AMENDED AND RESTATED
SECURITY AND PLEDGE AGREEMENT
THIS AMENDED AND RESTATED SECURITY AND PLEDGE AGREEMENT, dated as of March
14, 1997 (as amended, modified, restated, renewed, extended or replaced from
time to time, this "Agreement" or "Security Agreement"), amends and restates
that certain Security and Pledge Agreement, dated as of January 30, 1995, by and
among ANVIL KNITWEAR, INC., a Delaware corporation (the "Borrower"), ANVIL
HOLDINGS, INC., a Delaware corporation (the "Parent Company"), certain
Subsidiaries of the Borrower party thereto (hereinafter, together with the
Parent Company, the "Prior Guarantors") and NATIONSBANK, N.A. (successor in
interest to NationsBank, N.A. (Carolinas)), as Collateral Agent (in its capacity
as Collateral Agent thereunder and hereunder, together with any successor in
such capacity, the "Collateral Agent") for the Banks under the Existing Credit
Agreement described below (the "Prior Banks").
W I T N E S S E T H:
WHEREAS, NationsBank, N.A. (as successor in interest to NationsBank, N.A.
(Carolinas)) and the Prior Banks entered into that certain Credit Agreement,
dated as of January 30, 1995, among the Borrower, the Parent Company, the other
Prior Guarantors, the Prior Banks and NationsBank, N.A. (successor in interest
to NationsBank, N.A. (Carolinas)), as Agent and the Chase Manhattan Bank, N.A.,
as Documentation Agent (as amended and/or modified from time to time thereafter,
the "Existing Credit Agreement");
WHEREAS, NationsBank, N.A. and various other banks and financial
institutions as may now or hereafter become a party thereto (such banks and
financial institutions, together with their successors and assigns, may
hereinafter be referred to collectively as the "Banks" and individually as a
"Bank") have agreed to amend and restate the Existing Credit Agreement pursuant
to that certain Amended and Restated Credit Agreement, dated as of the date
hereof, among the Borrower, the Parent Company, those Subsidiaries of the
Borrower identified on the signature pages thereto and such other Subsidiaries
of the Borrower which may become a Guarantor in accordance with the terms
thereof (hereinafter together with the Parent Company sometimes referred to
individually as a "Guarantor" and collectively as the "Guarantors"), the Banks,
NationsBank, N.A., as Agent, and Bank of America Illinois, Banque Nationale de
Paris and Heller Financial, Inc., as Co-Agents (as amended, modified, extended,
renewed or replaced from time to time, the "Credit Agreement");
WHEREAS, the Banks have required that the Borrower and the Guarantors
(hereinafter the Borrower and the Guarantors may be referred to collectively as
the "Credit Parties" and individually as a "Credit Party") secure or resecure,
as applicable, their respective obligations under the Credit Agreement and the
other Credit Documents pursuant to the terms of this Security Agreement;
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:
1. Definitions. Terms used but not otherwise defined herein shall have the
meanings provided in the Credit Agreement; provided, however, that terms which
are defined in the Code shall have the meaning provided in the Code unless
specifically provided otherwise herein or in the Credit Agreement. As used
herein:
"Bank" or "Banks" means such terms as identified and defined in the
recitals hereto.
"Borrower" means Anvil Knitwear, Inc., a Delaware corporation.
"Code" means such term as defined in Section 3(g) hereof.
"Collateral Agent" means NationsBank, N.A., in its capacity as
collateral agent for the Banks under this Agreement, as identified and
defined in the opening paragraph hereto, together with its successors and
assigns in such capacity.
"Collateral" means, collectively, the General Collateral and the
Pledged Collateral.
"Copyright Licenses" means any written agreement, naming any Credit
Party as licensor, granting any right under any Copyright including,
without limitation, any thereof referred to in Schedule 1 hereto.
"Copyrights" means (a) all registered United States copyrights in
all Works, now existing or hereafter created or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, registrations, recordings and
applications in the United States Copyright office including, without
limitation, any thereof referred to in Schedule 1 hereto, and (b) all
renewals thereof including, without limitation, any thereof referred to in
Schedule 1 hereto.
"Credit Agreement" means such term as defined in the Recitals
hereof.
"Credit Documents" means such terms as defined in the Credit
Agreement.
"Credit Party" or "Credit Parties" means such terms as identified
and defined in the opening paragraph hereto.
"Default" means an event or condition which upon notice or lapse of
time, or both, would constitute an Event of Default.
"Default Rate" means such term as defined in Section 3(h) hereof.
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"Equipment" means, with respect to any Credit Party, all of such
Credit Party's equipment, machinery, tools, trade fixtures, furniture,
furnishings, office equipment, vehicles (including vehicles or equipment
subject to a certificate of title law), and rolling stock in each case now
or hereafter used or usable in connection with the Credit Party's
business, and including all substitutions and replacements, together with
all parts, accessories and attachments relating to any of the foregoing.
"Event of Default" means such term as defined in the Credit
Agreement.
"General Collateral" means such term as defined in Section 2(a)
hereof.
"Inventory" means, with respect to any Credit Party, all of such
Credit Party's inventory and goods (i) which are held for sale or lease or
are to be furnished under contracts of service or consumed in the Credit
Party's business, or (ii) which are raw materials, work in process,
finished goods, packaging materials and all other materials and supplies
of every nature in each case used or usable in connection with the Credit
Party's business or the acquisition, manufacture, processing, supply,
servicing, storing, packing, shipping, advertising, selling, leasing or
furnishing of such goods and any constituents or ingredients thereof, or
(iii) which are returned or repossessed goods, and (iv) documents and
documents of title.
"Patent License" means all written agreements providing for the
grant by or to a Credit Party of any right to manufacture, use or sell any
invention covered by a Patent, including, without limitation, any thereof
referred to in Schedule 1 hereto.
"Patents" means (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including, without
limitation, any thereof referred to in Schedule 1 hereto, and (b) all
applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof,
including, without limitation, any thereof referred to in Schedule 1
hereto.
"Permitted Collateral Locations" means such term as defined in
Section 3(b) hereof.
"Permitted Liens" means such term as defined in the Credit
Agreement.
"Pledged Collateral" means such term as defined in Section 2(b)
hereof.
"Pledged Securities" means such term as defined in Section 2(b)
hereof.
"Receivables and General Intangibles" means with respect to any
Credit Party, all of such Credit Party's accounts, accounts receivable,
factor balances, contracts, contract rights, book debts, instruments,
notes, checks, drafts, acceptances, documents (including documents of
title), chattel paper, choses in action, any right of the Credit Party for
services rendered or for rights or privileges granted, whether arising
from the sale of
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inventory or otherwise and whether or not earned by performance, and all
other forms of obligations owing to the Credit Party (including without
limitation amounts due from factors), and all of the Credit Party's rights
to any merchandise (including without limitation any returned or
repossessed goods and the rights of stoppage in transit) which is
represented by, arises from or is related to any of the foregoing, and all
franchises, franchise rights, all causes of action, Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses,
goodwill and similar intangibles and all income tax refunds, all
privileges, immunities, contracts, contract rights, licenses, permits and
similar intangibles, all leases and other agreements relating to real or
personal property, any rights to receive any payments in connection of any
pension plan or employee stock ownership plan or trust established for the
benefit of employees of the Credit Party, and any and all general
intangibles (as defined in the Code as in effect in the State of New York
or in any other relevant jurisdiction from time to time) not otherwise
covered in this definition.
