CREDIT AGREEMENT
DATED AS OF MARCH 31, 1995
AMONG
SIGNAL APPAREL COMPANY, INC.,
THE SHIRT SHED, INC.,
AMERICAN MARKETING WORKS, INC.
and
WALSH GREENWOOD & CO.
_____________________________________________________________
TABLE OF CONTENTS
Page
Section 1 Definitions
Section 1.1 Defined Terms . . . . . . . . . . . . . . 5
Section 1.2 Other Definitional Provisions . . . . . . 10
Section 2 Amount and Terms of Loan
Commitment
Section 2.1 Commitment . . . . . . . . . . . . . . . 10
Section 2.2 Note; Borrowing . . . . . . . . . . . . . 10
Section 2.3 Use of Proceeds of Loan . . . . . . . . 11
Section 2.4 Optional Prepayments . . . . . . . . . . 11
Section 2.5 Interest Rate and Payment Dates . . . . . 12
Section 2.6 Computation of Interest . . . . . . . . . 12
Section 3 Grant of Security Interest
Section 3.1 Security for the Loan . . . . . . . . . . 12
Section 3.2 Use of Collateral . . . . . . . . . . . . 13
Section 3.3 Subordination of Security Interest. . . . 13
Section 4 Warrants
Section 4.1 Fixed Rate Warrants . . . . . . . . . . . 14
Section 4.2 Discount Rate Warrants. . . . . . . . . . 14
Section 4.3 Exercise of Warrants. . . . . . . . . . . 14
Section 4.4 Registration Rights . . . . . . . . . . . 15
Section 5 Representations and Warranties
Section 5.1 Financial Condition . . . . . . . . . . . 15
Section 5.2 No Change . . . . . . . . . . . . . . . . 15
Section 5.3 Corporate Existence; Compliance with
Law . . . . . . . . . . . . . . . . . . . 15
Section 5.4 Corporate Power; Authorization;
Enforceable Obligations . . . . . . . . 16
Section 5.5 No Legal Bar . . . . . . . . . . . . . . 16
Section 5.6 No Material Litigation . . . . . . . . . 16
Section 5.7 No Default . . . . . . . . . . . . . . . 16
Section 5.8 Ownership of Property; Liens . . . . . . 17
Section 5.9 Taxes . . . . . . . . . . . . . . . . . . 17
Section 5.10 Federal Regulations . . . . . . . . . . . 17
Section 5.11 Hazardous Substances. . . . . . . . . . . 17
Section 5.12 Investment Company Act . . . . . . . . . 18
Section 5.13 Subsidiaries. . . . . . . . . . . . . . . 18
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Section 6 Conditions Precedent
Section 6.1 Conditions to Initial Loan . . . . . . . 18
(a) Loan Documents . . . . . . . . . . . . . . . . 18
(b) Corporate Proceedings of the Company . . . . . 18
(c) Corporate Documents . . . . . . . . . . . . . 19
(d) Good Standing Certificates . . . . . . . . . . 19
(e) Financial Information . . . . . . . . . . . . 19
(f) Litigation . . . . . . . . . . . . . . . . . . 19
(g) No Violation . . . . . . . . . . . . . . . . . 19
(h) Consents, Licenses, Approvals, Etc.. . . . . . 19
(i) Representations and Warranties . . . . . . . . 20
(j) No Default . . . . . . . . . . . . . . . . . . 20
(k) Security Interest. . . . . . . . . . . . . . . 20
(l) Legal Opinion. . . . . . . . . . . . . . . . . 20
Section 6.2 Conditions to Each Loan. . . . . . . . . . . . 20
(a) Representations and Warranties . . . . . . . . 20
(b) No Default . . . . . . . . . . . . . . . . . . 20
(c) Additional Matters . . . . . . . . . . . . . . 20
(d) Additional Documents . . . . . . . . . . . . . 21
(e) Extension of Greyrock Loan . . . . . . . . . . 21
Section 7 Affirmative Covenants
Section 7.1 Financial Statements . . . . . . . . . . 21
Section 7.2 Certificates; Other Information . . . . . 22
Section 7.3 Payment of Obligations . . . . . . . . . 22
Section 7.4 Conduct of Business and
Maintenance of Existence . . . . . . . 22
Section 7.5 Maintenance of Property; Insurance . . . 23
Section 7.6 Inspection of Property; Books and
Records; Discussions . . . . . . . . . 23
Section 7.7 Taxes and Other Liens . . . . . . . . . . 23
Section 7.8 Further Assurances. . . . . . . . . . . . 23
Section 7.9 Notices . . . . . . . . . . . . . . . . . 24
Section 7.10 Nomination of Directors . . . . . . . . . 25
Section 8 Negative Covenants
Section 8.1 Limitation on Indebtedness . . . . . . . 25
Section 8.2 Limitations on Liens . . . . . . . . . . 25
Section 8.3 Limitations on Guarantee Obligation . . . 27
Section 8.4 Limitations on Fundamental Changes . . . 27
Section 8.5 Limitations on Sale of Assets . . . . . . 27
Section 8.6 Limitation on Dividends . . . . . . . . . 28
3
Section 8.7 Limitation on Investments, Loans and
Advances . . . . . . . . . . . . . . . 28
Section 8.8 Transactions with Affiliates . . . . . . 29
Section 8.9 Sale and Leaseback . . . . . . . . . . . 29
Section 8.10 Fiscal Year . . . . . . . . . . . . . . . 29
Section 8.11 Subsidiary Formation. . . . . . . . . . . 29
Section 8.12 Change in Location, Name, etc.. . . . . . 29
Section 8.13 Financial Condition. . . . . . . . . . . 29
Section 9 Events of Default . . . . . . 30
Section 10 Miscellaneous
Section 10.1 Amendments and Waivers . . . . . . . . . 32
Section 10.2 Notices . . . . . . . . . . . . . . . . . 33
Section 10.3 No Waiver; Cumulative Remedies . . . . . 33
Section 10.4 Survival of Representations and Warranties 33
Section 10.5 Payments of Expenses and Taxes . . . . . 33
Section 10.6 Successors and Assigns . . . . . . . . . 34
Section 10.7 Counterparts . . . . . . . . . . . . . . 35
Section 10.8 Governing Law . . . . . . . . . . . . . . 35
Section 10.9 Submission to Jurisdiction; Waivers . . . 35
Section 10.10 Waiver of Jury Trial. . . . . . . . . . . 36
EXHIBITS
Exhibit A Note (subsection 2.2)
Exhibit B Form of Fixed Rate Warrant (subsection 4.1)
Exhibit C Form of Discount Rate Warrant (subsection 4.2)
Schedule 5.2 Material Adverse Changes (subsection 5.2)
Schedule 5.6 Material Litigation (subsection 5.6)
Schedule 5.7 Default (subsection 5.7)
Schedule 5.11 Environmental (subsection 5.11)
Schedule 6.1(h) Closing Certificate (subsection 6.1(h))
Schedule 8.1(c) Outstanding Indebtedness (subsection 8.1(c))
Schedule 8.2(f) Existing Liens (subsection 8.2(f))
Schedule 8.3 Existing Guarantees (subsection 8.3)
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CREDIT AGREEMENT, dated as of March 31, 1995 by and among
SIGNAL APPAREL COMPANY, INC., an Indiana corporation ( "SIGNAL"),
The Shirt Shed, Inc., a Delaware corporation ("SSI"), American
Marketing Works, Inc., a Delaware corporation ("AMW") and Walsh
Greenwood & Co., a New York limited partnership (the "LENDER"). SSI
and AMW are wholly owned subsidiaries of Signal. Signal, SSI and
AMW, individually and collectively, shall mean the "COMPANY"
herein, and unless specifically stated to the contrary, shall be
jointly and severally liable for all obligations of the Company
hereunder.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings:
AFFILIATE: any Person (other than a Subsidiary) which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, Signal. For purposes of this
definition, a Person shall be deemed to be "controlled by" Signal
if Signal possesses, directly of indirectly, power either to: (i)
vote 10% or more of the securities having ordinary voting power for
the election of directors of such Person, or (ii) direct or cause
the direction of the management and policies of such Person whether
by contract or otherwise.
