eurodollar Rate, the Bank shall, as soon as practicable thereafter, give
written or telex notice of such determination to the Borrower.
In the event of any such determination, until the circumstances giving rise to
such notice no longer exist, no Eurodollar Loans will be made hereunder. Each
determination by the Bank hereunder shall be conclusive absent manifest error.
6. Change in Legality. (a) Notwithstanding anything to the contrary herein
contained, if any change in any law or regulation or in the interpretation
thereof by any governmental authority charged with the administration or
interpretation thereof shall make it unlawful for the bank to make or maintain
any Eurodollar Loan, then, by written notice to the Borrower, the Bank may:
(i) declare that Eurodollar Loans will not thereafter be made
by the Bank hereunder, whereupon the Borrower shall be
prohibited from requesting Eurodollar Loans from the Bank hereunder
unless such declaration is subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it
be converted to Prime Loans, in which event (x) all such
Eurodollar Loans shall be automatically converted to Prime Loans as of
the effective date of such notice as provided in paragraph (b) below
and (y) all payments and prepayments of principal which would otherwise
have been applied to repay the converted Eurodollar Loans shall instead
by applied to repay the Prime Loans resulting from the conversion of
such Eurodollar Loans.
(b) For purposes of this Section 6, a notice to the Borrower by
by the Bank pursuant to paragraph (a) above shall be effective, if
lawful, on the last day of the then current Interest Period; in all
other cases, such notice shall be effective on the day of receipt by
the Borrower.
7. Warranties and Representations. The Borrower represents and warrants
that: a) it is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and is qualified to do
business and is in good standing under the laws of every state where its failure
to so qualify would have a material and adverse effect on the business,
operations, property or other condition of the Borrower; b) the execution,
issuance and delivery of this Note by the Borrower are within its corporate
powers and have been duly authorized, and the Note is valid, binding and
enforceable in accordance with its terms, and is not in violation of law or of
the terms of the Borrower's Certificate of Incorporation or By-Laws and does not
result in the breach of or constitute a default under any indenture, agreement
or undertaking to which the Borrower is a party or by which it or its property
may be bound or affected; c) no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by the borrower of
this Note, except those as have been obtained; d) the financial statements of
the Borrower heretofore furnished to the Bank are complete and correct and
fairly represent the financial condition of the Borrower and its Subsidiaries
(as defined in Section 8) as at the dates thereof and for the periods covered
thereby, which financial condition has not materially, adversely, changed
since the date of the most recently dated balance sheet heretofore furnished
to the Bank; e) no Event of Default (as hereinafter defined) has occurred and
no event has occurred which with the giving of notice or the lapse of time or
both would constitute an Event of Default; f) the Borrower shall not use
any part of the proceeds of any Loan to purchase or carry any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or to extend credit to others for the purpose of purchasing or
carrying any margin stock; g) there is no pending or, to the knowledge of
the Borrower, threatened action or proceeding affecting the Borrower before any
court, governmental agency or arbitrator which, if determined adversely to the
Borrower would have a materially adverse effect on the financial condition or
operations of the Borrower except as described in the financial statements of
the Borrower heretofore furnished to the Bank; and h) on the occasion of the
granting of each Loan all representations and warranties contained herein shall
be true and correct and with the same force and effect as though such
representations and warranties had been made on and as of the date of the
making of each such Loan.
8. Events of Default. Upon the occurrence of any of the following specified
events of default (each an "Event of Default"): a) default in making any payment
of principal, interest, or any other sum payable under this Note when due; or b)
default by Borrower in the due payment of any other indebtedness for borrowed
money or default in the observance or performance of any covenant or condition
contained in any agreement or instrument evidencing, securing, or relating to
any such indebtedness, which causes or permits the acceleration of the maturity
thereof; or c) any representation or warranty made by the Borrower herein or in
any certificate furnished by the Borrower in connection with the Loans evidenced
hereby or pursuant to the provisions hereof, proves untrue in any material
respect; or d) the Borrower becomes insolvent or bankrupt, is generally not
paying its debts as they become due, or makes an assignment for the benefit or
creditors, or a trust or receiver is appointed for the Borrower or for the
greater part of the properties of the Borrower with the consent of the Borrower,
or if appointed without the consent of the Borrower, such trustee or receiver is
not discharged within 30 days, or bankruptcy, reorganization, liquidation or
similar proceedings are instituted by or against the Borrower under the laws of
any jurisdiction, and if instituted against the Borrower are consented to by it
or remain undismissed for 30 days, or a writ or warrant of attachment or
similar process shall be issued against a substantial part of the property of
the Borrower and shall not be released or bonded within 30 days after levy;
or e) the Bank shall have determined, in its sole discretion, that one or more
conditions exist or events have occurred which have resulted, or may result,
in a material adverse change the business, properties or financial condition of
the Borrower; then, in any such event, and at any time thereafter, if any Event
of Default shall then be continuing, the bank may declare the principal and the
accrued interest in respect of all loans under this Note to be, whereupon the
Note shall become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly waived by the
Borrower.