"Records" means such term as defined in Section 2(a)(iv) hereof.
"Secured Obligations" means (i) in the case of the Borrower, all
indebtedness, obligations and liabilities of the Borrower under or in
connection with (A) the Credit Agreement, (B) any Hedging Agreement, (C)
this Security Agreement or (D) any other of the Credit Documents, whether
now existing or hereafter arising, due or to become due, direct or
indirect, absolute or contingent, and howsoever evidenced, held or
acquired, (ii) in the case of each of the Guarantors, all obligations,
including guaranty obligations, of the Guarantors under or in connection
with the Credit Agreement (whether as an original party thereto or by way
of Joinder Agreement), this Security Agreement or any other of the Credit
Documents, whether now existing or hereafter arising, due or to become
due, direct or indirect, absolute or contingent, and howsoever evidenced,
held or acquired, and (iii) all expenses and charges, legal and otherwise,
reasonably incurred by the Collateral Agent or the Banks, or any of them,
in collecting or enforcing any of such indebtedness, obligations and
liabilities or in realizing on or protecting any security therefor,
including without limitation the security afforded hereunder, together
with any and all modifications, extensions, renewals and/or substitutions
thereof.
"Subsidiary" or "Subsidiaries" means such terms as identified and
defined in the opening paragraph hereto, including any newly formed or
acquired subsidiaries which are made a party hereto subsequent to the date
hereof.
"Trademark License" means any written agreement providing for the
grant by or to a Credit Party of any right to use any Trademark,
including, without limitation, any thereof referred to in Schedule 1
hereto.
"Trademarks" means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and the
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications
in connection
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therewith, whether in the United States Patent and Trademark Office or in
any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, or otherwise,
including, without limitation, any thereof referred to in Schedule 1
hereto, and (b) all renewals thereof.
"Work" means any work which is subject to copyright protection
pursuant to Title 17 of the United States Code.
2. Grant of Security Interest in the Collateral. To secure the prompt
payment and performance when due of the Secured Obligations:
(a) Security Interest in Inventory, Receivables and General
Intangibles and Equipment. Each of the Credit Parties hereby grants to the
Collateral Agent for the benefit of the Banks a security interest in, and
acknowledges and agrees that the Collateral Agent has and shall continue
to have for the benefit of the Banks a continuing security interest, in
any and all right, title and interest of each Credit Party in and to:
(i) Inventory. All Inventory, wherever located and by
whomsoever held, whether now owned or existing or hereafter acquired
or arising.
(ii) Receivables and General Intangibles. All Receivables and
General Intangibles, whether now owned or existing or hereafter
acquired or arising, in which the Credit Party now has or hereafter
acquires any rights.
(iii) Equipment. All Equipment, wherever located and by
whomsoever held, whether now owned or hereafter acquired.
(iv) Records. Supporting evidence and documents relating to
any of the property described in subparagraphs (i)-(iii) above,
including, without limitation, written applications, credit
information, account cards, payment records, correspondence,
delivery and installation certificates, invoice copies, delivery
receipts, notes and other evidences of indebtedness, insurance
certificates and the like, together with all books of account,
ledgers and cabinets in which the same are reflected or maintained
(including computer records, tapes, software and the like), all
whether now existing or hereafter arising (the "Records").
(v) Accessions and Additions. All accessions and additions to
and substitutions and replacements of any and all of the foregoing,
whether now existing or hereafter arising.
(vi) Proceeds and Products. All proceeds and products of the
foregoing and all insurance relating to the foregoing collateral and
proceeds thereof (including without limitation insurance proceeds
payable on account of business interruption), whether now existing
or hereafter arising.
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Notwithstanding the foregoing, the foregoing grant of security
interest shall (i) exclude contracts, general intangibles or instruments
(other than rights to the payment of money) arising under contracts or
other agreements or instruments that, to the extent legally enforceable,
expressly prohibit assignment of such rights, or grant of security
interest in or lien on, without the prior written consent of the other
party(ies) thereto; provided, however, that, to the extent that such
contracts or other agreements or instruments do not prevent assignment of
or grant of security interest in the payments or rights to payment made
under such contracts or other agreements or instruments or the prohibition
of the assignment of or grant of security interest in such payment or
rights to payment is not effective under applicable law, the Collateral
Agent is granted a security interest in such payments or rights to
payment, and that if and when any such prohibition on the assignment,
pledge or grant of a security interest in such contract, general
intangible or instrument, as the case may be, is removed, the Collateral
Agent will be granted a security interest in such contract, general
intangible or instrument as of the date hereof, and the collateral will
include such contract, general intangible or instrument, (ii) exclude any
fixtures located at 228 E. 45th St., New York, New York 10017 and (iii)
not be construed as an assignment of any Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks or Trademark Licenses.
All of the foregoing items of Collateral described in this
subsection (a) may hereinafter sometimes be referred to collectively as
the "General Collateral".
(b) Pledge of Interest in Pledged Securities. Each of the Credit
Parties hereby pledges to the Collateral Agent for the benefit of the
Banks, and grants to the Collateral Agent for the benefit of the Banks, a
continuing security interest in any and all right, title and interest of
such Credit Party in and to the following, whether now owned or existing
or owned, acquired, or arising hereafter (collectively, the "Pledged
Collateral"):
(i) Pledged Securities. (A) 100% (or, if less, the full amount
owned by such Credit Party) of the issued and outstanding shares of
capital stock owned by such Credit Party of each Domestic Subsidiary
set forth on Schedule 2(b) attached hereto and (B) 65% (or, if less,
the full amount owned by such Credit Party) of the issued and
outstanding shares of each class of capital stock or other ownership
interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) ("Voting Equity") and 100% (or, if less, the
full amount owned by such Credit Party) of the issued and
outstanding shares of each class of capital stock or other ownership
interests not entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) ("Non-Voting Equity") owned by such Credit
Party of each other Subsidiary set forth on Schedule 2(b) attached
hereto, in each case together with the certificates (or other
agreements or instruments), if any, representing such shares, and
all options and other rights, contractual or otherwise, with respect
thereto (collectively, together with the shares of capital stock
described in Section 2(b)(ii) and 2(b)(iii) below, the "Pledged
Securities"), including, but not limited to, the following:
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(1) all shares or securities representing a dividend on
any of the Pledged Securities, or representing a distribution
or return of capital upon or in respect of the Pledged
Securities, or resulting from a stock split, revision,
reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the
holder of, or otherwise in respect of, the Pledged Securities;
and
(2) without affecting the obligations of such Credit
Party under any provision prohibiting such action hereunder,
in the event of any consolidation or merger in which a Credit
Party is not the surviving corporation, all shares of each
class of the capital stock of the successor corporation formed
by or resulting from such consolidation or merger.