AGREEMENT: this CREDIT AGREEMENT, as amended, supplemented or
modified from time to time.
AVAILABLE COMMITMENT: at any time, an amount equal to the
amount by which (a) the Commitment at such time EXCEEDS (b) the
aggregate principal amount of all Loans made by the Lender (whether
or not then outstanding).
BORROWING DATE: the date of any borrowing hereunder.
BUSINESS DAY: a day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized
or required by law to close.
CASH EQUIVALENTS: (i) securities issued or directly and
fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof having maturities of not more
than three months from the date of acquisition; (ii) time deposits
and certificates of deposit having maturities of not more than
three months from the date of acquisition of any domestic
commercial bank having capital and surplus in excess of
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$500,000,000, which has, or the holding company of which has, a
commercial paper rating meeting the requirements specified in
clause (iv) below; (iii) repurchase obligations with a term of not
more than seven days for underlying securities of the types
described in clauses (i) and (ii) entered into with any bank
meeting the qualifications specified in clause (ii) above; and (iv)
commercial paper rated at least A2 or the equivalent thereof by
Standard & Poor's Corporation or P2 or the equivalent thereof by
Moody's Investors Service, Inc. and in either case maturing within
nine months after the date of acquisition.
CLOSING DATE: the date on which the Lender makes its initial
Loan.
CODE: the Internal Revenue Code of 1986, as amended from time
to time.
COLLATERAL: as defined in Section 3.1.
COMMITMENT: the obligation of the Lender to make Loans to
Signal pursuant to Section 2.1, in a maximum principal amount of
$15,000,000, as such amount may be reduced from time pursuant to
this Agreement.
COMMITMENT PERIOD. the period from and including the Closing
Date to and including the close of business on the sixth Business
Day prior to the Maturity Date.
COMMON STOCK: shall mean Signal's common stock, par value
$0.01.
CONTRACTUAL OBLIGATION: as to any Person, any provision of
any security issued by such Person or of any agreement, instrument
or undertaking to which such Person is a party or by which it or
any of its property is bound.
DEED TO SECURE DEBT AND SECURITY INTEREST: security interest
granted by Signal in its real property located in Troup County,
Georgia granted pursuant to Section 3.1(a).
DEFAULT: any of the events specified in Section 9, whether or
not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
DISCOUNT RATE WARRANTS: warrants issued pursuant to Section
4.2.
DOLLARS AND $: dollars in lawful currency of the United
States of America.
6
EVENT OF DEFAULT: any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse
of time, or both, or any other condition, event or act has been
satisfied.
FINANCING LEASE: (a) any lease of property, real or personal,
the then present value of the minimum rental commitment of which
should, in accordance with GAAP, be capitalized on a balance sheet
of the lessee, and (b) any other such lease the obligations under
which are capitalized on a consolidated balance sheet of Signal and
its Subsidiaries.
FIXED RATE WARRANTS: warrants issued pursuant to Section 4.1.
GAAP: generally accepted accounting principles in the United
States of America in effect from time to time.
GOVERNMENTAL AUTHORITY: any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
GUARANTEE OBLIGATION: as to any Person, any obligation of
such Person guaranteeing any Indebtedness, leases, dividends or
other obligations (the "PRIMARY OBLIGATIONS") of any other Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such
Person, whether or not contingent: (a) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor; (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor; (c) to
purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation;
or (d) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guarantee
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the Company in good faith.
INDEBTEDNESS: of a Person, at a particular date, the sum
(without duplication) at such date of: (a) all indebtedness of such
Person for borrowed money or for the deferred purchase price of
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property or services other than trade payables in the ordinary
course of business; (b) all obligations of such Person under
Financing Leases; and (c) all obligations of such Person in respect
of letters of credit, acceptances, or similar obligations issued or
created for the account of such Person, including without
limitation all indebtedness of Signal, AMW or SSI under their
respective factoring arrangements with BNY Financial Corporation
("BNY").
INTERCREDITOR AGREEMENT: shall mean the Intercreditor
Agreement, dated as of March 31, 1995, among Lender, BNY Financial
Corporation ("BNY"), Greyrock Capital Group, Inc. ("GREYROCK"),
Signal, SSI and AMW.
INTEREST PAYMENT DATE: as to any Loan, the last day of 1995
and the last day of each calendar quarter thereafter while such
Loan is outstanding.
LIEN: any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any
financing statement under the Uniform Commercial Code or comparable
law of any jurisdiction in respect of any of the foregoing).
LOAN: as defined in Section 2.1.
LOAN DOCUMENTS: this Agreement; the Fixed Rate Warrants; the
Discount Rate Warrant; the Note; the Real Estate Mortgage, Security
Agreement, Assignment of Leases, Rents and Fixture Filing; the
Tennessee Deed of Trust and Security Agreement; the Deed to Secure
Debt and Security Interest; UCC financing statements covering both
personalty and fixtures; the Intercreditor Agreement; the
Shareholders' Agreement and other documents, agreements,
certificates, schedules or exhibits called for in any of the
foregoing or otherwise required of the Company to effect the
purposes hereof.
MATURITY DATE: March 31, 1998.
NOTE: as defined in Section 2.2.
OBLIGATIONS. the unpaid principal amount of, and interest
(including, without limitation, interest accruing after the
maturity of the Loans and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization of like proceeding, relating to the Company, whether
8
or not a claim for post-filing or post-petition interest is allowed
in such proceeding) on the Note, and all other obligations and
liabilities of the Company to the Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or
in connection with, this Agreement, the Note, the Discount Rate
Warrant, the Fixed Rate Warrants, any other Loan Document any other
document made, delivered or given in connection therewith or
herewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees and disbursements of counsel to the Lender) or
otherwise.
PERSON: an individual, partnership, corporation, business
trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority
or other entity of whatever nature.
PREFERRED STOCK: shall mean Signal's preferred stock, stated
value $100,000 per share, of which shares of only Series A and
Series C are outstanding as of the date hereof.
PRINCIPAL or PRINCIPAL AMOUNT: shall mean, at any time, an
amount equal to the principal amount of all outstanding Loans at
such time.
REAL ESTATE MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF
LEASES, RENTS AND FIXTURE FILING: security interest granted by SSI
in its real property located in Wabash County, Indiana granted
pursuant to Section 3.1(a).
REQUIREMENT OF LAW: as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation
or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its
property is subject.
RESPONSIBLE OFFICER: as to any Person, the chief executive
officer, president or the chief financial officer of such Person.
SENIOR DEBT: Indebtedness, including Guarantee Obligations
relating thereto, of the Company to BNY Financial Corporation and
Greyrock Capital Group, Inc.
SHAREHOLDERS' AGREEMENT: the Agreement dated as of March 31,
1995 among Signal and certain of its shareholders, including
Lender.
9
SUBSIDIARY: as to any Person, a corporation as to which
shares of stock having ordinary voting power (other than stock
having such power only by reason of the happening of a contingency)
to elect a majority of the board of directors or other managers of
such corporation are at the time owned, or the management of which
is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "SUBSIDIARY" or the "SUBSIDIARIES"
in this Agreement shall refer to a Subsidiary or Subsidiaries of
Signal.
TENNESSEE DEED OF TRUST AND SECURITY AGREEMENT: security
interest granted by Signal in its real property located in Hamilton
County, Tennessee granted pursuant to Section 3.1(a).