9. Collateral Security. As collateral security for the payment of any and
all sums owing under this Note and all other obligations, direct or contingent,
joint, several or independent, of the Borrower and of any Subsidiary and each
endorser and guarantor hereof now or hereafter existing, due or to become due
to, or held, or to be held by, the bank, whether created directly or acquired by
assignment or otherwise, (all of such obligations, including this Note, are
hereinafter called the "Obligations"), the Borrower hereby grants to the Bank a
lien on the security interest in any and all deposits or other sums at any time
credited by or due from the Bank to the Borrower, whether in regular or special
depository accounts or otherwise, and any and all monies, securities and other
property of the Borrower, and the proceeds thereof, now or hereafter held or
received by or in transit to the Bank from or for the Borrower, whether for
safekeeping, custody, pledge, transmission, collection or otherwise, and any
such deposits, sums, monies, securities and other property, nay at any time
after the occurrence of any Event of Default be set-off, appropriated and
applied by the bank against any of the Obligations whether or not such
Obligations are then due or are secured by any collateral, or, if they are so
secured, whether or not such collateral held by the Bank is considered to be
adequate. As used herein, the term "Subsidiary" or "Subsidiaries" means any
corporation or corporations of which the Borrower, along, or the Borrower and/or
any one or more if its Subsidiaries, owns, directly or indirectly, at least a
majority of securities having ordinary voting power for the election of
directors.
10. Definitions. As used herein:
(a) "Business Day" means any day other than a day on which the banks in New
York, New York are required or permitted by law to remain closed.
(b) "Eurodollar Rate" means with respect to any Eurodollar Loan Interest
Period, the rate per annum determined by the bank to be the rate at which
deposits in U.S. dollars are offered by a Reference Bank (selected by the Bank)
in the London interbank market at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in any amount
approximately equal to the principal amount of the Eurodollar Loan to which such
Interest Period is to apply and for a period of time comparable to such Interest
Period divided by one minus the Eurodollar Reserve Percentage.
"Eurodollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the federal
Reserve System in New York City with deposits exceeding one billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of the Bank to United
States residents). The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve Percentage.
"Reference Banks" means banks appearing in the display designated as page
"LIBOR" on the Reuters' Monitor Money Rates Service (or such other page as may
replace the LIBOR page on that service for the purpose of displaying London
Interbank Offered Rates of major banks); provided that if no such offered rate
shall appear on such display, "Reference Banks" shall mean one or more major
banks on the London interbank market as selected by the Bank.
(c) "Fixed Rate" means the Eurodollar Rate plus the applicable margin or
the Agreed Rate.
(d) "Interest Period" means that period selected by the Borrower, within
the limitations of the first paragraph of this Note, during which a Fixed Rate
Loan may bear interest at the applicable Fixed Rate.
11. Miscellaneous.
(a) The Borrower agrees to pay on demand all of the Bank's costs and
expenses, including reasonable counsel fees, in connection with collection of
any sums due to the Bank and enforcement of its rights under this Note.
(b) No modification or waiver of any provision of this Note shall be
effective unless such modification or waiver shall be in writing and signed by a
duly authorized officer of the Bank, and the same shall then be effective only
for the period and on the conditions and for the specific instances specified in
such writing. No failure or delay by the Bank in exercising any right, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any rights, power or privilege.
(c) the Borrower hereby waives presentment, demand for payment, notice of
protest, notice of dishonor, and any and all other notices or demands except as
otherwise expressly provided for herein.
(d) This Note shall be construed in accordance with and governed by the
laws of the State of New York and the Borrower consents to the jurisdiction of
the courts of New York in any action brought to enforce any rights of the Bank
under this Note.
(e) Borrower waives trial by jury and the right to interpose any set-off or
counterclaim in any litigation in any court with respect to, in connection with,
or arising our of, this Note or any instrument or document delivered pursuant
hereto or the validity, protection, interpretation, collection or enforcement
hereof or thereof.
ONEITA INDUSTRIES, INC.
By: s/s William H. Boyd
-----------------------------
Name: William H. Boyd
Title: Vice-President
LOAN AND REPAYMENT SCHEDULE
PROMISSORY NOTE DATED AS OF JANUARY 31, 1995
ONEITA INDUSTRIES, INC.
to NATWEST BANK N.A.
Last Day
of Amount of Unpaid
Amount Rate of Interest Principal Principal Notation
Date of Loan Interest Period Repayment Balance Made By
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