(ii) Additional Shares. 100% (or, if less, the full amount
owned by such Credit Party) of the issued and outstanding shares of
capital stock owned by such Credit Party of any Person which
hereafter becomes a Domestic Subsidiary and 65% (or, if less, the
full amount owned by such Credit Party) of the Voting Equity and
100% (or, if less, the full amount owned by such Credit Party) of
the Non-Voting Equity owned by such Credit Party of any other Person
which hereafter becomes a Subsidiary, including, without limitation,
the certificates representing such shares.
(iii) Other Equity Interests. Any and all other equity
interests of each Credit Party in any Domestic Subsidiary or any
other Subsidiary.
(iv) Proceeds. Except as otherwise set forth in Section 6
hereof, all proceeds and products of the foregoing, however and
whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Credit Party may from time to
time hereafter deliver additional shares of stock to the Collateral Agent
as collateral security for the Secured Obligations (upon delivery to the
Collateral Agent, such additional shares of stock shall be deemed to be
part of the Pledged Collateral of such Credit Party and shall be subject
to the terms of this Security Agreement whether or not Schedule 2(b) is
amended to refer to such additional shares).
3. General Representations, Warranties, Covenants and Agreements. The
Credit Parties hereby represent and warrant to, and covenant and agree with the
Collateral Agent for the benefit of the Banks that:
(a) Chief Executive Office. As of the date hereof, each such Credit
Party's chief executive office and chief place of business and other
executive offices and places of business are as shown on Schedule 3(a). As
of the date hereof, each such Credit Party has no executive offices or
places of business other than as shown on Schedule 3(a) and will
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not move or otherwise change its chief executive office or establish or
maintain an executive office or place of business at a location other than
as shown on Schedule 3(a) without providing the Collateral Agent with at
least 30 days' prior written notice and, in any such case, Schedule 3(a)
shall be deemed to include such new location.
(b) Location of Collateral. The Inventory or Equipment of each of
the Credit Parties is (and, as otherwise noted, has for the four months
immediately preceding the date of this Agreement been), and will remain,
in each such Credit Party's possession or control at the locations,
including ports of entry, shown on Schedule 3(a) (collectively with the
chief executive office shown thereon, the "Permitted Collateral
Locations"), except for Inventory or Equipment (i) which in the ordinary
course of the Credit Party's business as presently conducted is in
transit, (ii) consisting of vehicles and equipment which are subject to a
certificate of title law (and as to which a change in registration is not
required on account of any such transit), (iii) such other locations
within the United States as to which the Credit Parties shall have given
the Collateral Agent at least 30 days' prior written notice (except, in
the case of ports of entry, in which case the Credit Party shall provide
the Collateral Agent, on a quarterly basis, with the existing ports of
entry) or (iv) such other locations outside of the United States with
respect to raw materials or work-in-process being processed in the
ordinary course of business of such Credit Party. The Credit Parties will
not hold General Collateral, have General Collateral held or permit
General Collateral to be held at a location other than a Permitted
Collateral Location without the prior written consent of the Collateral
Agent. In addition, each of the Credit Parties will promptly give written
notice to the Collateral Agent of any change in the identity or location
of the General Collateral, or any material portion thereof. Each such
Credit Party owns, and will continue to own or lease, its respective
Permitted Collateral Locations except as otherwise indicated on Schedule
3(a).
(c) Books and Records. The books and records of each such Credit
Party relating to the Collateral (including ledger sheets, correspondence
and invoice documents and instruments relating to or evidencing the
Collateral) are, and will at all times be kept, at such Credit Party's
chief executive office unless otherwise indicated on Schedule 3(a). Each
such Credit Party will keep the books and records relating to the
Collateral current and in good order and will take reasonable steps to
safeguard them (including making and storing copies thereof where
appropriate).
(d) Legal Name and Trade Names. Each such Credit Party represents
and warrants that as of the date hereof (A) its correct legal name is as
shown in this Agreement, (B) it has not in the four months immediately
preceding the date of this Agreement changed its name, been a party to a
merger, consolidation or other change in structure and (C) except as shown
on Schedule 3(d), it does not use, and has not at any time in the four
months immediately preceding the date of this Agreement used, any trade
names or assumed names in the invoicing of accounts or otherwise in the
conduct of its business or the ownership of its properties. Each such
Credit Party further covenants and agrees that it will not change its
legal name, be a party to a merger, consolidation or other
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change in structure or use a trade name or assumed names in its business
without first giving the Collateral Agent at least 30 days' prior written
notice.
(e) Priority. The Collateral and every part thereof is and will be,
and except as otherwise consented to by the Required Banks, free and clear
of all security interests, liens (including without limitation mechanics,
laborers and statutory liens), attachments, levies, encumbrances of every
kind, nature and description and whether voluntary or involuntary, and
licenses for the use thereof except for Permitted Liens. Each such Credit
Party will warrant and defend the Collateral against any claims and
demands (other than the Permitted Liens) of all persons at any time
claiming the same or any interest in the Collateral. Each such Credit
Party further represents, warrants, covenants and agrees that the security
interest in the Collateral granted to the Collateral Agent hereunder,
other than the Permitted Liens, is not subject to (nor have any financing
statements been filed and remain of record, and that such Credit Party
will not grant or permit to exist), any other security interests, liens,
encumbrances or claims (including without limitation claims of the United
States of America or any department, agency or instrumentality thereof, or
any state, county or local governmental agency) on or against the
Collateral, whether senior, superior, junior, subordinate or equal to the
security interest granted to the Collateral Agent hereby, or otherwise.
(f) Inspection. Each such Credit Party will, upon reasonable notice
and at reasonable times during normal business hours (and also outside of
normal business hours after the occurrence and during the continuance of
an Event of Default), allow the Collateral Agent and/or any of the Banks
or their respective representatives free access to and right of inspection
of the Collateral and the books and records relating thereto and shall
otherwise cooperate with and promptly respond to the reasonable requests
of the Collateral Agent and/or any of the Banks or their respective
representatives with respect thereto. As to any premises not owned by such
Credit Party wherein any of the Collateral is located the Credit Party
shall, promptly upon request, use its commercially reasonable efforts to
cause each owner of such premises to enter into an agreement in form and
substance reasonably satisfactory to the Collateral Agent waiving any lien
such owner may have by contract or under law with respect to such
Collateral, and allowing the inspection and removal of such Collateral by
the Collateral Agent and otherwise.