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless
otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in the Note or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in the Note, and any certificate
or other document made or delivered pursuant hereto, accounting
terms relating to Signal and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to
them under GAAP.
(c) The words "HEREOF," "HEREIN" and "HEREUNDER" and
words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of
this Agreement, and section and exhibit references are to this
Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.
SECTION 2. AMOUNT AND TERMS OF LOAN COMMITMENT
2.1 COMMITMENT. Subject to the terms and conditions hereof,
the Lender agrees to make loans (each, a "LOAN"; collectively, the
"LOANS") to Signal from time to time during the Commitment Period
in an aggregate principal amount not to exceed the Available
Commitment.
2.2 NOTE; BORROWING. (a) The Loans made by the Lender shall
be evidenced collectively by a promissory note of the Company,
substantially in the form of EXHIBIT A (the "NOTE"), payable to the
order of the Lender and evidencing the obligation of the Company to
10
pay a principal amount equal to the lesser of (a) the amount of the
initial Commitment and (b) the Principal Amount, on the Maturity
Date, together with any accrued and unpaid interest. The Lender is
hereby authorized to record the date and amount of each Loan made
by the Lender, and the date and amount of each payment or
prepayment of principal thereof, on the schedule annexed to and
constituting a part of the Note, and any such recordation shall
constitute PRIMA FACIE evidence of the accuracy of the information
so recorded. The Note shall (x) be dated the Closing Date, (y) be
stated to mature on the Maturity Date and (z) bear interest on the
unpaid Principal Amount thereof from time to time outstanding as
provided in Section 2.5. Interest on the Note shall be payable on
the dates specified in Section 2.5(c).
(b) Signal may borrow under the Commitment during the
Commitment Period on any Business Day; PROVIDED that a Responsible
Officer of Signal shall give the Lender irrevocable notice in
writing (which notice must be received by the Lender prior to 10:00
A.M., New York City time) not less than two Business Days prior to
the requested Borrowing Date, specifying (i) the amount to be
borrowed and (ii) the requested Borrowing Date. Each borrowing
pursuant to the Commitment shall be in an aggregate principal
amount of not less than $1,000,000.
(c) Each request for borrowing shall be accompanied by a
certificate of a Responsible Officer of Signal stating that the
Company is not then in Default, that the representations and
warranties of Section 5 (with the consolidated balance sheet of
Signal referenced in Section 5.1 being the most recent published
consolidated year end balance sheet reported on by Signal's
independent certified public accountants as of the date of such
request) are accurate as of the date of the request, and that the
Loan requested will not cause a Default.
2.3 USE OF PROCEEDS OF LOANS. The Loans shall be used to
finance the working capital needs of the Company and for general
corporate purposes including business acquisitions; provided,
however, that no portion of the Loans shall be used to pay the
principal due upon any bank debt of the Company.
2.4 OPTIONAL PREPAYMENTS. With the written consent of BNY
and Greyrock, the Company may at any time and from time to time
prepay the Loan, in whole or in part, without premium or penalty,
upon at least two Business Days' irrevocable notice to the Lender,
specifying the date and amount of prepayment. If such notice is
given, the amount specified therein shall be due and payable on the
date specified therein. Partial prepayments shall be in an
aggregate principal amount of $100,000 or a whole multiple thereof.
The Principal Amount shall be reduced by the amount prepaid, and
Signal shall not be entitled to reborrow such amount.
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2.5 INTEREST RATE AND PAYMENT DATES. (a) Interest on each
Loan shall accrue for the period commencing on and including the
Borrowing Date thereof at a rate per annum equal to 25%.
(b) If all or a portion of the Principal Amount of any
Loan, the interest payable thereon or any other amount payable
hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum which is 2% above the rate which
would otherwise be applicable pursuant to Section 2.5(a) from the
date of such non-payment until paid in full (after as well as
before judgment).
(c) Interest shall be payable in arrears on each
Interest Payment Date provided, however, that, prior to the
Maturity Date, Signal shall be required to pay on each Interest
Payment Date, for the period commencing on the previous Interest
Payment Date, or commencing on the Closing Date for the first
Interest Payment Date and ending on such Interest Payment Date,
interest on the Principal Amount at a rate of 15% per annum with
the balance of the interest accruing as of each such Interest
Payment Date being due and payable on the Maturity Date; and
provided, further, that interest accruing pursuant to the preceding
Section 2.5(b) shall by payable on demand.
2.6 COMPUTATION OF INTEREST. (a) Interest in respect of the
Loan shall be calculated on the basis of a 360 day year for the
actual days elapsed.
SECTION 3. GRANT OF SECURITY INTEREST
3.1. SECURITY FOR THE LOAN. As security for the payment in
full of the Obligations, the Company hereby assigns to Lender and
grants to Lender a security interest in all of the following assets
of the Company now owned or hereafter acquired by the Company or in
which the Company now has or at any time in the future may acquire
any right, title or interest ( collectively, the "COLLATERAL"):
(a) all the Company's land and buildings located in
Troup County, Georgia; Wabash County, Indiana and Claiborne County,
Tennessee, together with all improvements and appurtenances or
additions thereto ("REAL PROPERTY");
(b) all inventory, equipment, instruments, chattel
paper, accounts, general intangibles (other than rights to
trademarks, patents, tradenames or service marks held by the
Company under licenses the terms of which licenses do not allow the
transfer or assignment by Company of the rights granted), contract
12
rights and goods, together with all products, proceeds, accessions,
improvements and appurtenances thereto;
(c) all machinery, furniture, fixtures, equipment and
other property located, installed (or to be installed) or used in
or about the buildings on the Real Property, including, but not
limited to, all heating, plumbing, lighting, water-heating,
refrigerating, air-conditioning and ventilating equipment, storm
doors and windows, shades, rugs, carpeting, awnings, blinds, drapes
and linoleum, signs and property of like nature, all of which are
hereby declared to be permanent accessions to the Real Property and
part of the realty described in the Mortgages, Deeds of Trust, and
Deeds to Secure Debt and Security Interests evidencing the security
interest granted hereby and are to be considered fixtures as such
term is defined in the Uniform Commercial Code adopted and in
effect in the States of Georgia, Indiana or Tennessee, as
applicable;
(d) all proceeds and products of any of the foregoing,
including, without limitation, all accounts receivable, accounts,
contract rights, instruments, documents, chattel paper and/or
general intangibles arising out of or in connection with any of the
foregoing, all rights of the Company in and to all Collateral
securing or otherwise relating to any obligations of third parties
to the Company in connection with any of the foregoing, cash
proceeds, non-cash proceeds, and insurance proceeds payable by
reason of loss or damage to any of the foregoing, whether now
existing or hereafter arising;
(e) all capital stock, instruments, or documents
evidencing the Company's ownership of Ocean Pacific Apparel Corp.
in the event of an acquisition of such company;
(f) all ledgers, journals, books and records of the
Company relating to any and all of the foregoing.
3.2. USE OF COLLATERAL. So long as an Event of Default has
not occurred, the Company shall have the right, in the ordinary
course of its business, to sell all items of Collateral listed in
Section 3.1 above or any additions or replacements thereto.
Lender's security interest hereunder shall automatically attach to
all proceeds of all sales and other dispositions of such items of
Collateral.
3.3. SUBORDINATION OF SECURITY INTEREST. The security
interest granted by this Section 3 shall in every respect be
subordinate to the security interests previously granted to the
Company's senior bank lenders, BNY Financial Corporation and
Greyrock Capital Group, Inc., until such time as such interests are
13
released and to secure interests hereafter created or perfected
pursuant to existing agreements with such senior lenders, as such
agreements may be amended. The respective rights of the Lender and
such senior bank lenders in and to the Collateral shall be governed
by the Intercreditor Agreement which is to be executed and
delivered contemporaneously herewith.
SECTION 4. WARRANTS
In order to induce the Lender to make its Loans and to enter
into this Agreement, Signal agrees to issue to Lender the following
warrants to purchase Signal's Common Stock:
4.1 FIXED RATE WARRANTS. Signal shall issue to Lender
1,500,000 warrants to purchase Common Stock at an exercise price of
$2.25 per share ("FIXED RATE WARRANTS"). The Fixed Rate Warrants
will be issued on the Closing Date and will thereafter vest and
become exercisable at the rate of 100,000 warrants for each
$1,000,000 in Loans borrowed by Signal. Any Fixed Rate Warrants not
so vested will expire upon the termination of this Agreement. All
vested Fixed Rate Warrants shall be exercisable within three years
of the date of vesting. The Fixed Rate Warrants shall be adjusted
for dilution resulting from certain recapitalizations of, certain
distributions by and certain issuances by Signal of Common Stock in
accordance with the terms of the Warrant Certificate evidencing the
Fixed Rate Warrants.
4.2 DISCOUNT RATE WARRANTS. On the Closing Date, Signal
shall issue to the Lender additional warrants to purchase 1,500,000
shares of Signal's Common Stock at a 25% discount to the twenty day
average trading price in December, 1996 ("DISCOUNT RATE WARRANTS").
Such warrants will be issued and will vest upon the execution
hereof by Lender and upon the commitment by Lender to the Loan. The
Discount Rate Warrants will be exercisable during a period of three
years commencing January 1, 1997. The Discount Rate Warrants will
be adjusted for any dilution resulting from certain
recapitalizations of, certain distributions by and certain
issuances by Signal of Common Stock in accordance with the terms of
the Warrant Certificate evidencing the Discount Rate Warrants.
4.3 EXERCISE OF WARRANTS. Signal shall execute and deliver
to the Lender certificates evidencing the Fixed Rate Warrants in
the form of EXHIBIT B and the Discount Rate Warrants in the form of
EXHIBIT C (the "WARRANT CERTIFICATES"). Each warrant shall be
exercised in accordance with the terms of its respective Warrant
Certificate.
4.4 REGISTRATION RIGHTS. The Fixed Rate and Discount Rate
Warrants and the Common Stock issued pursuant to the exercise of
14
the Fixed Rate and Discount Rate Warrants will not be registered
under the United States Securities Act of 1933, as amended. Lender
shall have the rights to demand registration specified in the
respective Warrant Certificates.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and
to make the Loans herein provided for, the Company hereby
represents and warrants to the Lender that, except as reflected in
the most recent Form 10-K and the two most recent Forms 10-Q filed
by Signal with the United States Securities and Exchange
Commission, and except for matters related to the indebtedness of
the Company to BNY Financial Corporation and to Greyrock Capital
Group, Inc.:
5.1 FINANCIAL CONDITION. The consolidated balance sheet of
Signal and its consolidated Subsidiaries at December 31, 1993 and
the related consolidated statements of income and retained earnings
and changes in financial position for the fiscal year ended on such
date, reported on by Arthur Andersen & Co., copies of which have
heretofore been furnished to the Lender, in all material respects
are complete and correct and present fairly the consolidated
financial condition of Signal and its consolidated Subsidiaries as
at such date, and the consolidated results of their operations and
changes in financial position for the fiscal year then ended.
5.2 NO CHANGE. Except as disclosed in SCHEDULE 5.2 there has
been no material adverse change in the business, operations,
property, prospects or financial or other condition of the Company,
taken as a whole, since December 31, 1993 or the latest audited
year end financial statement.
5.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of Signal
and its Subsidiaries: (a) is validly existing and in good standing
under the laws of the jurisdiction of its incorporation; (b) has
the corporate power and authority and the legal right to own and
operate its property, to lease the property it operates as lessee
and to conduct the business in which it is currently engaged; (c)
is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except where the failure to so qualify would not
have a material adverse effect on the business, operations,
properties, prospects or financial or other condition of Signal and
its Subsidiaries taken as a whole; and (d) is in compliance with
all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, have a material
adverse effect on the business, operations, property or financial
or other condition of Signal and its Subsidiaries taken as a whole
15
and could not materially adversely effect on the ability of the
Company to perform its obligations under this Agreement, the Note
or any other Loan Document.
5.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
The Company has the corporate power and authority and the legal
right to make, deliver and perform each Loan Document and to borrow
under this Agreement and has taken all necessary corporate action
to authorize such borrowing on the terms and conditions of this
Agreement and the Note and to authorize the execution, delivery and
performance of each Loan Document. No consent or authorization of,
filing with or other act by or in respect of any Governmental
Authority is required in connection with the borrowing hereunder or
with the execution, delivery, performance, validity or
enforceability of each Loan Document. Each Loan Document has been
duly executed and delivered on behalf of the Company. Each Loan
Document constitutes the legal, valid and binding obligations of
the Company enforceable against the Company in accordance with its
terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
5.5 NO LEGAL BAR. The execution, delivery and performance of
each Loan Document, the borrowing under this Agreement and the use
of the proceeds thereof, will not violate any Requirement of Law or
any Contractual Obligation of the Company or of any of its
Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties
or revenues pursuant to any Requirement of Law or Contractual
Obligation.
5.6 NO MATERIAL LITIGATION. Except as disclosed in SCHEDULE
5.6, no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the
knowledge of the Company, threatened by or against the Company or
any of its Subsidiaries or against any of its or their respective
properties or revenues (a) with respect to any Loan Document or any
of the transactions contemplated hereby or thereby, or (b) which
could have a material adverse effect on the business, operations,
property or financial or other condition of the Company and its
Subsidiaries taken as a whole.
5.7 NO DEFAULT. Except as disclosed in SCHEDULE 5.7, neither
Signal nor any of its Subsidiaries is now in default under or with
respect to any Contractual Obligation in any respect which could be
materially adverse to the business, operations, property, prospects
or financial or other condition of the Company and its Subsidiaries
taken as a whole or which could materially adversely affect the
16
ability of the Company to perform its obligations under any Loan
Document which default has not been waived by agreement signed by
the party or parties empowered to enforce such default.
5.8 OWNERSHIP OF PROPERTY; LIENS. Each of Signal, SSI and
AMW has good record and marketable title in fee simple to or valid
leasehold interests in all its respective Real Property, and good
title to all its other property, including the Collateral, and none
of such property is subject to any Lien, except as discussed in
Section 3.3 or as permitted in Section 8.2.
5.9 TAXES. The Company has filed or caused to be filed all
tax returns which to the knowledge of the Company are required to
be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its
property and has paid all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority
(other than those the amount or validity of which is currently
being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been
provided on the books of the Company or its Subsidiaries, as the
case may be); no tax liens have been filed; and, to the knowledge
of the Company, no claims are being asserted with respect to any
such taxes, fees or other charges.
5.10 FEDERAL REGULATIONS. No part of the proceeds of any
Loan hereunder will be used for "purchasing" or "carrying" any
"margin stock" within the respective meanings of each of the quoted
terms under Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System as now and from time to time hereafter
in effect or for any purpose which violates, or which would be
inconsistent with, the provisions of the Regulations of such Board
of Governors.