(g) Perfection of Security Interest. Except as set forth in Section
3(e) and except to the extent that security interests may be inconsistent
with or prohibited by governmental permits and except to the extent a
security interest can not be granted and perfected under applicable law,
each such Credit Party represents that this Agreement creates a valid
security interest in the Collateral (subject only to Permitted Liens)
securing payment and performance of the Secured Obligations and that all
filings and other action reasonably necessary to perfect such security
interest have been taken or shall be promptly taken upon the reasonable
request of the Collateral Agent. Each such Credit Party agrees to execute
and deliver to the Collateral Agent such further agreements and
assignments or other instruments (including affidavits, notices,
reaffirmations and amendments and restatements of existing documents, as
the Collateral Agent may reasonably request) and
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to do all such other things as the Collateral Agent may reasonably deem
necessary (i) to assure to the Collateral Agent its security interest
hereunder, including (A) such financing statements (including renewal
statements), statements or amendments thereof or supplements thereto or
other instruments as the Collateral Agent may from time to time reasonably
request in order to maintain the security interest granted hereunder in
accordance with the Uniform Commercial Code as enacted in the State of New
York, or other such jurisdiction as may be applicable, and any successor
statute(s) thereto (the "Code"), (B) with regard to Copyrights, a Notice
of Grant of Security Interest in Copyrights in the form of Schedule
3(g)(i), (C) with regard to Patents, a Notice of Grant of Security
Interest in Patents for filing with the United States Patent and Trademark
Office in the form of Schedule 3(g)(ii) attached hereto and (D) with
regard to Trademarks, a Notice of Grant of Security Interest in Trademarks
for filing with the United States Patent and Trademark Office in the form
of Schedule 3(g)(iii) attached hereto, (ii) to consummate the transactions
contemplated hereby and (iii) to otherwise protect and assure the
Collateral Agent and the Banks of their rights and interests hereunder. To
that end, each such Credit Party agrees that (i) in the event any Credit
Party shall refuse to provide additional financing statements upon the
reasonable request of the Collateral Agent, or shall fail to respond
promptly to any such request, and (ii) at any time after the occurrence
and during the continuance of an Event of Default, the Collateral Agent
may file one or more financing statements disclosing its security interest
in any or all of the Collateral without such Credit Party's signature
thereon, and further such Credit Party also hereby irrevocably makes,
constitutes and appoints the Collateral Agent, its nominee or any other
person whom the Collateral Agent may designate, as such Credit Party's
attorney in fact with full power to sign in the name of such Credit Party
any such financing statements, or amendments and supplements to financing
statements, renewal financing statements, notices or any similar documents
which in the Collateral Agent's reasonable discretion would be necessary,
appropriate or convenient in order to perfect and maintain perfection of
the security interests granted hereunder, such power, being coupled with
an interest, being and remaining irrevocable so long as any of the Secured
Obligations remain outstanding. Each such Credit Party hereby agrees that
a carbon, photographic or other reproduction of this Agreement or any such
financing statement is sufficient for filing as a financing statement by
the Collateral Agent without notice thereof to such Credit Party wherever
the Collateral Agent may in its sole discretion desire to file the same.
In the event for any reason the law of any jurisdiction other than New
York becomes or is applicable to the Collateral or any part thereof, or to
any of the Secured Obligations, each such Credit Party agrees to execute
and deliver all such instruments and to do all such other things as the
Collateral Agent reasonably deems necessary or appropriate to preserve,
protect and enforce the security interest of the Collateral Agent under
the law of such other jurisdiction (and, if any such Credit Party shall
fail to do promptly upon the request of the Collateral Agent, then the
Collateral Agent may execute any and all such requested documents on
behalf of such Credit Party pursuant to the power of attorney granted
hereinabove). If any Collateral is in the possession or control of any of
such Credit Party's agents and the Collateral Agent reasonably requests,
the Credit Party agrees to notify such agents in writing of the Collateral
Agent's security interest therein and, at any time after the occurrence,
and during the continuance, of an Event of Default, upon the Collateral
Agent's request,
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instruct them to hold all such Collateral for the Collateral Agent's
account and subject to the Collateral Agent's instructions. Each such
Credit Party agrees, upon the reasonable request of the Collateral Agent,
to mark its books and records to reflect the security interest of the
Collateral Agent in the Collateral.
(h) Advances by Secured Parties. On failure of any such Credit Party
to perform any of the covenants and agreements herein contained, the
Collateral Agent may, at its option, perform the same and in so doing may
expend such sums as the Collateral Agent may reasonably deem advisable in
the performance thereof, including without limitation the payment of any
insurance premiums, the payment of any taxes, liens and encumbrances,
expenditures made in defending against any adverse claim and all other
expenditures which the Collateral Agent may be compelled to make by
operation of law or which the Collateral Agent may make by agreement or
otherwise for the protection of the security hereof. All such sums and
amounts so expended shall be repayable by the Credit Parties promptly upon
demand, shall constitute additional Secured Obligations and shall bear
interest from the date said amounts are expended at the rate per annum
equal to the default rate provided in Section 2.2 of the Credit Agreement
for Revolving Loans which are Base Rate Loans (such rate per annum as so
determined being hereinafter referred to as the "Default Rate"). No such
performance of any covenant or agreement by the Collateral Agent on behalf
of any Credit Party, and no such advance or expenditure therefor, shall
relieve any Credit Party of any default under the terms of this Agreement.
The Collateral Agent, in making any payment hereby authorized may do so
according to any bill, statement or estimate procured from the appropriate
public office or holder of the claim to be discharged without inquiry into
the accuracy of such bill, statement or estimate or into the validity of
any tax assessment, sale, forfeiture, tax lien or title or claim. The
Collateral Agent, in performing any act hereunder, shall be the judge in
its reasonable discretion of whether such Credit Party is required to
perform the same under the terms of this Agreement.
4. Special Provisions regarding Receivables and General Intangibles.
(a) Contract Rights. Each such Credit Party represents and warrants,
and shall hereafter be deemed to have represented and warranted, that, as
of the time any contract right shall become subject to the security
interest hereunder, each and all of such contract rights and the papers
and documents relating thereto are genuine and in all respects what they
purport to be. Each Credit Party shall remain obligated and liable with
respect to all contract rights and general intangibles subject to the
grant of the security interest hereby and none of such obligations or
liabilities shall be assumed by the Collateral Agent or any of the Banks
on account hereof. Each such Credit Party agrees to provide to the
Collateral Agent, from time to time upon request, documents of title
relating to Inventory and promissory notes, chattel paper and other
instruments relating to receivables and General Intangibles, in each case
to the extent necessary to perfect the security interest of the Collateral
Agent. Further, the Borrower has by letter dated as of the Closing Date
identified to the Collateral Agent all promissory notes and chattel paper
as to which it is the payee evidencing indebtedness in excess of $25,000,
and will promptly give notice to
11
the Collateral Agent of its receipt after the Closing Date of any
promissory notes and chattel paper evidencing indebtedness in excess of
$25,000, and deliver such promissory notes and chattel paper promptly upon
request.
(b) Chief Executive Office. Each such Credit Party, in accordance
with the provisions of Sections 3(a) and 3(c) hereof, will keep all of its
books and records relating to its Receivables and General Intangibles only
at its chief executive office (or at other executive offices or places of
business identified in Schedule 3(a)) and will not change its chief
executive office without prior written notice to the Collateral Agent as
specified in Section 3(a).
5. Special Provisions regarding Inventory and Equipment.
(a) Treatment of Equipment. No material Equipment is or will be
attached to real estate in such a manner that it may become or be
considered to be a fixture, unless the Collateral Agent shall have a deed
of trust or mortgage on the subject property or such Credit Party shall
furnish or have furnished agreements by the parties having rights in or
liens on the subject property disclaiming rights or interests in or liens
on such Equipment unless the Collateral Agent shall otherwise consent.
(b) Inventory Location. Each such Credit Party represents and
warrants, and shall hereafter be deemed to have represented and warranted,
that, as of the time any Inventory shall become subject to the security
interest hereunder, such Inventory is located at its respective Permitted
Collateral Locations unless otherwise permitted by Section 3(b).