5.11 HAZARDOUS SUBSTANCES. To the best of the Company's
knowledge, after reasonable inquiry, the Company, and those holding
the Real Property under the Company, are in substantial compliance
with all laws and regulations relating to pollution and
environmental control. The Company will comply with all such laws
and regulations which may be imposed in the future other than those
which would not have a material adverse effect on the business,
assets properties or condition (financial or otherwise) of the
Company. Except as disclosed on SCHEDULE 5.11, the Real Property is
free from "hazardous substances" as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601, et seq., as amended, and the regulations
promulgated thereunder (other than substances reported to agencies
in the normal course of business in material safety data sheets or
the like); no portion of the Real Property is subject to federal,
state, or local regulation or liability because of the presence or
17
stored, leaked or spilled petroleum products, waste materials or
debris, "PCB's" or PCB items (as defined in 40 C.F.R. Section
763.63) underground storage tanks, "asbestos" (as defined in 40
C.F.R. Section 763.63) or the past or present accumulation,
spillage or leakage of any such substance; and the Company is in
substantial compliance with all federal, state and local
requirements relating to protection of health or the environment in
connection with the operation of their business; and the Company
knows of no complaint or investigation regarding the Real Property.
Further, the Company is unaware of any investigation, threat or
concern by any entity regarding environmental issues involving the
Real Property. There are not now any outstanding citations, notices
or orders of violation or noncompliance issued to the Company or
relating to its business assets, property or leaseholds under any
such laws, rules or regulations, nor any conditions which, if known
by the proper authorities, could result in any of the foregoing.
5.12 INVESTMENT COMPANY ACT. The Company is not an
"investment company", within the meaning of the Investment Company
Act of 1940, as amended.
5.13 SUBSIDIARIES. On the Closing Date, SSI and AMW are
the only Subsidiaries of Signal.
SECTION 6. CONDITIONS PRECEDENT
6.1 CONDITIONS TO INITIAL LOAN. The agreement of the Lender
to make the Loan requested to be made by it is subject to the
satisfaction, immediately prior to or concurrently with the making
of such Loan on the Closing Date, of the following conditions
precedent:
(a) LOAN DOCUMENTS. The Lender shall have received
each Loan Document, including, without limitation, this
Agreement and the Note, in each case executed and delivered by
a duly authorized officer of the Company.
(b) CORPORATE PROCEEDINGS OF THE COMPANY. The Lender
shall have received a copy of the resolutions in form and
substance reasonably satisfactory to the Lender, of the Board
of Directors of each of Signal, SSI and AMW authorizing (i)
the execution, delivery and performance of each Loan Document
and all other documents and agreements required of the Company
hereunder and (ii) the borrowing contemplated hereunder,
certified by the Secretary of SSI, AMW and Signal, as of the
Closing Date, which certificate shall state that the
resolutions thereby certified have not been amended, modified,
revoked or rescinded as of the date of such certificate.
18
(c) CORPORATE DOCUMENTS. The Lender shall have
received true and complete copies of the Restated Articles of
Incorporation and By-Laws of Signal, SSI and AMW certified as
of the Closing Date as true, complete and correct copies
thereof by the Secretary or an Assistant Secretary of each
such party.
(d) GOOD STANDING CERTIFICATES. The Lender shall have
received copies of certificates dated as of a recent date from
the Secretary of State or other appropriate authority of such
jurisdiction, evidencing the good standing of Signal and each
of its Subsidiaries in each State where the ownership, lease
or operation of property or the conduct of business requires
it to qualify as a foreign corporation except where the
failure to so qualify would not have a material adverse effect
on the business, operations, properties, prospects or
financial or other condition of Signal and its Subsidiaries
taken as a whole.
(e) FINANCIAL INFORMATION. The Lender shall have
received a copy of each of the financial statements referred
to in Section 5.1.
(f) LITIGATION. No suit, action, investigation,
inquiry or other proceeding except as disclosed herein
(including, without limitation, the enactment or promulgation
of a statute or rule) by or before any arbitrator or any
Governmental Authority shall be pending and no preliminary or
permanent injunction or order by a state or federal court
shall have been entered (i) in connection with this Agreement,
or (ii) which, in any such case, in the reasonable judgment of
the Lender, would have a material adverse effect on (A) the
transactions contemplated by this Agreement or (B) the
business, operations, properties, prospects or financial or
other condition of Signal and its Subsidiaries taken as a
whole.
(g) NO VIOLATION. The consummation of the transactions
contemplated hereby shall not contravene, violate or conflict
with, nor involve the Lender in a violation of, any
Requirement of Law.
(h) CONSENTS, LICENSES, APPROVALS, ETC. The Lender
shall have received a certificate of a Responsible Officer of
Signal either (i) attaching copies of all consents, licenses
and approvals required in connection with the execution,
delivery and performance by Signal and its Subsidiaries of
each Loan Document, including, but not limited to, consents of
the Company's senior bank lenders, and such consents, licenses
19
and approvals shall be in full force and effect, or (ii)
stating that no such consents, license or approval are so
required (SCHEDULE 6.1(h)).
(i) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Company herein
shall be true and correct in all material respects on and as
of the Closing Date as if made on and as of such date.
(j) NO DEFAULT. No Default or Event of Default shall
have occurred and be continuing on such date or after giving
effect to such Loan.
(k) SECURITY INTEREST. The security interests in
personal property granted herein shall be duly perfected in
accordance with applicable state law, and Signal and SSI shall
have delivered mortgages, deeds of trust or deeds to secure
debt duly executed by the record owner in recordable form
granting Lender a lien on the Real Property, including the
land, buildings, furnishings, equipment, improvements and
fixtures.
(l) LEGAL OPINION. Lender shall have received the legal
opinion of Witt, Gaither & Whitaker, P.C., counsel to Signal,
AMW and SSI, in form and substance satisfactory to the Lender.
6.2 CONDITIONS TO EACH LOAN. The agreement of the Lender to
make any Loan requested to be made by it on any date (including,
without limitation, the initial Loan) is subject to the
satisfaction of the following conditions precedent as of the date
such Loan is requested to be made:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Company in or
pursuant to any Loan Document shall be true and correct in all
material respects on and as of such date as if made on and as
of such date.
(b) NO DEFAULT. No Default or Event of Default shall
have occurred and be continuing on such date or after giving
effect to the Loans requested to be made on such date.
(c) ADDITIONAL MATTERS. All corporate and other legal
proceedings, and all documents, instruments and other legal
matters in connection with the transactions contemplated by
this Agreement and the other Loan Documents shall be
reasonably satisfactory in form and substance to the Lender.
20
(d) ADDITIONAL DOCUMENTS. The Lender shall have
received each additional document, instrument, legal opinion
or item of information reasonably requested by the Lender.
(e) EXTENSION OF GREYROCK LOAN. Evidence satisfactory to
Lender that the maturity dates of the $6,500,000 in loans by
Greyrock to AMW have been extended to December 31, 1996.
SECTION 7. AFFIRMATIVE COVENANTS
Signal hereby agrees that, so long as the Commitment is in
effect, the Note remains outstanding and unpaid or any other amount
is owing to the Lender hereunder, the Company shall do the
following:
7.1 FINANCIAL STATEMENTS. Furnish to the Lender:
(a) as soon as available, but in any event within 90
days after the end of each fiscal year of Signal, a copy of
the consolidated balance sheet of Signal and its consolidated
Subsidiaries as at the end of such year and the related
consolidated statements of income and retained earnings and
changes in financial position for such year, reported on by
independent certified public accountants, setting forth in
comparative form the figures for the previous year; and
(b) as soon as available, but in any event not later
than 45 days after the end of each of the first three
quarterly periods of each fiscal year of Signal, the unaudited
consolidated balance sheet of Signal and its consolidated
Subsidiaries as at the end of each such quarter and the
related unaudited consolidated statements of income and
retained earnings and changes in financial position of Signal
and its consolidated Subsidiaries for such quarter and the
portion of the fiscal year through such date, setting forth in
each case in comparative form the figures for the previous
year;
all such financial statements to be complete and correct in all
material respects and to be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods
reflected therein (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
7.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Lender:
(a) concurrently with the delivery of the financial
statements referred to in Section 7.1(a) above, a certificate
of the independent certified public accountants reporting on
21
such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial
statements referred to in Sections 7.1(a) and (b), a
certificate of a Responsible Officer stating that during such
period, to the best of such officer's knowledge, Signal has
observed or performed all of its covenants and other
agreements and satisfied every condition contained in this
Agreement and in the Note to be observed, performed or
satisfied by it, and that such officer has obtained no
knowledge of any Default or Event of Default except as
specified in such certificate;
(c) within five days after the same are sent, copies of
all financial statements and reports which Signal sends to its
stockholders, and within five days after the same are filed,
copies of all financial statements and reports which Signal
may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental
Authority; and
(d) promptly, such additional financial and other
information as the Lender may from time to time reasonably
request.
7.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as
the case may be, all its obligations for borrowed money to the
Company's senior lenders or other commercial lenders except when
the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and reserves in conformity with
GAAP with respect thereto have been provided on the books of Signal
or its Subsidiaries, as the case may be.
7.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Cause
Signal and each of its Subsidiaries to continue to engage in
business of the same general type as now conducted by it; preserve,
renew and keep in full force and effect its corporate existence;
take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its
business except as otherwise permitted pursuant to subsection 8.5;
and comply with all Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, have a
material adverse effect on the business, operations, property or
financial or other condition of Signal and its Subsidiaries taken
as a whole. The foregoing notwithstanding, Signal shall be entitled
22
to sell its Heritage Division for a price not less than its fair
market value.
7.5 MAINTENANCE OF PROPERTY; INSURANCE. Cause Signal and
each of its Subsidiaries to keep all property useful and necessary
in its business in good working order and condition, reasonable
wear and tear excepted; and maintain with financially sound and
reputable insurance companies insurance on all its property in at
least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in
the same or a similar business (PROVIDED that such insurance is
available at commercially reasonable rates); and furnish to the
Lender, upon written request, full information as to the insurance
carried.
7.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Cause Signal and each of its Subsidiaries to keep books and records
of account in which full, true and correct entries in conformity
with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and
permit representatives of the Lender to visit and inspect any of
its properties and examine and make abstracts from any of its books
and records at any reasonable time during business hours on
reasonable notice and as often as may reasonably be desired, and to
discuss the business, operations, properties and financial and
other condition of Signal and its Subsidiaries with officers and
employees of Signal and its Subsidiaries and with its independent
certified public accountants.
7.7 TAXES AND OTHER LIENS. Pay and discharge promptly all
taxes, assessments and governmental charges or levies imposed upon
the Company or upon the income or any of the Real Property as well
as all claims of any kind (including claims for labor, materials,
supplies and rent) which, if unpaid, might become a Lien upon any
or all of the Real Property or Collateral; provided, however, that
the Company shall not be required to pay any such tax, assessment,
charge, levy or claim if the amount, applicability or validity
thereof shall currently be contested in good faith by appropriate
proceedings diligently conducted and if the Company shall have set
up reserves therefor adequate under GAAP.
7.8 FURTHER ASSURANCES. Promptly cure any defects in the
creation and issuance of the Note and the execution and delivery of
the Loan Documents, including this Agreement and the perfection of
any Liens in favor of the Lender. The Company, at its expense,
will promptly execute and deliver to the Lender upon request all
such other and further documents, agreements and instruments in
compliance with or accomplishment of the covenants and agreements
of the Company in the Loan Documents, including this Agreement, or
to evidence further and describe more fully any collateral intended
23
as security for the Note, or to correct any omissions in the Loan
Documents, or to state more fully the obligation set out herein or
in any of the Loan Documents, or to perfect, protect or preserve
any Liens created pursuant to any of the Loan Documents, or to make
any recordings, to file any notices, or obtain any consents, all as
may be necessary or appropriate in connection therewith.
7.9 NOTICES. Promptly give notice to the Lender:
(a) of the occurrence of any Default or Event of
Default;
(b) of any (i) default or event of default under any
Contractual Obligation of Signal or any of its Subsidiaries or
(ii) litigation, investigation or proceeding which may exist
at any time between Signal or any of its Subsidiaries and any
Governmental Authority, which in either case, if not cured or
if adversely determined, as the case may be, would have a
material adverse effect on the business, operations, property
or financial or other condition of Signal and its Subsidiaries
taken as a whole;
(c) of any litigation or proceeding affecting Signal or
any of its Subsidiaries in which the amount involved is
$100,000 or more and not covered by insurance or in which
injunctive or similar relief is sought;
(d) of a material adverse change in the business
operations, property or financial or other condition of Signal
and its Subsidiaries taken as a whole; and
(e) of the institution of any proceeding or
investigations against, or the receipt of any notice of
potential liability for violation, or alleged violation, of
any federal, state or local law, rule or regulation, including
but not limited to regulations promulgated under the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901
ET SEQ., regulating the generation, handling or disposal of
any toxic or hazardous waste or substance, the violation of
which could give rise to a material liability against the
business, assets, properties, condition or prospects of Signal
taken as a whole.
Each notice pursuant to this subsection shall be accompanied
by a statement of a Responsible Officer setting forth details of
the occurrence referred to therein and stating what action the
Company proposes to take with respect thereto.
7.10 NOMINATION OF DIRECTORS. Until such time as all
Obligations have been paid in full and this Agreement has expired
24
or been terminated, and so long as Lender is a shareholder of
Signal, Signal shall place the names of any two persons specified
by Lender in nomination for election to Signal's board of directors
at each annual meeting of Signal's shareholders; provided, Lender
shall provide the names of such nominees to Signal within
sufficient time to comply with applicable rules regarding the
submission of proxies, and Lender shall provide such other
information as may be required by such proxy rules. The right
granted in the preceding sentence shall be in addition to any other
right Lender may have as a shareholder of Signal to nominate
directors of Signal.
SECTION 8. NEGATIVE COVENANTS
The Company hereby agrees that, so long as the Commitment is
in effect, the Note remains outstanding and unpaid or any other
amount is owing to the Lender hereunder, Signal shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly
except as reflected in the most recent Form 10-K and the two most
recent Forms 10-Q filed by Signal with the United States Securities
and Exchange Commission, and except for indebtedness of the
Company, whether now existing or hereafter incurred, to BNY
Financial Corporation or Greyrock Capital Group, Inc., their
successors and assigns:
8.1 LIMITATION ON INDEBTEDNESS. Create, incur, assume or
suffer to exist any Indebtedness, except for:
(a) Indebtedness in respect of the Loans and the Note;
(b) Indebtedness of Signal to any Subsidiary and of any
Subsidiary to Signal or any other Subsidiary;
(c) Indebtedness outstanding on the Closing Date and
listed on SCHEDULE 8.1(c) including any extensions or renewals
thereof.
8.2 LIMITATION ON LIENS. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings; provided
that adequate reserves with respect thereto are maintained on
the books of Signal or its Subsidiaries, as the case may be,
in conformity with GAAP;
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's, or other like Liens arising in the
ordinary course of business and not overdue for a period of
25
more than 60 days or which are being contested in good faith
by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liabilities to insurance
carriers under insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in
amount and which do not in any case materially detract from
the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of Signal
or such Subsidiary;
(f) Liens in existence on the Closing Date listed on
SCHEDULE 8.2(f), including Liens attaching after the date
hereof pursuant to after acquired property clauses, Liens in
the Company's "Receivables" as defined in and as contemplated
by the Company's factoring agreements with BNY;
(g) Liens securing or created in connection with
Indebtedness of Signal and its Subsidiaries permitted by
Section 8.1(c); PROVIDED that (i) such Liens shall be created
substantially simultaneously with the purchase of such fixed
or capital assets; (ii) such Liens do not at any time encumber
any property other than the property financed by such
Indebtedness; (iii) the amount of Indebtedness secured thereby
is not increased; and (iv) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed
the purchase price of such property at the time it was
acquired; and
(h) Liens on the property or assets of a corporation
which becomes a Subsidiary after the date hereof; PROVIDED
that (i) such Liens existed at the time such corporation
became a Subsidiary and were not created in anticipation
thereof; (ii) any such Lien is not spread to cover any
property or assets of Signal after the time such corporation
becomes a Subsidiary; and (iii) the amount of Indebtedness
secured thereby (other than accrued interest) is not
increased.