(c) Reports. Each such Credit Party will, from time to time promptly
upon the reasonable request of the Collateral Agent, provide the
Collateral Agent with such reports and schedules listing, summarizing
and/or identifying by location any or all of the Inventory and Equipment
as the Collateral Agent may reasonably request.
(d) Insurance. Each such Credit Party will insure the Collateral as
provided in the Credit Agreement.
6. Special Provisions Regarding Pledged Collateral.
(a) Representations and Warranties. Each such Credit Party
represents and warrants to the Collateral Agent for the benefit of the
Banks that (i) except for those Permitted Liens as identified in
subsections (i), (iii), (iv), (xii) and (xiii) of the definition thereof,
it is the owner of the Pledged Securities as identified on Schedule 2(b)
free and clear of all claims, pledges, liens, encumbrances or security
interests of every kind or nature except, (ii) except as identified on
Schedule 2(b), the Pledged Securities represent each such Credit Party's
entire interest in the issuer of such Pledged Securities, (iii) the
Pledged Securities have been duly and validly issued, (iv) except as
identified on Schedule 2(b), the Pledged Securities have been duly and
validly pledged to the Collateral Agent
12
hereby and (v) no consent or approval of any body, governmental,
regulatory or otherwise (including that of the subject entity, co-owners
or other shareholders), is required for the pledge contemplated hereby or
has not otherwise been obtained. Each such Credit Party covenants and
agrees that its entire interest in each issuer of such Pledged Securities
which is a Domestic Subsidiary (as defined in the Credit Agreement) (and
as to the Parent Company, its interest in the Borrower) will at all times
be subject to the grant and pledge contained herein in accordance with the
provisions hereof.
(b) Delivery of Stock Certificates in Transferable Form. All Pledged
Securities (including specifically without limitation share certificates
acquired subsequent to the date of this Agreement) will be delivered to
the Collateral Agent in form transferable for delivery together with
undated stock powers duly executed in blank in the form provided in
Schedule 6(h) hereto.
(c) Dividends, etc. Stock certificates, evidences of ownership and
other instruments acquired by or otherwise coming into the possession of
any such Credit Party on account of or in respect of the Pledged
Collateral, whether by stock dividend, stock split, recapitalization,
reorganization or otherwise, will be promptly delivered to the Collateral
Agent, together with appropriate undated stock powers executed in blank,
to be held as additional Pledged Collateral hereunder and will constitute
Pledged Collateral for all purposes hereunder. Subject to the terms of the
Credit Documents, so long as no Event of Default has occurred and is
continuing, dividends (other than stock dividends and other dividends
constituting Pledged Collateral which are addressed hereinabove) may be
paid to and accepted by any such Credit Party. Upon the occurrence and
during the continuance of an Event of Default, dividends (other than stock
dividends and other dividends constituting Pledged Collateral which are
addressed hereinabove) will be immediately paid over to the Collateral
Agent and held as additional Collateral hereunder. Any such other
dividends received by any of the Credit Parties after the occurrence and
during the continuance of an Event of Default will be accepted in trust
for the benefit of, and will be promptly paid over to, the Collateral
Agent.
(d) Endorsement. Upon the occurrence and during the continuance of
an Event of Default, the Collateral Agent shall have the right, for and in
the name, place and stead of any such Credit Party, to execute
endorsements, assignments or other instruments of conveyance or transfer
with respect to all or any of the Pledged Collateral.
(e) Collateral Agent's Obligation. The Collateral Agent shall have
no duty as to the collection or protection of the Pledged Collateral or
any income thereon or as to the preservation of any rights pertaining
thereto, beyond the safe custody of any thereof actually in its
possession. To the extent permitted by law, each such Credit Party
releases the Collateral Agent from any claims, causes of action and
demands at any time arising out of or with respect to this Agreement, the
Pledged Collateral and/or any actions, taken or omitted to be taken by the
Collateral Agent with respect thereto, and each such Credit Party hereby
agrees to hold the Collateral Agent harmless from and with respect to any
13
and all such claims, causes of action and demands in each case other than
those resulting from the gross negligence, willful misconduct or unlawful
conduct of the Collateral Agent.
(f) Waivers. Each such Credit Party acknowledges that if the Pledged
Collateral is of a type customarily sold on a recognized market then in
such case no demand, advertisement or notice, all of which are, to the
extent permitted by law, hereby expressly waived by each such Credit
Party, shall be required in connection with any sale or other disposition
of any part of the Pledged Collateral. The Collateral Agent shall not be
obligated to make any sale of Pledged Collateral if it shall determine not
to do so, regardless of the fact that notice of sale may have been given.
The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same
was so adjourned. Upon each private sale of Pledged Collateral of a type
customarily sold in a recognized market or subject to widely distributed
standard price quotations and upon each public sale, the Collateral Agent
may purchase all or any of the Pledged Collateral being sold, free from
any equity or right of redemption, which is hereby waived and released by
each such Credit Party, and may make payment therefor by endorsement
without recourse of the Secured Obligations in lieu of cash to the amount
then due thereon which such Credit Party hereby agrees to accept. In the
case of all sales of Pledged Collateral, public or private, the Credit
Parties shall pay all costs and expenses of every kind for sale or
delivery, including brokers' and attorneys' fees, and after deducting such
costs and expenses from the proceeds of sale, the Collateral Agent shall
apply any amount remaining to the payment of the Secured Obligations, and
the Credit Parties shall continue to be liable for any deficiency. The
balance, if any, remaining after payment in full of all of the Secured
Obligations, shall be paid to the Credit Parties.
(g) Unregistered Securities. Each such Credit Party recognizes that
the Collateral Agent may be unable to effect a public sale of all or a
part of the Pledged Securities by reason of certain prohibitions contained
in the Securities Act of 1933, as amended, as now or hereafter in effect,
or in applicable state securities laws, as now or hereafter in effect, but
may be compelled to resort to one or more private sales to a restricted
group of purchasers who will be obliged to agree, among other things, to
acquire such Pledged Securities for their own account, for investment and
not with a view to the distribution or resale thereof. Each such Credit
Party acknowledges, understands and agrees that private sales so made may
be at prices and other terms less favorable to the seller than if such
Pledged Securities were sold at public sales, and that neither the
Collateral Agent nor the Banks shall have any obligation to delay sale of
any such Pledged Securities for the period of time necessary to permit the
issuer of such Pledged Securities even if such issuer would agree, to
register such Pledged Securities for public sale under such applicable
securities laws. Each such Credit Party agrees that (i) if the Collateral
Agent shall, pursuant to the terms of this Agreement, sell or cause the
Pledged Securities or any portion thereof to be sold at private sale, the
Collateral Agent shall have the right to rely upon the advice and opinion
of any national brokerage or investment firm having a seat on the New York
Stock Exchange as to the best manner in which to expose the
14
Pledged Securities for sale and as to the best price reasonably obtainable
at the private sale thereof, and (ii) that private sales made under the
foregoing circumstances shall be deemed to have been made in a
commercially reasonable manner.
(h) Voting Rights. So long as no Event of Default has occurred and
is continuing, to the extent permitted by law, each Credit Party may
exercise any and all voting and other consensual rights pertaining to the
Pledged Collateral of such Credit Party or any part thereof for any
purpose not inconsistent with the terms of this Agreement or the Credit
Agreement. Upon the occurrence and during the continuance of an Event of
Default, all rights of a Credit Party to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant to this paragraph (h) shall cease and all such rights shall
thereupon become vested in the Agent.
7. Remedies.
(a) General 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 in accordance with the terms of the Credit Agreement, the Collateral
Agent shall have in addition to the rights and remedies provided herein,
in the Credit Documents or by law, the rights and remedies of a secured
party under the Code (regardless of whether the Code is the law of the
jurisdiction where the rights and remedies are asserted and regardless of
whether the Code applies to the affected Collateral), and further the
Collateral Agent may with or without judicial process or the aid and
assistance of others (i) enter on any premises on which any of the
Collateral may be located and, without resistance or interference by any
such Credit Party, take possession of the Collateral, (ii) dispose of any
Collateral on any such premises, (iii) require any such Credit Party to
assemble and make available to the Collateral Agent at its own expense any
Collateral at any place and time designated by the Collateral Agent which
is reasonably convenient to both parties, (iv) remove any Collateral from
any such premises for the purpose of effecting sale or other disposition
thereof, and/or (v) without demand and without advertisement, notice,
hearing or process of law, all of which each such Credit Party hereby
waives to the extent permitted by law, at any place and time or times,
sell and deliver any or all Collateral held by or for it at public or
private sale, by one or more contracts, in one or more parcels, for cash,
upon credit or otherwise, at such prices and upon such terms as the
Collateral Agent deems advisable, in its sole discretion, provided that
said disposition complies with any and all mandatory legal requirements.
In addition to all other sums due the Collateral Agent or any Bank
hereunder, the Credit Parties shall pay the Collateral Agent all
reasonable costs and expenses incurred by the Collateral Agent, including
reasonable attorneys' fees (including the allocated costs of in-house
counsel) and court costs, in obtaining or liquidating the Collateral, in
enforcing payment of Secured Obligations, or in the prosecution or defense
of any action or proceeding by or against the Collateral Agent or any Bank
concerning any matter arising out of or connected with this Agreement or
the Collateral or Secured Obligations, including without limitation any of
the foregoing arising in, arising under or related to a case under the
United States Bankruptcy Code. To the extent the rights of notice cannot
15
be legally waived hereunder, each such Credit Party agrees that any
requirement of reasonable notice shall be met if such notice is personally
served on or otherwise sent to such Credit Party in accordance with
Section 11 hereof at least 10 days before the time of sale or other event
giving rise to the requirement of such notice. The Collateral Agent shall
not be obligated to make any sale or other disposition of the Collateral
regardless of notice having been given. To the extent permitted by law,
the Collateral Agent or any Bank may be the purchaser at any such sale. To
the extent permitted by applicable law, each such Credit Party hereby
waives all of its rights of redemption from any such sale. Subject to the
provisions of applicable law, the Collateral Agent may postpone or cause
the postponement of the sale of all or any portion of the Collateral by
announcement at the time and place of such sale, and such sale may,
without further notice, to the extent permitted by law, be made at the
time and place to which the sale was postponed or the Collateral Agent may
further postpone such sale by announcement made at such time and place.
(b) Remedies relating to Pledged Collateral. 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 in accordance with the terms of the
Credit Agreement, and to the extent permitted by law, with regard to the
Pledged Collateral, the Collateral Agent may, but is not obligated to,
immediately (i) have the right to vote such Pledged Securities and (ii)
cause all or any of the Pledged Securities to be transferred to it or
registered in the name of its nominee(s).
(c) Access. In addition to the rights and remedies hereunder, 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 in accordance with the
terms of the Credit Agreement, the Collateral Agent shall have the right
to enter and remain upon the various premises of each such Credit Party
without cost or charge to the Collateral Agent, and use the same, together
with materials, supplies, books and records of such Credit Party for the
purpose of collecting and liquidating the Collateral, or for preparing for
sale and conducting the sale of the Collateral, whether by foreclosure,
auction or otherwise. In addition, the Collateral Agent may remove the
Collateral, or any part thereof, from such premises and/or any records
with respect thereto, in order to effectively collect or liquidate the
Collateral.
(d) Nonexclusive Nature of Remedies. Failure by the Collateral Agent
to exercise any right, remedy or option under this Agreement or any other
agreement between any such Credit Party and the Collateral Agent or any of
the Banks, or provided by law, or delay by the Collateral Agent in
exercising the same, shall not operate as a waiver; no waiver hereunder
shall be effective unless it is in writing, signed by the party against
whom such waiver is sought to be enforced and then only to the extent
specifically stated, which in the case of the Collateral Agent shall only
be granted as provided in Section 12 hereof. To the extent permitted by
law, neither the Collateral Agent nor any Bank, nor any party acting as
attorney for the Collateral Agent or any Bank, shall be liable hereunder
for any acts or omissions or for any error of judgment or mistake of fact
or law
16
other than for its gross negligence, willful misconduct or unlawful
conduct hereunder. The rights and remedies of the Collateral Agent under
this Agreement shall be cumulative and not exclusive of any other right or
remedy which the Collateral Agent or the Banks may have.
(e) Retention of Collateral. The Collateral Agent may, after
providing the notices required by Section 9-505(2) of the Code or
otherwise complying with the requirements of applicable law of the
relevant jurisdiction, to the extent the Collateral Agent is in possession
of any of the Collateral, retain the Collateral in satisfaction of the
Secured Obligations. Unless and until the Collateral Agent shall have
provided such notices, however, the Collateral Agent shall not be deemed
to have retained any Collateral in satisfaction of any Secured Obligations
for any reason.
(f) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which the
Collateral Agent or the Banks are legally entitled, the Credit Parties
shall be jointly and severally liable for the deficiency, together with
interest thereon at the default rate specified in Section 2.2 of the
Credit Agreement for Revolving Loans that are Base Rate Loans, together
with the costs of collection and the reasonable fees of any attorneys
employed by the Collateral Agent to collect such deficiency. Any surplus
remaining after the full payment and satisfaction of the Secured
Obligations shall be returned to the Credit Parties or to whomsoever a
court of competent jurisdiction shall determine to be entitled thereto.
8. Application of Proceeds. Upon the occurrence, and during the
continuance, of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by the Collateral
Agent in cash or its equivalent, will be applied first to costs and expenses of
collection and sale and then in reduction of the Secured Obligations in such
order and manner as the Collateral Agent may direct in its sole discretion, and
each such Credit Party irrevocably waives the right to direct the application of
such payments and proceeds and acknowledges and agrees that the Collateral Agent
shall have the continuing and exclusive right to apply and reapply any and all
such payments and proceeds in the Collateral Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.
Each of the Credit Parties shall remain liable to the Collateral Agent for any
deficiency. Any surplus remaining after the full payment and satisfaction of the
Secured Obligations shall be returned to such Credit Parties or to whomsoever a
court of competent jurisdiction shall determine to be entitled thereto.