26
8.3 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur,
assume or suffer to exist any Guarantee Obligation except Guarantee
Obligations outstanding on the Closing Date and set forth on
SCHEDULE 8.3.
8.4 LIMITATIONS OF FUNDAMENTAL CHANGES. Enter into any
transaction of acquisition or merger or consolidation or
amalgamation (except with any of its Subsidiaries), or liquidate,
wind up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, assign, transfer or otherwise
dispose of, all or substantially all of its property, business or
assets, or make any material change in the present method of
conducting business except as otherwise permitted hereunder and
except:
(a) any Subsidiaries of Signal may be merged or
consolidated with or into Signal (provided that Signal shall
be the continuing or surviving corporation) or with or into
any one or more wholly-owned Subsidiaries of Signal (provided
that the wholly-owned Subsidiary shall be the continuing or
surviving corporation);
(b) any wholly-owned Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to Signal or a
wholly-owned Subsidiary of Signal; and
(c) subject to Section 8.11, any acquisition of Ocean
Pacific Apparel Corporation.
8.5 LIMITATION ON SALE OF ASSETS. Convey, sell, lease,
assign, transfer or otherwise dispose of, any of its property,
business or assets (including, without limitation, receivables and
leasehold interests) whether now owned or hereafter acquired
except:
(a) obsolete, worn out or no longer in use property
disposed of in the ordinary course of business;
(b) the sale or other disposition of any property in the
ordinary course of business;
(c) the sale of inventory in the ordinary course of
business;
(d) the sale of accounts receivable to BNY under the
Company's factoring arrangements with BNY;
(e) as permitted by SECTION 8.4(b); and
27
(f) the sale of Signal's Heritage Division and all
assets generally used in the operation thereof for a price not
less than its fair market value.
8.6 LIMITATION ON DIVIDENDS. Except for the declaration and
payment of required dividends on its Preferred Stock, declare any
dividend (other than dividends payable solely in common stock of
Signal) on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for the purchase, redemption,
defeasance, retirement or other acquisition of any shares of any
class of stock of Signal, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of Signal
or any Subsidiary.
8.7 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or
purchase any stock, bonds, notes, debentures or other securities
of, or make any other investment in, any of the foregoing, an
"Investment", any Person, except:
(a) extensions of trade credit in the ordinary course
of business;
(b) Investments in Cash Equivalents;
(c) Investments by Signal in its Subsidiaries and
Investments by such Subsidiaries in Signal and in other
Subsidiaries;
(d) Investments permitted by subsection 8.4(c); and
(e) loans which refinance or restructure existing,
disclosed indebtedness but which do not increase the principal
amount of such existing indebtedness or change the terms of
such existing indebtedness in a manner which is materially
adverse to Lender.
8.8 TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale,
lease or exchange of property or the rendering of any service, with
any Subsidiary unless such transactions are otherwise permitted
under this Agreement, or are in the ordinary course of Signal's or
such Subsidiary's business and are upon fair and reasonable terms
no less favorable to Signal or such Subsidiary, as the case may be,
than it would obtain in a comparable arm's length transaction with
a Person not an Affiliate.
8.9 SALE AND LEASEBACK. Enter into any arrangement with any
Person providing for the leasing by Signal or any Subsidiary of
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real or personal property which has been or is to be sold or
transferred by Signal or such Subsidiary to such Person or to any
other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of
Signal or such Subsidiary; except for a sale and leaseback of
equipment no later than three months following the date of initial
purchase of such equipment.
8.10 FISCAL YEAR. Permit the fiscal year of Signal to end on
a day other than December 31.
8.11 SUBSIDIARY FORMATION. Form or acquire any Subsidiary
unless such Subsidiary shall have become a party to this Agreement
or shall have guaranteed the Obligations hereunder in favor of the
Lender.
8.12 CHANGES IN LOCATIONS, NAME, ETC. Unless it shall have
given the Lender at least 30 days prior written notice thereof, the
Company will not (i) change the location of its chief executive
office/chief place of business or remove its books and records
therefrom, (ii) permit any of the inventory or equipment to be kept
at a location other than that on the date hereof, or (iii) change
its name, identity or corporate structure to such an extent that
any financing statement filed by Lender in connection with this
Agreement would become seriously misleading.
8.13 FINANCIAL CONDITION. At any time fail to comply with the
financial covenants contained in paragraph 11 of the Factoring
Agreement entered into between BNY and Signal, dated May 23, 1991,
as amended from time to time (the "FACTORING AGREEMENT") or if the
Factoring Agreement shall have terminated such covenants as were in
effect immediately prior to such termination. To the extent such
covenants require the Company to meet specific dollar amounts as of
specific periods (for example, the end of each quarter) the last
stated dollar amount for the last period contained in such
covenants shall apply to each succeeding similar period.
SECTION 9. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) The Company shall fail to pay any principal of the
Note when due in accordance with the terms thereof or hereof;
or to pay any interest on the Note, or any other amount
payable hereunder, within five days after any such amount
becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made
by the Company in any of the Loan Documents or which is
29
contained in any certificate, document or financial or other
statement furnished at any time under or in connection with
this Agreement or the Note, including the most recent Form 10K
and the two most recent Forms 10Q filed by Signal with the
United States Securities and Exchange Commission, shall prove
to have been incorrect in any material respect on or as of the
date made or deemed made; or
(c) The Company shall default in the observance or
performance of any agreement contained in Section 8; or
(d) The Company shall default in the observance or
performance of any other agreement contained in this Agreement
or the Loan Documents, and such default shall continue
unremedied for the lesser of a period of 30 days or the cure
period applicable to such default in the pertinent Loan
Document; or
(e) Signal or any of its Subsidiaries shall (i) default
in any payment of principal or interest on any Indebtedness
(other than the Notes) or in the payment of any Guarantee
Obligation which default has not been waived and which
continues beyond the period of grace (not to exceed 30 days),
if any, provided in the instrument or agreement under which
such Indebtedness or Guarantee Obligation was created; or (ii)
default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or
Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist without waiver and
beyond any applicable grace period, the effect of which
default or other event or condition is to cause such
Indebtedness to become due prior to its stated maturity or
such Guarantee Obligation to become payable; or
(f)(i) Signal or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its
assets, or Signal or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or
30
(ii) there shall be commenced against Signal or any of
its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or
(iii) there shall be commenced against Signal or any of
its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its
assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry
thereof; or
(iv) Signal or any of its Subsidiaries shall take any
action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or
(v) Signal or any of its Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) One or more judgments or decrees shall be entered
against Signal or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of
$100,000 or more and all such judgments or decrees shall not have
been vacated, 30 days from the entry thereof;
(h) any of Marvin Winkler, the Chief Executive Officer
of Signal, Leon Ruchlamer, the President of Signal, or William
Watts, the chief financial officer of Signal, ceases to be employed
by Signal in his current position or in a position of equal or
greater responsibility with Signal, and a replacement for such
person (including any replacement of such replacement) reasonably
satisfactory to the Lender has not been hired to replace such
person within 30 days of the date such employment ceases; provided,
however, this provision shall not apply if Lender, Stephen Walsh,
Paul Greenwood or any director of Signal nominated by Lender should
support or not oppose a decision by the Board of Directors of the
Company to terminate any such officer or otherwise to cause such
officer to cease to be employed.