9. Costs of Counsel. If at any time hereafter, after the occurrence of an
Event of Default and until such time as such Event of Default has been waived by
the Required Banks or cured to the satisfaction of the Required Banks in
accordance with the terms of the Credit Agreement, the Collateral Agent employs
counsel to prepare or consider amendments, waivers or consents with respect to
this Agreement, or to take action or make a response in or with respect to any
legal or arbitral proceeding relating to this Agreement or relating to the
Collateral, or to protect the Collateral or exercise any rights or remedies
under this Agreement or with respect to the Collateral, then the Credit Parties
agree to promptly pay upon demand any and all such
17
reasonable costs and expenses of the Collateral Agent, all of which costs
and expenses shall constitute Secured Obligations hereunder.
10. Continuing Agreement.
(a) This Agreement shall be a continuing agreement in every respect
and shall remain in full force and effect until all of the Loans and LOC
Obligations together with interest and fees under the Credit Agreement
(and all guaranty obligations in respect thereof) shall have been paid in
full and all commitments relating thereto shall have been terminated. Upon
such payment and termination, this Agreement shall automatically be
terminated and the Collateral Agent shall, upon the request and at the
expense of the Credit Parties, forthwith release all of its liens and
security interests hereunder and shall execute and deliver to the Credit
Parties, or to such person or persons as the Credit Parties shall
reasonably designate, all Uniform Commercial Code termination statements
and similar documents prepared by the Credit Parties which the Credit
Parties shall reasonably request to evidence such termination.
Notwithstanding the foregoing all releases and indemnities provided
hereunder shall survive termination of this Agreement.
(b) Without limiting the foregoing, notwithstanding anything else to
the contrary in this Agreement, all Collateral sold, transferred or
otherwise disposed of in accordance with the terms of the Credit Agreement
shall be sold, transferred or otherwise disposed of free and clear of the
lien and security interest created hereunder. In connection with the
foregoing, the Collateral Agent shall execute and deliver to the Credit
Parties, or to such other person or persons as the Credit Parties shall
reasonably designate, all Uniform Commercial Code termination statements
and similar documents prepared by the Credit Parties which the Credit
Parties shall reasonably request to evidence the release of the lien and
security interest created hereunder with respect to any such Collateral.
(c) This Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in
whole or in part, of any of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent or any Bank as a
preference, fraudulent conveyance or otherwise under any bankruptcy,
insolvency or similar law, all as though such payment had not been made;
provided that in the event payment of all or any part of the Secured
Obligations is rescinded or must be restored or returned, all reasonable
costs and expenses (including without limitation any reasonable legal fees
and disbursements) incurred by the Collateral Agent or any Bank in
defending and enforcing such reinstatement shall be deemed to be included
as a part of the Secured Obligations.
11. Notices. Except as otherwise expressly provided herein, all notices
and other communications shall have been duly given and shall be effective (i)
when personally 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 the case
of the Credit Parties to the
18
address set out on Schedule 3(a) hereto, and in the case of the Collateral Agent
at the address set out below, or at such other address as such party may specify
by written notice to the other parties:
if to the Borrower or to a Credit Party:
Anvil Knitwear, Inc.
228 East 45th Street
New York, New York 10017
Attn: Jacob Hollander
Telephone: (212) 476-0352
Telecopy: (212) 885-9411
if to the Collateral Agent:
NationsBank, N.A.
101 N. Tryon Street
Independence Center
NC1-001-15-04
Charlotte, North Carolina 28255
Attn: Cliff Luckadoo
Telephone: (704) 386-7637
Telecopy: (704) 388-9436
with a copy to:
NationsBank, N.A.
NationsBank Corporate Center
100 North Tryon Street
NC1-007-08-11
Charlotte, North Carolina 28255
Attn: Joe Netzel
Telephone: (704) 386-1185
Telecopy: (704) 386-1270
The Credit Parties hereby acknowledge and agree that notices and other
communications to the Borrower at its address referred to above shall be deemed
adequate notice to each of the other Credit Parties.
12. Amendments; Waivers; Modifications. This Agreement and the provisions
hereof may not be amended, waived, modified, changed, discharged or terminated
except with the prior written consent of the Credit Parties and the Collateral
Agent.
13. Successors in Interest. This Agreement shall create a continuing
security interest in the Collateral and shall be binding upon the Credit
Parties, their respective successors and
19
assigns and shall inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and its successors and
assigns; provided, however, that the Credit Parties may not assign their
respective rights or delegate their respective duties hereunder without the
Collateral Agent's prior written consent. To the extent permitted by law, each
such Credit Party hereby releases the Collateral Agent and the Banks, and their
respective successors and assigns, from any liability for any act or omission
relating to this Agreement or the Collateral, except for any liability arising
from the Collateral Agent's gross negligence or willful misconduct.
14. Counterparts. This 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 Agreement to produce or account
for more than one such counterpart.
15. 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 Agreement.
16. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS AGREEMENT 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 STATE OF NEW YORK. Any
legal action or proceeding with respect to this Agreement may be brought
in the courts of the State of New York, or of the federal courts of the
United States sitting in New York City, and, by execution and delivery of
this Agreement, each party hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction
of such courts. Each party further irrevocably consents to the service or
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 such party at its address for notices pursuant
to Section 11. Nothing herein shall affect the right of any party to serve
process in any other manner permitted by law.
(b) Each party 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 Agreement
or 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 PARTY HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY.
20
17. Severability. If any provision of any of this Agreement 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.
18. The Collateral Agent. In acting under or by virtue of this Agreement,
the Collateral Agent shall be entitled to all the rights, authority, privileges
and immunities provided in the Credit Agreement, all of which provisions are
incorporated by reference herein with the same force and effect as if set forth
herein.
19. Entirety. This 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. In the event of any inconsistency
between this Agreement and the Credit Agreement, the terms of the Credit
Agreement shall control.
20. Survival. All representations and warranties of the Credit Parties
hereunder shall survive the execution and delivery of this Agreement and the
other Credit Documents.
21. Other Security. To the extent that any of the Secured Obligations are
now or hereafter secured by property other than the Collateral, or by a
guarantee, endorsement or property of any other person, then the Collateral
Agent or Banks shall have the right to proceed against such other property,
guarantee or endorsement upon the occurrence of any 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 in accordance
with the terms of the Credit Agreement, and the Collateral Agent shall have the
right, in its sole discretion, to determine which rights, security, liens,
security interests or remedies the Collateral Agent shall at any time pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of them or any of the Collateral
Agent's rights or the Secured Obligations under this Agreement or under any
other of the Credit Documents.
22. No Liability. Neither the Collateral Agent nor the Banks shall be
liable for or be responsible for any obligations under, or in respect of, any
contracts, agreements or other interest which comprise a part of the Collateral
hereunder on account of the security interests granted hereby.
[Remainder of Page Intentionally Left Blank]
21
IN WITNESS WHEREOF, the Credit Parties have caused this Security and
Pledge Agreement to be duly executed under seal as of the date first above
written.
BORROWER ANVIL KNITWEAR, INC.,
a Delaware corporation
By:
------------------------------
Name:
Title:
GUARANTORS ANVIL HOLDINGS, INC.,
a Delaware corporation
By:
------------------------------
Name:
Title:
COTTONTOPS, INC.,
a Delaware corporation
By:
------------------------------
Name:
Title:
Accepted and agreed to as of the date first above written.