(i) The two persons whom Lender is entitled to nominate
to serve on Signal's Board of Directors pursuant to Section 7.10
shall not have been elected at the duly called meeting of the
shareholders of Signal at which their nominations were presented.
31
then, and in any such event, (A) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (f) above with
respect of the Company, the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the
Note shall immediately become due and payable; (B) if such event is
an Event of Default specified in paragraph (a) above or in
paragraph (e) with respect to the Senior Debt which default shall
not have been waived, the Lender, at its option and in its sole
discretion, may by notice to Signal declare the Loans hereunder
(with accrued interest thereon) and all other amounts owing under
this Agreement and the Note to be due and payable forthwith,
whereupon the same shall immediately become due and payable; and
(C) if the Senior Debt shall have been repaid and if such event is
any other Event of Default, the Lender, at its option and in its
sole discretion, may by notice to Signal declare the Loan hereunder
(with accrued interest thereon) and all other amounts owing under
this Agreement and the Note to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section 9, presentment, demand,
protest and all other notices of any kind are hereby expressly
waived. The obligations of each Company in respect of the Loans are
subordinated to the obligations of each Company in respect of the
Senior Debt as provided in the Intercreditor Agreement.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Neither this Agreement, the
Note, nor any terms hereof or thereof may be amended, supplemented
or modified except in accordance with the provisions of this
Section 10.1. The Lender and the Company may, from time to time,
enter into written amendments, supplements or modifications hereto
for the purpose of adding any provisions to this Agreement or the
Note or changing in any manner the rights of the Lender or of the
Company hereunder or thereunder or waiving, on such terms and
conditions as the Lender may specify in such instrument, any of the
requirements of this Agreement or the Note or any Default or Event
of Default and its consequences. In the case of any waiver, the
Company and the Lender shall be restored to their former positions
and rights hereunder and under the Note, and any Default or Event
of Default waived shall be deemed to be cured and not continuing;
but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
10.2 NOTICES. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when
delivered by hand, or five days after being deposited in the mail,
postage prepaid, or, in the case of notice by telecopy or facsimile
transmission, when sent and telephonically or electronically
32
confirmed, addressed as follows or to such other address as may be
hereafter notified by the respective parties hereto and any future
holder of the Note:
The Company:
Signal Apparel Company, Inc.
P. O. Box 4296
Manufacturer's Road
Chattanooga, TN 37405
Attention: Marvin Winkler
The Lender:
Walsh Greenwood & Co.
One East Putnam Avenue
Greenwich, Connecticut 06830
Attention: Paul R. Greenwood
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Lender, any right,
remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement
and the Note.
10.5 PAYMENT OF EXPENSES AND TAXES. Signal agrees (a) to pay
or reimburse the Lender in an amount up to, but not exceeding,
$250,000 for all its out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of the
Loan Documents and any other documents prepared in connection
therewith, and the consummation of the transactions contemplated
hereby and thereby, including the fees and disbursements of counsel
to the Lender, (b) to pay or reimburse the Lender for all its costs
and expenses incurred in connection with the development,
preparation and execution of any amendment, supplement or
modification thereto, or the enforcement or preservation of any
rights under any Loan Document and any other such documents and any
such amendment, supplement or modification thereto, including,
without limitation, reasonable fees and disbursements of counsel to
the Lender, (c) to pay, indemnify, and hold the Lender harmless
33
from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying,
stamp, excise, franchise and other taxes, if any, which may be
payable or determined to be payable in connection with the
execution and delivery of, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of
any Loan Document and any such other documents (provided that
Signal shall have the right to contest before the relevant
Governmental Authority any such tax that may be assessed), and (d)
to pay, indemnify, and hold the Lender harmless from and against
any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of
any Loan Document and the transactions contemplated hereby and any
such other documents (all the foregoing, collectively, the
"indemnified liabilities"), provided, that Signal shall have no
obligation hereunder to the Lender with respect to willful
misconduct of the Lender. The agreements in this Section shall
survive repayment of the Note and all other amounts payable
hereunder.
10.6 SUCCESSORS AND ASSIGNS. (a) This Agreement shall be
binding upon and inure to the benefit of the Company and the
Lender, all future holders of the Note and their respective
successors and assigns, except that the Company may not assign or
transfer any of its rights under this Agreement without the prior
written consent of the Lender.
(b) The Lender may, in the ordinary course of its business
and in accordance with applicable law, at any time sell to one or
more lenders or other entities ("PARTICIPANTS") participating
interests in any Loan, the Note, the Commitment or any other
interest of the Lender hereunder and under the other Loan
Documents. In the event of any such sale by the Lender of
participating interests to a Participant, the Lender's obligations
under this Agreement to Signal shall remain unchanged, the Lender
shall remain solely responsible for the performance thereof, the
Lender shall remain the holder of the Note for all purposes under
this Agreement and the other Loan Documents, and Signal shall
continue to deal solely and directly with the Lender in connection
with the Lender's rights and obligations under this Agreement and
the other Loan Documents. The Company agrees that if amounts
outstanding under this Agreement and the Note are due or unpaid, or
shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be
deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement and the Note to the
same extent as if the amount of its participating interest were
owing directly to it as the Lender under this Agreement or the
34
Note; PROVIDED, that such Participant shall only be entitled to
such right of set-off if it shall have agreed in the agreement
pursuant to which it shall have acquired its participating interest
to share with the Lender the proceeds thereof. The Company also
agrees that each Participant shall be entitled to the benefits of
Section 10.5 with respect to its participation in the Commitment
and the Loans outstanding from time to time; PROVIDED FURTHER, that
no Participant shall be entitled to receive any greater amount
pursuant to such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no
such transfer occurred.
10.7 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
10.8 GOVERNING LAW. THIS AGREEMENT AND THE NOTE AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE
NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10.9 SUBMISSION TO JURISDICTION; WAIVERS. EACH OF SIGNAL,
SSI AND AMW HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-
EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED
OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO SUCH BORROWER AT ITS ADDRESS SET FORTH IN
SECTION 10.2 OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER SHALL
HAVE BEEN NOTIFIED PURSUANT THERETO;
35
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND
(E) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR
PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES.
10.10 WAIVER OF JURY TRIAL. EACH OF SIGNAL, SSI, AMW AND THE
LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE
NOTE, OR OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY AND FOR ANY
COUNTERCLAIM THEREIN.
36
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in New York by their
proper and duly authorized officers as of the day and year first
above written.
SIGNAL APPAREL COMPANY, INC.
By /s/ William H. Watts
Title Executive VP and CFO
THE SHIRT SHED, INC.
By /s/ William H. Watts
Title Executive VP and CFO
AMERICAN MARKETING WORKS, INC.
By /s/ William H. Watts
Title Executive VP and CFO
WALSH GREENWOOD & COMPANY
By /s/ Paul R. Greenwood
Title Managing Partner
37
LIST OF OMITTED EXHIBITS AND SCHEDULES
Exhibit A Note
Exhibit B Form of Fixed Rate Warrant
Exhibit C Form of Discount Rate Warrant
Schedule 5.2 Material Adverse Changes
Schedule 5.6 Material Litigation
Schedule 5.7 Default
Schedule 5.11 Environmental
Schedule 6.1(h) Closing Certificate
Schedule 8.1(c) Outstanding Indebtedness
Schedule 8.2(f) Existing Liens
Schedule 8.3 Existing Guarantees
The Registrant hereby agrees to furnish a copy of any of such omitted
Schedules or Exhibits supplementally upon request of the Commission's staff.