NATIONSBANK, N.A.,
as Collateral Agent for the Banks
By:
------------------------------
Name:
Title:
22
SCHEDULE 1
INTELLECTUAL PROPERTY
SCHEDULE 2(b)
PLEDGED SECURITIES
- ------------------------------------------------------------------------------------------------------
Percentage
Certificate No. of of Total
Issuer Nominal Owner No. Shares Ownership
- ------ ------------- --- ------ ---------
- ------------------------------------------------------------------------------------------------------
Anvil Knitwear, Inc., Anvil Holdings, Inc., 1 1000 100%
a Delaware corporation a Delaware corporation
- ------------------------------------------------------------------------------------------------------
Cottontops, Inc., Anvil Knitwear, Inc., 1 100 100%
a Delaware corporation a Delaware corporation
- ------------------------------------------------------------------------------------------------------
A.K.H. S.A. Anvil Knitwear, Inc.,
a Delaware corporation
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
SCHEDULE 3(a)
COLLATERAL LOCATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Other Places Record Owner
of Business and of Location
Credit Party Notice Address Chief Executive Office Collateral Locations (if not Credit Party)
------------ -------------- ----------------------- --------------------- ---------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Anvil Knitwear, Inc. 228 E. 45th St. 228 E. 45th Street Aynor, SC
New York, New York 10017 New York, New York 10017
Hamer, SC
Mullins, SC
Gibson, NC
Kings Mountain, NC
Red Springs, NC
Swannanoa, NC
Whiteville, NC
- ------------------------------------------------------------------------------------------------------------------------------------
Anvil Holdings, Inc. 228 E. 45th Street 228 E. 45th Street
New York, New York 10017 New York, New York 10017
- ------------------------------------------------------------------------------------------------------------------------------------
Cottontops, Inc. P.O. Box 789 P.O. Box 789
Farmville, NC 27828 Farmville, NC 27828
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 3(d)
PERMITTED TRADE NAMES
Company Fictitious Names Location
- ------- ---------------- --------
Anvil Knitwear, Inc. Teak, a division of Anvil Knitwear, Inc. Same as above
SCHEDULE 3(g)(i)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
COPYRIGHTS
United States Copyright Office
Gentlemen:
Please be advised that pursuant to the Amended and Restated Security and
Pledge Agreement dated as of March 14, 1997 (the "Security Agreement") by and
among the Credit Parties party thereto (each a "Credit Party" and collectively,
the "Credit Parties") and NationsBank, N.A., as Collateral Agent (the
"Collateral Agent") for the banks referenced therein (the "Banks"), the
undersigned Credit Party has granted a continuing security interest in and
continuing lien upon, the copyrights and copyright applications shown below to
the Collateral Agent for the ratable benefit of the Banks:
COPYRIGHTS
Date of
Copyright No. Description of Copyright Copyright
- ------------- ------------------------ ---------
Copyright Applications
Copyright Description of Copyright Date of Copyright
Applications No. Applied For Applications
- ---------------- ----------------- --------------
The Credit Parties and the Collateral Agent, on behalf of the Banks,
hereby acknowledge and agree that the security interest in the foregoing
copyrights and copyright applications (i) may only be terminated in accordance
with the terms of the Security Agreement and (ii) is not to be construed as an
assignment of any copyright or copyright application.
Very truly yours,
----------------------------------
[Credit Party]
By:_______________________________
Name:_____________________________
Title:____________________________
Acknowledged and Accepted:
NATIONSBANK, N.A., as Collateral Agent
By:___________________________________
Name:_________________________________
Title:________________________________
SCHEDULE 3(g)(ii)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
PATENTS
United States Patent and Trademark Office
Gentlemen:
Please be advised that pursuant to the Amended and Restated Security and
Pledge Agreement dated as of March 14, 1997 (the "Security Agreement") by and
among the Credit Parties party thereto (each a "Credit Party" and collectively,
the "Credit Parties") and NationsBank, N.A., as Collateral Agent (the
"Collateral Agent") for the banks referenced therein (the "Banks"), the
undersigned Credit Party has granted a continuing security interest in and
continuing lien upon, the patents and patent applications shown below to the
Collateral Agent for the ratable benefit of the Banks:
PATENTS
-------
Description of Patent Date of
Patent No. Item Patent
- ---------- ---- ------
Patent Applications
-------------------
Patent Description of Patent Date of Patent
Applications No. Applied For Applications
- ---------------- ----------- ------------
The Credit Parties and the Collateral Agent, on behalf of the Banks,
hereby acknowledge and agree that the security interest in the foregoing patents
and patent applications (i) may only be terminated in accordance with the terms
of the Security Agreement and (ii) is not to be construed as an assignment of
any patent or patent application.
Very truly yours,
----------------------------------
[Credit Party]
By:
------------------------------
Name:_____________________________
Title:____________________________
Acknowledged and Accepted:
NATIONSBANK, N.A., as Collateral Agent
By:
------------------------------
Name:_____________________________
Title:____________________________
SCHEDULE 3(g)(iii)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
TRADEMARKS
United States Patent and Trademark Office
Gentlemen:
Please be advised that pursuant to the Amended and Restated Security and
Pledge Agreement dated as of March 14, 1997 (the "Security Agreement") by and
among the Credit Parties party thereto (each a "Credit Party" and collectively,
the "Credit Parties") and NationsBank, N.A., as Collateral Agent (the
"Collateral Agent") for the banks referenced therein (the "Banks"), the
undersigned Credit Party has granted a continuing security interest in and
continuing lien upon, the trademarks and trademark applications shown below to
the Collateral Agent for the ratable benefit of the Banks:
TRADEMARKS
----------
Description of Trademark Date of
Trademark No. Item Trademark
- ------------- ---------- ---------
Trademark Applications
----------------------
Trademark Description of Trademark Date of Trademark
Applications No. Applied For Applications
- ---------------- ----------------- --------------
The Credit Parties and the Collateral Agent, on behalf of the Banks,
hereby acknowledge and agree that the security interest in the foregoing
trademarks and trademark applications (i) may only be terminated in accordance
with the terms of the Security Agreement and (ii) is not to be construed as an
assignment of any trademark or trademark application.
Very truly yours,
----------------------------------
[Credit Party]
By:
------------------------------
Name:_____________________________
Title:____________________________
Acknowledged and Accepted:
NATIONSBANK, N.A., as Collateral Agent
By:
------------------------------
Name:_____________________________
Title:____________________________
SCHEDULE 6(h)
FORM OF
IRREVOCABLE STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of [ISSUING CORPORATION], a _____________
corporation:
Certificate No. No. of Shares
--------------- -------------
and irrevocably appoints
its agent and attorney-in-fact to transfer all or any part of such capital stock
and to take all necessary and appropriate action to effect any such transfer.
The agent and attorney-in-fact may substitute and appoint one or more persons to
act for him. The effectiveness of a transfer pursuant to this stock power shall
be subject to any and all transfer restrictions referenced on the face of the
certificates evidencing such interest or in the certificate of incorporation or
bylaws of the subject corporation, to the extent they may from time to time
exist.
-------------------------------
Dated [Credit Party]
By:
---------------------------
Name:__________________________
Title:_________________________
[Address]
Witnessed by:
- ------------------------
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